EX-10.1 Ryder Executive Severance Plan



 





Exhibit 10.1




RYDER SYSTEM, INC.




EXECUTIVE SEVERANCE PLAN




Effective as of January 1, 2007




PREAMBLE




     Ryder System, Inc. (the “Company”) hereby adopts the Ryder System, Inc. Executive Severance
Plan (the “Plan”) to set forth its severance pay policy as it applies to Eligible Employees (as
defined in this Plan) of the Company and all of its subsidiaries and affiliates effective as of
January 1, 2007 for employees elected and promoted to or employed as an officer on or after January
1, 2007, and January 31, 2008 for employees who are already serving as officers on or before
December 31, 2006 (each shall be considered an “Effective Date”), unless otherwise prohibited by
law. As used herein, the masculine pronoun shall include the feminine, and the singular shall
include the plural, unless a contrary meaning is clearly intended.



     The Plan is intended to fall within the definition of a top hat “employee welfare benefit
plan” under Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). This document is intended to serve as the Plan document and the summary plan
description of the Plan. This document supersedes and replaces any prior plan, summary plan
descriptions, agreements (whether oral or written), summaries, policies, publications, memos or
notices regarding the Plan and any other severance, termination, or separation benefits (including
such benefits payable after a Change of Control) for Eligible Employees.



     All rights of Participants to benefits relating to this Plan shall be governed by the Plan and
the executed agreement and general release executed by the Company and the Participant in
connection with a Participant’s termination of employment. Any employee who participates in this
Plan shall not be entitled to any severance, separation, notice, or termination benefits under any
other severance or change of control policy, plan, agreement or practice of (i) the Company
(including any previously executed severance, employment or change of control severance
agreements); (ii) any predecessor agreement; or (iii) any respective subsidiary or affiliate
thereof, or pursuant to which the Company is bound or obligated to provide such benefits. Except
as set forth in this Plan, all such other severance (whether voluntary or involuntary) or change of
control policies, plans, agreements and practices of the Company or any of its subsidiaries or
affiliates in effect for Eligible Employees prior to the applicable Effective Date of this Plan
shall be deemed amended and superseded in their entirety by this Plan to the extent that they would
provide benefits to Participants upon their termination of employment.



     In the event that the terms of the Plan are inconsistent with other documents or other written
or verbal communications provided by the Company or its representatives with respect to this
severance program, the terms of the Plan shall govern. The Plan may not be amended or changed
except in accordance with the provisions set forth below.



 









 





Section 1




Definitions




     Capitalized terms used in the Plan and not elsewhere defined herein shall have the
meanings set forth in this Section:



     1.1 “Accrued Benefits” means (i) earned but unpaid Base Salary accrued through the
Termination Date and any accrued but unpaid vacation time to the extent carried to the Termination
Date under Company policy; (ii) unreimbursed expenses incurred in accordance with applicable
Company policy through the Termination Date; (iii) unpaid amounts under the terms of any incentive
plan in which the Participant participates as of the Termination Date, if and to the extent that
the Participant is entitled under the terms of any such plan to receive a payment as of the
Termination Date; and (iv) all other payments, benefits or perquisites to which the Participant may
be entitled through the Termination Date, subject to and in accordance with, the terms of any
applicable compensation arrangement or benefit, or any equity or perquisite arrangement, plan,
program or grant.



     1.2 “Base Salary” means the Participant’s annual base salary in effect on the
Termination Date, or, on or before the second anniversary of a Change of Control, and if higher,
the highest annual base salary in effect during the six (6) month period immediately preceding the
Change of Control. Base Salary for this purpose shall not include or reflect bonuses, overtime
pay, compensatory time-off, commissions, incentive or deferred compensation, employer contributions
towards employee benefits, cost of living adjustment, or any other additional compensation, and
shall not be reduced by any contributions made on the Participant’s behalf to any plan of the
Company under Section 125, 132, 401(k), or any other analogous section of the Code.



     1.3 “Benefits Continuation Period” means the period for each applicable benefit
beginning on the Termination Date and ending on the earliest of (i) the day on which the
Participant is eligible to receive coverage for such benefit from a new employer; (ii) in the case
of such benefits which require employee contributions, the date the Participant fails to timely
make such required employee contributions pursuant to the Company’s or plan’s instructions (after
giving effect to applicable grace periods) or otherwise cancels his coverage in accordance with the
terms of the relevant plan(s); or (iii) the last day of the Participant’s Severance Period.



