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EXHIBIT 10.10(b)
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RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 1
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Supersedes 1994 ACD President Incentive Compensation Plan
INTRODUCTION
The following material explains the operation and administration of the 1995
Incentive Plan for the President, Automotive Carrier Division (ACD). The plan
is intended to serve as a single, comprehensive source of information that will
explain your bonus for achieving various levels of performance. Questions
should be addressed to your supervisor.
BONUS OPPORTUNITY
The following table summarizes the maximum bonus opportunity:
MAXIMUM BONUS OPPORTUNITY AS A PERCENTAGE OF BASE SALARY
RSI ACD INDIVIDUAL TOTAL BONUS OPPORTUNITY
PERFORMANCE PERFORMANCE PERFORMANCE
60% 20% 20% 100%
BONUS PERFORMANCE MEASURES
For 1995, your bonus payout will be based on Ryder System, Inc. (RSI or the
Company) performance, ACD performance, and your performance as an individual.
RSI performance is measured based on RSI Net Earnings After Tax (NAT) Return on
Equity (ROE) performance and RSI Net Earnings Before Tax (NBT) performance for
1995.
ACD performance is measured based on ACD NBT performance for 1995.
Individual performance is determined based on a year-end assessment of your
performance against objectives that you agreed to with management at the start
of the year. Given their importance, the objectives should be in writing and
may be updated during the year to adjust for priorities that may have changed.
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RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 2
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DEFINITION OF MEASURES
Performance levels attained in the following areas determine the extent to
which participants of this bonus plan are eligible for bonus awards.
- RSI PERFORMANCE -- RSI performance payout is based on a grid which
combines RSI ROE performance and RSI NBT performance.
RSI ROE performance for the bonus year is calculated by
dividing RSI NAT by RSI average equity.
-- RSI NAT is defined as RSI's consolidated Net Earnings
After Tax from continuing operations for the bonus
year, as certified to the Board of Directors and
shareholders of RSI by the Company's independent
auditors, including appropriate accruals for all
incentive awards estimated to be payable for that
bonus year.
-- RSI average equity is defined as the average of the
four quarters' average equity. A quarter's average
equity is defined as the equity, as shown on RSI's
balance sheet at the beginning of each quarter plus
the total equity as shown on RSI's balance sheet at
the end of each quarter, divided by two.
RSI NBT is defined as RSI's consolidated Net Earnings Before Tax
as certified to the Board of Directors and shareholders of RSI by the
Company's independent auditors, net of a provision for the total of
all incentive awards, for the bonus year.
- ACD PERFORMANCE -- ACD performance payout is based on ACD
NBT performance.
ACD NBT performance is defined as ACD's consolidated Net
Earnings Before Tax as verified by the Senior Vice President and
Controller, RSI, net of a provision for the total of all incentive
awards, for the bonus year.
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RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 3
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- INDIVIDUAL PERFORMANCE -- Individual performance is defined as
each participant's performance against job requirements and
objectives (MBOs), as agreed upon between the individual and
his/her management, at the beginning of the bonus year. If
necessary, goals and objectives may be revised during the
bonus year to reflect changing business priorities.
Individual performance awards are separate from payments based
upon financial measurements and may be paid, in part or in
whole, based on the Company's performance and/or ability to
pay.
Bonus awards are subject to the recommendation of the
Administrator of the plan and approval by the Board of
Directors of RSI. (See "Bonus Payment")
NOTE: The effects of any unusual and material accounting
transactions may be excluded from bonus calculations with the
approval of the Board of Directors of RSI.
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RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 4
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BONUS CALCULATION
Bonus awards are based on the following grids.
1) RSI PERFORMANCE - ROE/NBT
RSI performance payout is based on a grid consisting of two
performance variables: 1995 RSI NAT ROE and 1995 RSI NBT. The
potential bonus payout percent is determined by locating the point on
the grid where the variables intersect. Actual performance may fall
between the points specifically displayed on the grid, and the grid
allows for interpolation between NBT points as shown. No bonus awards
will be paid for performance below threshold. The potential bonus
payout is expressed as a percentage of Maximum RSI Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL RSI PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM RSI PERFORMANCE BONUS OPPORTUNITY
1995 RSI NBT ($MM)
THRESHOLD MAXIMUM
260.5 276 289 306 313 327
ROE % OF OPPORTUNITY
< 14.5 30 40 50 55 75 80
14.5 - 17 40 50 60 65 85 90
> 17 50 60 65 75 90 100
2) ACD PERFORMANCE - NBT
ACD performance payout is based on 1995 ACD NBT. The bonus payout
percent is determined by locating the point on the grid which
corresponds to the variable. Actual performance may fall between the
points specifically displayed on the grid, and the grid allows for
interpolation between NBT points as shown. No bonus awards will be
paid for performance below threshold. The potential bonus payout is
expressed as a percentage of Maximum ACD Performance Bonus
Opportunity, as shown on page 1.
