<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
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[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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RYDER SYSTEM, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
RYDER SYSTEM, INC.
3600 N.W. 82nd Avenue
Miami, Florida 33166 (RYDER LOGO)
TO THE SHAREHOLDERS OF RYDER SYSTEM, INC.:
You are cordially invited to attend our Annual Meeting of Shareholders on
Friday, May 1, 1998, at 11:00 A.M., at the Miami Airport Hilton and Towers,
located in Miami, Florida.
The proposals to be acted upon at the Meeting include the election of directors,
the ratification of an amendment to the Ryder System, Inc. 1995 Stock Incentive
Plan and the ratification of the appointment of independent auditors for 1998. I
hope you will carefully read the proposals, which are described in the
accompanying Proxy Statement, and cast your vote in favor of them.
It is important that your shares be represented at the Meeting. Accordingly,
even if you plan to attend the Meeting, please sign, date and promptly mail the
enclosed proxy card in the postage-prepaid envelope.
On behalf of the Board of Directors, thank you for your cooperation and
continued support.
Sincerely,
/s/ M. ANTHONY BURNS
M. Anthony Burns
Chairman, President and
Chief Executive Officer
March 23, 1998
<PAGE> 3
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 1, 1998
The Annual Meeting of Shareholders of Ryder System, Inc. will be held at the
Miami Airport Hilton and Towers, 5101 Blue Lagoon Drive, Miami, Florida, on
Friday, May 1, 1998, at 11:00 A.M., for the following purposes:
(1) To elect five directors;
(2) To ratify an amendment to the Ryder System, Inc. 1995 Stock Incentive
Plan;
(3) To ratify the appointment of KPMG Peat Marwick LLP as auditors for the
Company; and
(4) To transact such other business as may properly come before the Meeting
and any adjournments of the Meeting.
Only Shareholders of record of the Company's Common Stock at the close of
business on March 5, 1998, are entitled to vote in person or by proxy at the
Annual Meeting or any adjournments of the Meeting.
The 1997 Annual Report of the Company has been mailed with this Notice and Proxy
Statement to each Shareholder entitled to vote at the Meeting.
RYDER SYSTEM, INC.
/s/ Vicki A. OMeara
Vicki A. O'Meara
Executive Vice President,
General Counsel and Secretary
March 23, 1998
Miami, Florida
YOUR VOTE IS IMPORTANT!
Please sign, date and return the accompanying proxy card in the enclosed
postage-prepaid envelope as promptly as possible.
If because of a disability you will need auxiliary aids or services to attend
the Annual Meeting, please contact the Secretary prior to the Meeting at Ryder
System, Inc., 3600 N.W. 82nd Avenue, Miami, Florida 33166 at (305) 500-3283.
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<PAGE> 4
RYDER SYSTEM, INC.
3600 N.W. 82nd Avenue
Miami, Florida 33166 RYDER LOGO
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TABLE OF CONTENTS PAGE
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Proxy Statement 1
Solicitation and Voting of Proxies 1
Policy of Confidential Voting 1
Procedures for the Meeting 1
Participants in the 401(k) Plan 2
Outstanding Voting Stock 2
Election of Directors (Item No. 1) 3
Board of Directors and Committees of
the Board 9
Compensation of Directors 9
Certain Relationships 10
Amendment to the Ryder System, Inc.
1995 Stock Incentive Plan (Item No.
2) 11
Selection of Auditors (Item No. 3) 13
Beneficial Ownership of Shares 14
Compensation Committee Report on
Executive Compensation 16
Compensation of Executive Officers 19
Option Grants 20
Aggregated Option Exercises and Fiscal
Year-End Option Values 21
Pension Benefits 21
Stock Performance 23
Cost of Solicitation 23
Submission of Shareholder Proposals for
the 1999 Annual Meeting 24
Ryder System, Inc. 1995 Stock Incentive
Plan Appendix A
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<PAGE> 5
PROXY STATEMENT
RYDER SYSTEM, INC.
3600 N.W. 82ND AVENUE
MIAMI, FLORIDA 33166
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Ryder System, Inc. (the "Company") of proxies to be voted
at the Annual Meeting of Shareholders of the Company to be held on Friday, May
1, 1998, and at any adjournments of the meeting ("Annual Meeting" or "Meeting").
This Proxy Statement and the accompanying proxy card are being distributed on or
about March 23, 1998, to holders of the Company's common stock ("Shareholders"
or, singularly, a "Shareholder") entitled to vote at the Meeting.
A Proxy Committee consisting of M. Anthony Burns, Edwin A. Huston and Vicki A.
O'Meara will vote the shares of common stock, par value $.50 per share, of the
Company ("Common Stock," "Common Shares" or "Shares" or, singularly, "Common
Share" or "Share") represented by each proxy card returned to the Company. The
Shares represented by such proxy cards will be voted in favor of the election of
each director nominated in this Proxy Statement, in favor of amending the Ryder
System, Inc. 1995 Stock Incentive Plan and in favor of the ratification of KPMG
Peat Marwick LLP as auditors of the Company unless a contrary instruction is
made on such proxy card, in which event the proxy will be voted by the Proxy
Committee in accordance with the Shareholder's instructions. Any Shareholder
giving a proxy has the power to revoke it at any time before it is exercised at
the Meeting by filing with the Secretary of the Company an instrument revoking
it, by delivering a duly executed proxy card bearing a later date, or by
appearing at the Meeting and voting in person.
POLICY OF CONFIDENTIAL VOTING
It is the Company's policy that all proxies, ballots and vote tabulations that
identify the particular vote of a Shareholder be kept confidential, except that
disclosure may be made: (i) to allow the independent election inspectors to
certify the results of the vote; (ii) as necessary to meet applicable legal
requirements, including the pursuit or defense of judicial actions; or (iii) in
the event of a proxy or consent solicitation in opposition to the Company based
on an opposition proxy or consent statement filed, or required to be filed, with
the Securities and Exchange Commission (the "SEC"). Accordingly, proxy cards are
returned in envelopes addressed to the tabulator, which receives, inspects and
tabulates the proxies. The final tabulation is inspected by inspectors of
election. Both the tabulator and the inspectors are independent of the Company,
its directors, officers and employees. Except as described above, information as
to the voting instructions given by individuals who are participants in the
Ryder System, Inc. Employee Savings Plan (the "401(k) Plan") will not be
disclosed to management by the trustee of the 401(k) Plan. Information as to
which Shareholders have not voted and periodic status reports on the aggregate
vote will be available to the Company.
PROCEDURES FOR THE MEETING
The presence, in person or by proxy, of the holders of a majority of the
outstanding Shares of Common Stock entitled to vote at the Meeting is necessary
to constitute a quorum at the Annual Meeting. Business at the Meeting will be
conducted in accordance with the procedures determined by the Chairman of the
Meeting and will be limited to matters properly brought before the Meeting
pursuant to the procedures prescribed in the Company's By-Laws. Those procedures
include the requirement that any Shareholder who desires either to bring a
Shareholder proposal before an annual meeting or to nominate a person for
election as a director at an annual meeting give written notice, prior to such
annual meeting, to the Company with respect to the proposal or nominee (see also
"Submission of Shareholder Proposals for the 1999 Annual Meeting"). The Chairman
of the Meeting may refuse to acknowledge any Shareholder proposal or any
nomination for director not made in accordance with the foregoing.
<PAGE> 6
The Board of Directors does not anticipate that any matters other than those set
forth in this Proxy Statement will be brought before the Annual Meeting. If,
however, other matters are properly brought before the Meeting, proxies will be
voted in accordance with the judgment of the Proxy Committee.
PARTICIPANTS IN THE 401(K) PLAN
If a Shareholder is a participant in the 401(k) Plan, the proxy card represents
the number of full Shares held for the benefit of the participant in the 401(k)
Plan as well as any Shares registered in the participant's name. Thus, a proxy
card for such a participant grants a proxy for Shares registered in the
participant's name and serves as a voting instruction for the trustee of the
401(k) Plan for the Share account in the participant's name.
OUTSTANDING VOTING STOCK
On March 5, 1998, there were 74,193,091 outstanding Shares of Common Stock. All
such Shares may be voted at the Annual Meeting and each outstanding Common Share
is entitled to one vote. Only holders of Common Stock of record at the close of
business on March 5, 1998, are entitled to vote at the Annual Meeting or any
adjournments of the Meeting. Neither broker non-votes nor abstentions are
counted as affirmative votes, in whole or in part.
2
<PAGE> 7
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ELECTION OF DIRECTORS
(ITEM NO. 1)
The Company has three classes of directors serving staggered three-year terms.
Serving in the class of directors whose term expires at the 1998 Annual Meeting
are Vernon E. Jordan, Jr., Paul J. Rizzo and Alva O. Way. The term of office of
Joseph L. Dionne, David T. Kearns and Lynn M. Martin expires at the 1999 Annual
Meeting. M. Anthony Burns, Edward T. Foote II and John A. Georges are currently
serving a term which expires at the 2000 Annual Meeting.
Mark H. Willes has resigned as a member of the Board of Directors effective
February 19, 1998.
On February 19, 1998, Christine A. Varney was appointed by the Board of
Directors to serve in the class of directors whose term expires at the 1998
Annual Meeting. In addition, David I. Fuente has been nominated by the Board to
serve as a member of the Board of Directors, serving in the class of directors
whose term expires at the 1999 Annual Meeting.
Accordingly, the Shareholders are asked to elect Vernon E. Jordan, Jr., Paul J.
Rizzo, Christine A. Varney and Alva O. Way, all of whom have been duly nominated
by the Board of Directors, to serve a term of office expiring at the 2001 Annual
Meeting, and David I. Fuente, who has been duly nominated by the Board of
Directors, to serve a term of office expiring at the 1999 Annual Meeting.
Unless a proxy card specifies otherwise, the Proxy Committee will vote the
Shares covered by the proxy for the election of Vernon E. Jordan, Jr., Paul J.