     1.4 “Cause” means: (i) fraud, misappropriation, or embezzlement by the Participant
against the Company or any of its subsidiaries and/or affiliates, (ii) conviction of or plea of
guilty or nolo contendere to a felony, (iii) conviction of or plea of guilty or nolo contendere to
a misdemeanor involving moral turpitude or dishonesty, (iv) willful failure to report to work for
more than thirty (30) continuous days not attributable to eligible vacation or supported by a
licensed physician’s statement, (v) a material breach by the Participant of Section 9 of this Plan
(Restrictive Covenants), (vi) willful failure to perform the Participant’s key job duties or
responsibilities, or (vii) any other activity which would constitute grounds for termination for
cause by the Company or its subsidiaries or affiliates, including but not limited to material
violations of the Company’s Principles of Business Conduct or any analogous code of
ethics or similar policy. Notwithstanding the foregoing, if a Change of Control has occurred



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within one year preceding a Cause determination, “Cause” shall not include subsections (vi) or
(vii) of the preceding sentence, provided that subsections (vi) and (vii) shall continue to apply
to any terminations that are deemed to have retroactively occurred pursuant to the last paragraph
in the definition of “Change of Control.” For the purposes of this Section 1.4, any good faith
interpretation by the Company of the foregoing definition of “Cause” shall be conclusive on the
Participant. For purposes of the Plan “Cause” shall be determined by such Participant’s direct
supervisor and the Chief Human Resources Officer (“CHRO”). In the event that a Participant is a
direct report to the CHRO, then the decision shall be made by the CHRO and the Chief Financial
Officer.



     1.5 “Change of Control” Except as provided below, for the purpose of this Plan, a
“Change of Control” shall be deemed to have occurred if:




     (a) 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 (a), the following acquisitions shall not constitute a Change
of Control: (i) any acquisition by any employee benefit plan or plans (or related trust) of
the Company and its subsidiaries and affiliates or (ii) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subparagraph
(c) of this Section 1.5; or




     (b) the individuals who, as of the January 1, 2007, constituted the Board of Directors
of the Company (the “Board” generally and as of January 1, 2007 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 the Effective Date 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) shall be,
for purposes of this Plan, considered as though such person were a member of the Incumbent
Board; or




     (c) there is a reorganization, merger or consolidation of the Company (a “Business
Combination”), in each case, unless, following such Business Combination, (i) all or



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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, (ii) 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 (iii) 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




     (d) there is a liquidation or dissolution of the Company approved by the shareholders;
or




     (e) there is a sale of all or substantially all of the assets of the Company.



     Notwithstanding anything in this Section 1.5 to the contrary, for purposes of the acceleration
of the payment of severance benefits pursuant to Section 5.2, a Change of Control shall only be
deemed to occur if such transactions or events would give rise to a “change in ownership or
effective control” under Section 409A of the Code, and the rulings and regulations issued
thereunder.



     If a Change of Control occurs and (i) the Participant’s employment is terminated within twelve
months prior to the date on which the Change of Control occurs and (ii) it is reasonably
demonstrated by the Participant that such termination of employment either (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, then the Participant
shall, to the extent practicable, receive the same compensation and benefits hereunder as though a
Change of Control had occurred on the date immediately prior to the date of such termination of
employment.



     1.6 “Change of Control Termination” means (i) an Involuntary Termination or (ii) a
termination of the Participant’s employment by the Participant for Good Reason, in each case that
occurs within twelve (12) months after a Change of Control (or occurs within twelve months prior to
a Change of Control and satisfies the other requirements set forth in the last paragraph of Section
1.5).



     1.7 “Code” means the Internal Revenue Code of 1986, as amended, supplemented or
substituted from time to time.



     1.8 “Committee” means the Compensation Committee of the Company’s Board of Directors.



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     1.9 “Disability” means an illness or injury that entitles the Participant to long-term
disability payments under the Company’s group long-term disability plan as in effect from time to
time.



     1.10 “Eligible Employees” means (i) all active officers of the Company employed or
residing in the United States in a management level 14 or above (or other classification
designating officer status, as those classifications may change from time to time), and (ii) who
have not entered into any agreements or arrangements providing severance or change of control
benefits with the Company.



