<PAGE> 1
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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO
-------------- -------------
Commission file number 1-4364
RYDER SYSTEM, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-0739250
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3600 N.W. 82 AVENUE, MIAMI, FLORIDA 33166 (305) 593-3726
(Address of principal executive (Telephone number
offices including zip code) including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K: [ X ]
---
The aggregate market value of the voting stock held by non-affiliates of the
registrant computed by reference to the price at which the stock was sold as of
January 31, 1995, was $1,697,753,340. The number of shares of Ryder System,
Inc. Common Stock ($.50 par value) outstanding as of January 31, 1995, was
78,766,628.
<TABLE>
<CAPTION>
Documents Incorporated by Part of Form 10-K into which
Reference into this Report Document is Incorporated
-------------------------- ----------------------------
<S> <C>
Ryder System, Inc. 1994 Annual Parts I, II and IV
Report to Shareholders*
Ryder System, Inc. 1995 Proxy Part III
Statement
</TABLE>
*The Ryder System, Inc. 1994 Annual Report to Shareholders is
incorporated herein only to the extent specifically stated.
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[Cover page 1 of 3 pages]
<PAGE> 2
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
Title of each class of securities Exchange on which registered
--------------------------------- ----------------------------
<S> <C>
Ryder System, Inc. Common Stock New York Stock Exchange
($.50 par value) and Preferred Pacific Stock Exchange
Share Purchase Rights Chicago Stock Exchange
(the Rights are not currently
exercisable or transferable
apart from the Common Stock)
Ryder System, Inc. 8 3/4% Series E New York Stock Exchange
Extendible Notes, due July 1, 2000
Ryder System, Inc. 9% Series G Bonds, New York Stock Exchange
due May 15, 2016
Ryder System, Inc. 8 3/8% Series H Bonds, New York Stock Exchange
due February 15, 2017
Ryder System, Inc. 8 3/4% Series J Bonds, New York Stock Exchange
due March 15, 2017
Ryder System, Inc. 9 7/8% Series K Bonds, New York Stock Exchange
due May 15, 2017
Ryder System, Inc. 9 1/4% Series N Notes, None
due May 15, 2001
Ryder System, Inc. Medium-Term Notes None
due from 9 months to 10 years
from date of issue at rate based
on market rates at time of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 2, due from 9 months to
10 years from date of issue at
rate based on market rates at time
of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 6, due from 9 months to
30 years from date of issue at
rate based on market rates at time
of issuance
</TABLE>
[Cover page 2 of 3 pages]
<PAGE> 3
<TABLE>
<CAPTION>
Title of each class of securities Exchange on which registered
--------------------------------- ----------------------------
<S> <C>
Ryder System, Inc. Medium-Term Notes, None
Series 7, due from 9 months to
30 years from date of issue at
rate based on market rates at time
of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 8, due from 9 months to
30 years from date of issue at
rate based on market rates at time
of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 9, due from 9 months to
30 years from date of issue at
rate based on market rates at time
of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 10, due from 9 months to
30 years from date of issue at
rate based on market rates at time
of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 11, due from 9 months to
30 years from date of issue at
rate based on market rates at time
of issuance
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
</TABLE>
[Cover page 3 of 3 pages]
<PAGE> 4
RYDER SYSTEM, INC.
Form 10-K Annual Report
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I
Item 1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 3 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 4 Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . 10
PART II
Item 5 Market for Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 6 Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 8 Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . 11
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 11
PART III
Item 10 Directors and Executive Officers of the Registrant . . . . . . . . . . . . 12
Item 11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Item 12 Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Item 13 Certain Relationships and Related Transactions . . . . . . . . . . . . . . 12
PART IV
Item 14 Exhibits, Financial Statement Schedules, and Reports on
Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
4
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PART I
ITEM 1. BUSINESS
General
Ryder System, Inc. ("the Company") was incorporated in Florida in 1955.
Through its subsidiaries, the Company engages primarily in the following
businesses: 1) full service leasing and short-term rental of trucks, tractors,
and trailers; 2) dedicated logistics services; 3) public transit management and
student transportation; and 4) transportation of new automobiles and trucks.
The Company's main operating segments are Vehicle Leasing & Services and
Automotive Carriers. General Motors Corporation ("GM") is the largest single
customer of the Company, accounting for approximately 10%, 11%, and 12% of
consolidated revenue of the Company in 1994, 1993 and 1992, respectively.
At December 31, 1994, the Company and its subsidiaries had a fleet of 188,831
vehicles and 43,095 employees.(1)
Segment Information
Financial information about industry segments is incorporated by reference from
the table "Selected Financial and Operational Data" on page 32, and "Notes to
Consolidated Financial Statements - Segment Information" on page 46, of the
Ryder System, Inc. 1994 Annual Report to Shareholders.
Vehicle Leasing & Services
The Vehicle Leasing & Services Division, comprised of Ryder Truck Rental, Inc.
("RTR"), Ryder Dedicated Logistics, Inc., and the Ryder Public Transportation
Services group of companies, engages in a variety of highway transportation
services including full service truck leasing, dedicated logistics services,
commercial and consumer truck rental, truck maintenance, student
transportation, and public transit management, operations and maintenance.
As of December 31, 1994, the Vehicle Leasing & Services Division had 179,725
vehicles and 36,929 employees, excluding reimbursed public transit and leased
personnel. Full service truck leasing was provided to more than 12,300
customers (ranging from small companies to large national enterprises), with a
fleet of 83,100 vehicles (including 10,480 vehicles leased to affiliates),
through 1,008 locations in 49 states, Puerto Rico, and 8 Canadian provinces.
Under full service leases, RTR (as Ryder Commercial Leasing & Services)
provides customers with the vehicles, maintenance, supplies and equipment
necessary for operation, while the customers furnish drivers and dispatch and
exercise control over the vehicles. A fleet of 73,265 vehicles, ranging from
heavy-duty tractors and trailers to light trucks, is available for short-term
rental from over 4,800 Division locations and independent dealers in 49 states
and Canada. Short-term truck rental, which tends to be seasonal, is used by
commercial customers to supplement their fleets during peak business seasons.
Additionally, RTR (as Ryder Consumer Truck Rental) serves the short-term
consumer truck rental market, which also tends to be seasonal and is
principally used by consumers for moving household goods. At December 31,
1994, RTR was servicing 32,163 vehicles (including 7,877 vehicles of
affiliates) under Ryder Programmed Maintenance, which provides essentially the
same maintenance services for customer-owned vehicles as are provided through
full service truck leasing.
Through Ryder Dedicated Logistics, Inc. ("RDL"), the Division offers
customer-tailored industrial and consumer product distribution and logistics
services from 661 locations in the U.S. and Canada. Services include varying
combinations of logistics system design, provision of vehicles and equipment,
maintenance, provision of drivers, warehouse management, transportation
management, vehicle dispatch, just-in-time delivery, and information systems
support. RDL also offers integrated logistics, the single source management of
a customer's primary logistics activities.
____________________
(1) This number does not include: (a) operating personnel of local transit
authorities managed by certain subsidiaries of the Company (in such situations,
the entire cost of compensation and benefits for such personnel is passed
through to the transit authority, which reimburses the Company's subsidiaries);
or (b) drivers obtained by certain subsidiaries of the Company under driver
leasing agreements for some of their operations.
5
<PAGE> 6
Logistics systems include metropolitan shuttles, interstate long-haul
operations, just-in-time service to assembly plants, and
factory-to-warehouse-to-retail facility service. These services are employed
in the automotive industry (RDL specializes in inbound and aftermarket parts
delivery for customers such as GM (including Saturn), Chrysler Corporation
("Chrysler"), Toyota Motor Manufacturing USA Inc. ("Toyota"), Ford Motor
Company ("Ford") and auto parts retailers), and in the paper and paper
packaging, chemical, electronic and office equipment, news, food and beverage,
housing, general retail and other industries.
Through Ryder Public Transportation Services ("RPTS"), in 1994 the Division
continued to expand its presence in the public transportation management,
operations and maintenance and student transportation markets through internal
growth. RPTS now manages or operates 89 public transit systems with 4,741
vehicles in 29 states, operates 7,753 school buses in 20 states, maintains
about 17,500 public transit or fleet vehicles in 18 states and provides public
transportation management consulting services.
The Division has historically disposed of its used and surplus revenue earning
equipment at prices in excess of book value. The Division reported gains on
the sale of revenue earning equipment (reported as reductions in depreciation
expense) of approximately 19%, 16% and 12% of the Division's earnings before
interest and taxes in 1994, 1993 and 1992, respectively. The extent to which
the Division may consistently continue to realize gains on disposal of its
revenue earning equipment is dependent upon various factors including the
general state of the used vehicle market, the condition and utilization of the
Division's fleet and depreciation policies with respect to its vehicles.
International
The Company's International Division has developed and is in the process of
implementing a strategy for growth in international markets outside the United
States and Canada. This strategy is designed to enable the International
Division to take advantage of, and build upon, the Company's expertise in
providing services to businesses involved in the over-the-road transportation
of goods. The Company's previously existing lease, rental, maintenance and
logistics operations in the United Kingdom, Germany and Poland have been
integrated into the International Division and expanded. In the fourth quarter
of 1994, the International Division opened offices and its first maintenance
facility in Mexico City. As of December 31, 1994, the International Division
had 9,973 vehicles, 2,918 employees, and provided service through 93 locations
in the United Kingdom, Germany, Mexico and Poland. (For financial reporting
purposes, the International Division's results are included with those of the
Vehicle Leasing & Services Division).
Automotive Carriers
The Company's Automotive Carrier Division transports new automobiles and trucks
to dealers and to and from distribution points throughout the United States and
several Canadian provinces for GM, Chrysler, Toyota, Ford, Honda and most other
automobile and light truck manufacturers. GM remains the Division's largest
customer, accounting for 54%, 54% and 57% of the Division's revenue in 1994,
1993 and 1992, respectively. The GM carriage contracts are typically subject
to cancellation upon 30 days' notice by either party. The business is
primarily dependent on the level of North American production, importation and
sales by GM and various other manufacturers. Consequently, the business is
adversely affected by any significant reductions in or prolonged curtailments
of production by customers because of market conditions, strikes or otherwise.
As of December 31, 1994, the Automotive Carrier Division had 4,306 auto
transport vehicles, 5,769 employees (exclusive of leased drivers), and provided
service through 80 locations in 32 states and 3 Canadian provinces. Most of
the Division's employees are covered by an industry-wide collective bargaining
agreement, the term of which ends in May 1995. A new industry-wide collective
bargaining agreement is currently being negotiated.
Competition
The Vehicle Leasing & Services Division's customers may finance lease or
purchase their own vehicles and provide maintenance services for themselves
substantially similar to those offered by the Division, or purchase such
services from others, or obtain transportation services from other common or
contract carriers. The Division also competes with other companies conducting
nationwide truck leasing, rental or bus operations, a large number of regional
truck leasing
6
<PAGE> 7
companies with multiple branches, many smaller companies operating primarily on
a local basis, but frequently with nationwide service and maintenance
capabilities resulting from their participation in cooperative programs and
membership in various associations, and both local and nationwide common and
contract carriers. Competition in the truck leasing business is based on a
number of factors which include price, equipment, maintenance and geographical
coverage. The Division also competes, to an extent, with a number of trailer
and vehicle manufacturers who have entered the field of trailer and vehicle
leasing, extended warranty maintenance, rental and other forms of
transportation services.
The carriage and dedicated logistics operations of the Vehicle Leasing &
Services Division and the Automotive Carrier Division are subject to potential
competition in most of the regions they serve from railroads and motor carriers
providing similar services, and from customers insofar as they may own or lease
equipment and provide the services for themselves.
A growing number of U.S. school districts now have the option of contracting
with private operators for student transportation services. In areas where
private contractors are utilized, the market is fragmented and competitive.
Even where private operators are being utilized, school districts still may
have the option of performing student transportation services themselves.
Public transit agencies generally have the option of contracting with private
operators for public transportation services or providing such services
themselves. The market for most types of public transportation services is
fragmented and competitive.
In the United Kingdom, both truck leasing and dedicated logistics are well
developed competitive markets, similar to those in the U.S. and Canada.
Value-added differentiation of the Company's service offerings continues to be
the Company's strategy in those markets. Recent developments in Mexico
following the approval of the North American Free Trade Agreement (NAFTA),
Germany's continued integration into the European Community and consequent
deregulation, and Poland's transformation to a market economy, create a growing
opportunity for the Company to provide services in these new markets. The
Company expects that competition with the Company's services in these emerging
markets will develop.
Other Developments and Further Information
Many federal, state and local laws designed to protect the environment, and
similar laws in some foreign jurisdictions, have varying degrees of impact on
the way the Company and its subsidiaries conduct their business operations,
primarily with regard to their use, storage and disposal of petroleum products
and various wastes associated with vehicle maintenance activities. Compliance
with these laws and with the Company's environmental protection policies
involves the expenditure of considerable amounts. Based on information
presently available, management believes that the ultimate disposition of such
matters, although potentially material to the Company's results of operations
in any one year, will not have a material adverse effect on the Company's
financial condition or liquidity.
For further discussion concerning the business of the registrant and its
subsidiaries see the information referenced under Items 7 and 8 of this report.
7
<PAGE> 8
Executive Officers of the Registrant
All of the executive officers of the Company were elected or re-elected to
their present offices either at or subsequent to the meeting of the Board of
Directors held on May 6, 1994, in conjunction with the Company's 1994 Annual
Meeting on the same date. They all hold such offices, at the discretion of the
Board of Directors, until their removal, replacement or retirement.
<TABLE>
<CAPTION>
Name Age Position
--------------------- --- ----------------------------------
<S> <C> <C>
M. Anthony Burns 52 Chairman, President and
Chief Executive Officer
C. Robert Campbell 50 Executive Vice President - Human
Resources and Administration
Dwight D. Denny 51 President - Ryder Commercial Leasing &
Services
R. Ray Goode 58 Senior Vice President - Public Affairs
James B. Griffin 40 President - Ryder Automotive Carrier
Group, Inc.
James M. Herron 60 Senior Executive Vice President and
General Counsel
Edwin A. Huston 56 Senior Executive Vice President -
Finance and Chief Financial Officer
Larry S. Mulkey 51 President - Ryder Dedicated Logistics, Inc.
Bruce D. Parker 47 Senior Vice President - Management
Information Systems and
Chief Information Officer
J. Ernest Riddle 53 Executive Vice President - Marketing
Gerald R. Riordan 46 President - Ryder Consumer Truck Rental and
President - Ryder Public Transportation
Services
Anthony G. Tegnelia 49 Senior Vice President and Controller
Randall E. West 46 Senior Vice President and General Manager
of the International Division
</TABLE>
M. Anthony Burns has been Chairman of the Board since May 1985, Chief Executive
Officer since January 1983 and President and a director since December 1979.
C. Robert Campbell has been Executive Vice President - Human Resources and
Administration since March 1991. Mr. Campbell served as Executive Vice
President - Finance of the Vehicle Leasing & Services Division from October
1981 to March 1991.
8
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Dwight D. Denny has been President - Ryder Commercial Leasing & Services since
December 1992, and was Executive Vice President and General Manager -
Commercial Leasing & Services of Ryder Truck Rental, Inc. from June 1991 until
December 1992. Mr. Denny served Ryder Truck Rental, Inc. as Senior Vice
President and General Manager - Eastern Area from March 1991 to June 1991 and
Senior Vice President - Central Area from December 1990 to March 1991. Mr.
Denny previously served Ryder Truck Rental, Inc. as Region Vice President in
Tennessee from July 1985 to December 1990.
R. Ray Goode has been Senior Vice President - Public Affairs since November
1993 and was President and Chief Executive Officer of We Will Rebuild from
September 1992 to November 1993. He was Managing Partner of Goode, Olcott,
Knight & Associates from April 1989 to September 1992, and served successively
as Vice President, President and Chairman and Chief Executive Officer of The
Babcock Company (a subsidiary of Weyerhaeuser Company) from 1976 to 1989. Mr.
Goode served as County Manager for Metropolitan Dade County, Florida from 1970
to 1976.
James B. Griffin has been President - Ryder Automotive Carrier Group, Inc.
since February 1993, and was Vice President and General Manager - Mid-South
Region of Ryder Truck Rental, Inc. from December 1990 to February 1993. Mr.
Griffin previously served Ryder Truck Rental, Inc. as Region Vice President in
Syracuse, New York from April 1988 to December 1990.
James M. Herron has been Senior Executive Vice President since July 1989 and
General Counsel since April 1973. Mr. Herron was also Secretary from February
1983 through February 1986.
Edwin A. Huston has been Senior Executive Vice President - Finance and Chief
Financial Officer since January 1987. Mr. Huston was Executive Vice President
- Finance from December 1979 to January 1987.
Larry S. Mulkey has been President - Ryder Dedicated Logistics, Inc. (formerly
Ryder Distribution Resources, Inc.) since November 1990. Mr. Mulkey was
President - Ryder Public Transportation Services from June 1993 to October 1994
and, prior to the organization of the Ryder Public Transportation Services
group in June 1993, from November 1990 to June 1993 he was President of each of
the companies comprising that group. From November 1990 to December 1992,
Ryder's operations in the United Kingdom and Germany reported to Mr. Mulkey.
He was Senior Vice President and General Manager - Central Area of Ryder Truck
Rental, Inc. from January 1986 to November 1990, and was Senior Vice President
and General Manager - Eastern Area of Ryder Truck Rental, Inc. from August 1985
to January 1986.
Bruce D. Parker has been Senior Vice President - Management Information Systems
and Chief Information Officer since September 1994. Mr. Parker previously
served American Airlines, Inc. as a Vice President of American and President of
Sabre Development Services Division from April 1993 to September 1994, as a
Vice President of Sabre Computer Services Division from 1988 to April 1993, and
as Managing Director of Customer Services for Sabre Computer Services Division
from 1987 to 1988.
J. Ernest Riddle has been Executive Vice President - Marketing since June 1994.
Mr. Riddle previously served as Senior Vice President - Marketing and Sales of
Ryder Commercial Leasing & Services from January 1993 to June 1994. Mr. Riddle
served Xerox Corporation as European Director of Marketing and Sales from
October 1992 to January 1993, as Vice President - Worldwide Marketing
Operations from November 1990 to October 1992, and as Vice President -
Marketing for the U.S. Marketing Group from November 1988 to November 1990.
Gerald R. Riordan has been President - Ryder Consumer Truck Rental since
December 1992 and has been President - Ryder Public Transportation Services
since October 1994. Mr. Riordan previously served as Senior Vice President and
General Manager - Consumer Rental of Ryder Truck Rental, Inc. from June 1991 to
December 1992. He served Ryder Truck Rental, Inc. as Senior Vice President -
Rental and Quality from December 1990 to June 1991, as Vice President of
Quality from January 1988 to December 1990, and as Vice President of Rental
from January 1983 to January 1988.
Anthony G. Tegnelia has been Senior Vice President since March 1991 and
Controller since August 1988. He is the Company's principal accounting
officer. Mr. Tegnelia was Vice President - Corporate Systems from November
1986 to August 1988. Mr. Tegnelia served as Executive Vice President - Finance
of the Company's former Freight System
9
<PAGE> 10
Division from September 1985 to October 1986, and Senior Vice President -
Finance of Ryder Distribution System (now Ryder Dedicated Logistics, Inc.)
from March 1984 to August 1985.
Randall E. West has been Senior Vice President and General Manager of the
International Division since December 1993, and was Vice President and General
Manager - Southwest Region of Ryder Truck Rental, Inc. (Ryder Commercial
Leasing & Services) from September 1991 to December 1993. Mr. West previously
served Ryder Truck Rental, Inc. as Region Vice President at New Orleans from
November 1988 to September 1991.
ITEM 2. PROPERTIES
The Company's property consists primarily of vehicles, vehicle maintenance and
repair facilities and other real estate and improvements. Information
regarding vehicles is included in Item 1, which is incorporated herein by
reference.
The Vehicle Leasing & Services Division has 1,968 locations in the United
States, Canada and Puerto Rico; 470 of these facilities are owned and the
remainder are leased. Such locations generally include a repair shop and
administrative offices.
The International Division has 93 locations in the United Kingdom, Germany,
Mexico and Poland; 18 of these facilities are owned and the remainder are
leased. Such locations generally include a repair shop and administrative
offices.
The Automotive Carrier Division has 72 operating locations in 32 states
throughout the United States and 8 operating locations in Canada; 25 locations
are owned and the remainder are leased.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are involved in various claims, law suits, and
administrative actions arising in the course of their businesses. Some involve
claims for substantial amounts of money and/or claims for punitive damages.
While any proceeding or litigation has an element of uncertainty, management
believes that the disposition of such matters, in the aggregate, will not have
a material impact on the consolidated financial condition, results of operation
or liquidity of the Company and its subsidiaries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
quarter ended December 31, 1994.
10
<PAGE> 11
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The information required by Item 5 is incorporated by reference from page 47
("Common Stock Data") of the Ryder System, Inc. 1994 Annual Report to
Shareholders.
ITEM 6. SELECTED FINANCIAL DATA
The information required by Item 6 is incorporated by reference from pages 48
and 49 of the Ryder System, Inc. 1994 Annual Report to Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by Item 7 is incorporated by reference from pages 26
through 31 of the Ryder System, Inc. 1994 Annual Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by Item 8 is incorporated by reference from pages 34
through 46 and page 47 ("Quarterly Data") of the Ryder System, Inc. 1994 Annual
Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
11
<PAGE> 12
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 regarding directors is incorporated by
reference from pages 4 through 8 of the Ryder System, Inc. 1995 Proxy
Statement.
The information required by Item 10 regarding executive officers is set out in
Item 1 of Part I of this Form 10-K Annual Report.
Additional information required by Item 10 is incorporated by reference from
page 24 ("Filings Under Section 16(a)") of the Ryder System, Inc. 1995 Proxy
Statement.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated by reference from pages 9,
10 ("Compensation of Directors") and 28 through 31 of the Ryder System, Inc.
1995 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 is incorporated by reference from page 23
of the Ryder System, Inc. 1995 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 is incorporated by reference from page 10
of the Ryder System, Inc. 1995 Proxy Statement.
12
<PAGE> 13
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
(a) 1. Financial Statements for Ryder System, Inc. and Consolidated
Subsidiaries:
Items A through E are incorporated by reference from pages 33 through
46 of the Ryder System, Inc. 1994 Annual Report to Shareholders.
A) Consolidated Statements of Earnings for years ended December
31, 1994, 1993 and 1992.
B) Consolidated Balance Sheets for December 31, 1994 and 1993.
C) Consolidated Statements of Cash Flows for years ended December
31, 1994, 1993 and 1992.
D) Notes to Consolidated Financial Statements.
E) Independent Auditors' Report.
2. Not applicable.
All other schedules and statements are omitted because they are not applicable
or not required or because the required information is included in the
consolidated financial statements or notes thereto.
Supplementary Financial Information consisting of selected quarterly financial
data is incorporated by reference from page 47 of the Ryder System, Inc. 1994
Annual Report to Shareholders.
13
<PAGE> 14
3. Exhibits:
The following exhibits are filed with this report or, where indicated,
incorporated by reference (Forms 10-K, 10-Q and 8-K referenced herein
have been filed under the Commission's file No. 1-4364). The Company
will provide a copy of the exhibits filed with this report at a
nominal charge to those parties requesting them.
EXHIBIT INDEX
Exhibit
Number Description
------ --------------------------------------------------------------------
3.1 The Ryder System, Inc. Restated Articles of Incorporation, dated
November 8, 1985, as amended through May 18, 1990, previously filed
with the Commission as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1990, are incorporated by
reference into this report.
3.2 The Ryder System, Inc. By-Laws, as amended through November 23,
1993, previously filed with the Commission as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31,
1993, are incorporated by reference into this report.
4.1 The Company hereby agrees, pursuant to paragraph (b)(4)(iii) of Item
601 of Regulation S-K, to furnish the Commission with a copy of any
instrument defining the rights of holders of long-term debt of the
Company, where such instrument has not been filed as an exhibit
hereto and the total amount of securities authorized thereunder does
not exceed 10% of the total assets of the Company and its
subsidiaries on a consolidated basis.
4.2(a) The Form of Indenture between Ryder System, Inc. and The Chase
Manhattan Bank (National Association) dated as of June 1, 1984,
filed with the Commission on November 19, 1985 as an exhibit to the
Company's Registration Statement on Form S-3 (No. 33-1632), is
incorporated by reference into this report.
4.2(b) The First Supplemental Indenture between Ryder System, Inc. and The
Chase Manhattan Bank (National Association) dated October 1, 1987.
4.3 The Form of Indenture between Ryder System, Inc. and The Chase
Manhattan Bank (National Association) dated as of May 1, 1987, and
supplemented as of November 15, 1990 and June 24, 1992, filed with
the Commission on July 30, 1992 as an exhibit to the Company's
Registration Statement on Form S-3 (No. 33-50232), is incorporated
by reference into this report.
4.4 The Rights Agreement between Ryder System, Inc. and First Chicago
Trust Company of New York (then named Morgan Guaranty Trust Company
of New York) dated as of February 28, 1986, previously filed with
the Commission as an exhibit to the Company's Registration Statement
on Form 8-A dated March 7, 1986, is incorporated by reference into
this report.
4.5 The Amendment to Rights Agreement between Ryder System, Inc. and
First Chicago Trust Company of New York dated as of July 28, 1989,
previously filed with the Commission as an exhibit to the Company's
Amendment to Application or Report on Form 8 dated August 2, 1989,
is incorporated by reference into this report.
14
<PAGE> 15
10.1(a) The change of control severance agreement for the Company's chief
executive officer dated as of January 1, 1992, and the severance
agreement for the Company's chief executive officer dated as of
January 1, 1992, previously filed with the Commission as an exhibit
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1991, are incorporated by reference into this report.
10.1(b) Amendments dated as of August 20, 1993 to the change of control
severance agreement for the Company's chief executive officer dated
as of January 1, 1992, and the severance agreement for the Company's
chief executive officer dated as of January 1, 1992, previously
filed with the Commission as an exhibit to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993, are
incorporated by reference into this report.
10.2(a) The form of amended and restated change of control severance
agreement for executive officers dated as of February 24, 1989.
10.2(b) Amendment dated as of August 20, 1993 to the form of amended and
restated change of control severance agreement for executive
officers dated as of February 24, 1989, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, is incorporated by reference
into this report.
10.2(c) The form of change of control severance agreement for executive
officers effective as of July 1, 1993, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, is incorporated by reference
into this report.
10.3(a) The form of amended and restated severance agreement for executive
officers dated as of February 24, 1989.
10.3(b) Amendment dated as of August 20, 1993 to the form of amended and
restated severance agreement for executive officers dated as of
February 24, 1989, previously filed with the Commission as an
exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1993, is incorporated by reference into this
report.
10.3(c) The form of severance agreement for executive officers effective as
of July 1, 1993, previously filed with the Commission as an exhibit
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1993, is incorporated by reference into this report.
10.4(a) The form of Ryder System, Inc. incentive compensation deferral
agreement dated as of November 30, 1993, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, is incorporated by reference
into this report.
10.4(b) The form of Ryder System, Inc. incentive compensation deferral
agreement dated as of November 30, 1994.
10.5(a) The form of Ryder System, Inc. salary deferral agreement dated as of
November 30, 1993, previously filed with the Commission as an
exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1993, is incorporated by reference into this
report.
15
<PAGE> 16
10.5(b) The form of Ryder System, Inc. salary deferral agreement dated as of
November 30, 1994.
10.6(a) The form of Ryder System, Inc. director's fee deferral agreement
dated as of December 31, 1993, previously filed with the Commission
as an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1993, is incorporated by reference into this
report.
10.6(b) The form of Ryder System, Inc. director's fee deferral agreement
dated as of December 31, 1994.
10.7(a) The Ryder System, Inc. and Vehicle Leasing & Services Division 1994
Incentive Compensation Plan for Headquarters Executive Management,
previously filed with the Commission as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993, is
incorporated by reference into this report.
10.7(b) The Ryder System, Inc. 1995 Incentive Compensation Plan for
Headquarters Executive Management.
10.8(a) The Ryder System, Inc. 1994 Incentive Compensation Plan for Ryder
System, Inc. Senior Executive Vice Presidents, previously filed with
the Commission as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1993, is incorporated by
reference into this report.
10.8(b) The Ryder System, Inc. 1995 Incentive Compensation Plan for Ryder
System, Inc. Senior Executive Vice Presidents.
10.9(a) The Ryder System, Inc. 1994 Incentive Compensation Plan for Senior
Vice President and General Manager of the International Division,
previously filed with the Commission as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993, is
incorporated by reference into this report.
10.9(b) The Ryder System, Inc. 1995 Incentive Compensation Plan for Senior
Vice President and General Manager, International Division.
10.10(a) The Ryder System, Inc. 1994 Incentive Compensation Plan for
President, Automotive Carrier Division, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, is incorporated by reference
into this report.
10.10(b) The Ryder System, Inc. 1995 Incentive Compensation Plan for
President, Automotive Carrier Division.
10.11(a) The Ryder System, Inc. 1994 Incentive Compensation Plan for
Chairman, President & Chief Executive Officer, Ryder System, Inc.,
previously filed with the Commission as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993, is
incorporated by reference into this report.
10.11(b) The Ryder System, Inc. 1995 Incentive Compensation Plan for
Chairman, President & Chief Executive Officer, Ryder System, Inc.
16
<PAGE> 17
10.12(a) The Ryder System, Inc. 1994 Incentive Compensation Plan for
President-Commercial Leasing & Services, Vehicle Leasing & Services
Division, previously filed with the Commission as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31,
1993, is incorporated by reference into this report.
10.12(b) The Ryder System, Inc. 1995 Incentive Compensation Plan for
President-Commercial Leasing & Services.
10.13(a) The Ryder System, Inc. 1994 Incentive Compensation Plan for
President-Consumer Rental, Vehicle Leasing & Services Division,
previously filed with the Commission as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993, is
incorporated by reference into this report.
10.13(b) The Ryder System, Inc. 1995 Incentive Compensation Plan for
President-Consumer Truck Rental.
10.14(a) The Ryder System, Inc. 1994 Incentive Compensation Plan for
President-Ryder Dedicated Logistics, Vehicle Leasing & Services
Division, previously filed with the Commission as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31,
1993, is incorporated by reference into this report.
10.14(b) The Ryder System, Inc. 1995 Incentive Compensation Plan for
President-Ryder Dedicated Logistics.
10.15(a) The Ryder System, Inc. 1980 Stock Incentive Plan, as amended and
restated as of October 22, 1993, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, is incorporated by reference
into this report.
10.15(b) Form of Combined Non-Qualified Stock Option and Limited Stock
Appreciation Right Agreement, dated May 6, 1994.
10.15(c) Form of Combined Non-Qualified Stock Option and Limited Stock
Appreciation Right Agreement, dated October 21, 1994.
10.15(d) Combined Non-Qualified Stock Option and Limited Stock Appreciation
Right Agreement, dated December 15, 1994, between Ryder System, Inc.
and M. Anthony Burns.
10.16 The Ryder System, Inc. Directors Stock Plan, as amended and restated
as of December 17, 1993, previously filed with the Commission as an
exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1993, is incorporated by reference into this
report.
10.17(a) The Ryder System Benefit Restoration Plan, effective January 1,
1985, previously filed with the Commission as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31,
1992, is incorporated by reference into this report.
10.17(b) The First Amendment to the Ryder System Benefit Restoration Plan,
effective as of December 16, 1988.
17
<PAGE> 18
10.18 Amendment, dated November 10, 1994, to the Amended and Restated
Severance Agreement between Ryder System, Inc. and C. R. Campbell.
10.19 Letter agreement, dated April 9, 1993, between Ryder System, Inc.
and James Ernest Riddle.
10.20 Distribution and Indemnity Agreement dated as of November 23, 1993
between Ryder System, Inc. and Aviall, Inc., previously filed with
the Commission as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1993, is incorporated by
reference into this report.
10.21 Tax Sharing Agreement dated as of November 23, 1993 between Ryder
System, Inc. and Aviall, Inc., previously filed with the Commission
as an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1993, is incorporated by reference into this
report.
11.1 Statement regarding computation of per share earnings.
13.1 The Ryder System, Inc. 1994 Annual Report to Shareholders. Those
portions of the Ryder System, Inc. 1994 Annual Report to
Shareholders which are not incorporated by reference into this
report are furnished to the Commission solely for information
purposes and are not to be deemed "filed" as part of this report.
21.1 List of subsidiaries of the registrant, with the state or other
jurisdiction of incorporation or organization of each, and the name
under which each subsidiary does business.
23.1 Auditors' consent to incorporation by reference in certain
Registration Statements on Forms S-3 and S-8 of their reports on
consolidated financial statements and schedules of Ryder System,
Inc. and its consolidated subsidiaries.
24.1 Manually executed powers of attorney for each of:
Arthur H. Bernstein
Edward T. Foote II
John A. Georges
Vernon E. Jordan, Jr.
Howard C. Kauffmann
David T. Kearns
Lynn M. Martin
James W. McLamore
Paul J. Rizzo
Donald V. Seibert
Hicks B. Waldron
Alva O. Way
Mark H. Willes
27.1 Financial Data Schedule.
(b) Reports on Form 8-K:
The Company did not file any reports on Form 8-K during the last
quarter of 1994.
18
<PAGE> 19
(c) Executive Compensation Plans and Arrangements:
Please refer to the description of Exhibits 10.1 through 10.19
set forth under Item 14(a)3 of this report for a listing of
all management contracts and compensation plans and
arrangements filed with this report pursuant to Item
601(b)(10) of Regulation S-K.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: March 29, 1995 RYDER SYSTEM, INC.
By: M. Anthony Burns
---------------------------------
M. Anthony Burns
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: March 29, 1995 By: M. Anthony Burns
---------------------------------
M. Anthony Burns
Chairman, President and Chief
Executive Officer
(Principal Executive Officer)
Date: March 29, 1995 By: Edwin A. Huston
---------------------------------
Edwin A. Huston
Senior Executive Vice President-Finance
and Chief Financial Officer
(Principal Financial Officer)
Date: March 29, 1995 By: Anthony G. Tegnelia
---------------------------------
Anthony G. Tegnelia
Senior Vice President and Controller
(Principal Accounting Officer)
20
<PAGE> 21
Date: March 29, 1995 By: Arthur H. Bernstein *
---------------------------------
Arthur H. Bernstein
Director
Date: March 29, 1995 By: Edward T. Foote II *
---------------------------------
Edward T. Foote II
Director
Date: March 29, 1995 By: John A. Georges *
---------------------------------
John A. Georges
Director
Date: March 29, 1995 By: Vernon E. Jordan, Jr. *
---------------------------------
Vernon E. Jordan, Jr.
Director
Date: March 29, 1995 By: Howard C. Kauffmann *
------------------------------
Howard C. Kauffmann
Director
Date: March 29, 1995 By: David T. Kearns *
---------------------------------
David T. Kearns
Director
Date: March 29, 1995 By: Lynn M. Martin *
---------------------------------
Lynn M. Martin
Director
Date: March 29, 1995 By: James W. McLamore *
------------------------------
James W. McLamore
Director
21
<PAGE> 22
Date: March 29, 1995 By: Paul J. Rizzo *
-----------------------------
Paul J. Rizzo
Director
Date: March 29, 1995 By: Donald V. Seibert *
---------------------------------
Donald V. Seibert
Director
Date: March 29, 1995 By: Hicks B. Waldron *
--------------------------------
Hicks B. Waldron
Director
Date: March 29, 1995 By: Alva O. Way *
----------------------------------
Alva O. Way
Director
Date: March 29, 1995 By: Mark H. Willes *
--------------------------------
Mark H. Willes
Director
*By: Ann E. Neal
---------------------------------
Ann E. Neal
Attorney-in-Fact
22
<PAGE> 1
EXHIBIT 4.2 (b)
------------------------------------------------------------------
RYDER SYSTEM, INC.
AND
THE CHASE MANHATTAN BANK
(National Association), as Trustee
----------------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of October 1, 1987
-----------------------------------
Supplemental to Indenture
Dated as of June 1, 1984
Debt Securities
------------------------------------------------------------------
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE, dated as of October 1, 1987, between
RYDER SYSTEM, INC., a Florida corporation (the "Company") and THE CHASE
MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking association duly
incorporated and existing under the laws of the United States of America (the
"Trustee"), as Trustee under the Original Indenture hereinafter mentioned.
RECITALS OF THE COMPANY
The Company has heretofore executed and delivered its Indenture, dated
as of June 1, 1984 (the "Original Indenture"), to the Trustee to provide for
the issuance from time to time of certain Debt Securities.
Section 9.01(4) of the Original Indenture provides, in pertinent part,
that the Company and the Trustee may enter into a supplemental indenture
without the consent of any Debt Securityholder to make any change in the
Original Indenture that does not adversely affect the rights of any Debt
Securityholder.
The Company deems it advisable and not adverse to the interests of any
Debt Securityholder to amend the Original Indenture as provided below.
NOW, THEREFORE, in consideration of the sum of one dollar duly paid by
the Company to the Trustee, the receipt of which is hereby acknowledged, it is
mutually covenanted and agreed that the Original Indenture will be amended, as
follows:
ARTICLE ONE
AMENDMENT
Section 1.01. The Original Indenture is hereby amended by adding
Section 3.07 as follows:
Section 3.07. Redemption at the Option of the Debt Securityholder.
If any Debt Securities of a Series are redeemable at the
option of a Debt Securityholder on a date which is prior to their
maturity date, pursuant to the provisions of Section 2.09, any such
Debt Securities redeemed by the Company shall continue to be
outstanding until they are delivered to the Trustee with instructions
that such Securities
2
<PAGE> 3
be cancelled. In connection with any such optional redemption of Debt
Securities, the Company may arrange for their purchase pursuant to an
agreement with one or more purchasers for the purchase of such Debt
Securities to be effected by such purchaser or purchasers paying to
the Debt Securityholder on or before the close of business on the
redemption date, an amount not less than the redemption price payable
by the Company upon the redemption of such Debt Securities, and the
obligation of the Company to pay the redemption price of such Debt
Securities shall be satisfied and discharged to the extent such
payment is so paid by such purchaser or purchasers.
ARTICLE TWO
MISCELLANEOUS PROVISIONS
Section 2.01. Terms Used Herein.
For all purposes of this First Supplemental Indentures, except
as otherwise stated herein, terms used in capitalized form herein and defined
in the Original Indenture have the meanings specified in the Original
Indenture.
Section 2.02. Trustee's Rights, Duties, etc.
All the provisions of the Original Indenture with respect to
the rights, duties and immunities of the Trustee shall be applicable in respect
hereof as fully and with like effect as if set forth herein in full.
Section 2.03. Governing Law.
The laws of the State of New York shall govern this
Supplemental Indenture.
Section 2.04. Duplicate Originals.
The parties may sign any number of copies of this First
Supplemental Indenture. Each signed copy shall be an original, but all of them
together shall together
3
<PAGE> 4
represent the same agreement. One signed copy is enough to prove this First
Supplemental Indenture.
SIGNATURES
RYDER SYSTEM, INC.
By: /s/ C.F. Wilson
-----------------------------
Vice President and
Treasurer
[Seal]
Attest:
/s/ Jeffrey J. Murphy
----------------------------
Secretary
THE CHASE MANHATTAN BANK
(National Association)
as Trustee
By: /s/ Ann L. Edmonds
-----------------------------
Vice President
[Seal]
Attest:
/s/ Mary Joe Hammill
-----------------------------
Title: Trust Officer
STATE OF FLORIDA )
) ss.:
COUNTY OF DADE )
Before me personally appeared Charles F. Wilson and Jeffrey J. Murphy,
known to me to be the individuals described in and who executed the foregoing
instrument as
4
<PAGE> 5
the Vice President and Treasurer and the Secretary respectively, of the above
named RYDER SYSTEM, INC., a Florida corporation, and severally acknowledged to
and before me that they executed such instrument as such Vice President and
Treasurer and Secretary, respectively, of said corporation, and that the seal
affixed to the foregoing instrument is the corporate seal of said corporation
and that it was affixed to said instrument by due and regular corporate
authority, and that said instrument is the free act and deed of said
corporation.
WITNESS my hand and official seal this 13th day of October, 1987.
/s/ Donna E. Ashley
-------------------
Notary Public
Notary Public, State of Florida
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On this 15th day of October, 1987 before me personally came Ann L.
Edmonds, to me known, who, being by me duly sworn, did depose and say that he
resides at Rye, New York, that he is a Vice President of the CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), one of the corporations described in and which
executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed the said instrument is such corporate seal;
that is was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Della K. Benjamin
---------------------
Notary Public
Notary Public, State of New York
5
<PAGE> 1
EXHIBIT 10.2(a)
Amended and Restated Change of Control
Severance Agreement
THIS AMENDED AND RESTATED AGREEMENT dated as of February 24, 1989
amends, restates and supersedes the provisions of a certain Change of Control
Severance Agreement between RYDER SYSTEM, INC., a Florida corporation (the
"Corporation"), and ________________ (the "Executive"), dated as of June 26,
1987.
WITNESSETH:
WHEREAS, the Executive is an officer and/or key employee of the
Corporation and/or its subsidiaries or affiliates and an integral part of its
management; and
WHEREAS, in order to retain the Executive and to assure both the
Executive and the Corporation of the continuity of management in the event of
any actual or threatened Change of Control (as defined in Section 2) of the
Corporation, the Corporation desires to provide severance benefits to the
Executive if the Executive's employment with the Corporation and/or its
subsidiaries or affiliates terminates as provided herein concurrent with or
subsequent to a Change of Control;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Corporation and the
Executive as follows:
1. Term of Agreement. This Agreement shall become effective as
of the date hereof and shall terminate upon the occurrence of the earliest of
the events specified below; provided, however, that Section 5 shall survive
termination of this Agreement:
(a) the last day of the Severance Period (as defined in Section
3(f));
(b) the termination of the Executive's employment by the
Corporation or its subsidiaries or affiliates for Death, Disability or Cause,
or by the Executive other than for Good Reason (as defined in Sections 3(b),
(a), and (c) respectively);
(c) one (1) year following the date of receipt of a mailing (by
overnight express mail or registered or certified mail, return receipt
requested) or hand delivery to the Executive by the Corporation of written
notice of its intent to terminate this Agreement, provided that such written
notice shall have been received by the Executive prior to the date of a Change
of Control (as defined in Section 2);
(d) three (3) years following the date of a Change of Control (as
defined in Section 2) if the Executive's employment with the Corporation or its
subsidiaries or affiliates has not been terminated as of such time;
(e) the material breach by the Executive of the provisions of
Section 5.
<PAGE> 2
Additionally, notwithstanding anything in this Agreement to the
contrary, if the Executive should die while receiving severance pay or benefits
pursuant to Section 4 as a result of the termination of the Executive's
employment by the Corporation or its subsidiaries or affiliates other than for
Death, Disability or Cause, or by the Executive for Good Reason (as defined in
Sections 3(b), (a), and (c) respectively), this Agreement shall terminate
immediately upon the Executive's death and both parties shall be released from
all obligations under this Agreement other than those under Section 5(b)(II)
and those relating to amounts or benefits which are payable under this
Agreement within five (5) business days after the Executive's Date of
Termination (if not already paid), are vested under any plan, program, policy
or practice, or the Executive is otherwise entitled to receive upon his death,
including but not limited to, life insurance. Any payment due pursuant to the
preceding sentence upon the Executive's death shall be made to the estate of
the deceased Executive, unless the plan, program, policy, practice or law
provides otherwise.
2. Change of Control. For the purpose of this Agreement, a
"Change of Control" shall be deemed to have occurred if:
(a) a third person, including a "group" as defined in Section
l3(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), but excluding any employee benefit plan or plans of the Corporation 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
Corporation's outstanding voting securities ordinarily having the right to vote
for the election of directors of the Corporation; or
(b) the individuals who, as of June 26, 1987, constituted the
Board of Directors of the Corporation (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 Corporation, 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 Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board; or
(c) there is a liquidation or dissolution of the Corporation or a
sale of all or
2
<PAGE> 3
substantially all of the assets of either or both (i) the business group which
constituted the Vehicle Leasing and Services Division of the Corporation as of
June 26, 1987 or (ii) the combined business groups of the Corporation as
constituted as of June 26, 1987 other than the business group which
constituted the Vehicle Leasing and Services Division of the Corporation as of
June 26, 1987.
If the Corporation 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 Subsections (a), (b) or (c), and the Executive'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 Subsections (a), (b) or (c),
then, upon the occurrence of any of the matters described in Subsections (a),
(b) or (c), 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.
3. Certain Definitions.
(a) Cause. The Executive's employment may be terminated for Cause
only if a majority of the Incumbent Board determines that Cause (as defined
below) exists. For purposes of this Agreement, "Cause" means (i) an act or
acts of fraud, misappropriation, or embezzlement on the Executive's part which
result in or are intended to result in his or another's personal enrichment at
the expense of the Corporation or its subsidiaries or affiliates, (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 attributable to eligible vacation or supported by a
licensed physician's statement.
(b) Death or Disability.
(i) The Executive's employment will be terminated by the
Corporation or its subsidiaries or affiliates automatically upon the
Executive's death ("Death").
(ii) After having established the Executive's Disability (as
defined below), the Corporation may give to the Executive written notice of the
Corporation's and/or its subsidiaries' or affiliates' intention to terminate
the Executive's employment for Disability. The Executive's employment will
terminate for Disability effective on the thirtieth (30th) day after the
Executive's receipt of such notice (the "Disability Effective Date") if within
such thirty (30) day period after such receipt the Executive shall fail to
return to full-time performance of his duties. For purposes of this Agreement,
"Disability" means disability which after the expiration of more than
twenty-six (26) weeks after its commencement is determined to be total and
permanent by an independent licensed physician mutually agreeable to the
parties.
In the event of the Executive's termination for Death or Disability,
the Executive and, to the extent applicable, his legal representatives,
executors, heirs, legatees and beneficiaries, shall have no rights under this
Agreement and their sole recourse, if any, shall be under the death or
3
<PAGE> 4
disability provisions of the plans, programs policies and practices of the
Corporation and/or its subsidiaries and affiliates, as appropriate.
(c) Good Reason. For purposes of this Agreement, "Good Reason"
means:
(i) any failure by the Corporation and/or its subsidiaries or
affiliates to furnish the Executive and/or where applicable, his family, with
(A) total annual cash compensation (including annual incentive compensation),
(B) total aggregate value of perquisites, (C) total aggregate value of
benefits, or (D) total aggregate value of long term compensation, including but
not limited to, stock options, in each case at least equal to or otherwise
comparable to in the aggregate or exceeding the highest level received by the
Executive from the Corporation and/or its subsidiaries or affiliates during the
six (6) month period (or the one (1) year period for compensation, perquisites
and benefits which are paid less frequently than every six (6) months)
immediately preceding the Change of Control, other than an inadvertent failure
remedied by the Corporation within five (5) business days after receipt of
notice thereof given by the Executive;
(ii) the Corporation's and/or its subsidiaries' or affiliates'
requiring the Executive to be based or to perform services at any site or
location more than fifteen (15) miles from the site or location at which the
Executive is based at the time of the Change of Control, except for travel
reasonably required in the performance of the Executive's responsibilities
(which does not materially exceed the level of travel required of the Executive
in the six (6) month period immediately preceding the Change of Control);
(iii) any failure by the Corporation to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated by Section
8(b);
(iv) any failure by the Corporation to pay into the Trust(s) (as
defined in Section 4(c)) the amounts and at the time or times as are required
pursuant to the terms of such Trust(s);
(v) any purported termination by the Corporation or its
subsidiaries or affiliates of the Executive's employment that is not effected
pursuant to a Notice of Termination satisfying the requirements of Section
3(d), which purported termination shall not be effective for purposes of this
Agreement; or
(vi) if the Executive is in management level 14 or above
immediately prior to the Change of Control, (A) any assignment to the Executive
of duties inconsistent in any material respect with the highest level of the
Executive's position (including titles and reporting relationships), authority,
responsibilities or status as in effect at any time during the six (6) month
period immediately preceding the Change of Control without the express prior
written consent of the Executive (which consent the Executive has the absolute
right to withhold), or (B) any other material adverse change in such position,
authority, responsibilities or status without the express prior written consent
of the Executive (which consent the Executive has the absolute right to
withhold).
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<PAGE> 5
For the purposes of this Section 3(c), any good faith interpretation
by the Executive of the foregoing definitions of "Good Reason" shall be
conclusive on the Corporation. Additionally, the Executive's continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder.
(d) Notice of Termination. Any termination of the Executive's
employment by the Executive for Good Reason or by the Corporation or its
subsidiaries or affiliates for any reason other than Death shall be
communicated by a Notice of Termination to the other party, with a copy to the
Trustee (as defined in Section 4(c)) hereto given in accordance with Section
9(b). For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than
fifteen (15) days after the giving of such notice or, in the event of
Disability, the Disability Effective Date).
(e) Date of Termination. Date of Termination means the date of
receipt by the Executive or the Corporation or its subsidiaries or affiliates
of the Notice of Termination or any later date specified therein, as the case
may be; provided, however, that if the Executive's employment is terminated by
reason of Death or Disability, the Date of Termination shall be the date of
Death of the Executive or the Disability Effective Date, as the case may be.
(f) Severance Period. Unless terminated sooner pursuant to
Section 1, the Severance Period means the period set forth below depending on
the Executive's management level immediately prior to the Change of Control,
which period shall begin on the day following the Executive's Date of
Termination:
<TABLE>
<S> <C>
Mgmt. Level 19 or above Three (3) years
Mgmt. Level 15-18 Two (2) years
Mgmt. Level 14 One (1) year and six (6) months
Mgmt. Level 13 One (1) year
Mgmt. Level 11-12 Six (6) months
</TABLE>
4. Obligations of the Corporation.
(a) Circumstances of Termination.
(i) If, within the three (3) year period commencing on a Change
of Control of the Corporation, (A) the Corporation or its subsidiaries or
affiliates shall terminate the Executive's employment for any reason other than
for Death, Disability or Cause, or (B) the Executive shall terminate his
employment with the Corporation or its subsidiaries or affiliates for Good
Reason, the Corporation agrees to provide the
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<PAGE> 6
Executive with compensation, benefits and perquisites in accordance with the
terms and provisions set forth in Subsection (iii) below and the other
provisions of this Agreement, and the Executive agrees that he shall be
subject to such terms and provisions. The Executive shall not be deemed to
have terminated his employment with the Corporation or any of its subsidiaries
or affiliates if he leaves the employ of the Corporation or any of its
subsidiaries or affiliates for immediate reemployment with the Corporation or
any of its subsidiaries or affiliates.
(ii) If during the term of this Agreement, (A) the Corporation or its
subsidiaries or affiliates shall terminate the Executive's employment for
Death, Disability or Cause or (B) the Executive shall terminate his employment
with the Corporation or its subsidiaries or affiliates other than for Good
Reason, then the Executive shall not be entitled to any of the benefits set
forth in Subsection (iii) below or in any other section of this Agreement,
except to the extent of the amounts which represent vested benefits or which
the Executive is otherwise entitled to receive under any plan, program, policy
or practice of the Corporation or any of its subsidiaries or affiliates at or
subsequent to the Executive's Date of Termination.
(iii) If the Executive is entitled to receive severance pay and
benefits under Subsection (i) above, the Corporation agrees to provide the
Executive with the following compensation, benefits and perquisites, subject to
Section 5(b):
(I) Cash Entitlement. The Corporation and/or the Trustee (as
defined in Section 4(c)) shall pay to the Executive the aggregate of the
amounts determined pursuant to clauses a through f below:
a. Unpaid Salary and Vacation. If not already paid, the
Executive's base salary and unused vacation entitlement through the Executive's
Date of Termination at the rate in effect at the time the Notice of Termination
was given, or if greater, at the highest rate in effect during the six (6)
month period immediately preceding the Change of Control.
b. Salary Multiple. The Executive's annual base salary at the
rate in effect at the time the Notice of Termination was given, or if greater,
at the highest rate in effect during the six (6) month period immediately
preceding the Change of Control ("Annual Base Salary"), multiplied by the
following salary multiple depending on the Executive's management level
immediately preceding the Change of Control:
<TABLE>
<S> <C>
Mgmt. Level 19 or above 3
Mgmt. Level 15-18 2
Mgmt. Level 14 1.5
Mgmt. Level 13 1
Mgmt. Level 11-12 .5
</TABLE>
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<PAGE> 7
c. Bonus Multiple. An amount equal to the product of (i) the
Executive's Annual Base Salary multiplied by (ii) the stated maximum bonus
opportunity percentage available to the Executive under the respective
incentive compensation plan immediately preceding either the Notice of
Termination or, if greater, the Change of Control multiplied by (iii) the
"Executive's Three Year Average Bonus Percentage" (as defined below) (the total
hereinafter referred to as the "Bonus Opportunity") multiplied by (iv) the
following multiple depending on the Executive's management level immediately
preceding either the Notice of Termination or, if greater, the Change of
Control:
<TABLE>
<S> <C>
Mgmt. Level 17 or above 1
Mgmt. Level 11-16 0
</TABLE>
The "Executive's Three Year Average Bonus Percentage" is the sum of
the bonus percentages paid to the Executive divided by the stated maximum bonus
opportunity percentages available to the Executive rounded to one decimal place
(e.g., 86.3%) for each of the three (3) fiscal years immediately preceding
either the Notice of Termination or, if greater, the Change of Control divided
by three (3).
If the Executive has been employed by the Corporation and/or its
subsidiaries or affiliates for less than three (3) fiscal years prior to the
Change of Control, or if the Executive was not eligible to receive an incentive
compensation award pursuant to an incentive compensation plan of the
Executive was not employed or eligible to receive an incentive award will be
the average bonus percentage paid for such year to all executives in the
Corporation or the Executive's respective division, as appropriate, with a
stated maximum bonus opportunity level similar to that of the Executive
immediately preceding either the Notice of Termination or, if greater, the
Change of Control divided by the average stated maximum bonus opportunity
available to these executives rounded to one decimal place (e.g., 86.3%).
CALCULATION EXAMPLE OF EXECUTIVE'S THREE YEAR AVERAGE
BONUS PERCENTAGE
<TABLE>
<CAPTION>
(1) (2) (1)/(2)
Bonus Percentage Stated Maximum Bonus Opportunity
Year Paid Bonus Opportunity Percent
---- ---------------------- ----------------- ---------------
<S> <C> <C> <C>
1 55.1% 60.0% 91.8%
2 71.8% 80.0% 89.8%
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
(1) (2) (1)/(2)
Bonus Percentage Stated Maximum Bonus Opportunity
Year Paid Bonus Opportunity Percent
---- ---- ----------------- -------
<S> <C> <C> <C>
3 102.0% 100.0% 102.0%
------
Sum 283.6%
Executive's Three Year Average
Bonus Percentage (Sum divided by 3) 94.5%
</TABLE>
d. Tenure - Related Bonus. An amount equal to the product of
the Bonus Opportunity determined in clause c above multiplied by the number of
the Executive's full and prorated partial years of service with the Corporation
and/or its subsidiaries or affiliates, subject to a maximum of twelve (12)
years, divided by twelve (12).
e. Change of Control Year Bonus. If the Executive has not yet
been paid an incentive compensation award for the calendar year in which the
Change of Control occurred in accordance with the terms of the respective
incentive compensation plan in effect immediately preceding the Change of
Control, the Executive shall receive an amount equal to the product of (i) the
actual salary earned by the Executive during the calendar year in which the
Change of Control occurred multiplied by (ii) the sum of (a) the greater of
actual company performance or eighty percent (80%) of maximum company
performance opportunity for such calendar year under the respective incentive
compensation plan as in effect immediately preceding the Change of Control
plus (b) the greater of actual individual performance or eighty percent (80%)
of maximum individual performance opportunity for the Executive for such
calendar year under the respective incentive compensation plan as in effect
immediately preceding the Change of Control; provided, however, if a "Big Six"
accounting firm chosen by the Corporation does not verify the actual company
and individual performance in accordance with the terms of respective
incentive compensation plan in effect immediately preceding the Change of
Control, the Executive shall receive an amount equal to the product of (i)
above multiplied by the sum of (a) one hundred percent (100%) of maximum
company performance opportunity for such calendar year under the respective
incentive compensation plan as in effect immediately preceding the Change of
Control plus (b) one hundred percent (100%) of maximum individual performance
opportunity for the Executive for such calendar year under the respective
incentive compensation plan as in effect immediately preceding the Change of
Control.
f. Prior Year Bonus. If bonuses for the calendar year prior to
the Executive's Date of Termination (other than those payable pursuant to
clause e above) have been distributed and the Executive is entitled to and has
not yet been paid his incentive compensation award for such calendar year, and
his Date of Termination is subsequent to the incentive compensation award
payment date for such calendar year, then the Executive shall receive an
additional amount equal to the product of the actual salary earned by the
Executive during the prior calendar year multiplied by the actual bonus
percentage approved for the Executive for such calendar year under the
respective incentive compensation plan.
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<PAGE> 9
The Corporation and/or the Trustee (as defined in Section 4(c)) shall
pay to the Executive the aggregate of the amounts determined pursuant to
clauses a through d and clause f above in a lump sum by cashier's check within
five (5) business days after the later of the Executive's Date of Termination
or the date of receipt by the Corporation and the Trustee (as defined in
Section 4(c)) of the Executive's written demand for payment accompanied by
notarized copies of the Notice of Termination, release and, to the extent
applicable, letter of resignation (as described in Section 5(b)(II)). The
Corporation and/or the Trustee (as defined in Section 4(c)) shall pay to the
Executive the amount determined pursuant to clause e above by cashier's check
no later than (i) the first March 15th following the calendar year in which the
Change of Control occurred or (ii) five (5) business days after the later of
the Executive's Date of Termination or the date of receipt by the Corporation
and the Trustee (as defined in Section 4(c)) of the Executive's written demand
for payment accompanied by notarized copies of the Notice of Termination,
release and, to the extent applicable, letter of resignation (as described in
Section 5(b)(II)), whichever is the last to occur.
