exv10w3









    Exhibit 10.3



 




    LANDSTAR
    SYSTEM, INC.

    



 




    SUPPLEMENTAL
    EXECUTIVE RETIREMENT PLAN



 




    As
    Amended and Restated Effective January 1, 2010



 



    In recognition of the valuable services provided to Landstar
    System, Inc., and its subsidiaries, by its key employees, the
    Board of Directors adopted this Plan to provide additional
    retirement benefits to those individuals whose benefits under
    the Company’s qualified retirement plan are restricted by
    operation of the provisions of the Internal Revenue Code of
    1986, as amended. The Plan was originally effective
    February 1, 1994 and was amended and restated by the
    Company as of January 1, 1999 and again as of
    January 1, 2008, to bring it into compliance with Code
    Section 409A and the regulations issued thereunder. The
    Company now wishes to amend and restate the Plan effective
    January 1, 2010, to make certain additional changes. The
    Company intends that the Plan shall at all times be maintained
    on an unfunded basis for federal income tax purposes under the
    Code and administered as a non-qualified, “top hat”
    plan exempt from the substantive requirements of the Employee
    Retirement Income Security Act of 1974, as amended
    (“ERISA”). The Plan, as amended, shall provide
    benefits under the terms and conditions hereinafter set forth.
    This Plan also reflects the transfer sponsorship of the Plan
    from Landstar System, Inc. to Landstar System Holdings, Inc.
    effective February 25, 2008.



 



    This January 1, 2010 amendment and restatement shall apply
    to all amounts credited under Section 3.1 on or after
    January 1, 2005, but shall not affect Grandfathered
    Accounts (as defined below), which shall continue to be subject
    to, and governed by, the terms of the Plan as in effect on
    December 31, 2004.



 




    ARTICLE 1

    



 




    DEFINITIONS



 



    1.1 “Accrued Benefit” means the balance of
    a Participant’s Individual Account maintained pursuant to
    Article 3 hereof.



 



    1.2 “Beneficiary” means the person(s)
    designated by a Participant to receive any benefits payable
    under this Plan subsequent to the Participant’s death. In
    the event a Participant has not filed a Beneficiary designation
    with the Employer, the Beneficiary shall be the
    Participant’s surviving spouse or, if there is no surviving
    spouse, the Participant’s estate.



 



    1.3 “Board” means the Board of Directors
    of Landstar System, Inc. Effective February 25, 2008,
    “Board” means the Board of Directors of Landstar
    System Holdings, Inc.



 



    1.4 “Code” means the Internal Revenue Code
    of 1986, as amended.



 



    1.5 “Committee” means the administrative
    committee appointed by the Board to administer the Savings Plan.



 



    1.6 “Company” means Landstar System, Inc,
    a Delaware corporation, and any successor in interest thereto
    that agrees to assume the Plan. Effective February 25,
    2008, “Company” means Landstar System Holdings, Inc.,
    a Delaware corporation, and any successor in interest thereto
    that agrees to assume the Plan.



 



    1.7 “Compensation” means
    “compensation” as defined in the Savings Plan (without
    regard to the limits imposed by Code Section 401(a)(17))
    plus Deferral Contributions hereunder.



 



    1.8 “Deferral Contributions” means a
    Participant’s deferred contributions under Section 3.2
    of the Plan to a maximum of 75% of Compensation minus the amount
    of Savings Plan Deferral Contributions made by that Participant.
    “Savings Plan Deferral Contributions” means the
    deferred contributions under the Savings Plan.



 



    1.9 “Effective Date” means
    February 1, 1994. “Amendment Effective Date”
    means January 1, 2010.














 







    1.10 “Employer” means the Company and each
    subsidiary that adopts the Plan pursuant to the authorization of
    the Board. An Employer, other than the Company, may terminate
    the Plan only as to its employees and a subsidiary’s status
    as an “Employer” may be revoked by the Board in which
    case the Plan shall be deemed terminated only as to such
    subsidiary’s employees.



