<PAGE> 1
================================================================================
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, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE 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)
<TABLE>
<CAPTION>
<S> <C>
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)
</TABLE>
Indicate by check mark whether the registrant (l) 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, 1996, was $1,852,783,055. The number of shares of Ryder System,
Inc. Common Stock ($.50 par value) outstanding as of January 31, 1996, was
79,317,214.
<TABLE>
<CAPTION>
<S> <C>
Documents Incorporated by Part of Form 10-K into which
Reference into this Report Document is Incorporated
------------------------------ ----------------------------
Ryder System, Inc. 1995 Annual Parts I, II and IV
Report to Shareholders*
Ryder System, Inc. 1996 Proxy Part III
Statement
</TABLE>
*The Ryder System, Inc. 1995 Annual Report to Shareholders is
incorporated herein only to the extent specifically stated.
================================================================================
[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, transferable or
exchangeable 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 due None
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, Series None
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, Series None
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, Series None
9, due 9 months or more 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 10, due 9 months or more from date of
issue at rate based on market rates at time
of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 11, due 9 months or more from date of
issue at rate based on market rates at time
of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 12, due 9 months or more from date of
issue at rate based on market rates at time
of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 13, due 9 months or more 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............................................... 11
Item 3 Legal Proceedings........................................ 11
Item 4 Submission of Matters to a Vote of Security Holders...... 12
PART II
Item 5 Market for Registrant's Common Equity and Related
Stockholder Matters ................................... 13
Item 6 Selected Financial Data.................................. 13
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 13
Item 8 Financial Statements and Supplementary Data.............. 13
Item 9 Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................... 13
PART III
Item 10 Directors and Executive Officers of the Registrant....... 14
Item 11 Executive Compensation................................... 14
Item 12 Security Ownership of Certain Beneficial Owners and
Management............................................. 14
Item 13 Certain Relationships and Related Transactions........... 14
PART IV
Item 14 Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.............................................. 15
</TABLE>
4
<PAGE> 5
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) integrated logistics, including dedicated contract carriage, the
management of common carriers, inventory deployment, and information
technology; 2) full service leasing and short-term rental of trucks, tractors
and trailers; 3) public transportation management, operations and maintenance
services, and student transportation services; and 4) transportation of new
automobiles and trucks. The Company's main operating segments are Vehicle
Leasing & Services (which is engaged in the businesses described in 1) through
3) above) and Automotive Carriers (which is engaged in the business described
in 4) above). General Motors Corporation ("GM") is the largest single customer
of the Company, accounting for approximately 9%, 10% and 11% of consolidated
revenue of the Company in 1995, 1994 and 1993, respectively.
At December 31, 1995, the Company and its subsidiaries had a fleet of 203,932
vehicles and 44,503 employees.(1)
Segment Information
Financial information about industry segments is incorporated by reference from
the "Financial Review" on pages 18 through 28 and the "Notes to Consolidated
Financial Statements - Segment Information" on page 42 of the Ryder System,
Inc. 1995 Annual Report to Shareholders.
Vehicle Leasing & Services
The Vehicle Leasing & Services Division, which is comprised of Ryder Dedicated
Logistics, Inc. ("Ryder Dedicated Logistics"), the Commercial Leasing and
Services and Consumer Truck Rental Divisions of Ryder Truck Rental, Inc. ("Ryder
Commercial Leasing & Services" and "Ryder Consumer Truck Rental," respectively),
the Ryder Public Transportation Services group of companies
("Ryder Public Transportation"), and Ryder International, Inc. ("Ryder
International"), provides a wide variety of highway
transportation services, including integrated logistics (including dedicated
contract carriage, the management of common carriers, inventory deployment, and
information technology), full service leasing of trucks, tractors and trailers,
commercial and consumer truck rental, contract and non-contract truck
maintenance, public transportation management, operations and maintenance
services, and student transportation services. As of December 31, 1995, the
Vehicle Leasing & Services Division had 197,029 vehicles and 39,383 employees
(excluding the personnel described in footnote 1 below). The total revenue
contributed by the Vehicle Leasing & Services Division was 89%, 86% and 85% of
the consolidated revenue of the Company in 1995, 1994 and 1993, respectively.
Through Ryder Dedicated Logistics, the Vehicle Leasing & Services Division
provides integrated logistics services (a system-wide management view of a
customer's entire supply chain, from raw materials supply through finished
goods distribution), and custom-tailored commercial and consumer product
distribution, including dedicated contract carriage, the management of common
carriers, inventory deployment, and information technology, from 747 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 (including cross docking and flow-through
distribution), transportation management, vehicle dispatch, just-in-time
delivery, and information systems support. Logistics systems include modal
procurement and management of all modes of transportation, shuttles, interstate
long-haul operations,
- -------------------------
(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.
5
<PAGE> 6
just-in-time service to assembly plants, and factory-to-warehouse-to-retail
facility service. These services are used in the automotive, paper and paper
packaging, chemical, electronic and office equipment, news, food and beverage,
housing, and general retail industries, along with other industries. Ryder
Dedicated Logistics specializes in inbound and aftermarket automotive parts
delivery. These specialized services are used by customers such as GM
(including Saturn), Chrysler Corporation ("Chrysler"), Toyota Motor
Manufacturing USA Inc. ("Toyota"), Ford Motor Company ("Ford"), and various
auto parts retailers. In 1995, Ryder Dedicated Logistics continued to expand
its presence in the logistics market through internal growth.
Through Ryder Commercial Leasing & Services, the Vehicle Leasing & Services
Division provides full service truck leasing to more than 12,400 customers
(ranging from large national enterprises to small companies), with a fleet of
91,697 vehicles (including 12,623 vehicles leased to affiliates), through 1,032
locations in 49 states, Puerto Rico, and 8 Canadian provinces. Under a full
service lease, Ryder Commercial Leasing & Services provides customers with
vehicles, maintenance, supplies and related equipment necessary for operation,
while the customers furnish and supervise their own drivers, and dispatch and
exercise control over the vehicles. Additionally, Ryder Commercial Leasing &
Services provides contract maintenance services to more than 1,250 customers,
servicing 34,610 vehicles (including approximately 7,900 vehicles owned by
affiliates) under maintenance contracts, and provides short-term commercial
truck rental, which tends to be seasonal, to commercial customers to supplement
their fleets during peak business periods. In 1995, Ryder Commercial Leasing &
Services focused on the expansion of its long-term contractual businesses such
as the full service leasing of trucks, tractors and trailers, and contract
truck maintenance, through internal growth. Additionally in 1995, Ryder
Commercial Leasing & Services continued to develop new services for customers.
Such developments include the Ryder Citicorp Finance Lease, which was
introduced to select customers in the fall of 1995. By expanding its vehicle
financing options, Ryder Commercial Leasing & Services gives customers the
flexibility to choose full service lease or finance lease with contract
maintenance for their vehicles. The Ryder Citicorp Finance Lease is scheduled
to be rolled out nationwide in 1996.
Through Ryder Consumer Truck Rental, the Vehicle Leasing & Services Division
provides short-term consumer truck rental, which tends to be seasonal,
principally to consumers who use the trucks primarily for the movement of
household goods. A fleet of 78,975 vehicles, ranging from heavy-duty tractors
and trailers to light-duty trucks, is available for commercial and consumer
short-term rental from over 5,000 locations and independent dealers in 49
states, the District of Columbia, Puerto Rico, and Canada.
Through Ryder Public Transportation, the Vehicle Leasing & Services Division
provides public transportation management, operations and maintenance services,
and student transportation services. Ryder Public Transportation now manages
or operates 92 public transportation systems with 4,580 vehicles in 29 states
and the District of Columbia, operates 8,267 school buses in 20 states,
maintains approximately 20,000 public transportation or fleet vehicles in 18
states and Puerto Rico, and provides public transportation management
consulting services. In 1995, Ryder Public Transportation continued to expand
its presence in the public transportation management, operations and
maintenance markets and student transportation markets through internal growth.
An increasing number of U.S. school districts now have the option of
contracting with private operators such as Ryder Public Transportation for
student transportation services.
Through Ryder International, the Vehicle Leasing & Services Division provides a
wide variety of highway transportation services in international markets
outside the United States and Canada, including integrated logistics (which
includes dedicated contract carriage, the management of common carriers,
inventory deployment, and information technology), full service leasing of
trucks, tractors and trailers, commercial truck rental, and contract and
non-contract truck maintenance. As of December 31, 1995, the International
Division had 12,146 vehicles, 3,229 employees, and provided service through 104
locations in the United Kingdom, Germany, Mexico, Poland, Argentina and Brazil.
The 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 full advantage of, and build upon, the Company's expertise in
providing logistics solutions to businesses involved in the over-the-road
transportation of goods. In 1995, the International Division continued to
expand its presence in Mexico through internal growth. Additionally, in the
fourth quarter of 1995, the International Division opened offices in Argentina
and Brazil.
6
<PAGE> 7
The Vehicle Leasing & Services Division has historically disposed of its used
surplus revenue earning equipment at prices in excess of book value. The
Vehicle Leasing & Services Division reported gains on the sale of revenue
earning equipment (reported as reductions in depreciation expense) of
approximately 20%, 19% and 16% of the Vehicle Leasing & Services Division's
earnings before interest and taxes in 1995, 1994 and 1993, respectively. The
extent to which the Vehicle Leasing & Services 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 Vehicle Leasing & Services
Division's fleet and depreciation policies with respect to its vehicles.
Automotive Carriers
The Automotive Carrier Division transports new automobiles and trucks to
dealers, and to and from various distribution points, throughout the United
States and several Canadian provinces for GM, Chrysler, Toyota, Ford, American
Honda Motor Co., Inc., and for most other automobile and light truck
manufacturers. GM remains the Automotive Carrier Division's largest single
customer accounting for 54%, 54% and 57% of the Automotive Carrier Division's
revenue in 1995, 1994 and 1993, respectively. The total revenue contributed by
the Automotive Carrier Division was 11%, 14% and 15% of the consolidated
revenue of the Company in 1995, 1994 and 1993, respectively.
The GM carriage contracts are typically subject to cancellation upon 30 days
notice by either party. The business is primarily dependent upon 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 other conditions.
As of December 31, 1995, the Automotive Carrier Division had 3,367 auto
transport vehicles (including owner-operator vehicles), 4,763 employees
(excluding leased drivers), and provided service through 85 locations in 34
states and 3 Canadian provinces. Most of the Automotive Carrier Division's
employees are covered by an industry-wide collective bargaining agreement, the
term of which ends May 31, 1999.
Competition
As an alternative to using the Company's services, customers may choose to
provide similar services for themselves, or may choose to purchase similar or
alternative services from other third-party vendors.
The integrated logistics operations of the Vehicle Leasing & Services Division
(which includes dedicated contract carriage, the management of common carriers,
inventory deployment, and information technology) and the Automotive Carrier
Division compete with companies providing similar services on a national,
regional and local level. Additionally, these businesses are subject to
potential competition in most of the regions they serve from railroads and
motor carriers. Competitive factors include price, equipment, maintenance,
geographical coverage, and expertise in logistics related technology.
Value-added differentiation of these service offerings has been, and will
continue to be, the Company's strategy.
The full service truck leasing, commercial and consumer truck rental, and
contract and non-contract truck maintenance operations of the Vehicle Leasing &
Services Division compete with companies providing similar services on a
national, regional and local level. Regional and local competitors may
sometimes provide services on a national level through their participation in
various cooperative programs and through their membership in various industry
associations. Competitive factors include price, equipment, maintenance and
geographical coverage. The Vehicle Leasing & Services Division also competes,
to an extent, with a number of truck and trailer manufacturers who have entered
the field of truck and trailer leasing, extended warranty maintenance, rental,
and other forms of transportation services. Value-added differentiation of the
Vehicle Leasing & Services Division's full service truck leasing, commercial and
consumer truck rental, and contract and non-contract truck maintenance service
offerings has been, and will continue to be, the Company's strategy.
The public transportation management, operations and maintenance services and
the student transportation services of the Vehicle Leasing & Services Division
compete with companies providing similar services on a national, regional and
local level. Additionally, many governmental entities choose to provide these
services for themselves. In geographical
7
<PAGE> 8
areas where third-party vendors are used, the market tends to be fragmented and
competitive. Competitive factors include price, equipment, maintenance, and
geographical coverage. Value-added differentiation of these service offerings
has been, and will continue to be, the Company's strategy.
The International Division competes, on a country-by-country basis, with
companies providing similar services in international markets outside the
United States and Canada. In the United Kingdom, the markets for full service
leasing of trucks, tractors and trailers, and dedicated contract carriage
services are well developed and competitive, similar to those in the U.S. and
Canada. Recent developments in Mexico following the approval of the North
American Free Trade Agreement (NAFTA), Germany's continued integration into the
European Community and the resulting deregulation, and Poland's transformation
to a market economy, create a growing opportunity for the International
Division to provide services in these new markets. Additionally, recent
developments in Argentina and Brazil, such as the expanded investment in
automotive manufacturing, create a growing opportunity for the International
Division to provide services in these new markets. The International Division
expects that competition with its services in these emerging markets will
develop. Competitive factors include price, equipment, maintenance,
geographical coverage, market knowledge and expertise in logistics related
technology. Value-added differentiation of the Company's service offerings
continues to be the International Division's strategy in those markets.
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 funds. 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 Company and its
subsidiaries see the information referenced under Items 7 and 8 of this report.
8
<PAGE> 9
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 5, 1995 in conjunction with the Company's 1995 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 53 Chairman, President and
Chief Executive Officer
Dwight D. Denny 52 Executive Vice President - Development
R. Ray Goode 59 Senior Vice President - Public Affairs
James B. Griffin 41 President - Ryder Commercial Leasing &
Services
John R. Haddock 49 Senior Vice President - Marketing
James M. Herron 61 Senior Executive Vice President and
General Counsel
Edwin A. Huston 57 Senior Executive Vice President -
Finance and Chief Financial Officer
Thomas E. McKinnon 51 Executive Vice President - Human
Resources
Larry S. Mulkey 52 President - Ryder Dedicated Logistics, Inc
Bruce D. Parker 48 Senior Vice President - Management
Information Systems and
Chief Information Officer
J. Ernest Riddle 54 President - Ryder International, Inc.
Gerald R. Riordan 47 President - Ryder Consumer Truck Rental and
President - Ryder Public Transportation
Services, Inc.
Anthony G. Tegnelia 50 Senior Vice President and Controller
Randall E. West 47 President - Ryder Automotive Carrier
Group, Inc.
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.
</TABLE>
9
<PAGE> 10
Dwight D. Denny has been Executive Vice President - Development since January
1996, and was President - Ryder Commercial Leasing & Services from December
1992 to December 1995. Mr. Denny served Ryder Truck Rental, Inc. as Executive
Vice President and General Manager - Commercial Leasing & Services from June
1991 to 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. Mr. Goode served as President and Chief Executive Officer of the We Will
Rebuild organization from September 1992 to November 1993. Mr. Goode 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 previously served as County
Manager for Metropolitan Dade County, Florida from 1970 to 1976.
James B. Griffin has been President - Ryder Commercial Leasing & Services since
January 1996, and was President - Ryder Automotive Carrier Group, Inc. from
February 1993 to December 1995. Mr. Griffin served Ryder Truck Rental, Inc. as
Vice President and General Manager - Mid-South Region 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.
John R. Haddock has been Senior Vice President - Marketing since January 1996,
and was Senior Vice President - Industry and Commercial Marketing from November
1994 to December 1995. Mr. Haddock previously served General Electric Company
as Vice President - Global Business Development of General Electric Medical
Systems from April 1994 to November 1994, as Vice President and General Manager
of Global X-Ray of General Electric Medical Systems from January 1993 to
April 1994, and as Vice President and General Manager of Americas Marketing and
Engineering from 1990 to January 1993.
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.
Thomas E. McKinnon has been Executive Vice President - Human Resources since
June 1995. Mr. McKinnon previously served Unisys Corporation as Vice President
- - Human Resources from August 1990 to June 1995.
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, was President of each of the companies comprising that group
from November 1990 to June 1993. From November 1990 to December 1992, Ryder's
operations in the United Kingdom and Germany reported to Mr. Mulkey. Mr.
Mulkey 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 served American
Airlines, Inc. as a Vice President of American and as President of Sabre
Development Services Division from April 1993 to September 1994. Mr. Parker
previously served 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 President - Ryder International, Inc. since January
1996, and was Executive Vice President - Marketing from June 1994 to December
1995. Mr. Riddle served as Senior Vice President - Marketing and Sales of Ryder
Commercial Leasing & Services from January 1993 to June 1994. Mr. Riddle
previously served Xerox
10
<PAGE> 11
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 - Field Operations for the U.S.
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,
Inc. since October 1994. Mr. Riordan served as Senior Vice President and
General Manager of the Consumer Rental Division of Ryder Truck Rental, Inc.
from June 1991 to December 1992. Mr. Riordan previously 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. Mr. Tegnelia is the Company's principal
accounting officer. Mr. Tegnelia served as 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 Division from
September 1985 to October 1986, and as Senior Vice President - Finance of Ryder
Distribution System (now Ryder Dedicated Logistics, Inc.) from March 1984 to
August 1985.
Randall E. West has been President - Ryder Automotive Carrier Group, Inc. since
January 1996, and was Senior Vice President and General Manager of the
International Division from December 1993 to December 1995. Mr. West served
Ryder Truck Rental, Inc. as Vice President and General Manager - Southwest
Region from September 1991 to December 1993. Mr. West previously served Ryder
Truck Rental, Inc. as Region Vice President in 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 2,086 locations in the United
States, Canada and Puerto Rico; 471 of these facilities are owned and the
remainder are leased. Such locations generally include a repair shop and
administrative offices.
The International Division has 104 locations in the United Kingdom, Germany,
Mexico, Poland, Argentina and Brazil; 16 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 78 locations in 34 states throughout the
United States and 7 locations in Canada; 24 of these facilities are owned and
the remainder are leased.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are involved in various claims, lawsuits, 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.
11
<PAGE> 12
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, 1995.
12
<PAGE> 13
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 43
("Common Stock Data") of the Ryder System, Inc. 1995 Annual Report to
Shareholders.
ITEM 6. SELECTED FINANCIAL DATA
The information required by Item 6 is incorporated by reference from pages 44
and 45 of the Ryder System, Inc. 1995 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 18
through 28 of the Ryder System, Inc. 1995 Annual Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by Item 8 is incorporated by reference from pages 30
through 42 and page 43 ("Quarterly Data") of the Ryder System, Inc. 1995 Annual
Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
13
<PAGE> 14
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. 1996 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 15 ("Filings Under Section 16(a)") of the Ryder System, Inc. 1996 Proxy
Statement.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated by reference from pages 9,
10 ("Compensation of Directors") and 19 through 22 of the Ryder System, Inc.
1996 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 is incorporated by reference from pages 14
and 15 of the Ryder System, Inc. 1996 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. 1996 Proxy Statement.
14
<PAGE> 15
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 29 through
42 of the Ryder System, Inc. 1995 Annual Report to Shareholders.
A) Consolidated Statements of Earnings for years ended December 31, 1995,
1994 and 1993.
B) Consolidated Balance Sheets for December 31, 1995 and 1994.
C) Consolidated Statements of Cash Flows for years ended December 31,
1995, 1994 and 1993.
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 43 of the Ryder System, Inc. 1995
Annual Report to Shareholders.
15
<PAGE> 16
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
- ------- ----------------------------------------------------------------
[S] [C]
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,
previously filed with the Commission as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, is
incorporated by reference into this report.
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(a) 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.
4.4(b) 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
16
<PAGE> 17
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.
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,
previously filed with the Commission as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, is
incorporated by reference into this report.
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, previously filed
with the Commission as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, is incorporated by
reference into this report.
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, 1994, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, is incorporated by reference
into this report.
17
<PAGE> 18
10.4(b) The form of Ryder System, Inc. Incentive Compensation Deferral
Agreement dated as of November 30, 1995.
10.5(a) The form of Ryder System, Inc. Salary Deferral Agreement dated
as of November 30, 1994, previously filed with the Commission as an
exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, is incorporated by reference into this
report.
10.5(b) The form of Ryder System, Inc. Salary Deferral Agreement dated as of
November 30, 1995.
10.6(a) The form of Ryder System, Inc. director's fee deferral agreement
dated as of December 31, 1994, previously filed with the Commission
as an exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994, 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, 1995.
10.7(a) The Ryder System, Inc. 1995 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, 1994, is incorporated by reference
into this report.
10.7(b) The Ryder System, Inc. 1996 Incentive Compensation Plan for
Headquarters Executive Management.
10.7(c) The Ryder System, Inc. 1996 Hybrid Incentive Compensation Plan for
Headquarters Executive Management.
10.8(a) The Ryder System, Inc. 1995 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, 1994, is incorporated by
reference into this report.
10.8(b) The Ryder System, Inc. 1996 Incentive Compensation Plan for Ryder
System, Inc. Senior Executive Vice Presidents and Executive Vice
President - Development.
10.9(a) The Ryder System, Inc. 1995 Incentive Compensation Plan for Senior
Vice President and General Manager, 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, 1994, is
incorporated by reference into this report.
10.9(b) The Ryder System, Inc. 1996 Incentive Compensation Plan for
President - Ryder International.
10.10(a) The Ryder System, Inc. 1995 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, 1994, is incorporated by reference
into this report.
10.10(b) The Ryder System, Inc. 1996 Incentive Compensation Plan for President
- Automotive Carrier Division.
18
<PAGE> 19
10.11(a) The Ryder System, Inc. 1995 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, 1994, is
incorporated by reference into this report.
10.11(b) The Ryder System, Inc. 1996 Incentive Compensation Plan for Chairman,
President & Chief Executive Officer, Ryder System, Inc.
10.12(a) The Ryder System, Inc. 1995 Incentive Compensation Plan for
President-Commercial Leasing & Services, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, is incorporated by reference
into this report.
10.12(b) The Ryder System, Inc. 1996 Incentive Compensation Plan for
President-Commercial Leasing & Services.
10.13(a) The Ryder System, Inc. 1995 Incentive Compensation Plan for
President-Consumer Truck Rental, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, is incorporated by reference
into this report.
10.13(b) The Ryder System, Inc. 1996 Incentive Compensation Plan for
President-Consumer Truck Rental.
10.14(a) The Ryder System, Inc. 1995 Incentive Compensation Plan for
President - Ryder Dedicated Logistics, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, is incorporated by reference
into this report.
10.14(b) The Ryder System, Inc. 1996 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 August 18, 1995.
10.15(b) The form of Ryder System, Inc. 1980 Stock Incentive Plan, United
Kingdom Section, dated May 4, 1995.
10.15(c) The form of Ryder System, Inc. 1980 Stock Incentive Plan, United
Kingdom Section, dated October 3, 1995.
10.15(d) The form of Combined Non-Qualified Stock Option and Limited Stock
Appreciation Right Agreement, dated October 3, 1995.
10.15(e) Combined Non-Qualified Stock Option and Limited Stock
Appreciation Right Agreement, dated January 15, 1996, between Ryder
System, Inc. and E.A. Huston.
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.
19
<PAGE> 20
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, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, is incorporated by reference
into this report.
10.18 Letter agreement, dated April 9, 1993, between Ryder System,
Inc. and James Ernest Riddle, previously filed with the Commission as
an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, is incorporated by reference into this
report.
10.19 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.
10.20 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.
10.21 The Ryder System, Inc. Stock for Merit Increase Replacement Plan, as
amended and restated as of August 18, 1995.
10.22 The Ryder System, Inc. 1995 Stock Incentive Plan, as amended and
restated as of August 18, 1995.
10.23 The Ryder System, Inc. Savings Restoration Plan effective April 1,
1995.
11.1 Statement regarding computation of per share earnings.
13.1 Portions of the Ryder System, Inc. 1995 Annual Report to
Shareholders. Those portions of the Ryder System, Inc. 1995 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
Joseph L. Dionne
Edward T. Foote II
20
<PAGE> 21
John A. Georges
Vernon E. Jordan, Jr.
David T. Kearns
Lynn M. Martin
James W. McLamore
Paul J. Rizzo
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 1995.
(c) Executive Compensation Plans and Arrangements:
Please refer to the description of Exhibits 10.1 through 10.23 set forth
under 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.
21
<PAGE> 22
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 27, 1996 RYDER SYSTEM, INC.
By: /s/ 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 27, 1996 By: /s/ M. Anthony Burns
---------------------------------------
M. Anthony Burns
Chairman, President and Chief
Executive Officer
(Principal Executive Officer)
Date: March 27, 1996 By: /s/ Edwin A. Huston
---------------------------------------
Edwin A. Huston
Senior Executive Vice President-Finance
and Chief Financial Officer
(Principal Financial Officer)
Date: March 27, 1996 By: /s/ Anthony G. Tegnelia
---------------------------------------
Anthony G. Tegnelia
Senior Vice President and Controller
(Principal Accounting Officer)
22
<PAGE> 23
Date: March 27, 1996 By: /s/ Arthur H. Bernstein *
----------------------------------
Arthur H. Bernstein
Director
Date: March 27, 1996 By: /s/ Joseph L. Dionne *
----------------------------------
Joseph L. Dionne
Director
Date: March 27, 1996 By: /s/ Edward T. Foote II *
----------------------------------
Edward T. Foote II
Director
Date: March 27, 1996 By: /s/ John A. Georges *
----------------------------------
John A. Georges
Director
Date: March 27, 1996 By: /s/ Vernon E. Jordan, Jr. *
----------------------------------
Vernon E. Jordan, Jr.
Director
Date: March 27, 1996 By: /s/ David T. Kearns *
----------------------------------
David T. Kearns
Director
Date: March 27, 1996 By: /s/ Lynn M. Martin *
----------------------------------
Lynn M. Martin
Director
Date: March 27, 1996 By: /s/ James W. McLamore *
----------------------------------
James W. McLamore
Director
23
<PAGE> 24
Date: March 27, 1996 By: /s/ Paul J. Rizzo *
--------------------------------------
Paul J. Rizzo
Director
Date: March 27, 1996 By: /s/ Hicks B. Waldron *
--------------------------------------
Hicks B. Waldron
Director
Date: March 27, 1996 By: /s/ Alva O. Way *
--------------------------------------
Alva O. Way
Director
Date: March 27, 1996 By: /s/ Mark H. Willes *
-------------------------------------
Mark H. Willes
Director
*By: /s/ P. Gray Finney
--------------------------------------
P. Gray Finney
Attorney-in-Fact
24
<PAGE> 1
EXHIBIT 10.4(b)
INCENTIVE COMPENSATION DEFERRAL AGREEMENT
THIS AGREEMENT, dated as of November 30, 1995, between Ryder System,
Inc. (the "Company") and ___________________________________ (the "Executive").
WITNESSETH:
WHEREAS, the Executive is serving as an executive of the Company or
one of its subsidiaries or affiliates; and
WHEREAS, the Company has established an incentive compensation plan,
with respect to the performance of the Executive and the Company during 1995,
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 1995 incentive compensation award to be made in 1996, 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
18, l995, 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 beneficiary designation shall
be made by the Executive on the form attached hereto. The Executive
may, at any time, change or revoke such beneficiary 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.
2
<PAGE> 3
(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.
(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,
3
<PAGE> 4
the Company's Employee Savings Plan, any amount of incentive
compensation 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. However, incentive
compensation deferred pursuant to this Agreement shall be included in
the Executive's compensation base for purposes of the Company's
Retirement Plan.
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
___________________________________ as my beneficiary.
________________________________________
(Executive)
4
<PAGE> 5
the Company's Employee Savings Plan, any amount of incentive
compensation 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. However, incentive
compensation deferred pursuant to this Agreement shall be included in
the Executive's compensation base for purposes of the Company's
Retirement Plan.
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
___________________________________ as my beneficiary.
________________________________________
(Executive)
4
<PAGE> 6
the Company's Employee Savings Plan, any amount of incentive
compensation 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. However, incentive
compensation deferred pursuant to this Agreement shall be included in
the Executive's compensation base for purposes of the Company's
Retirement Plan.
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:_____________________________________
Thomas E. McKinnon
Executive Vice President -
Human Resources
In accordance with Article 5 of the Incentive Compensation Deferral
Agreement set forth above, I hereby designate
___________________________________ as my beneficiary.
________________________________________
(Executive)
5
<PAGE> 7
EXHIBIT A
TO INCENTIVE COMPENSATION DEFERRAL AGREEMENT
DATED AS OF NOVEMBER 30, 1995
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.
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
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.
</TABLE>
If you elect a partial payment under this Section VI, you must also specify
either an amount or a percentage which you would like distributed on the
specified Commencement Date selected above.
Amount $ __________ or __________%
__________________________________
(Executive)
3
<PAGE> 1
EXHIBIT 10.5(b)
SALARY DEFERRAL AGREEMENT
THIS AGREEMENT, dated as of November 30, 1995, between Ryder System,
Inc. (the "Company") and ___________________________________ (the "Executive").
WITNESSETH:
WHEREAS, the Executive is serving as an executive of the Company or
one of its subsidiaries or affiliates at an annual rate of $_______________ as
of November 30, 1995; 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 1996 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
18, l995, 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 beneficiary designation shall
be made by the Executive on the form attached hereto. The Executive
may, at any time, change or revoke such beneficiary 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.
(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
2
<PAGE> 3
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
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. However, the amount of salary deferred pursuant to this
Agreement shall be included in the Executive's compensation base for
purposes of the Company's Retirement Plan.
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 _____________________________________________ as 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 _____________________________________________ as 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:______________________________________
Thomas E. McKinnon
Executive Vice President -
Human Resources
In accordance with Article 4 of the Salary Deferral Agreement set forth above,
I hereby designate _____________________________________________ as my
beneficiary.
________________________________________
(Executive)
4
<PAGE> 7
EXHIBIT A
TO SALARY DEFERRAL AGREEMENT
DATED AS OF NOVEMBER 30, 1995
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
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.
</TABLE>
If you elect a partial payment under this Section VI, you must also specify
either an amount or a percentage which you would like distributed on the
specified Commencement Date selected above.
Amount $ __________ or __________%
_____________________________________
(Executive)
3
<PAGE> 1
EXHIBIT 10.6(b)
AGREEMENT
THIS AGREEMENT, dated as of December 31, 1995, 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 1996 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 1996, 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 18, 1995, 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, 1995
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
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.
</TABLE>
If you elect a partial payment under this Section IV, you must also specify
either an amount or a percentage which you would like distributed on the
specified Commencement Date selected above.
Amount $_______________ or __________%
_______________________________
(Director)
2
<PAGE> 1
EXHIBIT 10.7(b)
===============================================================================
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1996 INCENTIVE COMPENSATION PLAN PAGE 1
===============================================================================
Supersedes 1995 Headquarters Executive Management Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1996
Incentive Plan for Ryder System, Inc. (RSI or the Company) headquarters staff
Officers, Directors and Managers whose positions are evaluated at Management
Level 9 (MS09) 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.
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>
---------------------------------------------------------------------------------------------------
MANAGEMENT LEVEL RSI INDIVIDUAL TOTAL BONUS
PERFORMANCE PERFORMANCE OPPORTUNITY
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Level 14+ * 80% 20% 100%
---------------------------------------------------------------------------------------------------
Management Level 13 48% 12% 60%
---------------------------------------------------------------------------------------------------
Management Level 12 40% 10% 50%
---------------------------------------------------------------------------------------------------
Management Level 11 32% 8% 40%
---------------------------------------------------------------------------------------------------
Management Level 10 24% 6% 30%
---------------------------------------------------------------------------------------------------
Management Level 9 16% 4% 20%
---------------------------------------------------------------------------------------------------
</TABLE>
(*) See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1996, 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
1996.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you and your supervisor agreed to 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
1996 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 (before
accounting changes) 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.
DIVERSITY OBJECTIVES WILL ACCOUNT FOR 25% OF EACH
PARTICIPANT'S 1996 INDIVIDUAL PERFORMANCE OBJECTIVES. THIS
REQUIREMENT RECOGNIZES THE IMPACT THAT SPECIFIC DIVERSITY
GOALS HAVE ON THE ORGANIZATION. THE CONCEPT OF DIVERSITY NEED
NOT BE LIMITED TO NUMBERS; IT EMBRACES THE INCLUSION OF
OTHERS AND A VALUE OF EVERY PERSON'S UNIQUENESS.
If applicable, 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")
<PAGE> 3
===============================================================================
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1996 INCENTIVE COMPENSATION PLAN PAGE 3
===============================================================================
NOTE: The effects of any unusual and material accounting transactions may be
excluded from bonus calculations at the discretion of the Board of Directors of
RSI.
<PAGE> 4
===============================================================================
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1996 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: 1996 RSI NAT ROE and 1996 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>
----------------------------------------------------------------------------------------------
1996 RSI NBT ($MM)
-----------------------------------------------------------------------------
THRESHOLD MAXIMUM
264.4 280.0 303.0 324.6 336.0 347.0
-----------------------------------------------------------------------------
ROE % OF OPPORTUNITY
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<14.0% 30 40 50 55 75 80
----------------------------------------------------------------------------------------------
14.0% - 16.0% 40 50 60 65 85 90
----------------------------------------------------------------------------------------------
>16.0% 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
Individual % of Critical with Above
Performance Total Shortfalls Expectations Expectations Exceptional
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Diversity 25% 0-50% 51-70% 71-89% 90-100%
Objectives
Other MBOs 75% 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
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1996 INCENTIVE COMPENSATION PLAN PAGE 5
===============================================================================
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
1996 RSI NAT ROE 15.0%
1996 RSI NBT $ 336MM
Individual Performance - Diversity Objectives Significantly Above Expectations
Individual Performance - Other MBOs 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
2a) Individual Performance - Diversity Objectives
4% Maximum Individual Performance Bonus Opportunity
25% Maximum Diversity Objectives
75% Potential Individual Performance Bonus Payout (from grid)
4% x 25% x 75% = .75% of Eligible Base Salary
.75% x $50,000 = $ 375
2b) Individual Performance - Other MBOs
4% Maximum Individual Performance Bonus Opportunity
75% Maximum Other MBOs
75% Potential Individual Performance Bonus Payout (from grid)
4% x 75% x 75% = 2.25% of Eligible Base Salary
2.25% x $50,000 = $ 1,125
-------------
TOTAL BONUS $ 8,300
---------------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
===============================================================================
RYDER
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1996 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 $48,858, then
effective June 1 receives an increase to a base salary of $50,810:
<TABLE>
<S> <C>
January 1 through May 31 of Bonus Year:
---------------------------------------
31 + 29 + 31 + 30 + 31 = 152=.415 x $48,858/yr. = $ 20,276
---------------------- ---
366 days 366
June 1 through December 31 of Bonus Year:
-----------------------------------------
366 - 152 = 214=.585 x $50,810/yr. = $ 29,724
--------- --- ---------------
366 days 366
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $ 50,000
</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
Executive Committee members. 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
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1996 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 18, 1995), 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
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1996 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 1996, 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 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 & EVP - Development Incentive
Compensation Plan, the Ryder International field and headquarters 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, the President of Ryder International,
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 performed 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
RSI HEADQUARTERS
EXECUTIVE MANAGEMENT
1996 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 & EVP - Development Incentive
Compensation Plan, the Ryder International field and headquarters bonus plans,
the Ryder Services Corporation Incentive Compensation Plan, the Automotive
Carrier Division executive and field bonus plans, and the Division Presidents'
bonus plans, including those granted off-cycle, may not exceed $530,000 per
year.