(II) Medical, Dental, Disability, Life Insurance and Other
Similar Plans and Programs. Until the earliest to occur of (i) the last day of
the Severance Period, (ii) the date on which the Executive becomes eligible for
the designated or comparable coverage as an employee of another employer which
provides or offers such coverage to its employees, or (iii) in the case of
benefits requiring employee contributions, the date the Executive fails to make
such contributions pursuant to the Corporation's or the plan's instructions
(which instructions shall be reasonable and given to the Executive by the
Corporation within five (5) business days following the Executive's Date of
Termination) or otherwise cancels his coverage in accordance with plan
provisions (the "Benefits Continuation Period"), the Corporation shall continue
to provide all benefits which the Executive and/or his family is or would have
been entitled to receive under all medical, dental, disability, supplemental
life, group life, and accidental death and dismemberment insurance plans and
programs, and other similar plans and programs of the Corporation and/or its
subsidiaries or affiliates not otherwise provided for in this Agreement, in
each case on a basis providing the Executive and/or his family with the
opportunity to receive benefits at least equal to the greatest level of
benefits provided by the Corporation and/or its subsidiaries or affiliates for
the Executive under such plans and programs if and as in effect at any time
during the six (6) month period immediately preceding either the Notice of
Termination or, if greater, the Change of Control whether or not such plans or
programs were in effect at the time of the execution of this Agreement. The
non-contributory benefits will be paid for by the Corporation. The medical and
dental plan benefits, to the extent applicable, will be provided in accordance
with the provisions of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"), except that the Corporation shall pay the COBRA
premiums for the standard medical and dental plan benefits during the Benefits
Continuation Period. If the Executive's participation in any such plan or
program is barred by COBRA or for any other reason, the Corporation shall pay
or provide for payment of such benefits or substantially similar benefits to
the Executive and/or his family. Upon termination of
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<PAGE> 10
his coverage under this paragraph, the Executive may be eligible under COBRA to
continue some of his benefits for an additional period of time. Additionally,
the Executive has thirty-one (31) days from the last day of coverage in which
to convert his group life insurance to an individual policy. The Executive
must arrange for conversion through an agent of The Prudential Insurance
Company of America, or such other insurance company as is then providing
coverage.
(III) Car. a. If, immediately prior to the Change of Control,
the Executive was assigned a car and was in management level 14 or above,
within five (5) business days after the Executive's Date of Termination, the
Corporation shall transfer to the Executive free and clear title to the car
assigned to the Executive on the Executive's Date of Termination, if any, or if
the Executive chooses, to a car comparable to that assigned to the Executive at
any time during the six (6) month period immediately preceding the Change of
Control.
b. If, immediately prior to the Change of Control, the
Executive was assigned a car and was in management level 13 or below, then the
following provisions will apply:
If the Executive has less than one (1) full year of service with the
Corporation and/or its subsidiaries or affiliates, the Executive may purchase
from the Corporation free and clear title to the car assigned to the Executive
on the Executive's Date of Termination, if any, or if the Executive chooses, to
a car comparable to that assigned to the Executive at any time during the six
(6) month period immediately preceding the Change of Control, for the average
retail value of the car listed in the National Automobile Dealer's Association,
Official Used Car Guide as of the date of the purchase.
If the Executive has one (1) or more but fewer than five (5) full
years of service with the Corporation and/or its subsidiaries or affiliates,
the Executive may purchase from the Corporation free and clear title to the car
assigned to the Executive on the Executive's Date of Termination, if any, or if
the Executive chooses, to a car comparable to that assigned to the Executive at
any time during the six (6) month period immediately preceding the Change of
Control, for fifty percent (50%) of the average retail value of the car listed
in the National Automobile Dealer's Association, Official Used Car Guide as of
the date of the purchase.
If the Executive has completed five (5) or more full years of service
with the Corporation and/or its subsidiaries or affiliates, the Corporation
shall transfer to the Executive free and clear title to the car assigned to the
Executive on the Executive's Date of Termination, if any, or if the Executive
chooses, to a car comparable to that assigned to the Executive at any time
during the six (6) month period immediately preceding the Change of Control.
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<PAGE> 11
Purchase arrangements and title transfer must be completed within
five (5) business days after the Executive's Date of Termination.
c. The Executive shall not be entitled to any car telephone
provided by the Corporation or its subsidiaries or affiliates and such car
telephone, if applicable, shall be returned to the Corporation immediately upon
title transfer. The Executive will be responsible for the sales tax on
transfer as well as for all insurance, maintenance, taxes and other liabilities
associated with the car after title transfer. Additionally, the Corporation
shall assign to the Executive all claims for breach of warranty and other
similar matters against the vendor and manufacturer of the car. The Executive
agrees to accept such car in an "As Is" condition. THE EXECUTIVE WAS SOLELY
RESPONSIBLE FOR THE SELECTION AND MAINTENANCE OF THE CAR AND THEREFORE
ACKNOWLEDGES THAT THE CORPORATION DOES NOT MAKE ANY WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE CAR, INCLUDING, BUT NOT LIMITED
TO THE CONDITION OR DESIGN OF THE CAR, ANY LATENT DEFECTS OF THE CAR, THE
MERCHANTABILITY OF THE CAR OR ITS FITNESS FOR ANY PARTICULAR PURPOSE.
d. Notwithstanding the Executive's management level, if the
Executive was receiving a car allowance immediately preceding the Change of
Control, the Corporation and/or the Trustee (as defined in Section 4(c)) shall
pay to the Executive, in a lump sum by cashier's check within five (5)
business days after the later of the Executive's Date of Termination or the
date of receipt by the Corporation and the Trustee (as defined in Section 4(c))
of the Executive's written demand for payment accompanied by notarized copies
of the Notice of Termination, release and, to the extent applicable, letter of
resignation (as described in Section 5(b)(II)), an amount equal to the product
of the Executive's monthly car allowance in effect at the time the Notice of
Termination was given, or if greater, the highest monthly car allowance in
effect for the Executive during the six (6) month period immediately preceding
the Change of Control, multiplied by the salary multiple for the Executive set
forth in clause (I)b above multiplied by 12.
(IV) Outplacement. The Corporation and/or the Trustee (as
defined in Section 4(c)) shall pay to the Executive, in a lump sum by cashier's
check within five (5) business days after the later of the Executive's Date of
Termination or the date of receipt by the Corporation and the Trustee (as
defined in Section 4(c)) of the Executive's written demand for payment
accompanied by notarized copies of the Notice of Termination, release and, to
the extent applicable, letter of resignation (as described in Section
5(b)(II)), an amount equal to twenty percent (20%) of the aggregate of the
Executive's Annual Base Salary and Bonus Opportunity (as defined in clauses
(I)b and (I)c above respectively), subject to a maximum cost of $50,000 if the
Executive was in management level 11-19 immediately prior to either the Notice
of Termination, or if greater, the Change of Control and a maximum cost of
$75,000 if the Executive was above management level 19 immediately prior to
either the Notice of Termination,
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<PAGE> 12
or if greater, the Change of Control, which Control, the Corporation amount
may be used by the Executive as he sees fit and, at his sole discretion, in
seeking new employment, including outplacement services.
(V) Perquisite, Country Club and Financial Planning/Tax
Preparation Allowances. The Corporation and/or the Trustee (as defined in
Section 4(c)) shall pay to the Executive, in a lump sum by cashier's check
within five (5) business days after the later of the Executive's Date of
Termination or the date of receipt by the Corporation and the Trustee (as
defined in Section 4(c)) of the Executive's written demand for payment
accompanied by notarized copies of the Notice of Termination, release and, to
the extent applicable, letter of resignation (as described in Section
5(b)(II)), an amount equal to the perquisite, country club and financial
planning/tax preparation allowances, as appropriate, the Executive would have
been entitled to receive under the plans, programs, policies and practices of
the Corporation and/or its subsidiaries or affiliates for the twelve (12) month
perquisite and financial planning/tax preparation payment period of the
Corporation or the Executive's respective division, as appropriate (i.e.,
January - December or September - August), in which the Notice of Termination
was given, if not yet paid, and one (1) additional twelve (12) month period
thereafter, but in no event for longer than the Severance Period, in each case
on a basis providing the Executive with benefits at least equal to the greatest
level of benefits provided by the Corporation and/or its subsidiaries or
affiliates for the Executive under such plans, programs, policies and practices
if and as in effect at any time during the six (6) month period immediately
preceding either the Notice of Termination, or if greater, the Change of
Control.
(VI) Split-Dollar Life Insurance and Deferred Compensation.
Notwithstanding anything in the applicable agreements, plans or policies to the
contrary, if the Executive is covered by the Corporation's split-dollar life
insurance with its attendant deferred compensation benefit on his Date of
Termination, and the Executive wishes to retain both the life insurance
coverage and its future deferred compensation benefit, the Executive may
purchase the policy from the Corporation by paying the Corporation an amount
equal to the cash value of the policy. If the Executive elects to purchase the
policy from the Corporation, the Executive will have all the benefits inherent
in ownership of the whole-life policy, including the cash value of the policy.
If the Executive wishes to retain the life insurance coverage only,
the Executive may convert the policy by forfeiting the deferred compensation
benefit. If the Executive chooses this alternative, the Corporation will
transfer ownership of the policy to the Executive, and contemporaneously the
Executive will execute an agreement relinquishing the deferred compensation
benefit. This alternative transfers the entire cash value of the policy to the
Executive and relieves the Corporation of the administrative record-keeping
associated with the Executive's deferred compensation benefit.
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<PAGE> 13
The Executive must notify the Corporation of his election for the
transfer of his split-dollar life insurance policy and deferred compensation
benefit within thirty (30) days following the Executive's Date of Termination
and the Corporation shall complete the transfer immediately upon receipt of
such notice and the required payment or executed agreement.
(b) Gross-Up for Excise Tax. In the event that it shall be
determined that any payment or benefit by the Corporation to or for the benefit
of the Executive pursuant to the terms of this Agreement or any other payments
or benefits received or to be received by the Executive in connection with or
as a result of the Change of Control or the Executive's termination of
employment or any event which is deemed by the Internal Revenue Service or any
other taxing authority to constitute a change in the ownership or effective
control of the Corporation, or in the ownership of a substantial portion of the
assets of the Corporation ("Change of Control Payments") shall be subject to
the tax (the "Excise Tax") imposed by Section 4999 (or any successor section)
of the Internal Revenue Code of 1986, as it may be amended from time to time
(the "Code"), the Corporation and/or the Trustee (as defined in Paragraph 4(c))
shall pay to the Executive an additional amount (the "Gross-Up Payment") such
that the net amount retained by the Executive, after (i) payment of any Excise
Tax on the Change of Control Payments and (ii) payment of any federal and state
and local income tax and Excise Tax upon the Gross-Up Payment, shall be equal
to the Change of Control Payments. The determination of whether the Executive
is subject to the Excise Tax and the amount of the Gross-Up Payment, if any,
shall be made by a "Big Six" accounting firm chosen by the Trustee (as defined
in Section 4(c)) and reasonably agreeable to the Executive, which determination
shall be binding upon the Executive and the Corporation. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed
to pay federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
calendar year in which the Gross-Up Payment is to be made in the state or
locality of the Executive's residence on the Executive's Date of Termination.
The Gross-Up Payment shall be paid to the Executive by cashier's check within
five (5) business days following the receipt by the Trustee (as defined in
Section 4(c)) of the Gross-Up Payment determination from the selected "Big Six"
accounting firm.
(c) Trust(s).
(i) In order to ensure in the event of a Change of Control that
timely payment will be made of certain obligations of the Corporation to the
Executive provided for under this Agreement, the Corporation shall pay into one
or more trust(s) (the "Trust(s)") established between the Corporation and any
financial institution with assets in excess of $100 million selected by the
Corporation prior to the Change of Control, as trustee (the "Trustee"), such
amounts and at such time or times as are required in order to fully pay all
amounts due the Executive pursuant to Section 4 that
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<PAGE> 14
are payable in cash or by cashier's check, or as are otherwise required
pursuant to the terms of the Trust(s). Thereafter, all such payments required
to be paid hereunder shall be made out of the Trust(s); provided, however,
that the Corporation shall retain liability for and pay the Executive any
amounts or provide for such other benefits due the Executive under this
Agreement for which there are insufficient funds in the Trust(s), for which no
funding of the Trust(s) is required or in the event that the Trustee fails to
make such payment to the Executive within the time frames set forth in this
Agreement. Prior to the Change of Control, and to the extent necessary
because of a change in the Trustee, after the Change of Control, the
Corporation shall provide the Executive with the name and address of the
Trustee.
(ii) For purposes of this Agreement, the term "the Corporation
and/or the Trustee" shall mean the Trustee to the extent the Corporation has
put funds in the Trust(s) and the Corporation to the extent the Corporation has
not funded or fully funded the Trust(s); provided, however, that in accordance
with Subsection (i) above, the Corporation shall retain liability for and pay
the Executive any amounts or provide for such other benefits due the Executive
under this Agreement for which the Trustee fails to make adequate payment to
the Executive within the time frames set forth in this Agreement.
5. Obligations of the Executive.
(a) Covenant of Confidentiality. All documents, records,
techniques, business secrets and other information of the Corporation, its
subsidiaries and affiliates, which have or will come into the Executive's
possession from time to time during the Executive's affiliation with the
Corporation and/or any of its subsidiaries or affiliates and which the
Corporation treats as confidential and proprietary to the Corporation and/or
any of its subsidiaries or affiliates shall be deemed as such by the Executive
and, shall be the sole and exclusive property of the Corporation, its
subsidiaries and affiliates. The Executive agrees that the Executive will keep
confidential and not divulge to any other party any of the Corporation's or its
subsidiaries' or affiliates' confidential information and business secrets,
including, but not limited to, such matters as costs, profits, markets, sales,
products, product lines, key personnel, pricing policies, operational methods,
customers, customer requirements, suppliers, plans for future developments, and
other business affairs and methods and other information not readily available
to the public. Additionally, the Executive agrees that upon his termination of
employment, the Executive shall promptly return to the Corporation any and all
confidential and proprietary information of the Corporation and/or its
subsidiaries or affiliates that is in his possession.
(b) If, within the three (3) year period commencing on a Change
of Control of the Corporation, (i) the Corporation or its subsidiaries or
affiliates shall terminate the Executive's employment for any reason other than
for Death, Disability or Cause, or (ii) the Executive shall terminate his
employment with the Corporation or its subsidiaries
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<PAGE> 15
or affiliates for Good Reason, and the Executive shall elect to receive
severance pay and benefits in accordance with Section 4, the Executive shall
be subject to the following additional provisions:
(I) Covenant Against Competition. During the Severance Period
or the one (1) year period following the Executive's Date of Termination,
whichever is shorter, the Executive shall not, without the prior written
consent of the Corporation's Chief Executive Officer, directly or indirectly
engage or become a partner, director, officer, principal, employee, consultant,
investor, creditor or stockholder in any business, proprietorship, association,
firm or corporation not owned or controlled by the Corporation or its
subsidiaries or affiliates which is engaged or proposes to engage or hereafter
engages in a business competitive directly with the business conducted by the
Corporation or any of its subsidiaries or affiliates immediately prior to the
Change of Control in any geographic area where such business of the Corporation
or its subsidiaries or affiliates is conducted; provided, however, that the
Executive is not prohibited from owning one percent (1%) or less of the
outstanding capital stock of any corporation whose stock is listed on a
national securities exchange.
During the Severance Period or the one (1) year period following the
Executive's Date of Termination, whichever is shorter, the Executive shall not,
either on the Executive's own account or for any person, firm or company,
solicit, interfere with or induce, or attempt to induce, any employee of the
Corporation or any of its subsidiaries or affiliates to leave his employment or
to breach his employment agreement, if any.
(II) Release. Upon the Executive's termination of employment,
the Executive and the Corporation shall execute a release agreement in the form
attached as Exhibit A; provided, however, that the only condition to the
Executive's receipt of any payments or benefits pursuant to this Agreement
shall be his tender of such release, executed by him, to the Corporation, and
the Executive's obligations and limitations under such release as executed by
him shall be conditioned upon the execution of such release by the Corporation
and delivery to the Executive within thirty (30) days of the Executive's
tender thereof to the Corporation. In addition, to the extent applicable,
upon the Executive's termination of employment, the Executive shall execute a
resignation letter in the form attached as Exhibit B.
(c) Specific Remedy. The Executive acknowledges and agrees that
if the Executive commits a material breach of the Covenant of Confidentiality
(Subsection (a) above) or the Covenant Against Competition (clause (I) of
Subsection (b) above), the Corporation shall have the right to have the
covenant specifically enforced by any court having appropriate jurisdiction on
the grounds that any such breach will cause irreparable injury to the
Corporation, and that money damages will not provide an adequate remedy to the
Corporation. The Executive further acknowledges and agrees that the Covenant
of Confidentiality and, if applicable, the Covenant Against Competition
contained in this Agreement are fair, do not unreasonably restrict the
15
<PAGE> 16
Executive's future employment and business opportunities, and are commensurate
with the compensation arrangements set out in this Agreement. In addition,
once the Executive makes an election to receive severance pay and benefits
pursuant to Section 4 and is subject to Subsection (b) above, the Executive
shall have no right to return any amounts or benefits that are already paid or
to refuse to accept any amounts or benefits that are payable in the future in
lieu of his specific performance of his obligations under Subsection (b) above.
6. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plans, programs, policies or practices
provided by the Corporation or any of its subsidiaries or affiliates and for
which the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under such plans, programs,
policies or practices or under any stock option or other agreements with the
Corporation or any of its subsidiaries or affiliates, specifically including
but not limited to the Ryder System, Inc. 1980 Stock Incentive Plan, the
deferred compensation agreements, the Corporation's and/or its subsidiaries' or
affiliates' retirement, 401(k) and profit sharing plans, the Ryder System, Inc.
Benefit Restoration Plan supplemental disability and retiree life insurance.
In the event there are any amounts which represent vested benefits or which the
Executive is otherwise entitled to receive under these or any other plans,
programs, policies or practices, including any plan, program, policy or
practice adopted after the execution of this Agreement, of the Corporation or
any of its subsidiaries or affiliates at or subsequent to the Executive's Date
of Termination, the Corporation shall pay or cause the relevant plan, program,
policy or practice to pay such amounts, to the extent not already paid, in
accordance with the provisions of such plan, program, policy or practice. The
phrase "Termination Date" as used in the Ryder System, Inc. 1980 Stock
Incentive Plan shall mean the end of the Severance Period with respect to
Non-Qualified Stock Options granted to the Executive, if any, pursuant to such
plan, and the Executive's Date of Termination with respect to Incentive Stock
Options and Restricted Stock Rights granted to the Executive, if any,
thereunder. The last day of the Severance Period will be considered to be the
Executive's termination date for purposes of the Executive's deferred
compensation agreement(s), if any.
7. Full Settlement. Except as specifically provided otherwise
in this Agreement, the Corporation's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any circumstances, including, without limitation, any
setoff, counterclaim, recoupment, defense or other right which the Corporation
may have against the Executive or others. The Executive shall not be obligated
to seek other employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement nor, except as
specifically provided otherwise in this Agreement, shall the amount of any
payment provided for under this Agreement be reduced by any compensation or
benefits earned by the Executive as the result of employment by another
employer after the Date of Termination, or otherwise. The Corporation agrees
to pay all legal fees and expenses
16
<PAGE> 17
which the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Corporation or others of the
validity or enforceability of, or liability under any provision of this
Agreement or any guarantee of performance thereof, in each case plus interest,
compounded daily, on the total unpaid amount determined to be payable under
this Agreement, such interest to be calculated on the basis of the greater of
(a) two percent (2%) over the base or prime commercial lending rate announced
by the First National Bank of Boston in effect from time to time during the
period of such nonpayment or (b) eighteen percent (18%), but in no event
greater than the highest interest rate permitted by law for such payments.
8. Successors. (a) This Agreement is personal to the
Executive and the Executive does not have the right to assign this Agreement or
any interest herein.
(b) This Agreement shall inure to the benefit of and be binding
upon the Corporation and its successors. The Corporation shall require any
successor to all or substantially all of the business and/or assets of the
Corporation, whether directly or indirectly, by purchase, merger,
consolidation, acquisition of stock, or otherwise, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent as
the Corporation would be required to perform if no such succession had taken
place, by a written agreement in form and substance reasonably satisfactory to
the Executive, delivered to the Executive within five (5) business days after
such succession. As used in this Agreement, "Corporation" shall mean the
Corporation as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
9. Miscellaneous. (a) The parties agree to submit to the
non-exclusive jurisdiction of the courts in the state of Florida. The captions
of this Agreement are not part of the provisions hereof and shall have no force
or effect. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party and/or the
Trustee, as applicable, by overnight express mail or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: at the Executive's last address appearing in
the payroll/personnel records of the Corporation;
If to the Corporation:
Ryder System, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: General Counsel
17
<PAGE> 18
If to the Trustee: at the address provided pursuant to Section 4(c);
or to such other address as either party or the Trustee shall have furnished to
the other in writing in accordance herewith. Notice and communications shall
be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. The Executive's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a waiver of such
provision or any other provision thereof.
(d) The Executive understands and acknowledges that the payment
and benefits provided to the Executive pursuant to this Agreement may be
unsecured obligations of the Corporation. The Executive further understands
and acknowledges that the payments and benefits under this Agreement, including
but not limited to the cash payments, the car, the outplacement, and the
split-dollar life insurance, may be compensation and as such may be included in
either the Executive's W-2 earnings statements or 1099 statements. The
Corporation may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation, as well as any other deductions consented to
in writing by the Executive.
(e) This Agreement, including its attached Exhibits, contains
the entire understanding of the Corporation and the Executive with respect to
the subject matter hereof. No agreements or representations, oral or written,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement and its
attached Exhibits.
(f) The employment of the Executive by the Corporation or its
subsidiaries or affiliates may be terminated by either the Executive or the
Corporation or its subsidiaries or affiliates at any time and for any reason.
Nothing contained in this Agreement shall affect such rights to terminate;
provided, however, that nothing in this Section 9(f) shall prevent the terms
and provisions of this Agreement from being enforced in the event of a
termination described in Section 4(a).
(g) Whenever used in this Agreement, 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.
(h) This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. Amendment and Restatement. The Corporation and the
Executive agree
18
<PAGE> 19
that this Agreement amends and correctly restates the entire agreement between
the parties as of February 24, 1989; that the provisions of this Agreement
supersede and replace the provisions of the Change of Control Severance
Agreement between the Corporation and the Executive dated as of June 26, 1987;
and that the terms and provisions of this Agreement shall be binding on the
Corporation and the Executive in all respects.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Corporation has caused these presents to be executed in its name on its behalf,
and its corporate seal to be hereunto affixed and attested by its secretary,
all as of the day and year first above written.
------------------------- ------------------------
Witness Executive
------------------------- ------------------------
Witness Social Security Number
ATTEST: RYDER SYSTEM, INC.
(the "Corporation")
By:
------------------------ ---------------------
Secretary Executive Vice President
(Seal)
19
<PAGE> 20
Amended and Restated
Change of Control
Severance Agreement
EXHIBIT A
MUTUAL RELEASE AGREEMENT
FOR AND IN CONSIDERATION OF (A) THE PAYMENT TO (Executive's Name) OF
THE SEVERANCE BENEFITS PURSUANT TO THE AMENDED AND RESTATED CHANGE OF CONTROL
SEVERANCE AGREEMENT BETWEEN RYDER SYSTEM, INC. ("RSI") AND (Executive's Name)
DATED ____________________, 19__(THE "CHANGE OF CONTROL SEVERANCE AGREEMENT")
AND (B) THE EXECUTION OF THIS MUTUAL RELEASE AGREEMENT BY BOTH RSI AND
(Executive's Name), WITH THE EXECUTION OF THIS AGREEMENT BY RSI AND THE
DELIVERY THEREOF TO (Executive's Name) OCCURRING WITHIN THIRTY (30) DAYS OF
(Executive's Name)'S TENDER OF THIS AGREEMENT TO RSI, (Executive's Name), ON
BEHALF OF HIMSELF/HERSELF, HIS/HER HEIRS, SUCCESSORS AND ASSIGNS (COLLECTIVELY
THE "EXECUTIVE"), AND RSI, ON BEHALF OF ITSELF, AND AS AGENT FOR ALL OF ITS
SUBSIDIARIES AND AFFILIATES, THEIR AGENTS, EMPLOYEES, OFFICERS, DIRECTORS,
SUCCESSORS AND ASSIGNS (COLLECTIVELY THE "CORPORATION"), HEREBY RELEASE AND
FOREVER DISCHARGE EACH OTHER FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS, AND
CAUSES OF ACTION, AND ALL LIABILITY WHATSOEVER, WHETHER KNOWN OR UNKNOWN, FIXED
OR CONTINGENT, WHICH THEY HAVE OR MAY HAVE AGAINST EACH OTHER AS A RESULT OF
THE EXECUTIVE'S EMPLOYMENT BY AND SUBSEQUENT TERMINATION AS AN EMPLOYEE OF THE
CORPORATION. THIS INCLUDES BUT IS NOT LIMITED TO CLAIMS AT LAW OR EQUITY OR
SOUNDING IN CONTRACT (EXPRESS OR IMPLIED) OR TORT ARISING UNDER FEDERAL, STATE,
OR LOCAL LAWS PROHIBITING AGE, SEX, RACE, HANDICAP, VETERAN OR ANY OTHER FORMS
OF DISCRIMINATION (INCLUDING THE AGE DISCRIMINATION IN EMPLOYMENT ACT AND TITLE
VII OF THE CIVIL RIGHTS ACT OF 1964) OR CLAIMS GROWING OUT OF ANY LEGAL
RESTRICTIONS ON THE CORPORATION'S RIGHT TO TERMINATE ITS EMPLOYEES.
The Executive and the Corporation understand and agree that this
Agreement and the Change of Control Severance Agreement shall not in any way be
construed as an admission by the Corporation or the Executive of any unlawful
or wrongful acts whatsoever against each other or any other person, and both
the Corporation and the Executive specifically disclaim any liability to or
wrongful acts against each other or any other person.
The Corporation and the Executive agree that the terms and provisions
of this Agreement and the Change of Control Severance Agreement, as well as any
and all incidents leading to or resulting from this Agreement and the Change of
Control Severance Agreement, are confidential and may not be discussed with
anyone without the prior written consent of the other party, except as required
by law; provided, however, that the Executive and RSI or its successor agree to
immediately give the other party notice of any request to discuss this
Agreement or the Change of Control Severance Agreement and to provide the other
party with the opportunity to contest such request prior to their response.
<PAGE> 21
The Executive and the Corporation acknowledge and agree that this
Agreement is intended to include and discharge all claims which they do not
know or suspect to exist at the time of execution relating to the Executive's
employment and termination and they expressly waive and relinquish any rights
that they may have to the contrary; provided, however, that this Agreement does
not release the Corporation or the Executive from any of their current, future
or ongoing obligations under the Change of Control Severance Agreement,
specifically including but not limited to cash payments and benefits due the
Executive in the case of the Corporation, and the Covenant of Confidentiality
and, to the extent applicable, the Covenant Against Competition in the case of
the Executive.
This Agreement shall be governed by and construed in accordance with
the laws of the state of Florida, without reference to principles of conflict
of laws. This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
WE CERTIFY THAT WE HAVE FULLY READ, HAVE RECEIVED AN EXPLANATION OF, HAVE
NEGOTIATED AND COMPLETELY UNDERSTAND THE PROVISIONS OF THIS AGREEMENT, THAT WE
HAVE HAD SUFFICIENT TIME AND THE OPPORTUNITY TO SEEK LEGAL ADVICE FROM AN
ATTORNEY BEFORE ENTERING INTO THIS AGREEMENT, AND THAT WE ARE SIGNING THIS
AGREEMENT FREELY AND VOLUNTARILY, WITHOUT DURESS, COERCION OR UNDUE INFLUENCE.
Dated this ___ day of _______, 19__.
__________________________ __________________________
Witness Executive
__________________________ __________________________
Witness Social Security Number
ATTEST: RYDER SYSTEM, INC., on behalf
of itself and as agent for
the Corporation
By:
__________________________ __________________________
Secretary
Its:
(Seal) ______________________
Executive's Date of Termination:
_____________________
2
<PAGE> 22
STATE OF _________)
) ss:
COUNTY OF ________)
Before me personally appeared __________________, to me well known and known to
me to be the person described in and who executed the foregoing instrument, and
acknowledged to and before me that he/she executed said instrument for the
purposes therein expressed.
WITNESS my hand and official seal this _____ day of ______________, 19__.
________________________
Notary Public
My Commission Expires:
_______________________
(Seal)
STATE OF _________)
) ss:
COUNTY OF ________)
Before me personally appeared ________________________ and
________________________, to me well known and known to me to be the _____
_________________ and ____________________ of Ryder System, Inc. who executed
the foregoing instrument, and acknowledged to and before me that they executed
said instrument for the purposes therein expressed.
WITNESS my hand and official seal this _____ day of ______________, 19__.
________________________
Notary Public
My Commission Expires:
_______________________ (Seal)
3
<PAGE> 23
Amended and Restated
Change of Control
Severance Agreement
EXHIBIT B
Resignation Letter
TO THE BOARD OF DIRECTORS
OF RYDER SYSTEM, INC.
Gentlemen:
Effective immediately, I hereby resign as an officer and/or director of Ryder
System, Inc. and/or its subsidiaries and affiliates and, to the extent
applicable, from all committees of which I am a member.
Sincerely,
________________________
Executive's Name
________________________
Date
<PAGE> 1
EXHIBIT 10.3(a)
Amended and Restated
Severance Agreement
THIS AMENDED AND RESTATED AGREEMENT dated as of February 24, 1989
amends, restates and supersedes the provisions of a certain Non-Change of
Control Severance Agreement between RYDER SYSTEM, INC., a Florida corporation
(the "Corporation"), and _________________________________ (the "Executive"),
dated as of June 26, 1987.
WITNESSETH:
WHEREAS, the Executive is an officer and/or key employee of the
Corporation and/or its subsidiaries or affiliates and an integral part of its
management; and
WHEREAS, in order to retain the Executive, the Corporation desires to
provide severance benefits to the Executive if the Executive's employment with
the Corporation or its subsidiaries or affiliates terminates as provided herein
prior to a Change of Control (as defined in Section 2);
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Corporation and the
Executive as follows:
1. Term of Agreement. This Agreement shall become effective as
of the date hereof and shall terminate upon the occurrence of the earliest of
the events specified below; provided, however, that Section 5 shall survive
termination:
(a) the last day of the Severance Period (as defined in Section
3(e));
(b) the termination of the Executive's employment by the
Executive for any reason or by the Corporation or its subsidiaries or
affiliates for Death, Disability or Cause (as defined in Sections 3(b) and (a)
respectively);
(c) one (1) year following the date of receipt of a mailing (by
registered or certified mail, return receipt requested) or hand delivery to the
Executive by the Corporation of written notice of its intent to terminate this
Agreement, provided that the Executive is not then receiving severance pay and
benefits pursuant to Section 4 as a result of his termination by the
Corporation or its subsidiaries or affiliates other than for Death, Disability
or Cause (as defined in Sections 3(b) and (a) respectively) prior to the end of
the one (1) year period;
(d) a Change of Control of the Corporation (as defined in
Section 2), provided that the Executive is not then receiving severance pay and
benefits pursuant to Section 4 as a result of his termination by the
Corporation or its subsidiaries or affiliates other than for Death, Disability
or Cause (as defined in Sections 3(b) and (a) respectively) prior to the Change
of Control;
(e) the material breach by the Executive of the provisions of
Section 5;
<PAGE> 2
(f) the termination of this Agreement pursuant to Section
4(a)(i) or Section 4(a)(iii)(II).
Additionally, notwithstanding anything in this Agreement to the
contrary, if the Executive should die while receiving severance pay or benefits
pursuant to Section 4 as a result of his termination by the Corporation or its
subsidiaries or affiliates other than for Death, Disability or Cause (as
defined in Sections 3(b) and (a) respectively), this Agreement shall terminate
immediately upon the Executive's death and both parties shall be released from
all obligations under this Agreement other than those under Section 5(b)(II)
and those relating to amounts or benefits which are payable under this
Agreement within five (5) business days after the Executive's Date of
Termination (if not yet paid), are vested under any plan, program, policy or
practice or which the Executive is otherwise entitled to receive upon his
death, including but not limited to, life insurance. Any payment due pursuant
to the preceding sentence upon the Executive's death shall be made to the
estate of the deceased Executive, unless the plan, program, policy, practice or
law provides otherwise.
2. Change of Control. For the purpose of this Agreement, a
"Change of Control" shall be deemed to have occurred if:
(a) a third person, including a "group" as defined in Section
l3(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), but excluding any employee benefit plan or plans of the Corporation 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
Corporation's outstanding voting securities ordinarily having the right to vote
for the election of directors of the Corporation; or
(b) the individuals who, as of June 26, 1987, constituted the
Board of Directors of the Corporation (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 Corporation, 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 Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board; or
2
<PAGE> 3
(c) there is a liquidation or dissolution of the Corporation or
a sale of all or substantially all of the assets of either or both (i) the
business group which constituted the Vehicle Leasing and Services Division of
the Corporation as of June 26, 1987 or (ii) the combined business groups of the
Corporation as constituted as of June 26, 1987 other than the business group
which constituted the Vehicle Leasing and Services Division of the Corporation
as of June 26, 1987.
If the Corporation 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 Subsections (a), (b) or (c), and the Executive'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 Subsections (a), (b) or (c),
then, upon the occurrence of any of the matters described in Subsections (a),
(b) or (c), 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.
3. Certain Definitions.
(a) Cause. The Executive's employment may be terminated for
Cause only if the Corporation's Chief Executive Officer determines that Cause
(as defined below) exists. For purposes of this Agreement, "Cause" means (i)
an act or acts of fraud, misappropriation, or embezzlement on the Executive's
part which result in or are intended to result in his or another's personal
enrichment at the expense of the Corporation or its subsidiaries or affiliates,
(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 attributable to eligible vacation or supported by a
licensed physician's statement. For the purposes of this Section 3(a), any
good faith interpretation by the Corporation of the foregoing definition of
"Cause" shall be conclusive on the Executive.
(b) Death or Disability.
(i) The Executive's employment will be terminated by the
Corporation or its subsidiaries or affiliates automatically upon the
Executive's death ("Death").
(ii) After having established the Executive's Disability (as
defined below), the Corporation may give to the Executive written notice of the
Corporation's and/or its subsidiaries' or affiliates' intention to terminate
the Executive's employment for Disability. The Executive's employment will
terminate for Disability effective on the thirtieth (30th) day after the
Executive's receipt of such notice (the "Disability Effective Date") if within
such thirty (30) day period after such receipt the Executive shall fail to
return to full-time performance of his duties. For purposes of this Agreement,
"Disability" means disability which after the expiration of more than
twenty-six (26) weeks after its commencement is determined to be total and
permanent by a licensed physician selected by the Corporation or its insurers
and reasonably acceptable to the Executive or his legal representative.
3
<PAGE> 4
In the event of the Executive's termination for Death or Disability,
the Executive and, to the extent applicable, his legal representatives,
executors, heirs, legatees and beneficiaries shall have no rights under this
Agreement and their sole recourse, if any, shall be under the death or
disability provisions of the plans, programs, policies and practices of the
Corporation and/or its subsidiaries and affiliates, as appropriate.
(c) Notice of Termination. Any termination by the Corporation
or its subsidiaries or affiliates other than for Death shall be communicated by
a Notice of Termination to the Executive hereto given in accordance with
Section 9(b). For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than
fifteen (l5) days after the giving of such notice or, in the event of
Disability, the Disability Effective Date).
(d) Date of Termination. Date of Termination means the date of
receipt of the Notice of Termination or any later date specified therein, as
the case may be; provided, however, that if the Executive's employment is
terminated by reason of Death or Disability, the Date of Termination shall be
the date of Death of the Executive or the Disability Effective Date, as the
case may be.
(e) Severance Period. Unless terminated sooner pursuant to
Section 1, the Severance Period means the period set forth below depending on
the Executive's management level at the time the Notice of Termination was
given, which period shall begin on the day following the Executive's Date of
Termination:
<TABLE>
<S> <C>
Mgmt. Level 19 or above Three (3) years
Mgmt. Level 15-18 Two (2) years
Mgmt. Level 14 One (1) year and six (6) months
Mgmt. Level 13 One (1) year
Mgmt. Level 11-12 Six (6) months
</TABLE>
4. Obligations of the Corporation.
(a) Circumstances of Termination.
(i) If, during the term of this Agreement prior to a Change of
Control, the Corporation or its subsidiaries or affiliates shall terminate the
Executive's employment for any reason other than for Death, Disability or
Cause, the Corporation agrees to provide the Executive with compensation,
benefits and perquisites in accordance with
4
<PAGE> 5
the terms and provisions set forth in Subsection (iii) below and the other
provisions of this Agreement, and the Executive agrees that he shall be subject
to such terms and provisions. The Executive shall not be deemed to have
terminated his employment with the Corporation or any of its subsidiaries or
affiliates, and thus shall not be entitled to any amounts or benefits pursuant
to this Agreement, if he leaves the employ of the Corporation or any of its
subsidiaries or affiliates for immediate reemployment with the Corporation or
any of its subsidiaries or affiliates. Additionally, notwithstanding anything
in this Agreement to the contrary, the Executive shall not be entitled to any
amounts or benefits pursuant to this Agreement if, as a result of the sale of
all or substantially all of the stock or assets of one or more of the
Corporation's subsidiaries or affiliates not constituting a Change of Control,
the Executive continues as an employee of any of the companies whose stock or
assets were sold or the Executive leaves the employ of the Corporation or any
of its subsidiaries or affiliates and the Executive (A) is offered employment
with the purchasing company or any of its subsidiaries or affiliates, or (B) is
offered continuing employment with the Corporation or any of its remaining
subsidiaries or affiliates. In the event of the occurrence of any of the
events set forth in the preceding sentence, this Agreement shall terminate
immediately and the Executive shall not be entitled to any amounts or benefits
hereunder; provided, however, that this Agreement shall continue in effect if
the Executive accepts the offer of continuing employment with the Corporation
or any of its remaining subsidiaries or affiliates.
(ii) If during the term of this Agreement, the Executive shall
terminate his employment with the Corporation or its subsidiaries or affiliates
for any reason, or the Corporation or its subsidiaries or affiliates shall
terminate the Executive's employment for Death, Disability or Cause, then the
Executive shall not be entitled to any of the benefits set forth in Subsection
(iii) below or in any other provision of this Agreement, except to the extent
of the amounts which represent vested benefits or which the Executive is
otherwise entitled to receive under any plan, program, policy or practice of
the Corporation or any of its subsidiaries or affiliates at or subsequent to
the Executive's Date of Termination.
(iii) If the Executive is entitled to receive severance pay and
benefits under Subsection (i) above, the Corporation agrees to provide the
Executive with the following compensation, benefits and perquisites, subject to
Section 5(b):
(I) Cash Entitlement. The Corporation shall pay to the Executive
the aggregate of the amounts determined pursuant to clauses a through e below:
a. Unpaid Salary and Vacation. If not already paid, the
Executive's base salary and unused vacation entitlement through the Executive's
Date of Termination at the rate in effect at the time the Notice of Termination
was given.
5
<PAGE> 6
b. Salary Multiple. A continuation of the Executive's annual
base salary at the rate in effect at the time the Notice of Termination was
given ("Annual Base Salary") for the Executive's applicable Severance Period
(as defined in Section 3(e)).
c. Bonus Multiple. An amount equal to the product of (i) the
Executive's Annual Base Salary multiplied by (ii) the stated maximum bonus
opportunity percentage available to the Executive under the respective
incentive compensation plan immediately preceding the Notice of Termination
multiplied by (iii) the "Executive's Three Year Average Bonus Percentage" (as
defined below) (the total hereinafter referred to as the "Bonus Opportunity")
multiplied by (iv) the following multiple depending on the Executive's
management level at the time the Notice of Termination was given:
<TABLE>
<S> <C>
Mgmt. Level 17 or above 1
Mgmt. Level 11-16 0
</TABLE>
The "Executive's Three Year Average Bonus Percentage" is the sum of
the bonus percentages paid to the Executive divided by the stated maximum bonus
opportunity percentages available to the Executive rounded to one decimal place
(e.g., 86.3%) for each of the three (3) fiscal years immediately preceding the
date the Notice of Termination was given divided by three (3).
If the Executive has been employed by the Corporation and/or its
subsidiaries or affiliates for less than three (3) fiscal years at the time the
Notice of Termination was given, or if the Executive was not eligible to
receive an incentive compensation award pursuant to an incentive compensation
plan of the Corporation and/or its subsidiaries or affiliates for one (1) or
more of the three (3) fiscal years immediately preceding the date the Notice of
Termination was given, the bonus percentage to be applied in the "Executive's
Three Year Bonus Percentage" calculation for any year in which the Executive
was not employed or eligible to receive an incentive award will be the average
bonus percentage paid for such year to all executives in the Corporation or the
Executive's respective division, as appropriate, with a stated maximum bonus
opportunity level similar to that of the Executive at the date the Notice of
Termination was given divided by the average stated maximum bonus opportunity
percentage available to these executives for such year rounded to one decimal
place (e.g., 86.3%).
6
<PAGE> 7
CALCULATION EXAMPLE OF EXECUTIVE'S THREE YEAR AVERAGE
BONUS PERCENTAGE
<TABLE>
<CAPTION>
(1) (2) (1)(2)
Bonus Percentage Stated Maximum Bonus Opportunity
Year Paid Bonus Opportunity Percent
---- -------------------- ----------------- ------------------------
<S> <C> <C> <C> <C>
1 55.1% 60.0% 91.8%
2 71.8% 80.0% 89.8%
3 102.0% 100.0% 102.0%
------
Sum 283.6%
Executive's Three Year Average
Bonus Percentage (Sum divided by 3) 94.5%
</TABLE>
d. Tenure - Related Bonus. An amount equal to the product of the
Bonus Opportunity determined in clause c above multiplied by the number of the
Executive's full and prorated partial years of service with the Corporation
and/or its subsidiaries or affiliates, subject to a maximum of twelve (12)
years, divided by twelve (12).
e. Prior Year Bonus. If bonuses for the calendar year prior to
the Executive's Date of Termination have been distributed and the Executive has
not yet been paid his incentive compensation award for such calendar year, and
his Date of Termination is subsequent to the incentive compensation award
payment date for such calendar year, then the Executive shall receive an
additional amount equal to the product of the actual salary earned by the
Executive during the prior calendar year multiplied by the actual bonus
percentage approved for the Executive for such calendar year under the
respective incentive compensation plan.
The Executive agrees that he shall not be eligible for or entitled to
any other incentive compensation award, including any pro rata incentive
compensation award, pursuant to the Corporation's and/or its subsidiaries' or
affiliates' incentive compensation plans. The Executive's agreement to this
provision is a material consideration for the Corporation's executing this
Agreement.
The Corporation shall pay to the Executive the amounts determined in
clauses a through e above as follows:
Clause a: In a lump sum no later than the next normal pay period for
the Executive, unless otherwise required by law.
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<PAGE> 8
Clause b: In equal semi-monthly installments on the fifteenth and
last day of each month during the Severance Period.
Clause c: No later than the first March 1st following the Executive's
Date of Termination.
Clauses d and e: In a lump sum within five (5) business days after
the Executive's Date of Termination.
(II) Medical, Dental, Disability, Life Insurance and Other Similar
Plans and Programs. Until the earliest to occur of (i) the last day of the
Severance Period, (ii) the date on which the Executive becomes eligible for the
designated coverage as an employee of another employer which provides or offers
such coverage to its employees, or (iii) in the case of benefits requiring
employee contributions, the date the Executive fails to make such contributions
pursuant to the Corporation's or the plan's instructions or otherwise cancels
his coverage in accordance with plan provisions (the "Benefits Continuation
Period"), the Corporation shall continue to provide all benefits which the
Executive and/or his family is or would have been entitled to receive under all
medical, dental, disability, supplemental life, group life, and accidental
death and dismemberment insurance plans and programs, and other similar plans
and programs of the Corporation and/or its subsidiaries or affiliates not
otherwise provided for in this Agreement, in each case on a basis providing the
Executive and/or his family with the opportunity to receive benefits at least
equal to those benefits provided by the Corporation and/or its subsidiaries or
affiliates for the Executive under such plans and programs if and as in effect
at the time the Notice of Termination was given whether or not such plans or
programs were in effect at the time of the execution of this Agreement. The
non-contributory benefits will be paid for by the Corporation. The medical and
dental plan benefits, to the extent applicable, will be provided in accordance
with the provisions of the Consolidated Omnibus Budget Reconciliation Act of
l985, as amended ("COBRA"), except that the Corporation shall pay the COBRA
premiums for the standard medical and dental plan benefits during the Benefits
Continuation Period. If the Executive's participation in any such plan or
program is barred by COBRA or for any other reason, the Corporation shall pay
or provide for payment of such benefits or substantially similar benefits to
the Executive and/or his family. Failure of the Executive to accept available
coverage from another employer or to notify the Corporation, in writing, within
thirty (30) days of the Executive's eligibility for coverage under another
employer's plan shall terminate the Severance Period and this Agreement
immediately, and the Corporation shall have no further obligations to the
Executive under this Agreement; provided, however, that the Executive will, if
applicable, continue to be subject to the provisions of Section 5 of this
Agreement. Upon termination of his coverage under this paragraph, the Executive
may be eligible under COBRA to continue some of his benefits for an additional
period of time. Additionally, the Executive has thirty-one (31) days from the
last day of coverage in which to convert his group life insurance to an
individual policy. The Executive must arrange for conversion through
8
<PAGE> 9
an agent of The Prudential Insurance Company of America, or such other
insurance company as is then providing coverage.
(III) Car. a. If, at the time the Notice of Termination was given,
the Executive was assigned a car and was in management level 14 or above,
within five (5) business days after the Executive's Date of Termination, the
Corporation shall transfer to the Executive free and clear title to the car
assigned to the Executive at the time the Notice of Termination was given.
b. If, at the time the Notice of Termination was given, the Executive
was assigned a car and was in management level 13 or below, then the following
provisions will apply:
If the Executive has less than one (1) full year of service with the
Corporation and/or its subsidiaries or affiliates, the Executive shall have no
right to purchase or receive from the Corporation the car assigned to the
Executive at the time the Notice of Termination was given since the Executive
shall have no rights under this Agreement pursuant to Section 4(c).
If the Executive has one (1) or more but fewer than five (5) full
years of service with the Corporation and/or its subsidiaries or affiliates,
the Executive may purchase from the Corporation free and clear title to the car
assigned to the Executive at the time the Notice of Termination was given for
fifty percent (50%) of the average retail value of the car listed in the
National Automobile Dealer's Association, Official Used Car Guide as of the
date of the purchase.
If the Executive has completed five (5) or more full years of service
with the Corporation and/or its subsidiaries or affiliates, the Corporation
shall transfer to the Executive free and clear title to the car assigned to the
Executive at the time the Notice of Termination was given.
Purchase arrangements and title transfer must be completed within five
(5) business days after the Executive's Date of Termination.
c. The Executive shall not be entitled to any car telephone
provided by the Corporation or its subsidiaries or affiliates and such car
telephone, if applicable, shall be returned to the Corporation immediately upon
title transfer. The Executive will be responsible for the sales tax on
transfer as well as for all insurance, maintenance, taxes and other liabilities
associated with the car after title transfer. Additionally, the Corporation
shall assign to the Executive all claims for breach of warranty and other
similar matters against the vendor and manufacturer of the car. The Executive
agrees to accept such car in an "As-Is" condition. THE EXECUTIVE WAS SOLELY
RESPONSIBLE FOR THE SELECTION AND MAINTENANCE OF THE CAR AND THEREFORE
ACKNOWLEDGES THAT THE CORPORATION DOES NOT MAKE
9
<PAGE> 10
ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE
CAR, INCLUDING, BUT NOT LIMITED TO THE CONDITION OR DESIGN OF THE CAR, ANY
LATENT DEFECTS OF THE CAR, THE MERCHANTABILITY OF THE CAR OR ITS FITNESS FOR
ANY PARTICULAR PURPOSE.
d. Notwithstanding the Executive's management level, if the
Executive was receiving a car allowance at the time the Notice of Termination
was given, the Corporation shall pay to the Executive, in a lump sum within
five (5) business days after the Executive's Date of Termination, an amount
equal to the product of the Executive's monthly car allowance in effect at the
time the Notice of Termination was given multiplied by 12 multiplied by the
following multiple depending on the Executive's management level at the time
the Notice of Termination was given:
<TABLE>
<S> <C>
Mgmt. Level 19 or above 3
Mgmt. Level 15-18 2
Mgmt. Level 14 1.5
Mgmt. Level 13 1
Mgmt. Level 11-12 .5
</TABLE>
(IV) Outplacement. Until the end of the Severance Period or until
the Executive obtains another full-time job, whichever occurs first, the
Corporation shall provide the Executive with professional outplacement services
of the Corporation's choice and shall reimburse the Executive for documented
incidental outplacement expenses directly related to job search such as resume
mailing, interviewing trips, and clerical support, subject to a maximum cost of
the lesser of (i) ten percent (10%) of the Executive's Annual Base Salary (as
defined in clause (I)b above), or (ii) $20,000 if the Executive was in
management level 11-19 at the time the Notice of Termination was given or
$30,000 if the Executive was above management level 19 at the time the Notice
of Termination was given. The Executive shall not be entitled to receive cash
in lieu of the professional outplacement services provided by the Corporation.
(V) Perquisite, Country Club and Financial Planning/Tax
Preparation Allowances. For the twelve (12) month perquisite, country club and
financial planning/tax preparation payment period of the Corporation or the
Executive's respective division, as appropriate (i.e., January - December or
September - August), in which the Notice of Termination was given, if not yet
paid, and one (1) additional twelve (12) month period thereafter, but in no
event for longer than the Severance Period, the Corporation shall continue to
provide the Executive with the perquisite, country club and financial
planning/tax preparation allowances, as appropriate, the Executive would have
been entitled to receive under the plans, programs, policies and practices of
the Corporation and/or its subsidiaries or affiliates (subject to the
Corporation's receipt of
10
<PAGE> 11
appropriate documented evidence of such expenses), in each case on a basis
providing the Executive with an opportunity to receive benefits at least equal
to those provided by the Corporation and/or its subsidiaries or affiliates for
the Executive under such plans, programs, policies and practices if and as in
effect at the time the Notice of Termination was given.
(VI) Split-Dollar Life Insurance and Deferred Compensation.
Notwithstanding anything in the applicable agreements, plans or policies to the
contrary, if the Executive is covered by the Corporation's split-dollar life
insurance with its attendant deferred compensation benefit at the time the
Notice of Termination is given, and the Executive wishes to retain both the
life insurance coverage and its future deferred compensation benefit, the
Executive may purchase the policy from the Corporation by paying the
Corporation an amount equal to the cash value of the policy. If the Executive
elects to purchase the policy from the Corporation, the Executive will have all
the benefits inherent in ownership of the whole-life policy, including the cash
value of the policy.
If the Executive wishes to retain the life insurance coverage only,
the Executive may convert the policy by forfeiting the deferred compensation
benefit. If the Executive chooses this alternative, the Corporation will
transfer ownership of the policy to the Executive, and contemporaneously the
Executive will execute an agreement relinquishing the deferred compensation
benefit. This alternative transfers the entire cash value of the policy to the
Executive and relieves the Corporation of the administrative record-keeping
associated with the Executive's deferred compensation benefit.
The Executive must notify the Corporation of his election for the
transfer of his split-dollar life insurance policy and deferred compensation
benefit within thirty (30) days following the Executive's Date of Termination
and the Corporation shall complete the transfer immediately upon receipt of
such notice and the required payment or executed agreement.
(b) If a Change of Control occurs and the Executive is then
receiving severance pay and benefits pursuant to Section 4(a) as a result of
his termination by the Corporation or its subsidiaries or affiliates other than
for Death, Disability or Cause prior to the Change of Control, the Corporation
shall pay to the Executive in a lump sum, within five (5) business days after
the Change of Control, an amount (in lieu of future periodic payments) equal to
the present value of all future cash payments due to the Executive under this
Agreement (including the maximum outplacement and perquisite, country club and
financial planning/tax preparation allowances, as appropriate) using the First
National Bank of Boston's base or prime commercial lending rate then in effect
for such computation. The Corporation and the Executive shall continue to be
liable to each other for all of their other respective obligations under this
Agreement.
11
<PAGE> 12
(c) Notwithstanding anything in this Agreement to the contrary, no
amount shall be paid or payable under this Agreement unless the Executive has
been employed by the Corporation and/or its subsidiaries or affiliates for at
least twelve (12) consecutive months at the time of his termination. In the
event the Executive is employed for less than twelve (12) consecutive months,
the Executive hereby agrees that he shall not receive or be entitled to
anything under this Agreement.
5. Obligations of the Executive.
(a) Covenant of Confidentiality. All documents, records,
techniques, business secrets and other information of the Corporation, its
subsidiaries and affiliates which have or will come into the Executive's
possession from time to time during the Executive's affiliation with the
Corporation and/or any of its subsidiaries or affiliates and which the
Corporation treats as confidential and proprietary to the Corporation and/or
any of its subsidiaries or affiliates shall be deemed as such by the Executive
and, shall be the sole and exclusive property of the Corporation, its
subsidiaries and affiliates. The Executive agrees that the Executive will keep
confidential and not divulge to any other party any of the Corporation's or its
subsidiaries' or affiliates' confidential information and business secrets,
including, but not limited to, such matters as costs, profits, markets, sales,
products, product lines, key personnel, pricing policies, operational methods,
customers, customer requirements, suppliers, plans for future developments, and
other business affairs and methods and other information not readily available
to the public. Additionally, the Executive agrees that upon his termination of
employment, the Executive shall promptly return to the Corporation any and all
confidential and proprietary information of the Corporation and/or its
subsidiaries or affiliates that is in his possession.
(b) If, at any time during the term of this Agreement, the
Corporation or its subsidiaries or affiliates shall terminate the Executive's
employment for any reason other than for Death, Disability or Cause, and the
Executive shall elect to receive severance pay and benefits in accordance with
Section 4, the Executive shall be subject to the following additional
provisions:
(I) Covenant Against Competition. During the Severance Period,
the Executive shall not, without the prior written consent of the Corporation's
Chief Executive Officer, directly or indirectly engage or become a partner,
director, officer, principal, employee, consultant, investor, creditor or
stockholder in any business, proprietorship, association, firm or corporation
not owned or controlled by the Corporation or its subsidiaries or affiliates
which is engaged or proposes to engage or hereafter engages in a business
competitive directly with the business conducted by the Corporation or any of
its subsidiaries or affiliates in any geographic area where such business of
the Corporation or its subsidiaries or affiliates is conducted; provided,
however, that the Executive is not prohibited from owning one percent (1%) or
less of the outstanding capital stock of any corporation whose stock is listed
on a national
12
<PAGE> 13
securities exchange.
During the Severance Period, the Executive shall not, either on the
Executive's own account or for any person, firm or company, solicit, interfere
with or induce, or attempt to induce, any employee of the Corporation or any of
its subsidiaries or affiliates to leave his employment or to breach his
employment agreement, if any.
(II) Release. Upon his termination of employment, the Executive
shall execute a release agreement in the form attached as Exhibit A and, to the
extent applicable, a resignation letter in the form attached as Exhibit B,
prior to and as a condition to receiving any payments or benefits pursuant to
this Agreement.
(c) Specific Remedy. The Executive acknowledges and agrees that
if the Executive commits a material breach of the Covenant of Confidentiality
(Subsection (a) above) or the Covenant Against Competition (clause (I) of
Subsection (b) above), the Corporation shall have the right to have the
covenant specifically enforced by any court having appropriate jurisdiction on
the grounds that any such breach will cause irreparable injury to the
Corporation, and that money damages will not provide an adequate remedy to the
Corporation. The Executive further acknowledges and agrees that the Covenant
of Confidentiality and, if applicable, the Covenant Against Competition
contained in this Agreement are fair, do not unreasonably restrict the
Executive's future employment and business opportunities, and are commensurate
with the compensation arrangements set out in this Agreement. In addition,
once the Executive makes an election to receive severance pay and benefits
pursuant to Section 4 and is subject to Subsection (b) above, the Executive
shall have no right to return any amounts or benefits that are already paid or
to refuse to accept any amounts or benefits that are payable in the future in
lieu of his specific performance of his obligations under Subsection (b) above.
6. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plans, programs, policies or practices
provided by the Corporation or any of its subsidiaries or affiliates and for
which the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under such plans, programs,
policies or practices or under any stock option or other agreements with the
Corporation or any of its subsidiaries or affiliates, specifically including
but not limited to the Ryder System, Inc. 1980 Stock Incentive Plan, the
deferred compensation agreements, the Corporation's and/or its subsidiaries' or
affiliates' retirement, 401(k) and profit sharing plans, the Ryder System, Inc.
Benefit Restoration Plan, supplemental disability and retiree life insurance.
In the event there are any amounts which represent vested benefits or which the
Executive is otherwise entitled to receive under these or any other plans,
programs, policies or practices, including any plan, program, policy or
practice adopted after the execution of this Agreement, of the Corporation or
any of its subsidiaries or affiliates at or subsequent to the Executive's Date
of Termination, the
13
<PAGE> 14
Corporation shall cause the relevant plan, program, policy or practice to pay
such amount, to the extent not already paid, in accordance with the provisions
of such plan, program, policy or practice. The phrase "Termination Date" as
used in the Ryder System, Inc. 1980 Stock Incentive Plan shall mean the end of
the Severance Period with respect to Non-Qualified Stock Options granted to the
Executive, if any, pursuant to such plan, and the Executive's Date of
Termination with respect to Incentive Stock Options and Restricted Stock Rights
granted to the Executive, if any, thereunder. The last day of the Severance
Period will be considered to be the Executive's termination date for purposes of
the Executive's deferred compensation agreement(s), if any.
7. No Mitigation. In no event shall the Executive be obligated
to seek other employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement nor, except as
specifically provided otherwise in this Agreement, shall the amount of any
payment provided for under this Agreement be reduced by any compensation or
benefits earned by the Executive as the result of employment by another
employer after the Date of Termination, or otherwise.
8. Assignment. This Agreement is personal to the Executive and
the Executive does not have the right to assign this Agreement or any interest
herein. This Agreement shall inure to the benefit of and be binding upon the
Corporation and its successors.
9. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the state of Florida, without
reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: at the Executive's last address appearing in the
payroll/personnel records of the Corporation.
If to the Corporation:
Ryder System, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in
14
<PAGE> 15
accordance herewith. Notice and communications shall be effective when
actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Executive understands and acknowledges that the payments
and benefits provided to the Executive pursuant to this Agreement may be
unsecured, unfunded obligations of the Corporation. The Executive further
understands and acknowledges that the payments and benefits under this
Agreement, including but not limited to the cash payments, the car, the
outplacement, and the split-dollar life insurance, may be compensation and as
such may be included in either the Executive's W-2 earnings statements or 1099
statements. The Corporation may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation, as well as any other
deductions consented to in writing by the Executive.