     1.11 “Equity Compensation Opportunities” means the Participant’s ability to obtain
equity in the Company (or a comparable cash-based incentive program) through a compensatory
arrangement. Equity Compensation Opportunities are measured using the valuation method applied by
the Company for financial accounting purposes and the Board may take into account in determining
that no reduction has occurred any exercises, cashing out, or other liquidity on favor of the
Participant that is either triggered by the Participant or occurring in connection with a Change of
Control. Changes in the underlying value of the stock shall not be treated as a reduction in the
Equity Compensation Opportunities, and the Company may take into account in replacing the value of
pre-Change of Control equity compensation with post-Change of Control equity compensation (or a
comparable cash-based incentive program) that the Participant may have received value for his
equity compensation in the Change of Control.



     1.12 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, supplemented or substituted from time to time.



     1.13 “Good Reason” only applies in the event of a Change of Control within one year
following a Change of Control and only occurs when the Company: (i) requires the Participant to be
based or to perform services at any site or location more than fifty (50) miles from the site or
location at which the Participant is based at the time of the Change of Control, except for travel
reasonably required in the performance of the Participant’s responsibilities (which does not
materially exceed the level of travel required of the Participant in the six (6) month period
immediately preceding the Change of Control), or (ii) reduces the aggregate value of the
compensation (which includes the Participant’s salary, Target Bonus opportunity, Equity
Compensation Opportunities and cash perquisites), payable to the Participant, or (iii) materially
and adversely changes the Participant’s duties and responsibilities. For the avoidance of doubt, a
change in reporting relationship or title shall not constitute “Good Reason.”



The Participant’s continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance surrounding Good Reason until ninety (90) days have elapsed since the
occurrence of the circumstance he would assert constitutes Good Reason.



     1.14 “Involuntary Termination” means the termination of a Participant’s employment by
the Company for any reason other than death, Disability or Cause; provided, however, that an
Involuntary Termination of a Participant’s employment shall not occur if:



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     (a) the termination of the Participant’s employment is due to the transfer of the
Participant’s employment between the Company and an affiliate or subsidiary of the Company,
or among affiliates or subsidiaries of the Company;




     (b) the termination results from the sale or transfer of all or any portion of the
operations of the Company or any of its subsidiaries and affiliates (the “Disposed
Business”) (by means of a stock or asset disposition, or other similar transaction) which
sale or transfer does not constitute a Change of Control, and either (i) the Participant’s
employment is transferred to the purchaser or transferee of the Disposed Business or (ii)
Participant terminates his employment with the Company or any of its subsidiaries or
affiliates notwithstanding that the Participant received an offer of employment from either
the purchaser or transferee of the Disposed Business or the Company or any of its
subsidiaries and affiliates, as determined by the Company in its sole discretion; or




     (c) the termination follows a Change of Control and either (i) the Participant’s
employment is transferred to the purchaser or transferee of the Disposed Business and the
obligations of this Plan are assumed by the purchaser or transferee or (ii) Participant
terminates his employment with the Company or any of its subsidiaries or affiliates or does
not accept an offer of employment from a purchaser or transferee notwithstanding that the
Participant received an offer of employment from either the purchaser or transferee of the
Disposed Business or the Company or any of its subsidiaries and affiliates which offer
included a continuation of the obligations of this Plan, as determined by the Company in its
sole discretion.



In no event shall an “Involuntary Termination” occur if the Participant terminates his employment
with the Company or any of its subsidiaries or affiliates for any reason. In the event of the
occurrence of any of the events set forth in subsection (b) and (c) above, the Company’s
obligations under this Plan shall terminate immediately and the Participant shall not be entitled
to any amounts or benefits hereunder but shall still be required to comply with Section 9 hereof.
This Plan shall, however, continue in effect if the Participant’s employment is transferred between
or among the Company and its subsidiaries or affiliates as contemplated in subsection (a) or (c)
above.



     1.15 “Notice of Termination” means written notice (i) specifying the Termination Date
(which shall not be less than thirty (30) days after the date of such notice in the case of a
termination on account of Disability or the Participant’s voluntary termination other than for Good
Reason); (ii) solely with respect to the Participant terminating for Good Reason, citing the
specific provisions of this Plan and the facts and circumstances, in reasonable detail, providing a
basis for such termination, provided that if the basis for such Good Reason is capable of being
cured by the Company, the Participant will provide the Company with an opportunity to cure the Good
Reason within thirty (30) calendar days after receipt of such notice, and (iii) solely
with respect to the Company terminating the Participant’s employment on account of Disability, its
intent to terminate his employment on account of Disability.