AMENDMENTS
The Board of Directors of RSI, or the Compensation Committee, 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, OR THE COMPENSATION COMMITTEE, RESERVES THE RIGHT TO
AMEND, SUSPEND, TERMINATE OR MAKE EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.7(c)
===============================================================================
RYDER
RSI HEADQUARTERS - HYBRID
EXECUTIVE MANAGEMENT
1996 INCENTIVE COMPENSATION PLAN PAGE 1
===============================================================================
Supersedes 1995 Headquarters Executive Management Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1996
Incentive Plan for selected Ryder System, Inc. (RSI or the Company)
headquarters staff Officers, Directors and Managers whose positions are
evaluated at Management Level 9 (MS09) or higher. This hybrid plan is a
combination of the Ryder System Inc. (RSI or the Company) Headquarters
Executive Management Incentive Compensation Plan and the Commercial
Headquarters Executive Management Incentive Compensation Plan. 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 for each
participating management level:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
RSI COMMERCIAL * INDIVIDUAL TOTAL BONUS
MANAGEMENT LEVEL PERFORMANCE PERFORMANCE PERFORMANCE OPPORTUNITY
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Level 14+ 40% 40% 20% 100%
--------------------------------------------------------------------------------------------------------
Management Level 13 24% 24% 12% 60%
--------------------------------------------------------------------------------------------------------
Management Level 12 20% 20% 10% 50%
--------------------------------------------------------------------------------------------------------
Management Level 11 16% 16% 8% 40%
--------------------------------------------------------------------------------------------------------
Management Level 10 12% 12% 6% 30%
--------------------------------------------------------------------------------------------------------
Management Level 9 8% 8% 4% 20%
--------------------------------------------------------------------------------------------------------
</TABLE>
(*) Commercial is defined as U.S. and Canada combined
BONUS PERFORMANCE MEASURES
For 1996, your bonus payout will be based on RSI performance, Commercial
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
1996.
Commercial performance is measured based on Commercial Net Earnings After Tax
(NAT) Return on Assets (ROA) and Commercial NBT for 1996.
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 - HYBRID
EXECUTIVE MANAGEMENT
1996 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 (before
accounting changes) 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.
- 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.
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.
<PAGE> 3
================================================================================
RYDER
RSI HEADQUARTERS - HYBRID
EXECUTIVE MANAGEMENT
1996 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.
DIVERSITY OBJECTIVES WILL ACCOUNT FOR 25% OF EACH
PARTICIPANT'S 1996 INDIVIDUAL PERFORMANCE OBJECTIVES. THIS
REQUIREMENT RECOGNIZES THE IMPACT THAT SPECIFIC DIVERSITY
GOALS HAVE ON THE ORGANIZATION. THE CONCEPT OF DIVERSITY NEED
NOT BE LIMITED TO NUMBERS; IT EMBRACES THE INCLUSION OF
OTHERS AND A VALUE OF EVERY PERSON'S UNIQUENESS.
If applicable, 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 at the discretion of the Board of Directors of
RSI.
<PAGE> 4
==============================================================================
RYDER
RSI HEADQUARTERS - HYBRID
EXECUTIVE MANAGEMENT
1996 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: 1996 RSI NAT ROE and 1996 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>
---------------------------------------------------------------------------------------------------
1996 RSI NBT ($MM)
---------------------------------------------------------------------------------------------------
THRESHOLD MAXIMUM
264.4 280.0 303.0 324.6 336.0 347.0
-------------------------------------------------------------------------------
ROE % OF OPPORTUNITY
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<14.0% 30 40 50 55 75 80
---------------------------------------------------------------------------------------------------
14.0% - 16.0% 40 50 60 65 85 90
---------------------------------------------------------------------------------------------------
>16.0% 50 60 65 75 90 100
---------------------------------------------------------------------------------------------------
</TABLE>
2) COMMERCIAL PERFORMANCE - ROA/NBT
Commercial performance payout is based on a grid consisting of two
performance variables: 1996 Commercial NAT ROA and 1996 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>
-------------------------------------------------------------------------------------------------
1996 COMMERCIAL NBT ($MM)
-------------------------------------------------------------------------------------------------
THRESHOLD MAXIMUM
188.0 205.0 219.0 230.4 237.0 248.0
-------------------------------------------------------------------------------
ROA % OF OPPORTUNITY
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<3.2% 30 40 50 55 75 80
-------------------------------------------------------------------------------------------------
3.2% - 3.8% 40 50 60 65 85 90
-------------------------------------------------------------------------------------------------
>3.8% 50 60 65 75 90 100
-------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
===============================================================================
RYDER
RSI HEADQUARTERS - HYBRID
EXECUTIVE MANAGEMENT
1996 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
INDIVIDUAL % OF CRITICAL WITH ABOVE
PERFORMANCE TOTAL SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DIVERSITY
OBJECTIVES 25% 0-50% 51-70% 71-89% 90-100%
OTHER MBOS 75% 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
RSI HEADQUARTERS - HYBRID
EXECUTIVE MANAGEMENT
1996 INCENTIVE COMPENSATION PLAN PAGE 6
================================================================================
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
1996 RSI NAT ROE 15.0%
1996 RSI NBT $ 336MM
1996 Commercial NAT ROA 3.4%
1996 Commercial NBT $ 230.4MM
Individual Performance - Diversity Objectives Significantly Above Expectations
Individual Performance - Other MBOs Significantly Above Expectations
</TABLE>
<TABLE>
<S> <C> <C>
1) RSI Performance
8% Maximum RSI Performance Bonus Opportunity
85% Potential RSI Performance Bonus Payout (from grid)
8% x 85% = 6.8% of Eligible Base Salary
6.8% x $50,000 = $ 3,400
2) Commercial Performance
8% Maximum Commercial Performance Bonus Opportunity
65% Potential Commercial Performance Bonus Payout (from grid)
8% x 65% = 5.2% of Eligible Base Salary
5.2% x $50,000 = $ 2,600
3a) Individual Performance - Diversity Objectives
4% Maximum Individual Performance Bonus Opportunity
25% Maximum Diversity Objectives
75% Potential Individual Performance Bonus Payout (from grid)
4% x 25% x 75% = .75% of Eligible Base Salary
.75% x $50,000 = $ 375
3b) Individual Performance - Other MBOs
4% Maximum Individual Performance Bonus Opportunity
75% Maximum Other MBOs
75% Potential Individual Performance Bonus Payout (from grid)
4% x 75% x 75% = 2.25% of Eligible Base Salary
2.25% x $50,000 = $ 1,125
-------
TOTAL BONUS $ 7,500
</TABLE>
<PAGE> 7
===============================================================================
RYDER
RSI HEADQUARTERS - HYBRID
EXECUTIVE MANAGEMENT
1996 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 $48,858,
then effective June 1 receives an increase to a base salary of $50,810:
January 1 through May 31 of Bonus Year:
--------------------------------------
<TABLE>
<S> <C> <C>
31 + 29 + 31 + 30 + 31 = 152=.415 x $48,858/yr. = $ 20,276
---------------------- ---
366 days 366
June 1 through December 31 of Bonus Year:
----------------------------------------
366 - 152 = 214=.585 x $50,810/yr. = $ 29,724
--------- --- --------
366 days 366
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $ 50,000
</TABLE>
<PAGE> 8
================================================================================
RYDER
RSI HEADQUARTERS - HYBRID
EXECUTIVE MANAGEMENT
1996 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
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 18, 1995), 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
RSI HEADQUARTERS - HYBRID
EXECUTIVE MANAGEMENT
1996 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 1996, 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 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 & EVP - Development Incentive
Compensation Plan, the Ryder International field and headquarters 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, the President of Ryder International,
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 performed 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
RSI HEADQUARTERS - HYBRID
EXECUTIVE MANAGEMENT
1996 INCENTIVE COMPENSATION PLAN PAGE 10
================================================================================
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 & EVP - Development Incentive
Compensation Plan, the Ryder International field and headquarters bonus plans,
the Ryder Services Corporation Incentive Compensation Plan, the Automotive
Carrier Division executive and field bonus plan, and the Division Presidents'
bonus plans, including those granted off-cycle, may not exceed $530,000 per
year.
AMENDMENTS
The Board of Directors of RSI, or the Compensation Committee, 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, OR THE COMPENSATION COMMITTEE, 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
EXECUTIVE VICE PRESIDENT -
DEVELOPMENT
1996 INCENTIVE COMPENSATION PLAN PAGE 1
===============================================================================
Supersedes 1995 Senior Executive Vice Presidents Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1996
Incentive Plan for the Senior Executive Vice Presidents and Executive Vice
President - Development 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 OPPORTUNITY *
PERFORMANCE ABOVE PLAN PERFORMANCE
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
80% 20% 20% 120%
-------------------------------------------------------------------------------------------------
</TABLE>
(*) See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1996, 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
1996.
RSI performance above plan is measured based on RSI NBT performance for 1996.
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
EXECUTIVE VICE PRESIDENT -
DEVELOPMENT
1996 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 (before
accounting changes) 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.
DIVERSITY OBJECTIVES WILL ACCOUNT FOR 25% OF EACH
PARTICIPANT'S 1996 INDIVIDUAL PERFORMANCE OBJECTIVES. THIS
REQUIREMENT RECOGNIZES THE IMPACT THAT SPECIFIC DIVERSITY
GOALS HAVE ON THE ORGANIZATION. THE CONCEPT OF DIVERSITY NEED
NOT BE LIMITED TO NUMBERS; IT EMBRACES THE INCLUSION OF OTHERS
AND A VALUE OF EVERY PERSON'S UNIQUENESS.
If applicable, 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.
<PAGE> 3
===============================================================================
RYDER SENIOR EXECUTIVE VICE PRESIDENTS
EXECUTIVE VICE PRESIDENT -
DEVELOPMENT
1996 INCENTIVE COMPENSATION PLAN PAGE 3
===============================================================================
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 at the discretion of the Board of Directors of
RSI.
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: 1996 RSI NAT ROE and 1996 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>
---------------------------------------------------------------------------------------------------
1996 RSI NBT ($MM)
---------------------------------------------------------------------------------------------------
THRESHOLD MAXIMUM
264.4 280.0 303.0 324.6 336.0 347.0
---------------------------------------------------------------------------------
ROE % OF OPPORTUNITY
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<14.0% 30 40 50 55 75 80
---------------------------------------------------------------------------------------------------
14.0% - 16.0% 40 50 60 65 85 90
---------------------------------------------------------------------------------------------------
>16.0% 50 60 65 75 90 100
</TABLE>
2) RSI PERFORMANCE ABOVE PLAN - NBT
RSI performance above plan payout is based on a grid of 1996 RSI NBT.
The potential bonus payout percent is determined by locating the point
on the grid under the 1996 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.
<PAGE> 4
================================================================================
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
EXECUTIVE VICE PRESIDENT -
DEVELOPMENT
1996 INCENTIVE COMPENSATION PLAN PAGE 4
================================================================================
POTENTIAL RSI PERFORMANCE ABOVE PLAN BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE ABOVE PLAN BONUS OPPORTUNITY
<TABLE>
<CAPTION> -------------------------------------
1996 RSI ABOVE PLAN NBT ($MM)
-------------------------------------
THRESHOLD MAXIMUM
<S> <C> <C>
324.6 336.0 347.0
-------------------------------------
% OF OPPORTUNITY
-------------------------------------
0 50 100
</TABLE> -------------------------------------
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
INDIVIDUAL % OF CRITICAL WITH ABOVE
PERFORMANCE TOTAL SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DIVERSITY
OBJECTIVES 25% 0-50% 51-70% 71-89% 90-100%
OTHER MBOS 75% 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
EXECUTIVE VICE PRESIDENT -
DEVELOPMENT
1996 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
1996 RSI NAT ROE 15.0%
1996 RSI NBT $ 336MM
Individual Performance - Diversity Objectives Significantly Above Expectations
Individual Performance - Other MBOs Significantly Above Expectations
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <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
3a) Individual Performance - Diversity Objectives
20% Maximum Individual Performance Bonus Opportunity
25% Maximum Diversity Objectives
75% Potential Individual Performance Bonus Payout (from grid)
20% x 25% x 75% = 3.75% of Eligible Base Salary
3.75% x $350,000 = $ 13,125
3b) Individual Performance - Other MBOs
20% Maximum Individual Performance Bonus Opportunity
75% Maximum Other MBOs
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% x 75% = 11.25% of Eligible Base Salary
11.25% x $350,000 = $ 39,375
---------
TOTAL BONUS $ 325,500
</TABLE>
<PAGE> 6
================================================================================
RYDER
SENIOR EXECUTIVE VICE PRESIDENTS
EXECUTIVE VICE PRESIDENT -
DEVELOPMENT
1996 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
$341,993, then effective June 1 receives an increase to a base
salary of $355,680:
<TABLE>
<CAPTION>
January 1 through May 31 of Bonus Year:
--------------------------------------
<S> <C> <C> <C>
31 + 29 + 31 + 30 + 31 = 152=.415 x $341,993/yr. = $ 141,927
---------------------- ---
366 days 366
June 1 through December 31 of Bonus Year:
----------------------------------------
366 - 152 = 214=.585 x $355,680/yr. = $ 208,073
--------- --- ---------
366 days 366
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $ 350,000
</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
Executive Committee members. 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
EXECUTIVE VICE PRESIDENT -
DEVELOPMENT
1996 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 18, 1995), 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
EXECUTIVE VICE PRESIDENT -
DEVELOPMENT
1996 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 1996, 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 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 & EVP - Development Incentive
Compensation Plan, the Ryder International field and headquarters 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, the President of Ryder International,
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 performed 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
EXECUTIVE VICE PRESIDENT -
DEVELOPMENT
1996 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 & EVP - Development Incentive
Compensation Plan, the Ryder International field and headquarters bonus plans,
the Ryder Services Corporation Incentive Compensation Plan, the Automotive
Carrier Division executive and field bonus plans, and the Division Presidents'
bonus plans, including those granted off-cycle, may not exceed $530,000 per
year.
AMENDMENTS
The Board of Directors of RSI, or the Compensation Committee, 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, OR THE COMPENSATION COMMITTEE, RESERVES THE RIGHT TO
AMEND, SUSPEND, TERMINATE OR MAKE EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.9(b)
===============================================================================
RYDER
PRESIDENT
RYDER INTERNATIONAL
1996 INCENTIVE COMPENSATION PLAN PAGE 1
===============================================================================
Supersedes 1995 Senior Vice President and General Manager Ryder International
Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1996
Incentive Plan for the President, 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.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
INTERNATIONAL
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 1996, 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
1996.
International performance is measured based on International NBT performance
for 1996.
International development is measured based on objectives set for 1996.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you and your supervisor agreed to 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 INTERNATIONAL
1996 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 (before accounting
changes) 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.
- 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.
- INTERNATIONAL DEVELOPMENT OBJECTIVES -- Payout is determined
based on achieving the following objectives:
Objectives to be determined by Ryder International at a later
date.
Note: All quantitative values are subject to interpolation.
<PAGE> 3
===============================================================================
RYDER
PRESIDENT
RYDER INTERNATIONAL
1996 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.
DIVERSITY OBJECTIVES WILL ACCOUNT FOR 25% OF EACH PARTICIPANT'S
1996 INDIVIDUAL PERFORMANCE OBJECTIVES. THIS REQUIREMENT
RECOGNIZES THE IMPACT THAT SPECIFIC DIVERSITY GOALS HAVE ON THE
ORGANIZATION. THE CONCEPT OF DIVERSITY NEED NOT BE LIMITED TO
NUMBERS; IT EMBRACES THE INCLUSION OF OTHERS AND A VALUE OF EVERY
PERSON'S UNIQUENESS.
If applicable, 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 at the discretion of the Board of Directors of
RSI.
<PAGE> 4
===============================================================================
RYDER
PRESIDENT
RYDER INTERNATIONAL
1996 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: 1996 RSI NAT ROE and 1996 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>
-------------------------------------------------------------------------------
1996 RSI NBT ($MM)
-------------------------------------------------------------------------------
THRESHOLD MAXIMUM
264.4 280.0 303.0 324.6 336.0 347.0
-------------------------------------------------------------------------------
ROE % OF OPPORTUNITY
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<14.0% 30 40 50 55 75 80
---------------------------------------------------------------------------------------------------
14.0% - 16.0% 40 50 60 65 85 90
---------------------------------------------------------------------------------------------------
>16.0% 50 60 65 75 90 100
---------------------------------------------------------------------------------------------------
</TABLE>
2) INTERNATIONAL PERFORMANCE - NBT
International performance payout is based on 1996 International
NBT. The bonus payout percent is determined by locating the point
on the 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>
---------------------------------------------------
1996 INTERNATIONAL NBT ($MM)
---------------------------------------------------
THRESHOLD MAXIMUM
---------------------------------------------------
<S> <C> <C> <C>
3.0 5.1 7.0 9.0
% OF OPPORTUNITY
---------------------------------------------------
<S> <C> <C> <C>
45 65 80 100
</TABLE>
<PAGE> 5
===============================================================================
RYDER
PRESIDENT
RYDER INTERNATIONAL
1996 INCENTIVE COMPENSATION PLAN PAGE 5
===============================================================================
3) INTERNATIONAL DEVELOPMENT OBJECTIVES
International development objectives payout is based on the
percentage of objectives achieved in 1996 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 SIGNIFICANTLY
INDIVIDUAL % OF CRITICAL WITH ABOVE
PERFORMANCE TOTAL SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DIVERSITY 25% 0-50% 51-70% 71-89% 90-100%
OBJECTIVES
OTHER MBOS 75% 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 INTERNATIONAL
1996 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 $ 350,000
1996 RSI NAT ROE 15.0%
1996 RSI NBT $ 336MM
1996 International NBT $ 5.1MM
1996 International Development Objectives 75%
Individual Performance - Diversity Objectives Significantly Above Expectations
Individual Performance - Other MBOs 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 $350,000 = $178,500
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 $350,000 = $ 22,750
3) International Development Objectives
10% Maximum International Objectives Bonus Opportunity
75% Potential International Objectives Bonus Payout
10% x 75% = 7.5%
7.5% x $350,000 = $ 26,250
4a) Individual Performance - Diversity Objectives
20% Maximum Individual Performance Bonus Opportunity
25% Maximum Diversity Objectives
75% Potential Individual Performance Bonus Payout (from grid)
20% x 25% x 75% = 3.75% of Eligible Base Salary
3.75% x $350,000 = $ 13,125
4b) Individual Performance - Other MBOs
20% Maximum Individual Performance Bonus Opportunity
75% Maximum Other MBOs
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 11.25% of Eligible Base Salary
11.25% x $350,000 = $ 39,375
--------
TOTAL BONUS $280,000
</TABLE>
<PAGE> 7
===============================================================================
RYDER
PRESIDENT
RYDER INTERNATIONAL
1996 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 $341,993,
then effective June 1 receives an increase to a base salary of
$355,680:
<TABLE>
<S> <C>
January 1 through May 31 of Bonus Year:
--------------------------------------
31 + 29 + 31 + 30 + 31 = 152=.415 x $341,993/yr. = $ 141,927
---------------------- ---
366 days 366
June 1 through December 31 of Bonus Year:
----------------------------------------
366 - 152 = 214=.585 x $355,680/yr. = $ 208,073
--------- --- - -------
366 days 366
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR= $ 350,000
</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
Executive Committee members. 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 INTERNATIONAL
1996 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 International, if employed in good standing at the time
bonus payments are made, is 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:
- 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 RSI (as defined and adopted by the Board of Directors on August
18, 1995), 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
PRESIDENT
RYDER INTERNATIONAL
1996 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 1996, 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 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
International 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 performed 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.
The total of all discretionary awards for employees under the RSI Headquarters
Executive Management Incentive Compensation Plan, the Vehicle Leasing &
Services Division (VLSD)
<PAGE> 10
===============================================================================
RYDER
PRESIDENT
RYDER INTERNATIONAL
1996 INCENTIVE COMPENSATION PLAN PAGE 10
===============================================================================
field and headquarters bonus plans, the RSI SEVP & EVP - Development Incentive
Compensation Plan, the Ryder International field and headquarters bonus plans,
the Ryder Services Corporation Incentive Compensation Plan, the Automotive
Carrier Division executive and field bonus plans, and the Division Presidents'
bonus plans, including those granted off-cycle, may not exceed $530,000 per
year.
AMENDMENTS
The Board of Directors of RSI, or the Compensation Committee, 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, OR THE COMPENSATION COMMITTEE, 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
1996 INCENTIVE COMPENSATION PLAN PAGE 1
================================================================================
Supersedes 1995 ACD President Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1996
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.
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
PERFORMANCE PERFORMANCE PERFORMANCE OPPORTUNITY*
-----------------------------------------------------------------------------------
<S> <C> <C> <C>
60% 20% 20% 100%
</TABLE>
(*) See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1996, 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
1996.
ACD performance is measured based on ACD NBT performance for 1996.
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
1996 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 (before
accounting changes) 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.
- 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.
DIVERSITY OBJECTIVES WILL ACCOUNT FOR 25% OF EACH
PARTICIPANT'S 1996 INDIVIDUAL PERFORMANCE OBJECTIVES. THIS
REQUIREMENT RECOGNIZES THE IMPACT THAT SPECIFIC DIVERSITY
GOALS HAVE ON THE ORGANIZATION. THE CONCEPT OF DIVERSITY NEED
NOT BE LIMITED TO NUMBERS; IT EMBRACES THE INCLUSION OF
OTHERS AND A VALUE OF EVERY PERSON'S UNIQUENESS.
<PAGE> 3
================================================================================
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1996 INCENTIVE COMPENSATION PLAN PAGE 3
================================================================================
If applicable, 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 at the discretion of the Board of Directors of
RSI.
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: 1996 RSI NAT ROE and 1996 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>
-------------------------------------------------------------------------------------------------
1996 RSI NBT ($MM)
-------------------------------------------------------------------------------------------------
THRESHOLD MAXIMUM
264.4 280.0 303.0 324.6 336.0 347.0
-------------------------------------------------------------------------------
ROE % OF OPPORTUNITY
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<14.0% 30 40 50 55 75 80
------------------------------------------------------------------------------------------------
14.0% - 16.0% 40 50 60 65 85 90
------------------------------------------------------------------------------------------------
>16.0% 50 60 65 75 90 100
------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
================================================================================
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1996 INCENTIVE COMPENSATION PLAN PAGE 4
================================================================================
2) ACD PERFORMANCE - NBT
ACD performance payout is based on 1996 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>
<CAPTION>
---------------------------------------------------------------------------------
1996 ACD NBT ($MM)
---------------------------------------------------------------------------------
THRESHOLD MAXIMUM
<S> <C> <C> <C> <C> <C>
41.0 44.0 46.0 50.0 52.0 54.0
---------------------------------------------------------------------------------
% OF OPPORTUNITY
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
20 40 55 65 80 100
---------------------------------------------------------------------------------
</TABLE>
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
INDIVIDUAL % OF CRITICAL WITH ABOVE
PERFORMANCE TOTAL SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DIVERSITY
OBJECTIVES 25% 0-50% 51-70% 71-89% 90-100%
OTHER MBOS 75% 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
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1996 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 $ 220,000
1996 RSI NAT ROE 15.0%
1996 RSI NBT $ 336MM
1996 ACD NBT $ 50MM
Individual Performance - Diversity Objectives Significantly Above Expectations
Individual Performance - Other MBOs 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) ACD Performance
20% Maximum ACD Performance Bonus Opportunity
65% Potential ACD Performance Bonus Payout (from grid)
20% x 65% = 13% of Eligible Base Salary
13% x $220,000 = $ 28,600
3a) Individual Performance - Diversity Objectives
20% Maximum Individual Performance Bonus Opportunity
25% Maximum Diversity Objectives
75% Potential Individual Performance Bonus Payout (from grid)
20% x 25% x 75% = 3.75% of Eligible Base Salary
3.75% x $220,000 = $ 8,250
3b) Individual Performance - Other MBOs
20% Maximum Individual Performance Bonus Opportunity
75% Maximum Other MBOs
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% x 75% = 11.25% of Eligible Base Salary
11.25% x $220,000 = $ 24,750
----------------
TOTAL BONUS $ 173,800
</TABLE>
<PAGE> 6
================================================================================
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1996 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 $214,966,
then effective June 1 receives an increase to a base salary of
$223,571:
<TABLE>
January 1 through May 31 of Bonus Year:
---------------------------------------
<S> <C>
31 + 29 + 31 + 30 + 31 = 152=.415 x $214,966/yr. = $ 89,211
---------------------- ---
366 days 366
June 1 through December 31 of Bonus Year:
-----------------------------------------
366 - 152 = 214=.585 x $223,571/yr. =
--------- ---
366 days 366 $ 130,789
--------------
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $ 220,000
</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
Executive Committee members. 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
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1996 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
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 18, 1995), 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
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1996 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 1996, 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 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 performed 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> 9
================================================================================
RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1996 INCENTIVE COMPENSATION PLAN PAGE 9
================================================================================
The total of all discretionary awards for employees under the RSI Headquarters
Executive Management Incentive Compensation Plan, the Vehicle Leasing &
Services Division (VLSD) field and headquarters bonus plans, the RSI SEVP & EVP
- - Development Incentive Compensation Plan, the Ryder International field and
headquarters bonus plans, the Ryder Services Corporation Incentive Compensation
Plan, the Automotive Carrier Division executive and field bonus plans, and the
Division Presidents' bonus plans, including those granted off-cycle, may not
exceed $530,000 per year.
AMENDMENTS
The Board of Directors of RSI, or the Compensation Committee, 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, OR THE COMPENSATION COMMITTEE, 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
1996 INCENTIVE COMPENSATION PLAN PAGE 1
==============================================================================
Supersedes 1995 Chairman, President & Chief Executive Officer Incentive
Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1996
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 OPPORTUNITY *
PERFORMANCE ABOVE PLAN PERFORMANCE
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------
80% 30% 20% 130%
-----------------------------------------------------------------------------------------------
</TABLE>
(*) See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1996, 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
1996.
RSI performance above plan is measured based on RSI NBT performance for 1996.
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
1996 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 (before
accounting changes) 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.
DIVERSITY OBJECTIVES WILL ACCOUNT FOR 25% OF EACH
PARTICIPANT'S 1996 INDIVIDUAL PERFORMANCE OBJECTIVES. THIS
REQUIREMENT RECOGNIZES THE IMPACT THAT SPECIFIC DIVERSITY
GOALS HAVE ON THE ORGANIZATION. THE CONCEPT OF DIVERSITY NEED
NOT BE LIMITED TO NUMBERS; IT EMBRACES THE INCLUSION OF
OTHERS AND A VALUE OF EVERY PERSON'S UNIQUENESS.
If applicable, goals and objectives may be revised during the
bonus year to reflect changing business priorities.
<PAGE> 3
==============================================================================
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1996 INCENTIVE COMPENSATION PLAN PAGE 3
==============================================================================
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 at the discretion of the Board of Directors of
RSI.
<PAGE> 4
==============================================================================
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1996 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: 1996 RSI NAT ROE and 1996 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>
------------------------------------------------------------------------------------------------
1996 RSI NBT ($MM)
------------------------------------------------------------------------------------------------
THRESHOLD MAXIMUM
264.4 280.0 303.0 324.6 336.0 347.0
-----------------------------------------------------------------------------
ROE % OF OPPORTUNITY
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<14.0% 30 40 50 55 75 80
------------------------------------------------------------------------------------------------
14.0% - 16.0% 40 50 60 65 85 90
------------------------------------------------------------------------------------------------
>16.0% 50 60 65 75 90 100
------------------------------------------------------------------------------------------------
</TABLE>
2) RSI PERFORMANCE ABOVE PLAN - NBT
RSI performance above plan payout is based on a grid of 1996 RSI NBT.
The potential bonus payout percent is determined by locating the point
on the grid under the 1996 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>
<CAPTION>
---------------------------------------
1996 RSI ABOVE PLAN NBT ($MM)
---------------------------------------
THRESHOLD MAXIMUM
324.6 336.0 347.0
---------------------------------------
% OF OPPORTUNITY
---------------------------------------
<S> <C> <C>
0 50 100
---------------------------------------
</TABLE>
<PAGE> 5
================================================================================
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1996 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
INDIVIDUAL % OF CRITICAL WITH ABOVE
PERFORMANCE TOTAL SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DIVERSITY
OBJECTIVES 25% 0-50% 51-70% 71-89% 90-100%
OTHER MBOS 75% 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
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1996 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 $ 725,000
1996 RSI NAT ROE 15.0%
1996 RSI NBT $ 336MM
Individual Performance - Diversity Objectives Significantly Above Expectations
Individual Performance - Other MBOs 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
3a) Individual Performance - Diversity Objectives
20% Maximum Individual Performance Bonus Opportunity
25% Maximum Diversity Objectives
75% Potential Individual Performance Bonus Payout (from grid)
20% x 25% x 75% = 3.75% of Eligible Base Salary
3.75% x $725,000 = $ 27,188
3b) Individual Performance - Other MBOs
20% Maximum Individual Performance Bonus Opportunity
75% Maximum Other MBOs
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% x 75% = 11.25% of Eligible Base Salary
11.25% x $725,000 = $ 81,562
TOTAL BONUS $ 710,500
</TABLE>
<PAGE> 7
================================================================================
RYDER
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1996 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
$708,412, then effective June 1 receives an increase to a base
salary of $736,768:
January 1 through May 31 of Bonus Year:
---------------------------------------
31 + 29 + 31 + 30 + 31 = 152=.415 x $708,412/yr. = $293,991
---------------------- ---
366 days 366
June 1 through December 31 of Bonus Year:
-----------------------------------------
366 - 152 = 214=.585 x $736,768/yr.= $431,009
--------- --- --------
366 days 366
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $725,000
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
Executive Committee members. 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
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1996 INCENTIVE COMPENSATION PLAN PAGE 8
===============================================================================
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 18, 1995), 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
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER
1996 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 1996, 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 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 performed 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, or the Compensation Committee, 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, OR THE COMPENSATION COMMITTEE, 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
1996 INCENTIVE COMPENSATION PLAN PAGE 1
================================================================================
Supersedes 1995 President, Commercial Leasing & Services Incentive Compensation
Plan
INTRODUCTION
The following material explains the operation and administration of the 1996
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.
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>
(*) Commercial performance is defined as U.S. and Canada combined
(**) See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1996, 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
1996.
RSI performance above plan is measured based on RSI NBT performance for 1996.
Commercial performance is measured based on Commercial Net Earnings After Tax
(NAT) Return on Assets (ROA) and Commercial NBT for 1996.
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
1996 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 (before
accounting changes) 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
1996 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.
DIVERSITY OBJECTIVES WILL ACCOUNT FOR 25% OF EACH
PARTICIPANT'S 1996 INDIVIDUAL PERFORMANCE OBJECTIVES. THIS
REQUIREMENT RECOGNIZES THE IMPACT THAT SPECIFIC DIVERSITY
GOALS HAVE ON THE ORGANIZATION. THE CONCEPT OF DIVERSITY NEED
NOT BE LIMITED TO NUMBERS; IT EMBRACES THE INCLUSION OF
OTHERS AND A VALUE OF EVERY PERSON'S UNIQUENESS.
If applicable, 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 at the discretion of the Board of Directors of
RSI.
<PAGE> 4
================================================================================
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1996 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: 1996 RSI NAT ROE and 1996 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>
----------------------------------------------------------------------------------------------------
1996 RSI NBT ($MM)
----------------------------------------------------------------------------------------------------
THRESHOLD MAXIMUM
264.4 280.0 303.0 324.6 336.0 347.0
--------------------------------------------------------------------------------
ROE % OF OPPORTUNITY
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<14.0% 30 40 50 55 75 80
----------------------------------------------------------------------------------------------------
14.0% - 16.0% 40 50 60 65 85 90
----------------------------------------------------------------------------------------------------
>16.0% 50 60 65 75 90 100
----------------------------------------------------------------------------------------------------
</TABLE>
2) RSI PERFORMANCE ABOVE PLAN - NBT
RSI performance above plan payout is based on a grid of 1996 RSI NBT.
The potential bonus payout percent is determined by locating the point
on the grid under the 1996 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>
<CAPTION>
----------------------------------------------
1996 RSI ABOVE PLAN NBT ($MM)
----------------------------------------------
THRESHOLD MAXIMUM
324.6 336.0 347.0
----------------------------------------------
% OF OPPORTUNITY
----------------------------------------------
<S> <C> <C>
0 50 100
----------------------------------------------
</TABLE>
<PAGE> 5
================================================================================
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1996 INCENTIVE COMPENSATION PLAN PAGE 5
================================================================================
3) COMMERCIAL PERFORMANCE - ROA/NBT
Commercial performance payout is based on a grid consisting of two
performance variables: 1996 Commercial NAT ROA and 1996 Commercial
NBT. The potential bonus payout percent is determined by locating the
point on the grid where the variables intersect. Actual performance
may fall between the points specifically displayed on the grid, and
the grid allows for interpolation between NBT points as shown. No
bonus awards will be paid for performance below threshold. The
potential bonus payout is expressed as a percentage of Maximum
Commercial Performance Bonus Opportunity, as shown on page 1.
POTENTIAL COMMERCIAL PERFORMANCE BONUS PAYOUT AS A PERCENTAGE
OF MAXIMUM COMMERCIAL NBT PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
1996 COMMERCIAL NBT ($MM)
------------------------------------------------------------------------------------------------
THRESHOLD MAXIMUM
188.0 205.0 219.0 230.4 237.0 248
--------------------------------------------------------------------------------
ROA % OF OPPORTUNITY
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<3.2% 30 40 50 55 75 80
------------------------------------------------------------------------------------------------
3.2% - 3.8% 40 50 60 65 85 90
------------------------------------------------------------------------------------------------
>3.8% 50 60 65 75 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
INDIVIDUAL % OF CRITICAL WITH ABOVE
PERFORMANCE TOTAL SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
DIVERSITY
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DIVERSITY
OBJECTIVES 25% 0-50% 51-70% 71-89% 90-100%
OTHER MBOS 75% 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
1996 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 $ 300,000
1996 RSI NAT ROE 15.0%
1996 RSI NBT $ 336MM
1996 Commercial NAT ROA 3.4%
1996 Commercial NBT $ 230.4MM
Individual Performance - Diversity Objectives Significantly Above Expectations
Individual Performance - Other MBOs Significantly Above Expectations
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
<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 $300,000 = $ 153,000
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 $300,000 = $ 30,000
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 $300,000 = $ 39,000
4a) Individual Performance - Diversity Objectives
20% Maximum Individual Performance Bonus Opportunity
25% Maximum Diversity Objectives
75% Potential Individual Performance Bonus Payout (from grid)
20% x 25% x 75% = 3.75% of Eligible Base Salary
3.75% x $300,000 = $ 11,250
4b) Individual Performance - Other MBOs
20% Maximum Individual Performance Bonus Opportunity
75% Maximum Other MBOs
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% x 75% = 11.25% of Eligible Base Salary
11.25% x $300,000 = $ 33,750
---------
TOTAL BONUS $ 267,000
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 7
===============================================================================
RYDER
PRESIDENT
COMMERCIAL LEASING & SERVICES
1996 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
$293,137, then effective June 1 receives an increase to a base
salary of $304,868:
January 1 through May 31 of Bonus Year:
--------------------------------------
31 + 29 + 31 + 30 + 31 = 152=.415 x $293,137/yr. = $ 121,652
---------------------- ---
366 days 366
June 1 through December 31 of Bonus Year:
----------------------------------------
366 - 152 = 214=.585 x $304,868/yr. = $ 178,348
--------- --- ---------
366 days 366
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $ 300,000
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
Executive Committee members. 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
1996 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 Vehicle Leasing & Services
Division (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 18, 1995), 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
1996 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 1996, 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 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 performed 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
1996 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 & EVP - Development Incentive
Compensation Plan, the Ryder International field and headquarters bonus plans,
the Ryder Services Corporation Incentive Compensation Plan, the Automotive
Carrier Division executive and field bonus plans, and the Division Presidents'
bonus plans, including those granted off-cycle, may not exceed $530,000 per
year.
AMENDMENTS
The Board of Directors of RSI, or the Compensation Committee, 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, OR THE COMPENSATION COMMITTEE, 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
1996 INCENTIVE COMPENSATION PLAN PAGE 1
===============================================================================
Supersedes 1995 President, Consumer Truck Rental Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1996
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.
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 1996, 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
1996.
