Exhibit 10.3
PERFORMANCE-BASED CASH AWARD
ISSUED UNDER
RYDER SYSTEM, INC. 2005 EQUITY COMPENSATION PLAN
2009 TERMS AND CONDITIONS
The following terms and
conditions apply to the 2009 performance-based cash awards (the
“PBCAs”) granted by Ryder System, Inc. (the
“Company”) under the Ryder System, Inc. 2005 Equity
Compensation Plan (the “Plan”), as specified in the
Performance-Based Cash Award Notification (the
“Notification”), to which these terms and conditions
are appended. Certain terms of the PBCAs are set forth in the
Notification. The Compensation Committee of the Company’s
Board of Directors (the “Committee”) shall administer
the PBCAs in accordance with the Plan. Capitalized terms used
herein and not defined shall have the meaning ascribed to such
terms in the Plan or in the Notification.
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1.
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General
.
Each PBCA represents the right to receive a fixed dollar amount on
a future date based upon the attainment of certain financial
performance goals, on the terms and conditions set forth herein, in
the Notification and in the Plan, the applicable terms, conditions
and other provisions of which are incorporated by reference herein
(collectively, the “Award Documents”). A copy of the
Plan and the documents that constitute the “Prospectus”
for the Plan under the Securities Act of 1933, have been delivered
to the Participant prior to or along with delivery of the
Notification. In the event there is an express conflict between the
provisions of the Plan and those set forth in any other Award
Document, the terms and conditions of the Plan shall govern. It is
intended that the PBCAs qualify as “performance-based
compensation” for purposes of Section 162(m) of the Internal
Revenue Code of 1986, as amended (the “Code”),
including any successor provisions and regulations.
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The
terms and conditions contained herein may be amended by the
Committee as permitted by the Plan; none of the terms and
conditions of the PBCAs may be amended or waived without the prior
approval of the Committee. Any amendment or waiver not approved by
the Committee will be void and have no force or effect. Any
employee or officer of the Company who authorizes any such
amendment or waiver without the prior approval of the Committee
will be subject to disciplinary action up to and including
forfeiture of his or her PBCAs and/or termination of employment
(unless otherwise prohibited by law). All decisions and
determination made by the Committee relating to the PBCAs shall be
final and binding on the Participant, his or her beneficiaries and
any other person having or claiming an interest under the
Plan.
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2.
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Financial
Performance Goals; Performance Period . The
PBCAs will vest only if, for the three-year period specified in the
Notification (the “Performance Period”), the
Company’s Total Shareholder Return (“Company
TSR”) is equal to or greater than the Total Shareholder
Return of the bottom 33 rd percentile of companies in
the S&P 500 Composite Index for the Performance Period as
published by Standard & Poor’s as the “S&P 500
TR”, or, if no such publication is available, based on a
comparable publication selected by the Committee (the
“Performance Goal”). For purposes of the preceding
sentence, Company TSR will be deemed to have met or exceeded the
Total Shareholder Return of the bottom 33 rd percentile
of the S&P 500 Composite Index (“TR”) if the
Average TSR Differential (as defined below) is greater than 0. The
Average TSR Differential means (a) the sum of the TSR
Differential (as defined below) for each monthly period beginning
January 1, 2009 and ending December 31, 2011 divided by
(b) 36. The TSR Differential for any given monthly period
means the absolute difference between (x) the Company TSR from
January 1, 2009 through the last business day of the month
minus (y) the TR for the bottom 33 rd percentile of
the companies in the S&P Composite Index for the same period,
(expressed as a positive or negative number, as the case may be).
As used herein, the term “Total Shareholder Return”
shall mean the percentage change in the stock price or index, as
applicable, assuming reinvestment of dividends on the ex-dividend
date.
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3.
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Payment
of Cash .
Subject to this Section 3 and Section 4 below, if the
Performance Goal is attained and the Committee otherwise approves
the payment of the PBCAs, the Participant will be entitled to
receive payment of the PBCAs, provided the Participant was
continuously employed by the Company or one of its Subsidiaries
from the date of grant of the PBCA to last day of the Performance
Period. For purposes of these terms and conditions, the Participant
shall not be deemed to have terminated his or her employment with
the Company and its Subsidiaries if he or she is immediately
thereafter employed by the Company or another Subsidiary. The
Participant will receive the cash (net of any applicable taxes)
after the issuance has been approved by the Committee or the Board,
as the case may be, provided that in no event shall the payment be
made after March 15, 2012, unless administratively
impracticable to do so.
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4.
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Termination
of PBCAs; Forfeiture. The
PBCA will terminate upon the termination of the Participant’s
employment with the Company and its Subsidiaries during the
Performance Period as described below.
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(a)
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Resignation
by the Participant or Termination by the Company or a
Subsidiary : All
outstanding PBCAs will be cancelled and the Participant will not
have any right to delivery of cash in respect of PBCAs. If the
Participant’s employment is terminated by the Company or a
Subsidiary for Cause (as defined in Section 11), then the
Company shall have the right to reclaim and receive from the
Participant cash delivered to the Participant upon the vesting of
any PBCAs within the one year period before the date of the
Participant’s termination of employment.
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(b)
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Termination
by reason of Death, Disability or Retirement
: If the death, Disability (as defined in Section 11) or
Retirement (as defined in Section 11) occurs after the end of
the Performance Period, the Participant (or his or her Beneficiary,
in the event of death) shall be entitled to receive the cash
amounts due to him or her under the Award. If the death, Disability
or Retirement occurs during the Performance Period and if based on
actual performance, the PBCA are earned and approved by the
Committee or Board, as the case may be, , the Participant (or his
or her Beneficiary, in the event of death) will be entitled to
receive a pro-rata cash payment based on the number of days during
the Performance Period that the Participant is considered to be an
active employee as determined by the Company, payable at the time
and manner specified in Section 3 above.
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(c)
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Proscribed
Activity : If,
during the Proscribed Period (as defined in Section 11) but
prior to a Change of Control (as defined in Section 11 below),
the Participant engages in a Proscribed Activity, then the Company
shall have the right to reclaim and receive from the Participant
all cash delivered to the Participant in respect of any PBCAs
during the one year period immediately prior to, or at any time
following, the date of the Participant’s termination of
employment.
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5.
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Change
of Control .
Notwithstanding
anything contained herein to the contrary, unless otherwise
determined by the Committee prior to a Change of Control which
occurs during the Performance Period, all outstanding PBCAs will
become fully payable immediately prior to any such Change of
Control and shall be paid within 30 days thereafter. To the
extent (i) Participant’s employment was terminated by
the Company other than for Cause or Disability within the
12 months prior to the date on which the Change of Control
occurred, (ii) during such 12 month period the
Participant did not engage in a Proscribed Activity, and
(iii) the Committee determines, in its sole and absolute
discretion, that the decision related to such termination was made
in contemplation of the Change of Control, then, upon the Change of
Control, the Participant will become entitled to a cash payment
equal to the product of: the Fair Market Value of a Share on the
date of the Change of Control a
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