Exhibit 10.7
RYDER SYSTEM,
INC.
DEFERRED COMPENSATION PLAN
This Ryder System, Inc. Deferred
Compensation Plan (the “Plan”) is amended and restated
as of January 1, 2009, unless otherwise provided herein.
Compensation deferred and vested as of December 31, 2004 shall
continue to be governed in accordance with the provisions of the
Plan in effect for the year of deferral. The Plan is established
and maintained by Ryder System, Inc. (“RSI”) solely for
the purpose of providing specified benefits to the members of the
Board of Directors of RSI and a select group of management and
highly compensated employees who contribute materially to the
continued growth, development and future business success of RSI
and its subsidiaries which elect to sponsor this Plan. This Plan
shall be unfunded for tax purposes and for purposes of Title I
of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).
ARTICLE I
DEFINITIONS
Wherever used herein the following terms shall have the meanings
hereinafter set forth:
1.1 “
Accounting Date ” means each business day of the Plan
Year on which the national stock exchanges and the Nasdaq system
are open for trading.
1.2 “
Accounting Period ” means each period beginning on the
day following an Accounting Date and ending on the following
Accounting Date.
1.3 “
Additional Company Allocations ” means the Additional
Company Allocations, if any, credited to the Participant’s
Account in accordance with Section 3.4(iii).
1.4 “
Affiliate ” means any member of a controlled group of
corporations or a group of trades or businesses under common
control of which an entity is a member. For purposes hereof:
(i) a “controlled group of corporations” shall
mean a controlled group of corporations as defined in Section
414(b) of the Code; and (ii) a “group of trades or
businesses under common control” shall mean a group of trades
or businesses under common control as defined in Section 414(c) of
the Code.
1.5 “
Beneficiary ” means the person or persons designated
by a Participant, upon such forms as shall be provided by the
Committee, to receive payments of the vested portion of the
Participant’s Account after the Participant’s death. If
the Participant shall fail to designate a Beneficiary, or if for
any reason such designation shall be ineffective, or if such
Beneficiary shall predecease the Participant or die simultaneously
with him, then the Beneficiary shall be, in the following order of
preference:
(i) the Participant’s
surviving spouse, or
(ii) the Participant’s
estate.
1.6 “
Benefit Restoration Plan ” means the Ryder System
Benefit Restoration Plan effective January 1, 1985, as amended
from time to time.
1.7 “
Board ” means the Board of Directors of the
Company.
1.8 “
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 thirty percent (30%) 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 1.8; or
(ii) the individuals who, as
of January 1, 2007 , constituted the Board (the Board
as of January 1, 2007 shall hereinafter be referred to as the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board, provided that any person becoming
a director subsequent to January 1, 2007 whose election, or
nomination for election, was approved by a vote of the persons
comprising at least a majority 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 (as in effect on
January 23, 2000)) 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 outstanding Company 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
outstanding Company 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, 30% 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 a majority 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.
For purposes of Section 3.6 (i),
if a Change of Control occurs prior to commencement of distribution
of a Participant’s benefits and if a Participant’s
employment is terminated prior to the date on which the Change of
Control occurs, and if it is reasonably demonstrated by the
Participant 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.
Notwithstanding anything in this
Section 1.8 to the contrary, for purposes of the acceleration
of the payment of benefits pursuant to Sections 5.3 and
7.2(iii), a Change of Control shall only be deemed to occur if such
transactions or events would give rise to a “change in the
ownership or effective control” or in the “ownership of
a substantial portion of the assets” of a Participant’s
Employer or other permissible service recipient under
Section 409A of the Code, and the rulings and regulations
issued thereunder.
1.9 “
Code ” means the Internal Revenue Code of 1986, as
amended from time to time, and any regulations relating
thereto.
1.10 “
Committee ” means the Committee appointed by the Board
to administer the Savings Plan in accordance with Article XI
of the Savings Plan or when applicable, the person to whom the
Committee has delegated authority pursuant to Article XI of
the Savings Plan for the matter in question.
1.11 “
Company ” means Ryder System, Inc., a Florida
corporation, or any successor corporation or other entity resulting
from a merger or consolidation into or with the Company or a
transfer or sale of substantially all of the assets of the
Company.