Consumer performance is measured based on Consumer Net Earnings After Tax (NAT)
Return on Assets (ROA) performance and Consumer NBT performance for 1996.
RPTS performance is measured based on RPTS Revenue performance and RPTS Product
Line Profit performance for 1996.
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
1996 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 (before
accounting changes) 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
1996 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' total revenue as verified by
the Senior Vice President and Controller, RSI.
RPTS Product Line Profit is defined as RPTS' 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.
DIVERSITY OBJECTIVES WILL ACCOUNT FOR 25% OF EACH
PARTICIPANT'S 1996 INDIVIDUAL PERFORMANCE OBJECTIVES. THIS
REQUIREMENT RECOGNIZES THE IMPACT THAT SPECIFIC DIVERSITY
GOALS HAVE ON THE ORGANIZATION. THE CONCEPT OF DIVERSITY NEED
NOT BE LIMITED TO NUMBERS; IT EMBRACES THE INCLUSION OF
OTHERS AND A VALUE OF EVERY PERSON'S UNIQUENESS.
If applicable, 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 at the discretion of the Board of Directors of
RSI.
<PAGE> 4
===============================================================================
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1996 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: 1996 RSI NAT ROE and 1996 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>
---------------------------------------------------------------------------------------------------
1996 RSI NBT ($MM)
---------------------------------------------------------------------------------------------------
THRESHOLD MAXIMUM
264.4 280.0 303.0 324.6 336.0 347.0
--------------------------------------------------------------------------------
ROE % OF OPPORTUNITY
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<14.0% 30 40 50 55 75 80
---------------------------------------------------------------------------------------------------
14.0% - 16.0% 40 50 60 65 85 90
---------------------------------------------------------------------------------------------------
>16.0% 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: 1996 Consumer NAT ROA and 1996 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>
----------------------------------------------------------------------------------
1996 CONSUMER NBT ($MM)
----------------------------------------------------------------------------------
THRESHOLD MAXIMUM
14.5 17.5 21.1 23.5 26.5
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ROA % OF OPPORTUNITY
----------------------------------------------------------------------------------
<1.5% 10 30 50 55 60
----------------------------------------------------------------------------------
1.5% - 2.4% 20 45 65 85 95
----------------------------------------------------------------------------------
>2.4% 30 60 80 90 100
----------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
===============================================================================
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1996 INCENTIVE COMPENSATION PLAN PAGE 5
===============================================================================
3) RPTS PERFORMANCE - REVENUE/PRODUCT LINE PROFIT
RPTS performance payout is based on a grid consisting of two
performance variables: 1996 RPTS Revenue and RPTS Product Line
Profit. The potential bonus payout percent is determined by locating
the point on the grid where the variables intersect. Actual
performance may fall between the points specifically displayed on the
grid, and the grid allows for interpolation between Profit points as
shown. No bonus awards will be paid for performance below threshold.
The potential bonus payout is expressed as a percentage of Maximum
RPTS Performance Bonus Opportunity, as shown on page 1.
POTENTIAL RPTS PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RPTS PERFORMANCE
BONUS OPPORTUNITY
<TABLE>
<CAPTION>
----------------------------------------------------------------------
1995 RPTS Product Line Profit ($MM)
----------------------------------------------------------------------
THRESHOLD MAXIMUM
REVENUE 35.0 38.0 41.7 45.0
----------------------------------------------------
($MM) % OF OPPORTUNITY
<S> <C> <C> <C> <C>
< 431 20 50 55 80
-------------------------------------------------------------------
431 - 461 30 60 65 90
-------------------------------------------------------------------
> 461 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>
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------
FAIR-SOME CONSISTENT SIGNIFICANTLY
INDIVIDUAL % OF CRITICAL WITH ABOVE
PERFORMANCE TOTAL SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
----------------------------------------------------------------------------------------
DIVERSITY
OBJECTIVES 25% 0-50% 51-70% 71-89% 90-100%
OTHER MBOs 75% 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
1996 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 $ 250,000
1996 RSI NAT ROE 15.0%
1996 RSI NBT $ 336MM
1996 Consumer NAT ROA 2.2%
1996 Consumer NBT $ 21.1MM
1996 RPTS Revenue $ 436MM
1996 RPTS Product Line Profit $ 41.7MM
Individual Performance - Diversity Objectives Significantly Above Expectations
Individual Performance - Other MBOs Significantly Above Expectations
</TABLE>
<TABLE>
<S> <C> <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 $250,000 = $ 127,500
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 $250,000 = $ 16,250
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 $250,000 = $ 16,250
4a) Individual Performance - Diversity Objectives
20% Maximum Individual Performance Bonus Opportunity
25% Maximum Diversity Objectives
75% Potential Individual Performance Bonus Payout (from grid)
20% x 25% x 75% = 3.75% of Eligible Base Salary
3.75% x $250,000 = $ 9,375
4b) Individual Performance - Other MBOs
20% Maximum Individual Performance Bonus Opportunity
75% Maximum Diversity Objectives
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% x 75% = 11.25% of Eligible Base Salary
11.25% x $250,000 = $ 28,125
---------
TOTAL BONUS $ 197,500
</TABLE>
<PAGE> 7
===============================================================================
RYDER
PRESIDENT
CONSUMER TRUCK RENTAL
1996 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 $244,280,
then effective June 1 receives an increase to a base salary of
$254,058:
January 1 through May 31 of Bonus Year:
---------------------------------------
31 + 29 + 31 + 30 + 31 = 152=.415 x $244,280/yr. = $ 101,376
---------------------- ---
366 days 366
June 1 through December 31 of Bonus Year:
-----------------------------------------
366 - 152 = 215=.585 x $254,058/yr. = $ 148,624
--------- --- ---------
366 days 366
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $ 250,000
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
Executive Committee members. 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
1996 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 Vehicle Leasing & Services
Division (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 18, 1995), 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
1996 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 1996, 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 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 performed 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
1996 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 & EVP - Development Incentive
Compensation Plan, the Ryder International field and headquarters bonus plans,
the Ryder Services Corporation Incentive Compensation Plan, the Automotive
Carrier Division executive and field bonus plans, and the Division Presidents'
bonus plans, including those granted off-cycle, may not exceed $530,000 per
year.
AMENDMENTS
The Board of Directors of RSI, or the Compensation Committee, 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, OR THE COMPENSATION COMMITTEE, 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
1996 INCENTIVE COMPENSATION PLAN PAGE 1
================================================================================
Supersedes 1995 President, Ryder Dedicated Logistics Incentive Compensation
Plan
INTRODUCTION
The following material explains the operation and administration of the 1996
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.
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 1996, 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
1996.
RSI performance above plan is measured based on RSI NBT performance for 1996.
RDL performance is measured based on RDL Revenue performance and RDL Product
Line NBT performance for 1996.
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
1996 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 (before
accounting changes) 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
1996 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.
DIVERSITY OBJECTIVES WILL ACCOUNT FOR 25% OF EACH
PARTICIPANT'S 1996 INDIVIDUAL PERFORMANCE OBJECTIVES. THIS
REQUIREMENT RECOGNIZES THE IMPACT THAT SPECIFIC DIVERSITY
GOALS HAVE ON THE ORGANIZATION. THE CONCEPT OF DIVERSITY NEED
NOT BE LIMITED TO NUMBERS; IT EMBRACES THE INCLUSION OF
OTHERS AND A VALUE OF EVERY PERSON'S UNIQUENESS.
If applicable, 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 at the discretion of the Board of Directors of
RSI.
<PAGE> 4
================================================================================
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1996 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: 1996 RSI NAT ROE and 1996 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>
---------------------------------------------------------------------------------------------------
1996 RSI NBT ($MM)
---------------------------------------------------------------------------------------------------
THRESHOLD MAXIMUM
264.4 280.0 303.0 324.6 336.0 347.0
---------------------------------------------------------------------------------
ROE % OF OPPORTUNITY
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<14.0% 30 40 50 55 75 80
---------------------------------------------------------------------------------------------------
14.0% - 16.0% 40 50 60 65 85 90
---------------------------------------------------------------------------------------------------
>16.0% 50 60 65 75 90 100
---------------------------------------------------------------------------------------------------
</TABLE>
2) RSI PERFORMANCE ABOVE PLAN - NBT
RSI performance above plan payout is based on a grid of 1996 RSI NBT.
The potential bonus payout percent is determined by locating the point
on the grid under the 1996 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>
<CAPTION>
-----------------------------------------
1996 RSI ABOVE PLAN NBT ($MM)
-----------------------------------------
THRESHOLD MAXIMUM
-----------------------------------------
324.6 336.0 347.0
-----------------------------------------
% OF OPPORTUNITY
-----------------------------------------
<S> <C> <C>
0 50 100
-----------------------------------------
</TABLE>
<PAGE> 5
================================================================================
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1996 INCENTIVE COMPENSATION PLAN PAGE 5
================================================================================
3) RDL PERFORMANCE - REVENUE/PRODUCT LINE NBT
RDL performance payout is based on a grid consisting of two
performance variables: 1996 RDL Revenue and 1996 RDL Product Line NBT.
The potential bonus payout percent is determined by locating the point
on the grid where the variables intersect. Actual performance may
fall between the points specifically displayed on the grid, and the
grid allows for interpolation between NBT points as shown. No bonus
awards will be paid for performance below threshold. The potential
bonus payout is expressed as percentage of Maximum RDL Performance
Bonus Opportunity, as shown on page 1.
POTENTIAL RDL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RDL PERFORMANCE BONUS OPPORTUNITY
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
1996 RDL PRODUCT LINE NBT ($MM)
-------------------------------------------------------------------------------------------------
THRESHOLD MAXIMUM
33.0 37.0 41.0 47.8 53.0 58.0
REVENUE ----------------------------------------------------------------------------------
($MM) % OF OPPORTUNITY
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<1,109 20 35 50 55 75 80
-------------------------------------------------------------------------------------------------
>1,109 30 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
INDIVIDUAL % OF CRITICAL WITH ABOVE
PERFORMANCE TOTAL SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DIVERSITY
OBJECTIVES 25% 0-50% 51-70% 71-89% 90-100%
OTHER MBOS 75% 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
1996 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 $ 340,000
1996 RSI NAT ROE 15.0%
1996 RSI NBT $ 336MM
1996 RDL Revenue $ 1,109MM
1996 RDL Product Line NBT $ 47.8MM
Individual Performance - Diversity Objectives Significantly Above Expectations
Individual Performance - Other MBOs 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 $340,000 = $ 173,400
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 $340,000 = $ 34,000
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 $340,000 = $ 44,200
4a) Individual Performance - Diversity Objectives
20% Maximum Individual Performance Bonus Opportunity
25% Maximum Diversity Objectives
75% Potential Individual Performance Bonus Payout (from grid)
20% x 25% x 75% = 3.75% of Eligible Base Salary
3.75% x $340,000 = $ 12,750
4b) Individual Performance - Other MBOs
20% Maximum Individual Performance Bonus Opportunity
75% Maximum Other MBOs
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% x 75% = 3.75% of Eligible Base Salary
11.25% x $340,000 = $ 38,250
---------
TOTAL BONUS $ 302,600
</TABLE>
<PAGE> 7
================================================================================
RYDER
PRESIDENT
RYDER DEDICATED LOGISTICS
1996 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
$332,222, then effective June 1 receives an increase to a base
salary of $345,518:
<TABLE>
<S> <C>
January 1 through May 31 of Bonus Year:
--------------------------------------
31 + 29 + 31 + 30 + 31 = 152=.415 x $332,222/yr. = $ 137,872
---------------------- ---
366 days 366
June 1 through December 31 of Bonus Year:
----------------------------------------
366 - 152 = 214=.585 x $345,518/yr. = $ 202,128
--------- --- ---------
366 days 366
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $ 340,000
</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
Executive Committee members. 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
1996 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 Vehicle Leasing & Services
Division (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 18, 1995), 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
1996 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 1996, 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 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 performed 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
1996 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 & EVP - Development Incentive
Compensation Plan, the Ryder International field and headquarters bonus plans,
the Ryder Services Corporation Incentive Compensation Plan, the Automotive
Carrier Division executive and field bonus plans, and the Division Presidents'
bonus plans, including those granted off-cycle, may not exceed $530,000 per
year.
AMENDMENTS
The Board of Directors of RSI, or the Compensation Committee, 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, OR THE COMPENSATION COMMITTEE, RESERVES THE RIGHT TO
AMEND, SUSPEND, TERMINATE OR MAKE EXCEPTIONS TO THIS PLAN AT ANY TIME.
<PAGE> 1
EXHIBIT 10.15(a)
RYDER SYSTEM, INC. 1980 STOCK INCENTIVE PLAN
(As amended on August 18, 1995)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Purpose ............................... 1
2. Definitions ........................... 1
3. Shares of Stock Subject to the Plan ... 5
4. Participation ......................... 6
5. Administration ........................ 6
6. Awards ................................ 6
7. Stock Options ......................... 6
8. Stock Appreciation Rights ............ 10
9. Limited SARs ......................... 11
10. Performance Units .................... 13
11. Restricted Stock Rights .............. 14
12. Dilution and Other Adjustments ....... 15
13. Substitute Options ................... 16
14. Miscellaneous Provisions ............. 16
15. Indemnification of the Committee ..... 17
16. Compliance with Law .................. 17
17. Amendment of the Plan ................ 18
18. Effective Date and Term of the Plan .. 18
</TABLE>
-i-
<PAGE> 3
RYDER SYSTEM, INC. 1980 STOCK INCENTIVE PLAN
--------------------------------------------
1. Purpose. The purpose of this Plan is to enable the Company to recruit and
retain those key executives most responsible for the Company's continued
success and progress, and by offering comparable incentives, to compete with
other organizations in attracting, motivating and retaining such executives,
thereby furthering the interests of the Company and its shareholders by giving
such executives a greater personal stake in and commitment to the Company and
its future growth and prosperity.
2. Definitions. For the purpose of the Plan:
(a) The term "Award" shall mean and include any Stock Option, SAR,
Limited SAR, Performance Unit or Restricted Stock Right granted under this Plan.
(b) During the three (3) year period following a Change of Control, the
term "cause" as used in Section 7 and Section 14(a) of this Plan with respect
to any Stock Option shall mean (i) an act or acts of fraud, misappropriation,
or embezzlement on the Grantee's part which result in or are intended to result
in his personal enrichment at the expense of the Company, (ii) conviction of a
felony, (iii) conviction of a misdemeanor involving moral turpitude, or (iv)
willful failure to report to work for more than thirty (30) continuous days not
supported by a licensed physician's statement, all as determined only by a
majority of the Incumbent Board.
(c) A "Change of Control" shall be deemed to have occurred if:
(i) any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) (a "Person") becomes the beneficial owner, directly or indirectly,
of twenty percent (20%) or more of the combined voting power of RSI's
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI; provided, however, that for purposes of this
subparagraph (i), the following acquisitions shall not constitute a Change of
Control: (A) any acquisition by any employee benefit plan or plans (or related
trust) of RSI and its subsidiaries and affiliates or (B) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A), (B) and
(C) of subparagraph (iii) of this Section 2(c); or
(ii) the individuals who, as of August 18, 1995, constituted the Board
of Directors of RSI (the "Board" generally and as of August 18, 1995 the
"Incumbent Board") cease for any reason to constitute at least two-thirds (2/3)
of the Board, provided that any person becoming a director subsequent to August
18, 1995 whose election, or nomination for election, was approved by a vote of
the persons comprising at least two-thirds (2/3) of the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act)
shall be, for purposes of this Plan, considered as though such person were a
member of the Incumbent Board; or
<PAGE> 4
(iii) there is a reorganization, merger or consolidation of RSI (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of RSI's outstanding Common Stock and
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities ordinarily having the
right to vote for the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns RSI or all
or substantially all of RSI's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of RSI's outstanding Common
Stock and outstanding voting securities ordinarily having the right to vote for
the election of directors of RSI, as the case may be, (B) no Person (excluding
any corporation resulting from such Business Combination or any employee
benefit plan or plans (or related trust) of RSI or such corporation resulting
from such Business Combination and their subsidiaries and affiliates)
beneficially owns, directly or indirectly, 20% or more of the combined voting
power of the then outstanding voting securities of the corporation resulting
from such Business Combination and (C) at least two-thirds (2/3) of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(iv) there is a liquidation or dissolution of RSI approved by the
shareholders; or
(v) there is a sale of all or substantially all of the assets of RSI.
If a Change of Control occurs and if a Grantee's employment is terminated prior
to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Grantee that such termination of employment (A) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change of Control or (B) otherwise arose in connection with or in anticipation
of a Change of Control, a Change of Control shall be deemed to have
retroactively occurred on the date immediately prior to the date of such
termination of employment.
(d) The term "Code" shall mean the Internal Revenue Code of 1986 as it may
be amended from time to time.
(e) The term "Committee" shall mean the Board of Directors of RSI and/or
the Compensation Committee of the Board of Directors of RSI constituted as
provided in Section 5 of the Plan.
(f) The term "Common Stock" shall mean the common stock of RSI as from
time to time constituted.
(g) The term "Company" shall mean RSI and its Subsidiaries.
2
<PAGE> 5
(h) The term "Disability" shall mean total physical or mental disability
of a Grantee as determined by the Committee upon the basis of such evidence as
the Committee in its discretion deems necessary and appropriate.
(i) The term "Disinterested Person" shall mean any person who qualifies as
a disinterested person as defined in Rule 16b-3, as promulgated under the 1934
Act, or any successor definition.
(j) The term "Employee" shall mean a full-time salaried employee of RSI or
any Subsidiary (which term shall include salaried officers).
(k) The term "Fair Market Value" shall mean, with respect to the Common
Stock, the mean between the highest and lowest sale price for shares as
reported by the composite transaction reporting system for securities listed on
the New York Stock Exchange on the date as of which such determination is being
made or on the most recently preceding date on which there was such a sale.
(l) The term "Grantee" shall mean an Employee who is selected by the
Committee to receive an Award under the Plan and in the case of a deceased
Employee shall mean the beneficiary of the Employee.
(m) The term "Incentive Stock Option" shall mean a Stock Option granted
under this Plan or a previously granted Stock Option that is redesignated by
the Committee as an Incentive Stock Option which is intended to constitute an
incentive stock option within the meaning of Section 422(b) of the Code.
(n) The term "Limited SAR" shall mean a Limited Stock Appreciation Right
granted by the Committee pursuant to Section 9 of the Plan.
(o) The terms "1966 Stock Option Plan" and "1966 Option" shall mean,
respectively, the Ryder System Stock Option Plan adopted in 1966, as amended,
and any stock option granted thereunder.
(p) The term "Non-qualified Stock Option" shall mean a Stock Option
granted under this Plan which is not intended to qualify under Section 422(b)
of the Code.
(q) The term "Offer" shall mean any tender offer or exchange offer for
Shares, other than one made by the Company, including all amendments and
extensions of any such Offer.
(r) The term "Offer Price per Share" shall have the meaning set forth in
Section 9(c) of the Plan.
(s) The term "Option" shall mean any stock option granted under this Plan
or the 1966 Stock Option Plan.
3
<PAGE> 6
(t) The term "Performance Goals" shall have the meaning set forth in
Section 10(c) of the Plan.
(u) The term "Performance Period" shall have the meaning set forth in
Section 10(d) of the Plan.
(v) The term "Performance Units" shall mean Performance Units granted by
the Committee pursuant to Section 10 of the Plan.
(w) The term "Plan" shall mean the Ryder System, Inc. 1980 Stock Incentive
Plan as the same shall be amended.
(x) The term "Price" shall mean, upon the occurrence of a Change of
Control, the excess of the highest of:
(i) the highest closing price of the Common Stock reported by the
composite transaction reporting system for securities listed on the New York
Stock Exchange within the sixty (60) days preceding the date of exercise;
(ii) the highest price per share of Common Stock included in a filing
made by any Person on any Schedule 13D pursuant to Section 13(d) of the 1934
Act as paid within the sixty (60) days prior to the date of such report; and
(iii) the value of the consideration to be received by the holders of
Common Stock, expressed on a per share basis, in any transaction referred to in
subparagraph (iii), (iv) or (v) of Section 2(c), with all noncash consideration
being valued in good faith by the Incumbent Board;
over the purchase price per Share at which the related Option is exercisable as
applicable, except that Incentive Stock Options and, if and to the extent
required in order for the related Option to be treated as an Incentive Stock
Option, SARs and Limited SARs granted with respect to Incentive Stock Options,
are limited to the spread between the Fair Market Value of Common Stock on the
date of exercise and the purchase price per Share at which the related Option
is exercisable.
(y) The term "Restricted Period" shall have the meaning set forth in
Section 11(a) of the Plan.
(z) The term "RSI" shall mean Ryder System, Inc.
(aa) The term "Restricted Stock Rights" shall mean a Restricted Stock
Right granted by the Committee pursuant to Section 11 of the Plan.
4
<PAGE> 7
(bb) The term "Retirement" shall mean retirement under the provisions of
the various retirement plans of the Company (whichever is appropriate to a
particular Grantee) as then in effect, or in the absence of any such retirement
plan being applicable, as determined by the Committee.
(cc) The term "SAR" shall mean a Stock Appreciation Right granted by the
Committee pursuant to the provisions of Section 8 of the Plan.
(dd) The term "Shares" shall mean shares of the Common Stock and any
shares of stock or other securities received as a result of the adjustment
provided for in Section 12 of the Plan.
(ee) The term "Spread" with respect to a SAR shall have the meaning set
forth in Section 8(b) of the Plan, and with respect to a Limited SAR, the
meanings set forth in Sections 9(c) and 9(d) of the Plan.
(ff) The term "Stock Option" shall mean any stock option granted under
this Plan.
(gg) The term "Subsidiary" shall mean any corporation, other than RSI, or
other form of business entity more than fifty percent (50%) of the voting
interest of which is owned or controlled, directly or indirectly, by RSI and
which the Committee designates for participation in the Plan.
(hh) The term "Termination Date" shall mean the date that a Grantee ceases
to be employed by RSI or any Subsidiary for any reason.
(ii) The term "Year" shall mean a calendar year.
3. Shares of Stock Subject to the Plan.
(a) Subject to the provisions of Paragraph (b) of this Section 3, at July
31, 1995, the maximum number of Shares which were available for issuance
pursuant to future grants under the Plan was 275,471, and 6,278,021 Shares were
subject to issuance pursuant to previously granted awards. Shares issued
pursuant to this Plan may be either authorized but unissued or reacquired
Shares held in the treasury.
(b) In the event any Stock Option or Restricted Stock Right expires or
terminates unexercised, the number of Shares subject to such Stock Option or
Restricted Stock Right shall again become available for issuance under the
Plan, subject to the provisions of Sections 7(a), 8(a), 9(b) and 10(i) of this
Plan.
(c) Effective October 22, 1993, no Grantee was eligible to receive any
Stock Option or series of Stock Options covering, in the aggregate, more than
300,000 Shares from the Shares which were available for issuance pursuant to
future grants on that date.
5
<PAGE> 8
4. Participation. Awards under the Plan shall be limited to key executive
Employees selected from time to time by the Committee.
5. Administration. The Plan shall be administered by the Board of
Directors of RSI, of which a majority of the Board of Directors and a majority
of the directors acting in the matter shall be Disinterested Persons, and/or the
Compensation Committee of the Board of Directors of RSI which shall consist of
not less than three members of the Board of Directors, each of whom shall be a
Disinterested Person. The Committee shall have plenary authority, subject to
the express provisions of the Plan, to (i) select Grantees; (ii) establish and
adjust Performance Goals and Performance Periods for Performance Units; (iii)
determine the nature, amount, time and manner of payment of Awards made under
the Plan, and the terms and conditions applicable thereto; (iv) interpret the
Plan; (v) prescribe, amend and rescind rules and regulations relating to the
Plan; (vi) determine whether and to what extent Stock Options previously granted
under the Plan shall be redesignated as Incentive Stock Options pursuant to the
provisions of Section 251(c) of the Economic Recovery Tax Act of 1981 and the
regulations issued thereunder, and in this connection, amend any Stock Option
Agreement or make or authorize any reports or elections or take any other action
to the extent necessary to implement the redesignation of any Stock Option as an
Incentive Stock Option, provided that any redesignation of a previously granted
Stock Option as an Incentive Stock Option shall not be effective unless and
until consented to by the Grantee; and (vii) make all other determinations
deemed necessary or advisable for the administration of the Plan. The
Committee's determination on the foregoing matters shall be conclusive. A
majority of the Committee shall constitute a quorum, and the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee without a meeting, shall be
the acts of the Committee.
6. Awards. Subject to the provisions of Section 3 of the Plan, the Committee
shall determine Awards taking into consideration, as it deems appropriate, the
responsibility level and performance of each Grantee. The Committee may grant
the following types of Awards: Stock Options pursuant to Section 7 hereof,
SARs pursuant to Section 8 hereof, Limited SARs pursuant to Section 9 hereof,
Performance Units pursuant to Section 10 hereof and Restricted Stock Rights
pursuant to Section 11 hereof. Unless otherwise determined by the Committee, a
Grantee may not be granted in any Year both (i) a Restricted Stock Right and
(ii) a Stock Option, SAR, Limited SAR or Performance Unit.
7. Stock Options.
(a) The Committee from time to time may grant Stock Options either alone
or in conjunction with and related to SARs, Limited SARs and/or Performance
Units to key executive Employees selected by the Committee as being eligible
therefor. The Stock Options may be of two types, Incentive Stock Options and
Non-qualified Stock Options. Each Stock Option shall cover such number of
Shares and shall be on such other terms and conditions not inconsistent with
this Plan as
6
<PAGE> 9
the Committee may determine and shall be evidenced by a Stock Option
Agreement setting forth such terms and conditions executed by the Company and
the Grantee. The Committee shall determine the number of Shares subject to each
Stock Option. The number of Shares subject to an outstanding Stock Option shall
be reduced on a one for one basis to the extent that any related SAR, Limited
SAR or Performance Unit is exercised and such Shares shall not again become
available for issuance pursuant to the Plan.
In the case of Stock Options, the aggregate Fair Market Value
(determined as of the date of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by an Employee during
any Year under the Plan or any other plan of the Company shall not exceed
$100,000. To the extent, if any, that the Fair Market Value of such Common
Stock with respect to which Incentive Stock Options are exercisable exceeds
$100,000, such Incentive Stock Options shall be treated as separate
Non-qualified Stock Options. For purposes of the two immediately preceding
sentences of this subparagraph (a), Stock Options shall be taken into account in
the order in which they were granted.
(b) Unless the Committee shall determine otherwise, each Stock Option may
be exercised only if the Grantee has been continuously employed by RSI or any
Subsidiary for a period of at least one (1) year commencing on the date the
Stock Option is granted; provided, however, that this provision shall not apply
in the event of a Change of Control.
(c) Each Stock Option shall be for such term (but, in no event, for
greater than ten years) and shall be exercisable in such installments as shall
be determined by the Committee at the time of grant of the Stock Option.
The Committee may, at any time, provide for the acceleration of
installments or any part thereof.
(d) The price per Share at which Shares may be purchased upon the exercise
of a Stock Option shall be determined by the Committee on the grant of the
Stock Option but such price shall not be less than one hundred percent (100%)
of the Fair Market Value on the date of grant of the Stock Option. If a
Grantee owns (or is deemed to own under applicable provisions of the Code and
rules and regulations promulgated thereunder) more than ten percent (10%) of
the combined voting power of all classes of the stock of the Company and a
Stock Option granted to such Grantee is intended to qualify as an Incentive
Stock Option, the Incentive Stock Option price shall be no less than one
hundred and ten percent (110%) of the Fair Market Value of the Common Stock on
the date the Incentive Stock Option is granted and the term of such Incentive
Stock Option shall be no more than five years.
(e) Except as provided in Paragraphs (h) and (l) of this Section 7, no
Stock Option may be exercised unless the Grantee, at the time of exercise, is
an Employee and has continuously been an Employee of RSI or any Subsidiary
since the grant of such Stock Option. A Grantee shall not be
7
<PAGE> 10
deemed to have terminated his period of continuous employ with RSI or any
Subsidiary if he leaves the employ of RSI or any Subsidiary for immediate
reemployment with RSI or any Subsidiary.
(f) To exercise a Stock Option, the Grantee shall (i) give written notice
to the Company in form satisfactory to the Committee indicating the number of
Shares which he elects to purchase, (ii) deliver to the Company payment of the
full purchase price of the Shares being purchased (A) in cash or a certified or
bank cashier's check payable to the order of the Company, or (B) if the Grantee
elects with the approval of the Committee, in Shares of the Common Stock having
a Fair Market Value on the date of exercise equal to the purchase price, or a
combination of the foregoing having an aggregate Fair Market Value equal to
such purchase price, and (iii) deliver to the Secretary of the Company such
written representations, warranties and covenants as the Company may require
under Section 16(a) of this Plan.
(g) Upon proper exercise of a Stock Option, the Grantee shall be treated
for all purposes as the registered owner of the Shares as to which the Stock
Option has been exercised as of the close of business on the date of exercise.
(h) Notwithstanding any other provision of the Plan, unless otherwise
determined by the Committee prior to a Change of Control, in the event of a
Change of Control, each Stock Option not previously exercised or expired under
the terms of 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 Stock Options shall automatically
terminate as of the Incumbent Board's determination pursuant to Section 14(a)
or the Grantee's Termination Date, as appropriate.
(i) If the Committee so determines prior to or during the thirty (30) day
period following the occurrence of a Change of Control, Grantees of Stock
Options not otherwise exercised or expired under the terms of the Plan as to
which no SARs or Limited SARs are then exercisable may, in lieu of exercising,
require RSI to purchase for cash all such Stock Options or portions thereof for
a period of sixty (60) days following the occurrence of a Change of Control at
the Price specified in Section 2(x); provided that Stock Options subject to
this purchase requirement held by Grantees who are subject to Section 16(b) of
the 1934 Act with respect to RSI must have been held for at least six (6)
months.
(j) Any determination made by the Committee pursuant to Section 7(h) or
7(i) may be made as to all eligible Stock Options or only as to certain of such
Stock Options specified by the Committee. Once made, any determination by the
Committee pursuant to Section 7(h) or 7(i) shall be irrevocable.
(k) The Company intends that Section 7(i) shall comply with the
requirements of Rule 16b-3 under the 1934 Act (the "Rule") during the term of
this Plan. Should any provision of Section 7(i) not be necessary to comply
with the requirements of the Rule, or should any additional provisions be
8
<PAGE> 11
necessary for Section 7(i) to comply with the requirements of the Rule,
the Committee may amend this Plan or any Stock Option agreement to add to or
modify the provisions thereof accordingly.
(l) Notwithstanding any of the provisions of this Section 7, a Stock
Option shall in all cases terminate and not be exercisable after the expiration
of the term of the Stock Option established by the Committee. Except as
provided in Section 7(h), Stock Options shall be exercisable after the Grantee
ceases to be employed by RSI or any Subsidiary as follows, unless otherwise
determined by the Committee:
(i) In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of Disability or Retirement, (A) any Non-qualified Stock
Option not previously exercised or expired shall continue to vest and be
exercisable during the three (3) year period following the Grantee's
Termination Date, and to the extent it is exercisable at the expiration of such
three (3) year period, it shall continue to be exercisable by such Grantee or
such Grantee's legal representatives, heirs or legatees for the term of such
Non-qualified Stock Option, and (B) any Incentive Stock Option shall, to the
extent it was exercisable on the Termination Date, continue to be exercisable
by such Grantee or such Grantee's legal representatives, heirs or legatees for
the term of such Incentive Stock Option; provided, however, that in order to
qualify for the special tax treatment afforded by Section 421 of the Code,
Incentive Stock Options must be exercised within the three (3) month period
commencing on the Termination Date (the exercise period shall be one (1) year
in the case of termination by reason of disability, within the meaning of
Section 422(e)(3) of the Code). Incentive Stock Options not exercised within
such three (3) month period shall be treated as Non-qualified Stock Options.
(ii) In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of death, any Stock Option shall, to the extent it was
exercisable on the Termination Date, continue to be exercisable by such
Grantee's legal representatives, heirs or legatees for the term of such Stock
Option.
(iii) Except as otherwise provided in subparagraph (i) or (ii) above,
in the event that a Grantee ceases to be employed by RSI or any Subsidiary for
any reason other than termination for cause, any Stock Option shall, to
the extent it was exercisable on the Termination Date, continue to be
exercisable for a period of three (3) months commencing on the Termination Date
and shall terminate at the expiration of such period; provided, however, that
in the event of the death of the Grantee during such three (3) month period,
such Stock Option shall, to the extent it was exercisable on the Termination
Date, be exercisable by the Grantee's personal representatives, heirs or
legatees for a period of one (1) year commencing on the date of the Grantee's
death and shall terminate at the expiration of such period.
(iv) Except as otherwise provided in subparagraphs (i), (ii) and (iii)
above, a Stock Option shall automatically terminate as of the Termination Date,
provided that if a Grantee's employment is interrupted by reason of Disability
or a leave of absence (as determined by the
9
<PAGE> 12
Committee) the Committee may permit the exercise of some or all of the Stock
Options granted on such terms and for such period of time as it shall
determine.
8. Stock Appreciation Rights.
(a) The Committee shall have authority in its discretion to grant a SAR to
any Grantee of a Stock Option with respect to all or some of the Shares covered
by such Stock Option. Each SAR shall be on such terms and conditions not
inconsistent with this Plan as the Committee may determine and shall be
evidenced by a SAR Agreement setting forth such terms and conditions executed
by the Company and the holder of the SAR. A SAR may be granted either at the
time of grant of a Stock Option or at any time thereafter during its term. A
SAR may be granted to a Grantee irrespective of whether such Grantee has a
Limited SAR. Each SAR shall be exercisable only if and to the extent that the
related Stock Option is exercisable, provided, however, that no SAR may be
exercised in any event (i) until the expiration of six (6) months from the date
of grant of the SAR unless prior to the expiration of such six (6) month period
the holder of the SAR ceases to be employed by RSI or any Subsidiary because of
death or Disability, or (ii) more than six (6) months after the Termination
Date of a Grantee. Upon the exercise of a SAR, the related Stock Option shall
cease to be exercisable to the extent of the Shares with respect to which such
SAR is exercised and shall be considered to have been exercised to that extent
for purposes of determining the number of Shares available for the grant of
further Awards pursuant to this Plan. Upon the exercise or termination of a
Stock Option, the SAR related to such Stock Option shall terminate to the
extent of the Shares with respect to which such Stock Option was exercised or
terminated.
(b) The term "Spread" as used in this Section 8 shall mean, with respect
to the exercise of any SAR, an amount equal to the product computed by
multiplying (i) the excess of (A) the Fair Market Value per Share on the date
such SAR is exercised over (B) the purchase price per Share at which the
related Stock Option is exercisable by (ii) the number of Shares with respect
to which such SAR is being exercised, provided, however, that the Committee may
at the grant of any SAR limit the maximum amount of the Spread to be paid upon
the exercise thereof.
(c) Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a SAR may be exercised only
when there is a positive Spread, that is, when the Fair Market Value per Share
exceeds the purchase price per Share at which the related Stock Option is
exercisable. Upon the exercise of a SAR, the Committee shall pay to the
Grantee exercising the SAR an amount equivalent to the Spread. The Committee
shall have the sole and absolute discretion to determine whether payment for
such SAR will be made in cash, Shares or a combination of cash and Shares,
provided, that any Shares used for payment shall be valued at their Fair Market
Value on the date of the exercise of the SAR.
(d) A SAR may be exercised only during the period beginning on the third
(3rd) business day following the date of release for publication of the
quarterly and annual summary statements of sales and earnings of the Company
and ending on the twelfth (12th) business day following such date.
10
<PAGE> 13
Such release shall be deemed to have taken place if the specified financial
data appears (i) on a wire service, (ii) in a financial news service,
(iii) in a newspaper of general circulation or (iv) is otherwise made
publicly available.