POTENTIAL ACD PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM ACD PERFORMANCE BONUS OPPORTUNITY
1995 ACD NBT ($MM)
THRESHOLD MAXIMUM
46 49 52 56 59 62
% OF OPPORTUNITY
20 40 55 65 80 100
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RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 5
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3) INDIVIDUAL PERFORMANCE
Individual performance payout is based on a grid consisting of
individual performance results versus objectives. The potential bonus
payout percent is determined by awarding a percentage within one of
the grid ranges. The potential bonus payout is expressed as a
percentage of Maximum Individual Performance Bonus Opportunity, as
shown on page 1.
POTENTIAL INDIVIDUAL PERFORMANCE BONUS PAYOUT
AS A PERCENTAGE OF MAXIMUM INDIVIDUAL PERFORMANCE BONUS OPPORTUNITY
FAIR - SOME CONSISTENT SIGNIFICANTLY
CRITICAL WITH ABOVE
INDIVIDUAL PERFORMANCE SHORTFALLS EXPECTATIONS EXPECTATIONS EXCEPTIONAL
% OF INDIVIDUAL
PERFORMANCE OPPORTUNITY 0-50% 51-70% 71-89% 90-100%
ALL PERFORMANCE GRIDS REPRESENT GUIDELINES ONLY. ACTUAL PAYOUTS MAY BE
PRORATED DOWNWARD AT THE COMPANY'S DISCRETION. ADDITIONAL CRITERIA MAY
ADJUST THE PERFORMANCE PORTION DOWNWARD IF SPECIFIC GOALS ARE NOT ACHIEVED.
THE GRIDS WILL BE REVISED ANNUALLY TO ENSURE CONSISTENCY WITH COMPANY GOALS
AND OBJECTIVES.
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RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 6
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BONUS CALCULATION EXAMPLE
Total bonus would be calculated as follows given the following
information:
Eligible Base Salary $200,000
1995 RSI NAT ROE 15%
1995 RSI NBT $ 313MM
1995 ACD NBT $ 56MM
Individual Performance Significantly Above Expectations
1) RSI Performance
60% Maximum RSI Performance Bonus Opportunity
85% Potential RSI Performance Bonus Payout (from grid)
60% x 85% = 51% of Eligible Base Salary
51% x $200,000 = $102,000
2) ACD Performance
20% Maximum RPTS Performance Bonus Opportunity
65% Potential RPTS Performance Bonus Payout (form grid)
20% x 65% = 13% of Eligible Base Salary
13% x $200,000 = $ 26,000
3) Individual Performance
20% Maximum Individual Performance Bonus Opportunity
75% Potential Individual Performance Bonus Payout (from grid)
20% x 75% = 15% of Eligible Base Salary
15% x $200,000 = $ 30,000
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TOTAL BONUS $158,000
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RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 7
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BASE SALARY CALCULATION
For the purpose of bonus calculations, base salary is defined as the average
annual rate of pay for the calendar year, excluding all other compensation paid
to the employee during the year, e.g. bonus, commissions, employee benefits,
moving expenses, and imputed income from company car, insurance, and amounts
attributable to any of the Company's stock plans.
Average annual rate of pay for a participant whose base salary changes within
the bonus year is calculated as shown below.
BASE SALARY CALCULATION EXAMPLE
Average annual rate of pay would be calculated as follows for
a participant who begins a bonus year with a base salary of
$200,000, then effective June 1 receives an increase to a base
salary of $220,000:
January 1 through May 31 of Bonus Year:
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31 + 28 + 31 + 30 + 31 = 151=.414 x $200,000/yr. = $ 82,800
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365 days 365
June 1 through December 31 of Bonus Year:
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365 - 151 = 214=.586 x $220,000/yr. = $128,920
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365 days 365
AVERAGE ANNUAL RATE OF PAY FOR BONUS YEAR = $211,720
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, Division Presidents and the Senior Vice
President and General Manager Ryder International. This amount will be
prorated based on each individual participant's earned salary (while in the
eligible position) in relation to the sum of the earned salaries of all
participants.