1.12 “
Company 3% Contributions ” means the Company
Contributions, if any, credited to the Participant’s Account
in accordance with Section 3.3.
1.13 “
Company 3% Contributions Account ” means the account
maintained by the Company under the Plan for a Participant that is
credited with the Participant’s Company 3% Contributions and
Savings Plan True-Up Allocations (if any) and any gains or losses
allocable thereto.
1.14 “
Company Discretionary Contributions ” means the
Company Discretionary Contributions, if any, credited to the
Participant’s Account in accordance with Section 3.2 of
the Plan.
1.15 “
Company Discretionary Contributions Account ” means
the account maintained by the Company under the Plan for a
Participant that is credited with the Participant’s Company
Discretionary Contributions, and any gains or losses allocable
thereto.
1.16 “
Company Matching Contributions ” means the Company
Matching Contributions, if any, credited to the Participant’s
Account in accordance with Section 3.4(i) of the Plan.
1.17 “
Company Matching Contributions Account ” means the
account maintained by the Company under the Plan for a Participant
that is credited with the Participant’s Company Matching
Contributions, Additional Company Allocations (if any), and any
gains or losses allocable thereto.
1.18 “
Company Stock ” means the common stock of the Company,
par value $.50, which is readily tradable on an established
securities market.
1.19 “
Compensation ” means (i) in the case of an
Eligible Employee, the sum of the total of all amounts earned by
the Eligible Employee as salary (including commissions) or annual
incentive bonuses, which for the avoidance of doubt shall include
any Savings Plan Tax-Deferred Contributions or other elective
amounts that are not includible in the gross income of the
Participant under Section 125, 132(f)(4), 402(e)(3), 402(h),
or 403(b) of the Code and Tax-Deferred Contributions for the Plan
Year, excluding any other amounts earned by the Participant for the
Plan Year but that are deferred under any other plan or arrangement
maintained by the Employer, or (ii) in the case of a Director,
the Director’s fees including the Director’s annual
cash retainer, committee retainer and per diem meeting fees earned
by the Director.
1.20 “
Compensation Limit Difference ” means the difference
between (a) and (b), where (a) is equal to the sum of: a
Participant’s aggregate compensation for the applicable Plan
Year, calculated pursuant to the terms of the Savings Plan without
giving effect to Section 401(a)(17) of the Code, and a
Participant’s Tax-Deferred Contributions under this Plan for
the applicable Plan Year; and (b) equals the limit set forth
in Section 401(a)(17) of the Code for the applicable Plan
Year.
1.21 “
Director ” means a member of the Board.
1.22 “
Disability ” means the occurrence of any of the
following: (i) a Participant’s inability to engage in
any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months; (ii) a Participant is, by
reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than
3 months under an accident and health plan covering employees
of the Participant’s Employer; or (iii) a determination
by the Social Security Administration that the Participant is
totally disabled. The existence of a Disability shall be determined
in a uniform and non-discriminatory manner by the Committee after
requiring any medical examinations by a physician or reviewing any
medical evidence which the Committee considers necessary.
Notwithstanding the foregoing, Disability shall not be inconsistent
with the definition contained in Section 409A of the Code, and
the regulations issued thereunder.
1.23 “
Eligible Employee ” means any employee who is
(i) employed by an Employer, (ii) designated by the
Committee to be eligible to participate in the Plan, and
(iii) is part of a select group of management or highly
compensated employees within the meaning of Sections 201(2),
301(a)(3) and 401(a)(l) of ERISA, and any regulations relating
thereto. Notwithstanding the foregoing, effective as of
January 1, 2005, employees shall only become Eligible
Employees for purposes of Section 3.1 on the January 1st, or
July 1st next following the date on which the Committee selects the
employee for Plan participation.
1.24 “
Employer ” means (i) the Company and
(ii) any other entity that is an Employer as defined in the
Savings Plan.
1.25 “
Investment Funds ” means those investment options that
shall from time to time be made available as investment options
under the Plan, as determined by the Committee.
1.26 “ Key
Employee ” means a Participant who is deemed to be a
“specified employee” in accordance with the policies
and procedures adopted by his Employer and its Affiliates and shall
generally include any Participant who is an officer of the
Company.