(e) The Company intends that this Section 8 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 8 not be necessary to comply with the requirements of the Rule or
should any additional provisions be necessary for this Section 8 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
(f) To exercise a SAR, the Grantee shall (i) give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which such holder is exercising the SAR and (ii) deliver to the
Company such written representations, warranties and covenants as the Company
may require under Section 16(a) of this Plan.
(g) A person exercising a SAR shall not be treated as having become the
registered owner of any Shares issued on such exercise until such Shares are
issued.
(h) The exercise of a SAR shall reduce the number of Shares subject to the
related Stock Option on a one for one basis.
9. Limited SARs.
(a) The Committee shall have authority in its discretion to grant a
Limited SAR to the holder of any Stock Option or any 1966 Option, with respect
to all or some of the Shares covered by such Option; provided, however, that in
the case of Incentive Stock Options, the Committee may grant Limited SARs only
if and to the extent that the grant of such Limited SARs is consistent with the
treatment of the Stock Option as an Incentive Stock Option. Each Limited SAR
shall be on such terms and conditions not inconsistent with this Plan as the
Committee may determine and shall be evidenced by a Limited SAR Agreement
setting forth such terms and conditions executed by the Company and the holder
of the Limited SAR. A Limited SAR may be granted to the holder of a 1966
Option at any time during its term and may be granted either at the time of
grant of a Stock Option or at any time thereafter during its term. A Limited
SAR may be granted to a Grantee irrespective of whether such Grantee has a SAR.
(b) Limited SARs may be exercised only during the sixty (60) day period
commencing after the occurrence of a Change of Control, provided, however, that
a Limited SAR that has not been held by the Grantee for at least six (6) months
before the occurrence of a Change of Control may be exercised only during the
sixty (60) day period commencing upon the expiration of such six (6) month
holding period.
11
<PAGE> 14
Each Limited SAR shall be exercisable only if and to the extent that the
related Option is exercisable, provided, however, that no Limited SAR may be
exercised in any event (i) until the expiration of six (6) months from the date
of grant of the Limited SAR, or (ii) more than six (6) months after the
Termination Date of a Grantee. Upon the exercise of a Limited SAR, the related
Stock Option or 1966 Option shall cease to be exercisable to the extent of the
Shares with respect to which such Limited SAR is exercised, and the Stock
Option and 1966 Option shall be considered to have been exercised to that extent
for purposes of determining the number of Shares available for the grant of
further Awards pursuant to this Plan and the 1966 Stock Option Plan,
respectively. Upon the exercise or termination of an Option, the Limited SAR
with respect to such Option shall terminate to the extent of the Shares
with respect to which the Option was exercised or terminated.
(c) For any Limited SAR, the term "Spread" as used in this Section 9 shall
mean an amount equal to the product computed by multiplying (A) the Price
specified in Section 2(x) by (B) the number of Shares with respect to which
such Limited SAR is being exercised.
(d) Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a Limited SAR may be
exercised only when there is a positive Spread, that is, when the Fair Market
value per Share exceeds the purchase price per Share at which the related Stock
Option is exercisable. Upon the exercise of a Limited SAR, the holder thereof
shall receive an amount in cash equal to the Spread.
(e) Notwithstanding any other provision of this Plan, no SAR or
Performance Unit may be exercised with respect to any Stock Option at a time
when any Limited SAR with respect to such Stock Option held by the Grantee of
such SAR or Performance Unit may be exercised.
(f) The Company intends that this Section 9 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 9 not be necessary to comply with the requirements of the Rule, or
should any additional provisions be necessary for this Section 9 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
(g) To exercise a Limited SAR, the holder shall give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which he is exercising the Limited SAR.
(h) The exercise of a Limited SAR shall reduce on a one for one basis the
number of Shares subject to the related Stock Option or 1966 Option.
12
<PAGE> 15
10. Performance Units.
(a) In conjunction with the granting of Stock Options under this Plan, the
Committee may grant Performance Units relating to such Stock Options; provided,
however, that in the case of Incentive Stock Options, the Committee may grant
Performance Units only if and to the extent that the grant of such Performance
Units is consistent with the treatment of the Stock Option as an Incentive
Stock Option. Each grant of Performance Units shall cover such number of
Shares and shall be on such other terms and conditions not inconsistent with
this Plan as the Committee may determine and shall be evidenced by a
Performance Unit Agreement setting forth such terms and conditions executed by
the Company and the Grantee of the Performance Units. The number of
Performance Units granted shall be equal to a specified number of Shares
subject to the related Stock Options. The Committee shall value such Units to
the extent that Performance Goals are achieved, provided, however, that in no
event shall the value per Performance Unit exceed one hundred and fifty percent
(150%) of the purchase price per Share at which the related Stock Option is
exercisable.
(b) The Committee shall have full and final authority to establish
Performance Goals for each Performance Period on the basis of such criteria,
and the attainment of such objectives, as the Committee may from time to time
determine. In setting Performance Goals, the Committee may take into
consideration such matters which it deems relevant and such financial and other
criteria including but not limited to projected cumulative compounded rate of
growth in earnings per share and average return on equity. During any
Performance Period, the Committee shall have the authority to adjust
Performance Goals for the Performance Period as it deems equitable in
recognition of extraordinary or nonrecurring events experienced by the Company
during the Performance Period including, but not limited to, changes in
applicable accounting rules or principles or changes in the Company's methods
of accounting during the Performance Period or significant changes in tax laws
or regulations which affect the financial results of the Company.
(c) The term "Performance Goals" as used in this Section 10 shall mean the
performance objectives established by the Committee for the Company for a
Performance Period for the purpose of determining if, as well as the extent to
which, a Performance Unit shall be earned.
(d) The term "Performance Period" as used in this Section 10 shall mean
the period of time selected by the Committee (which period shall be not more
than five nor less than three years) commencing on January 1 of the Year in
which the grant of Performance Units is made, during which the performance of
the Company is measured for the purpose of determining the extent to which
Performance Units have been earned.
(e) Performance Units shall be earned to the extent that Performance Goals
and other conditions established in accordance with Paragraph (b) of this
Section 10 are met. The Company shall promptly notify each Grantee of the
extent to which Performance Units have been earned by such Grantee. A
Performance Unit may be exercised only during the period following such notice
and prior to expiration of the related option. Performance Units which have
been earned shall be paid
13
<PAGE> 16
after exercise by the Grantee pursuant to Paragraph (h) of this Section 10.
The Committee shall have the sole and absolute discretion to determine whether
payment for such Performance Unit will be made in cash, Shares or a combination
of cash and Shares, provided that any Shares used for payment shall be valued at
their Fair Market Value on the date of the exercise of the Performance Unit.
(f) Unless otherwise determined by the Committee, in the event that a
Grantee of Performance Units ceases to be employed by RSI or any Subsidiary
during the term of the related Stock Option, the Performance Units held by him
shall be exercisable only to the extent the related Stock Option is exercisable
and shall be forfeited to the extent that the related Stock Option was not
exercisable on the Termination Date.
(g) The Company intends that this Section 10 shall comply with the
requirements of Section 16(b) of the 1934 Act and the rules thereunder, as from
time to time in effect, including the Rule. Should any provision of this
Section 10 not be necessary to comply with the requirements of said Section
16(b) and the rules thereunder or should any additional provision be necessary
for this Section 10 to comply with the requirements of Section 16(b) and the
rules thereunder, the Committee may amend this Plan or any Award agreement to
add to or modify the provisions thereof accordingly.
(h) To exercise Performance Units, the Grantee shall give written notice
to the Company in form satisfactory to the Committee addressed to the Secretary
of the Company specifying the number of Shares with respect to which he is
exercising Performance Units.
(i) The exercise of Performance Units shall reduce on a one for one basis
the number of Shares subject to the related Stock Option.
11. Restricted Stock Rights.
(a) The Committee from time to time may grant Restricted Stock Rights to
key executive Employees selected by the Committee as being eligible therefor,
which would entitle a Grantee to receive a stated number of Shares subject to
forfeiture of such Rights if such Grantee failed to remain continuously in the
employ of RSI or any Subsidiary for the period stipulated by the Committee (the
"Restricted Period").
(b) Restricted Stock Rights shall be subject to the following restrictions
and limitations:
(i) The Restricted Stock Rights may not be sold, assigned, transferred,
pledged, hypothecated, or otherwise disposed of;
(ii) Except as otherwise provided in Paragraph (d) of this Section 11,
the Restricted Stock Rights and the Shares subject to such Restricted Stock
Rights shall be forfeited and all rights of a Grantee to such Restricted Stock
Rights and Shares shall terminate without any payment of consideration by the
Company if the Grantee fails to remain continuously as an Employee of RSI or
14
<PAGE> 17
any Subsidiary for the Restricted Period. A Grantee shall not be deemed to
have terminated his period of continuous employment with RSI or any Subsidiary
if he leaves the employ of RSI or any Subsidiary for immediate reemployment with
RSI or any Subsidiary.
(c) The Grantee of Restricted Stock Rights shall not be entitled to any of
the rights of a holder of the Common Stock with respect to the Shares subject
to such Restricted Stock Rights prior to the issuance of such Shares pursuant
to the Plan. During the Restricted Period, for each Share subject to a
Restricted Stock Right, the Company will pay the holder an amount in cash equal
to the cash dividend declared on a Share during the Restricted Period on or
about the date the Company pays such dividend to the stockholders of record.
(d) In the event that the employment of a Grantee terminates by reason of
death, Disability or Retirement, such Grantee shall be entitled to receive the
number of Shares subject to the Restricted Stock Right multiplied by a fraction
(x) the numerator of which shall be the number of days between the date of
grant of such Restricted Stock Right and the date of such termination of
employment, and (y) the denominator of which shall be the number of days in the
Restricted Period, provided, however, that any fractional Share shall be
cancelled. If a Grantee's employment is interrupted by reason of Disability or
a leave of absence (as determined by the Committee), then the Committee may
permit the delivery of the Shares subject to the Restricted Stock Right in such
amounts as the Committee may determine.
(e) Notwithstanding Paragraphs (a) and (b) of this Section 11, unless
otherwise determined by the Committee prior to the occurrence of a Change of
Control, in the event of a Change of Control all restrictions on Restricted
Stock shall expire and all Shares subject to Restricted Stock Rights shall be
issued to the Grantees. Additionally, the Committee may, at any time, provide
for the acceleration of the Restricted Period and of the issuance of all or
part of the Shares subject to Restricted Stock Rights. Any determination made
by the Committee pursuant to this Section 11(e) may be made as to all
Restricted Stock Rights or only as to certain Restricted Stock Rights specified
by the Committee. Once made, any determination by the Committee pursuant to
this Section 11(e) shall be irrevocable.
(f) When a Grantee shall be entitled to receive Shares pursuant to a
Restricted Stock Right, the Company shall issue the appropriate number of
Shares registered in the name of the Grantee.
12. Dilution and Other Adjustments. If there shall be any change in the Shares
subject to the Plan or any Award granted under the Plan, as a result of merger,
consolidation, reorganization, recapitalization, stock dividend, stock split or
other change in the corporate structure, adjustments may be made by the
Committee, as it may deem appropriate, in the aggregate number and kind of
Shares subject to the Plan or to any outstanding Award, and in the terms and
provisions of this Plan and any Awards granted hereunder, in order to reflect,
on an equitable basis, any such change in the Shares contemplated by this
Section 12. Any adjustment made by the Committee pursuant to this
15
<PAGE> 18
Section 12 shall be conclusive and binding upon the Grantee, the Company
and any other related person.
13. Substitute Options. Incentive and/or Non-qualified Stock Options may be
granted under this Plan from time to time in substitution for either incentive
or non-qualified stock options or both held by employees of other corporations
who are about to become employees of the Company as the result of a merger,
consolidation or reorganization of the employing corporation with the Company,
or the acquisition by the Company of the assets of the employing corporation,
or the acquisition by the Company of stock of the employing corporation as the
result of which it becomes a Subsidiary of the Company. The terms and
conditions of the Stock Options so granted may vary from the terms and
conditions set forth in this Plan to such extent as the Committee at the time
of grant may deem appropriate to conform, in whole or in part, to the
provisions of the stock options in substitution for which they are granted,
but, in the event that the option for which a substitute Stock Option is being
granted is an incentive stock option, no variation shall adversely affect the
status of any substitute Stock Option as an incentive stock option under the
Code.
14. Miscellaneous Provisions.
(a) Notwithstanding any other provision of the Plan, no Stock Option, SAR,
Limited SAR or Restricted Stock Right granted hereunder may be exercised nor
shall any payment in respect of any Performance Unit granted hereunder be made
and all rights of the Grantee thereof, or of the Grantee's legal
representatives, heirs or legatees, shall be forfeited if, prior to the time of
such exercise or payment, the Committee (or in the event of a Change of
Control, the Incumbent Board) determines that the Grantee has (i) used for
profit or disclosed confidential information or trade secrets of the Company to
unauthorized persons, or (ii) breached any contract with, or violated any legal
obligation to, the Company, or (iii) engaged in any other activity which would
constitute grounds for termination for cause of the Grantee by the Company.
The Committee (or the Incumbent Board) shall give a Grantee written notice of
such determination prior to making any such forfeiture. The Committee (or the
Incumbent Board) may waive the conditions of this Paragraph in full or in part
if, in its sole judgment, such waiver will have no substantial adverse effect
upon the Company. The determination of the Committee (or the Incumbent Board)
as to the occurrence of any of the events specified above and to the
forfeiture, if any, shall be conclusive and binding upon the Grantee, the
Company and any other related person.
(b) The Grantee of an Award shall have no rights as a stockholder with
respect thereto, except as otherwise expressly provided in the Plan, unless and
until certificates for Shares are issued.
(c) No Award or any rights or interests therein shall be assignable or
transferable by the Grantee except by will or the laws of descent and
distribution. During the lifetime of the Grantee, an Award shall be
exercisable only by the Grantee or the Grantee's guardian or legal
representative.
16
<PAGE> 19
(d) The Company shall have the right to deduct from all Awards granted
hereunder to be distributed in cash any Federal, state, local or foreign taxes
required by law to be withheld with respect to such cash payments. In the case
of Awards to be distributed in Shares, the holder or other person receiving
such Common Stock shall be required, as a condition of such distribution,
either to pay to the Company at the time of distribution thereof the amount of
any such taxes which the Company is required to withhold with respect to such
Shares or to have the number of the Shares, valued at their Fair Market Value
on the date of distribution, to be distributed reduced by an amount equal to
the value of such taxes required to be withheld.
(e) No Employee shall have any claim or right to be granted an Award under
the Plan, nor having been selected as a Grantee for one Year, any right to be a
Grantee in any other Year. Neither the Plan nor any action taken hereunder
shall be construed as giving any Grantee any right to be retained in the employ
of RSI or any Subsidiary, and the Company expressly reserves its right at any
time to dismiss any Grantee with or without cause.
(f) The costs and expense of administering the Plan shall be borne by the
Company and not charged to any Award nor to any Grantee.
(g) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under the Plan, and payment of Awards
shall be subordinate to the claims of the Company's general creditors.
(h) Whenever used in the Plan, the masculine gender shall include the
feminine or neuter wherever necessary or appropriate and vice versa and the
singular shall include the plural and vice versa.
15. Indemnification of the Committee. Service on the Committee shall
constitute service as a director of the Company and members of the Committee
shall be entitled to indemnification, advancement of expenses and reimbursement
as directors of the Company pursuant to its Articles of Incorporation, bylaws,
resolutions of the Board of Directors of RSI or otherwise.
16. Compliance with Law.
(a) Each Grantee, to permit the Company to comply with the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable blue sky or state
securities laws, shall represent in writing to the Company at the time of the
grant of an Award and at the time of the issuance of any Shares thereunder that
such Grantee does not contemplate and shall not make any transfer of any Shares
to be acquired under an Award except in compliance with the 1933 Act and such
Grantee shall enter into such agreements and make such other representations
as, in the opinion of counsel to the Company, shall be sufficient to enable the
Company legally to issue the Shares without registration
17
<PAGE> 20
thereof under the 1933 Act. Certificates representing Shares to be acquired
under Awards shall bear legends as counsel for the Company may indicate are
necessary or appropriate to accomplish the purposes of this Section 16.
(b) If at any time the Committee shall determine that the listing,
registration or qualification of the Shares subject to any Award upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body is necessary or desirable as a
condition of, or in connection with, the granting of or issuance of Shares under
such Award, such Shares shall not be issued unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.
17. Amendment of the Plan. The Committee may at any time (i) terminate this
Plan or (ii) modify or amend this Plan in any respect, except that without
shareholder approval the Committee may not (A) materially increase the benefits
accruing to Grantees under the Plan if and to the extent required to maintain
the qualification of the Plan under the Rule, (B) materially increase the
number of securities which may be issued under the Plan, or (C) materially
modify the requirements as to eligibility for participation in the Plan. The
termination or any modification or amendment of this Plan shall not, without
the consent of any Grantee involved, adversely affect his rights under an Award
previously granted to him.
18. Effective Date and Term of the Plan.
(a) This Plan originally became effective for the fiscal year commenced
January 1, 1980. The Plan was approved on May 2, 1980, by the holders of a
majority of the then outstanding Shares of the Company. The Plan as then
amended was most recently approved by the holders of a majority of the
outstanding Shares of the Company on May 7, 1993.
(b) Unless previously terminated in accordance with Section 17 of this
Plan, this Plan shall terminate on the close of business on May 1, 2000, after
which no Awards shall be granted under this Plan. Such termination shall not
affect any Awards granted prior to such termination.
18
<PAGE> 1
EXHIBIT 10.15(b)
PISO
RYDER SYSTEM, INC.
1980 STOCK INCENTIVE PLAN, UNITED KINGDOM SECTION
AGREEMENT
THIS AGREEMENT, made as of this 4th day of May, 1995, between Ryder System,
Inc., a Florida corporation ("RSI"), and ____ (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 Stock Options ("Stock Options") to
purchase shares of Common Stock to key executive Employees of RSI or any
Subsidiary; and
WHEREAS, the United Kingdom Section of the Plan has been approved by the Inland
Revenue under the Income and Corporation Taxes Act 1984; and
WHEREAS, the Grantee is a key executive Employee and has been selected by the
Compensation Committee of the Board of Directors of RSI (the "Committee") to
receive Stock Options under the United Kingdom Section of the Plan;
NOW, THEREFORE, in consideration of the premises, RSI and the Grantee agree as
follows:
I. STOCK OPTION
Grant of Stock Option
Subject to the limitations and other terms and conditions set forth in this
Agreement and the Plan, the Committee grants to the Grantee on May 4, 1995, a
Stock Option to purchase an aggregate of ______ shares of RSI's Common
Stock, par value $.50 per share (the "Shares"), at a price of $23.3750 per
Share, the Fair Market Value on the date of grant and agreed to by the United
Kingdom Inland Revenue for this purpose.
Limitations on Exercise of Stock Option
Subject to the limitations and other terms and conditions set forth in this
Agreement and the Plan, the Stock Option shall be exercisable in installments
on or before May 3, 2005, as follows:
(i) 50% of the Shares subject to the Stock Option on or after May
4, 1996;
<PAGE> 2
(ii) the remaining 50% of the Shares subject to the Stock Option on
or after May 4, 1997.
Subject to the foregoing and the provisions of the Plan, any installment
portion of the Stock Option that becomes exercisable shall thereafter
accumulate and be exercisable at any time on or before the expiration of the
term of the Stock Option on May 3, 2005.
Exercise and Payment of Stock Option
Subject to the limitations and other terms and conditions set forth in this
Agreement and the Plan, the Stock Option, to the extent then exercisable, may
be exercised from time-to-time by delivering written notice to RSI addressed to
RSI Accounting specifying the number of Shares the Grantee then elects to
purchase under the 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. Within 30 days after any such exercise, RSI will deliver
to the Grantee certificates for the number of Shares with respect to which the
Stock Option has been exercised, issued in the name of the Grantee.
II. GENERAL
Transferability of Stock Options
No Stock Options 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, a Stock Option 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: RSI Accounting; 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 Stock Option and the issuance of Shares
subject thereto are subject in all respects to the terms of the United Kingdom
Section of the Plan and in the event
2
<PAGE> 3
that any provision of this Agreement shall be inconsistent with the terms of
the United Kingdom Section of the Plan, then the terms of the United Kingdom
Section of the Plan shall govern. The Committee shall have plenary authority
to interpret this Agreement and the Plan, including the United Kingdom Section
of the Plan, and to make all determinations deemed necessary or advisable for
the administration of the Plan. The Committee's interpretation and
determinations shall be conclusive.
Acknowledgement
The Grantee acknowledges that he has read the entire Plan including the
provisions thereof relating to termination of employment. Additionally, the
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.
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:
- ------------------------------ -------------------------------
Yasmine B. Zyne George E. Arseneau
Assistant Secretary Vice President, Human Resources
and Labor Relations
------------------------------------
(the "Grantee")
------------------------------------
National Insurance Number
3
<PAGE> 1
EXHIBIT 10.15(c)
SIP
RYDER SYSTEM INC.
1980 STOCK INCENTIVE PLAN, UNITED KINGDOM SECTION
AGREEMENT
THIS AGREEMENT, made as of this 3rd day of October, 1995 between Ryder System,
Inc., a Florida corporation ("RSI"), and ____ (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 Stock Options ("Stock Options") to
purchase shares of Common Stock to key executive Employees of RSI; and
WHEREAS, the United Kingdom Section of the Plan has been approved by the Inland
Revenue under the Income and Corporation Taxes Act 1984; and
WHEREAS, the Grantee is a key executive Employee and has been selected by the
Compensation Committee of the Board of Directors of RSI (the "Committee") to
receive Stock Options under the United Kingdom Section of the Plan;
NOW, THEREFORE, in consideration of the premises, RSI and the Grantee agree as
follows:
I. 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 on October 3, 1995
a Stock Option to purchase an aggregate of ______ shares of RSI's Common
Stock, par value $.50 per share (the "Shares"), at a price of $25.4375 per
Share, the Fair Market Value on the date of grant and agreed by the United
Kingdom Inland Revenue for this purpose.
Limitations on Exercise of Option
Subject to the limitations and other terms and conditions set forth in this
Agreement and the Plan, the Stock Option shall be exercisable in installments
on or before October 2, 2005 as follows:
(i) None of the Shares subject to the Stock Option for a period of
one year from the date of grant;
(ii) 33 1/3% of the Shares subject to the Stock Option on or after
October 3, 1996;
<PAGE> 2
(iii) 33 1/3% of the Shares subject to the Stock Option on or after
October 3, 1997;
(iv) the final 33 1/3% of the Shares subject to the Stock Option on
or after October 3, 1998.
Subject to the foregoing and the provisions of the Plan, any installment
portion of the Stock Option that becomes exercisable shall thereafter
accumulate and be exercisable at any time on or before the expiration of the
term of the Stock Option on October 2, 2005.
Exercise and Payment of Option
Subject to the limitations and other terms and conditions set forth in this
Agreement and the Plan, the Stock Option, to the extent then exercisable, may
be exercised 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 Stock Option, together with the full purchase price of
the Shares being purchased in cash or a certified or bank cashier's cheque
payable to the order of RSI. Within 30 days after any such exercise, RSI will
deliver to the Grantee certificates for the number of Shares with respect to
which the Stock Option has been exercised, issued in the name of the Grantee.
II. GENERAL
Transferability of Stock Options
No Stock Options 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, a Stock Option 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.
2
<PAGE> 3
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 Stock Option and the issuance of Shares
subject thereto are subject in all respects to the terms of the United Kingdom
Section of the Plan and in the event that any provision of this Agreement shall
be inconsistent with the terms of the United Kingdom Section of the Plan, then
the terms of the United Kingdom Section of the Plan shall govern. The
Committee shall have plenary authority to interpret this Agreement and the
Plan, including the United Kingdom Section of the Plan, and to make all
determinations deemed necessary or advisable for the administration of the
Plan. The Committee's interpretation 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. Additionally, the
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.
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 Thomas E. McKinnon
Assistant Secretary Executive Vice President,
Human Resources
-----------------------------------
GRANTEE
-----------------------------------
National Insurance Number
or Social Security Number
3
<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 3rd day of October, 1995, between Ryder
System, Inc., a Florida corporation ("RSI"), and ______(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. 1995 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
Compensation Committee of the Board of Directors of RSI (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 3, 1995 a Non-qualified Stock Option to purchase an aggregate of
_______ shares of RSI's Common Stock, par value $.50 per share (the "Shares"),
at a price of $25.4375 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 2, 2005
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) 33 1/3% of the Shares subject to the Non-qualified Stock
Option on or after October 3, 1996;
<PAGE> 2
(iii) 33 1/3% of the Shares subject to the Non-qualified Stock
Option on or after October 3, 1997;
(iv) the final 33 1/3% of the Shares subject to the Non-qualified
Stock Option on or after October 3, 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 October 2, 2005.
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(h) 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
2
<PAGE> 3
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 Person, but excluding any employee benefit plan or plans (or
related trust) 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 Business Combination
affecting RSI, 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 3, 1995 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 1934 Act 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 October 2, 2005, 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 Thomas E. McKinnon
Assistant Secretary Executive Vice President,
Human Resources
-----------------------------------
GRANTEE
-----------------------------------
Social Security Number
5
<PAGE> 1
EXHIBIT 10.15(e)
RYDER SYSTEM, INC
COMBINED NON-QUALIFIED STOCK OPTION
AND
LIMITED STOCK APPRECIATION RIGHT
AGREEMENT
THIS AGREEMENT, made as of this 15TH DAY OF JANUARY 1996, between Ryder System,
Inc., a Florida corporation ("RSI"), and E. A. HUSTON (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. 1995 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
Compensation Committee of the Board of Directors of RSI (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
JANUARY 15, 1996 a Non-qualified Stock Option to purchase an aggregate of
45,300 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 in installments on or before JANUARY 14, 2006
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 JANUARY 15, 1997;
(iii) 20% of the Shares subject to the Non-qualified Stock Option on
or after JANUARY 15, 1998;
1
<PAGE> 2
(iv) 20% of the Shares subject to the Non-qualified Stock Option on
or after JANUARY 15, 1999;
(v) and the final 20% of the Shares subject to the Non-qualified
Stock Option on or after JANUARY 15, 2000.
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 JANUARY 14, 2006.
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(h) 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
2
<PAGE> 3
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 Person, but excluding any employee benefit plan or plans (or
related trust) 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 Business combination
affecting RSI, 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 JANUARY 15, 1996 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 1934 Act 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 JANUARY 14, 2006, 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
3
<PAGE> 4
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.
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
4
<PAGE> 5
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 Thomas E. McKinnon
Assistant Secretary Executive Vice President,
Human Resources
----------------------------------
GRANTEE
----------------------------------
Social Security Number
5
<PAGE> 1
EXHIBIT 10.21
RYDER SYSTEM, INC.
STOCK FOR MERIT INCREASE REPLACEMENT PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Effective Date and Term of this Plan . . . . . . . . . . . . . . . . . . . . . . 1
3. Administration of this Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Common Stock Subject to this Plan . . . . . . . . . . . . . . . . . . . . . . . . 1
5. Eligible Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
6. Purchase Price of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
7. Option Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
8. Option Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
9. Non-Transferability of Options . . . . . . . . . . . . . . . . . . . . . . . . . 3
10. Exercise of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
11. Withholding Taxes on Option Exercise . . . . . . . . . . . . . . . . . . . . . . 4
12. Exercise of Options in the Event of a Change of Control . . . . . . . . . . . . . 4
13. Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
14. Amendments to this Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
15. Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
-i-
<PAGE> 3
RYDER SYSTEM, INC.
STOCK FOR MERIT INCREASE REPLACEMENT PLAN
1. Purpose of this Plan
The purpose of the Ryder System, Inc. Stock for Merit Increase Replacement
Plan, as amended (this "Plan"), is to give key executives of Ryder System, Inc.
(the "Company") and its subsidiaries who are primarily responsible for the
management of the business of the Company the opportunity to receive stock
option grants in lieu of merit salary increases, thereby encouraging focus on
the growth and profitability of the Company and its Common Stock (as defined in
Section 4).
2. Effective Date and Term of this Plan
This Plan shall become effective on May 5, 1995, subject to the approval of the
shareholders of the Company. Unless previously terminated in accordance with
Section 14 of this Plan, this Plan shall terminate on the close of business on
May 4, 2005, after which no Options (as defined in Section 4) shall be granted
under this Plan. Such termination shall not affect any Options granted prior to
such termination.
3. Administration of this Plan
This Plan shall be administered by the Compensation Committee (the "Committee")
of the Board of Directors of the Company which shall consist of not less than
three members of the Board of Directors, each of whom shall be a "disinterested
person" as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as
amended (the "1934 Act"). Additionally, all members of the Committee shall be
"outside directors" as defined or interpreted for purposes of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"). A majority of the
Committee shall constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in
writing by all members of the Committee without a meeting, shall be the acts of
the Committee. The Committee shall have plenary authority, subject to the
express provisions of this Plan, to (i) select participants; (ii) determine the
nature, amount, time and manner of stock option grants made under this Plan;
(iii) interpret this Plan; (iv) prescribe, amend and rescind rules and
regulations relating to this Plan; and (v) make all other determinations deemed
necessary or advisable for the administration of this Plan.
<PAGE> 4
4. Common Stock Subject to this Plan
The shares of Common Stock of the Company, par value $.50 per share ("Common
Stock"), to be issued upon the exercise of an option to purchase Common Stock
granted in lieu of a merit salary increase (an "Option") may be made available
from the authorized but unissued Common Stock, or Common Stock purchased on the
open market or otherwise.
Subject to the provisions of the next succeeding paragraph, the maximum
aggregate number of shares of Common Stock for which Options may be granted
under this Plan shall be 500,000 shares. If an Option granted under this Plan
expires or is terminated without having been exercised in full, the unpurchased
or forfeited shares or rights to receive shares shall become available for
grant to other executives. No executive shall be eligible to receive any
Options or series of Options covering, in the aggregate, more than 300,000
shares during the term of this Plan.
If there shall be any change in the shares of Common Stock subject to this Plan
or any Option granted under this Plan as a result of merger, consolidation,
reorganization, recapitalization, stock dividend, stock split or other change
in the corporate structure, adjustments may be made by the Committee, as it may
deem appropriate, in the aggregate number and kind of shares subject to this
Plan or to any outstanding Option, and in the terms and provisions of this Plan
and any Options granted hereunder, in order to reflect, on an equitable basis,
any such change in the shares contemplated by this paragraph. Any adjustment
made by the Committee pursuant to this paragraph shall be conclusive and
binding upon the grantee of an Option, the Company and any other related
person.
5. Eligible Persons
Only persons who are members of the Company's senior leadership group, known as
the "Executive Committee", or other elected officers of the Company or its
subsidiaries selected by the Committee, shall be eligible to receive grants of
Options under this Plan in lieu of a merit salary increase. No grant shall be
made to any member of the Committee or any other non-employee director.
No executive selected to participate in this Plan may receive a grant of
Options unless the executive has made an irrevocable election to receive
Options in lieu of a merit salary increase at least six (6) months in advance
of the date of grant of such Option. No such election shall obligate the
Company to grant a merit salary increase or Options.
2
<PAGE> 5
6. Purchase Price of Options
The purchase price for each share of Common Stock issuable under an Option
shall not be less than 100 percent (100%) of the Fair Market Value of a share
of Common Stock on the date of grant. "Fair Market Value" as used in this Plan
shall equal the mean of the high and low price of the Common Stock as reported
by the composite transaction reporting system for securities listed on the New
York Stock Exchange on the applicable date.
7. Option Term
The term of each Option as determined by the Committee shall not exceed ten
(10) years from the date of grant and shall expire as of the last day of the
designated term, unless terminated earlier under the provisions of this Plan.
8. Option Type
Option grants may be either non-qualified stock options or incentive stock
options governed by Section 422(b) of the Code.
9. Non-Transferability of Options
No Option granted under this Plan shall be assignable or transferable by the
grantee except by will or the laws of descent and distribution. A grantee shall
forfeit any Option assigned or transferred, voluntarily or involuntarily, other
than as permitted under this Section. Each Option shall be exercised during the
grantee's lifetime only by the grantee or the grantee's guardian or legal
representative.
10. Exercise of Options
Except as provided in Sections 12 and 13, and subject to any limitations under
Section 16 of the 1934 Act, each Option shall be exercisable as follows: (i)
twenty percent (20%) of the shares of Common Stock subject to an Option on the
date of grant and (ii) the remainder of the shares subject to such Option in
four equal annual installments on the first, second, third and fourth
anniversary of the date of grant. The Committee may, at any time, provide for
the acceleration of installments or any part thereof.
Subject to the provisions of this Section 10, each Option may be exercised in
whole or, from time to time, in part with respect to the number of then
exercisable shares in any sequence desired by the grantee and without regard to
the date of grant of stock options under other plans of the Company; provided,
however, that any incentive stock option must be exercised in accordance with
Section 422(b) of the Code.
3
<PAGE> 6
To exercise an Option, the grantee shall (i) give written notice to the Company
in form satisfactory to the Committee indicating the number of shares of Common
Stock which the grantee elects to purchase, (ii) deliver to the Company payment
of the full purchase price of the shares being purchased (A) in cash or a
certified or bank cashier's check payable to the order of the Company, or (B)
with the approval of the Committee, in shares of Common Stock having a Fair
Market Value on the date of exercise equal to the purchase price, or (C) a
combination of the foregoing having an aggregate Fair Market Value equal to
such purchase price, and (iii) deliver to the Secretary of the Company such
written representations, warranties and covenants as the Company may require to
permit this Plan and any Options or shares of Common Stock granted or issued
hereunder to comply with any applicable blue sky or other federal or state
securities laws.
Except as provided in Sections 12 and 13, no Option may be exercised unless the
grantee, at the time of exercise, is an employee and has continuously been an
employee of the Company or any subsidiary since the grant of such Option.
A grantee shall not be deemed to have terminated his period of continuous
employ with the company or any subsidiary if he leaves the employ of the
company or any subsidiary for immediate reemployment with the company or any
subsidiary.
A grantee of any Option shall not have any rights as a shareholder until the
close of business on the date on which the Option has been exercised.
11. Withholding Taxes on Option Exercise
Each grantee exercising an Option shall deliver to the Company payment in cash
or by check (as described in Section 10) equal to all federal, state and local
withholding taxes required to be collected by the Company in respect of the
exercise of such Option, and until such payment is made, the Company may, in
its discretion, retain all or a portion of the shares to be issued.
Notwithstanding the foregoing, to the extent permitted by law and pursuant to
such rules as the Committee may adopt, a grantee may authorize the Company to
satisfy any such withholding requirement by directing the Company to withhold
from any shares to be issued such number of shares as shall be sufficient to
satisfy the withholding obligation.
12. Exercise of Options in the Event of a Change of Control
Notwithstanding any other provision of this Plan, in the event of a Change of
Control (as defined below), each Option not previously exercised or expired
under the terms of this Plan shall become immediately exercisable in full and
shall remain exercisable to the full extent of the shares of Common Stock
available thereunder, regardless of any installment provisions applicable
thereto, for the remainder of its term, unless the grantee has been terminated
for Cause (as defined below) in which case the Options shall automatically
terminate.
4
<PAGE> 7
Grantees of Options not otherwise exercised or expired under the terms of this
Plan may, in lieu of exercising, require the Company to purchase for cash all
such Options or portions thereof for a period of sixty (60) days following the
occurrence of a Change of Control at the Price specified below; provided that
Options subject to this purchase requirement held by grantees who are subject
to Section 16(b) of the 1934 Act must have been held for at least six (6)
months.