 



    1.11 “Employee” means any individual
    employed on a regular basis by the Employer in the capacity of
    an officer of the Company or of any other Employer; provided,
    however, that to qualify as an “Employee” for purposes
    of the Plan, the individual must be a member of a group of
    “key management or other highly compensated employees”
    within the meaning of Sections 201, 301 and 401 of the
    Employee Retirement Income Security of 1974, as amended.



 



    1.12 “Grandfathered Account” means that
    portion of an Employee’s Individual Account that was
    credited as of December 31, 2004, and shall include
    earnings credited to such account under the terms of the Plan
    irrespective of when credited. The Grandfathered Account shall
    be calculated in accordance with Code Section 409A. The
    Company shall maintain a separate record of Grandfathered
    Accounts. All Grandfathered Accounts shall be subject to, and
    governed by, the terms of the Plan as in effect on
    December 31, 2004.



 



    1.13 “Individual Account” means the
    account established pursuant to Section 3.1.



 



    1.14 “Matching Contributions” means the
    matching contributions under the Savings Plan.



 



    1.15 “Participant” means any Employee who
    satisfies the eligibility requirements set forth in
    Section 2. In the event of the death or incompetency of a
    Participant, the term shall mean his personal representative or
    guardian.



 



    1.16 “Plan” means the Landstar System,
    Inc. Supplemental Executive Retirement Plan as set forth herein
    and as the same may be amended from time to time.



 



    1.17 “Plan Year” means the calendar year.



 



    1.18 “Savings Plan” means the Landstar
    System, Inc. 401(k) Savings Plan.



 



    1.19 “Termination of Employment” shall
    have the same meaning as “separation from service”
    under Code Section 409A and the regulations thereunder.



 




    ARTICLE 2

    



 




    ELIGIBILITY
    AND ELECTIONS



 



    2.1 Eligibility.  Each Employee who
    is a Participant in the Plan on the Amendment Effective Date
    shall continue to participate and each other Employee shall be
    eligible to participate on or after the first day of the month
    following such eligibility by filing an election with the
    Committee in accordance with the provisions of Section 3.2
    hereof.



 



    2.2 Election as to Form of
    Payment.  For each Plan Year for which a
    Participant elects to make Deferral Contributions, the
    Participant shall make an irrevocable election as to the form in
    which amounts credited to his or her Individual Account for such
    Plan Year will be paid, as follows:



 



    (a) Single sum payment; or



 



    (b) Annual installments over a period of ten
    (10) years in an amount equal to a fraction of the
    Individual Account as of the date of each installment
    distribution, as follows: 1/10 in the first year, 1/9 in the
    second year, 1/8 in the third year, and so on until the entire
    remaining balance is paid in the tenth year.



 



    2.3 Election as to Time of
    Payment.  For each Plan Year for which a
    Participant elects to make Deferral Contributions, the
    Participant shall make an irrevocable election as to when
    amounts credited to his or her Individual Account for such Plan
    Year will be paid, as follows:



 



    (a) Within 30 days following the six-month anniversary
    of the Participant’s Termination of Employment; or














 







    (b) Within 30 days of March 1 of the year following
    the year in which the Participant’s Termination of
    Employment occurs (if later than the date that is six months
    following the Participant’s Termination of Employment).



 




    ARTICLE 3

    



 




    INDIVIDUAL
    ACCOUNT



 



    3.1 Creation of Individual
    Account.  The Employer shall create and
    maintain an unfunded account (the “Individual
    Account”) for each Participant electing to contribute to
    the Plan under Section 3.2 to which it shall credit the
    amounts described in this Article 3.



 



    3.2 Election to Make Deferral Contributions.



 



    (a) For each Plan Year, a Participant may irrevocably
    elect, in the manner provided by the Committee, to have the
    Employer credit to the Participant’s Individual Account the
    amount of Deferral Contributions (which may be expressed as a
    percentage of Compensation) that the Participant elects to
    contribute to the Plan with respect to that Plan Year. The
    Participant’s election under this Section 3.2 shall be
    independent from any election the Participant may have made
    under the Savings Plan for such Plan Year. If the Participant
    elects to have an amount credited to the Individual Account for
    a Plan Year, the amount of the Participant’s Compensation
    otherwise payable from the Employer with respect to that Plan
    Year shall be reduced by a corresponding amount.