1.27 “
Leave of Absence ” means an Eligible Employee’s
leave of absence from active employment from his Employer because
of military service, illness which does not constitute a
Disability, educational pursuits, services as a juror or
temporarily with a government agency, or any other leave of
absence, if (i) such leave of absence is approved by the
Company or the Participant’s Employer, (ii) upon
termination of any such leave of absence, such Participant promptly
returns or has returned to the employ of his Employer or any of its
Affiliates, without employment (other than military service)
elsewhere in the meantime except with the consent of the Company or
the Participant’s Employer, and (iii) the period of such
leave does not exceed 6 months, or if longer, the period
during which the Participant retains the right to reemployment
under an applicable statute or by contract. The Company or the
Employer shall determine the first and last days of any Leave of
Absence that it approves, provided that, if the Leave of Absence
exceeds 6 months and the Participant does not retain a right to
reemployment under an applicable statute or by contract, a
Separation from Employment will be deemed to occur on the first day
immediately following the 6 month period.
1.28 “
Participant ” means a Director or an Eligible Employee
of the Employer.
1.29 “
Participant’s Account ” means the total amount
credited to the account maintained in the Plan in accordance with
the provisions of the Plan for each Participant, which represents
his total proportionate interest of all accounts under the Plan as
of any Accounting Date, and which consists of his Tax-Deferred
Contributions Account, any Company Discretionary Contributions
Account, any Company 3% Contributions Account, and any Company
Matching Contributions Account.
1.30 “
Plan ” means the Ryder System, Inc. Deferred
Compensation Plan.
1.31 “
Plan Year ” means the calendar year.
1.32 “
Retirement ” means either (i) in the case of an
Eligible Employee, termination of employment from an Employer and
its Affiliates at or after Retirement Age, or (ii) in the case
of a Director, termination of service as a member of the Board at
or after Retirement Age.
1.33 “
Retirement Age ” means (i) in the case of amounts
credited because of services as an Eligible Employee, the date on
which an Eligible Employee has both (a) attained age 55 and
(b) completed at least 10 years of service; or (ii), in
the case of amounts credited because of services a Director, the
date on which the Director has both (a) attained age 65 and
(b) completed at least 10 years of service. In the event
that a Participant’s Account is credited with amounts
attributable to the Participant’s services both as an
Eligible Employee and a Director, Retirement Age shall be defined
pursuant provision (ii) herein. For purposes of this
provision, Service shall mean that period of an Eligible
Employee’s continuous uninterrupted employment with an
Employer and any of its Affiliate, and with any predecessor
businesses of the Employer or any of its Affiliates, conducted as
corporations, partnerships, or proprietorships, from the Eligible
Employee’s last date of hire to the date of termination of
his employment for any reason; provided however, that the
employment of an Eligible Employee, who immediately before his
current employment was employed by a predecessor or acquired
business continuously up to the date of its merger with or
acquisition by the Employer or any of its Affiliates, shall include
only that part of his employment for said business which has
occurred after the date fixed for this purpose by the Company and
provided that the same date is uniformly fixed for this purpose as
to all of the employees of a given predecessor or acquired
business. An Eligible Employee may work simultaneously for more
than one Employer and Affiliate, but the total period of his
employment shall not be increased by reason of such simultaneous
employment.
1.34 “
Savings Plan ” means the Ryder System, Inc. 401(k)
Savings Plan, as restated as of January 1, 2007, as amended
from time to time thereafter, and each successor or replacement
salaried employees cash or deferred arrangement.
1.35 “
Savings Plan Tax-Deferred Contributions ” means the
Tax Deferred Contributions made by the Employer for the benefit of
a Participant under and in accordance with the terms of the Savings
Plan.
1.36 “
Separation from Employment ” means a termination of
the Participant’s employment relationship with his Employer
and its Affiliates due to Retirement, Disability, death, or other
termination of employment (voluntary or involuntary). The fact that
a Participant ceases to elect to have any Tax-Deferred
Contributions credited to his Account under the Plan shall not
constitute a Separation from Employment, and a Participant’s
absence from active employment due to military service or other
Leave of Absence shall not constitute a Separation from Employment.