For purposes of this Section 12 and otherwise, the following definitions shall
apply:
A "Change of Control" shall be deemed to have occurred if:
(i) any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the 1934 Act) (a "Person") becomes the beneficial
owner, directly or indirectly, of twenty percent (20%) or more of the combined
voting power of the Company's outstanding voting securities ordinarily having
the right to vote for the election of directors of the Company; provided,
however, that for purposes of this subparagraph (i), the following acquisitions
shall not constitute a Change of Control: (A) any acquisition by any employee
benefit plan or plans (or related trust) of the Company and its subsidiaries
and affiliates or (B) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C) of subparagraph (iii)
of this Section 12; or
(ii) the individuals who, as of August 18, 1995, constituted the
Board of Directors of the Company (the "Board" generally and as of August 18,
1995 the "Incumbent Board") cease for any reason to constitute at least two-
thirds (2/3) of the Board, provided that any person becoming a director
subsequent to August 18, 1995 whose election, or nomination for election, was
approved by a vote of the persons comprising at least two-thirds (2/3) of the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the 1934 Act) shall be, for purposes of this Plan, considered
as though such person were a member of the Incumbent Board; or
(iii) there is a reorganization, merger or consolidation of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Company's
outstanding Common Stock and outstanding voting securities ordinarily having
the right to vote for the election of directors of the Company immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than fifty percent (50%) of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities ordinarily having the right to vote for the election of directors,
as the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns RSI or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Company's outstanding Common Stock and outstanding voting securities
ordinarily having the right to vote for the election of directors of the
Company, as the case may be, (B) no Person
5
<PAGE> 8
(excluding any corporation resulting from such Business Combination or any
employee benefit plan or plans (or related trust) of the Company or such
corporation resulting from such Business Combination and their subsidiaries and
affiliates) beneficially owns, directly or indirectly, 20% or more of the
combined voting power of the then outstanding voting securities of the
corporation resulting from such Business Combination and (C) at least
two-thirds (2/3) of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(iv) there is a liquidation or dissolution of the Company approved
by the shareholders; or
(v) there is a sale of all or substantially all of the assets of
the Company.
If a Change of Control occurs and if a grantee's employment is terminated prior
to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the grantee that such termination of employment (A) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change of Control or (B) otherwise arose in connection with or in anticipation
of a Change of Control, a Change of Control shall be deemed to have
retroactively occurred on the date immediately prior to the date of such
termination of employment.
During the three (3) year period following a Change of Control, the term
"cause" as used in Section 13 [and Section 15] of this Plan [with respect to
any Option] shall mean (i) an act or acts of fraud, misappropriation or
embezzlement on the grantee's part which result in or are intended to result in
the grantee's personal enrichment at the expense of the Company, (ii)
conviction of a felony, (iii) conviction of a misdemeanor involving moral
turpitude, or (iv) willful failure to report to work for more than thirty (30)
continuous days not supported by a licensed physician's statement, all as
determined only by a majority of the Incumbent Board or the Committee, as the
case may be.
"Price" shall mean, upon the occurrence of a Change of Control, the excess
of the highest of:
(i) the highest closing price of the Common Stock reported by the
composite transaction reporting system for securities listed on the New York
Stock Exchange within the sixty (60) days preceding the date of exercise;
(ii) the highest price per share of Common Stock included in a
filing made by any person or group referred to in subparagraph (i) of the
definition of Change of Control on any Schedule 13D pursuant to Section 13(d)
of the 1934 Act as paid within the sixty (60) days prior to the date of such
report; and
(iii) the value of the consideration to be received by the holders
of Common Stock, expressed on a per share basis, in any transaction referred to
in subparagraph (iii), (iv) or (v) of
6
<PAGE> 9
the definition of Change of Control, with all noncash consideration being
valued in good faith by the Incumbent Board;
over the purchase price per share at which the related Option is exercisable as
applicable, except that incentive stock options are limited to the spread
between the Fair Market Value of Common Stock on the date of exercise and the
purchase price per share at which the related Option is exercisable.
13. Termination of Employment
If the grantee's employment with the Company or any subsidiary terminates for
any reason other than as specified in the subsequent paragraphs of this Section
13, any Option shall terminate three (3) months after the later of (i) the date
of such termination or (ii) with respect to a non-qualified stock option, the
end of any severance period applicable to such grantee; provided, however, that
in the event of the death of the grantee during such period, such Option shall,
to the extent it was exercisable on the termination date or at the end of any
applicable severance period, be exercisable by the grantee's personal
representatives, heirs or legatees for a period of one (1) year commencing on
the date of the grantee's death and shall terminate at the expiration of such
period.
If the termination of employment is due to the grantee's death, any Option
shall, to the extent it was exercisable on the termination date, continue to be
exercisable by such grantee's legal representatives, heirs or legatees for the
term of such Option.
If the termination of employment is due to the grantee's retirement or
disability, any non-qualified stock option not previously exercised or expired
shall continue to vest and be exercisable during the three (3) year period
following the grantee's termination date, and to the extent it is exercisable
at the expiration of such three (3) year period, it shall continue to be
exercisable by such grantee or such grantee's legal representatives, heirs or
legatees for the term of such non-qualified stock option. Any incentive stock
option shall, to the extent it was exercisable on the termination date,
continue to be exercisable by such grantee or such grantee's legal
representatives, heirs or legatees for the term of such incentive stock option;
provided, however, that in order to qualify for the special tax treatment
afforded by Section 421 of the Code, incentive stock options must be exercised
within the three (3) month period commencing on the termination date (the
exercise period shall be one (1) year in the case of termination by reason of
disability, within the meaning of Section 22(e)(3) of the Code). Incentive
stock options not exercised within such three (3) month period shall be treated
as non-qualified stock options.
If a grantee is terminated for cause, all Options with respect to such grantee
shall automatically terminate as of the grantee's termination date.
7
<PAGE> 10
14. Amendments to this Plan
The Committee may at any time (i) terminate this Plan or (ii) modify or amend
this Plan in any respect, except that, to the extent required to maintain the
qualification of this Plan under Section 16 of the 1934 Act, or as otherwise
required to comply with applicable law or the regulations of any stock exchange
on which the Common Stock is listed, the Committee may not, without
shareholders' approval, (A) materially increase the benefits accruing to
participants under this Plan; (B) materially increase the number of securities
which may be issued under this Plan; or (C) materially modify the requirements
as to eligibility for participation in this Plan. Should this Plan require
amendment to maintain full legal compliance because of rules, regulations,
opinions or statutes issued by the Securities and Exchange Commission, the U.S.
Department of the Treasury or any other governmental or governing body, then
the Committee or the Board may take whatever action, including but not limited
to amending or modifying this Plan, is necessary to maintain such compliance.
The termination or any modification or amendment of this Plan shall not,
without the consent of any grantee involved, adversely affect rights under an
Option previously granted to such grantee.
15. Miscellaneous Provisions
(a) Service on the Committee shall constitute service as a director of the
Company and members of the Committee shall be entitled to indemnification,
advancement of expenses and reimbursement as directors of the Company pursuant
to its Restated Articles of Incorporation, By-Laws, resolutions of the Board of
Directors or otherwise.
(b) No Employee shall have any claim or right to be granted an award under
this Plan, nor having been selected as a grantee for one year, any right to be
a grantee in any other year. Neither this Plan nor any action taken hereunder
shall be construed as giving any grantee any right to be retained in the employ
of the Company and the Company expressly reserves its right at any time to
dismiss any grantee with or without cause.
(c) With respect to grantees subject to Section 16 of the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent
any provision of this Plan or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee. Moreover, in the event this Plan does not include a
provision required by Rule 16b-3 to be stated herein, such provision (other
than one relating to eligibility requirements, or the price and amount of
Options) shall be deemed automatically to be incorporated by reference into
this Plan insofar as grantees subject to Section 16 are concerned.
8
<PAGE> 1
EXHIBIT 10.22
RYDER SYSTEM, INC. 1995 STOCK INCENTIVE PLAN
(As amended on August 18, 1995)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Shares of Stock Subject to the Plan . . . . . . . . . . . . . . . . . . . . . . . 5
4. Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6. Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7. Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
8. Stock Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9. Limited SARs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
10. Performance Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11. Restricted Stock Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12. Dilution and Other Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . 15
13. Substitute Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
14. Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
15. Indemnification of the Committee . . . . . . . . . . . . . . . . . . . . . . . . 17
16. Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
17. Amendment of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
18. Effective Date and Term of the Plan . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
-i-
<PAGE> 3
RYDER SYSTEM, INC. 1995 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this Plan is to enable the Company to recruit and
retain those key executives most responsible for the Company's continued
success and progress, and by offering comparable incentives, to compete with
other organizations in attracting, motivating and retaining such executives,
thereby furthering the interests of the Company and its shareholders by giving
such executives a greater personal stake in and commitment to the Company and
its future growth and prosperity.
2. Definitions. For the purpose of this Plan:
(a) The term "Award" shall mean and include any Stock Option, SAR,
Limited SAR, Performance Unit or Restricted Stock Right granted under this
Plan.
(b) During the three (3) year period following a Change of Control, the
term "cause" as used in Section 7 and Section 14(a) of this Plan with respect
to any Stock Option shall mean (i) an act or acts of fraud, misappropriation or
embezzlement on the Grantee's part which result in or are intended to result in
his personal enrichment at the expense of the Company, (ii) conviction of a
felony, (iii) conviction of a misdemeanor involving moral turpitude, or (iv)
willful failure to report to work for more than thirty (30) continuous days not
supported by a licensed physician's statement, all as determined only by a
majority of the Incumbent Board or the Committee, as the case may be.
(c) A "Change of Control" shall be deemed to have occurred if:
(i) any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) (a "Person") becomes the beneficial owner, directly or indirectly,
of twenty percent (20%) or more of the combined voting power of RSI's
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI; provided, however, that for purposes of this
subparagraph (i), the following acquisitions shall not constitute a Change of
Control: (A) any acquisition by any employee benefit plan or plans (or related
trust) of RSI and its subsidiaries and affiliates or (B) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A), (B) and
(C) of subparagraph (iii) of this Section 2(c); or
(ii) the individuals who, as of August 18, 1995, constituted the
Board of Directors of RSI (the "Board" generally and as of August 18, 1995 the
"Incumbent Board") cease for any reason to constitute at least two-thirds (2/3)
of the Board, provided that any person becoming a director subsequent to August
18, 1995 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
<PAGE> 4
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the 1934 Act) shall be, for purposes
of this Plan, considered as though such person were a member of the Incumbent
Board; or
(iii) there is a reorganization, merger or consolidation of RSI (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of RSI's outstanding Common Stock and
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities ordinarily having the
right to vote for the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns RSI or all
or substantially all of RSI's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of RSI's outstanding Common
Stock and outstanding voting securities ordinarily having the right to vote for
the election of directors of RSI, as the case may be, (B) no Person (excluding
any corporation resulting from such Business Combination or any employee
benefit plan or plans (or related trust) of RSI or such corporation resulting
from such Business Combination and their subsidiaries and affiliates)
beneficially owns, directly or indirectly, 20% or more of the combined voting
power of the then outstanding voting securities of the corporation resulting
from such Business Combination and (C) at least two-thirds (2/3) of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(iv) there is a liquidation or dissolution of RSI approved by the
shareholders; or
(v) there is a sale of all or substantially all of the assets of
RSI.
If a Change of Control occurs and if a Grantee's employment is terminated prior
to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Grantee that such termination of employment (A) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change of Control or (B) otherwise arose in connection with or in anticipation
of a Change of Control, a Change of Control shall be deemed to have
retroactively occurred on the date immediately prior to the date of such
termination of employment.
(d) The term "Code" shall mean the Internal Revenue Code of 1986 as it
may be amended from time to time.
(e) The term "Committee" shall mean the Compensation Committee of the
Board of Directors of RSI constituted as provided in Section 5 of this Plan.
2
<PAGE> 5
(f) The term "Common Stock" shall mean the common stock of RSI as from
time to time constituted.
(g) The term "Company" shall mean RSI and its Subsidiaries.
(h) The term "Disability" shall mean total physical or mental disability
of a Grantee as determined by the Committee upon the basis of such evidence as
the Committee in its discretion deems necessary and appropriate.
(i) The term "Disinterested Person" shall mean any person who qualifies
as a disinterested person as defined in Rule 16b-3, as promulgated under the
1934 Act, or any successor definition.
(j) The term "Employee" shall mean a full-time salaried employee of RSI
or any Subsidiary (which term shall include salaried officers).
(k) The term "Fair Market Value" shall mean, with respect to the Common
Stock, the mean between the highest and lowest sale price for shares as
reported by the composite transaction reporting system for securities listed on
the New York Stock Exchange on the date as of which such determination is being
made or on the most recently preceding date on which there was such a sale.
(l) The term "Grantee" shall mean an Employee who is selected by the
Committee to receive an Award under this Plan and in the case of a deceased
Employee shall mean the beneficiary of the Employee.
(m) The term "Incentive Stock Option" shall mean a Stock Option granted
under this Plan or a previously granted Stock Option that is redesignated by
the Committee as an Incentive Stock Option which is intended to constitute an
incentive stock option within the meaning of Section 422(b) of the Code.
(n) The term "Limited SAR" shall mean a Limited Stock Appreciation Right
granted by the Committee pursuant to Section 9 of this Plan.
(o) The term "Non-qualified Stock Option" shall mean a Stock Option
granted under this Plan which is not intended to qualify under Section 422(b)
of the Code.
(p) The term "Offer" shall mean any tender offer or exchange offer for
Shares, other than one made by the Company, including all amendments and
extensions of any such Offer.
(q) The term "Option" shall mean any stock option granted under this
Plan.
(r) The term "Performance Goals" shall have the meaning set forth in
Section 10(c) of this Plan.
3
<PAGE> 6
(s) The term "Performance Period" shall have the meaning set forth in
Section 10(d) of this Plan.
(t) The term "Performance Units" shall mean Performance Units granted by
the Committee pursuant to Section 10 of this Plan.
(u) The term "Plan" shall mean the Ryder System, Inc. 1995 Stock
Incentive Plan as the same shall be amended.
(v) The term "Price" shall mean, upon the occurrence of a Change of
Control, the excess of the highest of:
(i) the highest closing price of the Common Stock reported by the
composite transaction reporting system for securities listed on the New York
Stock Exchange within the sixty (60) days preceding the date of exercise;
(ii) the highest price per share of Common Stock included in a
filing made by any Person on any Schedule 13D pursuant to Section 13(d) of the
1934 Act as paid within the sixty (60) days prior to the date of such report;
and
(iii) the value of the consideration to be received by the holders
of Common Stock, expressed on a per share basis, in any transaction referred to
in subparagraph (iii), (iv) or (v) of Section 2(c), with all noncash
consideration being valued in good faith by the Incumbent Board;
over the purchase price per Share at which the related Option is exercisable as
applicable, except that Incentive Stock Options and, if and to the extent
required in order for the related Option to be treated as an Incentive Stock
Option, SARs and Limited SARs granted with respect to Incentive Stock Options,
are limited to the spread between the Fair Market Value of Common Stock on the
date of exercise and the purchase price per Share at which the related Option
is exercisable.
(y) The term "Restricted Period" shall have the meaning set forth in
Section 11(a) of this Plan.
(z) The term "RSI" shall mean Ryder System, Inc.
(aa) The term "Restricted Stock Rights" shall mean a Restricted Stock
Right granted by the Committee pursuant to Section 11 of this Plan.
(bb) The term "Retirement" shall mean retirement under the provisions of
the various retirement plans of the Company (whichever is appropriate to a
particular Grantee) as then in effect, or in the absence of any such retirement
plan being applicable, as determined by the Committee.
(cc) The term "SAR" shall mean a Stock Appreciation Right granted by the
Committee pursuant to the provisions of Section 8 of this Plan.
4
<PAGE> 7
(dd) The term "Shares" shall mean shares of the Common Stock and any
shares of stock or other securities received as a result of the adjustment
provided for in Section 12 of this Plan.
(ee) The term "Spread" with respect to a SAR shall have the meaning set
forth in Section 8(b) of this Plan, and with respect to a Limited SAR, the
meanings set forth in Sections 9(c) and 9(d) of this Plan.
(ff) The term "Stock Option" shall mean any stock option granted under
this Plan.
(gg) The term "Subsidiary" shall mean any corporation, other than RSI, or
other form of business entity more than fifty percent (50%) of the voting
interest of which is owned or controlled, directly or indirectly, by RSI and
which the Committee designates for participation in this Plan.
(hh) The term "Termination Date" shall mean the date that a Grantee
ceases to be employed by RSI or any Subsidiary for any reason; provided,
however, it shall mean the end of any severance period applicable to a Grantee
with respect to any Non-qualified Stock Options held by such Grantee.
(ii) The term "Year" shall mean a calendar year.
3. Shares of Stock Subject to this Plan.
(a) Subject to the provisions of Paragraph (b) of this Section 3, no
more than 3,300,000 Shares shall be issuable pursuant to grants under this
Plan. Shares issued pursuant to this Plan may be either authorized but unissued
or reacquired Shares purchased on the open market or otherwise.
(b) In the event any Stock Option or Restricted Stock Right expires or
terminates unexercised or any Restricted Stock Right is forfeited or cancelled,
the number of Shares subject to such Stock Option or Restricted Stock Right
shall again become available for issuance under this Plan, subject to the
provisions of Sections 7(a), 8(a), 9(b) and 10(i) of this Plan.
(c) No Grantee shall be eligible to receive any Stock Option or series
of Stock Options covering, in the aggregate, more than 800,000 Shares during
the term of this Plan.
4. Participation. Awards under this Plan shall be limited to key executive
Employees selected from time to time by the Committee.
5. Administration. This Plan shall be administered by the Compensation
Committee of the Board of Directors of RSI which shall consist of not less than
three members of the Board of Directors, each of whom shall be a Disinterested
Person. All members of the Committee shall be "outside directors" as defined
or interpreted for purposes of Section 162(m) of the Code. The Committee shall
have
5
<PAGE> 8
plenary authority, subject to the express provisions of this Plan, to (i)
select Grantees; (ii) establish and adjust Performance Goals and Performance
Periods for Performance Units; (iii) determine the nature, amount, time and
manner of payment of Awards made under this Plan, and the terms and conditions
applicable thereto; (iv) interpret this Plan; (v) prescribe, amend and rescind
rules and regulations relating to this Plan; (vi) determine whether and to what
extent Stock Options previously granted under this Plan shall be redesignated
as Incentive Stock Options and, in this connection, amend any Stock Option
Agreement or make or authorize any reports or elections or take any other
action to the extent necessary to implement the redesignation of any Stock
Option as an Incentive Stock Option, provided that any redesignation of a
previously granted Stock Option as an Incentive Stock Option shall not be
effective unless and until consented to by the Grantee; and (vii) make all
other determinations deemed necessary or advisable for the administration of
this Plan. The Committee's determination on the foregoing matters shall be
conclusive. A majority of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by all members of the Committee without a
meeting, shall be the acts of the Committee.
6. Awards. Subject to the provisions of Section 3 of this Plan, the Committee
shall determine Awards taking into consideration, as it deems appropriate, the
responsibility level and performance of each Grantee. The Committee may grant
the following types of Awards: Stock Options pursuant to Section 7 hereof, SARs
pursuant to Section 8 hereof, Limited SARs pursuant to Section 9 hereof,
Performance Units pursuant to Section 10 hereof and Restricted Stock Rights
pursuant to Section 11 hereof. Unless otherwise determined by the Committee, a
Grantee may not be granted in any Year both (i) a Restricted Stock Right and
(ii) a Stock Option, SAR, Limited SAR or Performance Unit.
7. Stock Options.
(a) The Committee from time to time may grant Stock Options either alone
or in conjunction with and related to SARs, Limited SARs and/or Performance
Units to key executive Employees selected by the Committee as being eligible
therefor. The Stock Options may be of two types, Incentive Stock Options and
Non-qualified Stock Options. Each Stock Option shall cover such number of
Shares and shall be on such other terms and conditions not inconsistent with
this Plan as the Committee may determine and shall be evidenced by a Stock
Option Agreement setting forth such terms and conditions executed by the
Company and the Grantee. The Committee shall determine the number of Shares
subject to each Stock Option. The number of Shares subject to an outstanding
Stock Option shall be reduced on a one for one basis to the extent that any
related SAR, Limited SAR or Performance Unit is exercised and such Shares shall
not again become available for issuance pursuant to this Plan.
In the case of Stock Options, the aggregate Fair Market Value
(determined as of the date of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by an Employee
during any Year under this Plan or any other plan of the Company shall not
6
<PAGE> 9
exceed $100,000. To the extent, if any, that the Fair Market Value of such
Common Stock with respect to which Incentive Stock Options are exercisable
exceeds $100,000, such Incentive Stock Options shall be treated as separate
Non-qualified Stock Options. For purposes of the two immediately preceding
sentences of this subparagraph (a), Stock Options shall be taken into account
in the order in which they were granted.
(b) Unless the Committee shall determine otherwise, each Stock Option
may be exercised only if the Grantee has been continuously employed by RSI or
any Subsidiary for a period of at least one (1) year commencing on the date the
Stock Option is granted; provided, however, that this provision shall not apply
in the event of a Change of Control.
(c) Each Stock Option shall be for such term (but, in no event for
greater than ten years) and shall be exercisable in such installments as shall
be determined by the Committee at the time of grant of the Stock Option.
The Committee may, at any time, provide for the acceleration of
installments or any part thereof.
(d) The price per Share at which Shares may be purchased upon the
exercise of a Stock Option shall be determined by the Committee on the grant of
the Stock Option but such price shall not be less than one hundred percent
(100%) of the Fair Market Value on the date of grant of the Stock Option. If a
Grantee owns (or is deemed to own under applicable provisions of the Code and
rules and regulations promulgated thereunder) more than ten percent (10%) of
the combined voting power of all classes of the stock of the Company and a
Stock Option granted to such Grantee is intended to qualify as an Incentive
Stock Option, the Incentive Stock Option price shall be no less than one
hundred and ten percent (110%) of the Fair Market Value of the Common Stock on
the date the Incentive Stock Option is granted and the term of such Incentive
Stock Option shall be no more than five years.
(e) Except as provided in Paragraphs (h) and (l) of this Section 7, no
Stock Option may be exercised unless the Grantee, at the time of exercise, is
an Employee and has continuously been an Employee of RSI or any Subsidiary
since the grant of such Stock Option. A Grantee shall not be deemed to have
terminated his period of continuous employ with RSI or any Subsidiary if he
leaves the employ of RSI or any Subsidiary for immediate reemployment with RSI
or any Subsidiary.
(f) To exercise a Stock Option, the Grantee shall (i) give written
notice to the Company in form satisfactory to the Committee indicating the
number of Shares which he elects to purchase, (ii) deliver to the Company
payment of the full purchase price of the Shares being purchased (A) in cash or
a certified or bank cashier's check payable to the order of the Company, or (B)
with the approval of the Committee, in Shares of the Common Stock having a Fair
Market Value on the date of exercise equal to the purchase price, or a
combination of the foregoing having an aggregate Fair Market Value equal to
such purchase price, and (iii) deliver to the Secretary of the Company such
written representations, warranties and covenants as the Company may require
under Section 16(a) of this Plan.
7
<PAGE> 10
(g) A Grantee of any Stock Option shall not have any rights as a
shareholder until the close of business on the date on which the Stock Option
has been exercised.
(h) Notwithstanding any other provision of this Plan, unless otherwise
determined by the Committee prior to a Change of Control, in the event of a
Change of Control, each Stock Option not previously exercised or expired under
the terms of this Plan shall become immediately exercisable in full and shall
remain exercisable to the full extent of the Shares available thereunder,
regardless of any installment provisions applicable thereto, for the remainder
of its term, unless Section 14(a) of this Plan applies or the Grantee has been
terminated for cause, in which case the Stock Options shall automatically
terminate as of the Incumbent Board's determination pursuant to Section 14(a)
or the Grantee's Termination Date, as appropriate.
(i) If the Committee so determines prior to or during the thirty (30)
day period following the occurrence of a Change of Control, Grantees of Stock
Options not otherwise exercised or expired under the terms of this Plan as to
which no SARs or Limited SARs are then exercisable may, in lieu of exercising,
require RSI to purchase for cash all such Stock Options or portions thereof for
a period of sixty (60) days following the occurrence of a Change of Control at
the Price specified in Section 2(v); provided that Stock Options subject to
this purchase requirement held by Grantees who are subject to Section 16(b) of
the 1934 Act with respect to RSI must have been held for at least six (6)
months.
(j) Any determination made by the Committee pursuant to Section 7(h) or
7(i) may be made as to all eligible Stock Options or only as to certain of such
Stock Options specified by the Committee. Once made, any determination by the
Committee pursuant to Section 7(h) or 7(i) shall be irrevocable.
(k) The Company intends that Section 7(i) shall comply with the
requirements of Rule 16b-3 under the 1934 Act (the "Rule") during the term of
this Plan. Should any provision of Section 7(i) not be necessary to comply with
the requirements of the Rule, or should any additional provisions be necessary
for Section 7(i) to comply with the requirements of the Rule, the Committee may
amend this Plan or any Stock Option agreement to add to or modify the
provisions thereof accordingly.
(l) Notwithstanding any of the provisions of this Section 7, a Stock
Option shall in all cases terminate and not be exercisable after the expiration
of the term of the Stock Option established by the Committee. Except as
provided in Section 7(h), Stock Options shall be exercisable after the Grantee
ceases to be employed by RSI or any Subsidiary as follows, unless otherwise
determined by the Committee:
(i) In the event that a Grantee ceases to be employed by RSI or
any Subsidiary by reason of Disability or Retirement, (A) any Non-qualified
Stock Option not previously exercised or expired shall continue to vest and be
exercisable during the three (3) year period following the Grantee's
Termination Date, and to the extent it is exercisable at the expiration of such
three (3) year period, it shall continue to be exercisable by such Grantee or
such Grantee's legal representatives, heirs or
8
<PAGE> 11
legatees for the term of such Non-qualified Stock Option, and (B) any Incentive
Stock Option shall, to the extent it was exercisable on the Termination Date,
continue to be exercisable by such Grantee or such Grantee's legal
representatives, heirs or legatees for the term of such Incentive Stock Option;
provided, however, that in order to qualify for the special tax treatment
afforded by Section 421 of the Code, Incentive Stock Options must be exercised
within the three (3) month period commencing on the Termination Date (the
exercise period shall be one (1) year in the case of termination by reason of
disability, within the meaning of Section 22(e)(3) of the Code). Incentive
Stock Options not exercised within such three (3) month period shall be treated
as Non-qualified Stock Options.
(ii) In the event that a Grantee ceases to be employed by RSI or
any Subsidiary by reason of death, any Stock Option shall, to the extent it was
exercisable on the Termination Date, continue to be exercisable by such
Grantee's legal representatives, heirs or legatees for the term of such Stock
Option.
(iii) Except as otherwise provided in subparagraph (i) or (ii)
above, in the event that a Grantee ceases to be employed by RSI or any
Subsidiary for any reason other than termination for cause, any Stock Option
shall, to the extent it was exercisable on the Termination Date, continue to be
exercisable for a period of three (3) months commencing on the Termination Date
and shall terminate at the expiration of such period; provided, however, that
in the event of the death of the Grantee during such three (3) month period,
such Stock Option shall, to the extent it was exercisable on the Termination
Date, be exercisable by the Grantee's personal representatives, heirs or
legatees for a period of one (1) year commencing on the date of the Grantee's
death and shall terminate at the expiration of such period.
(m) Except as otherwise provided in Section 7(1), a Stock Option shall
automatically terminate as of the Termination Date, provided that if a
Grantee's employment is interrupted by reason of Disability or a leave of
absence (as determined by the Committee) the Committee may permit the exercise
of some or all of the Stock Options granted on such terms and for such period
of time as it shall determine.
8. Stock Appreciation Rights.
(a) The Committee shall have authority in its discretion to grant a SAR
to any Grantee of a Stock Option with respect to all or some of the Shares
covered by such Stock Option. Each SAR shall be on such terms and conditions
not inconsistent with this Plan as the Committee may determine and shall be
evidenced by a SAR Agreement setting forth such terms and conditions executed
by the Company and the holder of the SAR. A SAR may be granted either at the
time of grant of a Stock Option or at any time thereafter during its term. A
SAR may be granted to a Grantee irrespective of whether such Grantee has a
Limited SAR. Each SAR shall be exercisable only if and to the extent that the
related Stock Option is exercisable, provided, however, that no SAR may be
exercised in any event (i) until the expiration of six (6) months from the date
of grant of the SAR unless prior to the expiration of such six (6) month period
the holder of the SAR ceases to be employed by RSI or any
9
<PAGE> 12
Subsidiary because of death or Disability, or (ii) more than six (6) months
after the Termination Date of a Grantee. Upon the exercise of a SAR, the
related Stock Option shall cease to be exercisable to the extent of the Shares
with respect to which such SAR is exercised and shall be considered to have
been exercised to that extent for purposes of determining the number of Shares
available for the grant of further Awards pursuant to this Plan. Upon the
exercise or termination of a Stock Option, the SAR related to such Stock Option
shall terminate to the extent of the Shares with respect to which such Stock
Option was exercised or terminated.
(b) The term "Spread" as used in this Section 8 shall mean, with respect
to the exercise of any SAR, an amount equal to the product computed by
multiplying (i) the excess of (A) the Fair Market Value per Share on the date
such SAR is exercised over (B) the purchase price per Share at which the
related Stock Option is exercisable by (ii) the number of Shares with respect
to which such SAR is being exercised, provided; however, that the Committee may
at the grant of any SAR limit the maximum amount of the Spread to be paid upon
the exercise thereof.
(c) Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a SAR may be exercised only
when there is a positive Spread, that is, when the Fair Market Value per Share
exceeds the purchase price per Share at which the related Stock Option is
exercisable. Upon the exercise of a SAR, the Committee shall pay to the Grantee
exercising the SAR an amount equivalent to the Spread. The Committee shall have
the sole and absolute discretion to determine whether payment for such SAR will
be made in cash, Shares or a combination of cash and Shares, provided, that any
Shares used for payment shall be valued at their Fair Market Value on the date
of the exercise of the SAR.
(d) A SAR may be exercised only during the period beginning on the third
(3rd) business day following the date of release for publication of the
quarterly and annual summary statements of sales and earnings of the Company
and ending on the twelfth (12th) business day following such date. Such release
shall be deemed to have taken place if the specified financial data appears (i)
on a wire service, (ii) in a financial news service, (iii) in a newspaper of
general circulation or (iv) is otherwise made publicly available.
(e) The Company intends that this Section 8 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 8 not be necessary to comply with the requirements of the Rule or
should any additional provisions be necessary for this Section 8 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
(f) To exercise a SAR, the Grantee shall (i) give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which such holder is exercising the SAR and (ii) deliver to the
Company such written representations, warranties and covenants as the Company
may require under Section 16(a) of this Plan.
10
<PAGE> 13
(g) A person exercising a SAR shall not be treated as having become the
registered owner of any Shares issued on such exercise until such Shares are
issued.
(h) The exercise of a SAR shall reduce the number of Shares subject to
the related Stock Option on a one for one basis.
9. Limited SARs.
(a) The Committee shall have authority in its discretion to grant a
Limited SAR to the holder of any Stock Option with respect to all or some of
the Shares covered by such Stock Option; provided, however, that in the case of
Incentive Stock Options, the Committee may grant Limited SARs only if and to
the extent that the grant of such Limited SARs is consistent with the treatment
of the Stock Option as an Incentive Stock Option. Each Limited SAR shall be on
such terms and conditions not inconsistent with this Plan as the Committee may
determine and shall be evidenced by a Limited SAR Agreement setting forth such
terms and conditions executed by the Company and the holder of the Limited SAR.
A Limited SAR may be granted to a Grantee irrespective of whether such Grantee
has a SAR.
(b) Limited SARs may be exercised only during the sixty (60) day period
commencing after the occurrence of a Change of Control; provided, however, that
a Limited SAR that has not been held by the Grantee for at least six (6) months
before the occurrence of a Change of Control may be exercised only during the
sixty (60) day period commencing upon the expiration of such six (6) month
holding period.
Each Limited SAR shall be exercisable only if and to the extent that
the related Option is exercisable; provided, however, that no Limited SAR may
be exercised in any event (i) until the expiration of six (6) months from the
date of grant of the Limited SAR, or (ii) more than six (6) months after the
Termination Date of a Grantee. Upon the exercise of a Limited SAR, the related
Stock Option shall cease to be exercisable to the extent of the Shares with
respect to which such Limited SAR is exercised, and the Stock Option shall be
considered to have been exercised to that extent for purposes of determining
the number of Shares available for the grant of further Awards pursuant to this
Plan. Upon the exercise or termination of an Option, the Limited SAR with
respect to such Option shall terminate to the extent of the Shares with respect
to which the Option was exercised or terminated.
(c) For any Limited SAR, the term "Spread" as used in this Section 9
shall mean an amount equal to the product computed by multiplying (A) the Price
specified in Section 2(v) by (B) the number of Shares with respect to which
such Limited SAR is being exercised.
(d) Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a Limited SAR may be
exercised only when there is a positive Spread, that is, when the Fair Market
value per Share exceeds the purchase price per Share at which the related
11
<PAGE> 14
Stock Option is exercisable. Upon the exercise of a Limited SAR, the holder
thereof shall receive an amount in cash equal to the Spread.
(e) Notwithstanding any other provision of this Plan, no SAR or
Performance Unit may be exercised with respect to any Stock Option at a time
when any Limited SAR with respect to such Stock Option held by the Grantee of
such SAR or Performance Unit may be exercised.
(f) The Company intends that this Section 9 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 9 not be necessary to comply with the requirements of the Rule, or
should any additional provisions be necessary for this Section 9 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
(g) To exercise a Limited SAR, the holder shall give written notice to
the Company in form satisfactory to the Committee specifying the number of
Shares with respect to which he is exercising the Limited SAR.
(h) The exercise of a Limited SAR shall reduce on a one for one basis
the number of Shares subject to the related Stock Option.
10. Performance Units.
(a) In conjunction with the granting of Stock Options under this Plan,
the Committee may grant Performance Units relating to such Stock Options;
provided, however, that in the case of Incentive Stock Options, the Committee
may grant Performance Units only if and to the extent that the grant of such
Performance Units is consistent with the treatment of the Stock Option as an
Incentive Stock Option. Each grant of Performance Units shall cover such number
of Shares and shall be on such other terms and conditions not inconsistent with
this Plan as the Committee may determine and shall be evidenced by a
Performance Unit Agreement setting forth such terms and conditions executed by
the Company and the Grantee of the Performance Units. The number of Performance
Units granted shall be equal to a specified number of Shares subject to the
related Stock Options. The Committee shall value such Units to the extent that
Performance Goals are achieved; provided, however, that in no event shall the
value per Performance Unit exceed one hundred and fifty percent (150%) of the
purchase price per Share at which the related Stock Option is exercisable.
(b) The Committee shall have full and final authority to establish
Performance Goals for each Performance Period on the basis of such criteria,
and the attainment of such objectives, as the Committee may from time to time
determine. In setting Performance Goals, the Committee may take into
consideration such matters which it deems relevant and such financial and other
criteria including but not limited to projected cumulative compounded rate of
growth in earnings per Share and average return on equity. During any
Performance Period, the Committee shall have the authority to adjust
Performance Goals for the Performance Period as it deems equitable in
recognition of extraordinary
12
<PAGE> 15
or nonrecurring events experienced by the Company during the Performance Period
including, but not limited to, changes in applicable accounting rules or
principles or changes in the Company's methods of accounting during the
Performance Period or significant changes in tax laws or regulations which
affect the financial results of the Company.
(c) The term "Performance Goals" as used in this Section 10 shall mean
the performance objectives established by the Committee for the Company for a
Performance Period for the purpose of determining if, as well as the extent to
which, a Performance Unit shall be earned.
(d) The term "Performance Period" as used in this Section 10 shall mean
the period of time selected by the Committee (which period shall be not more
than five nor less than three years) commencing on January 1 of the Year in
which the grant of Performance Units is made, during which the performance of
the Company is measured for the purpose of determining the extent to which
Performance Units have been earned.