(e) This Agreement, including its attached Exhibits, contains the
entire understanding of the Corporation and the Executive with respect to the
subject matter hereof. No agreements or representations, oral or written,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement and its
attached Exhibits.
(f) The employment of the Executive by the Corporation or its
subsidiaries or affiliates may be terminated by either the Executive or the
Corporation or its subsidiaries or affiliates at any time and for any reason.
Nothing contained in this Agreement shall affect such rights to terminate;
provided, however, that nothing in this Section 9(f) shall prevent the terms
and provisions of this Agreement from being enforced in the event of a
termination described in Section 4(a).
(g) Whenever used in this Agreement, 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.
(h) This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
10. Amendment and Restatement. The Corporation and the Executive agree
that this Agreement amends and correctly restates the entire agreement between
the parties as of February 24, 1989; that the provisions of this Agreement
supersede and replace the provisions of the Non-Change of Control Severance
Agreement between the Corporation and the Executive dated as of June 26, 1987;
and that the terms and provisions of this Agreement shall be binding on the
Corporation and the Executive in all respects.
15
<PAGE> 16
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Corporation has caused these presents to be executed in its name on its behalf,
and its corporate seal to be hereunto affixed and attested by its secretary,
all as of the day and year first above written.
________________________ ________________________
Witness Executive
________________________ ________________________
Witness Social Security Number
ATTEST: RYDER SYSTEM, INC.
(the "Corporation")
By:
________________________ _____________________
Secretary Executive Vice President
(Seal)
16
<PAGE> 17
Amended and Restated
--------------------
Severance Agreement
---------------------
EXHIBIT A
---------
RELEASE AGREEMENT
-----------------
FOR AND IN CONSIDERATION OF THE PAYMENT TO ME OF THE SEVERANCE BENEFITS
PURSUANT TO THE AMENDED AND RESTATED SEVERANCE AGREEMENT BETWEEN RYDER SYSTEM,
INC. ("RSI") AND ME DATED _________________, 19__ (THE "SEVERANCE AGREEMENT"),
I, (Executive's Name), ON BEHALF OF MYSELF, MY HEIRS, SUCCESSORS AND ASSIGNS
(COLLECTIVELY "I" OR "ME"), HEREBY RELEASE AND FOREVER DISCHARGE RSI AND ALL OF
ITS SUBSIDIARIES AND AFFILIATES, THEIR AGENTS, EMPLOYEES, OFFICERS, DIRECTORS,
SUCCESSORS AND ASSIGNS (COLLECTIVELY THE "CORPORATION"), FROM ANY AND ALL
CLAIMS, DEMANDS, ACTIONS, AND CAUSES OF ACTION, AND ALL LIABILITY WHATSOEVER,
WHETHER KNOWN OR UNKNOWN, FIXED OR CONTINGENT, WHICH I HAVE OR MAY HAVE AGAINST
THE CORPORATION AS A RESULT OF MY EMPLOYMENT BY AND SUBSEQUENT TERMINATION AS
AN EMPLOYEE OF THE CORPORATION. THIS INCLUDES BUT IS NOT LIMITED TO CLAIMS AT
LAW OR EQUITY OR SOUNDING IN CONTRACT (EXPRESS OR IMPLIED) OR TORT ARISING
UNDER FEDERAL, STATE, OR LOCAL LAWS PROHIBITING AGE, SEX, RACE, HANDICAP,
VETERAN OR ANY OTHER FORMS OF DISCRIMINATION (INCLUDING THE AGE DISCRIMINATION
IN EMPLOYMENT ACT AND TITLE VII OF THE CIVIL RIGHTS ACT OF 1964) OR CLAIMS
GROWING OUT OF ANY LEGAL RESTRICTIONS ON THE CORPORATION'S RIGHT TO TERMINATE
ITS EMPLOYEES.
I understand and agree that this Agreement and the Severance Agreement
shall not in any way be construed as an admission by the Corporation of any
unlawful or wrongful acts whatsoever against me or any other person, and the
Corporation specifically disclaims any liability to or wrongful acts against me
or any other person.
I agree that the terms and provisions of this Agreement and the Severance
Agreement, as well as any and all incidents leading to or resulting from this
Agreement and the Severance Agreement, are confidential and that I may not
discuss them with anyone without the prior written consent of RSI's or its
successor's Chief Executive Officer, except as required by law; provided,
however, that I agree to immediately give RSI or its successor notice of any
request to discuss this Agreement or the Severance Agreement and to provide RSI
or its successor with the opportunity to contest such request prior to my
response. Additionally, I agree that during the Severance Period (as defined
in the Severance Agreement), I shall not make any remarks disparaging the
conduct or character of the Corporation.
I acknowledge and agree that this Agreement is intended to include and
discharge all claims which I do not know or suspect to exist at the time of
execution relating to my employment and termination and I expressly waive and
relinquish any rights that I may have to the contrary;
<PAGE> 18
provided, however, that this Agreement does not release the Corporation from
any of its current, future or ongoing obligations under the Severance
Agreement, specifically including but not limited to cash payments and benefits
due me.
This Agreement shall be governed by and construed in accordance with the
laws of the state of Florida, without reference to principles of conflict of
laws. This Agreement may not be amended or modified otherwise than by a
written agreement executed by RSI and me or our respective successors and legal
representatives.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
I CERTIFY THAT I HAVE FULLY READ, HAVE RECEIVED AN EXPLANATION OF, HAVE
NEGOTIATED AND COMPLETELY UNDERSTAND THE PROVISIONS OF THIS AGREEMENT, THAT I
HAVE HAD SUFFICIENT TIME AND THE OPPORTUNITY TO SEEK LEGAL ADVICE FROM AN
ATTORNEY BEFORE ENTERING INTO THIS AGREEMENT, AND THAT I AM SIGNING THIS
AGREEMENT FREELY AND VOLUNTARILY, WITHOUT DURESS, COERCION OR UNDUE INFLUENCE.
Dated this ___ day of _______, 19__.
__________________________ __________________________
Witness Executive
__________________________ __________________________
Witness Social Security Number
Executive's Date of Termination:_____________________________________
2
<PAGE> 19
STATE OF _________)
) ss:
COUNTY OF ________)
Before me personally appeared __________________, to me well known and known to
me to be the person described in and who executed the foregoing instrument, and
acknowledged to and before me that he/she executed said instrument for the
purposes therein expressed.
WITNESS my hand and official seal this ___ day of __________, 19__.
_________________________
Notary Public
Commission Expires:
_________________________ (Seal)
3
<PAGE> 1
EXHIBIT 10.4(b)
INCENTIVE COMPENSATION DEFERRAL AGREEMENT
THIS AGREEMENT, dated as of November 30, 1994, between Ryder System, Inc.
(the "Company") and ___________________________________ (the "Executive").
WITNESSETH:
WHEREAS, the Company has established an incentive compensation plan, with
respect to the performance of the Executive and the Company during 1994, in
which the Executive is eligible to participate; and
WHEREAS, the Executive and the Company desire to enter into an arrangement
with respect to the deferred payment of a portion of such incentive
compensation upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Company and the Executive hereby agree as follows:
1. $ _______________ or _______________%, whichever is less, of the
Executive's 1994 incentive compensation award to be made in 1995, less any
deductions consented to in writing by the Executive, shall be deferred by
the Company.
2. The deferred incentive compensation is subject to Social Security and
Medicare taxes at the time the incentive compensation award is made.
Therefore, the Executive and the Company agree that the Social Security
and Medicare taxes will be paid in the manner determined by the Company.
Interest will be computed as set forth in Article 3 hereof on the amount
of the incentive compensation award deferred pursuant to Article 1 hereof.
The deferred incentive compensation plus interest computed as set forth in
Article 3 hereof (the "Deferred Compensation") shall be payable to the
Executive, the Executive's designated beneficiary, or the Executive's
estate as set forth in this Agreement.
3. Interest will be credited to the Executive's account at December 31st of
each year. Interest will accrue at a rate equal to the average annual
base rate charged by the First National Bank of Boston, compounded
annually, provided, however, that such annual interest rate will not
exceed 12% nor be less than 5%. Interest will accrue on the average daily
balance of the Executive's account beginning with the date on which the
deferred compensation or accrued interest is credited to the Executive's
account and ending with the date on which the deferred compensation or
accrued interest is actually paid.
Executive Initials ______________
<PAGE> 2
The Executive may elect payment of the account balance either in
installments or in a lump sum. Installment payments will be computed by
dividing the combined total of deferred compensation and credited
interest, as of the prior year end, by the number of installments
remaining. Lump sum and final installment payments will include principal
and interest credited to the Executive's account as of the prior year end
and all interest accrued subsequently in the year of payment.
4. Deferred Compensation shall be paid to the Executive after the first to
occur of the listed events and in accordance with the method of payment
and commencement date selected by the Executive on the attached Exhibit A
which is made a part of this Agreement. Notwithstanding the foregoing, in
the event of a Change of Control of the Company as defined by the
Company's Board of Directors on August 20, l993, the Company shall
immediately pay the Deferred Compensation in a lump sum to the Executive.
The Executive should notify the Director of Corporate Accounting
immediately upon the occurrence of the triggering event to ensure timely
payment. For purposes of Exhibit A, the term "effective date" means the
Executive's last day of employment or the last day of the Executive's
severance period, if applicable, whichever occurs later.
For purposes of this Article 4, the Executive shall be deemed to be
continuously employed by the Company or any affiliate of the Company if
the Executive is re-employed by the Company or an affiliate of the Company
within four weeks of the date the Executive's employment first ceased.
5. The Executive shall have the right to designate a beneficiary who, in the
event of the Executive's death prior to the payment of any or all of the
Deferred Compensation pursuant to this Agreement, shall receive the unpaid
Deferred Compensation. Such designation shall be made by the Executive on
the form attached hereto. The Executive may, at any time, change or
revoke such designation by written notice to the Director of Compensation.
6. (a) If the Executive dies prior to receipt of any or all of the Deferred
Compensation, no Deferred Compensation shall be paid for a period of
thirty days from the date the Director of Compensation receives
written notice of the Executive's death.
(b) If the Executive has designated a beneficiary pursuant to Article 5
hereof, on the first day of the month following such thirty day
period, the unpaid Deferred Compensation shall be paid to the
designated beneficiary in a lump sum, unless the Executive's
beneficiary elects within such thirty day period, by written notice
to the Director of Compensation that the Deferred Compensation be
paid to such beneficiary in annual (2 - 10) installments or not be
paid at all.
(c) If the Executive does not designate a beneficiary or the designated
beneficiary predeceases the Executive or elects not to receive the
unpaid Deferred
2
<PAGE> 3
Compensation, the unpaid Deferred Compensation shall be paid to
the Executive's estate in a lump sum on the first day of the month
following the thirty day period.
(d) If the designated beneficiary dies after the Executive but prior
to the payment of the Deferred Compensation and has not elected not
to receive such Deferred Compensation, no Deferred Compensation
shall be paid for a period of thirty days from the date the Director
of Compensation receives written notice of the death of the
designated beneficiary. The Deferred Compensation shall then be paid
to the estate of the designated beneficiary in a lump sum on the
first day of the month following such thirty day period.
7. The Company shall pay to the Executive during the term of the Executive's
employment that portion of the Deferred Compensation which shall be
necessary in the case of an unforeseeable emergency. For purposes of this
Article 7 an unforeseeable emergency shall mean an unanticipated emergency
that is caused by an event beyond the control of the Executive and that
would result in severe financial hardship to the Executive if early
withdrawal were not permitted. The Compensation Committee of the Board of
Directors of the Company (the "Compensation Committee") shall limit any
early withdrawal to the amount necessary to meet the emergency. The
Executive shall apply to the Compensation Committee for any emergency
payment under this Article 7 and shall furnish to the Compensation
Committee such information as the Executive deems appropriate and as the
Company and counsel for the Company deem necessary and appropriate to make
such determination. The determination of the Compensation Committee as to
whether a payment is warranted under this Article 7, and the amount of
such payment, shall be conclusive and binding on the Executive and the
Company.
8. The Deferred Compensation shall be paid out of the general funds of the
Company and no funds shall be set aside therefor. The Executive shall
have the status of a general unsecured creditor of the Company and this
Agreement constitutes a mere promise by the Company to make benefit
payments in the future. It is the intention of the parties that the
arrangements be unfunded for tax purposes and for purposes of Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
9. Any rights to receive Deferred Compensation payments under this Agreement
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors
of the Executive or the Executive's beneficiary. Any such attempted
action shall be null and void and shall extinguish the Company's
obligation under this Agreement to pay Deferred Compensation.
10. For purposes of determining deferrals or entitlements under certain other
benefit programs maintained by the Company in which the Executive
participates including, but not limited to, the Company's Retirement Plan
and the Company's Employee Savings Plan, any amount of incentive
compensation deferred pursuant to this Agreement will not be
3
<PAGE> 4
included in the Executive's compensation base unless and until such
deferred amount is paid to the Executive while the Executive is employed
by the Company or any affiliate of the Company.
11. The Executive and the Company acknowledge that this Agreement is not an
employment agreement between the Executive and the Company, and that the
Company and the Executive each has the right to terminate the Executive's
employment at any time for any reason unless there is a written employment
contract to the contrary.
12. This Agreement shall be binding upon any successor to the Company by
merger, consolidation, purchase or otherwise.
13. This Agreement, together with the Executive's beneficiary designation,
constitutes the entire agreement between the Company and the Executive
regarding the Deferred Compensation and shall not be modified except upon
the written agreement of the Company and the Executive.
14. This Agreement shall be governed in accordance with the laws of the State
of Florida.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
_____________________________________
(Executive)
_____________________________________
Social Security Number
RYDER SYSTEM, INC.
By:_________________________________
M. Anthony Burns
Chairman of the Board,
President and
Chief Executive Officer
In accordance with Article 5 of the Incentive Compensation Deferral
Agreement set forth above, I hereby designate __________________________________
my beneficiary.
________________________________________
(Executive)
4
<PAGE> 5
included in the Executive's compensation base unless and until such
deferred amount is paid to the Executive while the Executive is employed
by the Company or any affiliate of the Company.
11. The Executive and the Company acknowledge that this Agreement is not an
employment agreement between the Executive and the Company, and that the
Company and the Executive each has the right to terminate the Executive's
employment at any time for any reason unless there is a written employment
contract to the contrary.
12. This Agreement shall be binding upon any successor to the Company by
merger, consolidation, purchase or otherwise.
13. This Agreement, together with the Executive's beneficiary designation,
constitutes the entire agreement between the Company and the Executive
regarding the Deferred Compensation and shall not be modified except upon
the written agreement of the Company and the Executive.
14. This Agreement shall be governed in accordance with the laws of the State
of Florida.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
________________________________________
(Executive)
________________________________________
Social Security Number
RYDER SYSTEM, INC.
By:____________________________________
James M. Herron
Senior Executive
Vice President and
General Counsel
In accordance with Article 5 of the Incentive Compensation Deferral
Agreement set forth above, I hereby designate __________________________________
my beneficiary.
________________________________________
(Executive)
4
<PAGE> 6
included in the Executive's compensation base unless and until such
deferred amount is paid to the Executive while the Executive is employed
by the Company or any affiliate of the Company.
11. The Executive and the Company acknowledge that this Agreement is not an
employment agreement between the Executive and the Company, and that the
Company and the Executive each has the right to terminate the Executive's
employment at any time for any reason unless there is a written employment
contract to the contrary.
12. This Agreement shall be binding upon any successor to the Company by
merger, consolidation, purchase or otherwise.
13. This Agreement, together with the Executive's beneficiary designation,
f constitutes the entire agreement between the Company and the Executive
regarding the Deferred Compensation and shall not be modified except upon
the written agreement of the Company and the Executive.
14. This Agreement shall be governed in accordance with the laws of the State
of Florida.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
________________________________________
(Executive)
________________________________________
Social Security Number
RYDER SYSTEM, INC.
By:_____________________________________
C. Robert Campbell
Executive Vice President -
Human Resources and
Administration
In accordance with Article 5 of the Incentive Compensation Deferral
Agreement set forth above, I hereby designate __________________________________
my beneficiary.
________________________________________
(Executive)
4
<PAGE> 7
EXHIBIT A
TO INCENTIVE COMPENSATION DEFERRAL AGREEMENT
DATED AS OF NOVEMBER 30, 1994
INSTRUCTIONS: Indicate your selections by circling one (1) Method of Payment
and one (1) Commencement Date for each event listed. If you select
installments or a specific month or date for payment, fill in the appropriate
information. Then initial or sign this Exhibit, as appropriate, where
indicated. YOU MUST COMPLETE SECTIONS I, II, III AND IV. The "FIXED DATE"
event in Sections V and VI is optional and should not be completed unless some
form of distribution is desired prior to retirement or termination.
Event Triggering Payment
I. Early Retirement
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_____________________________ _________________________________
<S> <C>
- Lump Sum = deferred - January 1st following effective
amount plus accrued interest. date of early retirement.
- Annual Installments - First day of month following
Select 2-10: ____________ = effective date of early retirement.
account balance plus interest
credited thereto divided by - First day of month that you elect
number of installments following effective date of early
outstanding. retirement. Specify month:
___________________________________.
</TABLE>
II. Normal Retirement
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ _____________________________________
<S> <C>
- Lump Sum = deferred - January 1st following effective
amount plus accrued interest. date of normal retirement.
- Annual Installments - First day of month following
Select 2-10: ____________ = effective date of normal retirement.
account balance plus interest
credited thereto divided by - First day of month that you elect
number of installments following effective date of normal
outstanding. retirement. Specify month:
___________________________.
Executive Initials _____________________
</TABLE>
1
<PAGE> 8
Exhibit A (continued)
Event Triggering Payment
III. Voluntary or Involuntary Termination
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - January 1st following effective
amount plus accrued interest. date of voluntary or involuntary
termination.
- Annual Installments - First day of month following
Select 2-10: ____________ = effective date of voluntary or
account balance plus interest involuntary termination.
credited thereto divided by
number of installments
outstanding.
</TABLE>
IV. Disability Termination
(prior to eligibility for retirement)
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - January 1st following effective
plus accrued interest. date of disability termination.
- Annual Installments - First day of month following
Select 2-10: ____________ = effective date of disability
account balance plus interest termination.
credited thereto divided by
number of installments
outstanding.
11/30/94 Executive Initials _____________________
</TABLE>
THE TERM "EFFECTIVE DATE" MEANS THE EXECUTIVE'S LAST DAY OF EMPLOYMENT OR THE
LAST DAY OF THE EXECUTIVE'S SEVERANCE PERIOD, IF APPLICABLE, WHICHEVER OCCURS
LATER.
2
<PAGE> 9
Exhibit A (continued)
Event Triggering Payment
V. Fixed Date
Full Payment (Optional)
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - First day of month of fixed
amount plus accrued interest. date. Specify month and year:
_______________________.
- Annual Installments
Select 2-10: ____________ =
account balance plus interest
credited thereto divided by
number of installments outstanding.
</TABLE>
VI. Fixed Date
Partial Payment (Optional)
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = partial - First day of month of fixed
payment amount with the date. Specify month and year:
remainder to be paid as _______________________.
indicated by the first
appropriate event triggering
payment.
- Annual Installments Amount $ __________ or __________%
Select 2-10: ____________ =
partial payment amount divided
by number of installments
outstanding with the remainder
to be paid as indicated by the
first appropriate event
triggering payment.
__________________________________
(Executive)
</TABLE>
3
<PAGE> 1
EXHIBIT 10.5(b)
SALARY DEFERRAL AGREEMENT
THIS AGREEMENT, dated as of November 30, 1994, between Ryder System,
Inc. (the "Company") and ___________________________________ (the "Executive").
WITNESSETH:
WHEREAS, the Executive is serving as an executive of the Company at an
annual rate of $_______________ as of November 30, 1994; and
WHEREAS, the Executive and the Company desire to enter into an
arrangement with respect to the deferred payment of a portion of the
Executive's salary upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Company and the Executive hereby agree as follows:
1. $_______________ of the Executive's 1995 annual salary shall be
deferred by the Company, in equal installments, from the semi-monthly
salary payments paid to the Executive during such year. The deferred
salary is subject to Social Security and Medicare taxes at the time of
deferral. Therefore, the Executive and the Company agree that the
Social Security and Medicare taxes will be paid in the manner
determined by the Company. Such deferred salary plus interest
computed and accrued as set forth in Article 2 hereof (the "Deferred
Compensation") shall be payable to the Executive, the Executive's
designated beneficiary, or the Executive's estate as set forth in this
Agreement.
2. Interest will be credited to the Executive's account at December 31st
of each year. Interest will accrue at a rate equal to the average
annual base rate charged by the First National Bank of Boston,
compounded annually, provided, however, that such annual interest rate
will not exceed 12% nor be less than 5%. Interest will accrue on the
average daily balance of the Executive's account beginning with the
date on which the deferred compensation or accrued interest is
credited to the Executive's account and ending with the date on which
the deferred compensation or accrued interest is actually paid.
The Executive may elect payment of the account balance either in
installments or in a lump sum. Installment payments will be computed
by dividing the combined total of deferred compensation and credited
interest, as of the prior year end, by the number of installments
remaining. Lump sum and final installment payments will include
principal and interest credited to the Executive's account as of the
prior year end and all interest accrued subsequently in the year of
payment.
Executive Initials _______________
<PAGE> 2
3. Deferred Compensation shall be paid to the Executive after the first
to occur of the listed events and in accordance with the method of
payment and commencement date selected by the Executive on the
attached Exhibit A which is made a part of this Agreement.
Notwithstanding the foregoing, in the event of a Change of Control of
the Company as defined by the Company's Board of Directors on August
20, l993, the Company shall immediately pay the Deferred Compensation
in a lump sum to the Executive.
The Executive should notify the Director of Corporate Accounting
immediately upon the occurrence of the triggering event to ensure
timely payment. For purposes of Exhibit A, the term "effective date"
means the Executive's last day of employment or the last day of the
Executive's severance period, if applicable, whichever occurs later.
For purposes of this Article 3, the Executive shall be deemed to be
continuously employed by the Company or any affiliate of the Company
if the Executive is re-employed by the Company or an affiliate of the
Company within four weeks of the date the Executive's employment first
ceased.
4. The Executive shall have the right to designate a beneficiary who, in
the event of the Executive's death prior to the payment of any or all
of the Deferred Compensation pursuant to this Agreement, shall receive
the unpaid Deferred Compensation. Such designation shall be made by
the Executive on the form attached hereto. The Executive may, at any
time, change or revoke such designation by written notice to the
Director of Compensation.
5. (a) If the Executive dies prior to receipt of any or all of the
Deferred Compensation, no Deferred Compensation shall be paid
for a period of thirty days from the date the Director of
Compensation receives written notice of the Executive's death.
(b) If the Executive has designated a beneficiary pursuant to
Article 4 hereof, on the first day of the month following such
thirty day period, the unpaid Deferred Compensation shall be
paid to the designated beneficiary in a lump sum, unless the
Executive's beneficiary elects within such thirty day period,
by written notice to the Director of Compensation, that the
Deferred Compensation be paid to such beneficiary in annual (2
- 10) installments or not be paid at all.
(c) If the Executive does not designate a beneficiary or the
designated beneficiary predeceases the Executive or elects not
to receive the unpaid Deferred Compensation, the unpaid
Deferred Compensation shall be paid to the Executive's estate
in a lump sum on the first day of the month following the
thirty day period.
2
<PAGE> 3
(d) If the designated beneficiary dies after the Executive but
prior to the payment of the Deferred Compensation and has not
elected not to receive such Deferred Compensation, no Deferred
Compensation shall be paid for a period of thirty days from
the date the Director of Compensation receives written notice
of the death of the designated beneficiary. The Deferred
Compensation shall then be paid to the estate of the
designated beneficiary in a lump sum on the first day of the
month following such thirty day period.
6. The Company shall pay to the Executive during the term of the
Executive's employment that portion of the Deferred Compensation which
shall be necessary in the case of an unforeseeable emergency. For
purposes of this Article 6 an unforeseeable emergency shall mean an
unanticipated emergency that is caused by an event beyond the control
of the Executive and that would result in severe financial hardship to
the Executive if early withdrawal were not permitted. The
Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee") shall limit any early withdrawal to the
amount necessary to meet the emergency. The Executive shall apply to
the Compensation Committee for any emergency payment under this
Article 6 and shall furnish to the Compensation Committee such
information as the Executive deems appropriate and as the Company and
counsel for the Company deem necessary and appropriate to make such
determination. The determination of the Compensation Committee as to
whether a payment is warranted under this Article 6, and the amount of
such payment, shall be conclusive and binding on the Executive and the
Company.
7. The Deferred Compensation shall be paid out of the general funds of
the Company and no funds shall be set aside therefor. The Executive
shall have the status of a general unsecured creditor of the Company
and this Agreement constitutes a mere promise by the Company to make
benefit payments in the future. It is the intention of the parties
that the arrangements be unfunded for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
8. Any rights to receive Deferred Compensation payments under this
Agreement are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Executive or the Executive's
beneficiary. Any such attempted action shall be null and void and
shall extinguish the Company's obligation under this Agreement to pay
Deferred Compensation.
9. For purposes of determining deferrals or entitlements under certain
other benefit programs maintained by the Company in which the
Executive participates including, but not limited to, the Company's
Retirement Plan and the Company's Employee Savings Plan, any amount of
salary deferred pursuant to this Agreement will not be included in the
Executive's compensation base unless and until such deferred amount is
paid to the Executive while the Executive is employed by the Company
or any affiliate of the Company.
3
<PAGE> 4
10. The Executive and the Company acknowledge that this Agreement is not
an employment agreement between the Executive and the Company, and the
Company and the Executive each has the right to terminate the
Executive's employment at any time for any reason unless there is a
written employment agreement to the contrary.
11. This Agreement shall be binding upon any successor to the Company by
merger, consolidation, purchase or otherwise.
12. This Agreement, together with the Executive's beneficiary designation,
constitutes the entire agreement between the Company and the Executive
regarding the Deferred Compensation and shall not be modified except
upon the written agreement of the Company and the Executive.
13. This Agreement shall be governed in accordance with the laws of the
State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
________________________________________
(Executive)
________________________________________
Social Security Number
RYDER SYSTEM, INC.
By:______________________________________
M. Anthony Burns
Chairman of the Board
President and
Chief Executive Officer
In accordance with Article 4 of the Salary Deferral Agreement set forth above,
I hereby designate _____________________________________________ my
beneficiary.
________________________________________
(Executive)
4
<PAGE> 5
10. The Executive and the Company acknowledge that this Agreement is not
an employment agreement between the Executive and the Company, and the
Company and the Executive each has the right to terminate the
Executive's employment at any time for any reason unless there is a
written employment agreement to the contrary.
11. This Agreement shall be binding upon any successor to the Company by
merger, consolidation, purchase or otherwise.
12. This Agreement, together with the Executive's beneficiary designation,
constitutes the entire agreement between the Company and the Executive
regarding the Deferred Compensation and shall not be modified except
upon the written agreement of the Company and the Executive.
13. This Agreement shall be governed in accordance with the laws of the
State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
________________________________________
(Executive)
________________________________________
Social Security Number
RYDER SYSTEM, INC.
By:_____________________________________
James M. Herron
Senior Executive
Vice President and
General Counsel
In accordance with Article 4 of the Salary Deferral Agreement set forth above,
I hereby designate _____________________________________________ my
beneficiary.
________________________________________
(Executive)
4
<PAGE> 6
10. The Executive and the Company acknowledge that this Agreement is not
an employment agreement between the Executive and the Company, and the
Company and the Executive each has the right to terminate the
Executive's employment at any time for any reason unless there is a
written employment agreement to the contrary.
11. This Agreement shall be binding upon any successor to the Company by
merger, consolidation, purchase or otherwise.
12. This Agreement, together with the Executive's beneficiary designation,
constitutes the entire agreement between the Company and the Executive
regarding the Deferred Compensation and shall not be modified except
upon the written agreement of the Company and the Executive.
13. This Agreement shall be governed in accordance with the laws of the
State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
________________________________________
(Executive)
________________________________________
Social Security Number
RYDER SYSTEM, INC.
By:______________________________________
C. Robert Campbell
Executive Vice President -
Human Resources and
Administration
In accordance with Article 4 of the Salary Deferral Agreement set forth above,
I hereby designate _____________________________________________ my
beneficiary.
_______________________________________
(Executive)
4
<PAGE> 7
EXHIBIT A
TO SALARY DEFERRAL AGREEMENT
DATED AS OF NOVEMBER 30, 1994
INSTRUCTIONS: Indicate your selections by circling one (1) Method of Payment
and one (1) Commencement Date for each event listed. If you select
installments or a specific month or date for payment, fill in the appropriate
information. Then initial or sign this Exhibit, as appropriate, where
indicated. YOU MUST COMPLETE SECTIONS I, II, III AND IV. The "FIXED DATE"
event in Sections V and VI is optional and should not be completed unless some
form of distribution is desired prior to retirement or termination.
Event Triggering Payment
I. Early Retirement
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - January 1st following effective
amount plus accrued interest. date of early retirement.
- Annual Installments - First day of month following
Select 2-10: ____________ = effective date of early retirement.
account balance plus interest
credited thereto divided by - First day of month that you elect
number of installments following effective date of early
outstanding. retirement. Specify month:
___________________________.
</TABLE>
II. Normal Retirement
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - January 1st following effective
amount plus accrued interest. date of normal retirement.
- Annual Installments - First day of month following
Select 2-10: ____________ = effective date of normal retirement.
account balance plus interest
credited thereto divided by - First day of month that you elect
number of installments following effective date of normal
outstanding. retirement. Specify month:
___________________________.
Executive Initials _______________
</TABLE>
1
<PAGE> 8
Exhibit A (continued)
Event Triggering Payment
III. Voluntary or Involuntary Termination
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - January 1st following effective
amount plus accrued interest. date of voluntary or involuntary
termination.
- Annual Installments - First day of month following
Select 2-10: ____________ = effective date of voluntary or
account balance plus interest involuntary termination.
credited thereto divided by
number of installments
outstanding.
</TABLE>
IV. Disability Termination
(prior to eligibility for retirement)
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - January 1st following effective
amount plus accrued interest. date of disability termination.
- Annual Installments - First day of month following
Select 2-10: ____________ = effective date of disability
account balance plus interest termination.
credited thereto divided by
number of installments
outstanding.
Executive Initials ___________________
</TABLE>
THE TERM "EFFECTIVE DATE" MEANS THE EXECUTIVE'S LAST DAY OF EMPLOYMENT OR THE
LAST DAY OF THE EXECUTIVE'S SEVERANCE PERIOD, IF APPLICABLE, WHICHEVER OCCURS
LATER.
2
<PAGE> 9
Exhibit A (continued)
Event Triggering Payment
V. Fixed Date
Full Payment (Optional)
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - First day of month of fixed
amount plus accrued interest. date. Specify month and year:
_______________________.
- Annual Installments
Select 2-10: ____________ =
account balance plus interest
credited thereto divided by
number of installments outstanding.
</TABLE>
VI. Fixed Date
Partial Payment (Optional)
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = partial - First day of month of fixed
payment amount with the date. Specify month and year:
remainder to be paid as _______________________.
indicated by the first
appropriate event triggering
payment.
- Annual Installments Amount $ __________ or __________%
Select 2-10: ____________ =
partial payment amount divided
by number of installments
outstanding with the remainder
to be paid as indicated by the
first appropriate event
triggering payment.
_____________________________________
(Executive)
</TABLE>
3
<PAGE> 1
EXHIBIT 10.6(b)
AGREEMENT
THIS AGREEMENT, dated as of December 31, 1994, between RYDER SYSTEM, INC.
(the "Company") and (the "Director").
W I T N E S S E T H:
WHEREAS, the Director is now serving as a member of the Board of Directors
of the Company; and
WHEREAS, the Director and the Company desire to enter into an arrangement
with respect to the deferred payment of the Director's 1995 total annual fees
upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Company and the Director hereby agree as follows:
1. $ _______________ or _______________% of the Director's total annual fees
for calendar year 1995, including (i) the cash portion of the Board of
Directors' Annual Retainer Fee, (ii) Committee Annual Retainer Fee, (iii)
Board Meeting Per Diem Fee, and (iv) Committee Meeting Per Diem Fee shall
be deferred by the Company. Such deferred fees plus interest computed as
set forth in Article 2 hereof (the "Deferred Compensation") shall be
payable to the Director, the Director's designated beneficiary, or the
Director's estate as set forth in this Agreement.
2. Interest will be credited to the Director's account at December 31st of
each year. Interest will accrue at a rate equal to the average annual
base rate charged by the First National Bank of Boston, compounded
annually, provided, however, that such annual interest rate will not
exceed 12% nor be less than 5%. Interest will accrue on the average daily
balance of the Director's account beginning with the date on which the
deferred compensation or accrued interest is credited to the Director's
account and ending with the date on which the deferred compensation or
accrued interest is actually paid.
The Director may elect payment of the account balance either in
installments or in a lump sum. Installment payments will be computed by
dividing the combined total of deferred compensation and credited
interest, as of the prior year end, by the number of installments
remaining. Lump sum and final installment payments will include principal
and interest credited to the Director's account as of the prior year end
and all interest accrued subsequently in the year of payment.
Director Initials _____________________
<PAGE> 2
3. Deferred Compensation shall be paid to the Director after the first to
occur of the listed events and in accordance with the method of payment
and commencement date selected by the Director on the attached Exhibit A
which is made a part of this Agreement. Notwithstanding the foregoing, in
the event of a Change of Control of the Company as defined by the Company's
Board of Directors on August 20, 1993, the Company shall immediately pay
the Deferred Compensation in a lump sum to the Director.
The Director should notify the Director of Corporate Accounting
immediately upon the occurrence of the triggering event to ensure timely
payment.
4. The Director shall have the right to designate a beneficiary who, in the
event of the Director's death prior to payment of any or all of the
Deferred Compensation payable to the Director pursuant to this Agreement,
shall receive such Deferred Compensation. Such designation shall be made
by the Director on the form attached hereto. The Director may, at any
time, change or revoke such designation by written notice to the Director
of Compensation.
5. (a) If the Director dies prior to receipt of any or all of the
Deferred Compensation, no Deferred Compensation shall be paid
for a period of thirty days from the date the Director of
Compensation receives written notice of the Director's death.
(b) If the Director has designated a beneficiary pursuant to
Article 4 hereof, on the first day of the month following such
thirty day period, the unpaid Deferred Compensation shall be
paid to the designated beneficiary in a lump sum, unless the
Director's beneficiary elects within such thirty day period,
by written notice to the Director of Compensation, that the
Deferred Compensation be paid to such beneficiary in annual
(2-10) installments or not be paid at all.
(c) If the Director does not designate a beneficiary or the
designated beneficiary predeceases the Director or elects not
to receive the unpaid Deferred Compensation, then the unpaid
Deferred Compensation shall be paid to the Director's estate
in a lump sum on the first day of the month following such
thirty day period.
(d) If the designated beneficiary of the Director dies after the
Director, but prior to the payment of the Deferred Compensation,
and has not elected not to receive such Deferred Compensation, no
Deferred Compensation shall be paid for a period of thirty days
from the date the Director of Compensation receives written notice
of the death of the designated beneficiary. The Deferred
Compensation shall then be paid to the estate of the designated
beneficiary in a lump sum on the first day of the month following
such thirty day period.
2
<PAGE> 3
6. The Company shall pay to the Director during the term of the
Director's service that portion of the Deferred Compensation which
shall be necessary in the case of an unforeseeable emergency. For
purposes of this Article 6 an unforeseeable emergency shall mean an
unanticipated emergency that is caused by an event beyond the control
of the Director and that would result in severe financial hardship to
the Director if early withdrawal were not permitted. The Compensation
Committee of the Board of Directors of the Company (the "Compensation
Committee") shall limit any early withdrawal to the amount necessary
to meet the emergency. The Director shall apply to the Compensation
Committee for any emergency payment under this Article 6 and shall
furnish to the Compensation Committee such information as the Director
deems appropriate and as the Company and counsel for the Company deem
necessary and appropriate to make such determination. The
determination of the Compensation Committee as to whether a payment is
warranted under this Article 6, and the amount of such payment, shall
be conclusive and binding on the Director and the Company. If the
Director is a member of the Compensation Committee, the Director shall
not sit as a member of such Committee in the determination of the
Director's application under this Article 6.
7. The Deferred Compensation shall be paid out of the general funds of
the Company and no funds shall be set aside therefor. The Director
shall have the status of a general unsecured creditor of the Company
and this Agreement constitutes a mere promise by the Company to make
benefit payments in the future. It is the intention of the parties
that the arrangements be unfunded for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
8. Any rights to receive Deferred Compensation payments under this
Agreement are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Director or the Director's
beneficiary. Any such attempted action shall be null and void and
shall extinguish the Company's obligation under this Agreement to pay
Deferred Compensation.
9. The Director and the Company acknowledge that this Agreement is not an
agreement concerning continued service as a Director between the
Director and the Company.
10. This Agreement shall be binding upon any successor to the Company by
merger, consolidation, purchase or otherwise.
11. This Agreement, together with the Director's beneficiary designation,
constitutes the entire agreement between the Company and the Director
regarding Deferred Compensation and shall not be modified except upon
the written agreement of the Company and the Director.
3
<PAGE> 4
12. This Agreement shall be governed in accordance with the laws of the
State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
___________________________________
(Director)
___________________________________
Social Security Number
RYDER SYSTEM, INC.
By:________________________________
M. Anthony Burns
Chairman of the Board,
President and
Chief Executive Officer
In accordance with Article 4 of the Agreement set forth above, I
hereby designate _____________________________________________________________
my beneficiary.
__________________________________
(Director)
4
<PAGE> 5
EXHIBIT A
TO DIRECTOR DEFERRAL AGREEMENT
DATED AS OF DECEMBER 31, 1994
INSTRUCTIONS: Indicate your selections by circling one (1) Method of Payment
and one (1) Commencement Date for each event listed. If you select
installments or a specific month or date for payment, fill in the appropriate
information. Then initial or sign this Exhibit, as appropriate, where
indicated. The "FIXED DATE" events are optional and should not be completed
unless some form of distribution is desired prior to termination or retirement.
Event Triggering Payment
I. Termination of the Director's Service
as a Member of the Company's Board of Directors
_______________________________________________
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - January 1st following effective
amount plus accrued interest. date of termination.
- Annual Installments - First day of month following
Select 2-10: _______________ = effective date of termination.
account balance plus interest
credited thereto divided by
number of installments
outstanding.
</TABLE>
II. Retirement as a Member of the Company's Board of Directors
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - January 1st following effective
amount plus accrued interest. date of retirement.
- Annual Installments - First day of month following
Select 2-10: _______________ = effective date of retirement.
account balance plus interest
credited thereto divided by - First day of month that you
number of installments elect following effective date of
outstanding. retirement. Specify month:
____________________.
Director Initials __________________________
</TABLE>
1
<PAGE> 6
EXHIBIT A (continued)
Event Triggering Payment
III. Fixed Date While Providing Outside Director's Services for Ryder
Full Payment (Optional)
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = deferred - First day of month of fixed
amount plus accrued interest. date. Specify month and year:
______________________.
- Annual Installments
Select 2-10: _____________ =
account balance plus interest
credited thereto divided by
number of installments outstanding.
</TABLE>
IV. Fixed Date While Providing Outside Director's Services for Ryder
Partial Payment (Optional)
<TABLE>
<CAPTION>
METHOD OF PAYMENT COMMENCEMENT DATE
_______________________________ ____________________________________
<S> <C>
- Lump Sum = partial - First day of month of fixed
payment amount with the date. Specify month and year:
remainder to be paid as ______________________.
indicated in the event
of termination or
retirement, whichever
occurs first.
- Annual Installments Amount $_______________ or __________%
Select 2-10: ____________ =
partial payment amount divided
by number of installments
outstanding with the remainder
to be paid as indicated in the
event of termination or
retirement, whichever occurs
first.
_______________________________
(Director)
</TABLE>
2
<PAGE> 1
EXHIBIT 10.7(b)
--------------------------------------------------------------------------------
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1995 INCENTIVE COMPENSATION PLAN PAGE 1
--------------------------------------------------------------------------------
Supersedes 1994 Headquarters Executive Management Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1995
Incentive Plan for Ryder System, Inc. (RSI or the Company) headquarters staff
Officers, Directors and Managers whose positions are evaluated at 700 Hay
Points or higher. The plan is intended to serve as a single, comprehensive
source of information that will explain your bonus for achieving various levels
of performance. Questions should be addressed to your supervisor.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity for each
participating management level:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
<TABLE>
<CAPTION>
RSI INDIVIDUAL TOTAL BONUS
MANAGEMENT LEVEL PERFORMANCE PERFORMANCE OPPORTUNITY
<S> <C> <C> <C>
Management Level 14 + * 80% 20% 100%
(1500 + Hay Points)
Management Level 13 48% 12% 60%
(1192-1499 Hay Points)
Management Level 12 40% 10% 50%
(1050-1191 Hay Points)
Management Level 11 32% 8% 40%
(890-1049 Hay Points)
Management Level 10 24% 6% 30%
(790-889 Hay Points)
Management Level 9 16% 4% 20%
(700-789 Hay Points)
</TABLE>
* See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1995, your bonus payout will be based on RSI performance and your
performance as an individual.
RSI performance is measured based on RSI Net Earnings After Tax (NAT) Return on
Equity (ROE) performance and RSI Net Earnings Before Tax (NBT) performance for
1995.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you agreed to with management at the start
of the year. Given their importance, the objectives should be in writing and
may be updated during the year to adjust for priorities that may have changed.
<PAGE> 2
--------------------------------------------------------------------------------
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1995 INCENTIVE COMPENSATION PLAN PAGE 2
--------------------------------------------------------------------------------
DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
- RSI PERFORMANCE -- RSI performance payout is based on a grid which
combines RSI ROE performance and RSI NBT performance.
RSI ROE performance for the bonus year is calculated by
dividing RSI NAT by RSI average equity.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax from continuing operations for the bonus
year, as certified to the Board of Directors and
shareholders of RSI by the Company's independent
auditors, including appropriate accruals for all
incentive awards estimated to be payable for that
bonus year.
-- RSI average equity is defined as the average of the
four quarters' average equity. A quarter's average
equity is defined as the equity, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total equity as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT is defined as RSI's consolidated Net Earnings Before Tax as
certified to the Board of Directors and shareholders of RSI by the
Company's independent auditors, net of a provision for the total of
all incentive awards, for the bonus year.
- INDIVIDUAL PERFORMANCE -- Individual performance is defined as each
participant's performance against job requirements and objectives
(MBOs), as agreed upon between the individual and his/her management,
at the beginning of the bonus year. If necessary, goals and
objectives may be revised during the bonus year to reflect changing
business priorities.
Individual performance awards are separate from payments based
upon financial measurements and may be paid, in part or in whole,
based on the Company's performance and/or ability to pay.
Bonus awards are subject to the recommendation of the Administrator
of the plan and approval by the Board of Directors of RSI. (See
"Bonus Payment")
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with the
approval of the Board of Directors of RSI.
<PAGE> 3
--------------------------------------------------------------------------------
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1995 INCENTIVE COMPENSATION PLAN PAGE 3
--------------------------------------------------------------------------------
BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE - ROE/NBT
RSI performance payout is based on a grid consisting of two
performance variables: 1995 RSI NAT ROE and 1995 RSI NBT. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 RSI NBT ($MM)
THRESHOLD MAXIMUM
260.5 276 289 306 313 327
ROE % OF OPPORTUNITY
<S> <C> <C> <C> <C> <C> <C>
< 14.5 30 40 50 55 75 80
14.5 - 17 40 50 60 65 85 90
> 17 50 60 65 75 90 100
</TABLE>
2) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
FAIR - SOME CONSISTENT SIGNIFICANTLY
CRITICAL WITH ABOVE
INDIVIDUAL PERFORMANCE SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
<S> <C> <C> <C> <C>
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-50% 51-70% 71-89% 90-100%
</TABLE>
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL PAYOUTS MAY BE
PRORATED DOWNWARD AT THE COMPANY'S DISCRETION. ADDITIONAL CRITERIA MAY
ADJUST THE PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT
ACHIEVED. THE GRIDS WILL BE REVISED ANNUALLY TO ENSURE CONSISTENCY WITH
COMPANY GOALS AND OBJECTIVES.
<PAGE> 4
--------------------------------------------------------------------------------
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1995 INCENTIVE COMPENSATION PLAN PAGE 4
--------------------------------------------------------------------------------
BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows for a Management Level 9
participant, given the following information:
<TABLE>
<S> <C>
Eligible Base Salary $50,000
1995 RSI NBT $ 313MM
1995 RSI NAT ROE 15%
Individual Performance Significantly Above Expectations
</TABLE>
<TABLE>
<S> <C>
1) RSI Performance
16% Maximum RSI Performance Bonus Opportunity
85% Potential RSI Performance Bonus Payout (from grid)
16% x 85% = 13.6% of Eligible Base Salary
13.6% x $50,000 = $6,800
2) Individual Performance
4% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
4% x 75% = 3% of Eligible Base Salary
3% x $50,000 = $1,500
------
TOTAL BONUS $8,300
</TABLE>
<PAGE> 5
--------------------------------------------------------------------------------
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1995 INCENTIVE COMPENSATION PLAN PAGE 5
--------------------------------------------------------------------------------
BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, commissions, employee benefits,
moving expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for
a participant who begins a bonus year with a base salary of
$50,000, then effective June 1 receives an increase to a base
salary of $53,000:
<TABLE>
<S> <C>
January 1 through May 31 of Bonus Year:
---------------------------------------
31 + 28 + 31 + 30 + 31 = 151=.414 x $50,000/yr. = $20,700
---------------------- ---
365 days 365
June 1 through December 31 of Bonus Year:
-----------------------------------------
365 - 151 = 214=.586 x $53,000/yr. = $31,058
--------- ---
365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $51,758
</TABLE>
SPECIAL ROE AWARD
One and one-half percent of the RSI NAT amount in excess of that required to
reach 17% Return on Equity (ROE) will be credited to deferred compensation for
elected Officers of the Company, Division Presidents and the Senior Vice
President and General Manager Ryder International. This amount will be
prorated based on each individual participant's earned salary (while in the
eligible position) in relation to the sum of the earned salaries of all
participants.
<PAGE> 6
--------------------------------------------------------------------------------
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1995 INCENTIVE COMPENSATION PLAN PAGE 6
--------------------------------------------------------------------------------
ADMINISTRATION
The Chairman, President, and Chief Executive Officer of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
ELIGIBILITY
Employees whose positions are designated on page 1 and who are employed in good
standing at the time bonus payments are made are eligible to participate in
this plan. Individuals who have agreements which specifically provide for
incentive compensation other than that which is provided in this plan or who
are participants in any other incentive compensation plan of RSI, its
subsidiaries or affiliates are not eligible to participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave the Company during the bonus year under any
of the following conditions may be eligible for pro rata bonus awards:
- retirement under the provisions of one of the Company's
retirement plans or the Social Security Act, or
- disability
Note: The spouse or legal representative of a deceased participant may be
eligible for pro rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of the Company (as defined and adopted by the Board of Directors on
August 20, 1993), the funds necessary to pay incentive awards will be placed in
a trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by the Company. Participants will receive bonus awards for actual time
employed during the bonus year based upon: a) the greater of actual company
performance or 80% of maximum company performance opportunity plus b) the
greater of actual individual performance or 80% of maximum individual
performance opportunity.
<PAGE> 7
--------------------------------------------------------------------------------
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1995 INCENTIVE COMPENSATION PLAN PAGE 7
--------------------------------------------------------------------------------
However, if the Company fails to verify incentive awards through a "Big 6"
accounting firm, participants will receive 100% of their maximum company and
individual performance opportunities based on actual time worked during the
bonus year. The Company will be responsible for all legal fees and expenses
which participants may reasonably incur in enforcing their rights under the
plan in the event of a Change of Control of the Company.
Should a Change of Control occur during 1995, participants will receive
instructions regarding the collection of incentive awards.
BONUS ELIGIBILITY ON TERMINATION
Participants leaving the Company or VLSD under any conditions other than those
outlined in the Eligibility or Change of Control sections of this plan are not
eligible for bonus awards for the bonus year in which they leave, nor are they
eligible for awards for the preceding bonus year, if such awards have not yet
been distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the plan, the Compensation Committee of
the Board of Directors or the full Board of Directors of RSI will, in its sole
discretion, determine the participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent
auditor.
BONUS FUNDING
A maximum of 2.5% of consolidated RSI NBT and 9% of Vehicle Leasing and
Services Division (VLSD) NBT may be accrued by RSI and VLSD, respectively,
throughout the bonus year to fund all awards under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, and the Ryder Services Corporation
Incentive Compensation Plan, as well as any incentive or bonus payments
resulting from employment commitments or agreements. Accruals for the
Chairman, President and Chief Executive Officer of RSI, the President of
Automotive Carrier Division, the President of Commercial Leasing & Services,
the President of Consumer Truck Rental, the President of Ryder Dedicated
Logistics, and all discretionary awards are excluded from this funding
limitation.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan, the amount of the accrual, or the funding limitation.
Should the funding limitation or accrual not provide for bonus allotments under
the plan, proration will be affected at the discretion of the Chairman,
President and Chief Executive Officer of RSI. Unused monies from the fund may
not be carried forward for subsequent bonus years.
<PAGE> 8
--------------------------------------------------------------------------------
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1995 INCENTIVE COMPENSATION PLAN PAGE 8
--------------------------------------------------------------------------------
DISCRETIONARY AWARDS
With the approval of the Board of Directors of RSI, the Chairman, President,
and Chief Executive Officer of RSI has the authority to grant discretionary
bonus awards for exemplary performance to non-participants or to enhance the
awards of participants. Discretionary awards are not subject to the funding
limitations of this plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards must be
approved by the Chairman, President and Chief Executive Officer of RSI.
The total of all discretionary awards for employees under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, the Ryder Services Corporation Incentive
Compensation Plan, and the Division Presidents' bonus plans, including those
granted off-cycle, may not exceed $430,000 per year.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and affiliates'
incentive compensation plans annually to ensure equitability both within the
Company, and in relation to current economic conditions.
THE BOARD OF DIRECTORS RESERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE
EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.8(b)
--------------------------------------------------------------------------------
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
1995 INCENTIVE COMPENSATION PLAN PAGE 1
--------------------------------------------------------------------------------
Supersedes 1994 Senior Executive Vice Presidents Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1995
Incentive Plan for the Senior Executive Vice Presidents Chairman, President &
Chief Executive Officer (CEO) of Ryder System, Inc. (RSI or the Company). The
plan is intended to serve as a single, comprehensive source of information that
will explain your bonus for achieving various levels of performance.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
<TABLE>
<CAPTION>
RSI RSI PERFORMANCE INDIVIDUAL TOTAL BONUS
PERFORMANCE ABOVE PLAN PERFORMANCE OPPORTUNITY*
<S> <C> <C> <C>
80% 20% 20% 120%
</TABLE>
* See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1995, your bonus payout will be based on RSI performance, RSI performance
above plan, and your performance as an individual.
RSI performance is measured based on RSI Net Earnings After Tax (NAT) Return on
Equity (ROE) performance and RSI Net Earnings Before Tax (NBT) performance for
1995.
RSI performance above plan is measured based on RSI NBT performance for 1995.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you agreed to with management at the start
of the year. The objectives may be updated during the year to adjust for
priorities that may have changed.
<PAGE> 2
--------------------------------------------------------------------------------
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
1995 INCENTIVE COMPENSATION PLAN PAGE 2
--------------------------------------------------------------------------------
DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
- RSI PERFORMANCE -- RSI performance payout is based on a grid which
combines RSI ROE performance and RSI NBT performance.
RSI ROE performance for the bonus year is calculated by dividing
RSI NAT by RSI average equity.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax from continuing operations for the bonus
year, as certified to the Board of Directors and
shareholders of RSI by the Company's independent
auditors, including appropriate accruals for all
incentive awards estimated to be payable for that
bonus year.
-- RSI average equity is defined as the average of the
four quarters' average equity. A quarter's average
equity is defined as the equity, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total equity as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT is defined as RSI's consolidated Net Earnings Before Tax
as certified to the Board of Directors and shareholders of RSI by the
Company's independent auditors, net of a provision for the total of
all incentive awards, for the bonus year.
- RSI PERFORMANCE ABOVE PLAN -- RSI performance above plan payout is
based on RSI NBT performance. To achieve a payout, RSI NBT
performance must be above Plan.
- INDIVIDUAL PERFORMANCE -- Individual performance is defined as each
participant's performance against job requirements and objectives
(MBOs), as agreed upon between the individual and his/her management,
at the beginning of the bonus year. If necessary, goals and
objectives may be revised during the bonus year to reflect changing
business priorities.
Individual performance awards are separate from payments based
upon financial measurements and may be paid, in part or in whole,
based on the Company's performance and/or ability to pay.
Bonus awards are subject to the recommendation of the
Administrator of the plan and approval by the Board of Directors of
RSI. (See "Bonus Payment")
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with the approval
of the Board of Directors of RSI.
<PAGE> 3
--------------------------------------------------------------------------------
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
1995 INCENTIVE COMPENSATION PLAN PAGE 3
--------------------------------------------------------------------------------
BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE - ROE/NBT
RSI performance payout is based on a grid consisting of two
performance variables: 1995 RSI NAT ROE and 1995 RSI NBT. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 RSI NBT ($MM)
THRESHOLD MAXIMUM
260.5 276 289 306 313 327
ROE % OF OPPORTUNITY
<S> <C> <C> <C> <C> <C> <C>
< 14.5 30 40 50 55 75 80
14.5 - 17 40 50 60 65 85 90
> 17 50 60 65 75 90 100
</TABLE>
2) RSI PERFORMANCE ABOVE PLAN - NBT
RSI performance above plan payout is based on a grid of 1995 RSI NBT.
The potential bonus payout percent is determined by locating the point
on the grid under the 1995 RSI NBT. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Above
Plan Bonus Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE ABOVE PLAN BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE ABOVE PLAN BONUS OPPORTUNITY
<TABLE>
<S> <C> <C>
1995 RSI ABOVE PLAN NBT ($MM)
THRESHOLD MAXIMUM
306.0 313.0 327.0
% OF OPPORTUNITY
0 50 100
</TABLE>
<PAGE> 4
--------------------------------------------------------------------------------
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
1995 INCENTIVE COMPENSATION PLAN PAGE 4
--------------------------------------------------------------------------------
3) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
FAIR - SOME CONSISTENT SIGNIFICANTLY
CRITICAL WITH ABOVE
INDIVIDUAL PERFORMANCE SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
<S> <C> <C> <C> <C>
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-50% 51-70% 71-89% 90-100%
</TABLE>
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL PAYOUTS MAY BE
PRORATED DOWNWARD AT THE COMPANY'S DISCRETION. ADDITIONAL CRITERIA MAY
ADJUST THE PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT
ACHIEVED. THE GRIDS WILL BE REVISED ANNUALLY TO ENSURE CONSISTENCY WITH
COMPANY GOALS AND OBJECTIVES.
<PAGE> 5
--------------------------------------------------------------------------------
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
1995 INCENTIVE COMPENSATION PLAN PAGE 5
--------------------------------------------------------------------------------
BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows, given the following
information:
<TABLE>
<S> <C>
Eligible Base Salary $350,000
1995 RSI NAT ROE 15%
1995 RSI NBT $ 313MM
Individual Performance Significantly Above Expectations
</TABLE>
<TABLE>
<S> <C>
1) RSI Performance
80% Maximum RSI Performance Bonus Opportunity
85% Potential RSI Performance Bonus Payout (from grid)
80% x 85% = 68% of Eligible Base Salary
68% x $350,000 = $238,000
2) RSI Performance Above Plan
20% Maximum RSI Performance Above Plan Bonus Opportunity
50% Potential RSI Performance Above Plan Bonus Payout (from grid)
20% x 50% = 10% of Eligible Base Salary
10% x $350,000 = 35,000
3) Individual Performance
20% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $350,000 = $ 52,500
--------
TOTAL BONUS $325,500
</TABLE>
<PAGE> 6
--------------------------------------------------------------------------------
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
1995 INCENTIVE COMPENSATION PLAN PAGE 6
--------------------------------------------------------------------------------
BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, commissions, employee benefits,
moving expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for a
participant who begins a bonus year with a base salary of
$350,000, then effective June 1 receives an increase to a base
salary of $375,000:
<TABLE>
<S> <C>
January 1 through May 31 of Bonus Year:
---------------------------------------
31 + 28 + 31 + 30 + 31 = 151=.414 x $350,000/yr. = $144,900
---------------------- ---
365 days 365
June 1 through December 31 of Bonus Year:
-----------------------------------------
365 - 151 = 214=.586 x $375,000/yr. = $219,750
--------- ---
365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $364,650
</TABLE>
SPECIAL ROE AWARD
One and one-half percent of the RSI NAT amount in excess of that required to
reach 17% Return on Equity (ROE) will be credited to deferred compensation for
elected Officers of the Company, Division Presidents and the Senior Vice
President and General Manager Ryder International. This amount will be
prorated based on each individual participant's earned salary (while in the
eligible position) in relation to the sum of the earned salaries of all
participants.
<PAGE> 7
--------------------------------------------------------------------------------
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
1995 INCENTIVE COMPENSATION PLAN PAGE 7
--------------------------------------------------------------------------------
ADMINISTRATION
The Chairman, President, and Chief Executive Officer of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
ELIGIBILITY
Employees whose positions are designated on page 1 and who are employed in good
standing at the time bonus payments are made are eligible to participate in
this plan. Individuals who have agreements which specifically provide for
incentive compensation other than that which is provided in this plan or who
are participants in any other incentive compensation plan of RSI, its
subsidiaries or affiliates are not eligible to participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave the Company during the bonus year under any
of the following conditions may be eligible for pro rata bonus awards:
- retirement under the provisions of one of the Company's
retirement plans or the Social Security Act, or
- disability
Note: The spouse or legal representative of a deceased participant may be
eligible for pro rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of the Company (as defined and adopted by the Board of Directors on
August 20, 1993), the funds necessary to pay incentive awards will be placed in
a trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by the Company. Participants will receive bonus awards for actual time
employed during the bonus year based upon: a) the greater of actual company
performance or 80% of maximum company performance opportunity plus b) the
greater of actual individual performance or 80% of maximum individual
performance opportunity.
