EXHIBIT 10.5(b)
RYDER SYSTEM, INC.
BOARD OF DIRECTORS STOCK AWARD PLAN
TABLE OF CONTENTS
PAGE
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1. Purpose of this Plan......................................... 1
2. Effective Date and Term of this Plan ........................ 1
3. Administration of this Plan.................................. 1
4. Common Stock Subject to this Plan............................ 1
5. Eligible Persons............................................. 2
6. Awards ...................................................... 2
7. Units........................................................ 2
8. Payment Elections for Units.................................. 3
9. Stock Options................................................ 4
10. Exercise of Options.......................................... 4
11. Cessation of Service on the Board ........................... 4
12. Change of Control ........................................... 5
13. Amendments to this Plan...................................... 6
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RYDER SYSTEM, INC.
BOARD OF DIRECTORS STOCK AWARD PLAN
1. Purpose of this Plan
The purpose of the Ryder System, Inc. Board of Directors Stock Award Plan (this
"Plan") is to attract and retain persons of outstanding competence to serve as
directors of Ryder System, Inc. (the "Company") and to provide a more direct
link between directors' compensation and shareholder value by increasing the
proportion of directors' compensation which is stock based.
2. Effective Date and Term of this Plan
This Plan shall become effective on May 2, 1997, subject to the approval of the
shareholders of the Company. Unless previously terminated in accordance with
Section 13 of this Plan, this Plan shall terminate on the close of business on
May 1, 2007, after which no awards shall be granted under this Plan. Such
termination shall not affect any awards granted prior to such termination.
3. Administration of this Plan
This Plan shall be administered by the Compensation Committee (the "Committee")
of the Board of Directors (the "Board") of the Company. A majority of the
Committee shall constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in writing
by all members of the Committee without a meeting, shall be the acts of the
Committee. The Committee shall have plenary authority, subject to the express
provisions of this Plan, to (i) interpret this Plan; (ii) prescribe, amend and
rescind rules and regulations relating to this Plan; and (iii) make all other
determinations deemed necessary or advisable for the administration of this
Plan.
4. Common Stock Subject to this Plan
The shares of common stock of the Company, par value $.50 per share ("Common
Stock"), to be issued in connection with an award under this Plan may be made
available from authorized but unissued Common Stock, or Common Stock purchased
on the open market or otherwise. Subject to the provisions of the next
succeeding paragraph, the maximum aggregate number of shares of Common Stock for
which awards may be granted under this Plan shall be 200,000 shares. If a Unit
(as defined in Section 7) awarded under this Plan fails to become vested, any
share allocable to that Unit shall become available for grant to other
Participants (as defined in Section 5). If an Option (as defined in Section 9)
granted under this Plan expires or is terminated
without having been exercised in full, the unpurchased or forfeited shares or
rights to receive shares shall become available for grant to other Participants.
If there shall be any change in the shares of Common Stock subject to this Plan
or any Unit or Option awarded under this Plan as a result of a 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 Unit or Option, and in the
terms and provisions of this Plan and any Unit or Option granted hereunder, in
order to reflect, on an equitable basis, any such change in the shares
contemplated by this paragraph. Any adjustment made by the Committee pursuant to
this paragraph shall be conclusive and binding upon the Participant, the Company
and any other related person.
5. Eligible Persons
Participation in this Plan shall be limited to those members of the Board who,
at the time an award is made hereunder, are not employees of the Company or any
of its subsidiaries or affiliates within the meaning of the Employee Retirement
Income Security Act of 1974, as amended (a "Participant"). A member of the Board
who is an employee and who retires or resigns from employment with the Company
or any of its subsidiaries or affiliates, but remains a member of the Board,
shall become a Participant at the time of such termination of employment.
6. Awards
The Committee may grant the following types of awards under this Plan: Units
pursuant to Section 7 hereof and Options pursuant to Section 9 hereof.
7. Units
If this Plan is approved by the shareholders of the Company, effective as of May
2, 1997, the Company will discontinue its current retirement plan for the Board.
The retirement compensation which would have otherwise been payable at
retirement to those individuals who are Participants on May 2, 1997, shall be
converted to a present value dollar amount, based on actuarial assumptions
satisfactory to the Committee. Such dollar amount shall be converted into a
number of restricted stock units ("Units") by dividing such dollar amount by the
average of the Fair Market Values of the Common Stock on the last business day
of each of the three (3) months preceding May 2, 1997. "Fair Market Value" as
used in this Plan shall mean the average of the high and low price of a share of
Common Stock as reported by the composite transaction reporting system for
securities listed on the New York Stock Exchange on the applicable date.