(e) Performance Units shall be earned to the extent that Performance
Goals and other conditions established in accordance with Paragraph (b) of this
Section 10 are met. The Company shall promptly notify each Grantee of the
extent to which Performance Units have been earned by such Grantee. A
Performance Unit may be exercised only during the period following such notice
and prior to expiration of the related option. Performance Units which have
been earned shall be paid after exercise by the Grantee pursuant to Paragraph
(h) of this Section 10. The Committee shall have the sole and absolute
discretion to determine whether payment for such Performance Unit will be made
in cash, Shares or a combination of cash and Shares, provided that any Shares
used for payment shall be valued at their Fair Market Value on the date of the
exercise of the Performance Unit.
(f) Unless otherwise determined by the Committee, in the event that a
Grantee of Performance Units ceases to be employed by RSI or any Subsidiary
during the term of the related Stock Option, the Performance Units held by him
shall be exercisable only to the extent the related Stock Option is exercisable
and shall be forfeited to the extent that the related Stock Option was not
exercisable on the Termination Date.
(g) The Company intends that this Section 10 shall comply with the
requirements of Section 16(b) of the 1934 Act and the rules thereunder, as from
time to time in effect, including the Rule. Should any provision of this
Section 10 not be necessary to comply with the requirements of said Section
16(b) and the rules thereunder or should any additional provision be necessary
for this Section 10 to comply with the requirements of Section 16(b) and the
rules thereunder, the Committee may amend this Plan or any Award agreement to
add to or modify the provisions thereof accordingly.
(h) To exercise Performance Units, the Grantee shall give written notice
to the Company in form satisfactory to the Committee addressed to the Secretary
of the Company specifying the number of Shares with respect to which he is
exercising Performance Units.
13
<PAGE> 16
(i) The exercise of Performance Units shall reduce on a one for one
basis the number of Shares subject to the related Stock Option.
11. Restricted Stock Rights.
(a) The Committee from time to time may grant Restricted Stock Rights to
key executive Employees selected by the Committee as being eligible therefor,
which would entitle a Grantee to receive a stated number of Shares subject to
forfeiture of such Rights if such Grantee failed to remain continuously in the
employ of RSI or any Subsidiary for the period stipulated by the Committee (the
"Restricted Period").
(b) Restricted Stock Rights shall be subject to the following
restrictions and limitations:
(i) The Restricted Stock Rights may not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of;
(ii) Except as otherwise provided in Paragraph (d) of this Section
11, the Restricted Stock Rights and the Shares subject to such Restricted Stock
Rights shall be forfeited and all rights of a Grantee to such Restricted Stock
Rights and Shares shall terminate without any payment of consideration by the
Company if the Grantee fails to remain continuously as an Employee of RSI or
any Subsidiary for the Restricted Period. A Grantee shall not be deemed to have
terminated his period of continuous employment with RSI or any Subsidiary if he
leaves the employ of RSI or any Subsidiary for immediate reemployment with RSI
or any Subsidiary.
(c) The Grantee of Restricted Stock Rights shall not be entitled to any
of the rights of a holder of the Common Stock with respect to the Shares
subject to such Restricted Stock Rights prior to the issuance of such Shares
pursuant to this Plan. During the Restricted Period, for each Share subject to
a Restricted Stock Right, the Company will pay the holder an amount in cash
equal to the cash dividend declared on a Share during the Restricted Period on
or about the date the Company pays such dividend to the stockholders of record.
(d) In the event that the employment of a Grantee terminates by reason
of death, Disability or Retirement, such Grantee shall be entitled to receive
the number of Shares subject to the Restricted Stock Right multiplied by a
fraction (x) the numerator of which shall be the number of days between the
date of grant of such Restricted Stock Right and the date of such termination
of employment, and (y) the denominator of which shall be the number of days in
the Restricted Period, provided, however, that any fractional Share shall be
cancelled. If a Grantee's employment is interrupted by reason of Disability or
a leave of absence (as determined by the Committee), then the Committee may
permit the delivery of the Shares subject to the Restricted Stock Right in such
amounts as the Committee may determine.
14
<PAGE> 17
(e) Notwithstanding Paragraphs (a) and (b) of this Section 11, unless
otherwise determined by the Committee prior to the occurrence of a Change of
Control, in the event of a Change of Control all restrictions on Restricted
Stock shall expire and all Shares subject to Restricted Stock Rights shall be
issued to the Grantees. Additionally, the Committee may, at any time, provide
for the acceleration of the Restricted Period and of the issuance of all or
part of the Shares subject to Restricted Stock Rights. Any determination made
by the Committee pursuant to this Section 11(e) may be made as to all
Restricted Stock Rights or only as to certain Restricted Stock Rights specified
by the Committee. Once made, any determination by the Committee pursuant to
this Section 11(e) shall be irrevocable.
(f) When a Grantee shall be entitled to receive Shares pursuant to a
Restricted Stock Right, the Company shall issue the appropriate number of
Shares registered in the name of the Grantee.
12. Dilution and Other Adjustments. If there shall be any change in the Shares
subject to this Plan or any Award granted under this Plan as a result of
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split or other change in the corporate structure, adjustments may be made by
the Committee, as it may deem appropriate, in the aggregate number and kind of
Shares subject to this Plan or to any outstanding Award, and in the terms and
provisions of this Plan and any Awards granted hereunder, in order to reflect,
on an equitable basis, any such change in the Shares contemplated by this
Section 12. Any adjustment made by the Committee pursuant to this Section 12
shall be conclusive and binding upon the Grantee, the Company and any other
related person.
13. Substitute Options. Incentive and/or Non-qualified Stock Options may be
granted under this Plan from time to time in substitution for either incentive
or non-qualified stock options or both held by employees of other corporations
who are about to become employees of the Company as the result of a merger,
consolidation or reorganization of the employing corporation with the Company,
or the acquisition by the Company of the assets of the employing corporation,
or the acquisition by the Company of stock of the employing corporation as the
result of which it becomes a Subsidiary of the Company. The terms and
conditions of the Stock Options so granted may vary from the terms and
conditions set forth in this Plan to such extent as the Committee at the time
of grant may deem appropriate to conform, in whole or in part, to the
provisions of the stock options in substitution for which they are granted,
but, in the event that the option for which a substitute Stock Option is being
granted is an incentive stock option, no variation shall adversely affect the
status of any substitute Stock Option as an incentive stock option under the
Code.
14. Miscellaneous Provisions.
(a) Notwithstanding any other provision of this Plan, no Stock Option,
SAR, Limited SAR or Restricted Stock Right granted hereunder may be exercised
nor shall any payment in respect of any
15
<PAGE> 18
Performance Unit granted hereunder be made and all rights of the Grantee
thereof, or of the Grantee's legal representatives, heirs or legatees, shall be
forfeited if, prior to the time of such exercise or payment, the Committee (or
in the event of a Change of Control, the Incumbent Board) determines that the
Grantee has (i) used for profit or disclosed confidential information or trade
secrets of the Company to unauthorized persons, or (ii) breached any contract
with, or violated any legal obligation to, the Company, or (iii) engaged in any
other activity which would constitute grounds for termination for cause of the
Grantee by the Company. The Committee (or the Incumbent Board) shall give a
Grantee written notice of such determination prior to making any such
forfeiture. The Committee (or the Incumbent Board) may waive the conditions of
this Paragraph in full or in part if, in its sole judgment, such waiver will
have no substantial adverse effect upon the Company. The determination of the
Committee (or the Incumbent Board) as to the occurrence of any of the events
specified above and to the forfeiture, if any, shall be conclusive and binding
upon the Grantee, the Company and any other related person.
(b) The Grantee of an Award shall have no rights as a stockholder with
respect thereto, except as otherwise expressly provided in this Plan, unless
and until certificates for Shares are issued.
(c) No Award or any rights or interests therein shall be assignable or
transferable by the Grantee except by will or the laws of descent and
distribution. During the lifetime of the Grantee, an Award shall be exercisable
only by the Grantee or the Grantee's guardian or legal representative.
(d) The Company shall have the right to deduct from all Awards granted
hereunder to be distributed in cash any Federal, state, local or foreign taxes
required by law to be withheld with respect to such cash payments. In the case
of Awards to be distributed in Shares, the holder or other person receiving
such Common Stock shall be required, as a condition of such distribution,
either to pay to the Company at the time of distribution thereof the amount of
any such taxes which the Company is required to withhold with respect to such
Shares or to have the number of the Shares, valued at their Fair Market Value
on the date of distribution, to be distributed reduced by an amount equal to
the value of such taxes required to be withheld.
(e) No Employee shall have any claim or right to be granted an Award
under this Plan, nor having been selected as a Grantee for one Year, any right
to be a Grantee in any other Year. Neither this Plan nor any action taken
hereunder shall be construed as giving any Grantee any right to be retained in
the employ of RSI or any Subsidiary, and the Company expressly reserves its
right at any time to dismiss any Grantee with or without cause.
(f) The costs and expense of administering this Plan shall be borne by
the Company and not charged to any Award nor to any Grantee.
(g) This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under this Plan, and payment of
Awards shall be subordinate to the claims of the Company's general creditors.
16
<PAGE> 19
(h) Whenever used in this Plan, the masculine gender shall include the
feminine or neuter wherever necessary or appropriate and vice versa and the
singular shall include the plural and vice versa.
(i) With respect to Grantees subject to Section 16 of the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent
any provision of this Plan or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee. Moreover, in the event this Plan does not include a
provision required by Rule 16b-3 to be stated herein, such provision (other
than one relating to eligibility requirements, or the price and amount of
Awards) shall be deemed automatically to be incorporated by reference into this
Plan insofar as Grantees subject to Section 16 are concerned.
15. Indemnification of the Committee. Service on the Committee shall constitute
service as a director of the Company and members of the Committee shall be
entitled to indemnification, advancement of expenses and reimbursement as
directors of the Company pursuant to its Restated Articles of Incorporation,
By-Laws, resolutions of the Board of Directors of RSI or otherwise.
16. Compliance with Law.
(a) Each Grantee, to permit the Company to comply with the Securities
Act of 1933, as amended (the "1933 Act"), and any applicable blue sky or state
securities laws, shall represent in writing to the Company at the time of the
grant of an Award and at the time of the issuance of any Shares thereunder that
such Grantee does not contemplate and shall not make any transfer of any Shares
to be acquired under an Award except in compliance with the 1933 Act and such
Grantee shall enter into such agreements and make such other representations
as, in the opinion of counsel to the Company, shall be sufficient to enable the
Company legally to issue the Shares without registration thereof under the 1933
Act. Certificates representing Shares to be acquired under Awards shall bear
legends as counsel for the Company may indicate are necessary or appropriate to
accomplish the purposes of this Section 16.
(b) If at any time the Committee shall determine that the listing,
registration or qualification of the Shares subject to any Award upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of or issuance of Shares
under such Award, such Shares shall not be issued unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
17. Amendment of the Plan. The Committee may at any time (i) terminate this
Plan or (ii) modify or amend this Plan in any respect, except that, to the
extent required to maintain the qualification of
17
<PAGE> 20
this Plan under Section 16 of the 1934 Act, or as otherwise required to comply
with applicable law or the regulations of any stock exchange on which the
Shares are listed, the Committee may not, without shareholder approval, (A)
materially increase the benefits accruing to Grantees under this Plan, (B)
materially increase the number of securities which may be issued under this
Plan or (C) materially modify the requirements as to eligibility for
participation in this Plan. Should this Plan require amendment to maintain
full legal compliance because of rules, regulations, opinions or statutes
issued by the SEC, the U.S. Department of the Treasury or any other
governmental or governing body, then the Committee or the Board may take
whatever action, including but not limited to amending or modifying this Plan,
is necessary to maintain such compliance. The termination or any modification
or amendment of this Plan shall not, without the consent of any Grantee
involved, adversely affect his rights under an Award previously granted to him.
18. Effective Date and Term of the Plan.
(a) This Plan shall become effective on May 5, 1995, subject to the
approval of the shareholders of RSI.
(b) Unless previously terminated in accordance with Section 17 of this
Plan, this Plan shall terminate on the close of business on May 4, 2005, after
which no Awards shall be granted under this Plan. Such termination shall not
affect any Awards granted prior to such termination.
18
<PAGE> 1
EXHIBIT 10.23
RYDER SYSTEM, INC.
SAVINGS RESTORATION PLAN
This Ryder System, Inc. Savings Restoration Plan (the "Plan") is adopted
effective April 1, 1995. The Plan is established and maintained by Ryder
System, Inc. solely for the purpose of permitting certain employees of the
Employer who participate in the Ryder System, Inc. Employee Savings Plan A or B
(the "Savings Plan") to receive contributions equal to amounts in excess of
certain limitations on contributions imposed by the Internal Revenue Code of
1986, as amended.
ARTICLE I
DEFINITIONS
Wherever used herein the following terms shall have the meanings
hereinafter set forth:
1.1. "Accounting Date" means the last day of each calendar month and such
other date or dates as the Committee may designate from time to time as an
Accounting Date.
1.2. "Accounting Period" means each period beginning on the day following
an Accounting Date and ending on the following Accounting Date.
1.3. "Affiliate" means any Employer, and any member of a controlled group
of corporations, a group of trades or businesses under common control, an
affiliated service group of which any Employer is a member or any other entity
required to be aggregated with the Employer pursuant to regulations under
Section 414(o) of the Code. For purposes hereof: (i) a "controlled group of
corporations" shall mean a controlled group of corporations as defined in
Section 1563(a) of the Code, determined without regard to Sections 1563(a)(4)
and (e)(3)(c) thereof, (ii) a "group of trades or businesses under common
control" shall mean a group of trades or businesses under common control as
defined in the regulations promulgated under Section 414(c) of the Code; and
(iii) an "affiliated service group" shall mean an affiliated service group as
defined in Section 414(m) of the Code.
1.4. "Beneficiary" means the person or persons designated by a
Participant, upon such forms as shall be provided by the Committee, to receive
payments of the vested portion of the
-1-
<PAGE> 2
Participant's Account after the Participant's death. If the Participant shall
fail to designate a Beneficiary, or if for any reason such designation shall be
ineffective, or if such Beneficiary shall predecease the Participant or die
simultaneously with him, then the Beneficiary shall be, in the following order
of preference:
(i) the Participant's surviving spouse, or
(ii) the Participant's estate.
1.5. "Board" means the Board of Directors of the Company.
1.6. "Change of Control" shall be deemed to have occurred if:
(i) a third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), but excluding any employee benefit plan or plans of the Company and its
subsidiaries and affiliates, becomes the beneficial owner, directly or
indirectly, of twenty percent (20%) or more of the combined voting power of the
Company's outstanding voting securities ordinarily having the right to vote for
the election of directors of the Company; or
(ii) the individuals who, as of June 26, 1987, constituted the
Board of Directors of the Company (the "Board" generally and as of June 26,
1987 the "Incumbent Board") cease for any reason to constitute at least
two-thirds (2/3) of the Board, or in the case of a merger or consolidation of
the Company, do not constitute or cease to constitute at least two-thirds (2/3)
of the board of directors of the surviving company (or in a case where the
surviving corporation is controlled, directly or indirectly, by another
corporation or entity, do not constitute or cease to constitute at least
two-thirds (2/3) of the board of such controlling corporation or do not have or
cease to have at least two-thirds (2/3) of the voting seats on any body
comparable to a board of directors of such controlling entity or, if there is
no body comparable to a board of directors, at least two-thirds (2/3) voting
control of such controlling entity), provided that any person becoming a
director (or, in the case of a controlling noncorporate 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 Plan, considered as though such person were a member of the Incumbent
Board; or
(iii) there is a liquidation or dissolution of the Company or a sale
of all or substantially all of the assets of the Company.
-2-
<PAGE> 3
If the Company enters into an agreement or series of agreements or the
Board passes a resolution which will result in the occurrence of any of the
matters described in Paragraph (i), (ii) or (iii), and a Participant'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 Paragraph (i), (ii) or (iii),
then, upon the occurrence of any of the matters described in Paragraph (i),
(ii), or (iii), a Change of Control shall be deemed to have retroactively
occurred on the date of the execution of the earliest of such agreement(s) or
the passage of such resolution.
1.7. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and any regulations relating thereto.
1.8. "Committee" means the Committee appointed by the Board to administer
the Savings Plan in accordance with Article X of the Savings Plan or when
applicable, the person to whom the Committee has delegated authority pursuant
to Article X of the Savings Plan for the matter in question.
1.9. "Company" means Ryder System, Inc., a Florida corporation, or any
successor corporation or other entity resulting from a merger or consolidation
into or with the Company or a transfer or sale of substantially all of the
assets of the Company.
1.10. "Company Stock" means the common stock of the Company, par value
$.50, which is readily tradeable on an established securities market.
1.11. "Compensation" means the sum of (i) the total of all amounts paid to
a Participant by an Employer as salary (including commissions) or bonuses for
personal services and (ii) any Savings Plan Tax-Deferred Contributions or
Restoration Tax-Deferred Contributions made by the Employer on behalf of a
Participant for the Plan Year and any other amounts earned by the Participant
for the Plan Year but that are deferred under any other plan or arrangement
maintained by the Employer.
1.12. "Disability" means a Participant's inability to engage in any
substantial gainful activity by reason of any medically determined physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months,
as determined in a uniform and non-discriminatory manner by the Committee after
requiring any medical examinations by a physician or reviewing any medical
evidence which the Committee considers necessary, and which results in the
Participant's Separation from Employment.
1.13. "Eligible Employee" means any Participant in the Savings Plan who is
(i) employed by the Employer, (ii) designated by the Committee to be eligible
to participate in the Plan, and (iii) is part of a select group of management
or highly compensated employees within
-3-
<PAGE> 4
the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee
Retirement Income Security Act of 1974, as amended from time to time, and any
regulations relating thereto.
1.14. "Employee" means any employee of (i) the Company or (ii) any other
entity that is an Employer as defined in the Savings Plan.
1.15. "Employer" means (i) the Company and (ii) any other entity that is
an Employer as defined in the Savings Plan.
1.16. "Investment Funds" means those investment options that shall from
time to time be made available as investment options under the Plan, as
determined by the Committee.
1.17. "Leave of Absence" means an Employee's leave of absence from active
employment with the Company or an Affiliate because of military service,
illness which does not constitute a Disability, educational pursuits, services
as a juror, or temporarily with a government agency, or any other leave of
absence, if (i) such leave of absence is approved by the Company or an
Affiliate that employs the Employee, and (ii) upon termination of any such
leave of absence, such Employee promptly returns or has returned to the employ
of the Company or an Affiliate, without employment (other than military
service) elsewhere in the meantime except with the consent of the Company or an
Affiliate. The Company or an Affiliate shall determine the first and last days
of any Leave of Absence that it approves.
1.18. "Participant" means an Eligible Employee of the Employer who elects
to participate in the Plan.
1.19. "Participant's Account" means the total amount credited to the
account maintained in the Plan in accordance with the provisions of the Plan
for each Participant, which represents his total proportionate interest of all
accounts under the Plan as of any Accounting Date, and which consists of his
Restoration Tax-Deferred Contributions Account and his Restoration Matching
Contributions Account.
1.20. "Plan" means the Ryder System, Inc. Savings Restoration Plan.
1.21. "Plan Year" means the calendar year, except that the 1995 Plan Year
shall commence April 1, 1995 and shall end December 31, 1995.
1.22. "Restoration Matching Contribution" means the matching contributions
credited to the Participant's Account in accordance with Section 3.2 of the
Plan.
1.23. "Restoration Matching Contributions Account" means the account
maintained by the Company under the Plan for a Participant that is credited
with the Participant's Restoration Matching Contributions, and any gains or
losses allocable thereto.
-4-
<PAGE> 5
1.24. "Restoration Tax-Deferred Contributions" means the compensation
reduction contributions credited to the Participant's Account under Section 3.
l of the Plan.
1.25. "Restoration Tax-Deferred Contributions Account" means the account
maintained by the Company under the Plan for a Participant that is credited
with the Participant's Restoration Tax-Deferred Contributions, and any gains or
losses allocable thereto.
1.26. "Retirement Age" means the earlier of (i) the date on which a
Participant attains age 65, and (ii) the date on which a Participant has both
(a) attained age 55 and (b) completed at least 10 years of Service. For
purposes of this provision, Service shall mean that period of an Employee's
continuous uninterrupted employment with an Employer and any Affiliate, and
with any predecessor businesses of the Employer or an Affiliate, conducted as
corporations, partnerships, or proprietorships, from the Employee's last date
of hire to the date of termination of his employment for any reason; provided
however, that the employment of an Employee, who immediately before his current
employment was employed by a predecessor or acquired business continuously up
to the date of its merger with or acquisition by the Employer or an Affiliate,
shall include only that part of his employment for said business which has
occurred after the date fixed for this purpose by the Company and provided that
the same date is uniformly fixed for this purpose as to all of the employees of
a given predecessor or acquired business. An Employee may work simultaneously
for more than one Employer and Affiliate, but the total period of his
employment shall not be increased by reason of such simultaneous employment.
1.27. "Savings Plan" means the Ryder System, Inc. Employee Savings Plan A,
established effective January l, 1984, and as amended from time to time, and
the Ryder System, Inc. Employee Savings Plan B, established effective January
1, 1993, and as amended from time to time, and each successor or replacement
salaried employees' cash or deferred arrangement.
1.28. "Savings Plan Limitations" means those limitations applicable to the
Savings Plan imposed by (i) Section 402(g) of the Code, (ii) Section 415 of the
Code, (iii) Section 401(a)(17) of the Code, or (iv) any other limitations
imposed under the Code on contributions under the Savings Plan.
1.29. "Savings Plan Matching Contributions" means the total of all
Matching Contributions made by the Employer for the benefit of a Participant
under and in accordance with the terms of the Savings Plan.
1.30. "Savings Plan Tax-Deferred Contributions" means the Tax Deferred
Contributions made by the Employer for the benefit of a Participant under and
in accordance with the terms of the Savings Plan.
1.31. "Separation from Employment" means a discontinuance of the
Participant's employment relationship with the Company and its Affiliates due
to retirement at or after Retirement Age, Disability, death, layoff, or other
termination of employment (voluntary or
-5-
<PAGE> 6
involuntary). For purposes of this provision, the employment relationship with
the Company and its Affiliates of a Participant entitled to accrued vacation
time and/or severance pay after he ceases to perform services for the Company
and its Affiliates shall be deemed to terminate upon the date his accrued
vacation time, if any, expires, or if the Participant is entitled to severance
pay, then upon the earlier of (i) the last date on which the Participant is
entitled to receive payment of such severance pay from the Company or any
Affiliate, and (ii) the date which is 13 weeks after both (a) the Participant
has ceased to perform services for the Company and its Affiliates and, (b) the
Participant's accrued vacation time, if any, has expired. The fact that an
Employee who is a Participant ceases to elect to have any Restoration
Tax-Deferred Contributions credited to his Account under the Plan shall not
constitute a Separation from Employment, and a Participant's absence from
active employment due to military service or Leave of Absence shall not
constitute a Separation from Employment.
ARTICLE II
ELIGIBILITY
2.1. Eligibility. An Employee that becomes an Eligible Employee as of
April 1, 1995 shall be eligible to participate in the Plan on April 1, 1995.
Any other Employee shall be eligible to participate on the January 1 coincident
with or immediately following the date as of which he becomes an Eligible
Employee.
ARTICLE III
RESTORATION CONTRIBUTIONS AND VESTING
3.1. Restoration Tax-Deferred Contributions. Each Participant, so long as
he remains a Participant, may elect (on a form furnished by the Committee and
in accordance with Committee rules) to reduce and defer receipt pursuant to
this Plan of his Compensation by an amount equal to the excess of (i) a minimum
of 1% and a maximum of 10% of his Compensation, over (ii) the amount of his
Savings Plan Tax-Deferred Contributions for the Plan Year after taking into
account the Savings Plan Limitations. The amount of deferral so elected shall
be applied against and reduce the Participant's (x) salary (including
commissions), (y) bonuses, or (z) salary (including commissions) and bonuses,
earned during the Plan Year as elected by the Participant and as shall be
determined by the Committee. In no event shall any amounts be deferred under
this Plan for any Plan Year until the Participant's Savings Plan Tax-Deferred
Contributions have reached the Savings Plan Limitation for the Plan Year. For
the Plan Year that begins April 1, 1995 and ends December 31, 1995, the amount
of the Participant's percentage deferral election under the preceding sentence
shall be applied to his salary (including commissions), bonuses, or salary
(including commissions) and bonuses (depending upon the Participant's election)
for the entire 1995 calendar year, and the amount of the deferral as so
determined then shall be pro-rated on
-6-
<PAGE> 7
such basis as the Committee shall determine, as a reduction of the
Participant's salary (including commissions), bonuses, or salary (including
commissions) and bonuses, earned after the Participant's election becomes
effective. Participant Election and Enrollment Forms are effective on a Plan
Year basis, and must be filed before the beginning of the Plan Year to which
they relate. Participant Election and Enrollment Forms may not be amended or
revoked after the beginning of the Plan Year. The Employer shall withhold, by
payroll deduction, the Compensation deferred pursuant to this Section 3.1 from
the current compensation payments of a Participant and credit such withheld
amount to a Participant's Restoration Tax-Deferred Contributions Account under
the Plan.
3.2. Restoration Matching Contribution. For each Plan Year, the Employer
shall credit to the Participant's Restoration Matching Contributions Account of
each Participant who elects to make a Restoration Tax-Deferred Contribution for
the Plan Year an amount equal to the excess, if any, of:
(i) the amount of the Savings Plan Matching Contribution that
would have been credited to the Participant's Account under the Savings Plan if
the Restoration Tax-Deferred Contribution had been made into the Savings Plan
and the Savings Plan Limitations were not taken into account thereunder, over
(ii) the Savings Plan Matching Contributions actually allocated to
the Participant's Account under the Savings Plan for the Plan Year.
Each Matching Contribution for each Participant shall be credited to the
Participant's Account as of the end of the Accounting Period for which the
Restoration Tax-Deferred Contribution is withheld, or as soon as practicable
thereafter.
3.3. Vesting.
(i) A Participant's interest in his Restoration Tax-Deferred
Contributions Account shall be 100% nonforfeitable at all times. A
Participant's interest in his Restoration Matching Contribution Account shall
become non-forfeitable and vest in accordance with the following schedule,
based upon the number of the Participant's Months of Participation in the
Savings Plan, determined in accordance with the Savings Plan.
<TABLE>
<CAPTION>
Number of Months Vested Percentage
of Participation of Account
-------------------- ----------------
<S> <C>
Less than 12 0%
12 through 23 25%
24 through 35 50%
36 through 47 75%
More than 47 100%
</TABLE>
-7-
<PAGE> 8
Notwithstanding the foregoing, a Participant's vested percentage shall be 100%
(a) once the Participant has completed 5 Years of Service, as determined in
accordance with the Savings Plan, or (b) if the Participant's employment with
the Employer terminates at any time after he has attained his Retirement Age,
or by reason of the Participant's death or Disability, or (c) in the event that
a Change of Control shall occur while the Participant is an Employee of the
Employer or an Affiliate.
(ii) The nonvested portion of a Participant's Account that
is forfeited shall not be allocated to the Participant's Account of any other
Participant.
ARTICLE IV
INVESTMENT OF RESTORATION CONTRIBUTIONS
4.1. Investment. Amounts credited to a Participant's Account shall
be treated as if they were actually invested in the Investment Funds selected
by the Participant in accordance with the Plan, and shall be credited with
gains and losses allocable thereto at such times and in such manner as shall be
determined by the Committee. Each Eligible Employee upon becoming a Participant
shall elect on the Participant Election and Enrollment Form the portion of the
Participant's Account, in any whole percentage multiples (or in such other
proportions as the Committee may from time to time determine), that are to be
treated as if invested in each of the Investment Funds. A Participant may, at
such times and in such manner as shall be permitted by the Committee, change
such election as to the investment of his Participant's Account.
ARTICLE V
DISTRIBUTIONS
5.1. Timing of Distribution.
(i) The vested portion of a Participant's Account, less
any applicable tax withholding, shall be distributed on the January 1
immediately following a Participant's Separation from Employment, or as soon as
administratively practicable thereafter. The distribution to the Participant or
his Beneficiary shall be made in a lump sum or in installments in accordance
with the Participant's most recent Participant Election and Enrollment Form on
file with the Committee which is effective at least one year prior to the date
of such Separation from Employment. Such election shall indicate that the
Participant has chosen to receive either: (a) a lump sum on the January 1
immediately following the Participant's Separation from Employment, or as soon
as administratively practicable thereafter, or (b) a minimum of 2, and a
maximum of 10, annual installments beginning on the January 1 immediately
following the Participant's Separation from
-8-
<PAGE> 9
Employment, or as soon as administratively practicable thereafter. Each annual
installment shall be equal to the value of the Participant's Account multiplied
by a fraction, the numerator of which is 1 and the denominator of which is the
number of installments remaining to be paid.
(ii) If a Participant should die before distribution of
the entire vested portion of the Participant's Account has been made to him,
any remaining amounts, less applicable withholding taxes, shall be distributed
to the Participant's Beneficiary in the same manner in which such amounts
otherwise would have been distributed to the Participant.
(iii) Notwithstanding the foregoing provisions of this
Section 5.1, the remaining vested portion of a Participant's Account, less
applicable withholding taxes, shall be distributed to the Participant or his
Beneficiary, in a lump sum, as soon as administratively practicable following a
Change of Control.
(iv) The value of a Participant's Account, for purposes of
determining the amount to be distributed to the Participant or his Beneficiary,
shall be determined as of the December 31 immediately preceding the
distribution.
5.2. Method of Distribution. Distribution of the Participant's
Account shall be made in cash.
5.3. Hardship Distributions. Upon the written request of a
Participant and in the event the Committee determines that an "unforeseeable
emergency" has occurred with respect to a Participant, the Participant may
withdraw the lesser of (i) the amount the Committee deems to be necessary to
meet the emergency or (ii) the Participant's Account. For this purpose, an
"unforeseeable emergency" shall mean an unanticipated emergency, such as a
sudden and unexpected illness or accident of the Participant or a dependent of
the Participant or loss of the Participant's property due to casualty, that is
caused by an event beyond the control of the Participant and that would result
in severe financial hardship if the withdrawal were not permitted. The need to
pay a Participant's child's tuition to college and the desire to purchase a
home shall not be considered unforeseeable emergencies.
ARTICLE VI
ADMINISTRATION OF THE PLANS
6.1. Administration by the Committee. The Committee shall be
responsible for the general operation and administration of the Plan and for
carrying out the provisions thereof.
6.2. General Powers of Administration. All provisions set forth in
the Savings Plan with respect to the administrative powers and duties of the
Committee and procedures for filing claims shall also be applicable with
respect to the Plan. The Committee shall be entitled to rely
-9-
<PAGE> 10
conclusively upon all tables, valuations, certificates, opinions and reports
furnished by any actuary, accountant, controller, counsel or other person
employed or engaged by the Committee with respect to the Plan. All expenses of
administration relating to the Plan may be debited against the Participant's
Account, in the same manner as expenses are charged to accounts under the
Savings Plan.
ARTICLE VII
AMENDMENT OR TERMINATION
7.1. Amendment or Termination. The Company intends the Plan to be
permanent but reserves the right, by resolution of the Board or by action of
any committee thereof, to amend or terminate the Plan when, in the sole opinion
of the Board or the committee, such amendment or termination is advisable. Any
such amendment or termination shall be made pursuant to a resolution of the
Board, or by action of a committee thereof, and shall be effective as of the
date of such resolution or action unless specifically provided otherwise.
7.2. Effect of Amendment or Termination. No amendment or
termination of the Plan shall directly or indirectly reduce the balance of any
Participant's Account held hereunder as of the effective date of such amendment
or termination. Upon termination of the Plan, distribution of amounts in the
Participant's Account shall be made to the Participant or his Beneficiary in
the manner and at the time described in Article V of the Plan. No additional
credits of contributions shall be made to the Participant's Account for periods
after termination of the Plan, but the Committee shall continue to credit gains
and losses to the Participant's Account, until the balance of such
Participant's Account has been fully distributed to the Participant or his
Beneficiary.
ARTICLE VIII
GENERAL PROVISIONS
8.1. Participant's Rights Unsecured. The Plan at all times shall be
entirely unfunded and no provision shall at any time be made with respect to
segregating any assets of the Company or any other Employer for payment of any
distributions hereunder. Although the value of each Participant's Account will
be measured as if such Accounts were invested in the Investment Funds selected
by the Participant pursuant to the Plan, neither the Company nor any other
Employer shall be required to invest any assets in any Investment Funds, and if
the Company or any other Employer does in fact make any investments in any
Investment Funds, the Participant or Beneficiary shall have no rights in or
claims against any such investments. The right of a Participant or his
designated Beneficiary to receive a distribution hereunder shall be an
unsecured claim against the general assets of his Employer and the Company, and
neither the Participant nor a designated beneficiary shall have any rights in
or against any specific assets of the Company or
-10-
<PAGE> 11
any other Employer. All amounts credited to a Participant's Account shall
constitute general assets of his Employer or the Company and may be disposed of
by his Employer or the Company at such time and for such purposes as it may
deem appropriate.
8.2. No Guarantee of Benefits. Nothing contained in the Plan shall
constitute a guaranty by the Company or any other Employer or any other person
or entity that the assets of the Company or any other Employer will be
sufficient to pay any benefit hereunder.
8.3. Spendthrift Provision. No interest of any person or entity in,
or right to receive a distribution under, the Plan shall be subject in any
manner to sale, transfer, assignment, pledge, attachment, garnishment, or other
alienation or encumbrance of any kind; nor may such interest or right to
receive a distribution be taken, either voluntarily or involuntarily for the
satisfaction of the debts of, or other obligations or claims against, such
person or entity, including claims in bankruptcy proceedings.
8.4. Applicable Law. The Plan shall be construed and administered
under the laws of the State of Florida.
8.5. Indirect Payment of Benefits. If any Participant or his
Beneficiary is, in the judgment of the Committee, legally, physically or
mentally incapable of personally receiving-and receipting for any payment due
hereunder, payment may be made to the guardian or other legal representative of
such Participant or Beneficiary or, if none, to such person or institution who,
in the opinion of the Committee, is then maintaining or has custody of such
Participant or Beneficiary. Such payments shall constitute a full discharge
with respect thereto.
8.6. Notice of Address. Each person entitled to a benefit under the
Plan must file with the Employer, in writing, his post office address and each
change of post office address which occurs between the date of his termination
of employment with the Employer and the date he ceases to be a Participant. Any
communication, statement, or notice addressed to such a person at his latest
reported post office address will be binding upon him for all purposes of the
Plan and neither the Committee nor the Employer shall be obliged to search for
or ascertain his whereabouts.
8.7. Notices. Any notice required or permitted to be given
hereunder to a Participant or Beneficiary will be properly given if delivered
or mailed, postage prepaid, to the Participant or Beneficiary at his last post
office address as shown on the Employer's records. Any notice to the Committee
or the Employer shall be properly given or filed upon receipt by the Committee
or the Employer, as the case may be, at such address as may be specified from
time to time by the Committee.
8.8. Waiver of Notice. Any notice required hereunder may be waived
by the person entitled thereto.
-11-
<PAGE> 12
8.9. Unclaimed Payments. If a Participant or his Beneficiary fails
to apprise the Committee of changes in the address of the Participant or
Beneficiary, and the Committee is unable to communicate with the Participant or
Beneficiary at the address last recorded by the Committee within five years
after any benefit becomes due and payable from the Plan to the Participant or
Beneficiary, the Committee may mail a notice by registered mail to the last
known address of such person outlining the following action to be taken unless
such person makes written reply to the Committee within 60 days from the
mailing of such notice: The Committee may direct that such benefit and all
further benefits with respect to such person shall be discontinued and all
liability for the payment thereof shall terminate.