<PAGE> 8
--------------------------------------------------------------------------------
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
1995 INCENTIVE COMPENSATION PLAN PAGE 8
--------------------------------------------------------------------------------
However, if the Company fails to verify incentive awards through a "Big 6"
accounting firm, participants will receive 100% of their maximum company and
individual performance opportunities based on actual time worked during the
bonus year. The Company will be responsible for all legal fees and expenses
which participants may reasonably incur in enforcing their rights under the
plan in the event of a Change of Control of the Company.
Should a Change of Control occur during 1995, participants will receive
instructions regarding the collection of incentive awards.
BONUS ELIGIBILITY ON TERMINATION
Participants leaving the Company under any conditions other than those outlined
in the Eligibility or Change of Control sections of this plan are not eligible
for bonus awards for the bonus year in which they leave, nor are they eligible
for awards for the preceding bonus year, if such awards have not yet been
distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the plan, the Compensation Committee of
the Board of Directors or the full Board of Directors of RSI will, in its sole
discretion, determine the participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent
auditor.
BONUS FUNDING
A maximum of 2.5% of consolidated RSI NBT and 9% of Vehicle Leasing and
Services Division (VLSD) NBT may be accrued by RSI and VLSD, respectively,
throughout the bonus year to fund all awards under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, and the Ryder Services Corporation
Incentive Compensation Plan, as well as any incentive or bonus payments
resulting from employment commitments or agreements. Accruals for the
Chairman, President and Chief Executive Officer of RSI, the President of
Automotive Carrier Division, the President of Commercial Leasing & Services,
the President of Consumer Truck Rental, the President of Ryder Dedicated
Logistics, and all discretionary awards are excluded from this funding
limitation.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan, the amount of the accrual, or the funding limitation.
Should the funding limitation or accrual not provide for bonus allotments under
the plan, proration will be affected at the discretion of the Chairman,
President and Chief Executive Officer of RSI. Unused monies from the fund may
not be carried forward for subsequent bonus years.
<PAGE> 9
--------------------------------------------------------------------------------
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
1995 INCENTIVE COMPENSATION PLAN PAGE 9
--------------------------------------------------------------------------------
DISCRETIONARY AWARDS
With the approval of the Board of Directors of RSI, the Chairman, President,
and Chief Executive Officer of RSI has the authority to grant discretionary
bonus awards for exemplary performance to non-participants or to enhance the
awards of participants. Discretionary awards are not subject to the funding
limitations of this plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards must be
approved by the Chairman, President and Chief Executive Officer of RSI.
The total of all discretionary awards for employees under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, the Ryder Services Corporation Incentive
Compensation Plan, and the Division Presidents' bonus plans, including those
granted off-cycle, may not exceed $430,000 per year.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and affiliates'
incentive compensation plans annually to ensure equitability both within the
Company, and in relation to current economic conditions.
THE BOARD OF DIRECTORS RESERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE
EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.9(b)
--------------------------------------------------------------------------------
RYDER
SENIOR VICE PRESIDENT &
GENERAL MANAGER
RYDER INTERNATIONAL
1995 INCENTIVE COMPENSATION PLAN PAGE 1
--------------------------------------------------------------------------------
Supersedes 1994 Senior Vice President and General Manager Incentive
Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1995
Incentive Plan for the Senior Vice President and General Manager, Ryder
International. The plan is intended to serve as a single, comprehensive source
of information that will explain your bonus for achieving various levels of
performance. Questions should be addressed to your supervisor.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
<TABLE>
<CAPTION>
RSI INTERNATIONAL DEVELOPMENT INDIVIDUAL TOTAL BONUS
PERFORMANCE PERFORMANCE OBJECTIVES PERFORMANCE OPPORTUNITY*
----------- ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
60% 10% 10% 20% 100%
</TABLE>
* See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1995, your bonus payout will be based upon Ryder System, Inc. (RSI or the
Company) performance, International performance, International development
objectives and your performance as an individual.
RSI performance is measured based on RSI Net Earnings After Tax (NAT) Return on
Equity (ROE) performance and RSI Net Earnings Before Tax (NBT) performance for
1995.
International performance is measured based on International NBT performance
for 1995.
International development is measured based on objectives set for 1995.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you agreed to with management at the start
of the year. Given their importance, the objectives should be in writing and
may be updated during the year to adjust for priorities that may have changed.
<PAGE> 2
--------------------------------------------------------------------------------
RYDER
SENIOR VICE PRESIDENT &
GENERAL MANAGER
RYDER INTERNATIONAL
1995 INCENTIVE COMPENSATION PLAN PAGE 2
--------------------------------------------------------------------------------
DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
o RSI PERFORMANCE -- RSI performance payout is based on a
grid which combines RSI ROE performance and RSI NBT
performance.
RSI ROE performance for the bonus year is calculated by
dividing RSI NAT by RSI average equity.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax from continuing operations for the bonus
year, as certified to the Board of Directors and
shareholders of RSI by the Company's independent
auditors, including appropriate accruals for all
incentive awards estimated to be payable for that
bonus year.
-- RSI average equity is defined as the average of the
four quarters' average equity. A quarter's average
equity is defined as the equity, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total equity as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT is defined as RSI's consolidated Net Earnings Before
Tax as certified to the Board of Directors and shareholders of
RSI by the Company's independent auditors, net of a provision
for the total of all incentive awards, for the bonus year.
o INTERNATIONAL PERFORMANCE -- International performance payout
is based on International NBT performance.
International NBT performance is defined as International's
consolidated Net Earnings Before Tax as verified by the Senior
Vice President and Controller, RSI, net of a provision for the
total of all incentive awards, for the bonus year.
o INTERNATIONAL DEVELOPMENT OBJECTIVES -- Payout is determined
based on achieving the following objectives:
-- Double German revenue and break even on a monthly
basis by the end of the year.
-- Develop and launch a European joint venture or
alliance.
-- Determine and implement appropriate business
processes and systems to support new and existing
services.
-- In support of global human resource planning, create
an international bench strength pool (identification
and preparation of candidates).
-- Identify the next strategic market and begin the
entry process.
-- Complete and implement a Pan-European strategy.
-- Sign 5 new significant customers in Mexico by year
end.
<PAGE> 3
--------------------------------------------------------------------------------
RYDER
SENIOR VICE PRESIDENT &
GENERAL MANAGER
RYDER INTERNATIONAL
1995 INCENTIVE COMPENSATION PLAN PAGE 3
--------------------------------------------------------------------------------
Note: All quantitative values are subject to interpolation.
o INDIVIDUAL PERFORMANCE -- Individual performance is defined as
each participant's performance against job requirements and
objectives (MBOs), as agreed upon between the individual and
his/her management, at the beginning of the bonus year. If
necessary, goals and objectives may be revised during the
bonus year to reflect changing business priorities.
Individual performance awards are separate from payments based
upon financial measurements and may be paid, in part or in
whole, based on the Company's performance and/or ability to
pay.
Bonus awards are subject to the recommendation of the
Administrator of the plan and approval by the Board of
Directors of RSI. (See "Bonus Payment")
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with the
approval of the Board of Directors of RSI.
<PAGE> 4
--------------------------------------------------------------------------------
RYDER
SENIOR VICE PRESIDENT &
GENERAL MANAGER
RYDER INTERNATIONAL
1995 INCENTIVE COMPENSATION PLAN PAGE 4
--------------------------------------------------------------------------------
BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE - ROE/NBT
RSI performance payout is based on a grid consisting of two
performance variables: 1995 RSI NAT ROE and 1995 RSI NBT. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 RSI NBT ($MM)
THRESHOLD ------------------ MAXIMUM
--------- -------
<S> <C> <C> <C> <C> <C> <C>
260.5 276 289 306 313 327
ROE % OF OPPORTUNITY
--- ----------------
Less Than 14.5 30 40 50 55 75 80
14.5 - 17 40 50 60 65 85 90
Greater Than 17 50 60 65 75 90 100
</TABLE>
2) INTERNATIONAL PERFORMANCE - NBT
International performance payout is based on 1995 International NBT.
The bonus payout percent is determined by locating the point on the
grid which corresponds to the variable. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum International
Performance Bonus Opportunity, as shown on page 1.
POTENTIAL INTERNATIONAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INTERNATIONAL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 INTERNATIONAL NBT ($MM)
----------------------------
THRESHOLD MAXIMUM
--------- --------
<S> <C> <C> <C>
0.25 1 2 4
% OF OPPORTUNITY
----------------
55 65 80 100
</TABLE>
<PAGE> 5
--------------------------------------------------------------------------------
RYDER
SENIOR VICE PRESIDENT &
GENERAL MANAGER
RYDER INTERNATIONAL
1995 INCENTIVE COMPENSATION PLAN PAGE 5
--------------------------------------------------------------------------------
3) INTERNATIONAL DEVELOPMENT OBJECTIVES
International development objectives payout is based on the percentage
of objectives achieved in 1995 as shown on page 2. The potential
bonus payout is expressed as a percentage of Maximum Bonus
Opportunity, as shown on page 1.
4) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
FAIR - SOME CONSISTENT WITH SIGNIFICANTLY
CRITICAL WITH ABOVE
INDIVIDUAL PERFORMANCE SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
---------------------- ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-50% 51-70% 71-89% 90-100%
</TABLE>
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL PAYOUTS MAY BE
PRORATED DOWNWARD AT THE COMPANY'S DISCRETION. ADDITIONAL CRITERIA MAY
ADJUST THE PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT
ACHIEVED. THE GRIDS WILL BE REVISED ANNUALLY TO ENSURE CONSISTENCY WITH
COMPANY GOALS AND OBJECTIVES.
<PAGE> 6
--------------------------------------------------------------------------------
RYDER
SENIOR VICE PRESIDENT &
GENERAL MANAGER
RYDER INTERNATIONAL
1995 INCENTIVE COMPENSATION PLAN PAGE 6
--------------------------------------------------------------------------------
BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows, given the following
information:
<TABLE>
<S> <C>
Eligible Base Salary $190,000
1995 RSI NAT ROE 15%
1995 RSI NBT $ 313MM
1995 International NBT $ 1.0MM
1995 International Development Objectives 75%
Individual Performance Significantly Above Expectations
</TABLE>
<TABLE>
<S> <C>
1) RSI Performance
60% Maximum RSI Performance Bonus Opportunity
85% Potential RSI Performance Bonus Payout (from grid)
60% x 85% = 51% of Eligible Base Salary
51% x $190,000 = $ 96,900
2) International Performance
10% Maximum International Performance Bonus Opportunity
65% Potential International Performance Bonus Payout (from grid)
10% x 65% = 6.5% of Eligible Base Salary
6.5% x $190,000 = 12,350
3) International Development Objectives
10% Maximum International Objectives Bonus Opportunity
75% Potential International Objectives Bonus Payout
10% x 75% = 7.5%
7.5% x $190,000 = 14,250
4) Individual Performance
20% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $190,000 = $ 28,500
--------
TOTAL BONUS $152,000
</TABLE>
<PAGE> 7
--------------------------------------------------------------------------------
RYDER
SENIOR VICE PRESIDENT &
GENERAL MANAGER
RYDER INTERNATIONAL
1995 INCENTIVE COMPENSATION PLAN PAGE 7
--------------------------------------------------------------------------------
BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, commissions, employee benefits,
moving expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for a
participant who begins a bonus year with a base salary of
$190,000, then effective June 1 receives an increase to a base
salary of $210,000:
<TABLE>
<S> <C>
January 1 through May 31 of Bonus Year:
---------------------------------------
31 + 28 + 31 + 30 + 31 = 151=.414 x $190,000/yr. = $ 78,660
---------------------- ---
365 days 365
June 1 through December 31 of Bonus Year:
-----------------------------------------
365 - 151 = 214=.586 x $210,000/yr. = $123,060
--------- ---
365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $201,720
</TABLE>
SPECIAL ROE AWARD
One and one-half percent of the RSI NAT amount in excess of that required to
reach 17% Return on Equity (ROE) will be credited to deferred compensation for
elected Officers of the Company, Division Presidents and the Senior Vice
President and General Manager Ryder International. This amount will be
prorated based on each individual participant's earned salary (while in the
eligible position) in relation to the sum of the earned salaries of all
participants.
<PAGE> 8
--------------------------------------------------------------------------------
RYDER
SENIOR VICE PRESIDENT &
GENERAL MANAGER
RYDER INTERNATIONAL
1995 INCENTIVE COMPENSATION PLAN PAGE 8
--------------------------------------------------------------------------------
ADMINISTRATION
The Chairman, President, and Chief Executive Officer of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
ELIGIBILITY
The Senior Vice President and General Manager Ryder International, employed in
good standing at the time bonus payments are made are eligible to participate
in this plan. Individuals who have agreements which specifically provide for
incentive compensation other than that which is provided in this plan or who
are participants in any other incentive compensation plan of Ryder System, Inc.
(RSI or the Company), its subsidiaries or affiliates are not eligible to
participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave the Company during the bonus year under any
of the following conditions may be eligible for pro rata bonus awards:
o retirement under the provisions of one of the Company's retirement
plans or the Social Security Act, or
o disability.
Note: The spouse or legal representative of a deceased participant may be
eligible for pro rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of RSI (as defined and adopted by the Board of Directors on August
20, 1993), the funds necessary to pay incentive awards will be placed in a
trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by RSI. Participants will receive bonus awards for actual time employed during
the bonus year based upon: a) the greater of actual company performance or 80%
of maximum company performance opportunity plus b) the greater of actual
individual performance or 80% of maximum individual performance opportunity.
<PAGE> 9
--------------------------------------------------------------------------------
RYDER
SENIOR VICE PRESIDENT &
GENERAL MANAGER
RYDER INTERNATIONAL
1995 INCENTIVE COMPENSATION PLAN PAGE 9
--------------------------------------------------------------------------------
However, if RSI fails to verify incentive awards through a "Big 6" accounting
firm, participants will receive 100% of their maximum company and individual
performance opportunities based on actual time worked during the bonus year.
RSI will be responsible for all legal fees and expenses which participants may
reasonably incur in enforcing their rights under the plan in the event of a
Change of Control of RSI.
Should a Change of Control occur during 1995, participants will receive
instructions regarding the collection of incentive awards.
BONUS ELIGIBILITY ON TERMINATION
Participants leaving the Company under any conditions other than those outlined
in the Eligibility or Change of Control sections of this plan are not eligible
for bonus awards for the bonus year in which they leave, nor are they eligible
for awards for the preceding bonus year, if such awards have not yet been
distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the plan, the Compensation Committee of
the Board of Directors or the full Board of Directors of RSI will, in its sole
discretion, determine the participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent
auditor.
BONUS FUNDING
A maximum of 2.5% of consolidated RSI NBT and 9% of Vehicle Leasing and
Services Division (VLSD) NBT may be accrued by RSI and VLSD, respectively,
throughout the bonus year to fund all awards under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, and the Ryder Services Corporation
Incentive Compensation Plan, as well as any incentive or bonus payments
resulting from employment commitments or agreements. Accruals for the
Chairman, President and Chief Executive Officer of RSI, the President of
Automotive Carrier Division, the President of Commercial Leasing & Services,
the President of Consumer Truck Rental, the President of Ryder Dedicated
Logistics, and all discretionary awards are excluded from this funding
limitation.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan, the amount of the accrual, or the funding limitation.
Should the funding limitation or accrual not provide for bonus allotments under
the plan, proration will be effected at the discretion of the Chairman,
President and Chief Executive Officer of RSI. Unused monies from the fund may
not be carried forward for subsequent bonus years.
<PAGE> 10
--------------------------------------------------------------------------------
RYDER
SENIOR VICE PRESIDENT &
GENERAL MANAGER
RYDER INTERNATIONAL
1995 INCENTIVE COMPENSATION PLAN PAGE 10
--------------------------------------------------------------------------------
DISCRETIONARY AWARDS
With the approval of the Chairman, President and Chief Executive Officer of
RSI, and the Board of Directors, has the authority to grant discretionary bonus
awards for exemplary performance to non-participants or to enhance the awards
of participants. Discretionary awards are not subject to the funding
limitations of this plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards for
officers must be approved by the Chairman, President and Chief Executive
Officer of RSI. Off-cycle discretionary awards for non-officers may be granted
with the approval of the Chairman, President and Chief Executive Officer of
RSI.
The total of all discretionary awards for employees under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, the Ryder Services Corporation Incentive
Compensation Plan, and the Division Presidents' bonus plans, including those
granted off-cycle, may not exceed $430,000 per year.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and affiliates'
incentive compensation plans annually to ensure equitability both within the
Company, and in relation to current economic conditions.
THE BOARD OF DIRECTORS RESERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE
EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.10(b)
--------------------------------------------------------------------------------
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 1
--------------------------------------------------------------------------------
Supersedes 1994 ACD President Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1995
Incentive Plan for the President, Automotive Carrier Division (ACD). The plan
is intended to serve as a single, comprehensive source of information that will
explain your bonus for achieving various levels of performance. Questions
should be addressed to your supervisor.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
<TABLE>
<CAPTION>
RSI ACD INDIVIDUAL TOTAL BONUS OPPORTUNITY
PERFORMANCE PERFORMANCE PERFORMANCE
<S> <C> <C> <C>
60% 20% 20% 100%
</TABLE>
BONUS PERFORMANCE MEASURES
For 1995, your bonus payout will be based on Ryder System, Inc. (RSI or the
Company) performance, ACD performance, and your performance as an individual.
RSI performance is measured based on RSI Net Earnings After Tax (NAT) Return on
Equity (ROE) performance and RSI Net Earnings Before Tax (NBT) performance for
1995.
ACD performance is measured based on ACD NBT performance for 1995.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you agreed to with management at the start
of the year. Given their importance, the objectives should be in writing and
may be updated during the year to adjust for priorities that may have changed.
<PAGE> 2
--------------------------------------------------------------------------------
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 2
--------------------------------------------------------------------------------
DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
- RSI PERFORMANCE -- RSI performance payout is based on a grid which
combines RSI ROE performance and RSI NBT performance.
RSI ROE performance for the bonus year is calculated by
dividing RSI NAT by RSI average equity.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax from continuing operations for the bonus
year, as certified to the Board of Directors and
shareholders of RSI by the Company's independent
auditors, including appropriate accruals for all
incentive awards estimated to be payable for that
bonus year.
-- RSI average equity is defined as the average of the
four quarters' average equity. A quarter's average
equity is defined as the equity, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total equity as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT is defined as RSI's consolidated Net Earnings Before Tax
as certified to the Board of Directors and shareholders of RSI by the
Company's independent auditors, net of a provision for the total of
all incentive awards, for the bonus year.
- ACD PERFORMANCE -- ACD performance payout is based on ACD
NBT performance.
ACD NBT performance is defined as ACD's consolidated Net
Earnings Before Tax as verified by the Senior Vice President and
Controller, RSI, net of a provision for the total of all incentive
awards, for the bonus year.
<PAGE> 3
--------------------------------------------------------------------------------
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 3
--------------------------------------------------------------------------------
- INDIVIDUAL PERFORMANCE -- Individual performance is defined as
each participant's performance against job requirements and
objectives (MBOs), as agreed upon between the individual and
his/her management, at the beginning of the bonus year. If
necessary, goals and objectives may be revised during the
bonus year to reflect changing business priorities.
Individual performance awards are separate from payments based
upon financial measurements and may be paid, in part or in
whole, based on the Company's performance and/or ability to
pay.
Bonus awards are subject to the recommendation of the
Administrator of the plan and approval by the Board of
Directors of RSI. (See "Bonus Payment")
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with the
approval of the Board of Directors of RSI.
<PAGE> 4
--------------------------------------------------------------------------------
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 4
--------------------------------------------------------------------------------
BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE - ROE/NBT
RSI performance payout is based on a grid consisting of two
performance variables: 1995 RSI NAT ROE and 1995 RSI NBT. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 RSI NBT ($MM)
THRESHOLD MAXIMUM
260.5 276 289 306 313 327
ROE % OF OPPORTUNITY
<S> <C> <C> <C> <C> <C> <C>
< 14.5 30 40 50 55 75 80
14.5 - 17 40 50 60 65 85 90
> 17 50 60 65 75 90 100
</TABLE>
2) ACD PERFORMANCE - NBT
ACD performance payout is based on 1995 ACD NBT. The bonus payout
percent is determined by locating the point on the grid which
corresponds to the variable. Actual performance may fall between the
points specifically displayed on the grid, and the grid allows for
interpolation between NBT points as shown. No bonus awards will be
paid for performance below threshold. The potential bonus payout is
expressed as a percentage of Maximum ACD Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL ACD PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM ACD PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<S> <C> <C> <C> <C> <C>
1995 ACD NBT ($MM)
THRESHOLD MAXIMUM
46 49 52 56 59 62
% OF OPPORTUNITY
20 40 55 65 80 100
</TABLE>
<PAGE> 5
--------------------------------------------------------------------------------
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 5
--------------------------------------------------------------------------------
3) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
FAIR - SOME CONSISTENT SIGNIFICANTLY
CRITICAL WITH ABOVE
INDIVIDUAL PERFORMANCE SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
<S> <C> <C> <C> <C>
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-50% 51-70% 71-89% 90-100%
</TABLE>
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL PAYOUTS MAY BE
PRORATED DOWNWARD AT THE COMPANY'S DISCRETION. ADDITIONAL CRITERIA MAY
ADJUST THE PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT ACHIEVED.
THE GRIDS WILL BE REVISED ANNUALLY TO ENSURE CONSISTENCY WITH COMPANY GOALS
AND OBJECTIVES.
<PAGE> 6
--------------------------------------------------------------------------------
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 6
--------------------------------------------------------------------------------
BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows given the following
information:
<TABLE>
<S> <C>
Eligible Base Salary $200,000
1995 RSI NAT ROE 15%
1995 RSI NBT $ 313MM
1995 ACD NBT $ 56MM
Individual Performance Significantly Above Expectations
</TABLE>
<TABLE>
<S> <C>
1) RSI Performance
60% Maximum RSI Performance Bonus Opportunity
85% Potential RSI Performance Bonus Payout (from grid)
60% x 85% = 51% of Eligible Base Salary
51% x $200,000 = $102,000
2) ACD Performance
20% Maximum RPTS Performance Bonus Opportunity
65% Potential RPTS Performance Bonus Payout (form grid)
20% x 65% = 13% of Eligible Base Salary
13% x $200,000 = $ 26,000
3) Individual Performance
20% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $200,000 = $ 30,000
--------
TOTAL BONUS $158,000
</TABLE>
<PAGE> 7
--------------------------------------------------------------------------------
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 7
--------------------------------------------------------------------------------
BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, commissions, employee benefits,
moving expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for
a participant who begins a bonus year with a base salary of
$200,000, then effective June 1 receives an increase to a base
salary of $220,000:
<TABLE>
<S> <C>
January 1 through May 31 of Bonus Year:
---------------------------------------
31 + 28 + 31 + 30 + 31 = 151=.414 x $200,000/yr. = $ 82,800
---------------------- ---
365 days 365
June 1 through December 31 of Bonus Year:
-----------------------------------------
365 - 151 = 214=.586 x $220,000/yr. = $128,920
--------- ---
365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $211,720
</TABLE>
SPECIAL ROE AWARD
One and one-half percent of the RSI NAT amount in excess of that required to
reach 17% Return on Equity (ROE) will be credited to deferred compensation for
elected Officers of the Company, Division Presidents and the Senior Vice
President and General Manager Ryder International. This amount will be
prorated based on each individual participant's earned salary (while in the
eligible position) in relation to the sum of the earned salaries of all
participants.
<PAGE> 8
--------------------------------------------------------------------------------
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 8
--------------------------------------------------------------------------------
ADMINISTRATION
The Chairman, President, and Chief Executive Officer of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
ELIGIBILITY
The President, Automotive Carrier Division, if employed in good standing at the
time bonus payments are made is eligible to participate in this plan. If the
President, Automotive Carrier Division has an agreement which specifically
provides for incentive compensation other than that which is provided in this
plan or is a participant in any other incentive compensation plan of RSI, its
subsidiaries or affiliates, he/she is not eligible to participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave ACD or the Company during the bonus year
under any of the following conditions may be eligible for pro rata bonus
awards:
- retirement under the provisions of one of the Company's
retirement plans or the Social Security Act, or
- disability
Note: The spouse or legal representative of a deceased participant may be
eligible for pro-rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of the Company (as defined and adopted by the Board of Directors on
August 20, 1993), the funds necessary to pay incentive awards will be placed in
a trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by the Company. Participants will receive bonus awards for actual time
employed during the bonus year based upon: a) the greater of actual company
performance or 80% of maximum company performance opportunity plus b) the
greater of actual individual performance or 80% of maximum individual
performance opportunity.
<PAGE> 9
--------------------------------------------------------------------------------
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 9
--------------------------------------------------------------------------------
However, if the Company fails to verify incentive awards through a "Big 6"
accounting firm, participants will receive 100% of their maximum company and
individual performance opportunities based on actual time worked during the
bonus year. The Company will be responsible for all legal fees and expenses
which participants may reasonably incur in enforcing their rights under the
plan in the event of a Change of Control of the Company.
Should a Change of Control occur during 1995, participants will receive
instructions regarding the collection of incentive awards.
BONUS ELIGIBILITY ON TERMINATION
Participants leaving ACD or the Company under any conditions other than those
outlined in the Eligibility or Change of Control sections of this plan are not
eligible for bonus awards for the bonus year in which they leave, nor are they
eligible for awards for the preceding bonus year, if such awards have not yet
been distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the plan, the Compensation Committee of
the Board of Directors or the full Board of Directors of RSI will, in its sole
discretion, determine the participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent
auditor.
BONUS FUNDING
Accruals based on bonus performance measures for the President, ACD are
excluded from funding limitations.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan or the amount of the accrual. Should the accrual not
provide for bonus allotments under the plan, proration will be affected at the
discretion of the Chairman, President and Chief Executive Officer of RSI.
Unused monies may not be carried forward for subsequent bonus years.
DISCRETIONARY AWARDS
With the approval of the Board of Directors of RSI, the Chairman, President,
and Chief Executive Officer of RSI has the authority to grant discretionary
bonus awards for exemplary performance to non-participants or to enhance the
awards of participants. Discretionary awards are not subject to the funding
limitations of this plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards must be
approved by the Chairman, President and Chief Executive Officer of RSI.
<PAGE> 10
--------------------------------------------------------------------------------
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 10
--------------------------------------------------------------------------------
The total of all discretionary awards for employees under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, the Ryder Services Corporation Incentive
Compensation Plan, and the Division Presidents' bonus plans, including those
granted off-cycle, may not exceed $430,000 per year.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and affiliates'
incentive compensation plans annually to ensure equitability both within the
Company, and in relation to current economic conditions.
THE BOARD OF DIRECTORS RESERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE
EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.11(b)
--------------------------------------------------------------------------------
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1995 INCENTIVE COMPENSATION PLAN PAGE 1
--------------------------------------------------------------------------------
Supersedes 1994 Chairman, President & Chief Executive Officer Incentive
Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1995
Incentive Plan for the Chairman, President & Chief Executive Officer (CEO) of
Ryder System, Inc. (RSI or the Company). The plan is intended to serve as a
single, comprehensive source of information that will explain your bonus for
achieving various levels of performance.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
<TABLE>
<CAPTION>
RSI RSI PERFORMANCE INDIVIDUAL TOTAL BONUS
PERFORMANCE ABOVE PLAN PERFORMANCE OPPORTUNITY*
<S> <C> <C> <C>
80% 30% 20% 130%
</TABLE>
* See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1995, your bonus payout will be based on RSI performance, RSI performance
above plan, and your performance as an individual.
RSI performance is measured based on RSI Net Earnings After Tax (NAT) Return on
Equity (ROE) performance and RSI Net Earnings Before Tax (NBT) performance for
1995.
RSI performance above plan is measured based on RSI NBT performance for 1995.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you agreed to with the Board of Directors
at the start of the year. The objectives may be updated during the year to
adjust for priorities that may have changed.
<PAGE> 2
--------------------------------------------------------------------------------
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1995 INCENTIVE COMPENSATION PLAN PAGE 2
--------------------------------------------------------------------------------
DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
- RSI PERFORMANCE -- RSI performance payout is based on a grid
which combines RSI ROE performance and RSI NBT performance.
RSI ROE performance for the bonus year is calculated by
dividing RSI NAT by RSI average equity.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax from continuing operations for the bonus
year, as certified to the Board of Directors and
shareholders of RSI by the Company's independent
auditors, including appropriate accruals for all
incentive awards estimated to be payable for that
bonus year.
-- RSI average equity is defined as the average of the
four quarters' average equity. A quarter's average
equity is defined as the equity, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total equity as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT is defined as RSI's consolidated Net Earnings Before
Tax as certified to the Board of Directors and shareholders of
RSI by the Company's independent auditors, net of a provision
for the total of all incentive awards, for the bonus year.
- RSI PERFORMANCE ABOVE PLAN -- RSI performance above plan
payout is based on RSI NBT performance. To achieve a payout,
RSI NBT performance must be above plan.
- INDIVIDUAL PERFORMANCE -- Individual performance is defined as
each participant's performance against job requirements and
objectives (MBOs), as agreed upon between the individual and
his/her management, at the beginning of the bonus year. If
necessary, goals and objectives may be revised during the
bonus year to reflect changing business priorities.
Individual performance awards are separate from payments based
upon financial measurements and may be paid, in part or in
whole, based on the Company's performance and/or ability to
pay.
Such payments Bonus awards are subject to the recommendation
of the Administrator of the plan and approval by the Board of
Directors of RSI. (See "Bonus Payment")
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with
the approval of the Board of Directors of RSI.
<PAGE> 3
--------------------------------------------------------------------------------
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1995 INCENTIVE COMPENSATION PLAN PAGE 3
--------------------------------------------------------------------------------
BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE - ROE/NBT
RSI performance payout is based on a grid consisting of two
performance variables: 1995 RSI NAT ROE and 1995 RSI NBT. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 RSI NBT ($MM)
THRESHOLD MAXIMUM
260.5 276 289 306 313 327
ROE % OF OPPORTUNITY
<S> <C> <C> <C> <C> <C> <C>
< 14.5 30 40 50 55 75 80
14.5 - 17 40 50 60 65 85 90
> 17 50 60 65 75 90 100
</TABLE>
2) RSI PERFORMANCE ABOVE PLAN - NBT
RSI performance above plan payout is based on a grid of 1995 RSI NBT.
The potential bonus payout percent is determined by locating the point
on the grid under the 1995 RSI NBT. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Above
Plan Bonus Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE ABOVE PLAN BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE ABOVE PLAN BONUS OPPORTUNITY
<TABLE>
<S> <C> <C>
1995 RSI ABOVE PLAN NBT ($MM)
THRESHOLD MAXIMUM
306.0 313.0 327.0
% OF OPPORTUNITY
0 50 100
</TABLE>
<PAGE> 4
--------------------------------------------------------------------------------
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1995 INCENTIVE COMPENSATION PLAN PAGE 4
--------------------------------------------------------------------------------
3) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
FAIR - SOME CONSISTENT SIGNIFICANTLY
CRITICAL WITH ABOVE
INDIVIDUAL PERFORMANCE SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
<S> <C> <C> <C> <C>
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-50% 51-70% 71-89% 90-100%
</TABLE>
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL PAYOUTS MAY BE
PRORATED DOWNWARD AT THE COMPANY'S DISCRETION. ADDITIONAL CRITERIA MAY ADJUST
THE PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT ACHIEVED. THE GRIDS
WILL BE REVISED ANNUALLY TO ENSURE CONSISTENCY WITH COMPANY GOALS AND
OBJECTIVES.
<PAGE> 5
--------------------------------------------------------------------------------
RYDER
CHAIRMAN, PRESIDENT
CHIEF EXECUTIVE OFFICER
1995 INCENTIVE COMPENSATION PLAN PAGE 5
--------------------------------------------------------------------------------
BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows, given the following
information:
<TABLE>
<S> <C>
Eligible Base Salary $725,000
1995 RSI NAT ROE 15%
1995 RSI NBT $ 313MM
Individual Performance Significantly Above Expectations
</TABLE>
<TABLE>
<S> <C>
1) RSI Performance
80% Maximum RSI Performance Bonus Opportunity
85% Potential RSI Performance Bonus Payout (from grid)
80% x 85% = 68% of Eligible Base Salary
68% x $725,000 = $493,000
2) RSI Performance Above Plan
30% Maximum RSI Performance Above Plan Bonus Opportunity
50% Potential RSI Performance Above Plan Bonus Payout (from grid)
30% x 50% = 15% of Eligible Base Salary
15% x $725,000 = 108,750
3) Individual Performance
20% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $725,000 = $108,750
--------
TOTAL BONUS $710,500
</TABLE>
<PAGE> 6
--------------------------------------------------------------------------------
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1995 INCENTIVE COMPENSATION PLAN PAGE 6
--------------------------------------------------------------------------------
BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, commissions, employee benefits,
moving expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for a
participant who begins a bonus year with a base salary of
$725,000, then effective June 1 receives an increase to a base
salary of $760,000:
<TABLE>
<S> <C>
January 1 thru May 31 of Bonus Year:
------------------------------------
31 + 28 + 31 + 30 + 31 = 151=.414 x $725,000/yr. = $300,150
---------------------- ---
365 days 365
June 1 thru December 31 of Bonus Year:
--------------------------------------
365 - 151 = 214=.586 x $760,000/yr. = $445,360
--------- ---
365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $745,510
</TABLE>
SPECIAL ROE AWARD
One and one-half percent of the RSI NAT amount in excess of that required to
reach 17% Return on Equity (ROE) will be credited to deferred compensation for
elected Officers of the Company, Division Presidents and the Senior Vice
President and General Manager Ryder International. This amount will be
prorated based on each individual participant's earned salary (while in the
eligible position) in relation to the sum of the earned salaries of all
participants.
<PAGE> 7
--------------------------------------------------------------------------------
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1995 INCENTIVE COMPENSATION PLAN PAGE 7
--------------------------------------------------------------------------------
ADMINISTRATION
The Compensation Committee of the Board of Directors of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
ELIGIBILITY
The Chairman, President & Chief Executive Officer of RSI, if employed in good
standing at the time bonus payments are made, is eligible to participate in
this plan. If the CEO has an agreement which specifically provides for
incentive compensation other than that which is provided in this plan or is a
participant in any other incentive compensation plan of RSI, its subsidiaries
or affiliates, he/she is not eligible to participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave the Company during the bonus year under any
of the following conditions may be eligible for pro rata bonus awards:
- retirement under the provisions of one of the Company's
retirement plans or the Social Security Act, or
- disability
Note: The spouse or legal representative of a deceased participant may be
eligible for pro rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of the Company (as defined and adopted by the Board of Directors on
August 20, 1993), the funds necessary to pay incentive awards will be placed in
a trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by the Company. Participants will receive bonus awards for actual time
employed during the bonus year based upon: a) the greater of actual company
performance or 80% of maximum company performance opportunity plus b) the
greater of actual individual performance or 80% of maximum individual
performance opportunity.
<PAGE> 8
--------------------------------------------------------------------------------
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1995 INCENTIVE COMPENSATION PLAN PAGE 8
--------------------------------------------------------------------------------
However, if the Company fails to verify incentive awards through a "Big 6"
accounting firm, participants will receive 100% of their maximum company and
individual performance opportunities based on actual time worked during the
bonus year. The Company will be responsible for all legal fees and expenses
which participants may reasonably incur in enforcing their rights under the
plan in the event of a Change of Control of the Company.
Should a Change of Control occur during 1995, participants will receive
instructions regarding the collection of incentive awards.
BONUS ELIGIBILITY ON TERMINATION
Participants leaving the Company under any conditions other than those outlined
in the Eligibility or Change of Control sections of this plan are not eligible
for bonus awards for the bonus year in which they leave, nor are they eligible
for awards for the preceding bonus year, if such awards have not yet been
distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrators of the plan, the full Board of Directors
of RSI will, in its sole discretion, determine the participants, if any, who
will receive bonus awards and the amounts of such awards. Bonus award payments
will be distributed to eligible participants following such Board approval and
subsequent to certification of consolidated financial statements by an
independent auditor.
BONUS FUNDING
Accruals for the CEO and all discretionary awards are excluded from funding
limitations.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan or the amount of the accrual. Should the accrual not
provide for bonus allotments under the plan, proration will be affected at the
discretion of the Board of Directors of RSI. Unused monies may not be carried
forward for subsequent bonus years.
DISCRETIONARY AWARDS
With the approval of the Board of Directors of RSI, the Administrators of this
plan have the authority to grant discretionary bonus awards to enhance the
award of the participant of this plan. Discretionary awards are not subject to
funding limitations.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and affiliates'
incentive compensation plans annually to ensure equitability both within the
Company, and in relation to current economic conditions.
THE BOARD OF DIRECTORS RESERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE
EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.12(b)
--------------------------------------------------------------------------------
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1995 INCENTIVE COMPENSATION PLAN PAGE 1
--------------------------------------------------------------------------------
Supersedes 1994 President, Commercial Leasing & Services Incentive Compensation
Plan
INTRODUCTION
The following material explains the operation and administration of the 1995
Incentive Plan for the President, Commercial Leasing & Services (Commercial).
The plan is intended to serve as a single, comprehensive source of information
that will explain your bonus for achieving various levels of performance.
Questions should be addressed to your supervisor.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
<TABLE>
<CAPTION>
RSI RSI ABOVE PLAN COMMERCIAL INDIVIDUAL TOTAL BONUS
PERFORMANCE PERFORMANCE PERFORMANCE PERFORMANCE OPPORTUNITY *
<S> <C> <C> <C> <C>
60% 20% 20% 20% 120%
</TABLE>
* See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1995, your bonus payout will be based on Ryder System, Inc. (RSI or the
Company) performance, Commercial performance, RSI performance above plan, and
your performance as an individual.
RSI performance is measured based on RSI Net Earnings After Tax (NAT) Return on
Equity (ROE) performance and RSI Net Earnings Before Tax (NBT) performance for
1995.
RSI performance above plan is measured based on RSI NBT performance for 1995.
Commercial performance is measured based on Commercial Net Earnings After Tax
(NAT) Return on Assets (ROA) and Commercial NBT for 1995.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you agreed to with management at the
start of the year. Given their importance, the objectives should be in writing
and may be updated during the year to adjust for priorities that may have
changed.
<PAGE> 2
--------------------------------------------------------------------------------
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1995 INCENTIVE COMPENSATION PLAN PAGE 2
--------------------------------------------------------------------------------
DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
- RSI PERFORMANCE -- RSI performance payout is based on a grid
which combines RSI ROE performance and RSI NBT performance.
RSI ROE performance for the bonus year is calculated by
dividing RSI NAT by RSI average equity.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax from continuing operations for the bonus
year, as certified to the Board of Directors and
shareholders of RSI by the Company's independent
auditors, including appropriate accruals for all
incentive awards estimated to be payable for that
bonus year.
-- RSI average equity is defined as the average of the
four quarters' average equity. A quarter's average
equity is defined as the equity, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total equity as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT is defined as RSI's consolidated Net Earnings Before
Tax as certified to the Board of Directors and shareholders of
RSI by the Company's independent auditors, net of a provision
for the total of all incentive awards, for the bonus year.
- RSI PERFORMANCE ABOVE PLAN -- RSI performance above plan
payout is based on RSI NBT performance. To achieve a payout,
RSI NBT performance must be above plan.
- COMMERCIAL PERFORMANCE -- Commercial performance payout is
based on a grid which combines Commercial ROA performance and
Commercial NBT performance.
Commercial ROA performance for the bonus year is calculated by
dividing Commercial NAT by Commercial average assets.
-- Commercial NAT is defined as Commercial's
consolidated Net Earnings After Tax for the bonus
year, as verified by the Senior Vice President and
Controller, RSI, including appropriate accruals for
all incentive awards estimated to be payable for that
bonus year.
-- Commercial average assets is defined as the average
of the four quarters' average assets. A quarter's
average assets is defined as the assets, as shown on
Commercial's balance sheet at the beginning of each
quarter plus the total assets as shown on
Commercial's balance sheet at the end of each
quarter, divided by two.
<PAGE> 3
--------------------------------------------------------------------------------
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1995 INCENTIVE COMPENSATION PLAN PAGE 3
--------------------------------------------------------------------------------
Commercial NBT performance is defined as Commercial
consolidated Net Earnings Before Tax as verified by the Senior
Vice President and Controller, RSI, net of a provision for the
total of all incentive awards, for the bonus year.
- INDIVIDUAL PERFORMANCE -- Individual performance is defined as
each participant's performance against job requirements and
objectives (MBOs), as agreed upon between the individual and
his/her management, at the beginning of the bonus year. If
necessary, goals and objectives may be revised during the
bonus year to reflect changing business priorities.
Individual performance awards are separate from payments based
upon financial measurements and may be paid, in part or in
whole, based on the Company's performance and/or ability to
pay.
Bonus awards are subject to the recommendation of the
Administrator of the plan and approval by the Board of
Directors of RSI. (See "Bonus Payment")
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with
the approval of the Board of Directors of RSI.
<PAGE> 4
--------------------------------------------------------------------------------
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1995 INCENTIVE COMPENSATION PLAN PAGE 4
--------------------------------------------------------------------------------
BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE - ROE/NBT
RSI performance payout is based on a grid consisting of two
performance variables: 1995 RSI NAT ROE and 1995 RSI NBT. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 RSI NBT ($MM)
THRESHOLD MAXIMUM
260.5 276 289 306 313 327
ROE % OF OPPORTUNITY
<S> <C> <C> <C> <C> <C> <C>
< 14.5 30 40 50 55 75 80
14.5 - 17 40 50 60 65 85 90
> 17 50 60 65 75 90 100
</TABLE>
2) RSI PERFORMANCE ABOVE PLAN - NBT
RSI performance above plan payout is based on a grid of 1995 RSI NBT.
The potential bonus payout percent is determined by locating the point
on the grid under the 1995 RSI NBT. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Above
Plan Bonus Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE ABOVE PLAN BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE ABOVE PLAN BONUS OPPORTUNITY
<TABLE>
<S> <C> <C>
1995 RSI ABOVE PLAN NBT ($MM)
THRESHOLD MAXIMUM
306.0 313.0 327.0
% OF OPPORTUNITY
0 50 100
</TABLE>
<PAGE> 5
--------------------------------------------------------------------------------
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1995 INCENTIVE COMPENSATION PLAN PAGE 5
--------------------------------------------------------------------------------
3) COMMERCIAL PERFORMANCE - ROA/NBT
Commercial performance payout is based on a grid consisting of two
performance variables: 1995 Commercial NAT ROA and 1995 Commercial
NBT. The potential bonus payout percent is determined by locating the
point on the grid where the variables intersect. Actual performance
may fall between the points specifically displayed on the grid, and
the grid allows for interpolation between NBT points as shown. No
bonus awards will be paid for performance below threshold. The
potential bonus payout is expressed as a percentage of Maximum
Commercial Performance Bonus Opportunity, as shown on page 1.
POTENTIAL COMMERCIAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM COMMERCIAL NBT PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 COMMERCIAL NBT ($MM)
THRESHOLD MAXIMUM
180 189 198 208 218 224 234
ROA % OF OPPORTUNITY
<S> <C> <C> <C> <C> <C> <C> <C>
Less Than 3.3 20 30 40 50 55 75 90
Greater Than or Equal To 3.3 30 40 50 60 65 85 100
</TABLE>
4) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
FAIR - SOME CONSISTENT SIGNIFICANTLY
CRITICAL WITH ABOVE
INDIVIDUAL PERFORMANCE SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
<S> <C> <C> <C> <C>
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-50% 51-70% 71-89% 90-100%
</TABLE>
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL PAYOUTS MAY BE
PRORATED DOWNWARD AT THE COMPANY'S DISCRETION. ADDITIONAL CRITERIA MAY ADJUST
THE PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT ACHIEVED. THE GRIDS
WILL BE REVISED ANNUALLY TO ENSURE CONSISTENCY WITH COMPANY GOALS AND
OBJECTIVES.
<PAGE> 6
--------------------------------------------------------------------------------
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1995 INCENTIVE COMPENSATION PLAN PAGE 6
--------------------------------------------------------------------------------
BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows given the following
information:
<TABLE>
<S> <C>
Eligible Base Salary $330,000
1995 RSI NAT ROE 15%
1995 RSI NBT $ 313MM
1995 Commercial NAT ROA 3.4%
1995 Commercial NBT $ 218MM
Individual Performance Significantly Above Expectations
</TABLE>
<TABLE>
<S> <C>
1) RSI Performance
60% Maximum RSI Performance Bonus Opportunity
85% Potential RSI Performance Bonus Payout (from grid)
60% x 85% = 51% of Eligible Base Salary
51% x $330,000 = $168,300
2) RSI Performance Above Plan
20% Maximum RSI Performance Above Plan Bonus Opportunity
50% Potential RSI Performance Above Plan Bonus Payout (from grid)
20% x 50% = 10% of Eligible Base Salary
10% x $330,000 = $ 33,000
3) Commercial Performance
20% Maximum Commercial Performance Bonus Opportunity
65% Potential Commercial Performance Bonus Payout (from grid)
20% x 65% = 13% of Eligible Base Salary
13% x $330,000 = $ 42,900
4) Individual Performance
20% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $330,000 = $ 49,500
--------
TOTAL BONUS $293,700
</TABLE>
<PAGE> 7
--------------------------------------------------------------------------------
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1995 INCENTIVE COMPENSATION PLAN PAGE 7
--------------------------------------------------------------------------------
BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, commissions, employee benefits,
moving expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for a
participant who begins a bonus year with a base salary of
$330,000, then effective June 1 receives an increase to a base
salary of $350,000:
<TABLE>
<S> <C>
January 1 through May 31 of Bonus Year:
---------------------------------------
31 + 28 + 31 + 30 + 31 = 151=.414 x $330,000/yr. = $136,620
---------------------- ---
365 days 365
June 1 through December 31 of Bonus Year:
-----------------------------------------
365 - 151 = 214=.586 x $350,000/yr. = $205,100
--------- ---
365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $341,720
</TABLE>
SPECIAL ROE AWARD
One and one-half percent of the RSI NAT amount in excess of that required to
reach 17% Return on Equity (ROE) will be credited to deferred compensation for
elected Officers of the Company, Division Presidents and the Senior Vice
President and General Manager Ryder International. This amount will be
prorated based on each individual participant's earned salary (while in the
eligible position) in relation to the sum of the earned salaries of all
participants.
<PAGE> 8
--------------------------------------------------------------------------------
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1995 INCENTIVE COMPENSATION PLAN PAGE 8
--------------------------------------------------------------------------------
ADMINISTRATION
The Chairman, President, and Chief Executive Officer of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
ELIGIBILITY
The President, Commercial Leasing & Services, if employed in good standing at
the time bonus payments are made, is eligible to participate in this plan. If
the President, Commercial Leasing & Services has an agreement which
specifically provides for incentive compensation other than that which is
provided in this plan or is a participant in any other incentive compensation
plan of RSI, its subsidiaries or affiliates, he/she is not eligible to
participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave the Company or VLSD during the bonus year
under any of the following conditions may be eligible for pro rata bonus
awards:
- retirement under the provisions of one of the Company's
retirement plans or the Social Security Act, or
- disability
Note: The spouse or legal representative of a deceased participant may be
eligible for pro rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of the Company (as defined and adopted by the Board of Directors on
August 20, 1993), the funds necessary to pay incentive awards will be placed in
a trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by the Company. Participants will receive bonus awards for actual time
employed during the bonus year based upon: a) the greater of actual company
performance or 80% of maximum company performance opportunity plus b) the
greater of actual individual performance or 80% of maximum individual
performance opportunity.
<PAGE> 9
--------------------------------------------------------------------------------
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1995 INCENTIVE COMPENSATION PLAN PAGE 9
--------------------------------------------------------------------------------
However, if the Company fails to verify incentive awards through a "Big 6"
accounting firm, participants will receive 100% of their maximum company and
individual performance opportunities based on actual time worked during the
bonus year. The Company will be responsible for all legal fees and expenses
which participants may reasonably incur in enforcing their rights under the
plan in the event of a Change of Control of the Company.
Should a Change of Control occur during 1995, participants will receive
instructions regarding the collection of incentive awards.
BONUS ELIGIBILITY ON TERMINATION
Participants leaving the Company or VLSD under any conditions other than those
outlined in the Eligibility or Change of Control sections of this plan are not
eligible for bonus awards for the bonus year in which they leave, nor are they
eligible for awards for the preceding bonus year, if such awards have not yet
been distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the plan, the Compensation Committee of
the Board of Directors or the full Board of Directors of RSI will, in its sole
discretion, determine the participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent
auditor.
BONUS FUNDING
Accruals based on bonus performance measures for the President, Commercial
Leasing & Services are excluded from funding limitations.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan or the amount of the accrual. Should the accrual not
provide for bonus allotments under the plan, proration will be affected at the
discretion of the Chairman, President and Chief Executive Officer of RSI.
Unused monies may not be carried forward for subsequent bonus years.
DISCRETIONARY AWARDS
With the approval of the Board of Directors of RSI, the Chairman, President,
and Chief Executive Officer of RSI has the authority to grant discretionary
bonus awards for exemplary performance to non-participants or to enhance the
awards of participants. Discretionary awards are not subject to the funding
limitations of this plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards must be
approved by the Chairman, President and Chief Executive Officer of RSI.
<PAGE> 10
--------------------------------------------------------------------------------
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1995 INCENTIVE COMPENSATION PLAN PAGE 10
--------------------------------------------------------------------------------
The total of all discretionary awards for employees under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, the Ryder Services Corporation Incentive
Compensation Plan, and the Division Presidents' bonus plans, including those
granted off-cycle, may not exceed $430,000 per year.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and affiliates'
incentive compensation plans annually to ensure equitability both within the
Company, and in relation to current economic conditions.
THE BOARD OF DIRECTORS RESERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE
EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.13(b)
--------------------------------------------------------------------------------
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1995 INCENTIVE COMPENSATION PLAN PAGE 1
--------------------------------------------------------------------------------
Supersedes 1994 President, Consumer Truck Rental Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1995
Incentive Plan for the President, Consumer Truck Rental (Consumer). The plan
is intended to serve as a single, comprehensive source of information that will
explain your bonus for achieving various levels of performance. Questions
should be addressed to your supervisor.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
<TABLE>
<CAPTION>
RSI CONSUMER RPTS INDIVIDUAL TOTAL BONUS
PERFORMANCE PERFORMANCE PERFORMANCE PERFORMANCE OPPORTUNITY *
<S> <C> <C> <C> <C>
60% 10% 10% 20% 100%
</TABLE>
* See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1995, your bonus payout will be based on Ryder System, Inc. (RSI or the
company) performance, Consumer performance, Ryder Public Transportation
Services (RPTS) performance and your performance as an individual.
RSI performance is measured based on RSI Net Earnings After Tax (NAT) Return on
Equity (ROE) performance and RSI Net Earnings Before Tax (NBT) performance for
1995.
Consumer performance is measured based on Consumer Net Earnings After Tax (NAT)
Return on Assets (ROA) performance and Consumer NBT performance for 1995.
RPTS performance is measured based on RPTS Revenue performance and RPTS Product
Line Profit performance for 1995.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you agreed to with management at the start
of the year. Given their importance, the objectives should be in writing and
may be updated during the year to adjust for priorities that may have changed.
<PAGE> 2
--------------------------------------------------------------------------------
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1995 INCENTIVE COMPENSATION PLAN PAGE 2
--------------------------------------------------------------------------------
DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
- RSI PERFORMANCE -- RSI performance payout is based on a grid
which combines RSI ROE performance and RSI NBT performance.
RSI ROE performance for the bonus year is calculated by
dividing RSI NAT by RSI average equity.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax from continuing operations for the bonus
year, as certified to the Board of Directors and
shareholders of RSI by the Company's independent
auditors, including appropriate accruals for all
incentive awards estimated to be payable for that
bonus year.
-- RSI average equity is defined as the average of the
four quarters' average equity. A quarter's average
equity is defined as the equity, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total equity as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT is defined as RSI's consolidated Net Earnings Before
Tax as certified to the Board of Directors and shareholders of
RSI by the Company's independent auditors, net of a provision
for the total of all incentive awards, for the bonus year.
- CONSUMER PERFORMANCE -- Consumer performance payout is based
on a grid which combines Consumer ROA performance and Consumer
NBT performance.
Consumer ROA performance for the bonus year is calculated by
dividing Consumer NAT by Consumer average assets.
-- Consumer NAT is defined as Consumer's consolidated
Net Earnings After Tax for the bonus year, as
certified to the Board of Directors and shareholders
of RSI by the Company's independent auditors,
including appropriate accruals for all incentive
awards estimated to be payable for that bonus year.
-- Consumer average assets is defined as the average of
the four quarters' average assets. A quarter's
average assets is defined as the assets, as shown on
Consumer's balance sheet at the beginning of each
quarter plus the total assets as shown on Consumer's
balance sheet at the end of each quarter, divided by
two.
Consumer NBT is defined as Consumer's consolidated Net
Earnings Before Tax as verified by the Senior Vice President
and Controller, RSI, net of a provision for the total of all
incentive awards, for the bonus year.
<PAGE> 3
--------------------------------------------------------------------------------
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1995 INCENTIVE COMPENSATION PLAN PAGE 3
--------------------------------------------------------------------------------
- RPTS PERFORMANCE -- RPTS performance payout is based on a grid
which combines RPTS Revenue performance and RPTS Product Line
Profit performance.
RPTS Revenue is defined as RPTS's total revenue as verified by
the Senior Vice President and Controller, RSI.
RPTS Product Line Profit is defined as RPTS's product line
profit as verified by the Senior Vice President and
Controller, RSI.
- INDIVIDUAL PERFORMANCE -- Individual performance is defined as
each participant's performance against job requirements and
objectives (MBOs), as agreed upon between the individual and
his/her management, at the beginning of the bonus year. If
necessary, goals and objectives may be revised during the
bonus year to reflect changing business priorities.
Individual performance awards are separate from payments based
upon financial measurements and may be paid, in part or in
whole, based on the Company's performance and/or ability to
pay.
Bonus awards are subject to the recommendation of the
Administrator of the plan and approval by the Board of
Directors of RSI. (See "Bonus Payment")
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with
the approval of the Board of Directors of RSI.
<PAGE> 4
--------------------------------------------------------------------------------
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1995 INCENTIVE COMPENSATION PLAN PAGE 4
--------------------------------------------------------------------------------
BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE - ROE/NBT
RSI performance payout is based on a grid consisting of two
performance variables: 1995 RSI NAT ROE and 1995 RSI NBT. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 RSI NBT ($MM)
THRESHOLD MAXIMUM
260.5 276 289 306 313 327
ROE % OF OPPORTUNITY
<S> <C> <C> <C> <C> <C> <C>
< 14.5 30 40 50 55 75 80
14.5 - 17 40 50 60 65 85 90
> 17 50 60 65 75 90 100
</TABLE>
2) CONSUMER PERFORMANCE - ROA/NBT
Consumer performance payout is based on a grid consisting of two
performance variables: 1995 Consumer NAT ROA and 1995 Consumer NBT.
The potential bonus payout percent is determined by locating the point
on the grid where the variables intersect. Actual performance may
fall between the points specifically displayed on the grid, and the
grid allows for interpolation between NBT points as shown. No bonus
awards will be paid for performance below threshold. The potential
bonus payout is expressed as a percentage of Maximum Consumer
Performance Bonus Opportunity, as shown on page 1.
POTENTIAL CONSUMER PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM CONSUMER PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 CONSUMER NBT ($MM)
THRESHOLD MAXIMUM
18 22 27 29 32
ROA % OF OPPORTUNITY
<S> <C> <C> <C> <C> <C>
>1 - <2 20 35 50 55 60
2 - 2.7 30 55 65 85 95
> 2.7 40 65 80 90 100
</TABLE>
<PAGE> 5
--------------------------------------------------------------------------------
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1995 INCENTIVE COMPENSATION PLAN PAGE 5
--------------------------------------------------------------------------------
3) RPTS PERFORMANCE - REVENUE/PRODUCT LINE PROFIT
RPTS performance payout is based on a grid consisting of two
performance variables: 1995 RPTS Revenue and RPTS Product Line
Profit. The potential bonus payout percent is determined by locating
the point on the grid where the variables intersect. Actual
performance may fall between the points specifically displayed on the
grid, and the grid allows for interpolation between Profit points as
shown. No bonus awards will be paid for performance below threshold.
The potential bonus payout is expressed as a percentage of Maximum
RPTS Performance Bonus Opportunity, as shown on page 1.
POTENTIAL RPTS PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RPTS PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 RPTS PRODUCT LINE PROFIT ($MM)
THRESHOLD MAXIMUM
REVENUE 28 32 34 36
($MM) % OF OPPORTUNITY
<S> <C> <C> <C> <C>
< 375 20 50 55 75
375 - 405 30 60 65 85
> 405 40 70 75 100
</TABLE>
4) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
FAIR - SOME CONSISTENT SIGNIFICANTLY
CRITICAL WITH ABOVE
INDIVIDUAL PERFORMANCE SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
<S> <C> <C> <C> <C>
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-50% 51-70% 71-89% 90-100%
</TABLE>
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL PAYOUTS MAY BE
PRORATED DOWNWARD AT THE COMPANY'S DISCRETION. ADDITIONAL CRITERIA MAY ADJUST
THE PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT ACHIEVED. THE
GRIDS WILL BE REVISED ANNUALLY TO ENSURE CONSISTENCY WITH COMPANY GOALS AND
OBJECTIVES.
