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EXHIBIT 10.11(b) The Ryder System, Inc. 1994 Incentive Compensation
Plan for Senior Vice President and General Manager of
the International Division.
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RYDER
SENIOR VICE PRESIDENT AND GENERAL
MANAGER - INTERNATIONAL
INTERNATIONAL DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 1
Supersedes 1993 Bonus Plan for Chairman, Automotive Carrier Division,
Ryder International
INTRODUCTION
The following material explains the operation and administration of the 1994
Incentive Plan for the Senior Vice President and General Manager -
International. The plan is intended to serve as a single, comprehensive source
of information that will explain your bonus for achieving various levels of
performance. Questions should be addressed to your supervisor.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity for each
participating management level:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
RSI International International Individual Total Bonus
Performance Operations Development Performance Opportunity *
Performance
20% 20% 40% 20% 100%*
* See Special ROE Award section
BONUS PERFORMANCE MEASURES
For 1994, your bonus payout will be based on RSI performance, International
Operations, International Development Objectives, and your performance as an
individual.
RSI performance is measured based on a combination of RSI Net Earnings After
Tax (NAT) Return on Assets (ROA) performance and RSI Net Earnings Before Tax
(NBT) performance for 1994.
International Operations is measured based on a NBT performance of the
International Operations for 1994.
International Development Objectives - To be Determined
Individual performance is determined based on a year-end assessment of your
performance against objectives that you and your supervisor agreed to at the
start of the year. Given their importance, the objectives should be in writing
and updated during the year to adjust for priorities that may have changed.
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RYDER
SENIOR VICE PRESIDENT AND GENERAL
MANAGER - INTERNATIONAL
INTERNATIONAL DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 2
DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
- RSI PERFORMANCE -- RSI performance payout is based on a grid
which combines RSI ROA performance and RSI NBT performance.
RSI ROA performance for the bonus year is calculated by
dividing RSI NAT by RSI average assets.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax for the bonus year, as certified to the
Board of Directors and shareholders of RSI by the
Company's independent auditors, including appropriate
accruals for all incentive awards estimated to be
payable for that bonus year.
-- RSI average assets is defined as the average of the
four quarters' average assets. A quarter's average
assets is defined as the assets, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total assets as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT performance is defined as RSI's consolidated Net
Earnings Before Tax as certified to the Board of Directors and
shareholders of RSI by the Company's independent auditors, net
of a provision for the total of all incentive awards, for the
bonus year.
- INTERNATIONAL OPERATIONS PERFORMANCE -- based on a grid
which contains one performance variable; International
Operations NBT for 1994.
- INTERNATIONAL DEVELOPMENT OBJECTIVES -
1. New opportunity evaluation process
2. Germany
- Market profile/survey
- 2 new markets/locations
- 4 new lease sales reps
3. Mexico
- Establish operations
- 1 consulting account
- 1 beachhead account
4. Poland
- Establish operations
- Increase revenue by 50%
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RYDER
SENIOR VICE PRESIDENT AND GENERAL
MANAGER - INTERNATIONAL
INTERNATIONAL DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 3
- INDIVIDUAL PERFORMANCE -- Individual performance is defined as
each participant's performance against job requirements and
objectives (MBOs), as agreed upon between the individual and
his/her management, at the beginning of the bonus year. If
necessary, goals and objectives may be revised during the
bonus year to reflect changing business priorities.
Individual performance awards are separate from payments based
upon ROA and NBT performance, and may be paid, in part or in
whole, based on RSI's performance and/or ability to pay. Such
payments are subject to the recommendation of the
Administrator of the plan and approval by the Board of
Directors of RSI.
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with the
approval of the Board of Directors of RSI.
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RYDER
SENIOR VICE PRESIDENT AND GENERAL
MANAGER - INTERNATIONAL
INTERNATIONAL DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 4
BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE
RSI performance payout is based on a grid consisting of two
performance variables: 1994 Actual RSI NBT and 1994 RSI NAT ROA. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
1994 ACTUAL NBT ($MM)
THRESHOLD MAXIMUM
209.8 218.3 232.0 245.8 251.0 256.0 265.0
ROA (%) % OF COMPANY OPPORTUNITY
less than 2.5 15 30 40 50 60 70 80
2.5 - 3.0 25 40 50 60 75 85 95
greater than 3+ 35 50 60 70 80 90 100
2) INTERNATIONAL OPERATIONS PERFORMANCE
International Operations performance payout is based on a grid
consisting of one performance variable: 1994 International
Operations NBT. The potential bonus payout percent is
determined by locating the point on the grid under the actual
International Operations NBT . Actual performance may fall
between the points specifically displayed on the grid, and the
grid allows for interpolation between NBT points as shown. No
bonus awards will be paid for performance below threshold.