8.10. Employer-Employee Relationship. The establishment of this Plan
shall not be construed as conferring any legal or other rights upon any
Employee or any person for a continuation of employment, nor shall it interfere
with the rights of an Employer to discharge any Employee or otherwise act with
relation to him. Each Employer may take any action (including discharge) with
respect to any Employee or other person and may treat him without regard to the
effect which such action or treatment might have upon him as a Participant of
this Plan.
8.11. Receipt And Release. Any final payment or distribution to any
Participant, his Beneficiary or his legal representative in accordance with
this Plan shall be in full satisfaction of all claims against the Committee and
the Employer; the Employer or the Committee may require a Participant, his
Beneficiary or his legal representative to execute a receipt and release of all
claims under this Plan upon a final payment or distribution or a receipt to the
extent of any partial payment or distribution; and the form of any such receipt
and release shall be determined by the Employer or the Committee.
8.12. Limitations on Liability. Notwithstanding any of the preceding
provisions of the Plan, neither the Company, the Committee, nor any individual
acting as employee or agent of the Company or the Committee shall be liable to
any Participant, former Participant or other person for any claim, loss,
liability or expense incurred in connection with the Plan.
8.13. Miscellaneous. Words in the masculine gender shall include the
feminine and the singular shall include the plural, and vice versa, unless
qualified by the context. Any headings
-12-
<PAGE> 13
used herein are included for ease of reference only, and are not to be
construed so as to alter the terms hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed and its corporate seal to be hereunto affixed by its duly authorized
officers on this 31st day of March, 1995.
RYDER SYSTEM, INC.
By: /s/ C. Robert Campbell
-------------------------
C. Robert Campbell,
Executive Vice President-
Human Resources and
Administration
ATTEST:
By: /s/ H. Judith Chozianin
------------------------
Secretary
-13-
<PAGE> 1
Exhibit 11.1
Statement re: Computation of Per Share Earnings
Primary earnings per share are computed by dividing earnings applicable 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
applicable 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.
<PAGE> 1
EXHIBIT 13.1
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
FINANCIAL REVIEW
REVENUE
[GRAPH]
- - Dedicated Logistics - 17%
- - Full Service Truck Leasing - 33%
- - Commercial and Consumer Rental - 21%
- - Automotive Carriers - 11%
- - Public Transportation - 8%
- - International - 6%
- - Other - 4%
OVERVIEW
The company reported revenue growth in excess of 10% in 1995 and earnings
before accounting change were slightly higher than 1994 and the highest in
company history. These results were achieved in spite of the impact of a
softening economy on truck rental utilization, a 32-day strike by the
International Brotherhood of Teamsters and costs related to reorganizations and
the implementation of reengineering initiatives. Management believes it
achieved the goals established for 1995. First, the company continued to expand
its highest value-added contractual businesses, with both record revenue and
record sales of new business in dedicated logistics, and continued revenue
growth and strong sales of new business in full service truck leasing. Second,
the company continued to focus on customer service and lowering costs by
implementing several reengineering initiatives, including the completion of
several projects in the areas of sales and marketing, maintenance and finance
and administration. Finally, the company increased its overall market coverage
domestically, continued to grow in Europe and Mexico and commenced activities
in Brazil and Argentina.
Earnings from continuing operations were slightly higher in 1995 compared
with 1994 and 34% higher in 1994 compared with 1993. Vehicle Leasing & Services
pretax earnings were higher in 1995 while Automotive Carriers pretax earnings
declined due mainly to the impact of the Teamsters strike. Strong results from
the truck rental businesses and Automotive Carriers, driven in part by a strong
U.S. economy, were the primary reason for the increase in 1994 earnings
compared with 1993.
Revenue growth in 1995 was led by the company's two primary contractual
product lines - full service truck leasing and dedicated logistics - which both
surpassed growth rates achieved in 1994. Automotive Carriers revenue was lower
in 1995 as a result of the Teamsters strike and a fourth quarter slowdown in
vehicle production, which decreased the number of vehicles shipped. The
increase in 1994 revenue compared with 1993 reflected growth in all of the
company's major product lines.
Total operating expense as a percentage of revenue was about the same in
1995, 1994 and 1993. Within total operating expense in 1995, lower vehicle
liability and environmental expenses, as well as a benefit from the resolution
of certain operating tax matters, were offset by higher logistics
related spending and increased equipment rental costs due to an increase in the
number of vehicles leased by the company.
Depreciation expense (before gains on vehicle sales) increased 14% in 1995
and 11% in 1994 compared with the preceding years. Strong sales of new full
service lease and logistics contracts led to increases in the size of the
vehicle fleet and depreciation in both 1995 and 1994. The size of the vehicle
fleet increased 8% in 1995 to 203,932 units. Gains on vehicle sales were $19
million higher in both 1995 and 1994 compared with the preceding years. The
increases were due to a higher number of vehicles sold in both years, as well
as an increase in the average gain per vehicle sold in 1994.
Increased interest expense in both 1995 and 1994 was due to higher average
outstanding debt levels, resulting from growth in the vehicle fleet, combined
with higher interest rates on the company's variable-rate debt. At December 31,
1995, approximately 23% of the company's financing obligations had variable
interest rates.
18
<PAGE> 2
The company's effective tax rate for continuing operations was 41.2% in
1995, 41.1% in 1994 and 45.3% in 1993. The higher 1993 rate was the result of
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%.
ACCOUNTING CHANGES
The company adopted Statement of Financial Accounting Standards No. 116,
"Accounting for Contributions Received and Contributions Made," effective
January 1, 1995. The statement requires that a promise to make a contribution
be recognized in the financial statements as an expense and a liability when a
promise is made. As a result, a first quarter pretax charge of $12 million ($8
million after tax, or $0.10 per common share) was recorded as the cumulative
effect of a change in accounting principle to establish a liability for the
present value of the company's total outstanding charitable commitments as of
January 1, 1995.
In 1993, the company adopted Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions," and recorded a pretax charge of $41 million ($25 million after tax,
or $0.33 per common share), to establish the resulting transition obligation.
UNDERSTANDING RYDER'S BUSINESS PERFORMANCE
VEHICLE LEASING & SERVICES
<TABLE>
<CAPTION>
Dollars in thousands 1995 1994 1993
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue:
Full service lease and programmed maintenance $1,959,683 1,775,205 1,673,891
Commercial and consumer rental 1,115,376 1,101,266 912,316
Dedicated logistics 866,654 645,827 523,187
Public transportation 400,197 365,279 345,241
International 301,770 192,117 156,300
Other and eliminations (54,059) (21,959) (14,132)
- ----------------------------------------------------------------------------------------------------
Total 4,589,621 4,057,735 3,596,803
Operating expense 3,520,738 3,112,746 2,758,681
Depreciation expense 716,098 628,625 557,406
Gains on sales of revenue earning equipment (89,851) (72,721) (54,084)
Interest expense 196,833 151,581 128,760
Miscellaneous expense, net 3,346 3,246 1,670
- ----------------------------------------------------------------------------------------------------
Earnings before income taxes $ 242,457 234,258 204,370
====================================================================================================
Fleet size (owned and leased including international):
Full service lease 100,026 89,672 78,544
Commercial and consumer rental 81,685 75,759 67,016
Buses operated or managed 12,855 12,519 12,154
Ryder Truck Rental service locations 1,136 1,101 979
</TABLE>
Vehicle Leasing & Services includes the following product lines in the U.S. and
Canada: dedicated logistics, full service truck leasing, public transportation
and commercial and consumer truck rental. Vehicle Leasing & Services also
includes the company's International Division which consists of full service
truck leasing, logistics and truck rental operations in Europe, Mexico and
South America.
Vehicle Leasing & Services reported strong revenue growth in both 1995 and
1994. Revenue growth in both years was led by the division's two primary
contractual product lines, full service truck leasing and dedicated logistics,
as well as the International Division. Commercial and consumer truck rental
revenue was slightly higher in 1995 after showing strong gains in 1994.
Pretax profits for the division in 1995 benefited from higher total
operating margin within the division's contractual product lines, an increase
in gains on vehicle sales of $17 million, a benefit of $9 million from the
resolution of certain operating tax matters and lower vehicle liability and
environmental expenses. These items were partially offset by separation and
relocation costs of approximately $12 million and increases in indirect
operating expenses. The separation and relocation costs were incurred in the
third quarter of 1995 as a result of the consolidation of the division's 20
consumer truck rental administrative locations into two central locations, as
well as headcount reductions in response to new, more efficient, systems and
processes in the division's commercial businesses. Higher indirect operating
expenses were
19
<PAGE> 3
primarily the result of several strategic spending programs which
are designed to improve the future growth and profitability of the division.
These included continued investments in the development of logistics and other
systems capabilities, and reengineering of the division's maintenance, sales
and marketing, and finance and administration functions. Continuing initiatives
intended to enhance customer service, reduce on-going costs and improve
efficiency, such as the consolidation of various district administrative
functions in the commercial businesses into a single center, will result in
certain non-recurring costs in 1996.
Pretax earnings for the division in 1994 were higher compared with 1993,
as a result of higher overall operating margin and an increase of $19 million
in gains on vehicle sales, partially offset by an increase in indirect
operating expenses. Higher indirect operating expenses in 1994 compared with
1993 related to many of the same strategic spending programs which continued in
1995.
DEDICATED LOGISTICS
REVENUE
IN MILLIONS
[GRAPH]
DEDICATED LOGISTICS. Ryder Dedicated Logistics (RDL), the company's fastest
growing business unit, is a value-added supplier of integrated logistics
services - from systems designed to manage the inbound movement of raw
materials to the delivery of finished goods. RDL's expertise ranges from
transportation management and inventory deployment to the operation of
integrated solutions for such customers as Whirlpool, OfficeMax, Xerox,
BellSouth, General Motors and Saturn.
RDL does business with companies seeking the competitive advantage that
results when goods are moved accurately, quickly and at a reduced cost. This
means faster order-cycle times, reduced inventory, fewer facilities, greater
flexibility and improved customer service.
RDL's strong revenue growth of 34% in 1995 and 23% in 1994 was
attributable to record sales of new logistics contracts in both years. The
division continued to invest heavily in logistics and information technologies
and in sales and marketing to stimulate growth in this product line. Dedicated
logistics operating margin (revenue less direct operating expenses, including
vehicle-related costs and interest) was higher in both 1995 and 1994 as a result
of the growth in revenue. Operating margin as a percentage of revenue was about
the same in 1995 compared with 1994, and lower in 1994
20
<PAGE> 4
compared with 1993. The lower operating margin percentages in 1995 and 1994
compared with 1993 were due primarily to costs associated with commencing
operations on new accounts as well as higher driver wages.
FULL SERVICE TRUCK
LEASING REVENUE
IN MILLIONS
[GRAPH]
FULL SERVICE TRUCK LEASING. Full service truck leasing - Ryder's largest
product line - is designed for customers who wish to manage their own
transportation systems without investing the capital and human resources
necessary to own and maintain a fleet.
Under a full service lease, Ryder provides vehicles tailored to meet
customers' unique transportation requirements, as well as the full package of
services needed to operate and maintain them. This package can include vehicle
specifications and acquisition support; preventive maintenance; regulatory
compliance; licensing and permitting; emergency road service; fuel and fuel tax
reporting; safety programs; vehicle painting and washing; flexible return
conditions; and vehicle liability and protection programs. As part of Ryder
Commercial Leasing & Services, the full service lease product line also
provides vehicles to RDL and provides maintenance for virtually all of the
company's vehicles.
At December 31, 1995, Ryder had approximately 13,000 full service lease
customers and more than 90,000 vehicles on lease in the U.S. and Canada. Ryder
works with companies throughout a wide variety of industries including
beverage, baking and snack, grocery, newspaper, automotive aftermarket,
chemicals and retail. Customers include such well-known companies as General
Motors, Pepsi-Cola, Kraft Foods, AutoZone and The Home Depot.
Revenue from full service truck leasing increased 10% in 1995 and 6% in
1994 as a result of strong new lease sales in 1995 and 1994. The high level of
new sales led to a 12% increase in the average size of the full service lease
fleet in 1995. Operating margin from full service truck leasing increased in
both 1995 and 1994 due to the growth in revenue. However, margin as a
percentage of revenue was lower in both years compared with the preceding years
as a result of lower prices on newer leases compared with prices on older and
expiring leases and higher interest costs. In 1995, these items were somewhat
offset by lower vehicle liability expense due primarily to better accident
experience.
21
<PAGE> 5
PUBLIC TRANSPORTATION
REVENUE
IN MILLIONS
[GRAPH]
PUBLIC TRANSPORTATION. Logistics solutions are increasingly being applied to
the public as well as the private sector. Ryder Public Transportation Services
designs, manages and operates customized systems for school districts, transit
agencies, public utilities and municipalities. Services include transit
management and operation, student transportation and public fleet management
and maintenance.
Ryder Student Transportation Services is one of the largest providers of
student transportation services in the U.S., transporting more than 460,000
students in more than 350 school systems in 20 states. School systems using
Ryder's services include those in Providence, Kansas City, Seattle and
Minneapolis.
Ryder/ATE - one of the nation's leading providers of public transportation
services - provides a variety of public transit management and contracting
services, working with nearly 100 public transit organizations in such cities
as Los Angeles, Dallas and Indianapolis. Ryder/ATE designs, manages or operates
public transit systems that range from shuttle, fixed-route and express bus
service to paratransit systems.
Ryder/MLS is the nation's leading non-governmental provider of public
fleet management and maintenance services. Ryder/MLS manages and maintains
approximately 20,000 vehicles and units of equipment for local governments,
electric and gas utilities, and telecommunication companies.
Public transportation services revenue increased 10% in 1995 compared with
1994 and 6% in 1994 compared with 1993, as a result of the addition of several
new public transit and student transportation contracts. Margin and margin as a
percentage of revenue from public transportation services were both higher in
1995 compared with 1994, primarily as a result of higher revenue and lower
workers' compensation and vehicle liability expenses. Improved workers'
compensation and vehicle liability expenses were both due primarily to
favorable development of prior year claims. Margin from these businesses
increased in 1994 compared with 1993 as a result of higher revenue, while
margin as a percentage of revenue was about the same.
COMMERCIAL AND CONSUMER TRUCK RENTAL. Ryder is a leader in helping companies
and individuals meet their short-term transportation needs efficiently,
cost-effectively and safely.
Through its network of more than 5,000 dealers across North America, Ryder
Consumer Truck Rental offers do-it-yourself movers vehicles, which range from
the 10-foot Mini Moving Van to the 24-foot Maxi Moving Van, for local or one
way rental. In addition, many "light commercial" customers rent consumer trucks
for use during times of peak demand.
Ryder offers commercial users vehicles that range from heavy,
over-the-road tractors to panel vans and pickup trucks. Ryder not only rents
these vehicles to a variety of rental-only customers, but also provides them to
its broad base of full service truck leasing customers when they require
additional vehicles to meet peak demand,
22
<PAGE> 6
replacements for vehicles being serviced or temporary vehicles while awaiting
delivery of new full service lease vehicles.
Consumer truck rental revenue was relatively unchanged in 1995 compared
with 1994. Higher demand for long-distance rentals was offset by lower demand
for local rentals, including "light commercial" rentals. Consumer truck rental
revenue increased 20% in 1994 compared with 1993, driven by higher demand for
both long-distance and local rentals resulting from a strong U.S. economy.
Commercial truck rental revenue increased 3% in 1995 compared with 1994,
primarily reflecting higher demand from full service truck leasing customers
awaiting delivery of new lease vehicles or satisfying short-term needs. Revenue
from commercial truck rental increased 22% in 1994 compared with 1993, as a
result of higher demand from both full service lease and rental-only customers
driven by strength in the U.S. economy.
COMMERCIAL AND CONSUMER
TRUCK RENTAL REVENUE
IN MILLIONS
[GRAPH]
Consumer truck rental margin and margin as a percentage of revenue were
about the same in 1995 compared with 1994. Margins in 1995 reflected lower
vehicle utilization and higher interest expense, offset by significantly lower
vehicle liability expense due primarily to better accident experience in 1995
compared with 1994. Consumer truck rental margin and margin as a percentage of
revenue were significantly higher in 1994 compared with 1993 as a result of
revenue growth, better vehicle utilization and lower maintenance costs as a
percentage of revenue.
Commercial truck rental margin and margin as a percentage of revenue
decreased in 1995 compared with 1994, reflecting higher interest expense and
lower asset utilization. Margin and margin as a percentage of revenue were
significantly higher in 1994 compared with 1993 as a result of higher revenue,
increased asset utilization and lower maintenance costs as a percentage of
revenue, partially offset by higher interest expense.
Results for both rental product lines in 1995 were impacted by lower than
expected demand following strong revenue growth in 1994. In the commercial
truck rental product line, revenue in the fourth quarter of 1995 was lower than
revenue in the comparable 1994 period due to lower demand for rentals caused by
weakness in certain sectors of the economy and shorter delivery times for new
lease vehicles. The average combined truck rental fleet size was 13% higher in
1995 compared with 1994, although in the second half of 1995, the company
reduced rental fleet levels from first half levels. The company believes that
continued rental fleet reductions and reduced capital expenditures on new
vehicles in 1996 should properly position the truck rental product lines for
the expected demand in the coming year. The company's rental product lines
continue to be sensitive to changes in the U.S. economy and 1996 rental results
will depend to a great extent on the strength of the economy.
23
<PAGE> 7
INTERNATIONAL REVENUE
IN MILLIONS
[GRAPH]
INTERNATIONAL. Already an industry leader in transportation and logistics
solutions in the U.S. and Canada, Ryder is also growing in other parts of the
world. Ryder's International Division is comprised of operations in the United
Kingdom, Germany, Poland, Mexico, Brazil and Argentina.
Internationally, Ryder's best immediate opportunities lie in Western
Europe and the Americas, and the company is focusing its efforts in these
regions. Using its operations in Germany and the U.K. as a platform for
continental growth, the company intends to expand throughout the rest of
Europe. In the U.K., the company will continue to grow its business with such
existing customers as Nissan, Filofax, Hewlett-Packard and Sanyo.
Emerging markets offer substantial opportunities as potential customers
seek to increase operating productivity, and Ryder has followed U.S. customers
like Pepsi-Cola, Procter & Gamble and General Motors in support of their
businesses in markets outside the U.S. Ryder is also working on the initial
design of logistics systems for companies such as FEMSA in Mexico, Buenos Aires
Embotelladora S.A. (BAESA) in Brazil and Sevel Argentina S.A.
International Division revenue rose significantly in 1995 and 1994
compared with the preceding years as a result of full service truck leasing and
logistics acquisitions made in the U.K. in 1994 as well as strong lease sales
in the U.K. Pretax profits from the International Division were higher in 1995
compared with 1994 as a result of higher earnings in the U.K., somewhat offset
by higher international development expenses including start-up expenses in
Mexico, Brazil and Argentina. Pretax earnings in 1994 were about the same as in
1993. At this time, there are no significant legal restrictions regarding the
repatriation of cash flows to the U.S. from the foreign countries where the
company is currently operating.
Automotive Carriers
<TABLE>
<CAPTION>
Dollars in thousands 1995 1994 1993
- -----------------------------------------------------------
<S> <C> <C> <C>
Revenue $594,446 645,402 634,634
- -----------------------------------------------------------
Earnings before income taxes $ 43,144 50,078 31,955
- -----------------------------------------------------------
Total units transported (000) 5,791 6,277 5,934
Total miles traveled (000) 218,859 239,831 238,840
Auto transports:
Owned and leased 2,877 3,790 4,131
Owner-operators 490 516 505
Locations 85 80 89
</TABLE>
In North America's vehicle transportation market, Ryder is the largest highway
provider and has more than 60 years experience in delivering cars and trucks
from manufacturing plants, ports and railheads to dealers. Ryder's Automotive
Carrier Division transported 5.8 million vehicles in 1995, including more than
half of the General Motors vehicles, and almost half of the Toyota and Honda
vehicles produced in North America.
24
<PAGE> 8
Ryder's Automotive Carrier Division seeks new ways to increase efficiency,
provide better service and reduce costs. In 1995, the division introduced two
new auto transports with improved load configurations, quicker loading times,
significant weight reductions and increased fuel efficiency. One new
tractor-trailer configuration is capable of transporting 14 subcompact cars
within federal weight, height and length limits, and another is designed for
wide-body vehicles and is more than 10% lighter than comparable designs. Other
advances include the company's Hydrapac system, which produces a major increase
in fuel economy. The Hydrapac system uses a fuel-efficient auxiliary diesel
engine to power the vehicle's hydraulic lifts, night lighting, onboard vehicle
electronics and safety devices, allowing the main engine to be shut down during
loading and unloading. In addition, to reduce vehicle weight, Ryder has adopted
aircraft cylinder technology in its new hydraulic systems and is also
experimenting with lightweight and durable composite materials in trailer
structures.
AUTOMOTIVE CARRIERS
REVENUE
IN MILLIONS
[GRAPH]
Cars and trucks transported by Automotive Carriers include such popular
models as the Chevrolet Blazer, Chrysler minivans, Toyota Camry and Honda
Accord. In addition to vehicle transport, Ryder also provides value-added
services such as on- and off-loading of vehicles from railcars and vehicle
preparation for dealers.
The strike by the Teamsters, which began on September 7, 1995, and
lasted for 32 days, affected 1995 results for Automotive Carriers. On October 9,
1995, the Teamsters and representatives of the automobile truckaway industry
reached a four-year agreement (retroactive to May 21, 1995). The new agreement
includes provisions for wage and benefit increases over the term of the
agreement.
Automotive Carriers revenue decreased 8% in 1995 after an increase of 2%
in 1994. Lower 1995 revenue resulted from an 8% decrease in the number of
vehicles shipped. As a result of the Teamsters strike against the division,
some vehicles produced during the strike were transported by other carriers or
picked up directly by the automobile dealers. Additionally, shipments in 1995
were impacted by a fourth quarter reduction in vehicle production in North
America. Higher revenue in 1994 compared with 1993 reflected an increase in
vehicles shipped by the division as a result of increased North American
production. General Motors accounted for approximately 54% of the division's
revenue in both 1995 and 1994.
Pretax earnings for Automotive Carriers in 1995 were negatively impacted
by revenue lost during the strike, non-recurring expenses relating to the
strike and the fourth quarter reduction in vehicle production. The division's
earnings in 1995 included a $10 million pretax benefit from the resolution of
certain operating tax matters and pretax gains from property sales totaling $4
million. The increase in earnings in 1994 compared with 1993 was due to fleet
operating efficiencies, lower depreciation expense and the positive impact of
an organizational streamlining which took place in late 1993. The $6 million
cost of the organizational streamlining in 1993 also impacted earnings
comparisons between 1994 and 1993.
Other
Other, which is comprised of primarily corporate administrative costs, reported
net expenses of $21 million in 1995, compared with $24 million in 1994 and $27
million in 1993.
25
<PAGE> 9
FINANCIAL RESOURCES AND LIQUIDITY
Cash Flow
The company's cash requirements in 1995 continued to be funded internally
through operations and the sale of revenue earning equipment, as well as
through increased borrowings. Cash flow from continuing operating activities
was $809 million in 1995, compared with $831 million in 1994 and $771 million
in 1993. The decrease from 1994 resulted primarily from changes in certain
working capital items, including reduced accounts payable for vehicle purchases
due to the timing of new lease sales and vehicle deliveries, lower accrued
expenses and an increase in pension prepayments. These items were somewhat
offset by higher non-cash charges for depreciation and deferred income taxes
and proceeds of $30 million from the sale of receivables as part of the
company's receivables sales program. The increase in cash flow from continuing
operating activities in 1994 compared with 1993 was primarily attributable to
improved earnings and an increase in depreciation expense, partially offset by
less cash provided by changes in working capital items.
Capital expenditures were $2.2 billion in 1995, compared with $1.8 billion
and $1.2 billion in 1994 and 1993, respectively. Capital expenditures for full
service truck leasing increased $238 million in 1995 to $1.2 billion, primarily
due to new business sales. Capital expenditures for commercial and consumer
truck rental were $452 million in 1995, an increase of $18 million compared
with 1994, due primarily to the replacement of older units. Public
transportation services capital expenditures of $35 million in 1995 were
relatively unchanged compared with 1994. International Division capital
expenditures increased $64 million in 1995 to $157 million, due primarily to
new full service lease sales in the United Kingdom. Capital expenditures for
Automotive Carriers in 1995 were $61 million, an increase of $21 million
compared with 1994, as a result of planned fleet replacement. The remaining
increase in capital expenditures in 1995 primarily reflected expenditures on
operating property and equipment, including costs relating to reengineering and
systems initiatives and maintenance facilities improvements. The increase in
capital expenditures in 1994 compared with 1993 was due primarily to increased
expenditures in full service truck leasing as a result of new business sales
and higher expenditures in commercial truck rental to support demand created by
new lease customers and for fleet expansion.
Cash flow from continuing operating activities (excluding sales of
receivables) plus asset sales as a percentage of capital expenditures was 53%
in 1995, compared with 62% in 1994 and 80% in 1993. The decreases in 1995 and
1994 were due to increased capital expenditures required to support new lease
sales and reengineering and systems initiatives. The 1995 and 1994 increases in
capital expenditures were partially offset by increases of $99 million and $40
million, respectively, in proceeds from sales of property and revenue earning
equipment.
In 1996, management projects that capital expenditures will decrease
approximately 20% compared with 1995. The company plans to significantly reduce
its capital expenditures in the rental product lines as fleet levels are
adjusted to expected demand. Expenditures in full service truck leasing are
also expected to decline as a result of the redeployment of rental vehicles and
lower sales of used vehicles. Capital expenditures for the public
transportation services businesses are expected to
26
<PAGE> 10
increase due to anticipated growth and fleet replacement. International capital
expenditures are expected to increase in 1996 as a result of expansion in
Germany, Poland, Mexico and South America, somewhat offset by reduced
expenditures in the United Kingdom. Capital expenditures within Automotive
Carriers are expected to decrease as a result of a planned lower level of fleet
replacement compared with 1995. The company expects to fund its 1996 capital
expenditures with both internally generated funds and additional financing.
<TABLE>
<CAPTION>
RYDER DEBT RATINGS
Commercial Unsecured
Paper Notes
- ----------------------------------------------
<S> <C> <C>
Moody's Investors
Service P2 A3
Standard & Poor's
Ratings Group A2 A-
Duff and Phelps D1 A
</TABLE>
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
debt, as well as variable-rate financing available through commercial paper and
bank credit facilities. The company also periodically enters into sale and
leaseback agreements for revenue earning equipment, the majority of which are
accounted for as operating leases.
Debt increased from $1.9 billion at the end of 1994 to $2.6 billion at the
end of 1995. This increase was due to financing requirements associated with
1995 capital expenditures. During 1995, the company issued $968 million of
unsecured medium-term notes. The company also redeemed $300 million of
unsecured notes at par and made $70 million of scheduled unsecured note
payments. U.S. commercial paper outstanding at December 31, 1995, was $45
million, compared with $44 million at the end of 1994. The company's foreign
debt increased $114 million in 1995 due primarily to growth in business in the
United Kingdom. Proceeds from sale-leaseback transactions decreased from $400
million in 1994 to $300 million in 1995.
The company has no derivative financial instruments that are held for
trading purposes or that are leveraged. From time to time, the company enters
into various interest rate swap and cap agreements to manage interest rate
exposure in its existing debt portfolio. During 1995, the company terminated
interest rate swap agreements with notional amounts totaling $500 million and
related interest rate cap agreements with notional amounts totaling $350
million as part of its interest rate management program. The company had
deferred gains totaling $6 million at December 31, 1995 relating to these
transactions which will be recognized over the original remaining lives of the
terminated agreements. See the "Derivative Financial Instruments" note to the
consolidated financial statements for a further discussion of the company's
interest rate management program.
At the end of 1995, committed unused lines of credit totaled $629 million
and the company had $268 million of debt securities available for issuance
under a shelf registration statement filed in 1995.
The ratio of debt to equity at December 31, 1995 was 212%, compared with
169% at December 31, 1994. The ratio of debt to tangible equity at December 31,
1995 was 273%, compared with 227% at December 31, 1994.
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
27
<PAGE> 11
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 $12
million in 1995. 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 $14
million of environmental expenses in 1995, compared with $28 million in 1994
and $27 million in 1993, which included remediation costs, as well as normal
recurring expenses, such as licensing, testing and waste disposal fees. The
company made substantial progress toward completing the cleanup, or determining
the actions required to complete the cleanup, at most of its facilities during
the years leading up to December 31, 1994 and, as a result, environmental
remediation expenses decreased in 1995. Based on current circumstances and the
present standards imposed by governmental regulations, environmental expenses
are not expected to increase materially from 1995 levels 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 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 1995, the Financial Accounting Standards Board issued Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of." The company will adopt this statement in the first quarter
of 1996 and, based on information currently available, does not anticipate that
the effect of adoption will be material to the company's financial position or
results of operations.
OUTLOOK
In 1996, the company will focus on several key areas to sustain its growth and
maximize shareholder value. The company will continue to invest for profitable
growth by enhancing logistics capabilities, introducing new products and
services to the commercial markets and expanding internationally in select
strategic markets. The company will also focus on improving its margins and
cost structure by increasing productivity through continued implementation of
reengineering initiatives. In addition, to ensure the productivity of capital
is maximized, capital will be allocated to the best investment opportunities.
Total capital expenditures are projected to be lower in 1996 than in 1995, the
rental fleets will continue to be rationalized and capital will be allocated to
the products and services providing the best returns. Finally, investment in
new systems and technology will continue to be emphasized to improve
productivity and further accelerate growth.
The company's performance in 1996 will depend to some extent on domestic
economic conditions. However, the foundation established over the past several
years along with the goals set forth for 1996 should position the company for
continued earnings growth.
28
<PAGE> 12
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.
/s/ M.A. Burns
M. Anthony Burns
Chairman, President and
Chief Executive Officer
/s/ Edwin A. Huston
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, 1995 and 1994, and the related
consolidated statements of earnings and cash flows for each of the years in the
three-year period ended December 31, 1995. 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, 1995 and 1994, and the results
of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1995, 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 charitable contributions in
1995 and its method of accounting for income taxes and postretirement benefits
other than pensions in 1993.
/s/ KPMG PEAT MARWICK LLP
Miami, Florida
March 8, 1996
29
<PAGE> 13
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Years ended December 31
------------------------------------------------
In thousands, except per share amounts 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue $5,167,421 4,685,603 4,217,030
- ---------------------------------------------------------------------------------------------------------------
Operating expense 4,049,322 3,686,053 3,338,477
Depreciation expense, net of gains 664,073 591,669 543,338
Interest expense 191,157 144,735 124,789
Miscellaneous expense (income), net (1,517) 2,627 650
- ---------------------------------------------------------------------------------------------------------------
4,903,035 4,425,084 4,007,254
- ---------------------------------------------------------------------------------------------------------------
Earnings from continuing operations before income taxes 264,386 260,519 209,776
Provision for income taxes 108,961 106,990 95,054
- ---------------------------------------------------------------------------------------------------------------
Earnings from continuing operations 155,425 153,529 114,722
Loss from discontinued operations - - (150,713)
- ---------------------------------------------------------------------------------------------------------------
Earnings (loss) before cumulative effect of change
in accounting 155,425 153,529 (35,991)
Cumulative effect of change in accounting (7,759) - (25,433)
- ---------------------------------------------------------------------------------------------------------------
NET EARNINGS (LOSS) 147,666 153,529 (61,424)
Preferred dividend requirements - - 3,617
- ---------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) APPLICABLE TO COMMON SHARES $ 147,666 153,529 (65,041)
===============================================================================================================
Earnings (loss) per common share:
Continuing operations $ 1.96 1.95 1.43
Discontinued operations - - (1.94)
Cumulative effect of change in accounting (0.10) - (0.33)
- ---------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) PER COMMON SHARE $ 1.86 1.95 (0.84)
===============================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
30
<PAGE> 14
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended December 31
---------------------------------------------
In thousands 1995 1994 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONTINUING OPERATIONS
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings from continuing operations $ 155,425 153,529 114,722
Depreciation expense, net of gains 664,073 591,669 543,338
Deferred income taxes 93,807 56,648 44,905
Proceeds from sales of receivables 30,000 - -
Increase in receivables (86,312) (87,761) (6,616)
Decrease (increase) in inventories (2,575) (2,914) 881
Increase (decrease) in accounts payable (40,210) 66,087 41,738
Increase (decrease) in accrued expenses (9,956) 25,031 7,584
Increase in other non-current liabilities 19,876 27,733 21,255
Other, net (14,764) 941 3,226
- -----------------------------------------------------------------------------------------------------
809,364 830,963 771,033
- -----------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt proceeds 1,117,739 609,637 165,503
Debt repaid, including capital lease obligations (417,716) (195,099) (295,144)
Preferred stock redeemed - - (100,000)
Common stock issued 11,251 27,601 37,225
Dividends on common and preferred stock (47,372) (46,926) (50,790)
- -----------------------------------------------------------------------------------------------------
663,902 395,213 (243,206)
- -----------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and revenue earning equipment (2,151,757) (1,769,130) (1,237,486)
Sales of property and revenue earning equipment 364,499 265,259 224,921
Sale and leaseback of revenue earning equipment 300,000 400,000 -
Acquisitions, net of cash acquired - (144,574) -
Other, net 30,971 41,456 43,840
- -----------------------------------------------------------------------------------------------------
(1,456,287) (1,206,989) (968,725)
- -----------------------------------------------------------------------------------------------------
NET CASH FLOWS FROM CONTINUING OPERATIONS 16,979 19,187 (440,898)
NET CASH FLOWS FROM DISCONTINUED OPERATIONS - - 446,842
- -----------------------------------------------------------------------------------------------------
INCREASE IN CASH AND CASH EQUIVALENTS 16,979 19,187 5,944
CASH AND CASH EQUIVALENTS AT JANUARY 1 75,878 56,691 50,747
- -----------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT DECEMBER 31 $ 92,857 75,878 56,691
=====================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
31
<PAGE> 15
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31
-------------------------
Dollars in thousands, except per share amounts 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 92,857 75,878
Receivables 374,689 316,855
Inventories 59,699 57,124
Tires in service 195,742 164,347
Deferred income taxes 39,527 51,619
Prepaid expenses and other current assets 121,547 92,999
- ----------------------------------------------------------------------------------------------------------------------------------
Total current assets 884,061 758,822
- ----------------------------------------------------------------------------------------------------------------------------------
Revenue earning equipment 3,775,885 3,135,064
Operating property and equipment 661,365 594,328
Direct financing leases and other assets 269,819 223,680
Intangible assets and deferred charges 302,685 302,579
- ----------------------------------------------------------------------------------------------------------------------------------
$ 5,893,815 5,014,473
==================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 212,077 118,103
Accounts payable 380,264 422,532
Accrued expenses 527,834 552,518
- ----------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 1,120,175 1,093,153
- ----------------------------------------------------------------------------------------------------------------------------------
Long-term debt 2,411,024 1,794,795
Other non-current liabilities 474,218 426,848
Deferred income taxes 648,373 570,653
Shareholders' equity:
Common stock of $.50 par value per share
Authorized, 400,000,000; outstanding, 1995 - 79,280,613; 1994 - 78,760,742 550,197 539,101
Retained earnings 703,520 603,226
Translation adjustment (13,692) (13,303)
- ----------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,240,025 1,129,024
- ----------------------------------------------------------------------------------------------------------------------------------
$ 5,893,815 5,014,473
==================================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
32
<PAGE> 16
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATION. The consolidated financial statements include the
accounts of Ryder System, Inc. and its subsidiaries. All significant
intercompany accounts and transactions have been eliminated.
ORGANIZATION. Ryder System, Inc. is a multinational logistics and
transportation company operating in eight countries. The company's principal
product lines include dedicated logistics, full service truck leasing and
programmed truck maintenance, commercial and consumer truck rental, public
transportation services and automotive transport. See the "Segment Information"
footnote for further discussion of the company's operating segments, markets
and product lines.