Rizzo, Christine A. Varney and Alva O. Way to the class of directors whose term
expires at the 2001 Annual Meeting, and for the election of David I. Fuente to
the class of directors whose term expires at the 1999 Annual Meeting. In the
event any of these nominees becomes unavailable to serve (which is not
anticipated), the proxy card gives the Proxy Committee the authority to vote for
such other person as it may select.
The following material sets forth the name of each nominee and of each director
continuing in office, a description of positions and offices with the Company,
any other principal occupation, business experience during at least the last
five (5) years, certain directorships presently held, age and length of service
as a director of the Company.
The affirmative vote of a majority of the Shares entitled to vote at the Meeting
is necessary for the election of each nominee to the Board of Directors.
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3
<PAGE> 8
NOMINEES FOR DIRECTOR
FOR A TERM OF OFFICE EXPIRING AT THE 2001 ANNUAL MEETING
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VERNON E. JORDAN, JR. Mr. Jordan is a Senior Partner in the law firm of Akin,
Senior Partner, Gump, Strauss, Hauer & Feld, LLP. Prior to joining Akin,
PHOTO Akin, Gump, Strauss, Gump in 1982, he was President and Chief Executive Officer
Hauer & Feld, LLP of the National Urban League from 1972 to 1981. From 1970
to 1972, he was Executive Director of the United Negro
Director since 1989 Member--Audit Committee College Fund. He is currently serving on the Board of
Age 62 Member-- Committee on Directors Directors of American Express Company, Bankers Trust
and Public Company, Bankers Trust New York Corporation, Callaway Golf
Responsibility Company, Chanceller Media Corporation, Dow Jones & Company,
Inc., J.C. Penney Company, Inc., Revlon Group, Sara Lee
Corporation, Union Carbide Corporation and Xerox Corpora-
tion. He is also a trustee of The Ford Foundation and
Howard University.
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PAUL J. RIZZO Mr. Rizzo was employed with International Business Machines
Retired Vice Chairman, Corporation, where he held increasingly responsible
PHOTO International Business positions, from 1958 until his retirement as Vice Chairman
Machines Corporation of the Board in 1987. He returned to IBM in 1993 as Vice
Chairman of the Board until he retired again on December
Director 1987-1993 Chairman--Finance Committee 31, 1994. He was Dean of the Kenan-Flagler Business School
and since 1995 Member--Compensation Committee of the University of North Carolina from 1987 until 1992,
Age 70 when he retired from that position to become a partner in
Franklin Street Partners, a Chapel Hill investment firm. He
is currently serving on the Board of Directors of Johnson &
Johnson, The McGraw-Hill Companies and Cox Enterprises.
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CHRISTINE A. VARNEY Ms. Varney is a Partner in the law firm of Hogan & Hartson
Partner, L.L.P., which she rejoined in 1997 after 5 years in
PHOTO Hogan & Hartson L.L.P. government service. She is a leader of the Internet law
practice for the firm. Ms. Varney served as a Federal Trade
Member--Audit Committee Commissioner from 1994 to 1997 and as a Senior White House
Director since 1998 Member--Committee on Directors Advisor to the President from 1993 to 1994. She has also
Age 42 and Public served as Chief Counsel to the President's Primary Campaign
Responsibility in 1992 and as General Counsel to the Democratic National
Committee from 1989 to 1992. Prior to her government
service, Ms. Varney practiced law with the Firms of
Pierson, Semmes & Finley (1986-1988), and Surrey & Morse
(1984-1986).
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ALVA O. WAY Mr. Way was elected Chairman of the Board of IBJ Schroder
Chairman, IBJ Schroder Bank & Trust Company in 1986. He serves as a consultant to
PHOTO Bank & Trust Company and director of Schroder PLC, London, and related
companies. In 1951, Mr. Way joined General Electric Company
Chairman--Compensation where he served in various executive positions including
Committee Chief Financial Officer. In 1979, he was elected Vice
Member--Finance Committee Chairman of American Express Company, and in 1981 he was
named President of American Express Company and Chairman
and Chief Executive Officer of American Express Interna-
tional Banking Corporation. Mr. Way served as President of
The Travelers Companies, a financial services organization,
from 1983 through 1984. He is a director of Eli Lilly and
Director since 1985 Company, The McGraw-Hill Companies and Gould, Inc. He is a
Age 68 member of the Brown University Board of Fellows and
Chancellor Emeritus.
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NOMINEE FOR DIRECTOR
FOR A TERM OF OFFICE EXPIRING AT THE 1999 ANNUAL MEETING
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DAVID I. FUENTE Mr. Fuente has served as Chairman and Chief Executive
Chairman and Chief Officer of Office Depot since 1987, one year after the
PHOTO Executive Officer, company was founded. Before joining Office Depot, Mr.
Office Depot, Inc. Fuente served for eight years at Sherwin-Williams as
President of the Paint Stores Group. Before joining
Age 52 Sherwin-Williams, he was Director of Marketing at Gould,
Inc.
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5
<PAGE> 10
DIRECTORS CONTINUING IN OFFICE
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M. ANTHONY BURNS Mr. Burns, who joined the Company in 1974, was elected a
Chairman, President and director, President and Chief Operating Officer of the
PHOTO Chief Executive Officer, Company in December 1979. Effective January 1, 1983, he was
Ryder System, Inc. elected to the position of Chief Executive Officer of the
Company, and on May 3, 1985, he became Chairman of the
Director since 1979 Board. He serves on the Board of Directors of The Chase
Age 55 Manhattan Corporation, The Chase Manhattan Bank, N.A., J.C.
Penney Company, Inc. and Pfizer Inc. He is an Active Member
of The Business Council, a member of The Business
Roundtable and The Business Roundtable's Policy Committee,
and chairs The Business Roundtable's Health and Retirement
Task Force. He serves on the Board of the Boy Scouts of
America. He also serves on the Board of Trustees of the
University of Miami.
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JOSEPH L. DIONNE Mr. Dionne has been Chairman of the Board of The
Chairman, The McGraw-Hill McGraw-Hill Companies since 1988. He joined McGraw-Hill
PHOTO Companies Book Company in 1967 as Vice President for Research and
Development at Educational Developmental Laboratories. A
Chairman--Committee on Directors year later, he was appointed General Manager of California
Director since 1995 and Public Test Bureau and became a Vice President of McGraw-Hill Book
Age 64 Responsibility Company in 1970. He has held various positions in the
Member--Audit Committee company including Executive Vice President-Operations. In
1981, he became President and Chief Operating Officer of
McGraw-Hill and held that position until 1983 when he
became President and Chief Executive Officer. Prior to
joining McGraw-Hill, Mr. Dionne's experience included
teaching, educational administration and consulting work on
a number of experimental education projects. He serves on
the Board of Directors of The Equitable Companies,
Incorporated, The Equitable Life Assurance Society of the
United States and Harris Corporation, and is a trustee of
Hofstra University.
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6
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EDWARD T. FOOTE II Mr. Foote has been President of the University of Miami
President, University since 1981. Prior to joining the University of Miami, he
PHOTO of Miami was Special Advisor to the Chancellor and Board of
Trustees, Washington University, from 1980 to 1981. From
Member--Compensation 1973 to 1980, he was Dean of the Washington University
Director since 1987 Committee School of Law, and from 1970 to 1973, he was Vice
Age 60 Member--Committee on Chancellor, General Counsel and Secretary to the Board of
Directors and Trustees of Washington University. Prior to that he was an
Public associate with the law firm of Bryan, Cave, McPheeters and
Responsibility McRoberts.
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JOHN A. GEORGES Mr. Georges joined Windward Capital Partners, L.P. as a
Senior Managing Director, Senior Managing Director in May, 1996. Mr. Georges was
PHOTO Windward Capital Partners, L.P. Chairman of the Board and Chief Executive Officer of
and Retired Chairman and Chief International Paper from 1984 until April 1996 when he
Executive Officer, International retired. He is also a director of International Paper,
Director since 1993 Paper Company Warner-Lambert Company and AK Steel Holding Corporation.
Age 67 Mr. Georges is also the Chairman of DCV Inc. Mr. Georges is
Chairman--Audit Committee a member of The Business Council, The Trilateral
Member--Finance Committee Commission, Board Member of the University of Illinois
Foundation and a trustee of the Public Policy Institute of
the Business Council of New York State. He was formerly a
director of The New York Stock Exchange from 1987-1993 and
a director of The Federal Reserve Bank of New York from
1986-1992.
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DAVID T. KEARNS Mr. Kearns has been Chairman of the New American Schools
Chairman, New American Schools Development Corporation since 1993 and was Deputy Secretary
PHOTO Development Corporation, and of the United States Department of Education from 1991
Retired Chairman and Chief through 1993. From 1982 through 1990, Mr. Kearns was
Executive Officer, Xerox Chairman and Chief Executive Officer of Xerox Corporation,
Director 1988-1991 Corporation which he joined in 1971 as a Vice President. Prior to
and since 1993 joining Xerox, he was a Vice President in the Data
Age 67 Member--Audit Committee Processing Division of International Business Machines
Member--Finance Committee Corporation. Mr. Kearns is a member of The Business
Council, the Council on Foreign Relations and the American
Philosophical Society. Mr. Kearns is a trustee of the
University of Rochester and The Ford Foundation.
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LYNN M. MARTIN Since serving as Secretary of Labor under President George
Former U.S. Secretary of Labor; Bush from 1991 to 1993, Ms. Martin has served as
PHOTO Chairperson, Deloitte & Touche Chairperson of Deloitte & Touche LLP's Council for the
LLP's Council for the Advancement Advancement of Women and as an advisor to that firm. She is
of Women; advisor to Deloitte & a regular commentator, panelist, columnist and speaker on
Director since 1993 Touche LLP; and Professor, J.L. radio and television programs, in national publications and
Age 58 Kellogg Graduate School of before various business and academic groups, with respect
Management at Northwestern to the changing global economic and political environment.
University Prior to serving as Secretary of Labor, Ms. Martin
represented the 16th District of Illinois in the U.S. House
Member--Compensation Committee of Representatives from 1981 to 1991. She also serves as a
Member--Finance Committee director of The Procter & Gamble Company, Ameritech,
Harcourt General, Inc., The Dreyfus Funds, TRW Inc. and
Chicago's Lincoln Park Zoo. She is a member of the Council
on Foreign Relations.