Notwithstanding the foregoing, a Separation from Employment shall
not be inconsistent with the definition of “separation from
service” as defined by Section 409A of the Code and the
regulations issued thereunder. For the avoidance of doubt, for
purposes of determining whether a Separation from Employment has
occurred under Section 409A of the Code, pursuant to Treas.
Reg. §1.409A-1(h)(3), the Company has elected to use “at
least 80 percent” each place it appears in
Section 1563(a)(1), (2), and (3) and Treas. Reg.
§1.414(c)-2.
1.37 “
Tax-Deferred Contributions ” means the Compensation
reduction contributions credited to the Participant’s Account
under Section 3.1 of the Plan.
1.38 “
Tax-Deferred Contributions Account ” means the account
maintained by the Company under the Plan for a Participant that is
credited with the Participant’s Tax-Deferred Contributions,
and any gains or losses allocable thereto.
ARTICLE II
ELIGIBILITY
2.1
Eligibility . An employee shall be eligible to participate
upon the effective date of his designation by the Committee as an
Eligible Employee, provided that, an Eligible Employee will not be
eligible to make Tax-Deferred Contributions until the January 1 or
July 1 coincident with or immediately following the date as of
which he becomes an Eligible Employee. Each Director shall be
eligible to participate in the Plan each January 1 or July 1
coincident with or immediately following election to the Board.
ARTICLE III
CONTRIBUTIONS AND
VESTING
3.1 Tax-Deferred
Contributions .
(i) Each Participant who is an
Eligible Employee, so long as he remains a Participant, may elect
(via on-line election) to reduce and defer receipt pursuant to this
Plan of his Compensation by an amount equal to a minimum of 1% and
a maximum of 100% of his Compensation after applicable taxes and
deductions. The amount of deferral so elected shall be applied
against and reduce the Participant’s (x) salary
(including commissions), (y) annual incentive bonuses, or
(z) salary (including commissions) and annual incentive
bonuses, earned during the Plan Year as timely elected by the
Participant (via on-line election).
(ii) Each Participant who is a
Director, so long as he remains a Participant, may elect (on a form
furnished by the Committee and in accordance with Committee rules)
to reduce and defer receipt pursuant to this Plan of his
Compensation by an amount equal to a minimum of 1% and a maximum of
100% of his Compensation.
(iii) A Participant’s
election to participate in the Plan shall be effective on a Plan
Year basis and is irrevocable with respect to the applicable Plan
Year. Such election must be made before the beginning of the Plan
Year to which it relates, provided that, with respect to any
Compensation deemed to be “performance-based” under
Section 409A of the Code, if the Participant performs services
continuously from the later of the beginning of the performance
period or the date the performance criteria are established through
the date the election is made and such Compensation is not readily
ascertainable on the date the election is made, such election may
be made by no later than 6 months before the end of the
performance cycle. Notwithstanding the foregoing, during the first
Plan Year in which a Participant is designated as a Participant,
the Participant may make such election during the 30 day
period commencing with his becoming a Participant, provided that
only Compensation earned with respect to services performed
following such election may be deferred by the Participant.
(iv) The election of an
Eligible Employee to enroll in the Plan must be made via on-line
election, and the Employer shall withhold, by payroll deduction,
the Compensation deferred by an Eligible Employee pursuant to this
Section 3.1 from the current Compensation payments of an
Eligible Employee and credit such withheld amount to an Eligible
Employee’s Tax-Deferred Contributions Account under the Plan.
The election of a Director to enroll in the Plan must be made on a
Participant Election and Enrollment Form, and the Employer shall
withhold the Compensation deferred by a Director pursuant to this
Section 3.1 from the current Compensation payments of a
Director and credit such withheld amount to a Director’s
Tax-Deferred Contributions Account under the Plan. In either case,
an enrollment election may not be amended or revoked during the
Plan Year to which it relates.
3.2 Company
Discretionary Contributions .
(i) For Participants who are
Eligible Employees, and specifically excluding Participants who are
Directors, the Employer, in its sole discretion, may elect to
credit an amount determined by the Employer to the Company
Discretionary Contributions Account of each such Participant for
the Plan Year (such amount, a “Company Discretionary
Contribution”).
(ii) Each Company
Discretionary Contribution for each Participant shall be credited
to the Participant’s Account by March 15 subsequent to
the last day of the applicable Plan Year. Each Company
Discretionary