REVENUE RECOGNITION. Lease 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 vehicle 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 is computed using the
straight-line method on substantially all depreciable assets. Annual
straight-line depreciation rates are 8% to 33% for revenue earning equipment,
2.5% to 10% for buildings and improvements and 10% to 25% for machinery and
equipment.
Gains on operating property and equipment sales are reflected in
miscellaneous expense (income). Gains on sales of revenue earning equipment,
net of selling and equipment preparation costs, are reported as reductions of
depreciation expense and totaled $92 million, $74 million and $55 million in
1995, 1994 and 1993, respectively.
INTANGIBLE ASSETS. Intangible assets consist principally of goodwill totaling
$265 million in 1995 and $270 million in 1994. Goodwill is amortized on a
straight-line basis over appropriate periods generally ranging from 10 to 40
years. Accumulated amortization was approximately $76 million and $65 million
at December 31, 1995 and 1994, respectively. 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 undiscounted operating cash flows.
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.
Such liabilities are necessarily based on estimates and, while management
believes that the amount is adequate, there can be no assurance that changes to
management's estimates may not occur due to limitations inherent in the
estimation process. Changes in the estimates of these reserves are charged or
credited to income in the period determined. 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.
DERIVATIVE FINANCIAL INSTRUMENTS. The company enters into interest rate swap
and cap agreements as part of the management of its interest rate exposure; it
has no derivative financial instruments held for trading purposes and none of
the instruments are leveraged. The company assigns each interest rate swap and
cap agreement to a debt or operating lease obligation. Amounts to be paid or
received under 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. The premiums paid for
interest rate caps are recorded in deferred charges and amortized over the
lives of the cap agreements. Gains and losses on terminated interest rate swaps
and caps are deferred and amortized into income over the remaining original
lives of the terminated agreements which, in all cases, are equal to or shorter
than the remaining terms of the underlying debt or lease obligation.
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. The impact of currency fluctuation is included in shareholders'
equity as a translation adjustment.
ACCOUNTING CHANGES. Effective January 1, 1995, the company adopted Statement of
Financial Accounting Standards No. 116, "Accounting for Contributions Received
and Contributions Made," which requires
33
<PAGE> 17
that a promise to make a contribution be recognized in the financial statements
as an expense and a liability when a promise is made. As a result, a pretax
charge of $12 million ($8 million after tax, or $0.10 per common share) was
recorded as the cumulative effect of a change in accounting principle to
establish a liability for the present value of the company's total outstanding
charitable commitments as of January 1, 1995. Prior to the adoption of the new
statement, charitable contributions were recorded in the financial statements
in the period in which they were paid. Approximately two-thirds of the
charitable commitments recognized as a result of adopting the new statement
were paid in 1995 with the remainder payable from 1996 through 1999.
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.
USE OF ESTIMATES. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
SALES OF RECEIVABLES
The company participates in an agreement to sell, with limited recourse, up to
$250 million of trade receivables on a revolving basis through March 2001. The
costs associated with this program were $15 million in 1995, $8 million in 1994
and $6 million in 1993 and were charged to miscellaneous expense (income). At
December 31, 1995 and 1994, the outstanding balance of receivables sold
pursuant to this agreement was $250 million and $220 million, respectively.
REVENUE EARNING EQUIPMENT
<TABLE>
<CAPTION>
In thousands 1995 1994
- ------------------------------------------------------------
<S> <C> <C>
Full service lease $ 3,092,432 2,631,148
Commercial and consumer rental 2,162,649 1,999,867
- ------------------------------------------------------------
5,255,081 4,631,015
Accumulated depreciation (1,751,316) (1,738,019)
- ------------------------------------------------------------
3,503,765 2,892,996
- ------------------------------------------------------------
Other revenue earning equipment 637,327 699,571
Accumulated depreciation (365,207) (457,503)
- ------------------------------------------------------------
272,120 242,068
- ------------------------------------------------------------
$ 3,775,885 3,135,064
============================================================
</TABLE>
OPERATING PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
In thousands 1995 1994
- ------------------------------------------------------------
<S> <C> <C>
Land $ 116,719 116,212
Buildings and improvements 466,219 432,686
Machinery and equipment 483,116 394,400
Other 108,163 101,510
- ------------------------------------------------------------
1,174,217 1,044,808
Accumulated depreciation (512,852) (450,480)
- ------------------------------------------------------------
$ 661,365 594,328
============================================================
</TABLE>
ACCRUED EXPENSES AND OTHER NON-CURRENT LIABILITIES
<TABLE>
<CAPTION>
In thousands 1995 1994
- ------------------------------------------------------------
<S> <C> <C>
Salaries and wages $ 114,141 119,183
Employee benefits 17,974 8,564
Interest 45,325 35,524
Operating taxes 70,607 66,995
Self-insurance 381,189 393,801
Postretirement benefits other than
pensions 53,548 50,507
Vehicle rent and related accruals 167,182 149,842
Environmental liabilities 51,978 57,246
Other 100,108 97,704
- ------------------------------------------------------------
1,002,052 979,366
Non-current portion (474,218) (426,848)
- ------------------------------------------------------------
Accrued expenses $ 527,834 552,518
============================================================
</TABLE>
LEASES
OPERATING LEASES AS LESSOR. One of the company's major product lines is full
service leasing of commercial trucks, tractors and trailers. These lease
agreements provide for a fixed time charge plus a fixed per-mile charge. A
portion of these charges is often adjusted in accordance with changes in the
Consumer Price Index. Contingent rentals included in income during 1995, 1994
and 1993 were $240 million, $207 million and $169 million, respectively.
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
34
<PAGE> 18
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 consisted of:
<TABLE>
<CAPTION>
In thousands 1995 1994
- -------------------------------------------------------------------
<S> <C> <C>
Minimum lease payments receivable $295,426 254,585
Executory costs and unearned income (73,118) (65,680)
Unguaranteed residuals 41,228 38,408
- -------------------------------------------------------------------
Net investment in direct financing leases 263,536 227,313
Current portion included in receivables (43,674) (42,151)
- -------------------------------------------------------------------
Non-current portion included in other assets $219,862 185,162
===================================================================
</TABLE>
Contingent rentals included in income during 1995, 1994 and 1993 were $20
million, $15 million and $18 million, respectively.
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 1995, 1994 and 1993, rent expense was $204 million,
$141 million and $137 million, respectively. Rental rates have been modified by
certain interest rate swap agreements as discussed in the "Derivative Financial
Instruments" footnote.
LEASE PAYMENTS. Future minimum payments for leases in effect at December 31,
1995 are as follows:
<TABLE>
<CAPTION>
As Lessor As Lessee
--------------------- ---------
Direct
Operating Financing Operating
In thousands Leases Leases Leases
- ------------------------------------------------------------
<S> <C> <C> <C>
1996 $ 913,689 59,723 184,330
1997 791,240 53,007 189,620
1998 654,095 43,280 181,442
1999 488,197 37,733 183,194
2000 296,536 31,930 145,902
Thereafter 202,257 69,753 267,038
- ------------------------------------------------------------
$3,346,014 295,426 1,151,526
============================================================
</TABLE>
The amounts in 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 Statement
No. 109, 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) included
the following components:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
Current tax expense:
Federal $ 14,870 44,039 45,557
State 1,340 6,232 3,563
Foreign (1,056) 71 1,029
- ------------------------------------------------------------
15,154 50,342 50,149
- ------------------------------------------------------------
Deferred tax expense:
Federal 65,270 34,123 28,836
State 16,731 14,267 11,332
Foreign 11,806 8,258 4,737
- ------------------------------------------------------------
93,807 56,648 44,905
- ------------------------------------------------------------
Provision for income taxes $108,961 106,990 95,054
============================================================
</TABLE>
A reconciliation of the Federal statutory tax rate with the effective
tax rate for continuing operations follows:
<TABLE>
<CAPTION>
% of Pretax Income
- ------------------------------------------------------------
1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
Statutory rate 35.0 35.0 35.0
Impact on deferred taxes
for changes in tax rates - 0.6 3.7
State income taxes, net of
Federal income tax benefit 4.4 4.5 4.6
Amortization of goodwill 1.1 0.8 1.0
Miscellaneous items, net 0.7 0.2 1.0
- ------------------------------------------------------------
Effective rate 41.2 41.1 45.3
============================================================
</TABLE>
35
<PAGE> 19
The components of the net deferred income tax liability as of December 31,
1995 and 1994 were as follows:
<TABLE>
<CAPTION>
In thousands 1995 1994
- ------------------------------------------------------------
<S> <C> <C>
Deferred income tax assets:
Accrued self-insurance $ 142,460 148,816
Alternative minimum taxes 45,335 32,380
Accrued compensation and benefits 43,619 37,789
Miscellaneous other accruals 86,638 70,510
- ------------------------------------------------------------
318,052 289,495
Valuation allowance (9,969) (7,855)
- ------------------------------------------------------------
308,083 281,640
- ------------------------------------------------------------
Deferred income tax liabilities:
Property and equipment bases
differences (836,631) (734,722)
Other items (80,298) (65,952)
- ------------------------------------------------------------
(916,929) (800,674)
- ------------------------------------------------------------
Net deferred income tax liability $(608,846) (519,034)
============================================================
</TABLE>
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 $72 million at December 31, 1995. 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 alternative minimum tax credits, for tax purposes,
of $45 million at December 31, 1995 available to reduce future income tax
liabilities. The alternative minimum tax credits may be carried forward
indefinitely.
A valuation allowance has been established to reduce the income tax
benefits of tax loss carryforwards to amounts expected to be realized.
Income taxes paid totaled $13 million in 1995 and $45 million in 1994.
Income taxes paid in 1993 of $52 million included amounts related to both
continuing and discontinued operations.
DEBT
<TABLE>
<CAPTION>
In thousands 1995 1994
- ------------------------------------------------------------
<S> <C> <C>
U.S. commercial paper $ 44,500 44,000
Canadian commercial paper 55,920 55,963
Unsecured U.S. notes:
Debentures, 8.38% to 9.88%,
due 2000 to 2017 539,499 839,499
Medium-term notes, 4.81% to 9.90%,
due 1996 to 2025 1,645,600 748,400
Discount on unsecured U.S. notes (22,601) (22,215)
Unsecured foreign obligations
(principally pound sterling),
6.85% to 11.75%, due 1996 to 2002 275,611 195,793
Other debt, including capital leases 84,572 51,458
- ------------------------------------------------------------
Total debt 2,623,101 1,912,898
Current portion (212,077) (118,103)
- ------------------------------------------------------------
Long-term debt $2,411,024 1,794,795
============================================================
</TABLE>
Debt maturities (including sinking fund requirements) during the five
years subsequent to December 31, 1995 are as follows:
<TABLE>
<CAPTION>
Debt
In thousands Maturities
- ------------------------------------------------------------
<S> <C>
1996 $212,077
1997 188,953
1998 288,105
1999 428,284
2000 493,408
</TABLE>
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 .105%. There were
no borrowings under either of these agreements during 1995 or 1994 and the
company had $606 million available under these agreements at December 31, 1995.
The company had other committed lines of credit at December 31, 1995 totaling
$43 million, of which $23 million was available. The weighted average interest
rates for outstanding U.S. and Canadian commercial paper were 6.23% and 5.93%,
respectively, at December 31, 1995.
The primary revolving loan agreement contains the most restrictive
covenants as to the payment of cash dividends. As of December 31, 1995,
approximately $116 million of consolidated retained earnings were available for
the payment of cash dividends.
36
<PAGE> 20
Interest paid totaled $182 million in 1995 and $139 million in 1994.
Interest paid was $154 million in 1993 and included amounts related to both
continuing and discontinued operations. Interest rates have been modified by
derivative financial instruments as discussed in the following footnote.
DERIVATIVE FINANCIAL INSTRUMENTS
The company enters into various interest rate swap and cap agreements to manage
its mix of fixed and variable interest rate instruments and better match the
repricing life of the company's debt to its portfolio of assets. Under the
interest rate swap agreements the company agrees to exchange in cash, at
specified intervals, the difference between various floating and fixed interest
rates applied to notional principal amounts. Under the interest rate cap
agreements, the company is entitled to receive the amount, if any, by which a
specified variable rate exceeds the fixed cap rate specified in the agreement
applied to a notional principal amount.
The company had "fixed to floating" rate swap agreements with notional
principal amounts totaling $500 million outstanding at December 31, 1994 which
were assigned to certain debt obligations. 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. The company also had related interest rate cap
agreements outstanding with notional principal amounts totaling $350 million
and an average fixed cap rate of 5.46% at December 31, 1994. Consistent with
the objectives of the company's interest rate management program, the company
terminated these fixed to floating rate swap agreements and interest rate cap
agreements during 1995. At December 31, 1995, the company had deferred gains
totaling $6 million related to these terminated instruments.
At December 31, 1995 and 1994, the company had various "floating to fixed"
rate swap agreements outstanding with notional principal amounts of $171
million and $173 million, respectively, which were assigned to certain debt and
operating lease obligations. These agreements have expiration dates ranging
from 1996 to 1998 and floating rate reset frequencies of three or six months.
Under these agreements, the company received an average floating rate of 5.94%
and paid an average fixed rate of 7.01% at December 31, 1995. At December 31,
1994, the average rate received was 6.36% and the average rate paid was 7.02%.
The company also had "floating to floating" interest rate swap agreements
outstanding at December 31, 1995 with notional amounts totaling $100 million
which effectively convert the interest rate reset frequency on certain variable
interest rate obligations.
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.
FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying amounts and estimated fair values of the company's debt (excluding
capital leases), interest rate swap agreements and interest rate cap agreements
at December 31, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
Asset (Liability)
- ---------------------------------------------------------------------------
1995 1994
______________________ ______________________
Carrying Fair Carrying Fair
In thousands Amount Value Amount Value
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt $(2,571,757) (2,739,587) (1,896,376) (1,902,358)
Interest rate swaps:
Fixed to floating - - 411 (61,713)
Floating to fixed (980) (3,517) (1,007) 3,976
Interest rate caps - - 1,775 14,423
</TABLE>
The fair values above 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 all other
financial instruments approximate their carrying amounts.
37
<PAGE> 21
SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
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, 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)
Fixed Rate Auction Preferred Stock
(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
Net earnings - - 147,666 - 147,666
Common stock dividends declared - $.60 per share - - (47,372) - (47,372)
Common stock issued under employee
plans (519,871 shares) - 11,251 - - 11,251
Foreign currency translation adjustment - - - (389) (389)
Other - (155) - - (155)
- ---------------------------------------------------------------------------------------------------------------------------
At December 31, 1995 $ - 550,197 703,520 (13,692) 1,240,025
===========================================================================================================================
</TABLE>
At December 31, 1995, the company had 79,280,613 Preferred Stock Purchase
Rights outstanding. The Preferred Stock Purchase Rights were issued in March
1986 as a dividend to common shares outstanding and expired in March 1996. In
March 1996 the board of directors declared a dividend to common shares
outstanding of replacement Preferred Stock Purchase Rights (Rights) which
expire in March 2006. The Rights contain provisions substantially the same as
those that expired. The provisions 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, transferable or exchangeable 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, in the case of
exercise or transfer, makes a tender offer for 10% 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 1/100 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 100
times the common stock dividend per share and have 100 votes per share, voting
together with the common stock. By action of the board of directors, the Rights
may also be exchanged in whole or in part, at an exchange ratio of one share of
common stock per Right. The Rights have no voting rights and are redeemable, at
the option of the company, at a price of $.01 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.
38
<PAGE> 22
EMPLOYEE STOCK OPTION AND STOCK PURCHASE 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 1995, 1994 and 1993 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 and 1995 Stock Incentive Plans provide 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 20% to 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 plans also provide for
restricted stock rights to these employees at no cost to them; none were
granted in 1995, 1994 or 1993.
The following table summarizes the status of the company's stock option
plans:
<TABLE>
<CAPTION>
Shares in thousands 1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
Outstanding, January 1 6,580 6,110 6,342
Granted 1,140 1,380 772
Exercised (207) (405) (1,305)
Expired or canceled (89) (505) (127)
Adjustment for dividend of
Aviall stock - - 428
- ------------------------------------------------------------
Outstanding, December 31 7,424 6,580 6,110
============================================================
Average price of options
exercised $19.90 20.42 20.32
At December 31:
Average option price
per share outstanding $23.31 22.88 22.45
Exercisable options 5,482 4,839 4,901
Shares available for
future grant 3,232 983 1,858
</TABLE>
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 and 1995 Stock Incentive Plans, 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 1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
Outstanding, January 1 1,819 1,187 1,784
Granted 41 1,827 -
Exercised (314) (1,054) (641)
Expired or canceled (172) (141) (53)
Adjustment for dividend of
Aviall stock - - 97
- ------------------------------------------------------------
Outstanding, December 31 1,374 1,819 1,187
============================================================
Average price of options
exercised $22.89 18.16 19.92
At December 31:
Average option price
per share outstanding $22.79 22.87 18.08
Exercisable options 1,318 - 1,142
Shares available for
future grant 1,705 1,574 3,260
</TABLE>
During December 1993, the number and exercise price of all options and
subscribed shares outstanding at the time of the spin off of Aviall were
adjusted to reflect the impact of the spin off.
PENSION AND SAVINGS 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 to exceed 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 1995, 1994 and 1993 was as follows:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
- ------------------------------------------------------------
<S> <C> <C> <C>
Company-administered plans:
Present value of benefits
earned during the year $ 21,705 23,378 21,780
Interest cost on projected
benefit obligation 35,622 32,290 28,263
Return on plan assets:
Actual (124,435) (1,725) (43,551)
Deferred 86,462 (34,345) 11,366
Other, net (2,105) 165 (2,066)
- ------------------------------------------------------------
17,249 19,763 15,792
Union-administered plans 20,495 21,282 19,239
- ------------------------------------------------------------
Net pension expense $ 37,744 41,045 35,031
============================================================
</TABLE>
39
<PAGE> 23
The following table sets forth the plans' funded status and the company's
prepaid expense at December 31, 1995 and 1994:
<TABLE>
<CAPTION>
In thousands 1995 1994
- ------------------------------------------------------------
<S> <C> <C>
Plan assets at fair value $ 583,944 442,562
- ------------------------------------------------------------
Actuarial present value of service
rendered to date:
Accumulated benefit obligation,
including vested benefits
of $464,417 in 1995 and
$323,455 in 1994 (491,354) (350,269)
Additional benefit based on
estimated future salary levels (46,318) (53,681)
- ------------------------------------------------------------
Projected benefit obligation (537,672) (403,950)
- ------------------------------------------------------------
Plan assets in excess of projected
benefit obligation 46,272 38,612
Unrecognized transition amount (19,113) (22,647)
Other, primarily unrecognized prior
service cost and net losses (gains) 9,394 (1,389)
- ------------------------------------------------------------
Prepaid pension expense $ 36,553 14,576
============================================================
</TABLE>
The following table sets forth the actuarial assumptions used for the
company's dominant plan:
<TABLE>
<CAPTION>
1995 1994
- ------------------------------------------------------------
<S> <C> <C>
Discount rate 7.50% 8.50%
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 8 9
</TABLE>
The cumulative effect of the change in the discount rate as of December
31, 1995 is included above in unrecognized net losses (gains).
The company also 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 $11 million in 1995 and $7
million in 1994 and 1993.
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.
Total periodic postretirement benefit expense for 1995, 1994 and 1993 was
as follows:
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
- -----------------------------------------------------------------
<S> <C> <C> <C>
Current year service cost $1,588 1,792 1,360
Interest accrued on postretirement
benefit obligation 3,954 3,693 3,682
Other, net - 317 -
- -----------------------------------------------------------------
Periodic postretirement
benefit cost $5,542 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, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
In thousands 1995 1994
- ------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit
obligation:
Retirees $30,563 26,586
Fully eligible active plan
participants 8,627 6,631
Other active plan participants 16,596 16,031
- ------------------------------------------------------------
55,786 49,248
Unrecognized net gains (losses) (2,238) 1,259
- ------------------------------------------------------------
Accrued unfunded postretirement benefit
obligation $53,548 50,507
============================================================
Discount rate 7.5% 8.5%
</TABLE>
40
<PAGE> 24
The cumulative effect of the change in the discount rate as of December
31, 1995 is included above in unrecognized net gains (losses).
The actuarial assumptions include health care cost trend rates projected
ratably from 11.5% in 1996 to 6% in the year 2003 and thereafter. Increasing
the assumed health care cost trend rates by 1% in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1995 by $2
million and would not have a material effect on periodic postretirement benefit
cost for 1995.
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 27 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 estimate of 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 amounts for anticipated site testing, consulting,
remediation, disposal, post-remediation monitoring and legal fees, as
appropriate. 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. The company made
substantial progress toward completing the cleanup or determining the actions
required to complete the cleanup at most of its facilities during the years
leading up to December 31, 1994. As a result, the company's environmental
expenses, which included remediation costs as well as normal recurring expenses
such as licensing, testing and waste disposal fees, were $14 million in 1995
compared with $28 million in 1994 and $27 million in 1993.
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 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. 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.
Net sales of Aviall in 1993 prior to the spin off were approximately $1.1
billion. The loss from discontinued operations of $151 million was net of an
income tax benefit of $41 million and included 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. Interest expense of $24 million
was allocated and included in the operating results of discontinued operations
for 1993.
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.
41
<PAGE> 25
SEGMENT INFORMATION
The company's operating segments are Vehicle Leasing & Services and Automotive
Carriers. Vehicle Leasing & Services offers a variety of logistics and
transportation services, including dedicated logistics, full service truck
leasing and programmed truck maintenance and commercial and consumer truck
rental, primarily in North America with additional operations in South America
and Europe. It also provides public transportation services in the United
States which include student transportation, public transit management and
public fleet management and maintenance. 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 $447 million, $452 million
and $453 million, primarily from Automotive Carriers, was derived from General
Motors Corporation in 1995, 1994 and 1993, respectively.
<TABLE>
<CAPTION>
In thousands 1995 1994 1993
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUE:
Vehicle Leasing & Services $ 4,589,621 4,057,735 3,596,803
Automotive Carriers 594,446 645,402 634,634
Intersegment (16,646) (17,534) (14,407)
- ----------------------------------------------------------------------------------
$ 5,167,421 4,685,603 4,217,030
==================================================================================
Foreign portion of revenue $ 473,518 347,671 311,265
OPERATING PROFIT:
Vehicle Leasing & Services $ 442,635 389,085 335,793
Automotive Carriers 36,238 49,850 31,832
Other 72 166 (49)
- ----------------------------------------------------------------------------------
Operating profit 478,945 439,101 367,576
Miscellaneous income
(expense), net 1,517 (2,627) (650)
Interest expense (191,157) (144,735) (124,789)
Unallocated corporate
overhead expense (24,919) (31,220) (32,361)
- ----------------------------------------------------------------------------------
Earnings from continuing
operations before
income taxes $ 264,386 260,519 209,776
==================================================================================
Foreign portion of
operating profit $ 41,643 30,030 26,176
Foreign portion of earnings
from continuing operations
before income taxes $ 19,068 16,017 9,140
DEPRECIATION:
Vehicle Leasing & Services $ 716,098 628,625 557,406
Automotive Carriers 39,150 35,689 39,418
Other 1,288 900 1,074
- ----------------------------------------------------------------------------------
756,536 665,214 597,898
Gains on vehicle sales (92,463) (73,545) (54,560)
- ----------------------------------------------------------------------------------
$ 664,073 591,669 543,338
==================================================================================
IDENTIFIABLE ASSETS:
Vehicle Leasing & Services $ 5,474,602 4,644,294 3,908,931
Automotive Carriers 311,539 285,950 277,310
Other 138,941 121,911 107,327
Eliminations (31,267) (37,682) (35,180)
- ----------------------------------------------------------------------------------
$ 5,893,815 5,014,473 4,258,388
==================================================================================
Foreign portion of
identifiable assets $ 728,215 562,664 414,173
CAPITAL EXPENDITURES,
INCLUDING CAPITAL LEASES:
Vehicle Leasing & Services $ 2,087,932 1,722,329 1,205,620
Automotive Carriers 64,563 43,789 31,045
Other 831 4,044 856
- ----------------------------------------------------------------------------------
$ 2,153,326 1,770,162 1,237,521
==================================================================================
</TABLE>
42
<PAGE> 26
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA
Quarterly Data
<TABLE>
<CAPTION>
Quarters
------------------------------------------------------
In thousands, except per share amounts First Second Third Fourth
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
1995 $ 1,233,481 1,324,444 1,264,049 1,345,447
1994 $ 1,071,837 1,176,339 1,194,675 1,242,752
Earnings before cumulative effect of change in accounting:
1995 $ 26,579 51,486 20,931 56,429
1994 $ 23,738 49,842 41,957 37,992
Net earnings:
1995 $ 18,820 51,486 20,931 56,429
1994 $ 23,738 49,842 41,957 37,992
Earnings per common share before cumulative effect of change
in accounting:
1995 $ 0.34 0.65 0.26 0.71
1994 $ 0.30 0.64 0.53 0.48
Net earnings per common share:
1995 $ 0.24 0.65 0.26 0.71
1994 $ 0.30 0.64 0.53 0.48
</TABLE>
Net earnings in the first quarter of 1995 include the cumulative effect of
a change in accounting, resulting in an after tax charge of $8 million ($0.10
per common share). See "Summary of Significant Accounting Policies - Accounting
Changes" note for additional discussion.
Net earnings in the third quarter of 1995 were impacted, in part, by the
cost of the 32-day Teamsters strike against Automotive Carriers and
reorganization costs resulting from the implementation of cost-reduction
initiatives in the Vehicle Leasing & Services Division.
Net earnings in the fourth quarter of 1995 benefited, in part, from higher
vehicle and property gains, recovery of costs from certain customers which were
incurred during the Teamsters strike against Automotive Carriers, and the
favorable resolution of certain operating tax matters.
COMMON STOCK DATA
At December 31, 1995 and 1994, the company had 79,280,613 and 78,760,742
shares, respectively, of common stock outstanding. As of January 31, 1996,
there were 18,646 common shareholders of record. The payment of cash dividends
is subject to the restrictions described on page 36.
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 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
Market Price
------------------------------------------------
Common Share
1995 1994 Cash Dividends
------------------- ------------------ ------------------
High Low High Low 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First quarter $25 1/8 21 27 7/8 24 1/8 .15 .15
Second quarter 25 5/8 23 1/8 25 7/8 21 3/8 .15 .15
Third quarter 26 1/8 23 3/4 28 24 1/2 .15 .15
Fourth quarter 26 22 5/8 26 7/8 19 7/8 .15 .15
</TABLE>
43
<PAGE> 27
ELEVEN YEAR SUMMARY
<TABLE>
<CAPTION>
Dollars in thousands, except per share amounts 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue $5,167,421 4,685,603 4,217,030 4,019,675
Earnings from continuing operations (a):
Before income taxes $ 264,386 260,519 209,776 165,545
After income taxes $ 155,425 153,529 114,722 98,050
Per common share $ 1.96 1.95 1.43 1.17
Net earnings (loss) (b) $ 147,666 153,529 (61,424) 123,926
Per common share (b) $ 1.86 1.95 (0.84) 1.51
- ---------------------------------------------------------------------------------------------------------------------------
Cash dividends per common share $ 0.60 0.60 0.60 0.60
Average number of common and
common equivalent shares (in thousands) 79,370 78,768 77,535 75,046
Average common equity $1,176,373 1,057,931 1,266,715 1,327,624
Return on average common equity (%) (c) 13.2 14.5 10.2 8.1
Book value per common share $ 15.64 14.33 12.81 18.26
Market price - high (d) $ 26 1/8 28 26 5/8 28 7/8
Market price - low (d) $ 21 19 7/8 24 3/4 19 5/8
- ---------------------------------------------------------------------------------------------------------------------------
Total debt $2,623,101 1,912,898 1,531,446 1,668,947
Long-term debt $2,411,024 1,794,795 1,374,943 1,499,765
Debt to equity (%) 212 169 155 113
Debt to tangible equity (%) 273 227 202 135
- ---------------------------------------------------------------------------------------------------------------------------
Year-end assets $5,893,815 5,014,473 4,258,388 4,678,533
Return on average assets (%) (e) 2.8 3.3 2.7 2.3
Average asset turnover (%) (f) 92.4 99.6 103.2 104.0
- ---------------------------------------------------------------------------------------------------------------------------
Cash flow from continuing operating activities
and asset sales $1,173,863 1,096,222 995,954 1,066,936
Capital expenditures, including capital leases $2,153,326 1,770,162 1,237,521 1,071,034
- ---------------------------------------------------------------------------------------------------------------------------
Number of vehicles (f) 203,932 188,831 168,278 160,188
Number of employees (f) 44,503 43,095 37,949 37,336
- ---------------------------------------------------------------------------------------------------------------------------
</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 earnings for 1995 include the cumulative effect of a change in
accounting for charitable contributions resulting in an after tax charge of $8
million ($0.10 per common share). Net loss for 1993 includes the cumulative
effect of a change in accounting for postretirement benefits other than
pensions 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.
44
<PAGE> 28
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
<TABLE>
<CAPTION>
1991 1990 1989 1988 1987 1986 1985
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3,851,334 3,950,024 3,889,063 3,842,724 3,621,526 3,105,632 2,723,705
60,479 98,690 54,090 167,131 237,560 232,855 188,686
30,923 58,632 31,975 100,249 149,615 139,317 118,496
0.28 0.64 0.31 1.18 1.82 1.80 1.64
14,017 42,680 45,986 197,173 187,113 160,933 125,316
0.05 0.43 0.50 2.40 2.29 2.09 1.73
- ---------------------------------------------------------------------------------------------------------------------------
0.60 0.60 0.60 0.56 0.52 0.44 0.40
73,837 74,769 77,275 79,641 79,621 74,898 72,410
1,317,888 1,365,269 1,419,226 1,406,470 1,227,372 957,084 814,897
4.2 5.0 3.1 9.1 14.8 16.3 15.4
17.50 18.06 18.24 18.71 16.75 14.72 12.20
21 5/8 23 3/8 31 1/8 32 1/2 43 35 1/2 24 5/8
14 12 1/4 19 3/4 22 5/8 20 21 1/2 14 5/8
- ---------------------------------------------------------------------------------------------------------------------------
1,988,509 2,402,741 2,674,884 2,576,568 2,614,018 2,037,824 1,553,100
1,742,911 1,883,869 2,151,411 2,281,604 2,476,715 1,866,980 1,459,235
143 168 180 162 185 164 160
176 213 226 202 232 214 231
- ---------------------------------------------------------------------------------------------------------------------------
4,843,991 5,263,498 5,690,450 5,639,674 5,450,809 4,526,087 3,643,599
0.5 1.1 0.5 2.0 3.5 3.6 3.8
95.2 88.7 83.0 83.5 87.2 83.4 87.2
- ---------------------------------------------------------------------------------------------------------------------------
855,373 1,093,739 1,017,418 1,004,776 1,006,819 891,601 697,987
598,044 787,740 1,032,056 1,120,751 1,157,993 758,450 768,509
- ---------------------------------------------------------------------------------------------------------------------------
155,159 160,983 163,082 162,633 153,848 134,987 109,644
35,566 35,591 37,628 40,625 36,811 30,865 24,624
- ---------------------------------------------------------------------------------------------------------------------------
</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 the cumulative effect of changes in accounting and discontinued
operations.
(f) Excludes discontinued operations.
Average common shares and all per share information have been adjusted for the
March 1985 two-for-one split and the May 1986 three-for-two split, as
appropriate.
45
<PAGE> 1
EXHIBIT 21.1
RYDER SYSTEM, INC.
Subsidiaries as of March 1, 1996
Name of Company State /Country of
Incorporation
ATE Management of Duluth, Inc. Minnesota
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
MCL Ryder Transport Inc. Canada
Merrimack Valley Area Transportation Co., Corp. Massachusetts
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 Argentina S.R.L. Argentina
Ryder/ATE, Inc. Delaware
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 Deutschland GmbH West Germany
Ryder Distribution Services Ltd. England
Ryder do Brasil Ltda. Brazil
Ryder Driver Leasing, Inc. Florida
<PAGE> 2
<TABLE>
<S> <C>
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.zo.o. Poland
Ryder Puerto Rico, Inc. Delaware
Ryder Public Transportation Services, Inc. Florida
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 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
Spring Hill Integrated Logistics Management, Inc. Delaware
Terminal Service Co. (11) Washington
The Move Shop, Inc. Florida
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 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
Transit Management of Tyler, Inc. Texas
Transit Management of Washoe, Inc. Nevada
</TABLE>
Page 2 of 4 Pages
<PAGE> 3
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
(1) Kentucky and Wisconsin: B & C, Inc. of Michigan
Alabama: B & C of Michigan, Inc.
(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
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
(9) Maryland and Virginia: d/b/a Ryder/Jacobs
Page 3 of 4 Pages
<PAGE> 4
Michigan: d/b/a Atlas Trucking, Inc.
Michigan: d/b/a Ryder Atlas 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 4 of 4 Pages
<PAGE> 1
EXHIBIT 23.1
Independent Auditors' Consent
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
March 8, 1996, relating to the consolidated balance sheets of Ryder System,
Inc. and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of earnings and cash flows for each of the years in the
three-year period ended December 31, 1995, which reports appear in, or are
incorporated by reference in, the December 31, 1995 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.
- Registration Statement No. 33-58667 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.
<PAGE> 2
The Board of Directors and Shareholders
Ryder System, Inc.
Page 2
- 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.
- 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.
- Registration Statement No. 33-61509 covering the Ryder System,
Inc. Stock for Merit Increase Replacement Plan.
- Registration Statement No. 33-62013 covering the Ryder System,
Inc. 1995 Stock Incentive Plan.
/s/ KPMG Peat Marwick LLP
Miami, Florida
March 27, 1996
<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 P. Gray Finney, 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,
1995 (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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Janice Johnson
----------------------------------
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 P. Gray Finney, 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,
1995 (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/Joseph L. Dionne
----------------------------------
Joseph L. Dionne
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Joseph L. Dionne, 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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Janice Johnson
----------------------------------
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 P. Gray Finney, 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,
1995 (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 ____ day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Janice Johnson
----------------------------------
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 P. Gray Finney, 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,
1995 (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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Janice Johnson
----------------------------------
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 P. Gray Finney, 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,
1995 (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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Janice Johnson
----------------------------------
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 P. Gray Finney, 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,
1995 (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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Janice Johnson
----------------------------------
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 P. Gray Finney, 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,
1995 (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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Lourdes Palomares
----------------------------------
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 P. Gray Finney, 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,
1995 (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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Lourdes Palomares
----------------------------------
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 P. Gray Finney, 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,
1995 (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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Lourdes Palomares
----------------------------------
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 P. Gray Finney, 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,
1995 (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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Lourdes Palomares
----------------------------------
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 P. Gray Finney, 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,
1995 (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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Lourdes Palomares
----------------------------------
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 P. Gray Finney, 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,
1995 (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 16th day of February, 1996 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/Lourdes Palomares
----------------------------------
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, 1995 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-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 92,857
<SECURITIES> 0
<RECEIVABLES> 374,689
<ALLOWANCES> 0
<INVENTORY> 59,699
<CURRENT-ASSETS> 884,061
<PP&E> 7,066,625
<DEPRECIATION> 2,629,375
<TOTAL-ASSETS> 5,893,815
<CURRENT-LIABILITIES> 1,120,175
<BONDS> 2,411,024
0
0
<COMMON> 550,197
<OTHER-SE> 689,828
<TOTAL-LIABILITY-AND-EQUITY> 5,893,815
<SALES> 0
<TOTAL-REVENUES> 5,167,421
<CGS> 0
<TOTAL-COSTS> 4,711,878
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 191,157
<INCOME-PRETAX> 264,386
<INCOME-TAX> 108,961
<INCOME-CONTINUING> 155,425
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (7,759)
<NET-INCOME> 147,666
<EPS-PRIMARY> 1.86
<EPS-DILUTED> 0
</TABLE>