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RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 8
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ADMINISTRATION
The Chairman, President, and Chief Executive Officer of RSI will administer
this Incentive Compensation Plan.
BONUS YEAR
The bonus year is defined as the calendar year in which bonus awards are
earned.
ELIGIBILITY
The President, Automotive Carrier Division, if employed in good standing at the
time bonus payments are made is eligible to participate in this plan. If the
President, Automotive Carrier Division has an agreement which specifically
provides for incentive compensation other than that which is provided in this
plan or is a participant in any other incentive compensation plan of RSI, its
subsidiaries or affiliates, he/she is not eligible to participate in this plan.
Employees who are newly hired, promoted or transferred into or out of eligible
positions and those who move from one eligibility level to another will receive
pro rata bonus awards based on the average annual rate of pay in eligible
positions, provided they are employed in good standing at the time bonus awards
are distributed.
In addition, participants who leave ACD or the Company during the bonus year
under any of the following conditions may be eligible for pro rata bonus
awards:
- retirement under the provisions of one of the Company's
retirement plans or the Social Security Act, or
- disability
Note: The spouse or legal representative of a deceased participant may be
eligible for pro-rata bonus awards as well.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
Notwithstanding anything in this plan to the contrary, in the event of a Change
of Control of the Company (as defined and adopted by the Board of Directors on
August 20, 1993), the funds necessary to pay incentive awards will be placed in
a trust administered by an outside financial institution.
The amount of each participant's incentive award will be determined in
accordance with the provisions of the plan by a "Big 6" accounting firm chosen
by the Company. Participants will receive bonus awards for actual time
employed during the bonus year based upon: a) the greater of actual company
performance or 80% of maximum company performance opportunity plus b) the
greater of actual individual performance or 80% of maximum individual
performance opportunity.
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RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 9
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However, if the Company fails to verify incentive awards through a "Big 6"
accounting firm, participants will receive 100% of their maximum company and
individual performance opportunities based on actual time worked during the
bonus year. The Company will be responsible for all legal fees and expenses
which participants may reasonably incur in enforcing their rights under the
plan in the event of a Change of Control of the Company.
Should a Change of Control occur during 1995, participants will receive
instructions regarding the collection of incentive awards.
BONUS ELIGIBILITY ON TERMINATION
Participants leaving ACD or the Company under any conditions other than those
outlined in the Eligibility or Change of Control sections of this plan are not
eligible for bonus awards for the bonus year in which they leave, nor are they
eligible for awards for the preceding bonus year, if such awards have not yet
been distributed.
BONUS PAYMENT
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the plan, the Compensation Committee of
the Board of Directors or the full Board of Directors of RSI will, in its sole
discretion, determine the participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent
auditor.
BONUS FUNDING
Accruals based on bonus performance measures for the President, ACD are
excluded from funding limitations.
Bonus payout maximums are limited by the lower of the total earned opportunity
provided under the plan or the amount of the accrual. Should the accrual not
provide for bonus allotments under the plan, proration will be affected at the
discretion of the Chairman, President and Chief Executive Officer of RSI.
Unused monies may not be carried forward for subsequent bonus years.
DISCRETIONARY AWARDS
With the approval of the Board of Directors of RSI, the Chairman, President,
and Chief Executive Officer of RSI has the authority to grant discretionary
bonus awards for exemplary performance to non-participants or to enhance the
awards of participants. Discretionary awards are not subject to the funding
limitations of this plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards must be
approved by the Chairman, President and Chief Executive Officer of RSI.
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RYDER
PRESIDENT
AUTOMOTIVE CARRIER DIVISION
1995 INCENTIVE COMPENSATION PLAN PAGE 10
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The total of all discretionary awards for employees under the RSI Headquarters
Executive Management Incentive Compensation Plan, the VLSD field and
headquarters bonus plans, the RSI SEVP Incentive Compensation Plan, the SVP and
General Manager Ryder International Incentive Compensation Plan, the Ryder
International field and bonus plans, the Ryder Services Corporation Incentive
Compensation Plan, and the Division Presidents' bonus plans, including those
granted off-cycle, may not exceed $430,000 per year.
AMENDMENTS
The Board of Directors of RSI reviews RSI's, its subsidiaries' and affiliates'
incentive compensation plans annually to ensure equitability both within the
Company, and in relation to current economic conditions.
THE BOARD OF DIRECTORS RESERVES THE RIGHT TO AMEND, SUSPEND, TERMINATE OR MAKE
EXCEPTIONS TO THIS PLAN AT ANY TIME.