</TABLE>
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8
<PAGE> 13
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors currently consists of 10 members. During 1997, the Board
met 8 times. The Board has established standing Audit, Compensation and Finance
Committees and a Committee on Directors and Public Responsibility to assist the
Board in the discharge of its responsibilities. The Board may also appoint other
committees for specialized functions as appropriate. All of the directors of the
Company are independent directors (as that term is defined in the Company's
By-Laws) other than Mr. Burns. The Company's By-Laws provide that a majority of
the Board of Directors, and all members of the Compensation Committee and the
Committee on Directors and Public Responsibility, must be independent directors.
The Audit Committee consists of John A. Georges, Chairman, Joseph L. Dionne,
Vernon E. Jordan, Jr., David T. Kearns and Christine A. Varney. The Audit
Committee met 6 times in 1997. The Committee is responsible for recommending to
the Board the engagement of independent auditors, reviewing the scope of and
budget for the annual audit and reviewing with the independent auditors the
results of the audit engagement, including the financial statements of the
Company. The Committee also reviews the scope and results of the Company's
internal audit procedures and reviews compliance with Company policies relating
to conflicts of interest and business ethics.
The Compensation Committee consists of Alva O. Way, Chairman, Edward T. Foote
II, Lynn M. Martin and Paul J. Rizzo. The Compensation Committee met 6 times in
1997. The Committee reviews and recommends to the Board compensation for senior
management, recommends to the Board the adoption and implementation of new
incentive compensation plans, stock option plans and employee benefit plans and
reviews non-management Board members' compensation and benefits and recommends
changes as appropriate. The Compensation Committee Report on Executive
Compensation is set forth on pages 16 through 18 of this Proxy Statement.
The Finance Committee consists of Paul J. Rizzo, Chairman, John A. Georges,
David T. Kearns, Lynn M. Martin and Alva O. Way. The Finance Committee met 7
times in 1997. The Committee reviews the financial condition and capital
structure of the Company, advises the Board with respect to capital
appropriations and other financial matters affecting the Company and reviews and
recommends to the Board a dividend policy for the Company and any actions to be
taken thereunder.
The Committee on Directors and Public Responsibility consists of Joseph L.
Dionne, Chairman, Edward T. Foote II, Vernon E. Jordan, Jr. and Christine A.
Varney. The Committee met 6 times in 1997. The Committee reviews and recommends
criteria for Board membership, reviews the qualifications of and recommends
individuals for election as directors and reviews and recommends the function
and authority of all Board Committees as well as their composition. The
Committee will review nominees suggested by Shareholders in writing and sent to
the Secretary of the Company. Any such suggestion should include sufficient
information about the proposed nominee to permit the Board of Directors to make
an informed determination as to whether the proposed nominee, if elected, would
be an independent director, as that term is defined in the Company's By-Laws.
Additional responsibilities of the Committee include identifying and analyzing
current trends and issues pertaining to public policy, public affairs and
corporate responsibility and bringing such matters to the attention of the
Board.
The directors spend a considerable amount of time preparing for the Board and
Committee meetings and, in addition, are called upon for their counsel between
meetings. Each of the incumbent directors attended more than 75% of the
aggregate number of meetings of the Board of Directors and the committees on
which he or she served in 1997.
COMPENSATION OF DIRECTORS
Each director of the Company, other than Mr. Burns, is entitled to an annual
retainer of $21,500 for Board membership and $3,500 for each membership on a
major Board Committee. The chairperson of each such Committee is also entitled
to an additional retainer of $4,500 per year. The meeting fee payable to
directors for telephonic meetings of the Board of Directors or standing
Committees of the Board is $1,100. Directors are entitled to a per diem fee for
all other regular and special meetings of the Board or its Committees of $2,200
and $1,100, respectively, together with reimbursement for travel expenses. Mr.
Burns does not receive any additional compensation by reason of his membership
on the Board or attendance at meetings of any of its Committees.
9
<PAGE> 14
Under the Company's Directors Stock Plan, any eligible director may make an
election to receive a combination of Common Shares determined by a formula (the
"Formula") and $11,500 in cash in lieu of the annual retainer. The Formula
provides that the number of Shares granted to a participant will be equal to the
nearest number of whole Shares which can be purchased for $15,000 based on the
Fair Market Value of the Shares on the date of grant. The Shares will be
entitled to cash dividends and full voting rights. None of the Shares may be
sold or transferred prior to six months after the date when service as a
director ceases. A majority of the eligible directors have elected to
participate in the Directors Stock Plan.
Pursuant to the Company's Board of Directors Stock Award Plan, all non-employee
directors are awarded an annual stock option grant of 1,000 Shares at an option
price based upon the Fair Market Value of a Share on the day of the grant,
vesting in three equal annual installments. The stock option awards are made in
addition to the directors' annual cash retainers and meeting attendance fees.
The Company also provides all non-employee directors with $100,000 of accidental
death and dismemberment coverage under the Company's travel accident insurance
policy, optional coverage under the Company's medical plan and $100,000 of
coverage under the Company's group term life insurance policy, resulting in
additional average compensation of approximately $3,590 to each such director.
The Company has a Directors' Charitable Award Program under which it intends to
make charitable contributions in the name of current and future directors. The
program is designed to acknowledge the service of directors and to benefit and
recognize the mutual interest of directors and the Company in supporting worthy
charitable and educational institutions. In addition, it enhances the Company's
ability to attract and retain directors of the highest caliber and experience.
Under the Directors' Charitable Award Program, each current or future director
may designate up to two charitable organizations and it is the Company's
intention to contribute the sum of $500,000, in ten annual installments, to the
designated organizations in the director's name upon the director's death. The
program may be funded with the proceeds of insurance policies on the lives of
paired directors. Individual directors will derive no financial benefit from
this program, as all charitable deductions accrue solely to the Company. A
majority of the current directors and five retired directors participate in the
Directors' Charitable Award Program.
Directors of the Company may elect to defer receipt of their retainer and fees.
Deferred funds become part of the general assets of the Company and, at the
direction of the electing director, are credited with earnings based upon
several investment options, including Common Stock, a money market fund and
several equity mutual funds. At the discretion of the director, the funds may be
deferred until the earlier to occur of a fixed date, retirement, disability or
removal, and are payable in a lump sum or installments. However, upon a change
of control of the Company, all deferred amounts will be distributed immediately
to the director in a lump sum.
CERTAIN RELATIONSHIPS
In the ordinary course of business, the Company and its subsidiaries may from
time to time engage in transactions with other unaffiliated corporations whose
officers or directors are also directors of the Company. Mr. Jordan is a senior
partner in the law firm of Akin, Gump, Strauss, Hauer & Feld, LLP which
performed professional services on behalf of the Company in 1997. All such
transactions are conducted on a commercial, arms-length basis and may not come
to the special attention of the directors or officers of either the Company or
the other corporation involved. The Company does not consider either the
transactions or the amounts involved in such transactions to be significant.
10
<PAGE> 15
AMENDMENT TO THE RYDER SYSTEM, INC.
1995 STOCK INCENTIVE PLAN
(ITEM NO. 2)
The Ryder System, Inc. 1995 Stock Incentive Plan (the "1995 Plan") was adopted
by the Company's Shareholders at the 1995 Annual Meeting. The 1995 Plan is
designed to provide incentive compensation to key management employees of the
Company and to provide them with an ownership interest in the Company's Common
Stock. Non-employee directors are not eligible to participate in the 1995 Plan.
The Board of Directors believes that the 1995 Plan has enhanced the Company's
position in the highly competitive market for key executives, and has determined
to continue to grant options and other awards under the 1995 Plan as a means of
enhancing and encouraging the recruitment, retention and motivation of those
individuals, who contribute so much to the continued success of the Company. At
present, approximately 300 key employees are eligible to participate in the 1995
Plan.
On December 18, 1997, the Board of Directors approved, subject to Shareholder
ratification, an increase of 2,500,000 Shares in the number of Common Shares
currently available for grant under the 1995 Plan. As of December 31, 1997,
options to purchase 2,274,853 Shares were outstanding under the 1995 Plan and
827,610 Shares remained available for future grants. On March 13, 1998, the
closing price of a Common Share on the New York Stock Exchange Composite Index
was $35.69.
The 1995 Plan is administered by the Compensation Committee of the Board of
Directors (the "Committee"). Five types of awards may be granted to participants
under the 1995 Plan: (1) stock options, (2) Stock Appreciation Rights ("SARs"),
(3) Limited Stock Appreciation Rights ("Limited SARs"), (4) Performance Units
and (5) Restricted Stock Rights ("Rights").
The term of stock options granted under the 1995 Plan may not exceed 10 years
and the exercise price may not be less than 100% of the fair market value of the
Shares on the date of grant.
Generally, stock options granted under the 1995 Plan have been exercisable in
three equal annual installments commencing with the first anniversary of the
date of grant. A participant exercising a stock option must pay the exercise
price in full in cash or, at the discretion of the Committee, in previously
acquired Common Shares or in a combination of cash and Common Shares.
Unless otherwise determined by the Committee, in the event of a change in
control of the Company, each unexercised and unexpired stock option becomes
immediately exercisable in full, and remains exercisable in full for the
remainder of its term, unless the participant is terminated for cause.
If any change occurs in the Common Shares subject to the 1995 Plan or any award
granted under the 1995 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 and equitable, in the aggregate number and kind of Shares
subject to the 1995 Plan or to any outstanding award, and in the terms and
provisions of the 1995 Plan and any awards granted thereunder.
Under current Federal income tax laws, stock options granted under the 1995 Plan
will generally have the following consequences. The holder of a non-qualified
stock option under the 1995 Plan recognizes no income for Federal income tax
purposes upon the grant of such non-qualified stock option, and the Company,
therefore, receives no deduction at such time. At the time of exercise, however,
the holder generally will recognize income, taxable as ordinary income, to the
extent that the fair market value of the Shares received on the exercise date
exceeds the non-qualified stock option price. The Company will be entitled to a
corresponding deduction for Federal income tax purposes in the year in which the
non-qualified stock option is exercised. If the Shares are held for at least one
year and one day after exercise, long-term capital gain will be realized upon
disposition of such Shares to the extent the amount realized on such disposition
exceeds their fair market value as of the exercise date.(1)
- ---------------
1Long-term capital gains are subject to various tax rates depending on the
length of time the stock is held.