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The Company shall maintain an individual book account under this Plan for each
Participant awarded Units pursuant to this Section 7. Such account shall
initially be credited with the number of Units awarded to each Participant and
shall continue to be expressed in Units until such Participant has retired from
the Board. Any dividends or other distributions paid on the Common Stock shall
be credited to each Participant's account in respect of each Unit and shall be
deemed to be reinvested in additional Units based on the Fair Market Value of a
share of Common Stock on the dividend payment or distribution date. In addition,
the number of Units allocated to each Participant's account shall be adjusted to
reflect stock dividends, stock splits and similar transactions affecting the
value of Common Stock as described more fully in Section 4 hereof. The Units in
each Participant's account shall vest on the date of such Participant's
retirement from the Board and shall be paid to such Participant, in an
equivalent number of shares of Common Stock, in accordance with such
Participant's payment election described below in Section 8. Prior to vesting,
no Units in a Participant's account shall be assignable or transferable by such
Participant and no right or interest of any Participant shall be subject to any
lien, obligation or liability.
8. Payment Elections for Units
In connection with the commencement of participation in this Plan, each
Participant eligible to receive an award of Units hereunder shall make an
election (the "Payment Election") concerning the timing of distribution of the
amounts credited to such Participant's account. Any payment from such account
shall commence following such Participant's retirement from the Board, but in no
event prior to one year after receipt by the Committee of such Participant's
initial Payment Election, except for Participants retiring from the Board in
calendar year 1997 who shall receive payment in a lump sum as soon as
practicable following their retirement. The forms of payment available to all
other Participants shall be a lump sum payment or annual installments over a
period not to exceed ten (10) years from the earliest date the Participant may
commence receiving payments hereunder. Subsequent Payment Elections which shall
supersede the Initial Payment Election may be made by a Participant, but any
subsequent Payment Election shall not be valid unless it is made at least one
year prior to the date that the commencement of payments to the Participant
hereunder is otherwise due to commence.
In the event of a Participant's death before the balance from such Participant's
account is fully paid, payment of the balance of such Participant's account
shall be made to such Participant's estate in accordance with the manner
selected by the Participant prior to death; provided, however, the Committee
may, upon consideration of the application of the duly appointed administrator
or executor of such Participant's estate, direct that the balance of such
Participant's account be paid to the estate in a single payment.
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9. Stock Options
On the date of each annual meeting of the Company during the term of this Plan,
each Participant shall be granted a non-qualified stock option (an "Option") to
purchase 1,000 shares of Common Stock, provided the Participant will continue to
serve as a member of the Board following the meeting. Individuals who are
elected to the Board during the period of time between annual meetings, and who
would otherwise qualify as a Participant, shall receive an Option to purchase a
pro rata amount of Common Stock. The purchase price for each share of Common
Stock issuable under an Option shall not be less than 100 percent (100%) of the
Fair Market Value of a share of Common Stock on the date of grant. Each 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 Option. The Committee may, at any time, provide for the
acceleration of installments or any part thereof. No Option granted under this
Plan shall be assignable or transferable by a Participant except by will or the
laws of descent and distribution. A Participant shall forfeit any Option
assigned or transferred, voluntarily or involuntarily, other than as permitted
under this Section 9. Each Option shall be exercised during the Participant's
lifetime only by the Participant or the Participant's guardian or legal
representative.
10. Exercise of Options
Subject to the provisions of this Section 10, each Option may be exercised in
whole or, from time to time, in part with respect to the number of then
exercisable shares in any sequence desired by the Participant. To exercise an
Option, the Participant shall (i) give written notice to the Company in form
satisfactory to the Committee indicating the number of shares of Common Stock
which the Participant elects to purchase, (ii) deliver to the Company payment of
the full purchase price of the shares being purchased (A) in cash or a certified
or bank cashier's check payable to the order of the Company, or (B) with the
approval of the Committee, in shares of Common Stock having a Fair Market Value
on the date of exercise equal to the purchase price, or (C) a combination of the
foregoing having an aggregate Fair Market Value equal to such purchase price,
and (iii) deliver to the Secretary of the Company such written representations,
warranties and covenants as the Company may require to permit this Plan and any
Options or shares of Common Stock granted or issued hereunder to comply with any
applicable blue sky or other federal or state securities laws. A Participant
shall not have any rights as a shareholder with respect to shares subject to an
Option until the close of business on the date on which the Option has been
exercised.