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     1.16 “Participant” means an Eligible Employee who has satisfied the conditions for
participation set forth in Section 2.



     1.17 “Plan” means this Ryder System, Inc. Executive Severance Plan.



     1.18 “Plan Administrator” shall mean the Company’s Chief Human Resources Officer or
his designate.



     1.19 “Release” means a severance agreement and general release in such form as the
Company, in its sole discretion, determines appropriate that is executed by the Participant and the
Company in connection with the termination of the Participant’s employment with the Company or any
of its subsidiaries and affiliates. If the Participant is subject to the Older Workers Benefit
Protection Act (“OWBPA”), the Release shall be revocable until the end of the seventh
(7th) calendar day after Participant executes the Release



     1.20 “Release Effective Date” means, if the Participant is covered by the OWBPA on his
Termination Date, the later of: (i) the eighth (8th) calendar day after the execution of the
Release, provided that the Participant has not revoked the Release prior to such date, or (ii) the
Termination Date. If the Participant is not covered by the OWBPA on his Termination Date, the
Release Effective Date means the later of: (i) the date on which the Release is executed by the
Participant, or (ii) the Termination Date.



     1.21 “Severance Period” means: (i) one (1) year if not in connection with a Change of
Control Termination, or (ii) eighteen (18) months if in connection with a Change of Control
Termination.



     1.22 “Target Bonus” means the Participant’s stated target annual incentive award
opportunity which the Participant is eligible to receive under the Company’s annual incentive
compensation plan or awards for the year in which the Termination Date occurred.



     1.23 “Termination Date” means the effective date of the termination of the
Participant’s employment with the Company as designated by the Company or the Participant (in the
case of termination for Good Reason). If the Participant’s employment is terminated as a result of
a Disability, the Termination Date shall be the 30th day after the Company or any
subsidiary or affiliate has delivered a Notice of Termination to the Participant provided that the
Participant has not resumed his same full-time employment with the Company or any of its subsidiary
or affiliate.



Section 2




Participation




     An Eligible Employee shall participate in the Plan after the completion of twelve (12)
consecutive months of continuous employment with the Company provided, however, that any:



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     (a) employee of the Company who is not an Eligible Employee as of the Effective Date of
the Plan shall become a Participant only if, upon becoming an Eligible Employee, he executes
an acknowledgement form (the “Form”) agreeing to abide by the terms of this Plan within
sixty (60) days after being presented with such Form by the Company; and




     (b) eligible Employee who as of the effective date of the Plan is subject to an
agreement with the Company providing for severance, separation, notice or termination
benefits, whether oral or written, (including such benefits payable after a Change of
Control) shall become a Participant only if he executes the Form within sixty (60) days
after being presented with such Form by the Company.



Section 3




Notice of Termination




     Any termination of employment shall be communicated by a Notice of Termination to the other
party. No notice period is required other than as required in Section 1.15.



Section 4




Conditions and Eligibility for Severance Benefits




     4.1 Conditions for Eligibility. Subject to the conditions and limitations of this
Section 4 and elsewhere in the Plan, a Participant shall be entitled to the severance benefits
described herein only upon satisfaction of all the following conditions (and all other
applicable conditions contained herein):




     (a) he suffers an Involuntary Termination (for benefits described in Section 5) or a
Change of Control Termination (for benefits described in Section 6);




     (b) he executes without modification and in its entirety a Release and such Release
becomes effective;




     (c) if requested by the Company or any subsidiary or affiliate, he delivers a
resignation letter, acceptable to the Company, from all offices, directorships and fiduciary
positions in which the Participant was serving;




     (d) he returns to the Company any property of the Company or its subsidiaries or
affiliates which has come into his possession or control; and




     (e) he remains actively at work through his Termination Date unless the Company agrees
in writing to release the Participant from employment earlier than the Termination Date, or
in the case of a resignation as of a future date, the Company chooses unilaterally to
shorten the period before the resignation’s effective date.