11
<PAGE> 16
The following table shows information with respect to the granting of stock
options and related Limited SARs under the 1995 Plan during calendar year 1997.
A table showing information, with respect to the named executive officers,
regarding the exercise of options during 1997 and unexercised options held as of
the end of fiscal year 1997 is set forth at page 21 of this Proxy Statement.
Stock options granted are reported in terms of the number of Common Shares
subject to the grant. Because additional grants under the 1995 Plan would
require future action by the Committee or the Board of Directors, it is
impossible to state the benefits any named executive officer or other individual
may receive if this amendment to the 1995 Plan is approved by the Shareholders
at this time.
1995 STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
NAME DOLLAR VALUE($) NUMBER OF UNITS
- ---- --------------- ---------------
<S> <C> <C>
M. Anthony Burns........................... exercise price of $36.0625 per share 125,000 shares
Dwight D. Denny............................ exercise price of $36.0625 per share 46,000 shares
James B. Griffin........................... exercise price of $36.0625 per share 39,000 shares
Edwin A. Huston............................ exercise price of $36.0625 per share 34,000 shares
Thomas E. McKinnon......................... exercise price of $36.0625 per share 35,750 shares
All Current Executive Officers as a
Group.................................... average exercise price of $35.8691 per share 414,010 shares
All Non-Employee Directors as a Group...... not applicable 0 shares
All Employees, including Non-Executive
Officers, as a Group..................... average exercise price of $35.9399 per share 653,091 shares
</TABLE>
The affirmative vote of a majority of the Shares entitled to vote at the Meeting
is necessary for the ratification of this amendment to the 1995 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS AMENDMENT TO THE RYDER SYSTEM,
INC. 1995 STOCK INCENTIVE PLAN.
12
<PAGE> 17
SELECTION OF AUDITORS
(ITEM NO. 3)
Upon the recommendation of the Audit Committee of the Board of Directors, the
Board has selected KPMG Peat Marwick LLP, independent certified public
accountants, to audit the accounts of the Company and its subsidiaries for the
fiscal year ending December 31, 1998.
The firm of KPMG Peat Marwick LLP has audited the accounts of the Company since
1955 and has offices in, or convenient to, most of the localities where the
Company and its subsidiaries operate. The Company has been advised that
representatives of KPMG Peat Marwick LLP will be present at the 1998 Annual
Meeting with the opportunity to make a statement and to respond to appropriate
questions raised at the Meeting.
KPMG Peat Marwick LLP performed audit services in connection with the
examination of the financial statements of the Company and its subsidiaries for
the year ended December 31, 1997. They performed other audit services pertaining
to examinations of the separate financial statements of the Company's retirement
and benefit plans, as well as the Company's automotive carrier business in
connection with the sale of that business. In addition, they rendered other
services related to the review of financial statements and related information
contained in various registration statements and filings with the SEC, and to
the Company's acquisition of other companies.
The affirmative vote of a majority of the Shares entitled to vote at the Meeting
is necessary for the ratification of the appointment of KPMG Peat Marwick LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION OF
KPMG PEAT MARWICK LLP AS AUDITORS.
13
<PAGE> 18
BENEFICIAL OWNERSHIP OF SHARES
As of January 15, 1998, each director or nominee and each executive officer
named in the Summary Compensation Table herein, individually, and all directors,
nominees and executive officers of the Company as a group, beneficially owned
Common Stock as follows:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS(2)
- ------------------------ -------------------------- -------------------
<S> <C> <C>
M. Anthony Burns(4,5)....................................... 806,122 1.093%
Dwight D. Denny(4,5)........................................ 149,881 *
Joseph L. Dionne(6)......................................... 6,556 *
Edward T. Foote II(6)....................................... 7,887 *
David I. Fuente............................................. 0 *
John A. Georges(6).......................................... 7,709 *
James B. Griffin(4,5)....................................... 99,632 *
Edwin A. Huston(4,5)........................................ 158,472 *
Vernon E. Jordan, Jr.(6).................................... 8,554 *
David T. Kearns(6).......................................... 11,743 *
Lynn M. Martin(6)........................................... 4,956 *
Thomas E. McKinnon(4,5)..................................... 80,994 *
Paul J. Rizzo(6)............................................ 8,593 *
Christine A. Varney(7)...................................... 100 *
Alva O. Way(6).............................................. 10,657 *
Directors, Nominees and Executive Officers as a Group (20
persons)(3,4,5,6)......................................... 1,421,831 1.928%
</TABLE>
- ---------------
*Represents less than 1% of the Company's outstanding common stock.
(1)Unless otherwise noted, all Shares included in this table are owned directly,
with sole voting and dispositive power. The inclusion of Shares in this table
shall not be construed as an admission that such Shares are beneficially
owned for purposes of Section 16 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(2)Percent of class has been computed in accordance with Rule 13d-3(d)(1) of the
Exchange Act.
(3)Includes Shares held jointly with their spouses or other family members as
follows: all directors, nominees and executive officers as a group 4,137
Shares.
(4)Includes Shares held in the accounts of executive officers pursuant to the
401(k) Plan and the Deferred Compensation Plan as of January 15, 1998 as
follows: Mr. Burns 14,050 Shares; Mr. Denny 2,970 Shares; Mr. Griffin 9,345
Shares; Mr. Huston 4,061 Shares; Mr. McKinnon 4,982 Shares; all directors,
nominees and executive officers as a group 46,088 Shares.
(5)Includes Shares the direct ownership of which may be acquired within 60 days
of January 15, 1998, through the exercise of stock options, as follows: Mr.
Burns 661,232 Shares; Mr. Denny 137,830 Shares; Mr. Griffin 90,220 Shares;
Mr. Huston 124,779 Shares; Mr. McKinnon 76,012 Shares; all directors,
nominees and executive officers as a group 1,131,368 Shares.
(6)Includes the following number of Shares held as of January 15, 1998, in the
account of each of the following directors pursuant to the Directors Stock
Plan: Mr. Dionne 4,966; Mr. Foote 7,387; Mr. Georges 6,070; Mr. Jordan 8,043;
Mr. Kearns 8,895; Ms. Martin 4,456; Mr. Rizzo 6,593; and Mr. Way 9,157.
(7)As of February 27, 1998.
14
<PAGE> 19
The following table sets forth information regarding the number and percentage
of Shares held by all persons who are known by the Company to beneficially own
or exercise voting or dispositive control of more than 5% of the Company's
outstanding Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY
NAME AND ADDRESS OWNED PERCENT OF CLASS
- ---------------- ----------------- ----------------
<S> <C> <C>
Putnam Investments, Inc..................................... 7,973,663(1) 10.0%
One Post Office Square
Boston, MA 02109
Fidelity Management & Research Corp......................... 6,991,325(2) 9.1%
82 Devonshire Street
Boston, MA 02109-3614
Sanford C. Bernstein & Co., Inc............................. 6,624,597(3) 8.7%
One State Street Plaza
New York, NY 10004-1545
Loomis Sayles & Company Inc................................. 4,728,278(4) 6.2%
One Financial Center
Boston, MA 02111
</TABLE>
- ---------------
(1) Of the total Shares shown, the nature of beneficial ownership is as follows:
sole voting power 0; shared voting power 149,595; and shared dispositive
power 7,973,663. The foregoing ownership information is based upon
information furnished to the Company on behalf of Putnam Investments, Inc.
as of January 16, 1998.
(2) Of the total Shares shown, the nature of beneficial ownership is as follows:
sole voting power 462,175; shared voting power 0; and sole dispositive power
6,991,325. The foregoing ownership information is based upon information
furnished to the Company on behalf of Fidelity Management & Research Corp.
as of February 14, 1998.
(3) Of the total Shares shown, the nature of beneficial ownership is as follows:
sole voting power 3,715,010; shared voting power 646,437; and sole
dispositive power 6,624,597. The foregoing ownership information is based
upon information furnished to the Company on behalf of Sanford C. Bernstein
& Co., Inc. as of February 4, 1998.
(4) Of the total Shares shown, the nature of beneficial ownership is as follows:
sole voting power 2,900,350; shared voting power 39,800; and shared
dispositive power 4,728,278. The foregoing ownership information is based
upon information furnished to the Company on behalf of Loomis Sayles &
Company Inc. as of February 12, 1998.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Compliance with Section 16(a) of the Exchange Act requires the Company's
directors, executive officers, and persons owning more than 10% of the Company's
Common Stock to file with the SEC and the New York Stock Exchange initial
reports of ownership of Common Stock and other equity securities of the Company
on Form 3 and reports of changes in such ownership on Forms 4 or 5. Directors,
executive officers and greater than 10% Shareholders are required to furnish the
Company with copies of all Section 16(a) reports they file.
To the Company's knowledge, based solely on a review of the copies of the
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1997, the
Company's directors and executive officers complied with all applicable Section
16(a) filing requirements.
15
<PAGE> 20
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors (the "Committee")
is composed of four independent, non-employee directors of the Company. The
Committee administers the Company's executive policies and programs and
regularly reports to the Board of Directors, including decisions regarding Mr.
Burns' compensation. There are no interlocks between members of the Committee
and any executive officer of the Company.
The Company's goal is to attract, retain, motivate and reward management through
competitive compensation policies, while aligning executive interests with
Shareholder interests.
EVALUATION OF EXECUTIVE PERFORMANCE
It is the Committee's belief that variable, at-risk compensation, both annual
and long-term, should comprise a significant portion of executive compensation,
to be earned only if specific financial goals are met. As a result, in 1997, a
substantial portion of the targeted compensation of Mr. Burns and the other
named executive officers was at risk.