The potential bonus payout is expressed as a percentage of
Maximum International Operations Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL INTERNATIONAL OPERATIONS PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INTERNATIONAL OPERATIONS PERFORMANCE BONUS
OPPORTUNITY
1994 ACTUAL NBT ($MM)
MAX
1.8 1.9 2.0 2.5 3.0 3.5
% OF COMPANY OPPORTUNITY
0 30 60 70 80 100
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RYDER
SENIOR VICE PRESIDENT AND GENERAL
MANAGER - INTERNATIONAL
INTERNATIONAL DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 5
3) INTERNATIONAL DEVELOPMENT OBJECTIVES
1. New opportunity evaluation process
2. Germany
- Market profile/survey
- 2 new markets/locations
- 4 new lease sales reps
3. Mexico
- Establish operations
- 1 consulting account
- 1 beachhead account
4. Poland
- Establish operations
- Increase revenue by 50%
4) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
FAIR - SOME
CRITICAL CONSISTENT WITH SIGNIFICANTLY
SHORTFALLS EXPECTATIONS ABOVE
INDIVIDUAL PERFORMANCE EXPECTATIONS EXCEPTIONAL
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-29% 30-59% 60-89% 90-100%
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL
PAYOUTS MAY BE PRORATED DOWNWARD AT THE COMPANY'S
DISCRETION. ADDITIONAL CRITERIA MAY ALSO ADJUST THE
PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT
ACHIEVED. THE GRIDS WILL BE REVISED ANNUALLY TO ENSURE
CONSISTENCY WITH COMPANY GOALS AND OBJECTIVES.
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RYDER
SENIOR VICE PRESIDENT AND GENERAL
MANAGER - INTERNATIONAL
INTERNATIONAL DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 6
BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows given the following
information:
Eligible Base Salary $170,000
1994 RSI NBT $251.0MM
1994 RSI NAT ROA 2.7%
1994 INTERNATIONAL OPERATIONS NBT $ 2.0MM
1994 INTERNATIONAL DEVELOPMENT OBJ. 2.7%
Individual Performance Significantly Above Expectations
1) RSI Performance
20% Maximum RSI Performance Bonus Opportunity
70% Potential RSI Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $170,000 = $ 25,500
2) International Operations
20% Maximum International Operations Performance Bonus Opportunity
60% Potential International Oper. Performance Bonus Payout (from grid)
20% x 60% = 12% of Eligible Base Salary
12% x $170,000 = $ 20,400
3) International Development Objectives
40% Maximum RSI Performance Above Plan Bonus Opportunity
25% Potential RSI Performance Above Plan Bonus Payout (from grid)
40% x 25% = 10% of Eligible Base Salary
10% x $170,000 = $ 17,000
4) Individual Performance
20% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $170,000 = $ 25,500
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TOTAL BONUS $ 88,400
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RYDER
SENIOR VICE PRESIDENT AND GENERAL
MANAGER - INTERNATIONAL
INTERNATIONAL DIVISION BONUS PLAN SUMMARY
1994 INCENTIVE COMPENSATION PLAN PAGE 7
BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, employee benefits, moving
expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for a
participant who begins a bonus year with a base salary of $170,000,
then effective June 1 receives an increase to a base salary of
$190,000:
January 1 thru May 31 of Bonus Year:
31 + 28 + 31 + 30 + 31 = 151=.414 x $170,000/yr. = $ 70,380
---------------------- ---
365 days 365
June 1 thru December 31 of Bonus Year:
365 - 151 = 214=.586 x $190,000/yr. = $111,340
--------- ---
365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $181,720
SPECIAL ROE AWARD
One and one-half percent of the RSI NAT amount in excess of that required to
reach 17% Return on Equity (ROE) will be credited to deferred compensation for
elected Officers of the Company and the Division Presidents and Division
General Managers. This amount will be prorated based on each individual
participant's earned salary (while in the eligible position) in relation to the
sum of the earned salaries of all participants.
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RYDER SENIOR VICE PRESIDENT AND
GENERAL MANAGER -
INTERNATIONAL
INTERNATIONAL DIVISION BONUS PLAN ADMINISTRATION
1994 INCENTIVE COMPENSATION PLAN PAGE 1
ADMINISTRATION
The Chairman, President, and Chief Executive Officer of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
REVENUE CRITERIA
The level of an incumbent in a position whose bonus opportunity and bonus base
vary depending on annual revenue, will be determined according to actual 1994
revenue. The revenue criteria are outlined and defined in the footnote on the
participant's applicable Classification Guide contained in the 1994 Manager's
Guide to Salary Administration.