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     4.2 Exclusions. Each Participant shall cease to be entitled to severance benefits,
upon the earliest to occur of the following:




     (a) the end of the Severance Period;




     (b) his breach of any provision of the Release, the Plan or any other Company agreement
executed by the Participant including, but not limited to, the Form referenced in Section 2
or the refusal to execute the Form;




     (c) the revocation, invalidity or unenforceability of the Release;




     (d)
his reemployment by the Company, or any of its subsidiaries or
affiliates; and/or




     (e)
with respect to the continuation of benefits described in Section
5.1(d) or 6.1(d), the
end of the Benefits Continuation Period.




     4.3 Early Termination of Payments.




     (a) If a Participant dies prior to payment of all severance benefits to which he is
entitled, all Company obligations under the Plan shall cease except that the Accrued
Benefits (if unpaid at the time of death) shall be paid to the Participant’s surviving
spouse or, if no spouse survives, to the Participant’s estate.




     (b) If the Participant is receiving severance benefits under Sections 5 or 6, and (A)
if the Participant is reemployed by the Company (or any subsidiary, affiliate or successor)
or breaches the Plan’s terms or the Release, or (B) if the Company (or any subsidiary,
affiliate or successor) discovers information that would have permitted the Company to
terminate the Participant for Cause or if the Company or any subsidiary, affiliate or
successor discovers a breach of Section 9, payment of severance benefits shall immediately
cease. If the severance ceases because of re-employment and the Company has paid severance
in a lump sum, the Company (or any subsidiary or successor) shall have the right to require
that the Participant repay to the applicable entity the value of the severance benefits that
would not yet have been paid before re-employment if he had been receiving the severance in
semi-monthly installments. If the severance ceases because of a Cause determination or a
breach of Section 9, the Company (or any
subsidiary or successor) shall have the right to require that the Participant repay to
the applicable entity the full value of any previously received severance. The remedies
described in this paragraph are in addition to any other remedies that may be available to
the Company in the event of the occurrence of any of the circumstances described in this
paragraph.



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Section 5




Severance Benefits Other than as a Result of a Change of Control




     5.1 Benefits. If a Participant experiences an Involuntary Termination other than as a
result of a Change of Control and complies with all of the other terms and conditions of the Plan,
he shall be eligible to receive:




     (a) the Accrued Benefits, payable in a lump sum as soon as administratively feasible
following the Release Effective Date or such earlier date as their terms require;




     (b) continuation of the Participant’s Base Salary for the Severance Period payable in
accordance with the Company’s standard payroll practices even though he is then no longer
employed, provided that payments shall not commence before the Release Effective Date;




     (c) a pro-rata Target Bonus for the year containing the Termination Date which payment
shall be paid when such annual bonuses are paid to non-terminated employees (or, if later,
upon the satisfaction of all conditions for the payment of benefits hereunder) and based on
the actual financial performance of the Company for such year;




     (d) continuation of medical, prescription, dental and health care reimbursement
benefits for the Benefits Continuation Period for the Participant and his family through the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, supplemented or
substituted from time to time (“COBRA”), in accordance with the applicable plans, programs
or policies of the Company, and on such terms applicable to comparably situated active
employees during such period (which shall offset the Company’s COBRA obligation, if any),
provided that the Participant shall continue to pay to the Company any applicable
contribution amounts that the Participant would otherwise have to pay for such benefits if
the Participant was still employed by the Company. Further, if the Participant fails to
accept available coverage from another employer or fails to notify the Company within 30
days of Participant’s eligibility to receive coverage under another employer’s plan, the
Participant’s coverage under this Section 5.1(d) shall immediately terminate and Participant
shall cease to be entitled to any such benefits under this Plan and shall be required within
three (3) months after such failure to reimburse the Company for the greater of any premiums
or any benefits paid after such failure. In addition, the Participant agrees that the
Company may offset
against or deduct from any payments due but not paid under this Section 5 in full or
partial payment of such reimbursement;




     (e) if the Participant is covered by any Company-sponsored supplemental long-term
disability insurance program as of the Termination Date, the Company shall continue to pay
for the Participant’s coverage until the end of the Severance Period. At the end of the
Severance Period, the Participant shall be entitled to keep this policy if he continues to
pay the annual premiums;



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     (f) if the Participant is covered by any Company-sponsored executive life insurance
program as of the Termination Date, the Company shall continue to pay for the Participant’s
coverage until the end of the Severance Period. At the end of the Severance Period, the
Participant will have thirty-one days from the last day of the Severance Period to convert
his life insurance coverage to an individual policy;




     (g) professional outplacement services as determined in the Company’s sole discretion
until the earliest of (i) six (6) months after the end of the Severance Period, (ii) the
date on which the Participant obtains another full-time job, (iii) the date on which the
Participant becomes self-employed, and (iv) the date on which the Participant has received
all services or benefits due under the applicable Company-sponsored outplacement program.
The Company will not pay the Participant cash in lieu of professional outplacement services;
and




     (h) any benefits or rights to which the Participant is entitled under any of the
Company’s stock or equity plans in accordance with the terms and conditions of any such
plans.