In addition to reviewing the internal effectiveness of the Company's executive
compensation programs, the Committee continuously evaluates whether the programs
remain externally competitive. The Committee evaluates each element of the
program in light of the compensation practices and financial performance of a
comparative group of similar companies (companies with sales levels and/or
financial characteristics similar to those of the Company) with which the
Company must compete in hiring and retaining executives. The Committee believes
that these companies are the most appropriate comparison group for purposes of
compensation decisions. As a result, the companies surveyed by the Committee for
executive compensation data are not the same as the peer group index used in the
five-year stock performance graph included in this Proxy Statement.
Survey data from this "compensation peer group" is analyzed by management and by
Hewitt Associates and Frederick W. Cook & Co., Inc., independent compensation
consultants retained by the Company. Results are referenced by the Committee to
aid in setting total compensation for the Company's executive officers within
the median range for this compensation peer group.
STOCK OWNERSHIP GUIDELINES
To further underscore the importance of linking executive and Shareholder
interests, the Company established formal stock ownership guidelines in 1993 for
all executive officers of the Company. Based on this philosophy, individuals
were given a three year period over which to attain the required stock ownership
levels. The Chief Executive Officer of the Company must own two times annual
base salary in Company stock and executive officers of the Company must own one
times their base salary in Company stock.
COMPONENTS OF EXECUTIVE COMPENSATION
The Company's executive compensation program consists of three components: (1)
base salary; (2) annual cash incentive awards and (3) long-term incentive awards
in the form of stock options. Executive officers also receive a range of
employee benefits generally available to all employees of the Company. While
each element of compensation is reviewed separately, the Committee takes into
account the total compensation and benefits package in evaluating the executive
compensation program and making compensation decisions. During 1997, the
Committee conducted an in-depth review of the compensation program and, based on
the results of information provided from its external consultants, the Committee
believes that the total package represents an attractive compensation and
benefits program which is in line with those of comparable companies.
BASE SALARY
Base salaries for executive officers are set at levels considered appropriate in
light of the scope of responsibilities of each executive officer's position and
the importance of that position to the operations of the Company. The Committee
believes that salary levels for executive officers should be set within the
median range in comparison to salary levels at comparable companies with which
the Company competes for executive talent. In making decisions to adjust
individual salary levels, the Committee considers Company performance, the
executive officer's individual
16
<PAGE> 21
performance and position in the existing salary range, and the external
comparative data provided by the Company's outside compensation consultants. The
Committee, however, does not employ any predetermined formula or assign any
particular weight to any individual criterion in making these adjustments.
Actions on base salaries of executive officers other than Mr. Burns are
recommended by Mr. Burns to the Committee based upon the above criteria and
recommended for approval to the Board of Directors by the Committee.
The Stock For Merit Increase Replacement Plan for certain key executives
provides for executives to receive stock option grants in lieu of base salary
cash merit increases. In 1997, five grants were made under this plan.
Mr. Burns received a stock option grant in lieu of a merit increase during 1997
and his cash salary remains at the level set in June 1992.
ANNUAL INCENTIVE AWARDS
In 1997, the Company adopted a new annual incentive award program based on the
principles of Economic Value Added ("EVA"). The Company engaged Stern Stewart &
Co., independent financial consultants, to help incorporate EVA into the
Company's financial management and compensation programs for 1997. EVA measures
the return on investment that enhances Shareholder value. EVA, which determines
whether a business is earning more than its true cost of capital, will be
utilized as a management tool for capital allocation and will provide a basis on
which to assess future goals, strategies and ultimate financial performance.
Under the EVA annual incentive award program, executive compensation will
reflect the Company's business strategy and its return to Shareholders.
Under the 1997 Annual Incentive Compensation Plan, potential cash awards were
based upon Company financial performance as measured by EVA, subject to
performance on predetermined, non-financial measures and the Committee's
discretion. Award opportunities were set to provide above-median compensation in
relation to comparable companies in a year when Company performance exceeds
financial performance targets and below-median compensation in relation to
comparable companies in a year when performance is below these targets. Bonus
awards for 1997 were primarily driven by the Company's strong 1997 financial
results. The specific targets are considered confidential by the Company and are
not included in this Report in order to avoid compromising the Company's
competitive position.
Based on 1997 EVA results and the Committee's assessment of the CEO's
performance, Mr. Burns' annual incentive award totaled $735,101.
LONG-TERM INCENTIVE AWARDS
Under the Ryder System, Inc. 1995 Stock Incentive Plan, stock options may be
awarded to executive officers and other key executives of the Company who meet
stock ownership guidelines at the discretion of the Committee. The size of an
individual stock option award is based primarily upon the individual executive's
responsibilities and position within the Company. The Committee also considers
each executive's current individual performance, potential for promotion and
impact on Company performance and, beginning in 1997, attainment of stock
ownership guidelines. Stock option awards are intended to reflect the median
level of such awards for comparable positions at peer companies.
The Company has no policy regarding the timing and frequency of stock option
awards, although such awards generally have been made on an annual basis to the
Company's executive officers and on some occasions upon the hiring of a new
executive. In 1997, the Committee made an award of stock options to certain key
executives of the Company, including each of the named executive officers. The
Committee did not determine the size of such awards by reference to the amount
or value of stock options held by an individual executive officer at the time of
the award. These options were granted at the fair market value of the Company's
stock on the date of grant and will vest over a three-year period.
In 1997, Mr. Burns was granted options to purchase 125,000 shares. This award
was set at the median level for stock options awarded to chief executives of
peer companies.
17
<PAGE> 22
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Committee has reviewed the Company's executive compensation program in light
of Section 162(m) of the Internal Revenue Code as it pertains to the
disallowance of deductions for compensation in excess of $1 million to certain
executive officers. The Company's 1995 Stock Incentive Plan does meet the
requirements for Section 162(m) and accordingly, stock options awarded to the
Company's executive officers in 1997 are eligible for the "performance-based"
compensation exception. In 1997, the annual incentive compensation program was
based only on financial performance. For 1997, only the Chief Executive Officer
received compensation in excess of $1 million as defined by Section 162(m). The
Company has decided not to submit the Annual Incentive Compensation Plan to the
Shareholders for 162(m) approval at the Annual Meeting. The Committee believes
that preserving its flexibility is in the best interest of the Company and its
Shareholders.
Alva O. Way [Chairman], Edward T. Foote II, Lynn M. Martin and Paul J. Rizzo
18
<PAGE> 23
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the annual and long-term compensation which the
Company paid to, or deferred for, those persons who were as of December 31, 1997
(a) the chief executive officer and (b) each of the other four most highly
compensated executive officers of the Company (collectively, the "named
executive officers") for services rendered in 1997, 1996 and 1995.
SUMMARY COMPENSATION
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- ---------------------
AWARDS
---------------------
SECURITIES UNDERLYING
OTHER ANNUAL OPTIONS/LIMITED
SALARY BONUS COMPENSATION(1) SARs
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#)
--------------------------- ---- ------ ----- --------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
M. Anthony Burns Chairman of the 1997 725,000 735,101 75,481 250,000
Board, President 1996 725,000 0 4,490 100,000
and Chief Executive 1995 725,000 320,000 54,267 90,000
Officer
Dwight D. Denny Executive Vice 1997 330,000 273,565 2,994 68,000
President -- 1996 330,000 0 2,994 40,000
Development 1995 330,000 137,000 2,994 20,000
James B. Griffin President -- 1997 334,445 300,000 2,994 59,100
Ryder Transportation 1996 300,000 0 3,873 30,000
Services 1995 223,077 130,000 0 30,000
Edwin A. Huston Senior Executive Vice 1997 460,000 381,333 2,994 58,600
President -- Finance 1996 460,000 0 2,994 73,300
and Chief Financial 1995 460,000 202,500 2,994 28,000
Officer
Thomas E. McKinnon Executive Vice 1997 325,000 290,000 2,994 53,850
President -- Human 1996 325,000 0 2,994 51,600
Resources and 1995 179,653 150,000 1,665 52,000
Corporate Services
<CAPTION>
ALL OTHER
COMPENSATION(2)
NAME AND PRINCIPAL POSITION ($)
--------------------------- ---------------
<S> <C>
M. Anthony Burns 94,659
28,035
36,091
Dwight D. Denny 53,236
16,455
18,855
James B. Griffin 27,596
36,932
12,911
Edwin A. Huston 31,982
26,124
30,300
Thomas E. McKinnon 49,975
9,566
31,194
</TABLE>
- ---------------
(1) This column represents amounts reimbursed for the payment of income taxes on
certain perquisites provided to these executive officers. Other perquisites
and personal benefits furnished to the named executive officers, other than
Mr. Burns in 1995 and 1997, do not meet the disclosure thresholds
established under SEC regulations and are not included in this column. Mr.
Burns did not meet the disclosure thresholds established under the SEC
regulations in 1996. Of the 1997 and 1995 amounts shown for Mr. Burns,
$47,333 and $24,337, respectively, represent the incremental cost to the
Company for his personal use of the Company aircraft. The balance of the
1997 and 1995 amounts shown for Mr. Burns includes a Company provided car
(in 1995) or car allowance (in 1997), a tax planning allowance and other
perquisites.
(2) This column is composed of: (a) contributions to the 401(k) Plan in the
amounts of $2,400, $2,250 and $2,250 for Mr. Burns, Mr. Denny, Mr. Griffin
and Mr. Huston for 1997, 1996 and 1995, respectively; $2,400, $0 and $0 for
Mr. McKinnon for 1997, 1996 and 1995, respectively; (b) contributions to the
Deferred Compensation Plan for Mr. Burns in the amounts of $5,438, $13,425
and $21,525 for 1997, 1996 and 1995, respectively; for Mr. Denny in the
amounts of $2,138, $4,755 and $7,425 for 1997, 1996 and 1995, respectively;
for Mr. Griffin in the amounts of $0, $3,906 and $5,290 for 1997, 1996 and
1995, respectively; for Mr. Huston in the amounts of $3,450, $7,688 and
$11,925 for 1997, 1996 and 1995, respectively; for Mr. McKinnon in the
amount of $0 for 1997, 1996 and 1995; (c) dollar value of premiums for
compensatory split-dollar insurance payments for Mr. Burns in the amounts of
$78,683, $427 and $383 for 1997, 1996 and 1995, respectively; for Mr. Denny
in the amounts of $42,551, $125 and $114 for 1997, 1996 and 1995,
respectively; for Mr. Griffin in the amounts of $20,946, $47 and $42 for
1997, 1996 and 1995, respectively; for Mr. Huston in the amounts of $15,298,
$547 and $486 for 1997, 1996 and 1995, respectively; for Mr. McKinnon in the
amounts of $41,894, $0 and $0 in 1997, 1996 and 1995, respectively; (d)
premiums paid under the Supplemental Retiree Life Insurance Plan for Mr.