<PAGE> 6
--------------------------------------------------------------------------------
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1995 INCENTIVE COMPENSATION PLAN PAGE 6
--------------------------------------------------------------------------------
BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows given the following
information:
<TABLE>
<S> <C>
Eligible Base Salary $220,000
1995 RSI NAT ROE 15%
1995 RSI NBT $ 313MM
1995 Consumer NAT ROA 2.2%
1995 Consumer NBT $ 27MM
1995 RPTS Revenue $ 380MM
1995 RPTS Product Line Profit $ 34MM
Individual Performance Significantly Above Expectations
</TABLE>
<TABLE>
<S> <C>
1) RSI Performance
60% Maximum RSI Performance Bonus Opportunity
85% Potential RSI Performance Bonus Payout (from grid)
60% x 85% = 51% of Eligible Base Salary
51% x $220,000 = $112,200
2) Consumer Performance
10% Maximum Consumer Performance Bonus Opportunity
65% Potential Consumer Performance Bonus Payout (from grid)
10% x 65% = 6.5% of Eligible Base Salary
6.5% x $220,000 = $ 14,300
3) RPTS Performance
10% Maximum RPTS Performance Bonus Opportunity
65% Potential RPTS Performance Bonus Payout (from grid)
10% x 65% = 6.5% of Eligible Base Salary
6.5% x $220,000 = $ 14,300
4) Individual Performance
20% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $220,000 = $ 33,000
--------
TOTAL BONUS $173,800
</TABLE>
<PAGE> 7
--------------------------------------------------------------------------------
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1995 INCENTIVE COMPENSATION PLAN PAGE 7
--------------------------------------------------------------------------------
BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, commissions, employee benefits,
moving expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for a
participant who begins a bonus year with a base salary of
$220,000, then effective June 1 receives an increase to a base
salary of $240,000:
<TABLE>
<S> <C>
January 1 through May 31 of Bonus Year:
---------------------------------------
31 + 28 + 31 + 30 + 31 = 151=.414 x $220,000/yr. = $ 91,080
---------------------- ---
365 days 365
June 1 through December 31 of Bonus Year:
-----------------------------------------
365 - 151 = 214=.586 x $240,000/yr. = $140,640
--------- ---
365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $231,720
</TABLE>
SPECIAL ROE AWARD
One and one-half percent of the RSI NAT amount in excess of that required to
reach 17% Return on Equity (ROE) will be credited to deferred compensation for
elected Officers of the Company, Division Presidents and the Senior Vice
President and General Manager Ryder International. This amount will be
prorated based on each individual participant's earned salary (while in the
eligible position) in relation to the sum of the earned salaries of all
participants.
<PAGE> 8
--------------------------------------------------------------------------------
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1995 INCENTIVE COMPENSATION PLAN PAGE 8
--------------------------------------------------------------------------------
ADMINISTRATION
The Chairman, President, and Chief Executive Officer of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
ELIGIBILITY
The President, Consumer Truck Rental, if employed in good standing at the time
bonus payments are made, is eligible to participate in this plan. If the
President, Consumer Rental has an agreement which specifically provides for
incentive compensation other than that which is provided in this plan or is a
participant in any other incentive compensation plan of RSI, its subsidiaries
or affiliates, he/she is not eligible to participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave the Company or VLSD during the bonus year
under any of the following conditions may be eligible for pro rata bonus
awards:
- retirement under the provisions of one of the Company's
retirement plans or the Social Security Act, or
- disability
Note: The spouse or legal representative of a deceased participant may be
eligible for pro rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of the Company (as defined and adopted by the Board of Directors on
August 20, 1993), the funds necessary to pay incentive awards will be placed in
a trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by the Company. Participants will receive bonus awards for actual time
employed during the bonus year based upon: a) the greater of actual company
performance or 80% of maximum company performance opportunity plus b) the
greater of actual individual performance or 80% of maximum individual
performance opportunity.
<PAGE> 9
--------------------------------------------------------------------------------
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1995 INCENTIVE COMPENSATION PLAN PAGE 9
--------------------------------------------------------------------------------
However, if the Company fails to verify incentive awards through a "Big 6"
accounting firm, participants will receive 100% of their maximum company and
individual performance opportunities based on actual time worked during the
bonus year. The Company will be responsible for all legal fees and expenses
which participants may reasonably incur in enforcing their rights under the
plan in the event of a Change of Control of the Company.
Should a Change of Control occur during 1995, participants will receive
instructions regarding the collection of incentive awards.
BONUS ELIGIBILITY ON TERMINATION
Participants leaving the Company or VLSD under any conditions other than those
outlined in the Eligibility or Change of Control sections of this plan are not
eligible for bonus awards for the bonus year in which they leave, nor are they
eligible for awards for the preceding bonus year, if such awards have not yet
been distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the plan, the Compensation Committee of
the Board of Directors or the full Board of Directors of RSI will, in its sole
discretion, determine the participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent
auditor.
BONUS FUNDING
Accruals based on bonus performance measures for the President, Consumer Truck
Rental are excluded from funding limitations.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan or the amount of the accrual. Should the accrual not
provide for bonus allotments under the plan, proration will be affected at the
discretion of the Chairman, President and Chief Executive Officer of RSI.
Unused monies may not be carried forward for subsequent bonus years.
DISCRETIONARY AWARDS
With the approval of the Board of Directors of RSI, the Chairman, President,
and Chief Executive Officer of RSI has the authority to grant discretionary
bonus awards for exemplary performance to non-participants or to enhance the
awards of participants. Discretionary awards are not subject to the funding
limitations of this plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards must be
approved by the Chairman, President and Chief Executive Officer of RSI.
<PAGE> 10
--------------------------------------------------------------------------------
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1995 INCENTIVE COMPENSATION PLAN PAGE 10
--------------------------------------------------------------------------------
The total of all discretionary awards for employees under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, the Ryder Services Corporation Incentive
Compensation Plan, and the Division Presidents' bonus plans, including those
granted off-cycle, may not exceed $430,000 per year.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and affiliates'
incentive compensation plans annually to ensure equitability both within the
Company, and in relation to current economic conditions.
THE BOARD OF DIRECTORS RESERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE
EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.14(b)
--------------------------------------------------------------------------------
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1995 INCENTIVE COMPENSATION PLAN PAGE 1
--------------------------------------------------------------------------------
Supersedes 1994 President, Ryder Dedicated Logistics Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1995
Incentive Plan for the President, Ryder Dedicated Logistics (RDL). The plan is
intended to serve as a single, comprehensive source of information that will
explain your bonus for achieving various levels of performance. Questions
should be addressed to your supervisor.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
<TABLE>
<CAPTION>
RSI RSI RDL INDIVIDUAL TOTAL BONUS
PERFORMANCE ABOVE PLAN PERFORMANCE PERFORMANCE OPPORTUNITY *
<S> <C> <C> <C> <C>
60% 20% 20% 20% 120%
</TABLE>
* See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1995, your bonus payout will be based on Ryder System, Inc. (RSI or the
Company) performance, RSI performance above plan, RDL performance, and your
performance as an individual.
RSI performance is measured based on RSI Net Earnings After Tax (NAT) Return on
Equity (ROE) performance and RSI Net Earnings Before Tax (NBT) performance for
1995.
RSI performance above plan is measured based on RSI NBT performance for 1995.
RDL performance is measured based on RDL Revenue performance and RDL Product
Line NBT performance for 1995.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you agreed to with management at the
start of the year. Given their importance, the objectives should be in writing
and may be updated during the year to adjust for priorities that may have
changed.
<PAGE> 2
--------------------------------------------------------------------------------
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1995 INCENTIVE COMPENSATION PLAN PAGE 2
--------------------------------------------------------------------------------
DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
- RSI PERFORMANCE -- RSI performance payout is based on a grid
which combines RSI ROE performance and RSI NBT performance.
RSI ROE performance for the bonus year is calculated by
dividing RSI NAT by RSI average equity.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax from continuing operations for the bonus
year, as certified to the Board of Directors and
shareholders of RSI by the Company's independent
auditors, including appropriate accruals for all
incentive awards estimated to be payable for that
bonus year.
-- RSI average equity is defined as the average of the
four quarters' average equity. A quarter's average
equity is defined as the equity, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total equity as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT is defined as RSI's consolidated Net Earnings Before
Tax as certified to the Board of Directors and shareholders of
RSI by the Company's independent auditors, net of a provision
for the total of all incentive awards, for the bonus year.
- RSI PERFORMANCE ABOVE PLAN -- RSI performance above plan
payout is based on RSI NBT performance. To achieve a payout,
RSI NBT performance must be above Plan.
- RDL PERFORMANCE -- RDL performance payout is based on a grid
which combines RDL revenue performance and RDL Product Line
NBT performance.
RDL revenue is defined as RDL's total revenue as verified by
the Senior Vice President and Controller, RSI.
RDL Product Line NBT is defined as RDL's Product Line Net
Earnings Before Tax as verified by the Senior Vice President
and Controller, RSI, net of a provision for the total of all
incentive awards, for the bonus year.
<PAGE> 3
--------------------------------------------------------------------------------
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1995 INCENTIVE COMPENSATION PLAN PAGE 3
--------------------------------------------------------------------------------
- INDIVIDUAL PERFORMANCE -- Individual performance is defined as
each participant's performance against job requirements and
objectives (MBOs), as agreed upon between the individual and
his/her management, at the beginning of the bonus year. If
necessary, goals and objectives may be revised during the
bonus year to reflect changing business priorities.
Individual performance awards are separate from payments based
upon financial measurements and may be paid, in part or in
whole, based on the Company's performance and/or ability to
pay.
Bonus awards are subject to the recommendation of the
Administrator of the plan and approval by the Board of
Directors of RSI. (See "Bonus Payment")
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with
the approval of the Board of Directors of RSI.
<PAGE> 4
--------------------------------------------------------------------------------
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1995 INCENTIVE COMPENSATION PLAN PAGE 4
--------------------------------------------------------------------------------
BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE - ROE/NBT
RSI performance payout is based on a grid consisting of two
performance variables: 1995 RSI NAT ROE and 1995 RSI NBT. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 RSI NBT ($MM)
THRESHOLD MAXIMUM
260.5 276 289 306 313 327
ROE % OF OPPORTUNITY
<S> <C> <C> <C> <C> <C> <C>
< 14.5 30 40 50 55 75 80
14.5 - 17 40 50 60 65 85 90
> 17 50 60 65 75 90 100
</TABLE>
2) RSI PERFORMANCE ABOVE PLAN - NBT
RSI performance above plan payout is based on a grid of 1995 RSI NBT.
The potential bonus payout percent is determined by locating the point
on the grid under the 1995 RSI NBT. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Above
Plan Bonus Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE ABOVE PLAN BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE ABOVE PLAN BONUS OPPORTUNITY
<TABLE>
<S> <C> <C>
1995 RSI ABOVE PLAN NBT ($MM)
THRESHOLD MAXIMUM
306.0 313.0 327.0
% OF OPPORTUNITY
0 50 100
</TABLE>
<PAGE> 5
--------------------------------------------------------------------------------
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1995 INCENTIVE COMPENSATION PLAN PAGE 5
--------------------------------------------------------------------------------
3) RDL PERFORMANCE - REVENUE/PRODUCT LINE NBT
RDL performance payout is based on a grid consisting of two
performance variables: 1995 RDL Revenue and 1995 RDL Product Line NBT.
The potential bonus payout percent is determined by locating the point
on the grid where the variables intersect. Actual performance may
fall between the points specifically displayed on the grid, and the
grid allows for interpolation between NBT points as shown. No bonus
awards will be paid for performance below threshold. The potential
bonus payout is expressed as percentage of Maximum RDL Performance
Bonus Opportunity, as shown on page 1.
POTENTIAL RDL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RDL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
1995 RDL PRODUCT LINE NBT ($MM)
THRESHOLD MAXIMUM
REVENUE 25 27 30 33 37 40
($MM) % OF OPPORTUNITY
<S> <C> <C> <C> <C> <C> <C>
Less Than 800 10 25 40 55 70 80
Greater Than or Equal To 800 25 35 55 65 90 100
</TABLE>
4) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
FAIR - SOME CONSISTENT SIGNIFICANTLY
CRITICAL WITH ABOVE
INDIVIDUAL PERFORMANCE SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
<S> <C> <C> <C> <C>
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-50% 51-70% 71-89% 90-100%
</TABLE>
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL PAYOUTS MAY BE
PRORATED DOWNWARD AT THE COMPANY'S DISCRETION. ADDITIONAL CRITERIA MAY ADJUST
THE PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT ACHIEVED. THE GRIDS
WILL BE REVISED ANNUALLY TO ENSURE CONSISTENCY WITH COMPANY GOALS AND
OBJECTIVES.
<PAGE> 6
--------------------------------------------------------------------------------
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1995 INCENTIVE COMPENSATION PLAN PAGE 6
--------------------------------------------------------------------------------
BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows given the following
information:
<TABLE>
<S> <C>
Eligible Base Salary $315,000
1995 RSI NAT ROE 15%
1995 RSI NBT $ 313MM
1995 RDL Revenue $ 800MM
1995 RDL Product Line NBT $ 33MM
Individual Performance Significantly Above Expectations
</TABLE>
<TABLE>
<S> <C>
1) RSI Performance
60% Maximum RSI Performance Bonus Opportunity
85% Potential RSI Performance Bonus Payout (from grid)
60% x 85% = 51% of Eligible Base Salary
51% x $315,000 = $160,650
2) RSI Above Plan Performance
20% Maximum RSI Above Plan Performance Bonus Opportunity
50% Potential RSI Above Plan Performance Bonus Opportunity
20% x 50% = 10% of Eligible Base Salary
10% x $315,000 = $ 31,500
3) RDL Performance
20% Maximum RDL Performance Bonus Opportunity
65% Potential RDL Performance Bonus Payout (from grid)
20% x 65% = 13% of Eligible Base Salary
13% x $315,000 = $ 40,950
4) Individual Performance
20% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $315,000 = $ 47,250
--------
TOTAL BONUS $280,350
</TABLE>
<PAGE> 7
--------------------------------------------------------------------------------
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1995 INCENTIVE COMPENSATION PLAN PAGE 7
--------------------------------------------------------------------------------
BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, commissions, employee benefits,
moving expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for
a participant who begins a bonus year with a base salary of
$315,000, then effective June 1 receives an increase to a base
salary of $330,000:
<TABLE>
<S> <C>
January 1 through May 31 of Bonus Year:
---------------------------------------
31 + 28 + 31 + 30 + 31 = 151=.414 x $315,000/yr. = $130,410
---------------------- ---
365 days 365
June 1 through December 31 of Bonus Year:
-----------------------------------------
365 - 151 = 214=.586 x $330,000/yr. = $193,380
--------- ---
365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $323,790
</TABLE>
SPECIAL ROE AWARD
One and one-half percent of the RSI NAT amount in excess of that required to
reach 17% Return on Equity (ROE) will be credited to deferred compensation for
elected Officers of the Company, Division Presidents and the Senior Vice
President and General Manager Ryder International. This amount will be
prorated based on each individual participant's earned salary (while in the
eligible position) in relation to the sum of the earned salaries of all
participants.
<PAGE> 8
--------------------------------------------------------------------------------
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1995 INCENTIVE COMPENSATION PLAN PAGE 8
--------------------------------------------------------------------------------
ADMINISTRATION
The Chairman, President, and Chief Executive Officer of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
ELIGIBILITY
The President, Ryder Dedicated Logistics, if employed in good standing at the
time bonus payments are made, is eligible to participate in this plan. If the
President, Ryder Dedicated Logistics has an agreement which specifically
provides for incentive compensation other than that which is provided in this
plan or is a participant in any other incentive compensation plan of RSI, its
subsidiaries or affiliates, he/she is not eligible to participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave the Company or VLSD during the bonus year
under any of the following conditions may be eligible for pro rata bonus
awards:
- retirement under the provisions of one of the Company's
retirement plans or the Social Security Act, or
- disability
Note: The spouse or legal representative of a deceased participant may be
eligible for pro rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of the Company (as defined and adopted by the Board of Directors on
August 20, 1993), the funds necessary to pay incentive awards will be placed in
a trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by the Company. Participants will receive bonus awards for actual time
employed during the bonus year based upon: a) the greater of actual company
performance or 80% of maximum company performance opportunity plus b) the
greater of actual individual performance or 80% of maximum individual
performance opportunity.
<PAGE> 9
--------------------------------------------------------------------------------
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1995 INCENTIVE COMPENSATION PLAN PAGE 9
--------------------------------------------------------------------------------
However, if the Company fails to verify incentive awards through a "Big 6"
accounting firm, participants will receive 100% of their maximum company and
individual performance opportunities based on actual time worked during the
bonus year. The Company will be responsible for all legal fees and expenses
which participants may reasonably incur in enforcing their rights under the
plan in the event of a Change of Control of the Company.
Should a Change of Control occur during 1995, participants will receive
instructions regarding the collection of incentive awards.
BONUS ELIGIBILITY ON TERMINATION
Participants leaving the Company or VLSD under any conditions other than those
outlined in the Eligibility or Change of Control sections of this plan are not
eligible for bonus awards for the bonus year in which they leave, nor are they
eligible for awards for the preceding bonus year, if such awards have not yet
been distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the plan, the Compensation Committee of
the Board of Directors or the full Board of Directors of RSI will, in its sole
discretion, determine the participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent
auditor.
BONUS FUNDING
Accruals based on bonus performance measures for the President, Ryder Dedicated
Logistics are excluded from funding limitations.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan or the amount of the accrual. Should the accrual not
provide for bonus allotments under the plan, proration will be affected at the
discretion of the Chairman, President and Chief Executive Officer of RSI.
Unused monies may not be carried forward for subsequent bonus years.
DISCRETIONARY AWARDS
With the approval of the Board of Directors of RSI, the Chairman, President,
and Chief Executive Officer of RSI has the authority to grant discretionary
bonus awards for exemplary performance to non-participants or to enhance the
awards of participants. Discretionary awards are not subject to the funding
limitations of this plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards must be
approved by the Chairman, President and Chief Executive Officer of RSI.
<PAGE> 10
--------------------------------------------------------------------------------
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1995 INCENTIVE COMPENSATION PLAN PAGE 10
--------------------------------------------------------------------------------
The total of all discretionary awards for employees under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, the Ryder Services Corporation Incentive
Compensation Plan, and the Division Presidents' bonus plans, including those
granted off-cycle, may not exceed $430,000 per year.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and affiliates'
incentive compensation plans annually to ensure equitability both within the
Company, and in relation to current economic conditions.
THE BOARD OF DIRECTORS RESERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE
EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.15(b)
RYDER SYSTEM, INC.
COMBINED NON-QUALIFIED STOCK OPTION
AND
LIMITED STOCK APPRECIATION RIGHT
AGREEMENT
THIS AGREEMENT, made as of this 6th day of May, 1994, between Ryder System,
Inc., a Florida corporation ("RSI"), and ((NAME)) (the "Grantee");
W I T N E S S E T H:
WHEREAS, the Board of Directors of RSI has adopted and the shareholders of RSI
have approved the Ryder System, Inc. 1980 Stock Incentive Plan, as amended (the
"Plan"), which provides for the issuance of (i) Non-qualified Stock Options
("Non-qualified Stock Options") to purchase shares of Common Stock and (ii)
Limited Stock Appreciation Rights ("Limited SARs") to key executive Employees
of the Company; and
WHEREAS, the Grantee is a key executive Employee and has been selected by the
Board of Directors of RSI and/or the Compensation Committee of the Board of
Directors of RSI (collectively, the "Committee") to receive Non-qualified Stock
Options and Limited SARs under the Plan;
NOW, THEREFORE, in consideration of the premises, RSI and the Grantee agree as
follows:
I. NON-QUALIFIED STOCK OPTION
Grant of Option Subject to the limitations and other terms and conditions set
forth in this Agreement and the Plan, the Committee grants to the Grantee as of
May 6th, 1994 a Non-qualified Stock Option to purchase an aggregate of
((SHARES)) shares of RSI's Common Stock, par value $.50 per share (the
"Shares"), at a price of $24.0625 per Share, the Fair Market Value on the date
of grant.
Limitations on Exercise of Option Subject to the limitations and other terms
and conditions set forth in this Agreement and the Plan, the Non-qualified
Stock Option shall be exercisable on or before May 5th, 2004 as follows:
(i) None of the Shares subject to the Non-qualified Stock Option
for a period of two (2) years from the date of grant;
(ii) 100% of the Shares subject to the Non-qualified Stock Option
for a period beginning at least two (2) years after the date
of grant AND the earlier of (A) eight (8) years from the date
of grant or, (B) when Ryder stock trades at or above $45.00
per share based on the average of the high and low price for
the last trading day for each of three (3) consecutive months.
<PAGE> 2
Subject to the foregoing and the provisions of the Plan, when the Non-qualified
Stock Option becomes exercisable it shall thereafter be exercisable at any time
on or before the expiration of the term of the Non-qualified Stock Option on
May 5th, 2004.
Exercise and Payment of Option Subject to the limitations and other terms and
conditions set forth in this Agreement and the Plan, the Non-qualified Stock
Option, to the extent then exercisable, may be exercised in whole or in part
from time-to-time by delivering written notice to RSI addressed to the
Controller of RSI specifying the number of Shares the Grantee then elects to
purchase under the Non-qualified Stock Option, together with the full purchase
price of the Shares being purchased in cash or a certified or bank cashier's
check payable to the order of RSI, or in Shares 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 the purchase price.
As promptly as practicable after any such exercise, RSI will deliver to the
Grantee certificates for the number of Shares with respect to which the
Non-qualified Stock Option has been exercised, issued in the name of the
Grantee. The exercise of a Non-qualified Stock Option shall reduce on a
one-for-one basis the number of Shares subject to the related Limited SAR
granted under Section II of this Agreement.
Exercise and Payment Upon a Change of Control Subject to the limitations and
other terms and conditions set forth in this Agreement and the Plan:
(i) Notwithstanding any other provision of this Agreement,
pursuant to Section 7(i) of the Plan, unless otherwise determined by the
Committee prior to a Change of Control, in the event of a Change of Control,
the Non-qualified Stock Option granted under Section I of this Agreement, to
the extent not previously exercised or expired under the terms of this
Agreement and the 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 the Plan applies or the Grantee has been
terminated for cause, in which case the Non-qualified Stock Option shall
automatically terminate as of the Incumbent Board's determination pursuant to
Section 14(a) of the Plan or the Grantee's Termination Date, as appropriate.
(ii) If the Committee so determines prior to or during the thirty
day period following the occurrence of a Change of Control, the Grantee may in
lieu of exercising, require RSI to purchase for cash all or any portion of the
Non-qualified Stock Option granted under Section I of this Agreement, which is
not otherwise exercised or expired under the terms of this Agreement and the
Plan as to which no Limited SAR is then exercisable, for a period of sixty days
following the occurrence of a Change of Control at the Price upon a Change of
Control specified below; provided that if the Grantee is subject to Section
16(b) of the 1934 Act with respect to RSI, the Grantee must have held such
Non-qualified Stock Option for at least six-months.
Price Upon a Change of Control Subject to the limitations and other terms and
conditions set forth in this Agreement and the Plan, upon the occurrence of a
Change of Control, the Price of the Limited SAR and the Non-qualified Stock
Option or portions thereof as to which no Limited SAR is then exercisable,
shall be the excess of the highest of:
2
<PAGE> 3
(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 days preceding the date of exercise;
(ii) the highest price per share of Common Stock included in a
filing made by any 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
RSI and its Subsidiaries and affiliates, who becomes the beneficial owner,
directly or indirectly, of twenty percent 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, on any Schedule 13D pursuant to Section 13(d)
of the 1934 Act as paid within the sixty 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 liquidation or
dissolution of RSI or any sale of all or substantially all of the assets of
RSI, with all noncash consideration being valued in good faith by the Incumbent
Board;
over the purchase price per Share at which the related Non-qualified Stock
Option is exercisable, as applicable.
II. LIMITED STOCK APPRECIATION RIGHT
Grant of Limited SAR Subject to the limitations and other terms and conditions
set forth in this Agreement and the Plan, the Committee grants to the Grantee
as of May 6th, 1994 a Limited SAR with respect to all Shares subject to the
related Non-qualified Stock Option granted under Section I of this Agreement.
Such Limited SAR shall be exercisable only in the event of a Change of Control
and only if the Grantee is subject, in the opinion of counsel to RSI, to
Section 16(b) of the Securities Exchange Act of 1934 with respect to RSI at the
time of the Change of Control. The Limited SAR is the right to receive an
amount (the "Limited SAR Spread") equal to the product computed by multiplying
(i) the Price upon a Change of Control specified in Section I above by (ii) the
number of Shares with respect to which such Limited SAR is being exercised.
Limitations on Exercise of Limited SAR Subject to the limitations and
other terms and conditions set forth in this Agreement and the Plan, the
Limited SAR shall be exercisable only if and to the extent that the related
Non-qualified Stock Option is exercisable, but no later than May 5th, 2004,
the expiration date of the related Non-qualified Stock Option, provided,
however, that the Limited SAR may not be exercised in any event until the
expiration of six months from the date of grant of the Limited SAR nor more
than six months after the Termination Date of the Grantee. The Limited SAR may
be exercised only during the sixty day period commencing after the occurrence
of a Change of Control provided, however, that if the Limited SAR has not been
held by the Grantee for at least six months before the occurrence of a Change
of Control, such Limited SAR may be exercised only during the sixty day period
commencing upon the expiration of such six month period.
3
<PAGE> 4
Exercise and Payment of Limited SAR Subject to the limitations and other terms
and conditions set forth in this Agreement and the Plan, the Limited SAR may be
exercised by delivering a written notice to RSI addressed to the Controller of
RSI specifying the number of Shares with respect to which the Grantee is
exercising the Limited SAR. As promptly as practicable after any such
exercise, RSI will deliver to the Grantee an amount in cash equal to the
Limited SAR Spread. The exercise of a Limited SAR shall reduce the number of
Shares subject to the related Non-qualified Stock Option on a one-for-one
basis.
III. GENERAL
Transferability of Awards No Awards 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.
Notices All notices provided for in this Agreement or the Plan shall be
inwriting and shall be deemed to have been duly given if delivered in person
or mailed by registered mail, return receipt requested:
(a) If to RSI, at Ryder System, Inc., P. O. Box 020816,
Miami, Florida 33102-0816, Attention: Controller; and
(b) If to the Grantee, at the Grantee's business address
or address appearing in the payroll records of RSI;
or
(c) At such other addresses as may be furnished to RSI or
the Grantee in accordance with this paragraph.
Definitions and Interpretation Capitalized terms not otherwise defined in this
Agreement are defined as in the Plan. This Agreement and the grant, exercise,
adjustment, modification, cancellation and termination of the Non-qualified
Stock Option and the Limited SAR, the issuance of Shares subject thereto and
the payment of cash thereunder are subject in all respects to the terms of the
Plan and in the event that any provision of this Agreement shall be
inconsistent with the terms of the Plan, then the terms of the Plan shall
govern. The Committee shall have plenary authority to interpret this Agreement
and the Plan and to make all determinations deemed necessary or advisable for
the administration of the Plan. The Committee's interpretations and
determinations shall be conclusive.
Acknowledgement The Grantee acknowledges that he/she has read the entire Plan
including the provisions thereof relating to termination of employment and
Change of Control. Additionally, Grantee acknowledges that this Agreement is
not an employment agreement between the Grantee and RSI, and RSI and the
Grantee each has the right to terminate the Grantee's employment at any time
for any reason whatsoever, unless there is a written employment agreement to
the contrary.
4
<PAGE> 5
Governing Law This Agreement shall be construed and enforced in accordance
with, and governed by, the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Attest: Ryder System, Inc.
By:____________________________________ By: ________________________________
Yasmine B. Zyne C. Robert Campbell
Assistant Secretary Executive Vice President - Human
Resources and Administration
________________________________
GRANTEE
________________________________
Social Security Number
5
<PAGE> 1
EXHIBIT 10.15(c)
RYDER SYSTEM, INC.
COMBINED NON-QUALIFIED STOCK OPTION
AND
LIMITED STOCK APPRECIATION RIGHT
AGREEMENT
THIS AGREEMENT, made as of this 21st day of October, 1994, between Ryder
System, Inc., a Florida corporation ("RSI"), and ((NAME)) (the "Grantee");
W I T N E S S E T H:
WHEREAS, the Board of Directors of RSI has adopted and the shareholders of RSI
have approved the Ryder System, Inc. 1980 Stock Incentive Plan, as amended (the
"Plan"), which provides for the issuance of (i) Non-qualified Stock Options
("Non-qualified Stock Options") to purchase shares of Common Stock and (ii)
Limited Stock Appreciation Rights ("Limited SARs") to key executive Employees
of the Company; and
WHEREAS, the Grantee is a key executive Employee and has been selected by the
Board of Directors of RSI and/or the Compensation Committee of the Board of
Directors of RSI (collectively, the "Committee") to receive Non-qualified Stock
Options and Limited SARs under the Plan;
NOW, THEREFORE, in consideration of the premises, RSI and the Grantee agree as
follows:
I. NON-QUALIFIED STOCK OPTION
Grant of Option Subject to the limitations and other terms and conditions set
forth in this Agreement and the Plan, the Committee grants to the Grantee as of
October 21, 1994 a Non-qualified Stock Option to purchase an aggregate of
((SHARES)) shares of RSI's Common Stock, par value $.50 per share (the
"Shares"), at a price of $25.3750 per Share, the Fair Market Value on the date
of grant.
Limitations on Exercise of Option Subject to the limitations and other terms
and conditions set forth in this Agreement and the Plan, the Non-qualified
Stock Option shall be exercisable in installments on or before October 20, 2004
as follows:
(i) None of the Shares subject to the Non-qualified Stock Option
for a period of one year from the date of grant;
(ii) 50% of the Shares subject to the Non-qualified Stock Option on
or after October 21, 1995;
<PAGE> 2
(iii) an additional 50% of the Shares subject to the Non-qualified
Stock Option on or after October 21, 1996.
Subject to the foregoing and the provisions of the Plan, any installment
portion of the Non-qualified Stock Option that becomes exercisable shall
thereafter accumulate and be exercisable at any time on or before the
expiration of the term of the Non-qualified Stock Option on October 20, 2004.
Exercise and Payment of Option Subject to the limitations and other terms and
conditions set forth in this Agreement and the Plan, the Non-qualified Stock
Option, to the extent then exercisable, may be exercised in whole or in part
from time-to-time by delivering written notice to RSI addressed to the
Controller of RSI specifying the number of Shares the Grantee then elects to
purchase under the Non-qualified Stock Option, together with the full purchase
price of the Shares being purchased in cash or a certified or bank cashier's
check payable to the order of RSI, or in Shares 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 the purchase price.
As promptly as practicable after any such exercise, RSI will deliver to the
Grantee certificates for the number of Shares with respect to which the
Non-qualified Stock Option has been exercised, issued in the name of the
Grantee. The exercise of a Non-qualified Stock Option shall reduce on a
one-for-one basis the number of Shares subject to the related Limited SAR
granted under Section II of this Agreement.
Exercise and Payment Upon a Change of Control Subject to the limitations and
other terms and conditions set forth in this Agreement and the Plan:
(i) Notwithstanding any other provision of this Agreement,
pursuant to Section 7(i) of the Plan, unless otherwise determined by the
Committee prior to a Change of Control, in the event of a Change of Control,
the Non-qualified Stock Option granted under Section I of this Agreement, to
the extent not previously exercised or expired under the terms of this
Agreement and the 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 the Plan applies or the Grantee has been
terminated for cause, in which case the Non-qualified Stock Option shall
automatically terminate as of the Incumbent Board's determination pursuant to
Section 14(a) of the Plan or the Grantee's Termination Date, as appropriate.
(ii) If the Committee so determines prior to or during the thirty
day period following the occurrence of a Change of Control, the Grantee may in
lieu of exercising, require RSI to purchase for cash all or any portion of the
Non-qualified Stock Option granted under Section I of this Agreement, which is
not otherwise exercised or expired under the terms of this Agreement and the
Plan as to which no Limited SAR is then exercisable, for a period of sixty days
following the occurrence of a Change of Control at the Price upon a Change of
Control specified below; provided that if the Grantee is subject to Section
16(b) of the 1934 Act with respect to RSI, the Grantee must have held such
Non-qualified Stock Option for at least six-months.
2
<PAGE> 3
Price Upon a Change of Control Subject to the limitations and other terms and
conditions set forth in this Agreement and the Plan, upon the occurrence of a
Change of Control, the Price of the Limited SAR and the Non-qualified Stock
Option or portions thereof as to which no Limited SAR is then exercisable,
shall be 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 days preceding the date of exercise;
(ii) the highest price per share of Common Stock included in a
filing made by any 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
RSI and its Subsidiaries and affiliates, who becomes the beneficial owner,
directly or indirectly, of twenty percent 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, on any Schedule 13D pursuant to Section 13(d)
of the 1934 Act as paid within the sixty 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 liquidation or
dissolution of RSI or any sale of all or substantially all of the assets of
RSI, with all noncash consideration being valued in good faith by the Incumbent
Board;
over the purchase price per Share at which the related Non-qualified Stock
Option is exercisable, as applicable.
II. LIMITED STOCK APPRECIATION RIGHT
Grant of Limited SAR Subject to the limitations and other terms and conditions
set forth in this Agreement and the Plan, the Committee grants to the Grantee
as of October 21, 1994 a Limited SAR with respect to all Shares subject to the
related Non-qualified Stock Option granted under Section I of this Agreement.
Such Limited SAR shall be exercisable only in the event of a Change of Control
and only if the Grantee is subject, in the opinion of counsel to RSI, to
Section 16(b) of the Securities Exchange Act of 1934 with respect to RSI at the
time of the Change of Control. The Limited SAR is the right to receive an
amount (the "Limited SAR Spread") equal to the product computed by multiplying
(i) the Price upon a Change of Control specified in Section I above by (ii) the
number of Shares with respect to which such Limited SAR is being exercised.
Limitations on Exercise of Limited SAR Subject to the limitations and other
terms and conditions set forth in this Agreement and the Plan, the Limited SAR
shall be exercisable only if and to the extent that the related Non-qualified
Stock Option is exercisable, but no later than May 5th, 2004, the expiration
date of the related Non-qualified Stock Option, provided, however, that the
Limited SAR may not be exercised in any event until the expiration of six
3
<PAGE> 4
months from the date of grant of the Limited SAR nor more than six months after
the Termination Date of the Grantee. The Limited SAR may be exercised only
during the sixty day period commencing after the occurrence of a Change of
Control provided, however, that if the Limited SAR has not been held by the
Grantee for at least six months before the occurrence of a Change of Control,
such Limited SAR may be exercised only during the sixty day period commencing
upon the expiration of such six month period.
Exercise and Payment of Limited SAR Subject to the limitations and other terms
and conditions set forth in this Agreement and the Plan, the Limited SAR may be
exercised by delivering a written notice to RSI addressed to the Controller of
RSI specifying the number of Shares with respect to which the Grantee is
exercising the Limited SAR. As promptly as practicable after any such
exercise, RSI will deliver to the Grantee an amount in cash equal to the
Limited SAR Spread. The exercise of a Limited SAR shall reduce the number of
Shares subject to the related Non-qualified Stock Option on a one-for-one
basis.
III. GENERAL
Transferability of Awards No Awards 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.
Notices All notices provided for in this Agreement or the Plan shall be in
writing and shall be deemed to have been duly given if delivered in person or
mailed by registered mail, return receipt requested:
(a) If to RSI, at Ryder System, Inc., P. O. Box 020816, Miami,
Florida 33102-0816, Attention: Controller; and
(b) If to the Grantee, at the Grantee's business address or
address appearing in the payroll records of RSI; or
(c) At such other addresses as may be furnished to RSI or the
Grantee in accordance with this paragraph.
Definitions and Interpretation Capitalized terms not otherwise defined in this
Agreement are defined as in the Plan. This Agreement and the grant, exercise,
adjustment, modification, cancellation and termination of the Non-qualified
Stock Option and the Limited SAR, the issuance of Shares subject thereto and
the payment of cash thereunder are subject in all respects to the terms of the
Plan and in the event that any provision of this Agreement shall be
inconsistent with the terms of the Plan, then the terms of the Plan shall
govern. The Committee shall have plenary authority to interpret this Agreement
and the Plan and to make all determinations deemed necessary or advisable for
the administration of the Plan. The Committee's interpretations and
determinations shall be conclusive.
4
<PAGE> 5
Acknowledgement The Grantee acknowledges that he/she has read the entire Plan
including the provisions thereof relating to termination of employment and
Change of Control. Additionally, Grantee acknowledges that this Agreement is
not an employment agreement between the Grantee and RSI, and RSI and the
Grantee each has the right to terminate the Grantee's employment at any time
for any reason whatsoever, unless there is a written employment agreement to
the contrary.
Governing Law This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Attest: RSI
By:_________________________________ By: ___________________________________
Yasmine B. Zyne C. Robert Campbell
Assistant Secretary Executive Vice President - Human
Resources and Administration
_____________________________________
GRANTEE
_____________________________________
Social Security Number
5
<PAGE> 6
Acknowledgement The Grantee acknowledges that he/she has read the entire Plan
including the provisions thereof relating to termination of employment and
Change of Control. Additionally, Grantee acknowledges that this Agreement is
not an employment agreement between the Grantee and RSI, and RSI and the
Grantee each has the right to terminate the Grantee's employment at any time
for any reason whatsoever, unless there is a written employment agreement to
the contrary.
Governing Law This Agreement shall be construed and enforced in accordance
with, and governed by, the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Attest: RSI
By:__________________________________ By: ___________________________________
Edward R. Henderson James M. Herron
Assistant Secretary Senior Executive Vice President
and General Counsel
___________________________________
GRANTEE
___________________________________
Social Security Number
6
<PAGE> 1
EXHIBIT 10.15(d)
RYDER SYSTEM, INC.
COMBINED NON-QUALIFIED STOCK OPTION
AND
LIMITED STOCK APPRECIATION RIGHT
AGREEMENT
THIS AGREEMENT, made as of this 15th day of December, 1994, between Ryder
System, Inc., a Florida corporation ("RSI"), and M. A. Burns (the "Grantee");
W I T N E S S E T H:
WHEREAS, the Board of Directors of RSI has adopted and the shareholders of RSI
have approved the Ryder System, Inc. 1980 Stock Incentive Plan, as amended (the
"Plan"), which provides for the issuance of (i) Non-qualified Stock Options
("Non-qualified Stock Options") to purchase shares of Common Stock and (ii)
Limited Stock Appreciation Rights ("Limited SARs") to key executive Employees
of the Company; and
WHEREAS, the Grantee is a key executive Employee and has been selected by the
Board of Directors of RSI and/or the Compensation Committee of the Board of
Directors of RSI (collectively, the "Committee") to receive Non-qualified Stock
Options and Limited SARs under the Plan;
NOW, THEREFORE, in consideration of the premises, RSI and the Grantee agree as
follows:
I. NON-QUALIFIED STOCK OPTION
Grant of Option Subject to the limitations and other terms and conditions set
forth in this Agreement and the Plan, the Committee grants to the Grantee as of
December 15, 1994 a Non-qualified Stock Option to purchase an aggregate of
130,000 shares of RSI's Common Stock, par value $.50 per share (the "Shares"),
at a price of $21.9375 per Share, the Fair Market Value on the date of grant.
Limitations on Exercise of Option Subject to the limitations and other terms
and conditions set forth in this Agreement and the Plan, the Non-qualified
Stock Option shall be exercisable in installments on or before December 14,
2004 as follows:
(i) 20% of the Shares subject to the Non-qualified Stock Option
effective immediately;
(ii) 20% of the Shares subject to the Non-qualified Stock Option on
or after December 15,1995;
<PAGE> 2
(iii) 20% of the Shares subject to the Non-qualified Stock Option on
or after December 15, 1996;
(iv) 20% of the Shares subject to the Non-qualified Stock Option on
or after December 15, 1997;
(v) and the final 20% of the Shares subject to the Non-qualified
Stock Option on or after December 15, 1998.
Subject to the foregoing and the provisions of the Plan, any installment
portion of the Non-qualified Stock Option that becomes exercisable shall
thereafter accumulate and be exercisable at any time on or before the
expiration of the term of the Non-qualified Stock Option on December 14, 2004.
Exercise and Payment of Option Subject to the limitations and other terms and
conditions set forth in this Agreement and the Plan, the Non-qualified Stock
Option, to the extent then exercisable, may be exercised in whole or in part
from time-to-time by delivering written notice to RSI addressed to the
Controller of RSI specifying the number of Shares the Grantee then elects to
purchase under the Non-qualified Stock Option, together with the full purchase
price of the Shares being purchased in cash or a certified or bank cashier's
check payable to the order of RSI, or in Shares 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 the purchase price. As
promptly as practicable after any such exercise, RSI will deliver to the
Grantee certificates for the number of Shares with respect to which the
Non-qualified Stock Option has been exercised, issued in the name of the
Grantee. The exercise of a Non-qualified Stock Option shall reduce on a
one-for-one basis the number of Shares subject to the related Limited SAR
granted under Section II of this Agreement.
Exercise and Payment Upon a Change of Control Subject to the limitations and
other terms and conditions set forth in this Agreement and the Plan:
(i) Notwithstanding any other provision of this Agreement,
pursuant to Section 7(i) of the Plan, unless otherwise determined by the
Committee prior to a Change of Control, in the event of a Change of Control,
the Non-qualified Stock Option granted under Section I of this Agreement, to
the extent not previously exercised or expired under the terms of this
Agreement and the 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 the Plan applies or the Grantee has been
terminated for cause, in which case the Non-qualified Stock Option shall
automatically terminate as of the Incumbent Board's determination pursuant to
Section 14(a) of the Plan or the Grantee's Termination Date, as appropriate.
(ii) If the Committee so determines prior to or during the thirty
day period following the occurrence of a Change of Control, the Grantee may in
lieu of exercising, require RSI to purchase for cash all or any portion of the
Non-qualified Stock Option granted under Section I of this Agreement, which is
not otherwise exercised or expired under the terms of this Agreement and the
Plan as to which no Limited SAR is then exercisable, for a period of sixty
2
<PAGE> 3
days following the occurrence of a Change of Control at the Price upon a Change
of Control specified below; provided that if the Grantee is subject to Section
16(b) of the 1934 Act with respect to RSI, the Grantee must have held such
Non-qualified Stock Option for at least six-months.
Price Upon a Change of Control Subject to the limitations and other terms and
conditions set forth in this Agreement and the Plan, upon the occurrence of a
Change of Control, the Price of the Limited SAR and the Non-qualified Stock
Option or portions thereof as to which no Limited SAR is then exercisable,
shall be 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 days preceding the date of exercise;
(ii) the highest price per share of Common Stock included in a
filing made by any 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
RSI and its Subsidiaries and affiliates, who becomes the beneficial owner,
directly or indirectly, of twenty percent 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, on any Schedule 13D pursuant to Section 13(d)
of the 1934 Act as paid within the sixty 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 liquidation or
dissolution of RSI or any sale of all or substantially all of the assets of
RSI, with all noncash consideration being valued in good faith by the Incumbent
Board;
over the purchase price per Share at which the related Non-qualified Stock
Option is exercisable, as applicable.
II. LIMITED STOCK APPRECIATION RIGHT
Grant of Limited SAR Subject to the limitations and other terms and conditions
set forth in this Agreement and the Plan, the Committee grants to the Grantee
as of December 15, 1994 a Limited SAR with respect to all Shares subject to the
related Non-qualified Stock Option granted under Section I of this Agreement.
Such Limited SAR shall be exercisable only in the event of a Change of Control
and only if the Grantee is subject, in the opinion of counsel to RSI, to
Section 16(b) of the Securities Exchange Act of 1934 with respect to RSI at the
time of the Change of Control. The Limited SAR is the right to receive an
amount (the "Limited SAR Spread") equal to the product computed by multiplying
(i) the Price upon a Change of Control specified in Section I above by (ii) the
number of Shares with respect to which such Limited SAR is being exercised.
Limitations on Exercise of Limited SAR Subject to the limitations and other
terms and conditions set forth in this Agreement and the Plan, the Limited SAR
shall be exercisable only if and to the extent that the related Non-qualified
Stock Option is exercisable, but no later than
3
<PAGE> 4
December 14, 2004, the expiration date of the related Non-qualified Stock
Option, provided, however, that the Limited SAR may not be exercised in any
event until the expiration of six months from the date of grant of the Limited
SAR nor more than six months after the Termination Date of the Grantee. The
Limited SAR may be exercised only during the sixty day period commencing after
the occurrence of a Change of Control provided, however, that if the Limited
SAR has not been held by the Grantee for at least six months before the
occurrence of a Change of Control, such Limited SAR may be exercised only
during the sixty day period commencing upon the expiration of such six month
period.
Exercise and Payment of Limited SAR Subject to the limitations and other terms
and conditions set forth in this Agreement and the Plan, the Limited SAR may be
exercised by delivering a written notice to RSI addressed to the Controller of
RSI specifying the number of Shares with respect to which the Grantee is
exercising the Limited SAR. As promptly as practicable after any such exercise,
RSI will deliver to the Grantee an amount in cash equal to the Limited SAR
Spread. The exercise of a Limited SAR shall reduce the number of Shares subject
to the related Non-qualified Stock Option on a one-for-one basis.
III. GENERAL
Transferability of Awards No Awards 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.
Notices All notices provided for in this Agreement or the Plan shall be in
writing and shall be deemed to have been duly given if delivered in person or
mailed by registered mail, return receipt requested:
(a) If to RSI, at Ryder System, Inc., P. O. Box 020816,
Miami, Florida 33102-0816, Attention: Controller; and
(b) If to the Grantee, at the Grantee's business address
or address appearing in the payroll records of RSI; or
(c) At such other addresses as may be furnished to RSI or
the Grantee in accordance with this paragraph.
Definitions and Interpretation Capitalized terms not otherwise defined in this
Agreement are defined as in the Plan. This Agreement and the grant, exercise,
adjustment, modification, cancellation and termination of the Non-qualified
Stock Option and the Limited SAR, the issuance of Shares subject thereto and
the payment of cash thereunder are subject in all respects to the terms of the
Plan and in the event that any provision of this Agreement shall be
inconsistent with the terms of the Plan, then the terms of the Plan shall
govern. The Committee shall have plenary authority to interpret this Agreement
and the Plan and to make all determinations deemed necessary or advisable for
the administration of the Plan. The Committee's interpretations and
determinations shall be conclusive.
4
<PAGE> 5
Acknowledgement The Grantee acknowledges that he/she has read the entire Plan
including the provisions thereof relating to termination of employment and
Change of Control. Additionally, Grantee acknowledges that this Agreement is
not an employment agreement between the Grantee and RSI, and RSI and the
Grantee each has the right to terminate the Grantee's employment at any time
for any reason whatsoever, unless there is a written employment agreement to
the contrary.
Governing Law This Agreement shall be construed and enforced in accordance
with, and governed by, the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Attest: RSI
By: /s/ Yasmine B. Zyne By: /s/ James M. Herron
------------------------------- ------------------------------------
Yasmine B. Zyne James M. Herron
Assistant Secretary Senior Executive Vice President
and General Counsel
/s/ M.A. Burns
---------------------------------------
GRANTEE
_______________________________________
Social Security Number
5
<PAGE> 1
EXHIBIT 10.17(b)
FIRST AMENDMENT TO
THE RYDER SYSTEM BENEFIT RESTORATION PLAN
WHEREAS, with approval of its Board of Directors, Ryder System, Inc.
and its subsidiaries (the "Company") previously adopted the Ryder System
Benefit Restoration Plan ("Plan") effective as of January 1, 1985; and
WHEREAS, the Company desires to amend the Plan to provide certain
benefits in the event of a Change of Control (as that term is defined in the
Ryder System, Inc. Retirement Plan); and
WHEREAS, the Company has been authorized by the Compensation Committee
of its Board of Directors on December 16, 1988 to make such amendments;
NOW, THEREFORE, in consideration of the premises herein contained, the
Plan shall be amended to read as follows:
I. Section 1.03 is amended to read as follows:
"Code" - The Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
II. The following new Article VI is added to the Plan:
ARTICLE VI
Change of Control Provisions
6.01 Vesting - in the event of a Change of Control, any
Participant who would be eligible for benefits under the Plan if his employment
had terminated as of the date of the Change of Control, except for the fact
that the Participant was not yet vested in such benefits under the terms of the
vesting schedule applicable to the qualified plan in which he is a Participant,
shall be deemed to be immediately 100% vested in such benefits.
<PAGE> 2
6.02 Benefits Payable in the Event of Change of Control - In the
event of such Change of Control, the eligible Participant shall be entitled to
receive an immediate cash payment equal to the actuarial value of monthly
benefits otherwise payable from this Plan computed under the assumption that
the Participant's employment terminated as of the date of Change of Control.
The amount of such cash payment shall be determined in accordance with the
following provisions:
(a) The monthly benefit to which the Participant would
have been entitled at his normal retirement date and
at each early retirement date will be computed in
accordance with the terms of his or her plan, where
such amount shall be computed without regard to
limitations under Section 415 of the Code or any
other Code or federal law requirement or Canadian
federal law requirement. For this purpose, each
Participant will be deemed to have met the applicable
requirements to be eligible for the maximum early
retirement benefit that could be payable under the
terms of the qualified plan in which he or she
participates.
(b) The amount of benefit payable under the qualified
retirement plan in which the individual participates
will be computed at each applicable early and normal
retirement age.
(c) After subtracting the amount in (b) above from the
amount determined in (a) above at each applicable
early or normal retirement age, a lump sum cash
payment amount shall be determined by applying the
Pension Benefit Guaranty Corporation (PBGC) annuity
rates, in effect as of January 1 of the year that
includes the date of the Change of Control to the
resulting benefit payable at each of the retirement
ages. The result which produces the largest lump sum
amount shall be the cash amount payable under this
Plan.
6.03 Adjustment to Payment to Cover Participant's Tax Liability -
In addition to the cash payment determined under 6.02 above, an additional
amount shall be payable to the Participant such that the total cash payment
amount to the Participant shall be equal to the amount that would (after
adjusting for the assumed amount of federal income tax applicable to the total
cash payment) result in a net cash after-tax amount to the Participant equal
to the cash payment amount determined in 6.02 above.
<PAGE> 3
6.04 No Duplication of Benefits - In the event these Change of
Control provisions become applicable, any future benefits payable under this
Plan to the Participant shall be actuarially adjusted to reflect the benefits
paid under the provisions of this Article VI. The purpose of this Section
6.04 is to avoid the duplication of benefit payments on behalf of a Participant.
III. The remaining provisions of the Plan shall remain in full force and
effect.
IN WITNESS WHEREOF, the Company has caused this First Amendment to
be signed by its duly appointed officers and its corporate seal to be hereunto
affixed as of the day and year above written.
By: /s/ Gail M. McDonald
-------------------------------------
Gail M. McDonald
Title: Senior Vice President Human Resources
-------------------------------------
ATTEST:
By: /s/ Fred Ray Stuever
-----------------------------
Fred Ray Stuever
Title: Assistant Secretary
-----------------------------
(SEAL)
<PAGE> 1
EXHIBIT 10.18
RYDER SYSTEM, INC.
3600 NW 82 Avenue
Miami, Florida 33166
RYDER (LOGO)
MEMORANDUM
November 10, 1994
TO: C. Robert Campbell
FROM: M. Anthony Burns
RE: Release Agreement
In accordance with the Older Workers Benefit Protection Act, I am required to
inform you of the following regarding your execution of the attached Release
Agreement, Amendment and letter of resignation (collectively, the "Release
Agreement").
1. You should consult with an attorney before signing the Release
Agreement.
2. You will have twenty-one days to execute the Release Agreement. If
you have not executed the Release Agreement by such date, it will
automatically be declared null and void and revoked.
3. After you have executed the Release Agreement, you have seven (7)
calendar days to revoke your acceptance of it. If you revoke the
Release Agreement within the seven (7) calendar days, it is null and
void.
4. If you do not revoke your execution of the Release Agreement within
the seven (7) calendar days, it will become effective and you and
Ryder will be subject to the terms of your Amended and Restated
Severance Agreement dated as of February 24, 1989, as amended by the
Amendment.
Please acknowledge below your receipt of this document as well as the Release
Agreement and that you have read and understand this page of conditions.
Acknowledged:
-------------------------
C. Robert Campbell
-------------------------
Date
Attachment
<PAGE> 2
Amendment to the Amended and Restated Severance Agreement between
RYDER SYSTEM, INC. and C. R. CAMPBELL
dated February 24, l989
THIS AMENDMENT made as of the 10th day of November, 1994 by and between RYDER
SYSTEM, INC., a Florida corporation (the "Corporation"), and C. R. CAMPBELL
(the "Executive").
WITNESSETH:
WHEREAS, the Corporation and the Executive have entered into an Amended and
Restated Severance Agreement dated as of February 24, 1989, including Exhibits
A and B thereto (the "Severance Agreement"), providing for the Corporation's
payment of severance benefits to the Executive if the Executive's employment
with the Corporation or its subsidiaries or affiliates terminates prior to a
Change of Control (as defined in Section 2 of the Severance Agreement); and
WHEREAS, the Corporation and the Executive now desire to amend the Severance
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Corporation and the Executive have agreed and do hereby
agree as follows:
1. Section 3(c) is deleted in its entirety and the following new Section
3(c) is inserted in lieu thereof:
"(c) Notice of Termination. The Executive agrees that as of
November 1, 1994 he has received adequate Notice of Termination and
that his Date of Termination is as specified in Section 3(d)."
2. Section 3(d) is deleted in its entirety and the following new Section
3(d) is inserted in lieu thereof:
"(d) Date of Termination. Date of Termination means the date
determined by the Corporation's Chief Executive Officer, but in no
event shall it be later than forty-five (45) days following the date
the Executive's successor begins employment with the Corporation as
the Corporation's senior human resources officer. Until the Date of
Termination, the Executive agrees that he shall continue to provide
expertise and guidance in the business, affairs, and management of the
Corporation, specifically including but not limited to human resources
expertise and guidance, as requested by the Chief Executive Officer of
the Corporation, or his designee, and to conduct himself in strict
compliance and consistent with the Corporation's management principles
and the highest overall ethical standards.
<PAGE> 3
If the Executive obtains employment with another company or
becomes self employed prior to the Date of Termination as defined in
the preceding paragraph, the Executive shall immediately give notice
of that event to the Corporation and the Date of Termination shall be
the date of such notice."
3. Section 4(a)(iii)(I) is deleted in its entirety and the following new
Section 4(a)(iii)(I) is inserted in lieu thereof:
"(I) Cash Entitlement. The Corporation shall pay to the
Executive the aggregate of the amounts determined pursuant to clauses
a through d below:
a. Unpaid Salary and Vacation. The Executive's base
salary and unused vacation entitlement through the Executive's Date of
Termination at the rate in effect at the time the Notice of
Termination was given.
b. Salary Multiple. A continuation of the
Executive's annual base salary at the rate in effect at the time the
Notice of Termination was given ("Annual Base Salary") for the
Executive's applicable Severance Period (as defined in Section 3(e)).
c. 1994 Bonus and Bonus Multiple. Subject to the
approval of the Corporation's Board of Directors, a bonus pursuant to
the Corporation's 1994 incentive compensation plan if the Executive
has not been terminated by the Corporation for Cause prior to December
31, 1994.
In addition, a bonus multiple in an amount equal to
the product of (i) the Executive's Annual Base salary multiplied by
(ii) the stated maximum bonus opportunity percentage available to the
Executive under the respective incentive compensation plan immediately
preceding the Notice of Termination multiplied by (iii) the
"Executive's Three Year Average Bonus Percentage" (as defined below)
(the total hereinafter referred to as the "Bonus Opportunity").
The "Executive's Three Year Average Bonus Percentage"
is the sum of the bonus percentages paid to the Executive divided by
the stated maximum bonus opportunity percentages available to the
Executive rounded to one decimal place (e.g., 86.3%) for each of the
three (3) fiscal years 1992, 1993, and 1994 (bonuses paid in February
1993, 1994, and 1995)(or for fiscal years 1991, 1992, and 1993 if the
Executive does not receive a bonus for fiscal year 1994), divided by
three (3).
2
<PAGE> 4
CALCULATION EXAMPLE OF EXECUTIVE'S THREE YEAR AVERAGE
BONUS PERCENTAGE
<TABLE>
<CAPTION>
(1) (2)
Stated (1)/(2)
Bonus Maximum Bonus
Percentage Bonus Opportunity
Year Paid Opportunity Percent
---- ---------- ----------- -----------
<S> <C> <C> <C> <C>
1992 55.1% 60.0% 91.8%
1993 71.8% 80.0% 89.8%
1994 102.0% 100.0% 102.0%
------
Sum 283.6%
Executive's Three Year Average
Bonus Percentage (Sum divided by 3) 94.5%
</TABLE>
d. Tenure - Related Bonus. An amount equal to the
Bonus Opportunity determined in clause c above.
The Executive agrees that he shall not be eligible
for or entitled to any other incentive compensation award, including
any pro rata incentive compensation award, pursuant to the
Corporation's and/or its subsidiaries' or affiliates' incentive
compensation plans. The Executive's agreement to this provision is a
material consideration for the Corporation's executing this
Agreement.
The Corporation shall pay to the Executive the
amounts determined in clauses a through d above as follows:
Clause a: The Executive's base salary shall be paid
in equal semi-monthly installments on the fifteenth and last day of
each month through the Executive's Date of Termination. The
Executive's unused vacation shall be paid in a lump sum no later than
the next normal pay period for the Executive following the
Executive's Date of Termination, unless otherwise required by law.
Clause b: In equal semi-monthly installments on the
fifteenth and last day of each month during the Severance Period.
Clause c: The Executive's 1994 bonus shall be paid
no later than March 1, 1995. The Executive's bonus multiple shall be
paid no later than March 1, 1996.
Clauses d: In a lump sum within five (5) business
days after the Executive's Date of Termination or March 1, 1995,
whichever occurs later."
3
<PAGE> 5
4. The third sentence of Section 4(a)(iii)(II) is deleted in its
entirety and the following two (2) new sentences are inserted in lieu thereof:
"The medical and dental plan benefits, to the extent applicable, will
be provided in accordance with the provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
except that the Corporation shall pay the COBRA premiums for the
standard medical and dental plan benefits during the Benefits
Continuation Period minus the Executive's contributory obligation
determined as if the Executive were still an officer of the
Corporation. The Executive agrees that he will pay all required
employee contributions at the then current officer rate and be
subject to the terms of the plans, as they may be amended from time
to time, in order to be eligible for coverage under this Section."
5. The first sentence of Section 4(a)(iii)(III)c is deleted in its
entirety and the following new sentence is inserted in lieu thereof:
"Within five (5) business days following the Executive's Date of
Termination, the Corporation shall transfer to the Executive the car
telephone assigned to the Executive at the time the Notice of
Termination was given and the Executive shall be solely responsible
for all liabilities associated with the telephone thereafter."