 



    (b) A Participant’s election with respect to a Plan
    Year must be made no later than the December 31 preceding the
    Plan Year in which the Compensation would have been earned by
    the Participant; provided, however, that for the first Plan Year
    in which a Participant is eligible to participate in the Plan,
    such election may be made at any time during the 30 day
    period commencing on the date of eligibility as determined under
    Section 2.1. Any election by a Participant pursuant to this
    Section 2.2 shall be irrevocable and may not be modified in
    any respect.



 



    (c) If the Participant fails to make any election for any
    Plan Year, the Participant’s election in effect for the
    prior Plan Year as to the amount of Deferral Contributions, if
    any, and the form of payment applicable to Deferral
    Contributions, shall continue in effect for such Plan Year.



 



    3.3 Matching Contributions.  For
    each Plan Year, the Employer shall credit the Participant’s
    Individual Account with an amount equal to 100% of the Deferral
    Contributions and Savings Plan Deferral Contributions made on
    behalf of the Participant, up to the first 3% of the
    Participant’s Compensation, plus 50% of the Deferral
    Contributions and Savings Plan Deferral Contributions made on
    behalf of the Participant, up to the next 2% of the
    Participant’s Compensation, reduced by all matching
    contributions actually made under the Savings Plan.



 



    3.4 Earnings.  The amount credited
    to a Participant’s Individual Account shall be deemed to be
    invested in the investment funds in the proportions the
    Participant elects in a deemed investment election in accordance
    with such procedures as are specified by the Committee.
    Notwithstanding the foregoing, no contributions or new
    investments may be directed into the Company stock fund on or
    after October 1, 2004, but amounts invested in the Company
    stock fund as of October 1, 2004, shall continue to be
    invested in such fund subject to any subsequent election by the
    Participant to transfer amounts out of the Company stock fund.
    During each Plan Year, the Employer shall credit the
    Participant’s Individual Account with interest, earnings or
    appreciation (less losses and depreciation) with respect to the
    then balance of the Participant’s Individual Account, equal
    to the actual investment results of the Participant’s
    deemed investment elections. Notwithstanding the
    Participant’s investment elections under this Plan, the
    Company shall be under no obligation to actually invest the
    amounts credited to the Participant’s Individual Account in
    such manner, or in any manner, and such investment elections
    shall be used solely to determine the amounts by which the
    balance credited to the Participant’s Individual Account
    shall be adjusted.














 








    ARTICLE 4

    



 




    DISTRIBUTIONS
    OF RETIREMENT BENEFITS



 



    4.1 Payment of Individual
    Account.  The amount credited to the
    Participant’s Individual Account under Article 3
    shall, upon the Participant’s Termination of Employment, be
    paid in the form elected by the Participant under
    Section 2.2 and at the same time elected by the Participant
    under Section 2.3. Such distribution shall be equal to the
    total amount credited to the Participant’s Individual
    Account as of the date of distribution and shall include any
    additional credit to the Participant’s Individual Account
    made after such termination under Section 3.2 on account of
    Deferral Contributions made during the Plan Year in which the
    Participant has a Termination of Employment for any reason.



 



    4.2 Separate Payments.  For
    purposes of Code Section 409A, each payment under this Plan
    shall be treated as a separate payment.



 



    4.3 Distributions of Grandfathered
    Account.  The amount credited to the
    Participant’s Grandfathered Account shall, upon the
    Participant’s termination of employment, be paid in the
    same form and at the same time as the benefit payable to the
    Participant under the Savings Plan at termination of employment;
    provided, however, that, notwithstanding the form and timing of
    the payment of benefits under the Savings Plan, the Participant
    may elect to receive a single sum payment on March 1 of the Plan
    Year following the Plan Year in which the Participant terminates
    employment for any reason, by making an election prior to the
    date on which such termination occurred and benefits under the
    Savings Plan are paid or commence, in the manner specified by
    the Committee. Such distribution shall be equal to the total
    amount credited to the Participant’s Grandfathered Account
    as of the date of distribution and shall include any additional
    credit to the Participant’s Grandfathered Account made
    after such termination under Section 3.4.