11. Cessation of Service on the Board
If a Participant's service on the Board ceases for any reason, other than as
specified in the subsequent paragraphs of this Section 11, any Option held by
such Participant shall terminate three (3) months after the date of such
cessation of service; provided, however, that in the event
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of the death of the Participant during such three-month period, such Option
shall, to the extent it was exercisable on the date of cessation of service, be
exercisable by the Participant's legal representatives, heirs or legatees for a
period of one (1) year commencing on the date of the Participant's death and
shall terminate at the expiration of such period.
If the cessation of service on the Board is due to the Participant's death, any
Option shall, to the extent it was exercisable on the date of death, continue to
be exercisable by such Participant's legal representatives, heirs or legatees
for the term of such Option.
If the cessation of service is due to the Participant's retirement or
disability, any Option not previously exercised or expired shall continue to
vest and be exercisable during the three (3) year period following the date of
cessation of service, and to the extent it is exercisable at the expiration of
such three (3) year period, it shall continue to be exercisable by such
Participant or such Participant's legal representatives, heirs or legatees for
the term of such Option.
12. Change of Control
Notwithstanding any other provision of this Plan, in the event of a Change of
Control (as defined below), the Units in each Participant's account shall become
immediately vested and shall be paid in full in a lump sum of equivalent shares
of Common Stock to each Participant as soon as practicable following the Change
of Control. In addition, in the event of a Change of Control, each Option not
previously exercised or expired under the terms of this Plan shall become
immediately exercisable in full and shall remain exercisable to the full extent
of the shares of Common Stock available thereunder, regardless of any
installment provisions applicable thereto, for the remainder of its term.
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 the Company's
outstanding voting securities ordinarily having the right to vote for the
election of directors of the Company; provided, however, that for purposes of
this subparagraph (i), the following acquisitions shall not constitute a Change
of Control: (A) any acquisition by any employee benefit plan or plans (or
related trust) of the Company and its subsidiaries and affiliates or (B) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subparagraph (iii) of this Section 12; or
(ii) the individuals who, as of August 18, 1995, constituted the Board
(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
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whose initial assumption of office is in connection with an actual or threatened
election contest, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the 1934 Act) shall be, for purposes of this Plan, considered
as though such person were a member of the Incumbent Board; or
(iii) there is a reorganization, merger or consolidation of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Company's outstanding Common
Stock and outstanding voting securities ordinarily having the right to vote for
the election of directors of the Company immediately prior to such Business
Combination beneficially own, directly or indirectly, more than fifty percent
(50%) of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities ordinarily
having the right to vote for the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Company
or all or substantially all of the Company's assets either directly or through
one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Company's
outstanding Common Stock and outstanding voting securities ordinarily having the
right to vote for the election of directors of the Company, as the case may be,
(B) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan or plans (or related trust) of the
Company or such corporation resulting from such Business Combination and their
subsidiaries and affiliates) beneficially owns, directly or indirectly, 20% or
more of the combined voting power of the then outstanding voting securities of
the corporation resulting from such Business Combination and (C) at least
two-thirds (2/3) of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(iv) there is a liquidation or dissolution of the Company approved by the
shareholders; or
(v) there is a sale of all or substantially all of the assets of the
Company.
13. Amendments to this Plan
The Committee may at any time (i) terminate this Plan or (ii) modify or amend
this Plan in any respect, except that, to the extent required to maintain the
qualification of this Plan under Section 16 of the 1934 Act, or as otherwise
required to comply with applicable law or the regulations of any stock exchange
on which the Common Stock is listed, the Committee may not, without the
shareholders' approval, (A) materially increase the benefits accruing to
Participants under this Plan; (B) materially increase the number of securities
which may be issued under this Plan; or (C) materially modify the requirements
as to eligibility for participation in this Plan. Should this Plan require
amendment to maintain full legal compliance because of rules, regulations,
opinions or
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statutes issued by the Securities and Exchange Commission, the U.S. Department
of the Treasury or any other governmental or governing body, then the Committee
or the Board may take whatever action, including but not limited to amending or
modifying this Plan, is necessary to maintain such compliance. The termination
or any modification or amendment of this Plan shall not, without the consent of
any Participant involved, adversely affect rights under a Unit or an Option
previously awarded to such Participant.
Transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of this Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Committee. Moreover, in the event this Plan does not include a provision
required by Rule 16b-3 to be stated herein, such provision (other than one
relating to eligibility requirements, or the price and amount of Options) shall
be deemed automatically to be incorporated by reference into this Plan.
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