6. Section 4(a)(iii)(IV) is deleted in its entirety and the following
new Section 4(a)(iii)(IV) is inserted in lieu thereof:
"(IV) Outplacement, Office Space, Secretarial Support and
References. Until the end of the Severance Period or until the
Executive secures employment with another employer or becomes
self-employed, whichever occurs first, the Corporation shall provide
the Executive with professional outplacement services of the
Corporation's choice and shall reimburse the Executive for documented
incidental outplacement expenses directly related to job search such
as resume mailing, interviewing trips, professional services fees,
including those for Barry Cohen, and clerical support, subject to a
maximum cost of $30,000. The Executive shall not be entitled to
receive cash in lieu of the professional outplacement services
provided by the Corporation.
In addition, until the earliest to occur of the following:
the end of the Severance Period, twelve (12) months following the
Executive's Date of Termination, or the date the Executive secures
employment with another employer or becomes self-employed, the
Corporation shall provide the Executive with appropriate office
space, equipment and secretarial support at a location to be
determined by the Corporation. If possible, the Corporation will
attempt to find an appropriate office at the Corporation's
headquarters building, but will not be obligated to do so.
The Corporation's Chief Executive Officer shall provide a
favorable reference for the Executive to any prospective employer who
shall contact such individual seeking a reference for the Executive.
The Corporation agrees that the Executive may market himself as
Executive Vice President - Development reporting to the
4
<PAGE> 6
Chief Executive Officer through the end of the Severance Period or
until the Executive secures employment with another employer or
becomes self-employed, whichever occurs first, and that he will be
reported in the Corporation's Annual Report, Form 10-K and Proxy
Statements in accordance with applicable rules and regulations."
7. The following new sentence is added to the current end of Section
4(a)(iii)(V):
"In addition, the Corporation agrees that the Executive will have
continued use of the Corporation's Doral and Deering Bay Country Club
memberships during calendar year 1995."
8. Section 5(b)(II) is deleted in its entirety and the following new
Section 5(b)(II) is inserted in lieu thereof:
"(II) Release. As a condition to receiving any payments
or benefits pursuant to this Agreement, the Executive shall execute
(i) a release agreement in the form attached as Exhibit A upon his
execution of the Amendment to this Agreement dated November 10, 1994
and again upon his Date of Termination, and (ii) a resignation letter
in the form attached as Exhibit B upon his Date of Termination."
9. The remaining provisions of the Severance Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment to the
Amended and Restated Severance Agreement as of the day and year first above
written.
----------------------------- ------------------------------
Witness C. R. CAMPBELL
----------------------------- ------------------------------
Witness Social Security Number
ATTEST: RYDER SYSTEM, INC.
(the "Corporation")
----------------------------- By: --------------------------
Assistant Secretary
Its:
--------------------------
5
<PAGE> 7
Exhibit A
RELEASE AGREEMENT
FOR AND IN CONSIDERATION OF THE PAYMENT TO ME OF THE SEVERANCE
BENEFITS PURSUANT TO THE AMENDED AND RESTATED SEVERANCE AGREEMENT BETWEEN RYDER
SYSTEM, INC. ("RSI") AND ME DATED FEBRUARY 24, 1989, AS AMENDED ON NOVEMBER 10,
1994 (THE "SEVERANCE AGREEMENT"), I, C. ROBERT CAMPBELL, ON BEHALF OF MYSELF,
MY HEIRS, SUCCESSORS AND ASSIGNS (COLLECTIVELY "I" OR "ME"), HEREBY RELEASE AND
FOREVER DISCHARGE RSI AND ALL OF ITS SUBSIDIARIES AND AFFILIATES, THEIR CURRENT
AND FORMER AGENTS, EMPLOYEES, OFFICERS, DIRECTORS, SUCCESSORS AND ASSIGNS
(COLLECTIVELY THE "CORPORATION"), FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS,
AND CAUSES OF ACTION, AND ALL LIABILITY WHATSOEVER, WHETHER KNOWN OR UNKNOWN,
SUSPECTED OR UNSUSPECTED, FIXED OR CONTINGENT, WHICH I HAVE OR MAY HAVE AGAINST
THE CORPORATION AS A RESULT OF MY EMPLOYMENT BY AND SUBSEQUENT TERMINATION AS
AN EMPLOYEE OF THE CORPORATION, UP TO THE DATE OF THIS AGREEMENT. THIS
INCLUDES BUT IS NOT LIMITED TO CLAIMS AT LAW OR EQUITY OR SOUNDING IN CONTRACT
(EXPRESS OR IMPLIED) OR TORT ARISING UNDER FEDERAL, STATE, OR LOCAL LAWS
PROHIBITING AGE, SEX, RACE, DISABILITY, VETERAN OR ANY OTHER FORMS OF
DISCRIMINATION. THIS FURTHER INCLUDES ANY AND ALL CLAIMS ARISING UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT, THE AMERICANS WITH DISABILITIES ACT OF 1990,
TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AND THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT (ERISA), AS AMENDED, OR CLAIMS GROWING OUT OF ANY LEGAL
RESTRICTIONS ON THE CORPORATION'S RIGHT TO TERMINATE ITS EMPLOYEES.
This Agreement does not release the Corporation from any of its
current, future or ongoing obligations under the Severance Agreement,
specifically including but not limited to cash payments and benefits due me.
I understand and agree that this Agreement and the Severance
Agreement shall not in any way be construed as an admission by the Corporation
of any unlawful or wrongful acts whatsoever against me or any other person, and
the Corporation specifically disclaims any liability to or wrongful acts
against me or any other person.
I agree that the terms and provisions of this Agreement and the
Severance Agreement, as well as any and all incidents leading to or resulting
from this Agreement and the Severance Agreement, are confidential and that I
may not discuss them with anyone without the prior written consent of RSI's or
its successor's Chief Executive Officer, except as required by law; provided,
however, that I agree to immediately give RSI or its successor notice of any
request to discuss this Agreement or the Severance Agreement and to provide RSI
or its successor with the opportunity to contest such request prior to my
response.
6
<PAGE> 8
Additionally, I agree that I shall not make any remarks disparaging the conduct
or character of the Corporation and that I will cooperate with the Corporation,
at no extra cost, in any litigation or administrative proceedings involving any
matters with which I was involved during my employment with the Corporation.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Florida, without reference to principles of conflict
of laws. This Agreement may not be amended or modified otherwise than by a
written agreement executed by RSI and me or our respective successors and legal
representatives.
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
I UNDERSTAND AND ACKNOWLEDGE THAT I HAVE SEVEN (7) CALENDAR DAYS
FOLLOWING MY EXECUTION OF THIS RELEASE AGREEMENT TO REVOKE MY ACCEPTANCE OF
THIS RELEASE AGREEMENT AND THAT THIS RELEASE AGREEMENT SHALL NOT BECOME
EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED.
I CERTIFY THAT I HAVE FULLY READ, HAVE RECEIVED AN EXPLANATION OF, HAVE
NEGOTIATED AND COMPLETELY UNDERSTAND THE PROVISIONS OF THIS AGREEMENT, THAT I
HAVE BEEN ADVISED BY RSI TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS
AGREEMENT, THAT I HAVE BEEN GIVEN AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO
REVIEW AND CONSIDER THE PROVISIONS OF THIS AGREEMENT, AND THAT I AM SIGNING
THIS AGREEMENT FREELY AND VOLUNTARILY, WITHOUT DURESS, COERCION OR UNDUE
INFLUENCE.
Dated this day of ,1994.
---------------------------- -----------------------------
Witness C. ROBERT CAMPBELL
---------------------------- -----------------------------
Witness Social Security Number
7
<PAGE> 9
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me personally appeared C. Robert Campbell, to me well known and known to
me to be the person described in and who executed the foregoing instrument, and
acknowledged to and before me that he executed said instrument for the purposes
therein expressed.
WITNESS my hand and official seal this day of ,1994.
------------------------------
Notary Public
Commission Expires:
(Seal)
8
<PAGE> 10
Exhibit B
Date
TO THE BOARD OF DIRECTORS
OF RYDER SYSTEM, INC.
Gentlemen:
Effective immediately, I hereby resign as an officer and/or director of Ryder
System, Inc. and/or its subsidiaries and affiliates and, to the extent
applicable, from all committees of which I am a member.
Sincerely,
C. Robert Campbell
9
<PAGE> 1
EXHIBIT 10.19
RYDER SYSTEM, INC.
3600 NW 82 Avenue
Miami, Florida 33166
RYDER (LOGO)
April 9, 1993
Mr. James Ernest Riddle
44 Drayton Gardens
London SW 10-9SB, England
Dear Ernie:
As we discussed, the purpose of this letter is to set out the terms of your
employment as Senior Vice President-Marketing & Sales, Commercial Leasing &
Services Division, and to modify the terms of the Company's Change of Control
Severance Agreement and Severance Agreement, each dated December 14, 1992
(collectively, the "Severance Agreements"), which are included herein for your
signature. As such, this letter supercedes your offer of employment letter
dated October 26, 1992.
As agreed, this position has an annual base salary of $260,000. Your payroll
start date was December 14, 1992, at which time you were paid a $200,000
sign-on bonus.
The incentive plan for this level of management (Level 16) currently provides
for an annual bonus with a maximum potential of 100% of base salary. This
bonus is based on individual and company performance according to the Ryder
incentive compensation program applicable to the Division, and is paid in
February of each year for the preceding year, subject to the approval of the
Board of Directors each year.
Notwithstanding the above, for the years 1993 and 1994 only, you will receive a
minimum combined base salary and bonus guarantee of $400,000 for each year, so
long as you are an employee in good standing at the time of payment. In
addition, for the years 1993 and 1994, you will receive stock options for
15,000 shares for each year, so long as you are an employee in good standing at
the time of grant. Thereafter, as with any other executive, your eligibility
for stock options will be subject to the administration of the stock option
plan by the Board of Directors.
This position currently includes the following perquisites: use of a company
car (including fuel, maintenance and insurance); use of the company's
membership in the Doral Country Club; a cash perquisite allowance of $5,000 per
year, grossed up for taxes; tax preparation and financial planning allowance
of up to $6,000 per year; and a
<PAGE> 2
Mr. James Ernest Riddle
April 9, 1993
Page 2
split dollar life insurance policy (retirement supplement) of $50,000. The
perquisites offered to officers of the Division are subject to change at the
discretion of the Board of Directors.
You are eligible for Ryder's transferred employee relocation package which
includes a third party buy-out program for your residence and temporary living
expenses for up to four months from your starting date. You are also entitled
to those benefits currently offered to all Ryder employees, which are
summarized in the enclosed package. In addition, you will be eligible for a
pension in accordance with the provisions of the Ryder System, Inc. Retirement
Plan and retiree medical coverage at age 55 with five years of service.
In recognition of the reduced pension you incurred upon leaving Xerox before
age 55, Ryder will contribute the sum of $100,000 per year for twelve years to
a retirement supplement fund for your benefit according to the attached
schedule. This fund will not accrue interest, however, the fund will
immediately vest for the cumulative balance should you leave the Company
voluntarily, with an accelerated fund balance should you leave the Company
involuntarily. For example, if you voluntarily terminate your employment after
two years, according to the attached schedule you will be entitled to the
$200,000 balance contributed to the fund. If you are involuntarily terminated
after two years, you will be entitled to a $600,000 fund balance, as
illustrated. In either event, the Company would be relieved of its obligations
to make any further contributions to the fund.
As you know, the company's Severance Agreements provide for severance benefits
in the case of an involuntary termination. These severance benefits are
related to the management level of the executive and generally increase in
value as the executive's management level increases. In consideration of the
Company's accelerated contribution to your retirement supplement fund in the
case of an involuntary termination, you agree that, in the event you are
promoted above your current management level (Mgmt. Level 16), you will
receive either (i) any increase in severance benefits accruing to your new
management level pursuant to a Severance Agreement or (ii) your "involuntary
separation benefit", as illustrated on the attached schedule, whichever is
greater. In other words, in the event your "involuntary separation benefit" is
greater than the value of the increase in severance benefits pursuant to a
Severance Agreement, you will receive the accelerated fund balance in the
retirement supplement fund and your severance benefits pursuant to a Severance
Agreement will be limited to the benefits of your current management level.
<PAGE> 3
Mr. James Ernest Riddle
April 9, 1993
Page 3
In the event the increase in severance benefits pursuant to a Severance
Agreement is greater than your "involuntary separation benefit", you will
receive the severance benefits pursuant to a Severance Agreement according to
your then-current management level and your fund balance in the retirement
supplement fund will be determined without acceleration.
In order to amend the Severance Agreements to give effect to the foregoing, you
agree that you will not be entitled to the Mgmt. Level 19 or above Severance
Period contained in Section 3(f) of the Change of Control Severance Agreement,
the Mgmt. Level 19 or above salary multiple described in Section
4(a)(iii)(I)(b) of the Change of Control Severance Agreement or the Mgmt. Level
19 or above Severance Period contained in Section 3(e) of the Severance
Agreement, even though your management level may be Level 19 or above at the
time these determinations are made, it being understood that you would be
limited to the benefits of Mgmt. Level 16. Provided, that, in the event your
management level is Level 19 or above at the time any of these determinations
is made and the increase in benefits that would accrue to you as a Level 19
would be greater than your "involuntary separation benefit", you shall be
entitled to the Level 19 benefits and the fund balance in the retirement
supplement fund will be determined without acceleration, i.e., as if your
termination was voluntary. You also agree that you will not be entitled to the
Bonus Multiple contained in Section 4(a)(iii)(I)(c) of the Severance Agreements
even though your management level may be Level 17 or above at the time a
determination is made, provided, however, that if the Bonus Multiple would be
greater than your "involuntary separation benefit", you shall be entitled to
the Bonus Multiple and the retirement supplement fund will be determined
without acceleration, i.e., as if your termination was voluntary.
As further consideration for your agreement to these changes, the Company
agrees to waive the twelve-month employment provision of Section 4(c) of the
Severance Agreement so that you will be immediately eligible for the benefits
contained in the Severance Agreement.
Although this letter describes matters relating to your employment by Ryder, it
is expressly understood and agreed that this letter is not and is not meant to
be construed as a contract of employment.
<PAGE> 4
Mr. James Ernest Riddle
April 9, 1993
Page 4
If this letter accurately reflects the matters we have discussed, including the
changes to the Severance Agreements, please indicate your agreement by signing
the enclosed copy of this letter and returning it to me together with two
executed copies of each of the Severance Agreements, retaining one copy of each
Agreement for your files.
Sincerely,
----------------------
C. Robert Campbell
Executive Vice President - Human Resources
and Administration
Accepted and Agreed
-----------------------
James Ernest Riddle
CRC/eh
Enclosures
<PAGE> 5
J. E. RIDDLE
RETIREMENT SUPPLEMENT FUND
$(000)s
<TABLE>
<CAPTION>
A B B - A
RETIREMENT RETIREMENT
SUPPLEMENT SUPPLEMENT
BALANCE BALANCE INVOLUNTARY
VOLUNTARY INVOLUNTARY SEPARATION
YEAR TERMINATION TERMINATION BENEFIT
---- ------------ ----------- -------
<S> <C> <C> <C>
1993 100 400 300
1994 200 600 400
1995 300 700 400
1996 400 800 400
1997 500 900 400
1998 600 1,000 400
1999 700 1,000 300
2000 800 1,000 200
2001 900 1,000 100
2002 1,000 1,000 -
2003 1,100 1,100 -
2004 1,200 1,200 -
</TABLE>
5
<PAGE> 1
EXHIBIT 11.1
Statement re: Computation of Per Share Earnings
Primary earnings per share are computed by dividing earnings available to
common shares by the weighted average number of common and common equivalent
shares outstanding during the period.
For purposes of computing primary earnings per share, common equivalent shares
include the average number of common shares issuable upon the exercise of all
employee stock options and awards and outstanding employee stock subscriptions,
if dilutive, less the common shares which could have been purchased at the
average market price during the period, with the assumed proceeds, including
"windfall" tax benefits, from the exercise of the options, awards and
subscriptions.
Fully-diluted earnings per share are computed by dividing the sum of earnings
available to common shares and dividends on preferred shares, if any, that are
potentially dilutive by the weighted average number of common shares, common
equivalent shares and common shares assumed converted from potentially dilutive
securities outstanding during the period.
For purposes of computing fully-diluted earnings per share, common equivalent
shares are computed on a basis comparable to that for primary earnings per
share, except that common shares are assumed to be purchased at the market
price at the end of the period, if dilutive. Common shares assumed converted
from potentially dilutive securities in the twelve-month period ended December
31, 1992, include common shares that would have been issuable upon the
conversion of the Registrant's Fixed Rate Auction Preferred Stock, Series A and
B (collectively the "FRAPS"), at the applicable rate which would have resulted
in the greatest potential dilution. For the twelve-month period ended December
31, 1992, the FRAPS were antidilutive. In the second quarter of 1993 the
Company redeemed all of the FRAPS. The FRAPS have therefore not been
considered potentially dilutive securities in the computation of fully-diluted
earnings per share for the twelve-month periods ended December 31, 1993 and
1994.
<PAGE> 1
EXHIBIT 13.1
[PHOTO]
[RYDER Logo]
1994 ANNUAL REPORT
<PAGE> 2
Ryder System is an international company doing business in the Americas and
Western Europe, whose vision is to serve its customers with the best value in
logistics and transportation solutions, around the world or around the corner.
CONTENTS
Letter to Shareholders 3
Understanding the Need 7
Responding to the Need 13
Introduction to Financial Section 25
Financial Review 26
Selected Finanical and Operational Data 32
Report of Management and Independent Auditors' Report 33
Consolidated Financial Statements 34
Notes to Consolidated Financial Statements 37
Supplemental Financial Data 47
Glossary of Industry Terms 50
Board of Directors and Corporate Management 54
Operating Management 55
Corporate Information 56
Corporate Responsibility 57
<PAGE> 3
FINANCIAL HIGHLIGHTS Ryder System, Inc.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share amounts) 1994 1993 Change
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING DATA:
Revenue $ 4,685,603 4,217,030 +11%
Earnings from continuing operations $ 153,529 114,722 +34%
Net earnings (loss) (a) $ 153,529 (61,424) N/A
------------------------------------------------------------------------------------------------------------
FINANCIAL DATA:
Total assets $ 5,014,473 4,258,388 +18%
Total shareholders' equity $ 1,129,024 990,181 +14%
Return on average common equity (b) 14.5% 10.2% +4.3 pts.
Debt to equity 169% 155% +14 pts.
Debt to tangible equity 227% 202% +25 pts.
Total capital spending $ 1,914,736 1,237,521 +55%
------------------------------------------------------------------------------------------------------------
PER COMMON SHARE DATA:
Earnings from continuing operations $ 1.95 1.43 +36%
Net earnings (loss) (a) $ 1.95 (0.84) N/A
Book value $ 14.33 12.81 +12%
Cash dividends $ 0.60 0.60 -
Market price (high-low) (c) $ 28-19 7/8 26 5/8-24 3/4
------------------------------------------------------------------------------------------------------------
OTHER DATA:
Common shareholders of record 19,605 19,025 +3%
Common shares outstanding 78,760,742 77,294,484 +2%
Number of vehicles 188,831 168,278 +12%
Number of employees 43,095 37,949 +14%
============================================================================================================
</TABLE>
(a) Net loss for 1993 includes an after tax charge of $25 million for the
cumulative effect of a change in accounting and an after tax charge of
$169 million related to the discontinued aviation services
subsidiaries. See "Notes to Consolidated Financial Statements" for
additional discussion.
(b) Excludes the cumulative effect of a change in accounting and special
charges related to discontinued operations.
(c) On December 7, 1993, the company completed the spin off of its
aviation services subsidiaries by distributing to common stockholders
one share of Aviall, Inc. common stock valued at $16.25 for each four
Ryder System, Inc. common shares owned. The high and low presented
for 1993 were the values of the company's common stock after the spin
off. The high and low for 1993 prior to the spin off were 33 1/2 and
26 1/4, respectively.
<TABLE>
<CAPTION>
LINES OF BUSINESS
----------------------------------------------------------------------------------------------------------
(In thousands) 1994 1993 1992 1991 1990
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUE:
Vehicle Leasing & Services $4,057,735 3,596,803 3,384,952 3,229,437 3,285,742
Automotive Carriers 645,402 634,634 651,216 645,051 688,971
Other - - - - 3,267
Intersegment (17,534) (14,407) (16,493) (23,154) (27,956)
----------------------------------------------------------------------------------------------------------
Total $4,685,603 4,217,030 4,019,675 3,851,334 3,950,024
==========================================================================================================
EARNINGS FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES:
Vehicle Leasing & Services $ 234,258 204,370 135,291 52,511 79,711
Automotive Carriers 50,078 31,955 48,220 24,318 22,604
Other (23,817) (26,549) (17,966) (16,350) (3,625)
----------------------------------------------------------------------------------------------------------
Total $ 260,519 209,776 165,545 60,479 98,690
==========================================================================================================
</TABLE>
(Copyright 1995) Ryder System, Inc.
<PAGE> 4
PERFORMANCE HIGHLIGHTS
Earnings per share from
Revenue (in millions) continuing operations
[FIGURE 1] [FIGURE 3]
1990 - $3,950 1990 - $0.64
1991 - $3,851 1991 - $0.28
1992 - $4,020 1992 - $1.17
1993 - $4,217 1993 - $1.43
1994 - $4,686 1994 - $1.95
Expansion of contractual Earnings increased while
business contributed to also making major
the company's 11% revenue investments in logistics,
growth during 1994. marketing and sales,
and reengineering.
Return on Average Full Service Lease
Common Equity Customer Satisfaction Index
[FIGURE 2] [FIGURE 4]
1990 - 5.0% 1990 - 81.0
1991 - 4.2% 1991 - 80.4
1992 - 8.1% 1992 - 82.6
1993 - 10.2% 1993 - 83.7
1994 - 14.5% 1994 - 84.5
Return on average common Customer satisfaction with
equity approaches the com- the company's full service
pany's 17% goal. truck leasing product con-
tinues to climb.
2
<PAGE> 5
LETTER TO SHAREHOLDERS
[PHOTO]
M. ANTHONY BURNS
In terms of both revenue and earnings from continuing operations, 1994 was
Ryder's strongest year ever. All of our business units contributed to the
record-setting performance, and we are particularly pleased with the growth in
our long-term, contractual businesses, which helps reduce our sensitivity to
the inevitable peaks and valleys of the economy.
STRONG FINANCIAL PERFORMANCE IN 1994
Revenue from continuing operations in 1994 was $4.7 billion, 11% greater than
revenue of $4.2 billion in 1993 and the highest percentage increase in revenue
since 1987. Earnings from continuing operations rose to $154 million, or $1.95
per share, an increase in earnings per share of 36%, compared with $115
million, or $1.43 per share, in 1993. It is important to note that we achieved
this performance while continuing to make major investments in logistics,
marketing and sales, and reengineering.
In dedicated logistics, we enjoyed revenue growth in excess of 20%.
The strong momentum of Ryder Dedicated Logistics was demonstrated by fourth
quarter revenue growth of 33%, making the unit - for the first time - the
company's second largest revenue generator. A 7% rise in revenue, with 9%
growth in the fourth quarter, was recorded in full service truck leasing, still
our largest business unit, with much of the increase coming from new customers.
This bodes well for the future, because the bulk of this unit's growth has come
historically from expanding business with existing customers.
Net new sales of long-term, contractual business were excellent; in
fact, sales of new full service truck leasing and dedicated logistics contracts
exceeded previous highs. Ryder Plc, our United Kingdom subsidiary, experienced
a 45% revenue increase in the fourth quarter of 1994, benefiting from continued
growth in existing contractual business and several strategic acquisitions made
during the year.
Our return on equity in 1994 was 14.5%, moving us ever closer to our
goal of a 17% return on equity in the next several years. Asset turnover was
nearly 100%, and our capital spending reached $1.9 billion, the majority of
which was invested in our long-term, contractual product lines. Our balance
sheet is strong and our cash flow is solid.
A REFINED VISION
We refined our vision to reflect the exciting developments that are taking
place within Ryder, our industry, and the markets we serve. We have also
modified our organization to promote teamwork and ensure that our structure is
aligned with our vision. Our vision is: Ryder will serve its customers with the
best value in logistics and transportation solutions around the world or around
the corner.
Today, as never before, our customers expect excellent value from the
solutions we offer, and we intend to deliver just that. Importantly, while
increasing customer value is the key
3
<PAGE> 6
to success in today's - and tomorrow's - marketplace, it is also central to
building shareholder value. Our vision is reinforced by ever-increasing demands
in the marketplace:
- Reengineering efforts often lead companies to the conclusion that they
should be focusing their efforts on their core competencies while
outsourcing their non-core functions.
- The speed with which companies deliver their products has taken on new
significance as reduced cycle times yield competitive advantage.
- Controlling costs, particularly in the area of inventory investment,
is critical.
- The battle for market share is being fought globally. This creates
huge logistics challenges for companies as they develop efficient
strategies to distribute their products throughout their markets.
- More companies now see the need for formal logistics strategies.
To fulfill our vision and capitalize on the significant opportunities
arising from the marketplace needs, we are leveraging our core competencies of
logistics management and asset management by focusing on three areas of
emphasis. First, we will stress the value of the solutions we provide. Second,
we will seek to increase the volume of business being done within each of our
business units. Finally, we will continue to lower our cost structure.
[PHOTO]
We are using the power
of information technology
to add value, allowing
our customers to replace
inventory with information.
ADDING VALUE
Our value-added services help drive down our customers' costs, while allowing
our customers to better serve their own customers. We continue to introduce
new, high quality products and services to the market; in 1994, we expanded our
services in transportation management (carrier selection) and inventory
deployment to help fill out our integrated logistics capabilities. Acquisition
and alliance activities are a key part of our strategy in order to compress the
time required to introduce these services.
We are also taking our value-added services into new industries.
Just-in-time delivery, for example, a service we have been providing primarily
to the automotive industry, is one that we are now expanding to serve such
other industries as electronics and appliances.
In addition, we are using the power of information technology to add
value. Flow-through distribution services, enabled by technology, are allowing
our customers to replace inventory with information. Introducing technology
into our shop management services helps our customers better manage their
transportation activities through improved management reporting. Technology is
also a key enabler for our expanded services in the area of carrier management.
We have added to our sales force and also improved our training and
support efforts. We believe our sales force is the best prepared in the
industry when it comes to helping our customers solve complex logistics and
transportation issues, and we are continuing to build our expertise in the area
of logistics system design. Our market coverage strategy is built around teams
consisting of sales, operations and logistics managers.
4
<PAGE> 7
[PHOTO]
We have added to
our sales force and also
improved our training
and support efforts. We
believe our sales force
is the best prepared in
the industry.
[PHOTO]
Increased growth
will come through
the development of
new markets as well
as expanding our
penetration in
existing markets.
These teams are organized, and performance-compensated, around the customer in
order to speed decision making and pursue continuous customer improvement. We
have implemented new pricing strategies and tools in order to better find and
price value throughout the marketplace.
INCREASING VOLUME
We need to increase our volume in order to grow. Our robust volume growth in
1994 confirms the value we are providing to our customers. Ryder's full service
truck leasing and dedicated logistics businesses added approximately 2,500 new
customers in 1994, and expanding our business with existing customers also
generated a significant portion of our revenue growth. Our fleet grew 12%
during the year to a total of almost 190,000 vehicles.
Increased growth will come through the development of new markets as
well as expanding our penetration in existing markets. Telecommunications is a
good example of a new market where significant progress has been made, and we
are continuing to improve our penetration of the automotive, bakery, and
beverage industries. We study the needs of the industries we target, develop
new information systems and equipment to meet those needs, and hire industry
specialists who understand the "ins and outs" of the business and can speak to
customers in their own language.
Our logistics and full service truck leasing businesses are also
growing outside the U.S. In the United Kingdom, we made several acquisitions in
1994 which will provide a solid base from which we can hasten the growth of our
distribution business, and we have strengthened our operations in Germany and
opened new operations in Mexico. We will serve our existing customers as they
expand in these markets, and, of course, seek to provide our services to
companies that are already there. As we expand in Western Europe and the
Americas, we will use the experience and expertise gained in Germany and Mexico
to help us.
ENHANCING SERVICES WHILE LOWERING COSTS
The key to increasing customer value and lowering our cost structure lies in
reengineering, where we are using technology and process changes to drive
efficiencies. Information technology will help us take costs out. Building and
changing processes provides the discipline to make sure unnecessary costs don't
creep back in.
Since we began our reengineering efforts, we have invested
approximately $85 million in three crucial areas:
- Marketing and sales, providing innovation in account management,
knowledge-based marketing, and improved purchasing and asset
management processes;
- Vehicle maintenance, automating the shop environment and equipping our
service technicians with state-of-the-art electronic diagnostic tools;
and
5
<PAGE> 8
[PHOTO]
We are automating our
maintenance shops and
equipping our service
technicians with state-of-
the-art electronic tools.
- Administration and finance, including a redesign of our invoice and
billing processes to make them more customer friendly.
We are sensitive to the impact that reengineering will have on the way
we do business, and we are investing in change management processes to enhance
the success of program implementation.
The success of our ongoing reengineering initiatives was recognized in
early 1995 when the consulting firm Arthur D. Little announced that Ryder was
included in Little's 1995 "Best of the Best" list. Little's annual Best of the
Best program recognizes 20 companies that have developed and implemented
outstanding standards in six critical business processes: customer management,
process management, manufacturing management, product and technology
management, supply chain management and environmental management.
Our standing as the leader in third-party logistics was similarly
recognized during 1994, in a survey conducted by Northeastern University and
Mercer Management Consulting among CEOs of companies that identify themselves
as offering logistics services. According to that survey, Ryder is seen at the
top of the list of "today's winners" and further out in front "three years from
now."
BOARD OF DIRECTORS
Before closing this letter, I want to take a moment to acknowledge the return
of Paul J. Rizzo, retired vice chairman of International Business Machines
Corporation, to our board of directors, effective January 1, 1995. It is a
pleasure to have Mr. Rizzo back with us.
A LOOK AHEAD
I have seen this company and the markets we serve change in ways that would
have been impossible to predict just a few years ago. Today, we are
transforming Ryder into a world class, integrated logistics company capable of
delivering a broad base of customized, yet flexible products and services that
can manage all, or part, of a customer's supply chain. We are on track to
achieve our vision as we continue to drive toward a culture that is
market-driven and fosters teamwork, collaboration and learning.
I thank our employees for their limitless talent and devotion, our
customers for giving us the opportunity to serve them, and our shareholders for
your continued support.
M. Anthony Burns
Chairman, President and Chief Executive Officer
February 17, 1995
6
<PAGE> 9
[PHOTO]
UNDERSTANDING THE NEED
THE ROLE OF LOGISTICS AND TRANSPORTATION
IN TODAY'S GLOBAL ECONOMY
Call it distribution or logistics or supply-chain management. By whatever name,
it is the sinuous, gritty, and cumbersome process by which companies move
materials, parts, and products to customers.... Hard-pressed to knock out
competitors on quality or price, companies are trying to gain an edge through
their ability to deliver the right stuff in the right amount at the right time.
FORTUNE, November 28, 1994
7
<PAGE> 10
EFFICIENCIES IN LOGISTICS AND TRANSPORTATION HAVE BECOME JUST AS IMPORTANT TO
STRATEGIC PLANNING AS IMPROVEMENTS IN MANUFACTURING AND MARKETING.
Logistics and transportation services form the cornerstone of a steady shift in
the way business is conducted in the global marketplace of the 1990s. Once
regarded simply as overhead, these disciplines are now recognized as strategic
and are used by sophisticated companies as a competitive weapon to improve
customer service, control costs, reduce cycle time and increase margins.
Producing and marketing world class products used to be enough to guarantee
success. That is no longer true. Successful companies have found that speed -
delivering the right products in the right quantity to the right place at the
right time - at the right cost - is the key differentiator today.
Nearly 80% of more than 1,300 corporate executives surveyed by Ryder
agree. They said that product delivery is just as important as a product's
quality. In addition, their customers have come to expect high quality at a
reasonable price. Therefore, finding efficiencies in logistics and
transportation has become just as important to their strategic planning as
improvements in manufacturing and marketing.
This trend has catapulted interest in logistics and transportation
from the loading dock to the corporate boardroom. A recent survey by KPMG Peat
Marwick LLP found that the logistics function now reports to the president or
chief executive officer in 29% of the 309 companies surveyed. The top two
concerns of executives in the KPMG study were cost control and inventory
<TABLE>
<S> <C> <C> <C> <C>
JUST IN TIME
300 TIMES [PHOTO] [PHOTO] [PHOTO] [PHOTO]
A DAY, Thursday, 9 a.m.: A Workers load The drivers check Spring Hill,Tennesee,
365 DAYS Ryder truck arrives speedometers and the on-board com- Friday, 3 a.m.: The
A YEAR at a Saturn supplier odometers packed in puter, which tells truck parks its trailer
in Winchester, reusable bins. them where they at a computer-
Virginia. should go, how to assigned spot.
get there, and how
long it should take.
</TABLE>
8
<PAGE> 11
management. To achieve gains in both, more and more companies are focusing on
transportation and logistics.
ON A BROAD SCALE AMERICAN COMPANIES ARE TAPPING INTO A TREMENDOUS RESOURCE -
CASH PREVIOUSLY TIED UP IN EXCESS INVENTORY - BY MORE EFFCIENTLY MANAGING THE
IN-BOUND FLOW OF MATERIAL.
THE BACKBONE OF COMMERCE
As the amount spent on global freight and passenger transportation continues to
rise, productivity is being boosted also as both companies and their
transportation partners become more sophisticated. The Eno Transportation
Foundation, Inc., which tracks vital U.S. freight and passenger statistics,
estimates that freight costs increased to over $390 billion in 1993 (truck
freight expenditures represent almost 80 of this figure). Yet distribution
costs as a percentage of gross domestic product declined by 33% from 1981 to
1992, according to Cass Information Systems.
"Taken together," writes Keith G. Biondo, publisher of Inbound
Logistics magazine, "these two facts show that on a broad scale American
companies are tapping into a tremendous resource - cash previously tied up in
excess inventory - by more efficiently managing the in-bound flow of material.
Companies are using top carriers and premium services to do this for them, or
to help them do it themselves."
Dr. Douglas M. Lambert, the Prime F. Osborn III Professor of
Transportation and Logistics at the University of North Florida, describes the
importance of supply chain management this way: "For many manufacturers,
wholesalers and retailers, investments in inventory represent the largest
single component
<TABLE>
<S> <C> <C> <C> <C>
[PHOTO] [PHOTO] [PHOTO] [PHOTO] [PHOTO]
A driver downloads The Ryder 12:53 p.m.: The trailer ...for Saturn and unwrap pre-
the key-shaped floppy mainframe arrives at one of workers to unload inspected parts to
disk from his on-board generates perfor- Saturn's 56 receiving the bins... ready them for the
computer into mance reports docks, just in time... production line.
Ryder's mainframe. for Saturn.
</TABLE>
Text, photos and captions excerpted from "Delivering the Goods" by Ronald
Henkoff, FORTUNE (November 28, 1994) (c) 1994 Time Inc. Reprinted by
permission.
9
<PAGE> 12
of a company's corporate assets. Utilizing efficient supply chain management
concepts and integrated information systems can result in increased customer
service, less inventory on hand, decreased transportation and warehousing
costs and improvements in cash flow and return on assets."
These factors take on even greater significance as companies reach out
to large new markets around the world, aided by trade pacts such as the General
Agreement on Tariffs and Trade (GATT) and the North American Free Trade
Agreement (NAFTA). Three-quarters of the world's highway transportation market
lies outside the U.S., with Europe and Latin America representing 23% and 14% of
the world's market, respectively.
CORPORATIONS AND PUBLIC SECTOR ORGANIZATIONS ARE EVALUATING THEIR LOGISTICS AND
TRANSPORTATION PROCESSES IN ORDER TO FIND MORE EFFICIENT AND LESS EXPENSIVE
WAYS TO MANAGE INVENTORY AND MOVE FREIGHT OR PEOPLE.
Research by Bernard J. La Londe, Mason Professor of Transportation and
Logistics at The Ohio State University, in conjunction with Cass Information
Systems, identified the "global perspective" as one of five reasons why
transportation and logistics have become such important topics among U.S.
corporate executives:
Global marketing perspective - executives are thinking about global market
suppliers and competitors as well as local ones.
Reduced order cycle times - the average transit time from factory to shelf in
the U.S. is expected to decrease from 60 hours to 38 hours by the year 2000.
Shift from transactional to contractual/relationship linkages among companies -
the percentage of freight moving under contract in 1990 was 45%; that number is
expected to grow to 75% by the year 2000.
Replacing inventory with information in the logistics process - taking excess
inventory out of the pipeline is key to speeding the process and saving money.
Improved asset productivity - maximizing utilization of assets will
increasingly be seen as the primary way to bring value to customers. This means
more miles per truck, fewer vehicles on hand, filling vehicles to capacity, and
maintaining vehicles when they are not used, anywhere, any place or any time of
the day or night.
TREND TOWARD OUTSOURCING
The pressures of global competition are causing many companies to concentrate
their resources on their core businesses. As a result, corporations and public
sector organizations are evaluating their logistics and transportation
processes in order to find more efficient and less expensive ways to manage
inventory and move freight or people, whether it is around the corner or around
the world. Increasingly, they are turning to third-party providers like Ryder
which use sophisticated systems to meet those challenges. The best third-party
providers have the ability to keep pace with current technology by leveraging
their assets and expertise for the benefit of all their
10
<PAGE> 13
customers. They achieve economies of scale that enable them to control costs
and, in the end, provide competitive advantages for their customers.
While third-party suppliers did $6 billion in full service truck
leasing business and, according to Cass Information Systems, $16 billion in
logistics business in the U.S. in 1993, it is widely believed that both of
these businesses are underpenetrated. Professor Donald J. Bowersox of Michigan
State University's Eli Broad Graduate School of Management writes that "the
growth potential of leasing and contract logistics is limited only by the
combined imagination of service providers and their customers."
Research supports this. A study of fortune 500 manufacturing companies
by Professor Robert C. Lieb of Northeastern University's College of Business
Administration found that as the acceptance of transportation and
logistics-related outsourcing continues to grow, so too does the level.
Third-party logistics contracts which involve the out sourcing of all primary
functions across a company's logistic channel are occurring with greater
frequency. Therefore, there is a growing need for single-source providers
capable of supplying cost-effective, integrated solutions.
The decision to outsource logistics and transportation products and
services by world class companies like those surveyed by Professor Lieb
typically begins with an internal assessment of whether the company can manage
and/or execute an integrated logistics strategy on its own in a cost-effective
manner. Some can, and do it well. If the company decides to seek
LOGISTICS HELPS XEROX
KEEP ITS CUSTOMERS SATISFIED
Excellence in business today means continually improving customer satisfaction,
while at the same time controlling costs. Xerox understands this formula for
success, as well as the role that logistics plays in bringing it to life.
Xerox has been working with Ryder Dedicated Logistics for many years.
Ryder is the largest third-party provider operating out-bound logistics systems
for Xerox in which the traditional role of drivers has been significantly
expanded. Ryder drivers are, in fact, highly trained customer service
representatives that not only deliver office equipment to Xerox customers, but
they also install the equipment and familiarize the office staff on its
operation. Drivers are an integral component of the overall logistics process
Ryder Dedicated Logistics manages for Xerox that includes: management of
flow-through logistics centers, final equipment assembly, delivery,
installation, equipment familiarization and the recovery and shipment of
equipment being replaced.
[PHOTO]
The resulting benefit of this integrated process is that Xerox is able to
cost-effectively compress the time it takes to fulfill a customer's order,
enhancing customer satisfaction. The speed at which a company can deliver a
product to the customer can mean the difference between winning and losing in
today's competitive, time-based marketplace.
11
<PAGE> 14
the assistance of a third-party provider for some or all of the services it
needs, there is a broad range of logistics and transportation products and
services offered in the marketplace.
COMPLEX SERVICES LIKE INTEGRATED LOGISTICS REQUIRE HIGHLY TRAINED PERSONNEL AND
SOPHISTICATED LOGISTICS INFORMATION SYSTEMS, AND INVOLVE LONG-TERM PARTNERSHIPS
BETWEEN PROVIDERS AND SHIPPERS.
These products and services have varying degrees of complexity and
customization associated with each. They include services such as common and
for-hire transport via highway, air, rail or water; warehousing; freight
payment; dedicated contract carriage; traffic management; import/export
management; and integrated logistics management of the entire supply chain.
Complex services like integrated logistics require highly trained personnel and
sophisticated logistics information systems, and involve long-term partnerships
between providers and shippers.
Cass Information Systems Executive Vice President Bob Delaney cites
three additional reasons why companies outsource their logistics and
transportation needs in his "Fifth Annual State of Logistics Report." They
include:
Financial leverage - outsourcing permits a company to get out of the
transportation business, reducing equipment, facilities and personnel, as well
as freeing up cash and improving return on investment.
Freeing up management - companies can focus on their core business activities
like manufacturing, marketing, or research and development. No more worrying
about complex government regulations or inventory buffers.
Risk reduction - the right provider has better resources to keep a company's
distribution network running in spite of unexpected disaster, wherever it
strikes. Earthquakes, fire, floods, snow and strikes all wreak havoc on
smaller, less flexible internal organizations.
These developments in transportation and logistics are not only
changing the way products are sold, they are radically changing the way
products are designed, manufactured and delivered. The impact of this is
increasingly being felt in a wide range of businesses, such as the automotive,
appliance and grocery industries, and in public sector organizations for their
passenger transportation and fleet maintenance functions.
Today's advanced logistics and transportation products and services
are making global markets more accessible to more businesses. Most logistical
accomplishments occur outside the glare of public attention; most consumers are
unaware of the savings they have reaped in the past decade as a result of
advances in logistics and transportation technologies. Clearly, a major
opportunity exists for leaders in these disciplines to redefine their
businesses and build even greater growth in the coming years. Ryder is one of
the few companies that has the resources and track record to meet this
challenge.
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<PAGE> 15
[FIGURE 5]
Revenue of $4.7 billion
Dedicated Logistics - 15%
Full Service Leasing - 35%
Commercial and Consumer Rental - 23%
Automotive Carriers - 14%
Public Transportation Services and Other - 13%
RESPONDING TO THE NEED
HOW RYDER USES LOGISTICS AND TRANSPORTATION
SOLUTIONS TO HELP ITS CUSTOMERS BECOME MORE COMPETITIVE
Today's increasingly global economy presents a clear and growing need for
sophisticated, information-based logistics and transportation solutions and the
resulting benefits of improved customer service, reduced inventory, lower
overall costs, and greater speed to market. No company better understands the
need and how to deliver the benefits - indeed, no one is better positioned to
lead the growth in partnered logistics and transportation services - than
Ryder.
Ryder is a market-driven company focused on two core competencies -
asset management and logistics management - that enable the company to provide
customized, cost-effective logistics and transportation solutions to customers.
The company leverages its core competencies across all of its business
units. Through close coordination, Ryder is able to deliver to its customers a
comprehensive range of products and services, ranging from a single truck
rental to a complex integrated logistics system, seamlessly and efficiently.
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<PAGE> 16
LOGISTICS
Ryder Dedicated Logistics is the company's fastest growing business unit,
providing logistics reengineering, logistics operations and logistics
management solutions for hundreds of customers in a multitude of industries,
including such familiar names as Saturn, Xerox, Northern Telecom, The Wall
Street Journal, and Delphi Energy and Engine Management Systems (formerly AC
Delco Systems).
Dedicated logistics enjoyed significant revenue growth during 1994
making the unit - for the first time - the company's second largest revenue
generator. Revenue growth accelerated over the second half of 1994, as
strategic investments in reengineering and marketing to expand the company's
logistics capabilities began to take effect.
This business unit is steadily building competencies to position
itself as the first and best single-source integrated logistics provider,
managing its customers' entire supply chain, from raw materials to finished
product distribution. The business unit was selected in 1994 to provide
logistics services by such world class companies as Mercedes-Benz, BellSouth
and Whirlpool.
THIS BUSINESS UNIT IS STEADILY BUILDING COMPETENCIES TO POSITION ITSELF AS THE
FIRST AND BEST SINGLE-SOURCE INTEGRATED LOGISTICS PROVIDER, MANAGING ITS
CUSTOMERS' ENTIRE SUPPLY CHAIN, FROM RAW MATERIALS TO FINISHED PRODUCT
DISTRIBUTION.
DEDICATED LOGISTICS REVENUE
(in millions)
[FIGURE 6]
1990 $337
1991 $416
1992 $498
1993 $569
1994 $692
The integrated logistics system that Ryder has been selected to
operate for Whirlpool is one of the most comprehensive, non-automotive systems
in the U.S. Ryder is responsible for transporting material and components from
suppliers nationwide to eleven Whirlpool manufacturing facilities. In-bound
loads are "mixed and matched" according to the changing needs of Whirlpool's
flexible manufacturing plants, which can quickly convert from producing one
appliance model to another.
Whirlpool is just one of an increasing number of Ryder customers
demanding a more complete range of information-based logistics service
offerings. The acquisition of LogiCorp in 1994 gave Ryder the sophisticated
information technology needed to deliver cost-efficient carrier management to
its customers for all freight modes - domestically or internationally - whether
it be by air, rail, sea, highway or an intermodal combination. Through
alliances, Ryder has also expanded its service offerings in the area of
inventory management.
In a study conducted in 1994 by Mercer Management Consulting and
Northeastern University, chief executive officers of 22 logistics firms - many
direct competitors of Ryder - were asked to rank the country's leading
third-party logistics providers. Ryder finished in first place. The study
went on to ask which provider would be the leader in three years. Ryder was
again ranked first, by an even wider margin.
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<PAGE> 17
"Ryder offered us a creative plan that places responsibility for our
sophisticated and complex logistics operations under one roof. We expect the
new system to reduce costs, improve quality, and reduce our overall order
processing and manufacturing cycle time."
Dan E. Prickett,
Director of Inbound
Logistics, Whirlpool
North American
Appliance Group
[PHOTO]
15
<PAGE> 18
[PHOTO]
"Ryder plays an important role in delivering the commitment Pepperidge Farm has
made to its customers and consumers in providing the freshest product possible
to the market."
Stephen D. Gould,
Vice President
of Distribution,
Pepperidge Farm, Inc.
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<PAGE> 19
PUBLIC TRANSPORTATION
Ryder's logistics expertise extends to its Public Transportation Services unit,
which includes student transportation, public transit and public fleet
maintenance. Performance of this unit was up solidly in 1994. Ryder is one of
the largest providers of student transportation services in the U.S.,
transporting more than 440,000 students in 20 states to and from school each
day. Through ATE Management and Service Company, Ryder operates or manages 89
public transit systems, ranging from computer-routed dial-a-ride vans for
seniors and persons with disabilities, to fixed-route and commuter express bus
services. Ryder/MLS is the nation's leading provider of municipal fleet
management and maintenance services. MLS maintains thousands of vehicles for
local governments and utilities, including police, fire, construction and other
public works vehicles.
PUBLIC TRANSPORTATION
SERVICES REVENUE
(in millions)
[FIGURE 7]
1990 - $256
1991 - $272
1992 - $324
1993 - $345
1994 - $365
FULL SERVICE TRUCK LEASING
Full service truck leasing continues to be Ryder's largest business and the
foundation upon which Ryder's other units rest. The full
FULL SERVICE LEASE AND
PROGRAMMED MAINTENANCE
REVENUE (in millions)
[FIGURE 8]
1990 - $1,684
1991 - $1,725
1992 - $1,718
1993 - $1,750
1994 - $1,866
INVESTMENTS IN TECHNOLOGY, SALES AND MARKETING, AND REENGINEERING HAVE GREATLY
ENHANCED RYDER'S FULL SERVICE TRUCK LEASING PRODUCTS AND SERVICES, AND HAVE
HELPED THE COMPANY TO SUSTAIN ITS LEADERSHIP AND GROWTH POTENTIAL IN THE
MARKETPLACE.
service leasing unit provides nearly all the vehicles used by Ryder to serve
logistics customers, as well as maintenance for Ryder's truck rental fleets and
its Public Transportation Services vehicles.
Ryder offers its customers a flexible and immediate range of full
service truck leasing products and services. With more than 13,000 customers,
including such well-known companies as Pepsi-Cola, Home Depot, and
International Paper, Ryder is the largest full service truck leasing company in
the world.
Full service truck leasing reported a 7% increase in revenue in 1994,
with much of the increase coming from new customers. Investments in
technology, sales and marketing, and reengineering have greatly enhanced
Ryder's full service truck leasing products and services, and have helped the
company to sustain its leadership and growth potential in the marketplace.
At the heart of Ryder's full service truck leasing success is its
expertise in asset management. Ryder professionals purchase, manage, maintain
and dispose of trucks better than anyone in the business.
Included in Ryder's total fleet of almost 190,000 vehicles (one of the
world's largest) are nearly 90,000 full service lease vehicles. The
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<PAGE> 20
company's network of more than 1,000 maintenance facilities allows customers
to get responsive vehicle service no matter where they are or when they need
it. Ryder's facilities are being equipped with Ryder Fast Track Maintenance
technology used to maximize vehicle "uptime" by more quickly and accurately
scheduling work, capturing valuable vehicle performance data, and diagnosing
and repairing vehicle problems.
One customer that relies heavily upon Ryder's maintenance expertise is
Pepperidge Farm, which has been working with Ryder since 1974 and currently has
more than 80 tractors, nearly 120 trailers and 10 straight trucks under full
service lease. Consumers have come to expect the freshest products from
Pepperidge Farm, making the dependability and productivity of its vehicles a
particularly important concern.
COMMERCIAL AND CONSUMER
RENTAL REVENUE
(in millions)
[FIGURE 9]
1990 - $892
1991 - $778
1992 - $836
1993 - $936
1994 - $1,140
TRUCK RENTAL
Ryder's two truck rental fleets - one serving commercial customers, the other
primarily consumers - recorded higher revenue
RYDER HAS SUCCESSFULLY DIFFERENTIATED ITSELF IN THE RENTAL MARKETPLACE THROUGH
SUCH PROGRAMS AS THE COMMERCIAL TRUCK RENTAL GUARANTEE, WHICH PROMISES THAT
VEHICLE CHECK-IN OR CHECK-OUT WILL NOT TAKE MORE THAN 20 MINUTES, AND THE
VEHICLE WILL BE PROPERLY MAINTAINED, CLEAN AND ROAD-READY.
in 1994, thanks to a strong economy and successful marketing programs that
boosted vehicle utilization.
Ryder is the world's largest commercial truck rental company and, with
its fleet of more than 41,000 commercial rental vehicles, helps businesses meet
their short-term transportation needs efficiently and cost-effectively. Ryder
has successfully differentiated itself in the rental marketplace through such
programs as the Commercial Truck Rental Guarantee. The company's promise is
that vehicle check-in or check-out will not take more than 20 minutes, and the
vehicle will be properly maintained, clean and road-ready. Such distinctive
service is crucial, because truck rental is often a customer's first experience
with Ryder. Therefore, that first impression can play a key role in the
customer's decision to convert later to a full service truck lease.
The commercial rental fleet is also used to supply replacement and
initial start-up vehicles to Ryder's full service lease and logistics
customers, and to supplement these customers' full-time fleets during peak
demand periods.
Ryder's more than 34,000 yellow consumer rental trucks are a familiar
sight on the nation's highways and come equipped with the features that
do-it-yourself movers want, such as air conditioning, automatic transmissions
and AM/FM radios.
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<PAGE> 21
[PHOTO]
"We used a 24-foot Ryder truck and car carrier to move our belongings from
Chicago to Atlanta. Ryder was the most convenient company for us to rent from
because they had dealerships in our neighborhoods in both Chicago and Atlanta."
Curtis and Julia Phillip,
Lithonia, Georgia
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<PAGE> 22
[PHOTO]
"Ryder's automotive carriers have been transporting Chrysler vehicles to
dealers for nearly 60 years. As our customers' needs have changed, our products
have changed, and Ryder has changed with us. When it comes to transportation,
it's fair to say that Ryder delivers."
Edward J. Krajca,
Director Logistics
Procurement and Supply,
Chrysler Corporation
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<PAGE> 23
The company prides itself on being the most convenient company for the
do-it-yourself mover. Its over 4,800 dealers are located throughout North
America. In addition to renting trucks, they offer a variety of moving supplies
such as boxes, sealing tape and packing material. Ryder also provides its
customers with instructional brochures, offers discounts to AAA members and
maintains a 24-hour toll-free service hotline. RyderFIRST(R), the first
nationwide automated reservation system for dealers in the consumer truck
rental industry, is designed to ensure that the right truck is available to the
consumer at the right time and at the right price, and also enables Ryder to
more efficiently manage its fleet and maximize utilization.
Ryder Move Management arranges cost-effective moves - both truck
rental and van line - for clients such as Procter & Gamble and Bank of America.
AUTOMOTIVE CARRIERS
REVENUE
(in millions)
[FIGURE 10]
1990 - $689
1991 - $645
1992 - $651
1993 - $635
1994 - $645
AUTOMOTIVE CARRIERS
Ryder's Automotive Carrier Division had an excellent year in 1994. Earnings
were higher as a result of continued strength in
IN ORDER TO ENSURE THE MOST EFFICIENT, DAMAGE-FREE DELIVERY FOR ITS CUSTOMERS,
RYDER PROVIDES ITS DRIVERS WITH EXTENSIVE TRAINING ON HOW TO SAFELY DRIVE THEIR
VEHICLES AND LOAD AND UNLOAD THEIR CARGO.
the new vehicle market and the ongoing positive effects of an organizational
streamlining that took place at the end of 1993.
Ryder transports more than half of all the General Motors vehicles -
and almost half of the Chrysler, Toyota and Honda vehicles - sold annually in
the U.S. and transported nearly 6.3 million vehicles in 1994 from assembly
plants, railheads and ports. Cars and trucks carried include popular models
such as the complete Saturn line, the Cadillac Seville STS and El Dorado
Touring Coupe, the full line of Chevrolet pickup trucks, the Nissan Altima,
the Dodge Intrepid and Chrysler's Jeep(R) Grand Cherokee.
In addition to vehicle transport, Ryder also offers a number of
finished vehicle services, such as final detailing for automotive dealerships,
on- and off-loading vehicles from rail cars, and yard management.
In order to ensure the most efficient, damage-free delivery for its
customers, Ryder provides its drivers with extensive training on how to safely
drive their vehicles and load and unload their
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<PAGE> 24
cargo. Ryder has an excellent safety record as is reflected by its workers'
compensation costs, which have dropped over the past several years.
The company is also committed to constantly upgrading its carrier
equipment and information technology. By reducing the weight of new transports,
Ryder has been able to boost carrying capacity and fuel efficiency. The company
has also developed a number of "driver-friendly" features such as hydraulic
ramps and skids and easy-to-release friction tie-downs.
The Automotive Carrier Division is also working with Ryder Dedicated
Logistics to design seamless in-bound and out-bound automotive logistics
solutions for a number of auto manufacturers, including Mercedes-Benz and
General Motors.
FOREIGN PORTION OF
REVENUE
(in millions)
[FIGURE 11]
1990 - $302
1991 - $327
1992 - $336
1993 - $311
1994 - $348
INTERNATIONAL
Ryder is already a leader in the U.S. transportation and logistics industries,
but roughly three-fourths of the world's freight moves outside of the U.S. The
international transportation and logistics
THE INTERNATIONAL TRANSPORTATION AND LOGISTICS MARKETPLACE REPRESENTS AN
OPPORTUNITY FOR RYDER TO EXPAND ITS FULL SERVICE TRUCK LEASING AND LOGISTICS
BUSINESSES. EUROPE AND LATIN AMERICA HOLD THE BEST OPPORTUNITIES, AND THE
COMPANY IS FOCUSING ITS EFFORTS IN THESE REGIONS.
marketplace, therefore, represents an opportunity for Ryder to expand its full
service truck leasing and logistics businesses.
Europe and Latin America hold the best opportunities for Ryder
internationally, and the company is focusing its efforts in these regions.
Ryder's strategy is to serve its existing customers as they expand in these
markets and to provide services to companies which are already there.
Ryder has operations in several countries. The company has had a major
presence in Canada and the United Kingdom for decades. Ryder has operated in
Germany since the late 1980s. In 1993, Ryder opened an operation in Poland, and
at the end of 1994, Ryder entered Mexico.
Ryder Plc, the company's United Kingdom subsidiary, experienced a
revenue increase of 45% in the fourth quarter of 1994, benefiting from
continued growth in existing business and several strategic acquisitions made
during the year.
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<PAGE> 25
"Ryder's integrated warehouse service provides us with efficient, cost
effective and accurate distribution services that enable us to concentrate our
resources on our specific product assembly requirements. It is a truly
beneficial partnership."
Robin Field,
Chief Executive,
Filofax Group plc
London, England
[PHOTO]
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<PAGE> 26
Filofax Group plc, a Ryder customer in the United Kingdom, became a
customer as a result of a 1994 acquisition. Ryder provides a totally integrated
warehouse and distribution service for all Filofax products throughout the
United Kingdom.
Ryder has strengthened its operations in Germany, consolidating its
full service truck leasing, commercial truck rental and dedicated logistics
operations in one headquarters office in Dusseldorf. This location was selected
because of its favorable location in Germany and its proximity to other
European nations.
Ryder is developing a presence in the Mexican market as well. The
company will focus initially on three major Mexican industrial centers:
Guadalajara, Mexico City and Monterrey.
Mexico and Germany, in addition to having enormous transportation and
logistics needs themselves, will also serve as platforms for Ryder's future
expansion into Latin America and Western Europe, respectively.
LEADING THE INDUSTRY
Businesses around the world are discovering the competitive advantages that
well-designed and executed logistics and transportation systems can yield. As
companies come closer to achieving parity in traditional areas such as quality
and price - and with excellence in both areas taken as a given by today's
customer - the role that logistics and transportation play in a company's
ability to compete and win will only become more prominent.
Ryder's expertise in asset management and logistics and the
interaction among its business units make the company unique in its ability to
provide its customers with a complete range of sophisticated logistics and
transportation services. It would be difficult for any organization - customer
or competitor - to duplicate this ability without the devotion of tremendous
time and resources.
Every industry needs a leader, and Ryder continues to strengthen its
leadership in the logistics and transportation industry. Ryder's company-wide
commitment to understanding the needs of its customers and responding to them
with innovative, cost-effective logistics and transportation solutions will
help to maintain the company's leadership position in the years ahead.
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<PAGE> 27
INTRODUCTION TO FINANCIAL SECTION
Some of the Significant Factors Affecting 1994 Results Were:
EARNINGS FROM CONTINUING OPERATIONS REACH NEW RECORD
Earnings totaled $154 million, an increase of 34% from 1993, and reached the
highest level ever for the company.