 




    ARTICLE 5

    

    DEATH BENEFIT
    



 



    5.1 In the event of a Participant’s death prior to the
    commencement of the Participant’s benefit payments pursuant
    to Article 4, his Beneficiary will receive a lump sum
    distribution equal to the balance of the Participant’s
    Individual Account on the date of the Participant’s death.
    The payment to the Beneficiary will be made as soon as
    practicable following the completion of the valuation for the
    date on which the Participant died. If the Participant is due an
    additional credit to the Participant’s Individual Account
    for the Plan Year in which the balance of the Individual Account
    becomes payable hereunder, the additional credit will be paid to
    the Participant’s Beneficiary as soon as practicable
    following the Plan Year-end valuation. In the event of a
    Participant’s death after the commencement of the
    Participant’s benefits in annual installments, his
    Beneficiary will receive payments at the same time and in the
    same manner as if the Participant had survived.



 




    ARTICLE 6

    

    VESTING
    



 



    6.1 The balance of a Participant’s Individual Account
    shall be 100% vested at all times.



 




    ARTICLE 7

    

    FUNDING
    



 



    7.1 The Board may, but shall not be required to, authorize
    the establishment of a trust by the Company to serve as the
    funding vehicle for the benefits described herein. In any event,
    the Employer’s obligations hereunder shall constitute a
    general, unsecured obligation, payable solely out of its general
    assets, which may include the assets of any such trust
    established for purposes of the Plan, but no Participant shall
    have any right to any specific assets of the Employer.














 








    ARTICLE 8

    

    ADMINISTRATION
    



 



    8.1 Powers and Duties of the
    Committee.  The Committee shall have full
    power and authority to interpret and administer this Plan and
    the Committee’s actions in doing so shall be final,
    conclusive and binding on all persons interested in the Plan.
    The Committee may from time to time adopt rules and regulations
    governing this Plan. Any action required of the Company, the
    Employer or the Board under the Plan shall be made in the
    Company’s, the Employer’s or the Board’s sole
    discretion which need not be uniformly applied to similarly
    situated persons. Any such action shall be final, conclusive and
    binding on all persons interested in the Plan.



 



    8.2 Claim for Benefits.  A
    Participant who believes that he or she is being denied a
    benefit to which he or she is entitled under the Plan may file a
    written request for such benefit with the Committee, setting
    forth the claim.



 



    (a) Initial Review.  Upon receipt of a
    claim, the Committee shall advise the Participant that a reply
    will be forthcoming within 90 days and shall, in fact,
    deliver such reply within such period. The Committee may,
    however, extend the reply period for an additional 90 days
    for reasonable cause. If the claim is denied in whole or in
    part, the Participant shall be provided a written decision,
    using language calculated to be understood by the Participant,
    setting forth:



 



    (i) the specific reason or reasons for such denial;



 



    (ii) the specific reference to relevant provisions of this
    Plan on which such denial is based;



 



    (iii) a description of any additional material or
    information necessary for the Participant to perfect his or her
    claim and an explanation why such material or such information
    is necessary;



 



    (iv) appropriate information as to the steps to be taken if
    the Participant wishes to submit the claim for review;



 



    (v) the time limits for requesting a review under Paragraph
    (b) below and for review under Paragraph
    (c) below; and



 



    (vi) the Participant’s right to bring an action for
    benefits under Section 502 of ERISA.



 



    (b) Appeal.  Within 60 days after the
    receipt by the Participant of a decision to deny the claim, the
    Participant may request in writing that the Committee review the
    determination of the Committee. The Participant or his or her
    duly authorized representative may, but need not, review the
    relevant documents and submit issues and comment in writing for
    consideration by the Committee. If the Participant does not
    request a review of the initial determination within such
    60-day
    period, the Participant shall be barred and stopped from
    challenging the determination.