Burns in the amounts of $0, $3,795 and $3,795 for 1997, 1996 and 1995,
respectively; for Mr. Denny in the amounts of $0, $3,459 and $3,459 for
1997, 1996 and 1995, respectively; for Mr. Griffin in the amounts of $0,
$1,665 and $1,665 for 1997, 1996 and 1995, respectively; for Mr. Huston in
the amounts of $0, $4,805 and $4,805 for 1997, 1996 and 1995, respectively;
for Mr. McKinnon in the amounts of $0, $4,111 and $4,111 for 1997, 1996 and
1995, respectively; (e) premiums paid under the Supplemental Long-Term
Disability Insurance Plan for Mr. Burns in the amount of $8,138 for 1997,
1996 and 1995; for Mr. Denny in the amounts of $6,147, $5,866 and $5,607 for
1997, 1996 and 1995, respectively; for Mr. Griffin in the amounts of $4,250,
$4,064 and $3,664 for 1997, 1996 and 1995; respectively; for Mr. Huston in
the amount of $10,834 for 1997, 1996 and 1995, for Mr. McKinnon in the
amounts of $5,681, $5,455 and $0 for 1997, 1996 and 1995, respectively; and
(f) relocation expenses paid for Mr. Griffin in the amount of $25,000 in
1996 and for Mr. McKinnon in the amount of $27,083 in 1995.
SEVERANCE AGREEMENTS
The Company has entered into severance agreements with each executive officer,
including the named executive officers, and other key employees of the Company
and its subsidiaries, which provide that if the Company terminates the
employment of an executive for reasons other than death, disability or cause,
or, if within the three-year period commencing with a change of control of the
Company (as defined in the 1995 Stock Incentive Plan), the executive terminates
employment with the Company for good reason, the Company will provide the
executive with a multiple of
19
<PAGE> 24
salary and bonus ranging from a maximum of three times salary and three times
bonus for the highest level executive to a minimum of .5 times salary and, for
each year of service, one month bonus (subject to a maximum of 12 months bonus)
for lower level executives, as well as various benefits and perquisites, net of
excise taxes. In the event of a termination of employment and, if applicable, a
change of control of the Company, which triggers the provisions of a severance
agreement, Mr. Burns would be entitled to three times salary and three times
bonus, Messrs. Denny, Griffin and Huston would be entitled to three times salary
and two times bonus and Mr. McKinnon would be entitled to two times salary and
two times bonus.
OPTION GRANTS
The following table provides information regarding the grant of stock options to
the named executive officers in fiscal year 1997. In addition, in accordance
with SEC regulations, hypothetical gains of 5% and 10% required by the SEC along
with a third column representing a 0% gain (listed in the table under "Potential
Realizable Value at Assumed Annual Rates of Stock Price Appreciation for
Option/Limited SAR Term") are shown for these stock options. These hypothetical
gains are based on assumed rates of annual compound stock price appreciation of
0%, 5% and 10% from the date the stock options were granted over the full option
term of ten (10) years.
OPTION/LIMITED SAR GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE(1) AT
NUMBER(2) OF OPTIONS/LIMITED ASSUMED ANNUAL RATES OF
SECURITIES SARs GRANTED STOCK PRICE APPRECIATION FOR
UNDERLYING TO EMPLOYEES IN EXERCISE OPTION/LIMITED SAR TERM
OPTIONS/LIMITED FISCAL YEAR PRICE --------------------------------
NAME SARs GRANTED 1997 PER SHARE(3) EXPIRATION DATE(4) 0% 5% 10%
---- --------------- --------------- ------------ ------------------ ---- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
M. Anthony Burns..... 125,000 9.0% $31.500 February 20, 2007 $0 $2,476,273 $6,275,361
125,000 9.0 36.063 September 30, 2007 0 2,834,939 7,184,292
Dwight D. Denny...... 22,000 1.6 31.500 February 20, 2007 0 435,824 1,104,464
46,000 3.3 36.063 September 30, 2007 0 1,043,258 2,643,820
James B. Griffin..... 20,100 1.4 31.500 February 20, 2007 0 398,185 1,009,078
39,000 2.8 36.063 September 30, 2007 0 884,501 2,241,499
Edwin A. Huston...... 24,600 1.8 31.500 February 20, 2007 0 487,330 1,234,991
34,000 2.4 36.063 September 30, 2007 0 771,103 1,954,127
Thomas E. McKinnon... 18,100 1.3 31.500 February 20, 2007 0 358,564 908,672
35,750 2.6 36.063 September 30, 2007 0 810,793 2,054,708
</TABLE>
- ---------------
(1)If the 5% or 10% annual compound stock price appreciation shown in the table
were to occur, the price of the stock for the February 1997 grant would be
$51.31 or $81.70, respectively, on February 20, 2007, and the September 1997
grant would be $58.74 or $93.54, respectively, on September 30, 2007. The
appreciation in the market value of the Company's Common Stock from the date
of the grant would be $1,459,856,316 and $3,699,562,531, respectively, for
the February 1997 grant and $1,671,303,759 and $4,235,411,866, respectively,
for the September 1997 grant. The appreciation during this period realized by
the five named executive officers from these stock options would be .28%
(February 1997) and .38% (September 1997), of the gain to all Shareholders
under these two cases. The use of the 5% and 10% rates as required by the SEC
is not intended by the Company to forecast possible future appreciation of
the Company's Common Stock.
(2)Stock options generally vest in annual installments over three to five years.
The stock option grant expiring on September 30, 2007 included Limited SARs
equal to the number of Shares subject to such stock option. The numbers given
reflect an option with a tandem Limited SAR as a single unit.
(3)Represents fair market value as of date of grant.
(4)Ten (10) years from date of grant.
20
<PAGE> 25
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table provides information, with respect to the named executive
officers, regarding the exercise of options during fiscal year 1997 and
unexercised options held as of the end of fiscal year 1997.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997 AND FISCAL YEAR-END 1997 OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/LIMITED SARs IN-THE-MONEY OPTIONS AT
AT FISCAL YEAR-END 1997 FISCAL YEAR-END 1997(1)
SHARES ACQUIRED VALUE ---------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
M. Anthony Burns........ 133,936 $1,828,092 636,232 347,667 $6,168,556 $892,303
Dwight D. Denny......... 19,697 374,197 128,250 156,934 1,124,960 704,875
James B. Griffin........ 0 0 80,680 145,080 564,142 705,565
Edwin A. Huston......... 162,409 1,776,392 106,039 108,861 742,223 407,207
Thomas E. McKinnon...... 0 0 67,092 90,358 469,881 221,865
</TABLE>
- ---------------
(1)Amounts reflecting gains on outstanding stock options based on a fair market
value of $33.0313 for the Common Stock, as determined by using the average of
the high and low price on December 31, 1997. As no change in control of the
Company has occurred, the tandem Limited SARs had no calculable value at such
date.
PENSION BENEFITS
The Company covers substantially all regular full-time employees who are not
covered by plans administered by labor unions or plans sponsored by a subsidiary
or division of the Company under the Ryder System, Inc. Retirement Plan (the
"Retirement Plan"). Benefits payable under the Retirement Plan are based on an
employee's career earnings with the Company and its subsidiaries. At normal
retirement age of 65, a participant is entitled to a monthly pension benefit
payable for life. The annual pension benefit, when paid in the form of a life
annuity with no survivor's benefits, is generally equal to the sum of 1.45% of
the first $15,600 of compensation and bonus received, plus 1.85% of the portion
of such compensation and bonus in excess of $15,600 during each such year while
a Retirement Plan member. Accrued benefits under the Retirement Plan have been
improved from time to time.
Retirement Plan benefits vest at the earlier of the completion of five (5) years
of credited service or upon reaching age 65, provided, however, that in the
event of a change of control of the Company, all participants will be fully
vested and the term "accrued benefit" will include the value of early retirement
benefits for any participant age 45 or above or with 10 or more years of
service. These benefits are not subject to any reduction for Social Security
benefits or other offset amounts. An employee's pension benefits may be paid in
certain alternative forms having actuarially equivalent values.
The maximum annual benefit under a qualified pension plan is currently $130,000
beginning at the Social Security retirement age (currently age 65). The maximum
compensation and bonus that may be taken into account in determining annual
retirement accruals is currently $160,000. The Company maintains a
non-qualified, unfunded benefit plan, called the Benefit Restoration Plan (the
"Restoration Plan"), which covers those participants of the Retirement Plan
whose benefits are reduced by the Internal Revenue Code or other United States
laws. A participant in the Restoration Plan is entitled to a benefit equaling
the difference between the amount of benefits the participant is entitled to
without reduction and the amount of benefits the participant is entitled to
after the reductions.
21
<PAGE> 26
The table below sets forth annual pension benefit projections assuming each
named executive officer remains continuously employed by the Company at current
compensation levels until retirement at the normal retirement date.
ESTIMATED ANNUAL BENEFITS AT RETIREMENT(1)
(IN THE FORM OF A SINGLE LIFE ANNUITY)
<TABLE>
<S> <C>
M. Anthony Burns........................................... $518,130
Edwin A. Huston............................................ $278,142
Dwight D. Denny............................................ $218,135
James B. Griffin........................................... $214,836
Thomas E. McKinnon......................................... $154,216(2)
</TABLE>
In addition to the Retirement Plan, the Company maintains the Split Dollar Life
Insurance Plan for the benefit of each named executive officer and certain other
key executives. This Plan provides participants with additional life insurance.