REVENUE REACHES AN ALL TIME HIGH
Total revenue was $4.7 billion, representing an increase of 11% over 1993's
revenue of $4.2 billion, and the highest amount ever reported by the company.
All product lines experienced revenue growth.
REVENUE GROWTH FROM DEDICATED LOGISTICS AND
FULL SERVICE TRUCK LEASING IS ACCELERATED
Dedicated logistics revenue grew 21% in 1994 compared with 14% in 1993. For
full service truck leasing, revenue in 1994 was 7% higher compared with flat
revenue in 1993.
SALES OF NEW LONG-TERM CONTRACTUAL BUSINESS
EXCEED PREVIOUS HIGHS
Sales of new contracts in both dedicated logistics and full service truck
leasing reached their highest level ever, reflecting the successful efforts of
the company's sales and marketing initiatives.
RETURN ON AVERAGE COMMON EQUITY APPROACHES COMPANY'S GOAL
1994's return reached 14.5%, a substantial improvement over 1993's performance
of 10.2%, and represents significant progress toward the company's goal of 17%.
HIGHER CAPITAL SPENDING
Increased capital spending 55% to $1.9 billion in response to higher sales of
new long-term contractual business.
HIGHER ASSET UTILIZATION IN COMMERCIAL AND
CONSUMER TRUCK RENTAL
Average asset utilization climbed as a result of better asset management and
stronger economic conditions.
SEVERAL STRATEGIC ACQUISITIONS COMPLETED, INCLUDING
THREE IN THE UNITED KINGDOM
The acquisitions included three leasing companies, a logistics management
company and a provider of dedicated distribution solutions. The United Kingdom
acquisitions will provide substantial revenue growth in the international area.
CONTINUING INVESTMENT IN STRATEGIC INITIATIVES
Invested a significant portion of the company's earnings in several strategic
areas designed to enhance future profitability, including logistics and systems
capabilities and reengineering of the maintenance, sales and marketing and
finance and administration areas.
CREDIT RATING UPGRADED
Credit rating for the company's unsecured notes was raised by Moody's from Baa1
to A3, reflecting strengthening financial position.
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<PAGE> 28
FINANCIAL REVIEW Ryder System, Inc. and Consolidated Subsidiaries
OVERVIEW
The company continued to report strong growth in 1994, with both revenue and
earnings from continuing operations reaching their highest levels in the
company's history. These results were achieved while also making significant
investments in logistics and systems capabilities, sales and marketing, and
reengineering. Additionally, management believes it achieved its four primary
objectives established for 1994. First, dedicated logistics growth was
substantially accelerated, with resulting record sales of new logistics
contracts signed and 21% higher dedicated logistics revenue in 1994 compared
with 1993. Second, full service truck leasing growth also accelerated, with
sales of new contracts at their highest level ever. Third, the company made
significant progress toward implementing its reengineering programs which are
intended to further improve customer service and reduce costs. Finally, the
company began expanding its international operations.
Earnings from continuing operations in 1994 increased to $154 million, or
$1.95 per common share, compared with $115 million, or $1.43 per common share
in 1993, and $98 million, or $1.17 per common share in 1992. Higher 1994
earnings reflected record pretax earnings from Vehicle Leasing & Services and a
significant increase in pretax earnings at Automotive Carriers. Earnings
comparisons were aided by a lower effective income tax rate in 1994 compared
with 1993. The company's effective tax rate for continuing operations was 41.1%
in 1994, 45.3% in 1993 and 40.8% in 1992. The higher 1993 rate resulted from an
accumulated deferred income tax adjustment of $8 million, or $0.10 per common
share, necessitated by an increase in the corporate Federal income tax rate
from 34% to 35%.
Revenue in 1994 totaled $4.7 billion, an increase of $469 million, or 11%,
over 1993. Vehicle Leasing & Services revenue increased 13% to $4.1 billion,
reflecting accelerated revenue growth in all of its major product lines.
Automotive Carriers revenue increased slightly to $645 million. In 1993, the
company reported an increase in revenue of $197 million, or 5%, compared with
1992, led by dedicated logistics and commercial and consumer truck rental.
Operating expense increased 10% in 1994 compared with 1993, due primarily
to the increase in revenue and higher spending on logistics and systems
capabilities, sales and marketing, and reengineering. Higher direct operating
costs at dedicated logistics also impacted 1994 operating expense. Operating
expense in 1993 increased 5% compared with 1992 due primarily to increased
revenue.
Depreciation expense (net of gains) in 1994 increased 9% compared with 1993
due to a larger vehicle fleet as a result of strong lease sales (aided by
growth in logistics contracts), and rental fleet expansion of certain vehicle
types in selected markets. The size of the total vehicle fleet increased 12% in
1994 to 188,831 units. The increase in depreciation was partially offset by an
increase in gains on vehicle sales of $19 million. Net depreciation expense
decreased in 1993 compared with 1992 as a result of higher 1993 gains on
vehicle sales. The higher gains more than offset an increase in depreciation
which resulted from a larger vehicle fleet during 1993.
Interest expense totaled $145 million in 1994, compared with $125 million
in 1993 and $140 million in 1992. The 1994 increase was due to higher average
outstanding debt levels, resulting from the growth in the vehicle fleet,
combined with higher interest rates on the company's variable-rate debt in the
second half of the year. The 1993 decrease resulted primarily from lower
interest rates on the company's variable-rate debt.
EARNINGS FROM CONTINUING OPERATIONS
(in millions)
[FIGURE 12]
1992 - $ 98
1993 - $115
1994 - $154
Higher 1994 earnings reflected record pretax earnings from Vehicle Leasing
& Services and a significant increase in pretax earnings from Automotive
Carriers.
In 1993, the company adopted Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions," and recorded an after tax charge of $25 million, or $0.33 per common
share, to establish the resulting transition obligation. Expense for
postretirement benefits for continuing operations was $6 million in 1994 and $5
million in 1993, compared with $3 million in 1992 under the previous accounting
policy.
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<PAGE> 29
FINANCIAL RESOURCES AND LIQUIDITY
CASH FLOW
In 1994, a majority of the company's cash needs were funded internally through
operations and sales of revenue earning equipment. The company also increased
its level of borrowings in 1994 as a result of higher capital spending,
including the company's continued investments in various programs designed to
improve future profitability. Cash flow from continuing operating activities
was $831 million in 1994, compared with $771 million in 1993 and $847 million
in 1992. The increase in 1994 was a result of improved earnings and an increase
in depreciation expense, partially offset by an increase in certain working
capital items. The most significant working capital change impacting cash flow
comparisons was an increase in receivables resulting from higher revenue. The
decrease in cash flow from continuing operating activities in 1993 compared
with 1992 was primarily attributable to higher proceeds from the sale of
receivables in 1992.
Capital expenditures were $1.8 billion in 1994, compared with $1.2 billion
in 1993 and $1.1 billion in 1992. Capital expenditures in 1994 for full service
truck leasing were $1.1 billion, an increase of $353 million compared with
1993, due to higher new lease sales, aided by growth in logistics contracts.
Capital expenditures for commercial truck rental in 1994 increased $71 million
to $255 million, as a result of demand created by new lease customers and an
increase in the number of certain vehicle types within selected markets.
Consumer truck rental 1994 capital expenditures of $196 million were relatively
unchanged compared with 1993. Capital expenditures for the public
transportation services businesses increased $18 million in 1994 to $35
million, as a result of new contracts and planned fleet replacement. Capital
expenditures for Automotive Carriers in 1994 increased $13 million to $40
million, as a result of replacing older equipment with more efficient, higher
technology, automobile hauling equipment. The remaining increase in capital
expenditures was primarily for operating property and equipment and included
expenditures to expand and upgrade maintenance facilities and for systems
technology and development.
During 1994, the company made expenditures of $145 million on strategic
acquisitions which strengthened the company's existing full service truck
leasing and logistics businesses. Acquisitions made include three providers of
full service truck leasing (one in the U.S. and two in the United Kingdom), a
logistics management company and a provider of dedicated distribution services
in the United Kingdom. The company will continue to evaluate strategic
acquisition opportunities as a means of strengthening its core contractual
businesses.
Cash flow from continuing operating activities (excluding sales of
receivables) plus asset sales as a percentage of capital expenditures was 62%
in 1994, compared with 80% in 1993 and 89% in 1992. The decrease in 1994 was
due to a significant increase in capital expenditures required to support the
increase in new lease sales.
In 1995, management projects that capital expenditures will increase
approximately 10% compared with 1994. The company plans to increase its capital
expenditures for full service truck leasing (including the impact of logistics
growth), commercial and consumer truck rental and the public transportation
services businesses to accommodate planned vehicle replacements and an increase
in fleet size. The company plans to increase capital expenditures at Automotive
Carriers to continue the replacement of older equipment with more efficient,
higher technology equipment. Capital expenditures within the company's
international operations are also expected to increase as these operations
expand. The company expects to fund its 1995 capital expenditures with
internally generated funds and additional financing as necessary.
TOTAL CAPITAL SPENDING
(in millions)
[FIGURE 13]
1992 - $1,092
1993 - $1,238
1994 - $1,915
Capital spending was higher in 1994 primarily
as a result of increased purchases of full
service lease equipment.
Several strategic 1994 acquisitions also
impacted capital spending.
FINANCING
Ryder is a capital intensive company and often depends on external capital. The
company has a variety of financing alternatives available to fund its capital
needs. These alternatives include long- and medium-term public and private
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<PAGE> 30
debt, as well as variable-rate financing available through bank credit
facilities and commercial paper. The company also periodically enters into
sale and leaseback agreements for revenue earning equipment which have
historically been accounted for as operating leases.
In August 1994, Moody's Investors Service upgraded its rating on the
company's unsecured notes from Baa1 to A3 and reaffirmed the commercial paper
rating of P2, reflecting the company's strengthening financial condition. The
company's other credit ratings were A2 for commercial paper and A- for
unsecured notes from Standard & Poor's Ratings Group, and D1 for commercial
paper and A for unsecured notes from Duff and Phelps.
Debt increased from $1.5 billion at the end of 1993 to $1.9 billion at the
end of 1994. This increase was due to financing requirements associated with
1994 capital expenditures and acquisitions. During 1994, the company issued
$437 million of primarily fixed-rate unsecured notes and made $119 million of
scheduled unsecured note payments. The company also borrowed an amount
equivalent to $99 million of primarily variable-rate pound sterling denominated
obligations during 1994. U.S. commercial paper outstanding at December 31,
1994, was $44 million, compared with $84 million at the end of 1993. Proceeds
from sale-leaseback transactions during 1994 were $400 million. The company did
not enter into any sale-leaseback transactions during 1993.
The company has no derivative financial instruments held for trading
purposes or that are leveraged. During 1994, the company increased its
outstanding interest rate swap agreements by a total notional principal amount
of $358 million and interest rate cap agreements by a notional principal amount
of $350 million, as part of the management of its interest rate exposure. See
the "Financial Instruments" note to the consolidated financial statements for a
further discussion of the company's interest rate management program.
At the end of 1994, committed unused lines of credit totaled $614 million.
At December 31, 1994, the company had $434 million of debt securities available
for issuance under a shelf registration statement filed in 1992. The ratio of
debt to equity at December 31, 1994 was 169%, compared with 155% at December
31, 1993. The ratio of debt to tangible equity at December 31, 1994 was 227%,
compared with 202% at December 31, 1993.
In January 1995, the company redeemed at par, $100 million of its 9.375%
unsecured notes. The company also announced that it will redeem $200 million of
9.20% unsecured notes at par in March 1995.
RESULTS OF OPERATIONS
VEHICLE LEASING & SERVICES
REVENUE. Revenue for Vehicle Leasing & Services increased 13% in 1994 compared
with 1993 and 6% in 1993 compared with 1992. The increases reflected growth in
all of the division's contractual product lines - full service truck leasing,
dedicated logistics and public transportation services - as well as the truck
rental businesses.
Revenue from full service truck leasing increased 7% in 1994 compared with
1993 and 2% in 1993 compared with 1992. Revenue in 1994 benefited from a
significant increase in new lease sales combined with the impact of
acquisitions made in 1994. The average fleet size in 1994 increased 11%
compared with 1993, a rate greater than the revenue growth rate, primarily as a
result of lower prices on new leases compared with prices on those expiring.
The increase in revenue in 1993 was due to new lease sales.
Revenue from dedicated logistics increased 21% in 1994 compared with 1993.
Higher revenue was attributable to a record level of new logistics contracts
sold and an expansion of service provided to existing customers. The division
continues to reinvest heavily in logistics capabilities, including new
information technologies, and sales and marketing programs to further
accelerate the growth in dedicated logistics. For the same reasons, dedicated
logistics revenue increased 14% in 1993 compared with 1992.
Revenue from the division's public transportation services businesses
increased 6% in 1994 compared with 1993, as a result of several new student
transportation contracts. The same businesses reported revenue that was 7%
higher in 1993 compared with 1992, due primarily to new contracts and several
small acquisitions made in late 1992.
Commercial truck rental revenue increased 25% in 1994 compared with 1993,
reflecting higher demand from both full service truck leasing customers
awaiting new lease vehicles or satisfying short-term needs, and the commercial
truck rental market in general. Increased demand in 1994 also reflected
continued strength in the U.S. economy. To satisfy the higher demand, the
average fleet size increased approximately 19% in 1994 compared with 1993.
Revenue from commercial truck
28
<PAGE> 31
rental increased 16% in 1993 compared with 1992, as a result of higher demand.
Consumer truck rental revenue increased 19% in 1994 compared with 1993.
This increase reflected higher demand for long-distance rentals, and to a
lesser extent, local rentals, driven by continued strength in the nation's
economy. Higher revenue per transaction for local rentals also contributed to
the increase. The consumer truck rental average fleet size was 6% higher in
1994 than in 1993. Consumer truck rental revenue increased 8% in 1993 compared
with 1992, driven by higher demand and an increase in market share for this
product line.
VEHICLE LEASING & SERVICES
EARNINGS BEFORE
REVENUE INCOME TAXES
(in millions) (in millions)
[FIGURE 14] [FIGURE 15]
1992 - $3,385 1992 - $135
1993 - $3,597 1993 - $204
1994 - $4,058 1994 - $234
EARNINGS BEFORE INCOME TAXES. Pretax earnings for Vehicle Leasing & Services
were $234 million in 1994 compared with $204 million in 1993, an increase of
15%. Overall, higher pretax earnings in 1994 were the result of increased
revenue in all major product lines, higher commercial and consumer truck rental
margin as a percentage of revenue, and higher gains on vehicle sales. Partially
offsetting these increases were continued investments in several strategic
spending programs which are designed to improve the future growth and
profitability of the division. The division's pretax earnings in 1993 increased
$69 million, or 51%, compared with 1992.
Margin (revenue less direct operating expenses, depreciation, and interest
expense) from full service truck leasing increased slightly in 1994 as a result
of higher revenue and acquisitions made. Margin as a percentage of revenue was
lower in 1994 as a result of lower prices on new leases compared with prices on
those expiring, combined with higher interest expense. Full service truck
leasing margin in 1993 increased slightly compared with 1992, primarily as a
result of higher revenue and lower interest expense as a percentage of revenue.
Dedicated logistics reported slightly higher margin in both 1994 and 1993
as a result of the continued growth in revenue. Margin as a percentage of
revenue for dedicated logistics was lower in 1994 as a result of higher
operating costs including new contract start-up costs. Higher operating costs
also resulted from increases in driver wages. Dedicated logistics margin as a
percentage of revenue was relatively unchanged in 1993 compared with 1992.
Margin from the public transportation services businesses increased in 1994
compared with 1993, primarily as a result of higher revenue; margin as a
percentage of revenue was relatively unchanged. Margin from these businesses
increased in 1993 compared with 1992 as a result of higher revenue and a
decrease in vehicle liability and workers' compensation expense.
Commercial truck rental margin and margin as a percentage of revenue
increased substantially in 1994, reflecting higher revenue, increased asset
utilization and lower maintenance costs as a percentage of revenue, partially
offset by higher interest expense. Lower maintenance costs as a percentage of
revenue reflected a reduction in the average age of the fleet. Both margin and
margin as a percentage of revenue increased significantly in 1993 compared with
1992, primarily as a result of increased revenue, improved asset utilization,
lower maintenance costs and lower interest expense.
Consumer truck rental recorded significantly higher margin and higher
margin as a percentage of revenue in 1994 as a result of revenue growth,
increased asset utilization and lower maintenance costs as a percentage of
revenue, partially offset by higher vehicle liability expense. The improvement
in maintenance costs as a percentage of revenue was primarily due to a change
in the age and mix of the fleet to newer and more maintenance efficient
vehicles. Vehicle liability expense increased in 1994 over a lower than normal
1993 level. Consumer truck rental margin and margin as a percentage of revenue
were higher in 1993 compared with 1992 as a result of revenue growth, better
asset utilization and lower than normal vehicle liability expense.
For the division as a whole, pretax profits were higher in 1994 compared
with 1993 as a result of higher overall margin and an increase in gains on
vehicle sales, partially offset by
29
<PAGE> 32
increases in indirect operating expenses. Higher gains were due to an
increase in both the average gain per vehicle sold and the number of vehicles
sold. Higher indirect operating expenses were primarily the result of several
strategic spending programs. These programs are focused on further developing
logistics and other systems capabilities, improving the division's sales and
marketing initiatives, and reengineering the company's maintenance, sales and
marketing, and finance and administration functions. In fact, within dedicated
logistics, the increase in strategic spending on logistics capabilities and
sales and marketing programs in 1994 more than offset margin growth. These
strategic spending programs are expected to continue to impact profitability
in 1995 as the company strives to continue stimulating growth in its long-term
contractual products while making its operations more customer responsive and
efficient for the future. Pretax earnings for the division in 1993 were higher
compared with 1992, as a result of margin increases and an increase of $21
million in gains on vehicle sales, partially offset by an increase in indirect
operating expenses. Gains on vehicle sales increased due to higher gains per
vehicle sold, while indirect operating expenses were affected by an increase
in sales and marketing spending.
AUTOMOTIVE CARRIERS
REVENUE. Automotive Carriers revenue increased 2% in 1994 after a decrease of
3% in 1993. Higher 1994 revenue resulted from an increase in the number of
units shipped, somewhat offset by a decline in average length of haul. The
overall increase in the number of units shipped in 1994 was a result of higher
vehicle production in North America. Shipments of General Motors vehicles were
relatively unchanged in 1994 compared with 1993, while the number of vehicles
shipped for other manufacturers was up 13%. Lower revenue in 1993 compared with
1992 reflected a decrease in average length of haul. The division's largest
customer, General Motors, accounts for approximately 54% of its revenue.
EARNINGS BEFORE INCOME TAXES. Pretax earnings increased $18 million in 1994
compared with 1993. Earnings comparisons were impacted by a 1993 pretax charge
of $6 million for the cost of a program to streamline the division's
operations. Pretax earnings in 1994 benefited from the effects of the 1993
streamlining, fleet operating efficiencies and reduced depreciation expense.
Lower depreciation resulted from an increase in the age of the vehicle fleet
and a reduction in the size of the fleet. Pretax earnings in 1993 were lower
compared with 1992 due to a decrease in revenue, the charge for the
organizational streamlining, higher labor costs, and higher cargo damage and
vehicle liability expense.
AUTOMOTIVE CARRIERS
EARNINGS BEFORE
REVENUE INCOME TAXES
(in millions) (in millions)
[FIGURE 16] [FIGURE 17]
1992 - $651 1992 - $48
1993 - $635 1993 - $32
1994 - $645 1994 - $50
The truckaway automobile hauling industry is currently negotiating a new
industry-wide collective bargaining agreement with the International
Brotherhood of Teamsters. The current agreement with the Teamsters expires on
May 21, 1995. While negotiations are in the early stages, the agreement may
provide for wage and benefit increases. However, management does not expect
material adverse economic consequences from the outcome of the negotiations.
OTHER
Other, which is composed primarily of corporate administrative costs, reported
net expenses of $24 million in 1994 compared with $27 million in 1993 and $18
million in 1992. The lower level of expenses in 1992 reflected a combination
of higher reimbursement of corporate administrative costs from the divisions
and lower overall levels of spending.
FOREIGN OPERATIONS
The majority of the company's foreign operations are in the United Kingdom and
Canada. These operations are composed primarily of full service truck leasing,
commercial and consumer truck rental, dedicated logistics and automotive
carriage. The results of these operations have been included in the discussions
above. In 1994, revenue and pretax earnings from foreign operations were $348
million and $16 million, respectively, compared with $311 million and $9
million in 1993 and $336 million and $7 million in 1992. The 1994
30
<PAGE> 33
increase in revenue was due to a significant increase in full service truck
lease and commercial truck rental revenue in the United Kingdom, primarily as
a result of strong new lease sales and acquisitions made in 1994. Of the $7
million increase in pretax earnings in 1994, $4 million related to a change in
the capital structure of the operations in the United Kingdom, which
effectively reduced its interest costs. The remaining increase was due
primarily to higher pretax earnings in the United Kingdom and Canada, somewhat
offset by start-up costs in Germany and Mexico. Growth in profitability from
foreign operations will continue to be impacted in the short-term by start-up
related investments in Germany, Mexico and other targeted international markets
as opportunities are identified. The company will continue to evaluate further
strategic expansion in Western Europe and the Americas. Economic and political
developments in Mexico will be closely monitored as the company expands in that
country. At this time there are no legal restrictions regarding the
repatriation of cash flows to the U.S. from the foreign countries where the
company is currently operating.
ENVIRONMENTAL MATTERS
The operations of the company involve storing and dispensing petroleum
products, primarily diesel fuel, regulated under environmental protection laws.
These laws require the company to eliminate or mitigate the effect of such
substances on the environment. In response to these requirements, the company
has upgraded operating facilities and implemented various programs to detect
and minimize contamination.
Capital expenditures related to these programs totaled approximately $8
million in 1994. Environmental capital expenditures are primarily related to a
mandated tank replacement program required to be completed by the end of 1998.
These capital expenditures are not expected to increase materially in relation
to the company's level of total capital expenditures. The company incurred $24
million of environmental expenses in 1994 and 1993, compared with $23 million
in 1992. Based on the present standards imposed by governmental regulations,
management expects that environmental expenses will remain at current levels or
decrease slightly in the near-term.
The ultimate cost of the company's environmental liabilities cannot
presently be projected with certainty due to the presence of several unknown
factors, primarily the level of contamination, the effectiveness of selected
remediation methods, the stage of management's investigation at the individual
sites and the recoverability of such costs from third parties. Based upon
information presently available, management believes that the ultimate
disposition of these matters, although potentially material to the results of
operations in any one year, will not have a material adverse effect on the
company's financial condition or liquidity. See the "Environmental Matters"
note to the consolidated financial statements for a further discussion.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1993, the Financial Accounting Standards Board issued Statement No.
116, "Accounting for Contributions Received and Contributions Made." The
statement, which is effective for fiscal years beginning after December 15,
1994, requires that promises to make contributions be recognized in the
financial statements as an expense and a liability when a promise is made.
Currently, contributions are recognized as an expense in the period paid. The
company anticipates that adoption of the statement in the first quarter of 1995
will result in an after tax charge to earnings of approximately $8 million, or
$0.10 per common share, to record the cumulative effect of the change in
accounting.
OUTLOOK
In 1995, the company will continue to build upon accomplishments achieved and
initiatives started in 1994. However, to ensure the momentum created in 1994 is
sustained and shareholder value is maximized, the company will focus on three
areas of emphasis in 1995. First, the company will intensify the marketing and
selling of its highest value-added contractual products, dedicated logistics
and full service truck leasing, to maximize its less economically sensitive
sources of revenue. Second, the company will attempt to increase its market
coverage and market share. Finally, the company will attempt to continue to
lower its cost structure by further implementing its reengineering in the areas
of sales and marketing, maintenance, and finance and administration.
Strong financial results in 1994 have positioned Ryder for continued
earnings growth in 1995. While continued investments in strategic initiatives
may slow the growth in profitability in the near-term, these investments are
being made to better position the company for long-term growth and
profitability. Sustained earnings improvement in 1995 also depends to a great
extent on domestic economic conditions.
31
<PAGE> 34
<TABLE>
SELECTED FINANCIAL AND OPERATIONAL DATA Ryder System, Inc. and Consolidated Subsidiaries
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands) 1994 1993 1992
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
VEHICLE LEASING & SERVICES
Revenue:
Full service lease and programmed maintenance $1,865,738 1,749,592 1,718,090
Commercial and consumer rental 1,140,190 935,792 835,722
Dedicated logistics 691,647 569,479 497,509
Other 608,619 558,041 514,326
Eliminations (248,459) (216,101) (180,695)
---------------------------------------------------------------------------------------------------------------------------------
Total 4,057,735 3,596,803 3,384,952
Operating expense 3,112,746 2,758,681 2,598,020
Depreciation expense 628,625 557,406 536,951
Gains on sales of revenue earning equipment (72,721) (54,084) (33,525)
Interest expense 151,581 128,760 145,336
Miscellaneous expense, net 3,246 1,670 2,879
---------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes $ 234,258 204,370 135,291
---------------------------------------------------------------------------------------------------------------------------------
Fleet size (owned and leased):
Full service lease 89,672 78,544 74,902
Commercial and consumer rental 75,759 67,016 62,924
Buses operated or managed 12,519 12,154 11,860
Ryder Truck Rental service locations 1,101 979 971
=================================================================================================================================
AUTOMOTIVE CARRIERS
Revenue $ 645,402 634,634 651,216
---------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes $ 50,078 31,955 48,220
---------------------------------------------------------------------------------------------------------------------------------
Total units transported (000) 6,277 5,934 5,871
Total miles traveled (000) 239,831 238,840 247,034
Auto transports:
Owned and leased 3,790 4,131 4,237
Owner-operators 516 505 508
Locations 80 89 92
=================================================================================================================================
</TABLE>
32
<PAGE> 35
REPORT OF MANAGEMENT
To the Shareholders of Ryder System, Inc.:
The financial information in this annual report has been prepared by the
management of Ryder System. Management is responsible for the fair presentation
of the financial statements of the company in accordance with generally
accepted accounting principles and for the objectivity of key underlying
assumptions and estimates.
Ryder System maintains a dynamic system of internal controls to provide
reasonable assurance that assets are safeguarded and transactions are properly
authorized, recorded and reflected in the financial statements. This system is
continually reviewed, evaluated and revised to reflect changes in the company
and in the businesses in which we operate. One of the key elements of Ryder
System's internal financial controls has been the company's success in
recruiting, selecting, training and developing professional financial managers
who implement and oversee the financial control system.
The board of directors, acting through its audit committee, is
responsible for determining that management fulfills its responsibilities in
the preparation of financial statements and the financial control of
operations. The audit committee is composed solely of outside directors. The
committee recommends to the board of directors the appointment of the
independent public accountants and meets regularly with management, internal
auditors and independent accountants.
Our commitment to social responsibility is a key management principle.
Management is responsible for conducting our businesses in an ethical, moral
manner assuring that our business practices encompass the highest, most
uncompromising standards of personal and business conduct. These standards,
which address conflicts of interest, compliance with laws and acceptable
business practices and proper employee conduct are included in our Code of
Conduct. The importance of these standards is stressed throughout the company
and all of our employees are expected to comply with them.
M. Anthony Burns
Chairman, President and
Chief Executive Officer
Edwin A. Huston
Senior Executive Vice President -
Finance and Chief Financial Officer
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of Ryder System, Inc.:
We have audited the accompanying consolidated balance sheets of Ryder System,
Inc. and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of earnings and cash flows for each of the years in the
three-year period ended December 31, 1994. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Ryder
System, Inc. and subsidiaries as of December 31, 1994 and 1993, and the results
of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1994, in conformity with generally
accepted accounting principles.
As discussed in the notes to the consolidated financial statements, the
Company changed its method of accounting for income taxes and for
postretirement benefits other than pensions in 1993.
KPMG PEAT MARWICK LLP
Miami, Florida
February 7, 1995
33
<PAGE> 36
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS Ryder System, Inc. and Consolidated Subsidiaries
Years ended December 31
------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share amounts) 1994 1993 1992
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUE $4,685,603 4,217,030 4,019,675
------------------------------------------------------------------------------------------------------------------------
Operating expense 3,686,053 3,338,477 3,164,775
Depreciation expense, net of gains 591,669 543,338 547,013
Interest expense 144,735 124,789 139,664
Miscellaneous expense, net 2,627 650 2,678
------------------------------------------------------------------------------------------------------------------------
4,425,084 4,007,254 3,854,130
------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations before income taxes 260,519 209,776 165,545
Provision for income taxes 106,990 95,054 67,495
------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations 153,529 114,722 98,050
Earnings (loss) from discontinued operations - (150,713) 25,876
------------------------------------------------------------------------------------------------------------------------
Earnings (loss) before cumulative effect of change in accounting 153,529 (35,991) 123,926
Cumulative effect of change in accounting - (25,433) -
------------------------------------------------------------------------------------------------------------------------
NET EARNINGS (LOSS) 153,529 (61,424) 123,926
Preferred dividend requirements - 3,617 10,500
------------------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) APPLICABLE TO COMMON SHARES $ 153,529 (65,041) 113,426
========================================================================================================================
Earnings (loss) per common share:
Continuing operations $ 1.95 1.43 1.17
Discontinued operations - (1.94) 0.34
Cumulative effect of change in accounting - (0.33) -
------------------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) PER COMMON SHARE $ 1.95 (0.84) 1.51
========================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
34
<PAGE> 37
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS Ryder System, Inc. and Consolidated Subsidiaries
Years ended December 31
------------------------------------------------------------------------------------------------------------------------
(In thousands) 1994 1993 1992
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONTINUING OPERATIONS
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings from continuing operations $ 153,529 114,722 98,050
Depreciation expense, net of gains 591,669 543,338 547,013
Deferred income taxes 56,648 44,905 22,292
Proceeds from sales of receivables - - 115,000
Decrease (increase) in receivables (87,761) (6,616) 2,282
Decrease (increase) in inventories (2,914) 881 (4,030)
Increase in accounts payable 66,087 41,738 4,580
Increase in accrued expenses 25,031 7,584 13,909
Increase in other non-current liabilities 27,733 21,255 25,380
Other, net 941 3,226 22,126
------------------------------------------------------------------------------------------------------------------------
830,963 771,033 846,602
------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt proceeds 609,637 165,503 244,494
Debt repaid, including capital lease obligations (195,099) (295,144) (533,503)
Preferred stock redeemed - (100,000) -
Common stock issued 27,601 37,225 31,242
Dividends on common and preferred stock (46,926) (50,790) (55,141)
------------------------------------------------------------------------------------------------------------------------
395,213 (243,206) (312,908)
------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and revenue earning equipment (1,769,130) (1,237,486) (1,070,472)
Sales of property and revenue earning equipment 265,259 224,921 220,334
Sale and leaseback of revenue earning equipment 400,000 - 200,000
Acquisitions, net of cash acquired (144,574) - (20,525)
Other, net 41,456 43,840 40,273
------------------------------------------------------------------------------------------------------------------------
(1,206,989) (968,725) (630,390)
------------------------------------------------------------------------------------------------------------------------
NET CASH FLOWS FROM CONTINUING OPERATIONS 19,187 (440,898) (96,696)
NET CASH FLOWS FROM DISCONTINUED OPERATIONS - 446,842 87,448
------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 19,187 5,944 (9,248)
Cash and cash equivalents at January 1 56,691 50,747 59,995
------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT DECEMBER 31 $ 75,878 56,691 50,747
========================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
35
<PAGE> 38
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS Ryder System, Inc. and Consolidated Subsidiaries
December 31
-----------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share amounts) 1994 1993
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 75,878 56,691
Receivables 316,855 197,956
Inventories 57,124 52,963
Tires in service 164,347 144,488
Deferred income taxes 51,619 60,326
Prepaid expenses and other current assets 92,999 89,020
-----------------------------------------------------------------------------------------------------------------------
Total current assets 758,822 601,444
-----------------------------------------------------------------------------------------------------------------------
Revenue earning equipment 3,135,064 2,676,047
Operating property and equipment 594,328 510,489
Direct financing leases and other assets 223,680 223,374
Intangible assets and deferred charges 302,579 247,034
-----------------------------------------------------------------------------------------------------------------------
$5,014,473 4,258,388
=======================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 118,103 156,503
Accounts payable 422,532 297,282
Accrued expenses 552,518 514,982
-----------------------------------------------------------------------------------------------------------------------
Total current liabilities 1,093,153 968,767
-----------------------------------------------------------------------------------------------------------------------
Long-term debt 1,794,795 1,374,943
Other non-current liabilities 426,848 397,873
Deferred income taxes 570,653 526,624
Shareholders' equity:
Common stock of $.50 par value per share
Authorized, 400,000,000; outstanding, 1994 - 78,760,742; 1993 - 77,294,484 539,101 508,832
Retained earnings 603,226 496,623
Translation adjustment (13,303) (15,274)
-----------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,129,024 990,181
-----------------------------------------------------------------------------------------------------------------------
$5,014,473 4,258,388
=======================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
36
<PAGE> 39
<TABLE>
<S> <C>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ryder System, Inc. and Consolidated Subsidiaries
</TABLE>
December 31, 1994, 1993 and 1992
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATION. The consolidated financial statements include Ryder
System, Inc. and subsidiaries. All significant intercompany transactions have
been eliminated in consolidation.
REVENUE RECOGNITION. Lease revenue and other transportation services revenue is
recognized as earned.
CASH EQUIVALENTS. All investments in highly liquid debt instruments with a
maturity of three months or less at purchase are classified as cash
equivalents.
INVENTORIES. Inventories, which consist primarily of fuel and truck parts, are
valued using the lower of cost (specific identification or average cost) or
market.
REVENUE EARNING EQUIPMENT, OPERATING PROPERTY AND EQUIPMENT AND DEPRECIATION.
Revenue earning equipment, principally vehicles, and operating property and
equipment are stated at cost. Provision for depreciation and amortization on
substantially all depreciable assets is computed using the straight-line
method. Annual straight-line depreciation rates are 8% to 30% for revenue
earning equipment, 2.5% to 10% for buildings and improvements and 8% to 33% for
machinery and equipment.
Gains on operating property and equipment sales are reflected in
miscellaneous expense. Gains on sales of revenue earning equipment, net of
selling and equipment preparation costs, are reported as reductions of
depreciation expense and totaled $74 million, $55 million and $34 million in
1994, 1993 and 1992, respectively.
INTANGIBLE ASSETS. Intangible assets consist principally of goodwill totaling
$270 million in 1994 and $215 million in 1993. These amounts are reported net
of accumulated amortization of $65 million and $57 million, respectively.
Goodwill is amortized on a straight-line basis primarily over 40 years, with
goodwill acquired during 1994 amortized over a period of 10 to 20 years.
Goodwill was reduced by $4 million in 1994 and $1 million in 1993 as a result
of the recognition of tax benefits associated with prior year acquisitions. The
company reevaluates the recoverability of intangible assets as well as the
amortization periods to determine whether an adjustment to the carrying value
or a revision to estimated useful lives is appropriate. The primary indicators
of recoverability are the associated current and forecasted operating cash
flow.
ACCRUED INSURANCE AND LOSS RESERVES. The company retains a portion of the risk
under vehicle liability, workers' compensation and other insurance programs. In
addition, the company has indemnified the buyer of its reinsurance operations
(sold in 1989) from adverse loss development in excess of loss reserves
transferred to the buyer. Reserves have been recorded which reflect the
undiscounted estimated liabilities including claims incurred but not reported.
Amounts estimated to be paid within one year have been classified as accrued
expenses with the remainder included in other non-current liabilities.
OTHER COSTS. Advertising and sales promotion costs are expensed as incurred.
Vehicle repairs and maintenance which do not extend the life or increase the
value of the vehicle are expensed as incurred.
FOREIGN CURRENCY TRANSLATION. The company's foreign operations use the local
currency as their functional currency. Assets and liabilities of these
operations are translated at the exchange rates in effect on the balance sheet
date. Income statement items are translated at the average exchange rates for
the year. For these companies, the impact of currency fluctuation is included
in shareholders' equity as a translation adjustment.
ACCOUNTING CHANGES. Effective January 1, 1995, the company will adopt Statement
of Financial Accounting Standards No. 116, "Accounting for Contributions
Received and Contributions Made." This statement requires that promises to make
contributions be recognized in the financial statements as an expense and a
liability when a promise is made. The company anticipates that adoption in the
first quarter of 1995 will result in an after tax charge to earnings of
approximately $8 million, or $0.10 per common share, to record the cumulative
effect of the change in accounting.
Effective January 1, 1993, the company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" and Statement No. 109, "Accounting for Income
Taxes." The company also adopted Statement No. 112, "Employers' Accounting for
Postemployment Benefits," effective January 1, 1993, which did not impact the
company's financial position or results of operations.
SALES OF RECEIVABLES
The company participates in an agreement to sell, with limited recourse, up to
$220 million of trade receivables on a revolving basis through September 1996.
The costs associated with this program approximate the costs of issuing
commercial paper and are charged to miscellaneous expense. At both December 31,
1994 and 1993, the outstanding balance of receivables sold pursuant to this
agreement was $220 million.
37
<PAGE> 40
REVENUE EARNING EQUIPMENT
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
(In thousands) 1994 1993
----------------------------------------------------------------------------------------
<S> <C> <C>
Full service lease $ 2,631,148 2,361,684
Commercial and consumer rental 1,999,867 1,728,299
----------------------------------------------------------------------------------------
4,631,015 4,089,983
Accumulated depreciation (1,738,019) (1,636,778)
----------------------------------------------------------------------------------------
2,892,996 2,453,205
----------------------------------------------------------------------------------------
Other revenue earning equipment 699,571 694,139
Accumulated depreciation (457,503) (471,297)
----------------------------------------------------------------------------------------
242,068 222,842
----------------------------------------------------------------------------------------
$ 3,135,064 2,676,047
========================================================================================
</TABLE>
OPERATING PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
(In thousands) 1994 1993
----------------------------------------------------------------------------------------
<S> <C> <C>
Land $ 116,212 108,209
Buildings and improvements 432,686 409,028
Machinery and equipment 394,400 323,359
Other 101,510 72,825
----------------------------------------------------------------------------------------
1,044,808 913,421
Accumulated depreciation (450,480) (402,932)
----------------------------------------------------------------------------------------
$ 594,328 510,489
========================================================================================
</TABLE>
ACCRUED EXPENSES AND OTHER
NON-CURRENT LIABILITIES
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
(In thousands) 1994 1993
----------------------------------------------------------------------------------------
<S> <C> <C>
Salaries and wages $ 119,183 104,787
Employee benefits 8,564 13,527
Interest 35,524 29,578
Operating taxes 66,995 61,898
Insurance and loss reserves 393,801 382,607
Postretirement benefits other than pensions 50,507 47,076
Vehicle rent and related accruals 149,842 143,199
Other 154,950 130,183
----------------------------------------------------------------------------------------
979,366 912,855
Less - non-current portion (426,848) (397,873)
----------------------------------------------------------------------------------------
Accrued expenses $ 552,518 514,982
========================================================================================
</TABLE>
ACQUISITIONS
During 1994, the company completed a number of acquisitions, including a
logistics management company, three providers of full service truck leasing
(one in the U.S. and two in the U.K.) and a provider of dedicated distribution
services in the U.K. All acquisitions consummated during the three-year period
ended December 31, 1994 have been accounted for using the purchase method and
were not material in relation to the company's total assets. The consolidated
financial statements reflect the results of operations of the acquired
businesses from the acquisition dates. Had the acquisitions been consummated at
January 1, 1992, consolidated revenue and net earnings for the three-year
period would not have been materially affected.
The fair value of assets acquired and liabilities assumed in
connection with these acquisitions follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
(In thousands) 1994 1993 1992
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Working capital $ (3,675) - 435
Goodwill 66,969 - 3,072
Other net assets 82,181 - 17,173
Debt assumed - - (155)
----------------------------------------------------------------------------------------
Net assets acquired $145,475 - 20,525
========================================================================================
</TABLE>
LEASES
OPERATING LEASES AS LESSOR. One of the company's major product lines is full
service leasing of commercial trucks, tractors and trailers. The standard full
service lease requires the company to furnish the customer a vehicle, together
with all services, supplies and equipment necessary for its operation. These
services include maintenance, parts, tires, licenses, taxes, a substitute
vehicle if needed and, in most cases, fuel. The agreements provide for a fixed
time charge plus a fixed per-mile charge and, in some instances, a provision
for guaranteed mileage. A portion of these charges is often adjusted in
accordance with changes in the Consumer Price Index.
DIRECT FINANCING LEASES. The company leases additional revenue earning
equipment under agreements that are accounted for as direct financing leases.
The provisions of these lease agreements are essentially the same as operating
leases, except these leases meet certain requirements for classification
as direct financing leases under Statement of Financial Accounting Standards
No. 13, "Accounting for Leases." The net investment in direct financing leases
consists of:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
(In thousands) 1994 1993
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Minimum lease payments receivable $254,585 259,654
Executory costs and unearned income (65,680) (70,387)
Unguaranteed residuals 38,408 38,736
----------------------------------------------------------------------------------------------------
Net investment in direct financing leases 227,313 228,003
Current portion included in receivables 42,151 43,143
----------------------------------------------------------------------------------------------------
Non-current portion included in other assets $185,162 184,860
====================================================================================================
</TABLE>
OPERATING LEASES AS LESSEE. The company leases vehicles, facilities and office
equipment under operating lease agreements. The majority of these agreements
are vehicle leases which specify that rental payments be adjusted every six
months based on changes in interest rates and provide for early termination at
stipulated values. During 1994, 1993 and 1992, rent expense was $141 million,
$137 million and $132 million, respectively.
38
<PAGE> 41
CAPITAL LEASES. The company occasionally enters into lease arrangements
accounted for as capitalized leases. Capital leases entered into during the
three-year period ended December 31, 1994 were not material. Capital leases are
amortized over the effective economic lease term.
LEASE PAYMENTS. Future minimum payments for leases in effect at December 31,
1994, which include an estimate of the future fixed time and guaranteed mileage
charges for operating leases as lessor, are as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
As Lessor As Lessee
----------------------- ---------------------
Direct
Operating Financing Operating Capital
(In thousands) Leases Leases Leases Leases
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 $1,016,513 58,252 158,710 5,615
1996 834,856 49,878 172,115 5,439
1997 659,624 41,106 139,028 3,385
1998 492,625 30,064 128,945 2,874
1999 299,133 24,237 129,486 2,622
Thereafter 226,823 51,048 223,071 423
----------------------------------------------------------------------------------------------------
$3,529,574 254,585 951,355 20,358
Portion representing interest (3,836)
----------------------------------------------------------------------------------------------------
Present value of minimum lease payments $16,522
====================================================================================================
</TABLE>
The amounts on the previous table are based upon the assumption that
revenue earning equipment will remain on lease for the length of time specified
by the respective lease agreements. This is not a projection of future fixed
lease revenue; no effect has been given to renewals, new business,
cancellations or future rate changes.
INCOME TAXES
Effective January 1, 1993, the company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Under this method,
deferred tax assets and liabilities are determined based upon differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Additionally, deferred tax balances are
adjusted in periods that include the enactment of tax rate changes. The
adoption of this statement, which was made on a prospective basis, did not have
a material impact on the company's financial condition or results of
operations. Prior to 1993, the company followed the accounting for income taxes
prescribed by Statement No. 96.
The total provision for income taxes (excluding taxes related to
discontinued operations and cumulative effect of change in accounting) includes
the following components:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
(In thousands) 1994 1993 1992
---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current tax expense:
Federal $ 44,039 45,557 31,648
State 6,232 3,563 13,841
Foreign 71 1,029 (286)
----------------------------------------------------------------------------------------------
50,342 50,149 45,203
---------------------------------------------------------------------------------------------
Deferred tax expense:
Federal 34,123 28,836 20,825
State 14,267 11,332 (3,041)
Foreign 8,258 4,737 4,607
---------------------------------------------------------------------------------------------
56,648 44,905 22,391
---------------------------------------------------------------------------------------------
Amortization of deferred
investment tax credits - - (99)
---------------------------------------------------------------------------------------------
Provision for income taxes $106,990 95,054 67,495
=============================================================================================
</TABLE>
A reconciliation of the Federal statutory tax rate with the effective
tax rate for continuing operations follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
% of Pretax Income
----------------------------------------
1994 1993 1992
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory rate 35.0 35.0 34.0
Impact on deferred taxes
for changes in tax rates 0.6 3.7 -
State income taxes, net of
Federal income tax benefit 4.5 4.6 4.3
Amortization and write-down
of goodwill, net of benefits
realized from business sold 0.8 1.0 1.0
Miscellaneous items, net 0.2 1.0 1.5
----------------------------------------------------------------------------------------------
Effective rate 41.1 45.3 40.8
==============================================================================================
</TABLE>
The components of the net deferred income tax asset and liability as
of December 31, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
(In thousands) 1994 1993
----------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred income tax assets:
Accrued insurance and loss reserves $ 148,816 145,719
Alternative minimum taxes 32,380 34,869
Accrued compensation and benefits 37,789 37,191
Accrued reserves and other items 70,510 63,027
---------------------------------------------------------------------------------------------
289,495 280,806
Valuation allowance (7,855) (5,723)
---------------------------------------------------------------------------------------------
281,640 275,083
----------------------------------------------------------------------------------------------
Deferred income tax liabilities:
Property and equipment basis differences (734,722) (672,341)
Other items (65,952) (69,040)
----------------------------------------------------------------------------------------------
(800,674) (741,381)
---------------------------------------------------------------------------------------------
Net deferred income tax liability $(519,034) (466,298)
=============================================================================================
</TABLE>
39
<PAGE> 42
Deferred taxes have not been provided on temporary differences related
to investments in foreign subsidiaries that are considered permanent in
duration. These temporary differences consist primarily of undistributed
foreign earnings of $62 million at December 31, 1994. A full foreign tax
provision has been made on these undistributed foreign earnings. Determination
of the amount of deferred taxes on these temporary differences is not
practicable due to foreign tax credits and exclusions.
The company had unused investment tax credits, for tax purposes, of $1
million and unused alternative minimum tax credits, for tax purposes, of $32
million at December 31, 1994, available to reduce future income tax
liabilities. The investment tax credits are expected to be utilized before
their expiration in 1998, and have been reflected in the financial statements
as a reduction of deferred income taxes.
Income taxes paid totaled $45 million in 1994. Income taxes paid of
$52 million in 1993 and $44 million in 1992 include amounts related to both
continuing and discontinued operations.
DEBT
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
(In thousands) 1994 1993
----------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. commercial paper $ 44,000 83,500
Canadian commercial paper 55,963 32,482
Unsecured U.S. notes:
Debentures, 8.38% to 9.88%,
due 1998 to 2017 839,499 840,499
Medium-term notes, 4.81% to 9.90%,
due 1995 to 2021 748,400 393,300
Discount on unsecured U.S. notes (22,215) (22,776)
Unsecured foreign obligations (principally
pound sterling), 6.21% to 11.75%,
due 1995 to 1998 195,793 105,466
Capital lease obligations and other debt 51,458 98,975
---------------------------------------------------------------------------------------------
Total debt 1,912,898 1,531,446
Less - amount classified as current (118,103) (156,503)
---------------------------------------------------------------------------------------------
Long-term debt $1,794,795 1,374,943
==============================================================================================
</TABLE>
Debt maturities (including sinking fund requirements and excluding
capital lease obligations) during the five years subsequent to December 31,
1994, are as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Debt
(In thousands) Maturities
----------------------------------------------------------------------------------------------
<S> <C>
1995 $114,057
1996 171,760
1997 169,357
1998 467,862
1999 261,899
==============================================================================================
</TABLE>
In January 1995, the company redeemed at par $100 million of 9.375%
debentures scheduled to be retired in 1998; these debentures were refinanced
with medium-term notes at an average rate of 8.37% maturing in 1999 and 2000
(maturities of new debt reflected above). Additionally, in January 1995, the
company announced that it will redeem in March 1995 at par $200 million of
9.20% debentures scheduled to mature in 1998.
To support the company's outstanding U.S. commercial paper, the
company maintains two revolving credit agreements. The primary agreement, with
a total commitment of $500 million, has no expiration date. The secondary
agreement, with a total commitment of $150 million, expires in December 1999.
No compensating balances are required for either of these facilities, however
they do require annual commitment fees ranging from .095% to .165%. There were
no borrowings under either of these agreements during 1994 or 1993. The company
had $606 million available under these agreements at December 31, 1994. The
company has other committed lines of credit at December 31, 1994 totaling
$43 million, of which $8 million was available. The weighted average interest
rate for outstanding U.S. and Canadian commercial paper was 6.06% and 6.07%,
respectively, at December 31, 1994.
The primary revolving loan agreement contains the most restrictive
covenants as to the payment of cash dividends. As of December 31, 1994,
approximately $105 million of consolidated retained earnings were available for
the payment of cash dividends.
Interest paid totaled $139 million in 1994. Interest paid was $154
million in 1993 and $187 million in 1992 and included amounts related to both
continuing and discontinued operations.
40
<PAGE> 43
FINANCIAL INSTRUMENTS
The company enters into interest rate swap and cap agreements as part of the
management of its interest rate exposure; the company has no derivative
financial instruments held for trading purposes and none of the instruments are
leveraged. The company has assigned each interest rate swap and cap agreement
to a debt or operating lease obligation.
In order to manage its mix of fixed and variable rate debt instruments
and to better match the repricing life of the company's debt to its portfolio
of assets, the company enters into interest rate swap agreements which
effectively convert the interest rate on certain debt from fixed rate to
floating rate over the terms of the agreements. The company had notional
principal amounts of $500 million and $200 million of such "fixed to floating"
rate swap agreements outstanding at December 31, 1994 and 1993, respectively,
with expiration dates ranging from 2001 to 2009. Under these agreements, the
company received an average fixed rate of 6.15% and paid an average floating
rate of 5.93% at December 31, 1994.
In 1994, the company entered into interest rate cap agreements to
limit its exposure to movements in interest rates above a specified level on
certain fixed to floating rate swap agreements. Under these agreements the
company is entitled to receive the amount, if any, by which London Interbank
Offered Rate (LIBOR) exceeds the fixed cap rate specified in the agreement
applied to a notional principal amount. At December 31, 1994, the company had
interest rate cap agreements outstanding with an aggregate notional principal
amount of $350 million. The premiums paid by the company for the interest rate
caps are recorded in deferred charges and amortized over the lives of the cap
agreements, which expire in 1996 and 1997. The recorded amount of the interest
rate caps was $2 million at December 31, 1994. The company receives payments
under the cap agreements when floating rates exceed the fixed cap rates, which
average 5.46% at December 31, 1994.
To mitigate exposure to variable interest rates, the company enters
into agreements to effectively convert the interest rate exposure on certain
debt and operating lease agreements in which the company is a lessee, from
floating rate to fixed rate over the terms of the agreements. These "floating
to fixed" rate swap agreements had notional amounts totaling $173 million and
$115 million outstanding at December 31, 1994 and 1993, respectively, with
expiration dates ranging from 1996 to 1998. Under these agreements, the company
received an average floating rate of 6.36% and paid an average fixed rate of
7.02% at December 31, 1994.
Under the interest rate swap agreements the company agrees to exchange
in cash, at specified intervals, the difference between fixed and floating
interest rate amounts based on agreed upon notional principal amounts. Floating
interest rates paid or received by the company are based on the LIBOR and
reprice periodically, typically in three to six month intervals.
Amounts to be paid or received under the swap and cap agreements are
recognized over the terms of the agreements as adjustments to interest expense
or rent expense. Amounts receivable or payable under the agreements are
included in receivables or accrued expenses in the consolidated balance sheets
and were not material at December 31, 1994 and 1993.
Although the company is exposed to credit loss for the interest rate
differential in the event of nonperformance by the counterparties to the
agreements described above, it does not currently anticipate nonperformance.
The company mitigates counterparty risk by entering into transactions with
financial institutions in the high investment grade category of ratings by
Standard & Poor's Ratings Group and/or Moody's Investors Service.
The estimated fair values of the company's debt, interest rate swap
and cap agreements were determined from dealer quotations and represent the
discounted future cash flows through maturity or expiration using current
rates, and are effectively the amounts the company would pay or receive to
terminate the agreements or retire the debt. The fair values of the interest
rate swap and cap agreements discussed below are before consideration of the
offsetting gains or losses associated with the exposures the instruments are
intended to hedge.
At December 31, 1994, the company had unrecognized gains of $13
million and $5 million on the interest rate caps and floating to fixed rate
swap agreements, respectively, and an unrecognized loss of $61 million on the
fixed to floating rate swap agreements. At December 31, 1993, the company had
an unrecognized gain of $7 million on its fixed to floating rate swap
agreements and an unrecognized loss of $3 million on its floating to fixed rate
swap agreements. Changes in the fair values of these instruments are offset by
changes in the fair values of the underlying assigned obligations.
The estimated fair value of the company's debt (excluding capital
lease obligations) was $1.91 billion and $1.65 billion at December 31, 1994 and
1993, respectively. This compares with net book values of $1.90 billion and
$1.50 billion at December 31, 1994 and 1993, respectively.
41
<PAGE> 44
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY
--------------------------------------------------------------------------------------------------------------------------------
Preferred Common Retained Translation
(In thousands, except share and per share amounts) Stock Stock Earnings Adjustment Total
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
At December 31, 1991 $ 98,025 430,033 856,027 3,569 1,387,654
Net earnings - - 123,926 - 123,926
Dividends declared:
Common stock - $.60 per share - - (44,641) - (44,641)
Fixed Rate Auction Preferred Stock (FRAPS) - $10.50 per share - - (10,500) - (10,500)
Common stock issued under employee plans (1,720,115 shares) - 31,242 - - 31,242
Foreign currency translation adjustment - - - (14,587) (14,587)
Other - 2,040 - - 2,040
--------------------------------------------------------------------------------------------------------------------------------
At December 31, 1992 98,025 463,315 924,812 (11,018) 1,475,134
Net loss - - (61,424) - (61,424)
Dividends declared:
Common stock - $.60 per share - - (45,832) - (45,832)
FRAPS - $4.96 per share - - (4,958) - (4,958)
Aviall, Inc. stock - - (314,000) - (314,000)
Redemption of FRAPS (98,025) - (1,975) - (100,000)
Common stock issued under employee plans (1,883,062 shares) - 37,225 - - 37,225
Foreign currency translation adjustment - - - (4,256) (4,256)
Other - 8,292 - - 8,292
--------------------------------------------------------------------------------------------------------------------------------
At December 31, 1993 - 508,832 496,623 (15,274) 990,181
Net earnings - - 153,529 - 153,529
Common stock dividends declared - $.60 per share - - (46,926) - (46,926)
Common stock issued under employee plans (1,466,258 shares) - 27,601 - - 27,601
Foreign currency translation adjustment - - - 1,971 1,971
Other - 2,668 - - 2,668
--------------------------------------------------------------------------------------------------------------------------------
AT DECEMBER 31, 1994 $ - 539,101 603,226 (13,303) 1,129,024
================================================================================================================================
</TABLE>
At December 31, 1994, the company had 78,760,742 Preferred Stock Purchase
Rights (Rights) outstanding. The Rights were issued in March 1986 as a dividend
to common shares outstanding and expire in 1996. The Rights contain provisions
to protect shareholders in the event of an unsolicited attempt to acquire the
company which is not believed by the board of directors to be in the best
interest of shareholders. The Rights are evidenced by common stock
certificates, are subject to antidilution provisions, and are not exercisable
or transferable apart from the common stock until ten days after a person, or a
group of affiliated or associated persons, acquires beneficial ownership of 10%
or more, or makes a tender offer for 30% or more, of the company's common
stock. The Rights entitle the holder, except such an acquiring person, to
purchase at the current exercise price of $100 that number of the company's
common shares which at the time would have a market value of $200. In the event
the company is acquired in a merger or other business combination (including
one in which the company is the surviving corporation), each Right entitles its
holder to purchase at the current exercise price of $100 that number of common
shares of the surviving corporation which would then have a market value of
$200. In lieu of common shares, Rights holders can purchase 1/150 of a share of
Series C Preferred Stock for each Right. The Series C Preferred Stock would be
entitled to quarterly dividends equal to the greater of $10 per share or 150
times the common stock dividend per share, and have 150 votes per share, voting
together with the common stock. The Rights have no voting rights and are
redeemable, at the option of the company, at a price of $.033 per Right prior
to the acquisition by a person or a group of affiliated or associated persons
of beneficial ownership of 10% or more of the company's common stock.
In 1993, the company redeemed all of its outstanding Fixed Rate Auction
Preferred Stock (Series A and B) for $100 million.
EMPLOYEE STOCK OPTION AND
DIRECTORS' STOCK PLANS
OPTION PLANS. The Profit Incentive Stock Plan provides for the granting of
stock options to certain non-officer employees to purchase common shares at
prices not less than 85% of the fair market value at the date of grant; all
options granted in 1994, 1993 and 1992 were at fair market value. These options
are for terms not exceeding 10 years and are exercisable cumulatively 25% or
50% each year, based on the terms of the grant.
The 1980 Stock Incentive Plan provides for the granting of stock options
to key employees at a price equal to the fair market value of shares at the
date of grant. These options are for terms not exceeding 10 years, are
generally exercisable cumulatively
42
<PAGE> 45
20% or 50% each year, based on the terms of the grant, and may be granted in
tandem with stock appreciation rights, limited stock appreciation rights and
performance units. The plan also provides for restricted stock rights to these
employees at no cost to them; none were granted in 1994, 1993 or 1992.
The following table summarizes the status of the company's stock option
plans:
<TABLE>
<CAPTION>
----------------------------------------------------------------
(Shares in thousands) 1994 1993 1992
----------------------------------------------------------------
<S> <C> <C> <C>
Outstanding, January 1 6,110 6,342 6,557
Average per share $22.45 23.09 22.37
Granted 1,380 772 840
Average per share $24.80 26.43 23.93
Exercised 405 1,305 757
Average per share $20.42 20.32 17.18
Expired or canceled 505 127 298
Average per share $24.87 24.98 24.57
Adjustment for dividend of Aviall stock - 428 -
Outstanding, December 31 6,580 6,110 6,342
Average per share $22.88 22.45 23.09
Exercisable, December 31 4,839 4,901 4,957
Available for future grant 983 1,858 903
================================================================
</TABLE>
During December 1993, the number and exercise price of all options
outstanding at the time of the spin off of Aviall were adjusted using a
conversion ratio such that: (1) the aggregate difference between the exercise
price and the market value of the shares which are subject to the options is
unchanged from the same calculation immediately prior to the spin off and (2)
the ratio of the exercise price per option to the market value per share is
also unchanged.