ELIGIBILITY
Employees whose positions are designated on page 1 of the Bonus Plan Summary
and who are employed in good standing at the time bonus payments are made are
eligible to participate in this plan. Individuals who have agreements which
specifically provide for incentive compensation other than that which is
provided in this plan or who are participants in any other incentive
compensation plan of Ryder System, Inc. (RSI or the Company), its subsidiaries
or affiliates are not eligible to participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave the Company during the bonus year under any
of the following conditions may be eligible for pro rata bonus awards:
- retirement under the provisions of one of the Company's
retirement plans or the Social Security Act, or
- disability.
Note: The spouse or legal representative of a deceased participant may be
eligible for pro rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of RSI (as defined and adopted by the Board of Directors on August
20, 1993), the funds necessary to pay incentive awards will be placed in a
trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by RSI. Participants will receive bonus awards for actual time employed during
the bonus year based upon: a) the greater of actual company performance or 80%
of maximum company performance opportunity plus b) the greater of actual
individual performance or 80% of maximum individual performance opportunity.
However, if RSI fails to verify incentive awards through a "Big 6" accounting
firm, participants will receive 100% of their maximum company and individual
performance opportunities based on actual time worked during the bonus year.
RSI will be responsible for all legal fees and expenses which participants may
reasonably incur in enforcing their rights under the plan in the event of a
Change of Control of RSI.
Should a Change of Control occur during 1994, participants will receive
instructions regarding the collection of incentive awards.
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RYDER SENIOR VICE PRESIDENT AND
GENERAL MANAGER -
INTERNATIONAL
INTERNATIONAL DIVISION BONUS PLAN ADMINISTRATION
1994 INCENTIVE COMPENSATION PLAN PAGE 2
BONUS ELIGIBILITY ON TERMINATION
Participants leaving the Company under any conditions other than those outlined
in the Eligibility or Change of Control sections of this plan are not eligible
for bonus awards for the bonus year in which they leave, nor are they eligible
for awards for the preceding bonus year, if such awards have not yet been
distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the plan, the Compensation Committee of
the Board of Directors or the full Board of Directors of RSI will, in its sole
discretion, determine the participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent
auditor.
BONUS FUNDING
A maximum of 2.5% of consolidated RSI NBT and 10% of Vehicle Leasing & Services
Division (VLSD) NBT may be accrued by RSI and VLSD, respectively, throughout
the bonus year to fund all awards under this bonus plan, the RSI/VLSD
Headquarters Executive Management Incentive Compensation Plan, all VLSD field
bonus plans, the RSI SEVP Incentive Compensation Plan, the Ryder International
Incentive Compensation Plan, and the Ryder Services Corporation Incentive
Compensation Plan as well as any incentive or bonus payments resulting from
employment commitments or agreements. Accruals for the Chairman, President and
Chief Executive Officer of RSI, the ACD President, the President Commercial
Leasing & Services, the President Ryder Dedicated Logistics, the President
Consumer Rental, and all discretionary awards are excluded from this funding
limitation.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan, the amount of the accrual, or the funding limitation.
Should the funding limitation or accrual not provide for bonus allotments under
the plan, proration will be effected at the discretion of the Chairman,
President and Chief Executive Officer of RSI. Unused monies from the fund may
not be carried forward for subsequent bonus years.
DISCRETIONARY AWARDS
With the approval of the Chairman, President and Chief Executive Officer of
RSI, and the Board of Directors, has the authority to grant discretionary bonus
awards for exemplary performance to non-participants or to enhance the awards
of participants. Discretionary awards are not subject to the funding
limitations of this plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards for
officers must be approved by the Chairman, President and Chief Executive
Officer of RSI. Off-cycle discretionary awards for non-officers may be granted
with the approval of the Chairman, President and Cheif Executive Officer of
RSI.
The total of all discretionary awards for employees under this plan, the
RSI/VLSD Headquarters Executive Management Incentive Compensation Plan, all
VLSD field bonus plans, the RSI SEVP Incentive Compensation Plan, the Ryder
International Incentive Compensation Plan, the Division Presidents' Incentive
Compensation Plan and the Ryder Services Corporation Incentive Compensation
Plan, including those granted off-cycle, may not exceed $430,000 per year.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and affiliates'
incentive compensation plans annually to ensure equitability both within the
Company, and in relation to current economic conditions. THE BOARD OF
DIRECTORS RESERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE EXCEPTIONS TO
THIS PLAN AT ANY TIME.