The Company pays all costs equal to the premiums on the life insurance acquired
prior to retirement. The participant owns the policy but must assign a portion
of the policy's Cash Surrender Value and death benefits to the Company. In the
event of death prior to normal retirement, the participant's beneficiary will
receive three times the participant's annual base salary offset by the
Company-wide group term life insurance policy. In the event a participant ceases
to be employed by the Company prior to the participant's normal retirement date,
the participant has the right to purchase the policy from the Company for an
amount equal to the premiums the Company has paid on the policy. Assuming normal
retirement dates, the Company will be repaid, from the cash surrender value of
the policy, an amount equal to the aggregate net premiums paid on the policy or
its collateral interest in the policy. The participant will have a projected
post-retirement life insurance coverage equal to 50% of the life insurance
coverage immediately prior to retirement.
- ---------------
(1)These amounts include benefits under the Retirement Plan and the Restoration
Plan combined.
(2)This amount includes $75,424 from a supplemental executive retirement plan
benefit agreement between Mr. McKinnon and the Company.
22
<PAGE> 27
STOCK PERFORMANCE
COMPARISON OF 5 YEAR CUMULATIVE RETURN
AMONG RYDER SYSTEM, INC., S&P 500 INDEX & DOW JONES TRANSPORTATION 20 INDEX(1)
<TABLE>
<CAPTION>
Dow Jones
Measurement Period Transportation 20
(Fiscal Year Covered) Ryder System, Inc. S&P 500 Index Index
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 115.42 110.06 123.07
1994 98.16 111.51 102.94
1995 110.72 153.46 140.27
1996 125.93 187.24 160.10
1997 148.57 250.96 237.07
</TABLE>
- ---------------
(1)Assumes for comparison that the value of the Company's Common Stock and of
each index was $100 on December 31, 1992, and that all dividends, including
the Company's distribution of Aviall, Inc. common stock in December 1993,
were reinvested. Past performance is not necessarily an indicator of future
results.
COST OF SOLICITATION
The cost of solicitation of proxies, including expenses in connection with the
preparation and mailing of this Proxy Statement, will be borne by the Company.
The Company has retained D. F. King & Co., Inc. to aid in the solicitation of
proxies. For their services, D. F. King & Co., Inc. will receive a fee estimated
at $20,000 plus reimbursement of reasonable out-of-pocket expenses. The Company
does not otherwise expect to pay any compensation for the solicitation of
proxies, but will reimburse brokers and nominees for their reasonable expenses
for sending proxy material to principals and obtaining their proxies. In
addition to solicitation by mail, directors, officers and employees of the
Company may solicit proxies personally or by telephone or other means of
communication.
23
<PAGE> 28
SUBMISSION OF SHAREHOLDER PROPOSALS FOR
THE 1999 ANNUAL MEETING
Pursuant to SEC regulations, in order to be included in the Company's Proxy
Statement for the 1999 Annual Meeting, Shareholder proposals must be received at
the principal office of the Company, 3600 N.W. 82nd Avenue, Miami, Florida,
33166, Attention: Secretary, no later than November 24, 1998, as well as meet
all other SEC requirements. In addition, the Company's By-Laws provide that any
Shareholder who desires either to bring a Shareholder proposal before an annual
meeting or to present a nomination for director at an annual meeting must give
advance notice to the Company regarding the proposal or nominee. The By-Laws
require that written notice be delivered to the Secretary of the Company not
less than 60 days prior to the date of the annual meeting at which the proposal
or nomination is to be presented and contain certain information regarding the
Shareholder desiring to present a proposal or make a nomination, as the case may
be. A copy of the By-Laws is available upon request from the Secretary of the
Company.
RYDER SYSTEM, INC.
/s/ Vicki A. O'Meara
Vicki A. O'Meara
Executive Vice President,
General Counsel and Secretary
March 23, 1998
Miami, Florida
24
<PAGE> 29
APPENDIX A
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
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
A-1
<PAGE> 30
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.
(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 "Employee" shall mean a full-time salaried employee of RSI or
any Subsidiary (which term shall include salaried officers).
(j) 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.
(k) 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.
(l) 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.
(m) The term "Limited SAR" shall mean a Limited Stock Appreciation Right
granted by the Committee pursuant to Section 9 of this Plan.
(n) The term "Non-employee Director" shall mean any person who qualifies as
a non-employee director as defined in Rule 16b-3, as promulgated under the
1934 Act, or any successor definition.
(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.
A-2
<PAGE> 31
(r) The term "Performance Goals" shall have the meaning set forth in
Section 10(c) of this Plan.
(s) The term "Performance Period" shall have the meaning set forth in
Section 10(d) of this Plan.
(t) The term "Performance Units" shall mean Performance Units granted by
the Committee pursuant to Section 10 of this Plan.
(u) The term "Plan" shall mean the Ryder System, Inc. 1995 Stock Incentive
Plan as the same shall be amended.
(v) The term "Price" shall mean, upon the occurrence of a Change of
Control, the excess of the highest of:
(i) the highest closing price of the Common Stock reported by the
composite transaction reporting system for securities listed on the New
York Stock Exchange within the sixty (60) days preceding the date of
exercise;
(ii) the highest price per share of Common Stock included in a filing
made by any Person 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.
(w) The term "Restricted Period" shall have the meaning set forth in
Section 11(a) of this Plan.
(x) The term "RSI" shall mean Ryder System, Inc.
(y) The term "Restricted Stock Rights" shall mean a Restricted Stock Right
granted by the Committee pursuant to Section 11 of this Plan.
(z) 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.
(aa) The term "SAR" shall mean a Stock Appreciation Right granted by the
Committee pursuant to the provisions of Section 8 of this Plan.
(bb) 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.
(cc) 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.
(dd) The term "Stock Option" shall mean any stock option granted under this
Plan.
(ee) 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.
(ff) 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.
(gg) The term "Year" shall mean a calendar year.
A-3
<PAGE> 32
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 two or more members of the Board of
Directors, each of whom shall be a Non-employee Director. 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 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.
A-4
<PAGE> 33
In the case of Stock Options, the aggregate Fair Market Value (determined
as of the date of grant) of Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by an Employee during any
Year under this Plan or any other plan of the Company shall not exceed
$100,000. To the extent, if any, that the Fair Market Value of such Common
Stock with respect to which Incentive Stock Options are exercisable exceeds
$100,000, such Incentive Stock Options shall be treated as separate
Non-qualified Stock Options. For purposes of the two immediately preceding
sentences of this subparagraph (a), Stock Options shall be taken into
account in the order in which they were granted.
(b) Unless the Committee shall determine otherwise, each Stock Option may
be exercised only if the Grantee has been continuously employed by RSI or
any Subsidiary for a period of at least one (1) year commencing on the date
the Stock Option is granted; provided, however, that this provision shall
not apply in the event of a Change of Control.
(c) Each Stock Option shall be for such term (but, in no event for greater
than ten years) and shall be exercisable in such installments as shall be
determined by the Committee at the time of grant of the Stock Option.
The Committee may, at any time, provide for the acceleration of
installments or any part thereof.
(d) The price per Share at which Shares may be purchased upon the exercise
of a Stock Option shall be determined by the Committee on the grant of the
Stock Option, but such price shall not be less than one hundred percent
(100%) of the Fair Market Value on the date of grant of the Stock Option.
If a Grantee owns (or is deemed to own under applicable provisions of the
Code and rules and regulations promulgated thereunder) more than ten
percent (10%) of the combined voting power of all classes of the stock of
the Company and a Stock Option granted to such Grantee is intended to
qualify as an Incentive Stock Option, the Incentive Stock Option price
shall be no less than one hundred and ten percent (110%) of the Fair Market
Value of the Common Stock on the date the Incentive Stock Option is granted
and the term of such Incentive Stock Option shall be no more than five
years.
(e) Except as provided in Paragraphs (h) and (l) of this Section 7, no
Stock Option may be exercised unless the Grantee, at the time of exercise,
is an Employee and has continuously been an Employee of RSI or any
Subsidiary since the grant of such Stock Option. A Grantee shall not be
deemed to have terminated his period of continuous employ with RSI or any
Subsidiary if he leaves the employ of RSI or any Subsidiary for immediate
reemployment with RSI or any Subsidiary.
(f) To exercise a Stock Option, the Grantee shall (i) give written notice
to the Company in form satisfactory to the Committee indicating the number
of Shares which he elects to purchase, (ii) deliver to the Company payment
of the full purchase price of the Shares being purchased (A) in cash or a
certified or bank cashier's check payable to the order of the Company, or
(B) with the approval of the Committee, in Shares of the Common Stock
having a Fair Market Value on the date of exercise equal to the purchase
price, or a combination of the foregoing having an aggregate Fair Market
Value equal to such purchase price, and (iii) deliver to the Secretary of
the Company such written representations, warranties and covenants as the
Company may require under Section 16(a) of this Plan.
(g) A Grantee of any Stock Option shall not have any rights as a
shareholder until the close of business on the date on which the Stock
Option has been exercised.
(h) Notwithstanding any other provision of this Plan, unless otherwise
determined by the Committee prior to a Change of Control, in the event of a
Change of Control, each Stock Option not previously exercised or expired
under the terms of this Plan shall become immediately exercisable in full
and shall remain exercisable to the full extent of the Shares available
thereunder, regardless of any installment provisions applicable thereto,
for the remainder of its term, unless Section 14(a) of this Plan applies or
the Grantee has been terminated for cause, in which case the Stock Options
shall automatically terminate as of the Incumbent Board's determination
pursuant to Section 14(a) or the Grantee's Termination Date, as
appropriate.
(i) If the Committee so determines prior to or during the thirty (30) day
period following the occurrence of a Change of Control, Grantees of Stock
Options not otherwise exercised or expired under the terms of this Plan as
to which no SARs or Limited SARs are then exercisable may, in lieu of
exercising, require RSI to purchase for
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<PAGE> 34
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).
(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 this Section 7 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 this Section 7 not be necessary to
comply with the requirements of the Rule, or should any additional
provisions be necessary for this Section 7 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 22(e)(3) of the Code). Incentive Stock Options
not exercised within such three (3) month period shall be treated as
Non-qualified Stock Options.