DIRECTORS' STOCK PLAN. Under the company's Directors' Stock Plan, any eligible
director may elect to receive restricted common shares equal to the nearest
number of whole shares that can be purchased for $15 thousand based on the fair
market value at the date of the grant, in lieu of $10 thousand cash
compensation. The shares fully vest six months after the date of grant,
provided that the director continues to serve in that capacity at that date.
The shares may not be sold or transferred until six months after the date when
service as a director ceases. During 1994, 6,232 shares, with a fair market
value of $165 thousand at the date of grant, were issued under this plan. No
shares were issued pursuant to this plan prior to 1994.
PENSION PLANS
The company and its subsidiaries sponsor several defined benefit pension plans,
covering substantially all employees not covered by union-administered plans,
including certain employees in foreign countries. These plans generally provide
participants with benefits based on years of service and career-average
compensation levels. Funding policy for these plans is to make contributions
based on normal costs plus amortization of unfunded past service liability, but
not greater than the maximum allowable contribution deductible for Federal
income tax purposes. The majority of the plans' assets are invested in a master
trust which, in turn, is primarily invested in listed stocks and bonds. The
company also contributed to various defined benefit, union-administered, multi-
employer plans for employees under collective bargaining agreements. Total
pension expense for 1994, 1993 and 1992 was as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------
(In thousands) 1994 1993 1992
----------------------------------------------------------------
<S> <C> <C> <C>
Company-administered plans:
Present value of benefits
earned during the year $ 23,378 21,780 20,320
Interest cost on projected
benefit obligation 32,290 28,263 25,269
Return on plan assets:
Actual (1,725) (43,551) (26,387)
Deferred (34,345) 11,366 (2,271)
Other, net 165 (2,066) (2,113)
----------------------------------------------------------------
19,763 15,792 14,818
Union-administered plans 21,282 19,239 19,448
----------------------------------------------------------------
Net pension expense $ 41,045 35,031 34,266
================================================================
</TABLE>
Included in the above amounts is the pension expense allocated to
discontinued operations totaling $2 million in 1993 and 1992.
The following table sets forth the plans' funded status and the company's
prepaid expense at December 31, 1994 and 1993:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
(In thousands) 1994 1993
-----------------------------------------------------------------------------
<S> <C> <C>
Plan assets at fair value $ 442,562 423,636
-----------------------------------------------------------------------------
Actuarial present value of service rendered to date:
Accumulated benefit obligation, including
vested benefits of $323,455 in
1994 and $376,951 in 1993 (350,269) (402,560)
Additional benefit based on estimated
future salary levels (53,681) (56,431)
-----------------------------------------------------------------------------
Projected benefit obligation (403,950) (458,991)
-----------------------------------------------------------------------------
Projected benefit obligation (in excess of)
less than plan assets 38,612 (35,355)
Unrecognized transition amount (22,647) (26,276)
Other, primarily unrecognized prior
service cost and net (gains) losses (1,389) 66,865
-----------------------------------------------------------------------------
Prepaid pension expense $ 14,576 5,234
=============================================================================
</TABLE>
43
<PAGE> 46
The following table sets forth the actuarial assumptions used for the
company's dominant plan:
<TABLE>
<CAPTION>
-----------------------------------------------------------
1994 1993
-----------------------------------------------------------
<S> <C> <C>
Discount rate for determining projected
benefit obligation 8.50% 7.00%
Rate of increase in compensation levels 5.00% 5.00%
Expected long-term rate of return on
plan assets 8.50% 8.50%
Transition amortization in years 15 15
Gain and loss amortization in years 9 9
===========================================================
</TABLE>
The cumulative effect of the change in the discount rate as of December 31,
1994 is included above in unrecognized net gains (losses).
In connection with the spin off of Aviall, the company was required to
retain the accumulated benefit obligation and associated assets related to
participants in the company's primary pension plan who were either present or
former employees of Aviall for services rendered through the date of the spin
off. The company treated all present or former employees of Aviall as
terminated participants of this plan as of the date of the spin off.
EMPLOYEE SAVINGS AND
STOCK PURCHASE PLANS
SAVINGS PLANS. The company has defined contribution savings plans that cover
substantially all eligible employees. Company contributions to the plans are
based on employee contributions and the level of company match. Company
contributions to the plans totaled approximately $7 million in 1994 and 1993
and $4 million in 1992.
PURCHASE PLANS. The Employee Stock Purchase Plan provides for periodic
offerings to substantially all U.S. and Canadian employees, with the exception
of executives who participate in the 1980 Stock Incentive Plan, to subscribe
shares of the company's common stock at 85% of the fair market value on either
the date of offering or the last day of the purchase period, whichever is less.
The U.K. Stock Purchase Scheme provides for periodic offerings to
substantially all U.K. employees to subscribe shares of the company's common
stock at 85% of the fair market value on the date of the offering.
The following table summarizes the status of the company's stock purchase
plans:
<TABLE>
<CAPTION>
----------------------------------------------------------------------
(Shares in thousands) 1994 1993 1992
----------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding, January 1 1,187 1,784 1,350
Average per share $18.08 19.79 19.06
Granted 1,827 - 1,745
Average per share $22.92 - 19.92
Exercised 1,054 641 1,019
Average per share $18.16 19.92 19.23
Expired or canceled 141 53 292
Average per share $18.45 19.92 19.24
Adjustment for dividend of Aviall stock - 97 -
Outstanding, December 31 1,819 1,187 1,784
Average per share $22.87 18.08 19.79
Exercisable, December 31 - 1,142 -
Available for future grant 1,574 3,260 3,207
======================================================================
</TABLE>
Shares outstanding at the time of the spin off of Aviall were adjusted
using a method similar to the one used for the company's stock option plans.
POSTRETIREMENT BENEFITS
OTHER THAN PENSIONS
The company and its subsidiaries sponsor plans which provide retired employees
with certain health care and life insurance benefits. Substantially all
employees not covered by union-administered health and welfare plans are
eligible for these benefits. Health care benefits for the company's principal
plans are generally provided to qualified retirees under age 65 and eligible
dependents. Generally, these plans require employee contributions which vary
based on years of service and include provisions which cap company
contributions.
Effective January 1, 1993, the company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." The statement requires that the expected costs
of health care and life insurance provided to retired employees be recognized
as expense during the years employees render service. As a result of adopting
this statement, a pretax charge of $41 million ($25 million after tax, or $0.33
per common share) was recorded as the cumulative effect of a change in
accounting principle to establish a liability for the present value of expected
future benefits attributed to employees' service rendered prior to January 1,
1993. Under the company's previous accounting policy the cost of these benefits
was recognized as expense as claims were incurred. Costs under this method were
$3 million in 1992.
44
<PAGE> 47
Total periodic postretirement benefit expense for 1994 and 1993 was as
follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------
(In thousands) 1994 1993
--------------------------------------------------------------------
<S> <C> <C>
Current year service cost $1,792 1,360
Interest accrued on postretirement
benefit obligation 3,693 3,682
Other, net 317 -
--------------------------------------------------------------------
Periodic postretirement benefit cost $5,802 5,042
====================================================================
</TABLE>
The company's postretirement benefit plans are not funded. The company's
obligation under the plans as of December 31, 1994 and 1993 is as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------
(In thousands) 1994 1993
--------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $26,586 27,487
Fully eligible active plan participants 6,631 4,401
Other active plan participants 16,031 20,697
--------------------------------------------------------------------
49,248 52,585
Unrecognized net gain (loss) 1,259 (5,509)
--------------------------------------------------------------------
Accrued unfunded postretirement benefit obligation $50,507 47,076
====================================================================
</TABLE>
The following table sets forth the actuarial assumptions used for the
company's dominant plan:
<TABLE>
<CAPTION>
--------------------------------------------------------------------
1994 1993
--------------------------------------------------------------------
<S> <C> <C>
Discount rate for determining accumulated
postretirement benefit obligation 8.50% 7.00%
Present health care cost trend rate 12.50% 13.00%
Ultimate trend rate in 2003 and later 6.00% 6.00%
====================================================================
</TABLE>
The cumulative effect of the change in the discount rate as of December 31,
1994 is included above in unrecognized net gain (loss).
Increasing the assumed health care cost trend rates by 1% in each year
would increase the accumulated postretirement benefit obligation as of December
31, 1994 by $2 million and would not have a material effect on periodic
postretirement benefit cost for 1994.
ENVIRONMENTAL MATTERS
The company's operations involve storing and dispensing petroleum products,
primarily diesel fuel. In 1988, the Environmental Protection Agency issued
regulations that established requirements for testing and replacing underground
storage tanks. The company is involved in various stages of investigation,
cleanup and tank replacement to comply with the regulations. In addition, the
company received notices from the Environmental Protection Agency and others
that it has been identified as a potentially responsible party (PRP) under the
Comprehensive Environmental Response, Compensation and Liability Act, the
Superfund Amendments and Reauthorization Act and similar state statutes and may
be required to share in the cost of cleanup of 25 identified disposal sites.
The company records a liability for environmental assessments and/or
cleanup when it is probable a loss has been incurred. Generally, the timing of
these accruals coincides with the identification of an environmental problem
through the company's internal procedures or upon notification from regulatory
agencies. The company's probable environmental loss is based on information
obtained from independent environmental engineers and/or from company experts
regarding the nature and extent of environmental contamination, remedial
alternatives available and the cleanup criteria required by relevant
governmental agencies. The estimated costs include anticipated site testing,
consulting, remediation, disposal, post-remediation monitoring and legal fees,
as appropriate, based on information available at that time. These amounts
represent the estimated undiscounted costs to fully resolve the environmental
matters in accordance with prevailing Federal, state and local requirements
based on information presently available. The liability does not reflect
possible recoveries from insurance companies or reimbursement of remediation
costs by state agencies, but does include a reasonable estimate of cost sharing
with other PRPs at Superfund sites. At December 31, 1994 and 1993, the company
had accrued $57 million and $45 million, respectively, for environmental
liabilities. The company incurred $24 million of environmental expenses in both
1994 and 1993 and $23 million in 1992.
The ultimate costs of the company's environmental liabilities cannot be
projected with certainty due to the presence of several unknown factors,
primarily the level of contamination, the effectiveness of selected remediation
methods, the stage of investigation at the individual sites, the determination
of the company's liability in proportion to other responsible parties and the
recoverability of such costs from third parties. Based on information presently
available, management believes that the ultimate disposition of these matters,
although potentially material to the results of operations in any one year,
will not have a material adverse effect on the company's financial condition or
liquidity.
DISCONTINUED OPERATIONS
On December 7, 1993, the company completed the spin off of its aviation
services subsidiaries as a new public company ("Aviall, Inc." or "Aviall").
Under the terms of the spin off, the company distributed to common stockholders
one share of Aviall, Inc. common stock for each four Ryder System, Inc. common
shares owned. The distribution had the effect of reducing the company's
retained earnings by $314 million.
In the accompanying consolidated statements of earnings, Aviall's results
of operations have been combined with those of the company's previously
discontinued aircraft leasing
45
<PAGE> 48
business, which was disposed of in 1992, and reported as discontinued
operations.
The results of discontinued operations are summarized below:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
Period Ended Year Ended
December 7, December 31,
(In thousands) 1993 1992
----------------------------------------------------------------------------
<S> <C> <C>
Net sales $1,086,600 1,171,847
============================================================================
Earnings (loss) from operations before
income taxes and disposition gain $ (191,874) 33,099
Income tax benefit (provision) 41,161 (13,223)
----------------------------------------------------------------------------
Earnings (loss) from operations
before disposition gain (150,713) 19,876
----------------------------------------------------------------------------
Estimated gain on disposition - 9,272
Income tax provision - (3,272)
----------------------------------------------------------------------------
Net gain on disposition - 6,000
----------------------------------------------------------------------------
Earnings (loss) from discontinued operations $ (150,713) 25,876
============================================================================
</TABLE>
The loss from discontinued operations in 1993 includes an after tax charge
of $169 million ($2.18 per common share) related to the restructuring of Aviall
and transaction costs associated with the spin off. Earnings from discontinued
operations for 1992 include an after tax gain of $6 million ($0.08 per common
share) on the final disposition of the discontinued aircraft leasing business.
Interest expense was allocated to the discontinued businesses based upon an
assumed debt to equity ratio consistent with other similar businesses and with
the company's historical interest allocation method for segment reporting.
Interest expense of $24 million and $33 million was included in the operating
results of discontinued operations for 1993 and 1992, respectively.
The company will continue to guarantee, for a limited period, approximately
$19 million of Aviall's indebtedness to the European Investment Bank in
exchange for a customary guarantee fee.
OTHER MATTERS
The company is a party to various claims, legal actions and complaints arising
in the ordinary course of business. While any proceeding or litigation has an
element of uncertainty, management believes that the disposition of these
matters will not have a material impact on the financial condition, liquidity
or results of operations of the company.
SEGMENT INFORMATION
The company's operating segments are Vehicle Leasing & Services and Automotive
Carriers. Vehicle Leasing & Services offers a variety of truck-related services
including full service truck leasing, commercial and consumer truck rental,
programmed maintenance service and dedicated logistics. It also operates
student transit services and manages and operates public transit services.
Automotive Carriers is the largest highway transporter of new cars and trucks
in the United States and a major transporter in Canada.
Revenue by segment includes intersegment transactions which are based on
substantially the same terms as transactions with unaffiliated customers. These
amounts are eliminated in consolidation. Revenue of $452 million, $453 million
and $468 million, primarily from Automotive Carriers, was derived from General
Motors Corporation in 1994, 1993 and 1992, respectively.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
(In thousands) 1994 1993 1992
-------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUE:
Vehicle Leasing & Services $4,057,735 3,596,803 3,384,952
Automotive Carriers 645,402 634,634 651,216
Intersegment (17,534) (14,407) (16,493)
-------------------------------------------------------------------------------
$4,685,603 4,217,030 4,019,675
-------------------------------------------------------------------------------
Foreign portion of revenue $ 347,671 311,265 336,499
===============================================================================
OPERATING PROFIT:
Vehicle Leasing & Services $ 389,085 335,793 283,505
Automotive Carriers 49,850 31,832 47,876
Other 166 (49) 118
-------------------------------------------------------------------------------
Operating profit 439,101 367,576 331,499
Miscellaneous expense, net (2,627) (650) (2,678)
Interest expense (144,735) (124,789) (139,664)
Unallocated corporate
overhead expense (31,220) (32,361) (23,612)
-------------------------------------------------------------------------------
Earnings from continuing operations
before income taxes $ 260,519 209,776 165,545
-------------------------------------------------------------------------------
Foreign portion of operating profit $ 30,030 26,176 25,692
-------------------------------------------------------------------------------
Foreign portion of earnings from
continuing operations
before income taxes $ 16,017 9,140 6,711
===============================================================================
DEPRECIATION:
Vehicle Leasing & Services $ 628,625 557,406 536,951
Automotive Carriers 35,689 39,418 43,155
Other 900 1,074 1,144
-------------------------------------------------------------------------------
665,214 597,898 581,250
Gains on vehicle sales (73,545) (54,560) (34,237)
-------------------------------------------------------------------------------
$ 591,669 543,338 547,013
===============================================================================
IDENTIFIABLE ASSETS:
Vehicle Leasing & Services $4,644,294 3,908,931 3,446,998
Automotive Carriers 285,950 277,310 303,917
Other 121,911 107,327 61,283
Eliminations (37,682) (35,180) (43,789)
-------------------------------------------------------------------------------
5,014,473 4,258,388 3,768,409
Net assets of discontinued operations - - 910,124
-------------------------------------------------------------------------------
Total assets $5,014,473 4,258,388 4,678,533
-------------------------------------------------------------------------------
Foreign portion of identifiable assets $ 562,664 414,173 394,571
===============================================================================
CAPITAL EXPENDITURES,
INCLUDING CAPITAL LEASES:
Vehicle Leasing & Services $1,722,329 1,205,620 1,030,012
Automotive Carriers 43,789 31,045 40,528
Other 4,044 856 494
-------------------------------------------------------------------------------
$1,770,162 1,237,521 1,071,034
===============================================================================
</TABLE>
46
<PAGE> 49
<TABLE>
<CAPTION>
SUPPLEMENTAL FINANCIAL DATA Ryder System, Inc. and Consolidated Subsidiaries
QUARTERLY DATA
----------------------------------------------------------------------------------------------------------------------------
Quarters
-------------------------------------------------------------
(In thousands, except per share amounts) First Second Third Fourth
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
1994 $1,071,837 1,176,339 1,194,675 1,242,752
1993 $ 999,657 1,080,233 1,043,495 1,093,645
----------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations:
1994 $ 23,738 49,842 41,957 37,992
1993 $ 19,946 40,744 23,488 30,544
----------------------------------------------------------------------------------------------------------------------------
Net earnings (loss):
1994 $ 23,738 49,842 41,957 37,992
1993 $ (1,197) (122,204) 27,783 34,194
----------------------------------------------------------------------------------------------------------------------------
Earnings per common share from continuing operations:
1994 $ 0.30 0.64 0.53 0.48
1993 $ 0.23 0.51 0.30 0.39
----------------------------------------------------------------------------------------------------------------------------
Net earnings (loss) per common share:
1994 $ 0.30 0.64 0.53 0.48
1993 $ (0.05) (1.60) 0.36 0.44
============================================================================================================================
</TABLE>
Quarterly and year-to-date computations of per share amounts are made
independently; therefore, the sum of per share amounts for the quarters may not
equal per share amounts for the year.
Net loss in the first quarter of 1993 includes the cumulative effect
of a change in accounting resulting in an after tax charge of $25 million
($0.33 per common share). See "Postretirement Benefits Other Than Pensions"
note for additional discussion.
Net loss for the second quarter of 1993 includes an after tax charge
of $169 million ($2.18 per common share) related to the discontinued aviation
services subsidiaries. See "Discontinued Operations" note for additional
discussion.
COMMON STOCK DATA
At December 31, 1994 and 1993, the company had 78,760,742 and 77,294,484
shares, respectively, of common stock outstanding. As of January 31, 1995,
there were 19,516 common stockholders. The payment of cash dividends is subject
to the restrictions described on page 40.
The company's common shares are traded on the New York Stock Exchange,
the Chicago Stock Exchange and the Pacific Stock Exchange and its ticker symbol
is "R." Quarterly market price ranges of the common shares and quarterly cash
dividends on common shares during 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Market Price
------------------------------------------------ Common Share
1994 1993 Cash Dividends
-------------------- ------------------- ---------------
High Low High Low 1994 1993
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First quarter $27 7/8 24 1/8 32 1/4 27 1/4 .15 .15
Second quarter 25 7/8 21 3/8 31 7/8 26 1/2 .15 .15
Third quarter 28 24 1/2 33 1/2 27 7/8 .15 .15
Fourth quarter (a) 26 7/8 19 7/8 26 5/8 24 3/4 .15 .15
=====================================================================================================
</TABLE>
(a) On December 7, 1993, the company completed the spin off of its
aviation services subsidiaries by distributing to common stockholders
one share of Aviall, Inc. common stock valued at $16.25 for each four
Ryder System, Inc. common shares owned. The high and low presented
for the first, second and third quarter of 1993 represent the values
of the company's common stock before the spin off. The high and low
for the fourth quarter of 1993 represent the values of the company's
common stock after the spin off. The high and low for the fourth
quarter prior to the spin off were 31 3/4 and 26 1/4,
respectively.
47
<PAGE> 50
<TABLE>
<CAPTION>
SUPPLEMENTAL FINANCIAL DATA
ELEVEN YEAR SUMMARY
----------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share amounts) 1994 1993 1992 1991
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue $4,685,603 4,217,030 4,019,675 3,851,334
Earnings from continuing operations (a):
Before income taxes $ 260,519 209,776 165,545 60,479
After income taxes $ 153,529 114,722 98,050 30,923
Per common share $ 1.95 1.43 1.17 0.28
Net earnings (loss) (b) $ 153,529 (61,424) 123,926 14,017
Per common share (b) $ 1.95 (0.84) 1.51 0.05
----------------------------------------------------------------------------------------------------------
Cash dividends per common share $ 0.60 0.60 0.60 0.60
Average number of common and
common equivalent shares (in thousands) 78,768 77,535 75,046 73,837
Average common equity $1,057,931 1,266,715 1,327,624 1,317,888
Return on average common equity (%) (c) 14.5 10.2 8.1 4.2
Book value per common share $ 14.33 12.81 18.26 17.50
Market price - high (d) $ 28 26 5/8 28 7/8 21 5/8
Market price - low (d) $ 19 7/8 24 3/4 19 5/8 14
----------------------------------------------------------------------------------------------------------
Total debt $1,912,898 1,531,446 1,668,947 1,988,509
Long-term debt $1,794,795 1,374,943 1,499,765 1,742,911
Debt to equity (%) 169 155 113 143
Debt to tangible equity (%) 227 202 135 176
----------------------------------------------------------------------------------------------------------
Year-end assets $5,014,473 4,258,388 4,678,533 4,843,991
Return on average assets (%) (e) 3.3 2.7 2.3 0.5
Average asset turnover (%) (e) 99.6 103.2 104.0 95.2
----------------------------------------------------------------------------------------------------------
Cash flow from continuing operating activities
and asset sales $1,096,222 995,954 1,066,936 855,373
Capital expenditures, including capital leases $1,770,162 1,237,521 1,071,034 598,044
----------------------------------------------------------------------------------------------------------
Number of vehicles (e) 188,831 168,278 160,188 155,159
Number of employees (e) 43,095 37,949 37,336 35,566
==========================================================================================================
</TABLE>
(a) Earnings from continuing operations for 1989 include a pretax charge
of $83 million ($52 million after tax or $0.67 per common share)
related to several unusual items, primarily anticipated losses on
accelerated vehicle dispositions, changes to prior years' workers'
compensation loss reserves and staff and facility reductions. Earnings
from continuing operations for 1988 include a pretax charge of $66
million ($50 million after tax or $0.63 per common share) related to a
provision for business restructurings and revaluation of goodwill.
(b) Net loss for 1993 includes the cumulative effect of a change in
accounting resulting in an after tax charge of $25 million ($0.33 per
common share), and an after tax charge of $169 million ($2.18 per
common share) related to the discontinued aviation services
subsidiaries. Net earnings for 1992 include an after tax gain of $6
million ($0.08 per common share), related to the final disposition of
the discontinued aircraft leasing business. Net earnings for 1991 and
1990 include after tax charges of $52 million ($0.70 per common share)
and $36 million ($0.48 per common share), respectively, for the
discontinuance of the same business. Net earnings for 1989 and 1988
include, in addition to the items discussed in (a) above, after tax
extraordinary losses of $6 million ($0.08 per common share) and $19
million ($0.23 per common share), respectively, related to the early
retirement of debt. Also included in 1988 is a one-time favorable
adjustment of $81 million ($1.02 per common share) for the cumulative
effect of a change in accounting for income taxes. Net earnings
(loss) for all years include the results of discontinued operations.
48
<PAGE> 51
<TABLE>
<CAPTION>
Ryder System, Inc. and Consolidated Subsidiaries
------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share amounts) 1990 1989 1988 1987 1986 1985 1984
------------------------------------------------------------------------------------------------------------------------------------
<S> <S> <C> <C> <C> <C> <C> <C>
Revenue 3,950,024 3,889,063 3,842,724 3,621,526 3,105,632 2,723,705 2,445,038
Earnings from continuing operations (a):
Before income taxes 98,690 54,090 167,131 237,560 232,855 188,686 191,125
After income taxes 58,632 31,975 100,249 149,615 139,317 118,496 115,736
Per common share 0.64 0.31 1.18 1.82 1.80 1.64 1.62
Net earnings (loss) (b) 42,680 45,986 197,173 187,113 160,933 125,316 135,908
Per common share (b) 0.43 0.50 2.40 2.29 2.09 1.73 1.91
------------------------------------------------------------------------------------------------------------------------------------
Cash dividends per common share 0.60 0.60 0.56 0.52 0.44 0.40 0.36
Average number of common and
common equivalent shares (in thousands) 74,769 77,275 79,641 79,621 74,898 72,410 71,226
Average common equity 1,365,269 1,419,226 1,406,470 1,227,372 957,084 814,897 702,972
Return on average common equity (%) (c) 5.0 3.1 9.1 14.8 16.3 15.4 16.8
Book value per common share 18.06 18.24 18.71 16.75 14.72 12.20 10.84
Market price - high (d) 23 3/8 31 1/8 32 1/2 43 35 1/2 24 5/8 19 5/8
Market price - low (d) 12 1/4 19 3/4 22 5/8 20 21 1/2 14 5/8 12 3/4
------------------------------------------------------------------------------------------------------------------------------------
Total debt 2,402,741 2,674,884 2,576,568 2,614,018 2,037,824 1,553,100 1,055,471
Long-term debt 1,883,869 2,151,411 2,281,604 2,476,715 1,866,980 1,459,235 1,012,054
Debt to equity (%) 168 180 162 185 164 160 138
Debt to tangible equity (%) 213 226 202 232 214 231 151
------------------------------------------------------------------------------------------------------------------------------------
Year-end assets 5,263,498 5,690,450 5,639,674 5,450,809 4,526,087 3,643,599 2,718,591
Return on average assets (%) (e) 1.1 0.5 2.0 3.5 3.6 3.8 4.8
Average asset turnover (%) (e) 88.7 83.0 83.5 87.2 83.4 87.2 100.6
------------------------------------------------------------------------------------------------------------------------------------
Cash flow from continuing operating activities
and asset sales 1,093,739 1,017,418 1,004,776 1,006,819 891,601 697,987 658,935
Capital expenditures, including capital leases 787,740 1,032,056 1,120,751 1,157,993 758,450 768,509 865,463
------------------------------------------------------------------------------------------------------------------------------------
Number of vehicles (e) 160,983 163,082 162,633 153,848 134,987 109,644 100,654
Number of employees (e) 35,591 37,628 40,625 36,811 30,865 24,624 21,688
====================================================================================================================================
</TABLE>
(c) Excludes the cumulative effect of changes in accounting and special
charges and gains related to discontinued operations.
(d) On December 7, 1993, the company completed the spin off of its
aviation services subsidiaries by distributing to common stockholders
one share of Aviall, Inc. common stock valued at $16.25 for each four
Ryder System, Inc. common shares owned. The high and low presented
for 1993 were the values of the company's common stock after the spin
off. The high and low for 1993 prior to the spin off were 33 1/2 and
26 1/4, respectively.
(e) Excludes discontinued operations.
Average common shares and all per share information have been adjusted for 3%
stock dividends in 1983-1984, the March 1985 two-for-one split and the May
1986 three-for-two split, as appropriate.
49
<PAGE> 52
GLOSSARY OF INDUSTRY TERMS
[PHOTO]
Ryder auto carriers
transported nearly 6.3 million
vehicles in 1994.
ASSET MANAGEMENT:
A Ryder core competency that encompasses the specification,
purchasing, managing, maintaining, and disposing of vehicles at the
appropriate time, all to increase return on investment.
ASSET RATIONALIZATION:
A process that audits a company's transportation and distribution
assets and compares them against an optimum supply chain design.
AUTOMOTIVE CARRIAGE:
A business that delivers finished vehicles to dealers from
manufacturing plants, ports and railheads. Automotive carriers often
provide other value-added services such as vehicle inspection, yard
management and finished vehicle detailing.
BACKHAUL:
The return movement of a vehicle from its original destination back to
its point of origin with a payload.
CONTRACT CARRIER:
A for-hire carrier that serves only shippers with which the carrier
has a continuing contract, and not the general public.
CONTRACT LOGISTICS:
The use of a third-party provider to plan, implement and control the
efficient, cost-effective flow and storage of raw materials,
in-process inventory, finished goods and related information from the
point of origin to the point of consumption, or any portion thereof.
CUBED OUT:
A term that refers to the percentage of a vehicle's cubic hauling
space that is utilized in a shipment. If a particular vehicle is 100%
"cubed out," it has no additional space in which to carry freight.
CYCLE TIME:
The time it takes for a business to receive, fulfill and then deliver
an order to a customer. Once measured only in days, many industries
now measure it in hours.
DEDICATED CONTRACT CARRIAGE:
A third-party contractual service that dedicates vehicles and drivers
to a single customer for its exclusive use, usually done in a closed
loop or fixed route situation.
EFFICIENT CONSUMER RESPONSE (ECR):
A grocery industry initiative designed to replenish stock on store
shelves based on actual consumer demand rather than by demand
forecasting.
50
<PAGE> 53
[PHOTO]
Home Depot is one
of Ryder's more
than 13,000 full service
truck leasing customers.
ELECTRONIC DATA INTERCHANGE (EDI):
Computer-to-computer communication between two or more companies that
is used to generate documents like purchase orders and
invoices. EDI also enables firms to access the information systems of
suppliers, customers and carriers to determine real-time status of
shipments and inventory.
FINANCE LEASE:
Often, a full-payout agreement in which the customer, at the end of
the lease term, assumes ownership of the vehicle or is provided with a
purchase option. The lessee is usually responsible for maintenance,
taxes and insurance.
FLOW-THROUGH DISTRIBUTION:
A process in which products from multiple locations are brought into a
central facility (sometimes called a cross-dock), are re-sorted by
delivery destination and shipped in the same day. This eliminates
warehousing, reduces inventory levels and speeds order turnaround
time. The designing, location and management of flow-through
distribution locations is often a part of a company's logistics
reengineering strategy.
FULL SERVICE TRUCKLEASE:
A full service truck lease is a system that provides the customer with
a truck and a variety of support services for a single monthly lease
payment. Full service leases may include features like preventive
maintenance, emergency roadside repairs, equipment evaluations and
specifications, fuel, administrative support, driver support, safety
programs, and the return of vehicles at the end of the contract term.
INTEGRATED LOGISTICS:
A system-wide management view of the entire supply chain, from raw
materials supply through finished goods distribution. It requires
managing all functions that make up the supply chain as a single
entity, rather than managing individual functions separately.
INTERMODAL TRANSPORTATION:
Transporting freight by using two or more transportation modes. An
example would be freight in containers which might first be taken to a
port by truck, transported by ship, then carried by rail, and finally
be transferred back to a truck for delivery to its final destination.
INVENTORY DEPLOYMENT:
A technique for reducing the number of warehouses required by
replacing excess inventory with event-driven information derived from
tracking the location of inventory at rest as well as in motion. It is
typically done using bar-coding and radio frequency technology, which
eliminate paperwork.
51
<PAGE> 54
[PHOTO]
Ryder Dedicated Logistics
delivers parts to Saturn's
manufacturing facility
just in time, 300 times a day,
365 days a year.
INVENTORY MANAGEMENT:
The process of ensuring the availability of products through inventory
administration activities such as planning, stock positioning, and
monitoring the age of the product.
INVENTORY TURNS:
The number of times inventory is sold during a period, generally
measured in turns per year.
JUST-IN-TIME (JIT):
An in-bound manufacturing strategy that smoothes material flow into
assembly and manufacturing plants. JIT minimizes inventory investment
by providing timely, sequential deliveries of product exactly where
and when it is needed, from a multitude of suppliers. Traditionally an
automotive strategy, it is being introduced into many other
industries.
LESS-THAN-TRUCKLOAD (LTL) CARRIERS:
Trucking companies that consolidate and then transport small shipments
of freight by utilizing a network of terminals and relay points.
LOGISTICS:
The function which encompasses materials management and physical
distribution.
LOGISTICS CHANNEL:
The network of supply chain participants engaged in storage, handling,
transfer, transportation and communications functions that contribute
to the efficient flow of goods.
OUTSOURCING:
Subcontracting business functions or processes such as logistics and
transportation services to an outside firm, instead of doing them
in-house.
PRIVATIZATION:
A trend in the U.S. public sector brought about by the need to gain
cost and service efficiencies available through private management of
public services.
PUBLIC TRANSIT:
The transportation of people by public sector organizations to and
from work or other destinations. There is a trend in the public sector
to outsource public transit to third-party providers, or "privatize,"
in order to gain cost and service efficiencies.
QUICK RESPONSE (QR) DELIVERY:
A rapidly expanding delivery process using information technology to
measure customer demand, enabling retailers to have stock on shelves
when needed while maintaining minimum backroom inventories.
52
<PAGE> 55
[PHOTO]
Ryder has more
than 34,000 vehicles
in its consumer truck
rental fleet.
RENTAL DAY:
The basic unit used to measure fleet utilization rates by companies
that are in the business of renting vehicles. The total number of
rental days recorded by commercial truck rental companies is an
indicator that measures businesses' incremental need to ship products.
REVERSE LOGISTICS:
Historically, the logistics process ended once products reached
the consumer. Reverse logistics melds classic logistics activities with
conservation, recycling and disposal - activities that center around
preserving the environment and the need to conserve raw materials.
ROLLING STOCK:
In the transportation business, rolling stock traditionally has
meant "vehicles." The term is used in logistics to refer to inventory
in motion, not at rest.
STUDENT TRANSPORTATION:
The logistics business that transports students to and from
school and extracurricular activities.
SUPPLY CHAIN MANAGEMENT:
An integrating process that combines the classic logistics
functions of physical distribution and materials management with the
purchasing of raw materials and/or inventory and sales, marketing,
information technology and strategic planning functions.
[PHOTO]
Ryder Student
Transportation Services
transports more than
440,000 students to and
from school each day.
THIRD-PARTY PROVIDER:
A firm that supplies goods and services such as transportation
and logistics to another company.
TIME-BASED COMPETITION:
A competitive marketing strategy based on a company's ability to
deliver its products to customers faster than its competition.
TRUCKLOAD (TL) CARRIERS:
Trucking companies that move full truckloads of freight directly from
the point of origin to its destination.
TRUCK RENTAL:
A short-term transaction, generally under 12 months, that
allows the customer the use of a truck for a specified period of time,
generally measured in "rental days." Rental can be used to supplement a
leased or privately-owned fleet during short periods of peak need to
execute rush orders or handle excess volume, or to test new routes and
distribution channels.
UTILIZATION RATE:
A fleet productivity measurement that tracks the percentage of time
that a truck or vehicle is being used or rented.
53
<PAGE> 56
<TABLE>
<S> <C>
BOARD OF DIRECTORS CORPORATE MANAGEMENT
M. ANTHONY BURNS M. ANTHONY BURNS
Chairman, President and Chairman, President and
Chief Executive Officer Chief Executive Officer
ARTHUR H.BERNSTEIN (1,3) JAMES M. HERRON
President and Chief Executive Officer, Senior Executive Vice President and
Bancorp Capital Group,Inc. General Counsel
EDWARD T. FOOTE II (2,3) EDWIN A. HUSTON
President, University of Miami Senior Executive Vice President -
Finance and Chief Financial Officer
JOHN A. GEORGES (1,4)
Chairman and C. ROBERT CAMPBELL
Chief Executive Officer, Executive Vice President -
International Paper Company Human Resources and Administration
VERNON E. JORDAN, JR. (1,4) J. ERNEST RIDDLE
Senior Partner, Executive Vice President -
Akin, Gump, Strauss, Marketing
Hauer & Feld, LLP
R. RAY GOODE
HOWARD C. KAUFFMANN (2,4) Senior Vice President -
Retired President, Public Affairs
Exxon Corporation
JOHN R. HADDOCK
DAVID T. KEARNS (1,3) Senior Vice President -
Chairman, Industry and Commercial Marketing
New American Schools Development
Corporation and Retired Chairman BRUCE D. PARKER
and Chief Executive Officer, Senior Vice President -
Xerox Corporation MIS and Chief Information Officer
LYNN M. MARTIN (2,3) KEVIN M. PETERS
Former U.S. Secretary of Labor; Senior Vice President -
Chairperson, Corporate Account Sales
Deloitte & Touche's Council
for the Advancement of Women; ANTHONY G. TEGNELIA
advisor to Deloitte & Touche; and Senior Vice President and Controller
Professor, J.L. Kellogg Graduate School of
Management at Northwestern University STEVEN R. GOLDBERG
Vice President and Treasurer
JAMES W. MCLAMORE (1,4)
Chairman Emeritus, JOSHUA HIGH
Burger King Corporation Vice President - Corporate Tax
PAUL J. RIZZO (2,3) J. WAYNE JOHNSON
Retired Vice Chairman, Vice President - Risk Management
International Business
Machines Corporation LISA A. RICKARD
Vice President - Federal Affairs
DONALD V. SEIBERT (1,4)
Retired Chairman of the Board and FRED RAY STUEVER
Chief Executive Officer, Vice President -
J.C. Penney Company, Inc. Environment, Health and Safety
HICKS B. WALDRON (2,4) H. JUDITH CHOZIANIN
Retired Chairman and Secretary
Chief Executive Officer,
Avon Products, Inc.
ALVA O. WAY (2,3)
Chairman,
IBJ Schroder Bank &
Trust Company
MARK H. WILLES (2,3)
Vice Chairman,
General Mills, Inc.
(1) Audit Committee
(2) Compensation Committee
(3) Finance Committee
(4) Committee on Directors and
Public Responsibility
</TABLE>
54
<PAGE> 57
<TABLE>
<S> <C>
OPERATING MANAGEMENT
VEHICLE LEASING & RYDER PUBLIC
SERVICES DIVISION TRANSPORTATION SERVICES
President
RYDER COMMERCIAL Gerald R. Riordan
LEASING &SERVICES
President Senior Vice President &
Dwight D. Denny General Manager
John H. Dorr
Senior Vice President
Franklin W. Stephens Vice Presidents &
General Managers
Vice Presidents & John A. Elliott
General Managers (Ryder Student Transportation
Joel E. Biggerstaff Services, Inc.)
(Southeast Region) John C. Green
Christopher H. Culley (Managed Logistics
(Mid West Region) Systems, Inc.)
Robert A. Dickinson Bobby J. Griffin
(Southwest Region) (ATE Management and
John R. Hosmer Service Company,Inc.)
(Mid Atlantic Region)
Stephen E. Hunt
(Northeast Region) AUTOMOTIVE CARRIER
Edward R. Justis, Jr. DIVISION
(Mid South Region)
William L. O'Donnell RYDER AUTOMOTIVE CARRIER
(Great Lakes Region) GROUP, INC.
Douglas M. Slack President
(West Region) James B. Griffin
Vice Presidents Executive Vice President
George E. Arseneau Michael J. Wagner
Thomas D. Hjertquist
Michael W. Kuryla Senior Vice President
Tracy A. Leinbach Steven C. Nichols
J. Randall Nobles
Robert P. Tabb Vice President
Rolland G. Hill
RYDER TRUCK RENTAL
CANADA LTD. A.T.G. AUTOMOTIVE
Vice President & TRANSPORT GROUP, INC.
General Manager Vice President &
Gordon J. Box General Manager
David N. Flett
RYDER DEDICATED
LOGISTICS, INC. BLAZER TRUCK LINES, INC.
President Vice President &
Larry S. Mulkey General Manager
Donn B. Whitmer
Senior Vice President
William D. Zollars RYDER AUTOMOTIVE
OPERATIONS, INC.
Vice Presidents Senior Vice President
William A. Baum Bruce R. LeMar
Jerry W. Bowman
Enrique P. Fiallo Vice Presidents
Shar Javad Ronald R. Borges
C. Michael McCanta Ronald L. Butterbaugh
Miles M. Raper Stephen M. Donly
Vincent E. Fortuna
RYDER CONSUMER John S.Gottlieb
TRUCK RENTAL Gerald J. MacDonald
President Craig J. McGrath
Gerald R. Riordan W. Joseph Tripp
Area Vice Presidents
Raymond W. Casey INTERNATIONAL
(Eastern Area) DIVISION
Wayne M. Mincey
(Central Area) Senior Vice President &
Jack P. Summerville General Manager
(Western Area) Randall E.West
Vice Presidents Vice Presidents
David S. Russell Dennis M. Custage
C. Mack Kenneth V. Eckhart
Scott R. Francis
Glenn A. Schneider
RYDER PLC
Managing Director
John Hodges
RYDER TRANSPORT
SERVICES GMBH
Managing Director
Rainer Sandow
RYDER DE MEXICO,
S.A. DE C.V.
Managing Director
Jaime White Ibanez
</TABLE>
55
<PAGE> 58
RYDER IN THE MARKETPLACE
VEHICLE LEASING & SERVICES DIVISION
Ryder Commercial Leasing & Services
Ryder Dedicated Logistics, Inc.
Ryder Consumer Truck Rental
Ryder Student Transportation Services,Inc.
Ryder Truck Rental Canada Ltd.
ATE Management and Service Company,Inc.
Ryder Move Management,Inc.
Managed Logistics Systems, Inc.
AUTOMOTIVE CARRIER DIVISION
Automotive Transport Inc.
Blazer Truck Lines, Inc.
Commercial Carriers, Inc.
Delavan
F.J. Boutell Driveaway Co., Inc.
MCL Motor Carriers Limited
QAT, Inc.
INTERNATIONAL DIVISION
Ryder Plc (United Kingdom)
Ryder Transport Services GmbH (Germany)
Ryder Polska Sp.z o.o (Poland)
Ryder de Mexico, S.A. de C.V. (Mexico)
DIVIDEND REINVESTMENT PLAN
Stockholders may automatically reinvest their dividends and cash in additional
shares of Ryder System stock by enrolling in the company's Dividend
Reinvestment Plan. Costs of the plan are paid by the company.
Information about the Dividend Reinvestment Plan may be obtained by
writing to the following address:
The First National Bank of Boston
Shareholder Services Division
Dividend Reinvestment Unit M/S 45-01-06
Post Office Box 1681
Boston, Massachusetts 02105-1681
CORPORATE INFORMATION
ANNUAL MEETING
The annual meeting of stockholders of Ryder System, Inc. will be held at 11:00
a.m., Friday, May 5, 1995, at the Miami Airport Hilton and Towers, 5101 Blue
Lagoon Drive, Miami,Florida. A formal notice of the meeting, together with a
proxy statement and a form of proxy, was mailed to each stockholder with this
annual report.
STOCKHOLDER INFORMATION AND 1994 FORM 10-K
For stockholder information or to obtain without charge a copy of Ryder
System's Form 10-K Annual Report to the Securities and Exchange Commission,
which will be available after March 31, 1995, please write to:
Robert H. Tromberg
Group Director - Investor Relations
Ryder System, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
AUDITORS
KPMG Peat Marwick LLP
Certified Public Accountants
One Biscayne Tower
Suite 2900
2 South Biscayne Boulevard
Miami,Florida 33131
TRANSFER AGENT AND REGISTRAR
The First National Bank of Boston
Shareholder Services Division
Investor Relations Unit M/S 45-02-09
Post Office Box 644
Boston, Massachusetts 02105-0644
(617) 575-3170
COMMON STOCK LISTINGS
New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
TRADING SYMBOL: R
EXECUTIVE OFFICES
Ryder System,Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
(305) 593-3726
56
<PAGE> 59
CORPORATE RESPONSIBILITY
In communities where its employees live and work, Ryder supports efforts which
favorably impact the ability of women, minorities and the disadvantaged to
participate more fully in society. The company believes such efforts are not
only the right things to do, but also good business.
Ryder addresses corporate responsibility in two ways, through Ryder-based
programs designed to expand opportunities for women and minorities and through
support of community organizations with the same focus.
To Ryder, expanding opportunities for women and minorities provides a
competitive advantage, both domestically and in important emerging global
markets. The company believes so strongly in this advantage that it now
requires employement diversity objectives as part of annual business plans for
all bonus-eligible management personnel.
To attract the best and brightest talent, including women and minority
employees, Ryder works with and receives excellent advice from groups such as
Catalyst, which represents women's issues; National Council of LaRaza, which
represents Hispanic issues; and the National Urban League, which represents
African American issues. Recruiting drives at historically black colleges and
universities such as Florida A&M University, Howard University and Morehouse
College also continue to be rich sources of qualified recruits. Of Ryder's
1994 MBA college recruits, more than 50% were women or minorities.
[PHOTO]
MEMBERS OF THE DIVERSITY COUNCIL MEET WITH TONY BURNS.
From left: CAELI MATTHEWS, PRESIDENT, RYDER WOMEN'S MANAGEMENT
ASSOCIATION; OFELIA SAN PEDRO, PRESIDENT, RYDER
HISPANIC NETWORK; LOLLY WALTON, PRESIDENT, RYDER
PROFESSIONAL SECRETARIES; AND MARY WALTON, PRESIDENT,
RYDER BLACK EMPLOYEE NETWORK.
The company has established employee network groups for the areas of Black
Employees, Hispanic Employees, Professional Secretaries and Women's Management.
These groups provide tangible business results through mentoring and
recruiting, and by offering special insights into ways to improve operations
and marketing. One interesting outgrowth has been an initiative to expand
market penetration in key minority markets.
The company's charitable contributions are made largely through the Ryder
System Charitable Foundation, which supports a wide array of local and national
causes aimed at bringing the disadvantaged more fully into the mainstream.
Reflecting a growing belief that education provides the best hope of
reaching that goal, a relatively large precentage of giving is made to programs
in this area. From the local classroom to the national level, the company
supports efforts to address the complex challenges facing today's educators.
Scholarships and financial aid are made available for minority students at
the community college, undergraduate and graduate levels through relationships
with specific schools as well as the United Negro College Fund and the Jackie
Robinson Foundation, which combines college scholarships with much-needed
hands-on business experience.
At home in South Florida, Ryder is a leader in meeting a variety of
community needs. The company provides active leadership and significant
financial support to such human needs groups as the United Way of Dade County.
Extending its educational focus to the arts, support for "in-school" programs
of the Florida Grand Opera, Coconut Grove Playhouse and Florida Philharmonic
helps expose people of all ages and backgrounds to new cultural arts
experiences. The company has made a significant gift to the South Florida
Performing Arts Center Foundation's capital campaign and is providing
leadership to that campaign, which will help fund construction of a new
performing arts complex in downtown Miami.
At Ryder, diversity and community involvement are fundamental elements of
its business philosophy, and the company also encourage its employees to be
active in the communities where they live and work. In doing so, the company
believes it not only extends a positive impact to the communities, but also
helps to develop business leadership skills in its employees.
57
<PAGE> 60
RYDER SYSTEM, INC.
3600 NW 82nd Avenue
Miami, Florida 33166
<PAGE> 1
EXHIBIT 21.1
RYDER SYSTEM, INC.
Subsidiaries as of March 1, 1995
<TABLE>
<CAPTION>
State/Country of
----------------
Name of Company Incorporation
--------------- -------------
<S> <C>
ATE Management and Service Company, Inc. Delaware
ATE Management of Duluth, Inc. Minnesota
A.T.G. Automotive Transport Group, Inc. Canada
Automobile Transport Inc. Canada
B & C, Inc. (1) Michigan
Blazer Truck Lines Inc. (2) Michigan
F. J. Boutell Driveaway Co., Inc. Michigan
Cape Area Transportation Systems, Inc. Massachusetts
Central Virginia Transit Management Company, Inc. Virginia
Commercial Carriers, Inc. (3) Michigan
Commuter Services, Inc. Virginia
E/H Service Corporation Wisconsin
Far East Freight, Inc. Florida
Forrest Rental Services Limited England
Harbor Drive Realty, Inc. Florida
H.N.S. Management Company, Inc. Connecticut
Managed Logistics System, Inc. Delaware
MCL Motor Carriers Limited Canada
Merrimack Valley Area Transportation Co., Corp. Massachusetts
Metro Service Corp. Wisconsin
Mid-South Transportation Management, Inc. Tennessee
Mitchell Self Drive Limited England
Murray Recon, Inc. New York
Network Sales, Inc. (4) Tennessee
Network Vehicle Central, Inc. Florida
Old Dominion Transit Management Company Virginia
OSHCO, Inc. Florida
Paratransit Brokerage Services, Inc. Massachusetts
Parking Management of Southwest Virginia, Inc. Virginia
QAT, Inc. Florida
RMX, Inc. (5) Delaware
RSI Acquisition Corp. Delaware
RSI Purchase Corp. Delaware
RTA Transit Services, Inc. Massachusetts
Ryder Automotive Carrier Group, Inc. Florida
Ryder Automotive Operations, Inc. Florida
Ryder Capital S.A. de C.V. Mexico
RYDERCORP Florida
RYDERCORP, Inc. Delaware
Ryder de Mexico S.A. de C.V. Mexico
Ryder Dedicated Capacity, Inc. Tennessee
Ryder Dedicated Logistics, Inc. (6) Delaware
Ryder Dedicated Logistics Limited England
Ryder Distribution Services Ltd. England
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
Ryder Driver Leasing, Inc. Florida
Ryder Energy Distribution Corporation Florida
Ryder (Europe) Limited England
Ryder Finance, Inc. Florida
Ryder Freight Broker, Inc. Virginia
Ryder International, Inc. Florida
Ryder Mexicana, S.A. de C.V. Mexico
Ryder Move Management, Inc. Oregon
Ryder Pension Fund Limited England
Ryder Plc England
Ryder Polska Sp. z o. o. Poland
Ryder Puerto Rico, Inc. Delaware
Ryder Realty, Inc. Delaware
Ryder Relocation Services, Inc. Florida
Ryder Services Corporation (7) Florida
Ryder Servicios S.A. de C.V. Mexico
Ryder St. Louis Redevelopment Corporation Missouri
Ryder Student Transportation Services, Inc. (8) Florida
Ryder System, B.V. Amsterdam, Netherlands
Ryder System, Ltd. England
Ryder System Holdings (UK) Limited England
Ryder Transport Services GmbH West Germany
Ryder Transport Services Limited England
Ryder Transportation Limited England
Ryder Truck Rental, Inc. (9) Florida
Ryder Truck Rental Canada Ltd. (10) Canada
Ryder Truck Rental Limited England
Ryder Truck Rental-One Way, Inc. Delaware
Ryder Truckstops, Inc. Florida
Ryder Vehicle Leasing & Sales Corp. Barbados
Saunders Leasing System of Canada Limited [Canada] - being dissolved
Southwestern Virginia Transit Management Company, Inc. Virginia
Terminal Service Co. (11) Washington
Transit Management Company of Laredo Texas
Transit Management of Alexandria, Inc. Virginia
Transit Management of Charlotte, Inc. North Carolina
Transit Management of Connecticut, Inc. Connecticut
Transit Management of Decatur, Inc. Illinois
Transit Management of Durham, Inc. North Carolina
Transit Management of Great Falls, Inc. Montana
Transit Management of Hamilton, Inc. Ohio
Transit Management of Jamestown, Inc. New York
Transit Management of Monroe County, Inc. Michigan
Transit Management of Nashua, Inc. New Hampshire
Transit Management of Richland, Inc. Ohio
Transit Management of St. Joseph, Inc. Missouri
Transit Management of Sioux Falls, Inc. South Dakota
Transit Management of Spartanburg, Inc. South Carolina
Transit Management of Tucson, Inc. Arizona
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
Transit Management of Tyler, Inc. Texas
Transit Management of Washoe, Inc. Nevada
Transit Management of Waukesha, Inc. Wisconsin
Transport Support, Inc. Delaware
Unilink Contract Hire Limited England
UniRyder Limited England
United Contract Hire Limited England
Westland Trailer Co., S.A. de C.V. [Mexico] - being dissolved
Westside Corporate Center, Inc. Florida
</TABLE>
(1) Kentucky and Wisconsin: B & C, Inc. of Michigan
(2) California: Michigan Blazer Truck Lines Inc.
(3) Florida: d/b/a Commercial Carriers of Michigan, Inc.
Michigan and New York: d/b/a Delavan
(4) Ontario, Canada: d/b/a Vehicle Network Sales
(5) Texas: Delaware RMX, Inc.
(6) Arizona, Arkansas, California, Colorado, Connecticut, Delaware,
Florida, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maine,
Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New
Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon,
Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah,
Virginia and Washington: d/b/a LogiCorp.
Florida: d/b/a UniRyder
(7) New Jersey, Ohio and Texas: d/b/a Ryder Claims Services Corporation
(8) California, Colorado, Connecticut, Illinois, Minnesota, Missouri,
Montana and New Jersey: d/b/a Ryder Transportation
California: d/b/a Ryder
Colorado: d/b/a Grand Connection
Illinois: d/b/a North American Motor Coach
Massachusetts: d/b/a DePalma Transportation Sales
Minnesota: d/b/a Kare Kabs
New York: d/b/a Ryder Student Transportation
Rhode Island: d/b/a Ryder Student Transportation Sales
<PAGE> 4
(9) Maryland and Virginia: d/b/a Ryder/Jacobs
Michigan: d/b/a Atlas Trucking, Inc.
Michigan: d/b/a Ryder Atlas Trucking of Western Michigan
(10) French Name: Location de Camions Ryder du Canada Ltee.
Canadian Provinces: Ryder Dedicated Logistics
(11) Florida: Terminal Service Co. of Washington
<PAGE> 1
EXHIBIT 23.1
KPMG Peat Marwick LLP
One Biscayne Tower Telephone 305 358 2300 Telefax 305 577 0544
Suite 2900
2 South Biscayne Boulevard
Miami, FL 33131
Independent Auditors' Consent
To the Board of Directors and Shareholders
Ryder System, Inc.:
We consent to incorporation by reference in the following Registration
Statements on Forms S-3 and S-8 of Ryder System, Inc. of our reports dated
February 7, 1995, relating to the consolidated balance sheets of Ryder System,
Inc. and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of earnings and cash flows for each of the years in the
three-year period ended December 31, 1994, which reports appear in, or are
incorporated by reference in, the December 31, 1994 annual report on Form 10-K
of Ryder System, Inc.:
Form S-3:
- Registration Statement No. 33-20359 covering $1,000,000,000
aggregate principal amount of debt securities.
- Registration Statement No. 33-50232 covering $800,000,000
aggregate principal amount of debt securities.
Form S-8:
- Registration Statement No. 33-20608 covering the Ryder System
Employee Stock Purchase Plan.
- Registration Statement No. 33-4333 covering the Ryder Employee
Savings Plan.
- Registration Statement No. 1-4364 covering the Ryder System
Profit Incentive Stock Plan.
- Registration Statement No. 33-69660 covering the Ryder System,
Inc. 1980 Stock Incentive Plan.
- Registration Statement No. 33-37677 covering the Ryder System
UK Stock Purchase Scheme.
- Registration Statement No. 33-442507 covering the Ryder Student
Transportation Services, Inc. Retirement/Savings Plan.
- Registration Statement No. 33-63990 covering the Ryder System,
Inc. Directors' Stock Plan.
- Registration Statement No. 33-58001 covering the Ryder System,
Inc. Employee Savings Plan A.
<PAGE> 2
Independent Auditors' Consent
Ryder System, Inc.
Page 2
- Registration Statement No. 33-58003 covering the Ryder System,
Inc. Employee Savings Plan B.
- Registration Statement No. 33-58045 covering the Ryder System,
Inc. Savings Restoration Plan.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Act.
KPMG PEAT MARWICK LLP
Miami, Florida
March 29, 1995
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ Arthur H. Bernstein
------------------------
Arthur H. Bernstein
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Arthur H. Bernstein, personally known to me and known to me
to be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ Edward T. Foote II
-----------------------
Edward T. Foote II
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Edward T. Foote II, personally known to me and known to me
to be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 27 day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ Susan E. Myers
----------------------------------
Notary Public
My commission expires:
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ John A. Georges
--------------------
John A. Georges
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared John A. Georges, personally known to me and known to me to
be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ Vernon E. Jordan, Jr.
--------------------------
Vernon E. Jordan, Jr.
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Vernon E. Jordan, Jr., personally known to me and known to
me to be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ Howard C. Kauffmann
------------------------
Howard C. Kauffmann
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Howard C. Kauffmann, personally known to me and known to me
to be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ David T. Kearns
--------------------
David T. Kearns
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared David T. Kearns, personally known to me and known to me to
be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ Lynn M. Martin
-------------------
Lynn M. Martin
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Lynn M. Martin, personally known to me and known to me to be
the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ James W. McLamore
----------------------
James W. McLamore
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared James W. McLamore, personally known to me and known to me to
be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ Paul J. Rizzo
------------------
Paul J. Rizzo
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Paul J. Rizzo, personally known to me and known to me to be
the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ Donald V. Seibert
----------------------
Donald V. Seibert
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Donald V. Seibert, personally known to me and known to me to
be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ Hicks B. Waldron
---------------------
Hicks B. Waldron
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Hicks B. Waldron, personally known to me and known to me to
be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ Alva O. Way
----------------
Alva O. Way
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Alva O. Way, personally known to me and known to me to be
the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James M. Herron, Edward R. Henderson
and Ann E. Neal, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for the
undersigned and in his or her name, place and stead, in any and all capacities,
to sign the Ryder System, Inc. Form 10-K (Annual Report pursuant to the
Securities Exchange Act of 1934) for the fiscal year ended December 31, 1994
(the "Form 10-K"), and any and all amendments thereto, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and with the New York Stock Exchange,
Chicago Stock Exchange and Pacific Stock Exchange, granting unto each said
attorney-in-fact and agent full power and authority to perform every act
requisite and necessary to be done in connection with the execution and filing
of the Form 10-K and any and all amendments thereto, as fully for all intents
and purposes as he or she might or could do in person, hereby ratifying all
that each said attorney-in-fact and agent, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
/s/ Mark H. Willes
-------------------
Mark H. Willes
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Mark H. Willes, personally known to me and known to me to be
the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 17th day of February, 1995 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
----------------------------------
Notary Public
My commission expires:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RYDER
SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AND
STATEMENTS OF EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 75,878
<SECURITIES> 0
<RECEIVABLES> 316,855
<ALLOWANCES> 0
<INVENTORY> 57,124
<CURRENT-ASSETS> 758,822
<PP&E> 6,375,394
<DEPRECIATION> 2,646,002
<TOTAL-ASSETS> 5,014,473
<CURRENT-LIABILITIES> 1,093,153
<BONDS> 1,794,795
<COMMON> 539,101
0
0
<OTHER-SE> 589,923
<TOTAL-LIABILITY-AND-EQUITY> 5,014,473
<SALES> 0
<TOTAL-REVENUES> 4,685,603
<CGS> 0
<TOTAL-COSTS> 4,280,349
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 144,735
<INCOME-PRETAX> 260,519
<INCOME-TAX> 106,990
<INCOME-CONTINUING> 153,529
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 153,529
<EPS-PRIMARY> 1.95
<EPS-DILUTED> 0
</TABLE>