 



    (c) Decision on Review.  After considering
    all materials presented by the Participant, the Committee will
    render a written decision, setting forth the specific reasons
    for the decision and, if the Participant’s claim is denied,
    in whole or in part, such written decision will contain the
    required information described in Paragraph (b) above. The
    Committee shall render its decision within 60 days of
    receipt of the Participant’s request for review; provided,
    however, the Committee may extend the reply period for an
    additional 60 days for reasonable cause. The
    Committee’s decision shall be final and binding on all
    parties.



 




    ARTICLE 9

    

    AMENDMENT
    



 



    9.1 The Board shall have the right to amend or modify the
    Plan at any time in any manner whatsoever; provided, however,
    that no amendment shall operate to reduce the Accrued Benefit
    which any Participant who is participating in the Plan or
    entitled to a benefit payment at the time the amendment is
    adopted would otherwise receive hereunder.














 








    ARTICLE 10

    

    TERMINATION
    



 



    10.1 Continuance of the Plan is completely voluntary and is
    not assumed as a contractual obligation of the Employer. The
    Board shall have the right at any time to discontinue the Plan;
    provided, however, that the termination shall not operate to
    reduce the Accrued Benefit which any Participant who is
    participating in the Plan or entitled to a benefit payment at
    the time the termination is approved would otherwise receive
    hereunder. If the Plan is terminated, Participants shall be
    entitled to a distribution of their benefit under the Plan as
    soon as practicable following termination of the Plan if on
    account of an event described in Treas. Reg.
    § 1.409A-3(j)(4)(ix)(A), (B), (C) or (D) and
    the requirements, as applicable, of such regulations are met
    with respect to the termination of the Plan and distribution of
    benefits hereunder. Otherwise, distribution shall occur in
    accordance with the terms of the Plan.



 




    ARTICLE 11

    

    MISCELLANEOUS
    



 



    11.1 Rights of
    Participants.  Nothing contained herein
    (a) shall be deemed to exclude a Participant from any
    compensation, bonus, pension, insurance, severance pay or other
    benefit to which the Participant otherwise is or might become
    entitled to as an Employee or (b) shall be construed as
    conferring upon an Employee the right to continue in the employ
    of the Employer as an executive or in any other capacity.



 



    11.2 Effect on Other Plans.  Any
    amounts payable by the Employer hereunder shall not be deemed
    salary or other compensation to a Participant for the purposes
    of computing benefits to which the Participant may be entitled
    under any other arrangement established by the Employer for the
    benefit of its Employees.



 



    11.3 Binding Nature of Plan.  The
    rights and obligations created hereunder shall be binding on a
    Participant’s heirs, executors and administrators and on
    the successors and assigns of the Employer.



 



    11.4 Governing Law.  The Plan shall
    be construed in accordance with and governed by the laws of the
    State of Florida, to the extent not superseded by federal law,
    without reference to the principles of conflict of laws.



 



    11.5 No Assignment.  The rights of
    any Participant under this Plan are personal and may not be
    assigned, transferred, pledged or encumbered. Any attempt to do
    so shall be void.



 



    11.6 No Liability.  Neither the
    Company, the Employer nor any member of the Board or the
    Committee shall be responsible or liable in any manner to any
    Participant, Beneficiary or any person claiming through them for
    any benefit or action taken or omitted in connection with the
    granting of benefits, the continuation of benefits or the
    interpretation and administration of this Plan.



 



    11.7 Section 409A.  The Plan
    is intended to comply with the applicable requirements of Code
    Section 409A and its corresponding regulations and related
    guidance, and shall be administered in accordance with Code
    Section 409A to the extent Code Section 409A applies
    to the Plan. To the extent that any provision of the Plan would
    cause a conflict with the requirements of Code
    Section 409A, or would cause the administration of the Plan
    to fail to satisfy the requirements of Code Section 409A,
    such provision shall be deemed null and void to the extent
    permitted by applicable law.