(ii) In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of death, any Stock Option shall, to the extent it
was exercisable on the Termination Date, continue to be exercisable by
such Grantee's legal representatives, heirs or legatees for the term of
such Stock Option.
(iii) Except as otherwise provided in subparagraph (i) or (ii) above, in
the event that a Grantee ceases to be employed by RSI or any Subsidiary
for any reason other than termination for cause, any Stock Option shall,
to the extent it was exercisable on the Termination Date, continue to be
exercisable for a period of three (3) months commencing on the
Termination Date and shall terminate at the expiration of such period;
provided, however, that in the event of the death of the Grantee during
such three (3) month period, such Stock Option shall, to the extent it
was exercisable on the Termination Date, be exercisable by the Grantee's
personal representatives, heirs or legatees for a period of one (1) year
commencing on the date of the Grantee's death and shall terminate at the
expiration of such period.
(m) Except as otherwise provided in Section 7(l), a Stock Option shall
automatically terminate as of the Termination Date, provided that if a
Grantee's employment is interrupted by reason of Disability or a leave of
absence (as determined by the Committee) the Committee may permit the
exercise of some or all of the Stock Options granted on such terms and for
such period of time as it shall determine.
8. STOCK APPRECIATION RIGHTS
(a) The Committee shall have authority in its discretion to grant a SAR to
any Grantee of a Stock Option with respect to all or some of the Shares
covered by such Stock Option. Each SAR shall be on such terms and
conditions not inconsistent with this Plan as the Committee may determine
and shall be evidenced by a SAR Agreement setting forth such terms and
conditions executed by the Company and the holder of the SAR. A SAR may be
granted either at the time of grant of a Stock Option or at any time
thereafter during its term. A SAR may be granted to a Grantee irrespective
of whether such Grantee has a Limited SAR. Each SAR shall be
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<PAGE> 35
exercisable only if and to the extent that the related Stock Option is
exercisable. 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) 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.
(e) 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.
(f) 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.
(g) 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.
Each Limited SAR shall be exercisable only if and to the extent that the
related Option is exercisable. 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
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<PAGE> 36
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 Stock Option is exercisable. Upon the exercise of a Limited SAR,
the holder thereof shall receive an amount in cash equal to the Spread.
(e) Notwithstanding any other provision of this Plan, no SAR or Performance
Unit may be exercised with respect to any Stock Option at a time when any
Limited SAR with respect to such Stock Option held by the Grantee of such
SAR or Performance Unit may be exercised.
(f) The Company intends that this Section 9 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision
of this Section 9 not be necessary to comply with the requirements of the
Rule, or should any additional provisions be necessary for this Section 9
to comply with the requirements of the Rule, the Committee may amend this
Plan or any Award agreement to add to or modify the provisions thereof
accordingly.
(g) To exercise a Limited SAR, the holder shall give written notice to the
Company in form satisfactory to the Committee specifying the number of
Shares with respect to which he is exercising the Limited SAR.
(h) The exercise of a Limited SAR shall reduce on a one for one basis the
number of Shares subject to the related Stock Option.
10. PERFORMANCE UNITS
(a) In conjunction with the granting of Stock Options under this Plan, the
Committee may grant Performance Units relating to such Stock Options;
provided, however, that in the case of Incentive Stock Options, the
Committee may grant Performance Units only if and to the extent that the
grant of such Performance Units is consistent with the treatment of the
Stock Option as an Incentive Stock Option. Each grant of Performance Units
shall cover such number of Shares and shall be on such other terms and
conditions not inconsistent with this Plan as the Committee may determine
and shall be evidenced by a Performance Unit Agreement setting forth such
terms and conditions executed by the Company and the Grantee of the
Performance Units. The number of Performance Units granted shall be equal
to a specified number of Shares subject to the related Stock Options. The
Committee shall value such Units to the extent that Performance Goals are
achieved; provided, however, that in no event shall the value per
Performance Unit exceed one hundred and fifty percent (150%) of the
purchase price per Share at which the related Stock Option is exercisable.
(b) The Committee shall have full and final authority to establish
Performance Goals for each Performance Period on the basis of such
criteria, and the attainment of such objectives, as the Committee may from
time to time determine. In setting Performance Goals, the Committee may
take into consideration such matters which it deems relevant and such
financial and other criteria including but not limited to projected
cumulative compounded rate of growth in earnings per Share and average
return on equity. During any Performance Period, the Committee shall have
the authority to adjust Performance Goals for the Performance Period as it
deems equitable in recognition of extraordinary or nonrecurring events
experienced by the Company during the Performance Period including, but not
limited to, changes in applicable accounting rules or principles or changes
in the Company's methods of accounting during the Performance Period or
significant changes in tax laws or regulations which affect the financial
results of the Company.
(c) The term "Performance Goals" as used in this Section 10 shall mean the
performance objectives established by the Committee for the Company for a
Performance Period for the purpose of determining if, as well as the extent
to which, a Performance Unit shall be earned.
(d) The term "Performance Period" as used in this Section 10 shall mean the
period of time selected by the Committee (which period shall be not more
than five nor less than three years) commencing on January 1 of
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<PAGE> 37
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.
(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
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<PAGE> 38
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 this Plan or any Award
granted under this Plan as a result of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other change in the corporate
structure, adjustments may be made by the Committee, as it may deem appropriate,
in the aggregate number and kind of Shares subject to this Plan or to any
outstanding Award, and in the terms and provisions of this Plan and any Awards
granted hereunder, in order to reflect, on an equitable basis, any such change
in the Shares contemplated by this Section 12. Any adjustment made by the
Committee pursuant to this Section 12 shall be conclusive and binding upon the
Grantee, the Company and any other related person.
13. SUBSTITUTE OPTIONS
Incentive and/or Non-qualified Stock Options may be granted under this Plan from
time to time in substitution for either incentive or non-qualified stock options
or both held by employees of other corporations who are about to become
employees of the Company as the result of a merger, consolidation or
reorganization of the employing corporation with the Company, or the acquisition
by the Company of the assets of the employing corporation, or the acquisition by
the Company of stock of the employing corporation as the result of which it
becomes a Subsidiary of the Company. The terms and conditions of the Stock
Options so granted may vary from the terms and conditions set forth in this Plan
to such extent as the Committee at the time of grant may deem appropriate to
conform, in whole or in part, to the provisions of the stock options in
substitution for which they are granted, but, in the event that the option for
which a substitute Stock Option is being granted is an incentive stock option,
no variation shall adversely affect the status of any substitute Stock Option as
an incentive stock option under the Code.
14. MISCELLANEOUS PROVISIONS
(a) Notwithstanding any other provision of this Plan, no Stock Option, SAR,
Limited SAR or Restricted Stock Right granted hereunder may be exercised
nor shall any payment in respect of any Performance Unit granted hereunder
be made and all rights of the Grantee thereof, or of the Grantee's legal
representatives, heirs or legatees, shall be forfeited if, prior to the
time of such exercise or payment, the Committee (or in the event of a
Change of Control, the Incumbent Board) determines that the Grantee has (i)
used for profit or disclosed confidential information or trade secrets of
the Company to unauthorized persons, or (ii) breached any contract with, or
violated any legal obligation to, the Company, or (iii) engaged in any
other activity which would constitute grounds for termination for cause of
the Grantee by the Company. The Committee (or the Incumbent Board) shall
give a Grantee written notice of such determination prior to making any
such forfeiture. The Committee (or the Incumbent Board) may waive the
conditions of this Paragraph in full or in part if, in its sole judgment,
such waiver will have no substantial adverse effect upon the Company. The
determination of the Committee (or the Incumbent Board) as to the
occurrence of any of the events specified above and to the forfeiture, if
any, shall be conclusive and binding upon the Grantee, the Company and any
other related person.
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<PAGE> 39
(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.
(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
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<PAGE> 40
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 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.
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<PAGE> 41
APPENDIX B
PROXY
RYDER SYSTEM, INC.
ANNUAL MEETING-MAY 1, 1998
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints M. Anthony Burns, Edwin A.
Huston and Vicki A. O'Meara, and each of them, as true and lawful agents and
proxies with full power of substitution in each, to represent the undersigned
and to vote, as designated below, all the shares of common stock of RYDER
SYSTEM, INC., held of record by the undersigned on March 5, 1998, at the Annual
Meeting of Shareholders to be held at the Miami Airport Hilton and Towers, 5101
Blue Lagoon Drive, Miami, Florida, on Friday, May 1, 1998, and at any
adjournments thereof, on all matters to come before the meeting.
<TABLE>
<CAPTION>
<S> <C>
Election of Directors. Nominees: COMMENTS:(change of address)
Vernon E. Jordan, Jr., Paul J. Rizzo, Christina A. ----------------------------------------------------------------------
Varncy and Alva O. Way for a term of office expiring ----------------------------------------------------------------------
at the 2001 Annual Meeting, and David I. Fuente for ----------------------------------------------------------------------
a term of office expiring at the 1999 Annual Meeting. (If you have written in the above space, please mark the corresponding
box on the reverse of this card)
</TABLE>
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. However, please sign the card in
any event since the Proxy Committee cannot vote your shares unless you sign and
return this card.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
DETACH HERE
[X] Please mark
votes as in
this example.
This proxy when property executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR election of directors and
FOR proposals 2 and 3.
DIRECTORS RECOMMENDED A VOTE "FOR"
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election 2. Ratification of an Amendment to the
of Directors [ ] [ ] Ryder System, Inc., 1995 Stock [ ] [ ] [ ]
(see reverse). Incentive Plan.
3. Ratification of KPMG Peat Marwick [ ] [ ] [ ]
LLP as auditors:
- ----------------------------------------------------------
For, except vote withheld from the nominee(s) listed above
Mark here for Change of Address Comments and Note On Reverse Side [ ]
In their discretion said proxies may vote for a new nominee of
management if any nominee has become unavailable, and any other
matters properly coming before the meeting all as act forth in the
Notice of Annual Meeting and Proxy Statement.
Please sign exactly as named appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
Signature: Date: Signature: Date:
-------------------------- --------------------- -------------------------- ----------------------------
</TABLE>