     5.2 Payment of Severance Benefits. Notwithstanding anything herein to the contrary:
(i) no payments hereunder (other than Accrued Benefits payable pursuant to their terms) shall be
made to a Participant prior to the Release Effective Date; and (ii) to the extent necessary to
comply with Code Section 409A, the payment terms for any of the severance benefits payable pursuant
to Section 5.1 shall be amended to comply with Code Section 409A.



     If a Change of Control occurs and the Participant is then receiving severance benefits
described in Section 5.1, the Company shall pay to the Participant, in a lump sum, seven (7)
calendar days after the Change of Control, an amount (in lieu of future payments) equal to the
present value of all future cash payments due under the Plan using the prime commercial lending
rate published by the Trustee at the time the Change of Control occurs, but the Company and the
Participant shall continue to be liable to each other for all other obligations under this Plan.



Section 6




Severance Benefits As a Result of a Change of Control




     6.1 Benefits. If a Participant experiences a Change of Control Termination, and
complies with all of the other terms and conditions of the Plan, he shall be eligible to receive:



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     (a) the Accrued Benefits, payable in a lump sum as soon as administratively feasible
following the Release Effective Date or such earlier date as their terms require;




     (b) a lump sum payment equal to the Participant’s Base Salary for the applicable
Severance Period payable on the Release Effective Date or as soon thereafter as is
practicable;




     (c) an amount equal to (1) one times the Participant’s Target Bonus payable on the
Release Effective Date or as soon thereafter as is practicable;




     (d) continuation of medical, prescription, dental and health care reimbursement
benefits for the Benefits Continuation Period for the Participant and his family through the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, supplemented or
substituted from time to time (“COBRA”), in accordance with the applicable plans, programs
or policies of the Company, and on such terms applicable to comparably situated active
employees during such period (which shall offset the Company’s COBRA obligation, if any),
provided that the Participant shall continue to pay to the Company any applicable
contribution amounts that the Participant would otherwise have to pay for such benefits if
the Participant was still employed by the Company. Further, if the Participant fails to
accept available coverage from another employer or fails to notify the Company or the
Trustee within 30 days of Participant’s eligibility to receive coverage under another
employer’s plan, the Participant’s coverage under this Section 6.1(d) shall immediately
terminate and Participant shall cease to be entitled to any such benefits under this Plan
and shall be required within three (3) months after such failure to reimburse the Company or
the Trustee for the greater of any premiums or any benefits paid after such failure. In
addition, the Participant agrees that the Company may offset against or deduct from any
payments due but not paid under this Section 6 in full or partial payment of such
reimbursement;




     (e) if the Participant is covered by any Company-sponsored supplemental long-term
disability insurance program as of the Termination Date, the Company (or the Trustee) shall
continue to pay for the Participant’s coverage until the end of the Severance Period. At
the end of the Severance Period, the Participant shall be entitled to keep this policy if he
continues to pay the annual premiums;




     (f) if the Participant is covered by any Company-sponsored executive life insurance
program as of the Termination Date, the Company (or the Trustee) shall
continue to pay for the Participant’s coverage until the end of the Severance Period.
At the end of the Severance Period, the Participant will have thirty-one days from the last
day of the Severance Period to convert his life insurance coverage to an individual policy;




     (g) a lump sum equal to the value of the Company-sponsored outplacement program
maintained by the Company immediately prior to the Change of Control, based on the
Participant’s management level as of the Termination Date, payable on the Release Effective
Date or as soon thereafter as is practicable; and



12









 






     (h) any benefits or rights to which the Participant is entitled under any of the
Company’s stock or equity plans in accordance with the terms and conditions of any such
plans.



     6.2 Timing of Severance Benefits. The severance benefits described in Sections
6.1(a), 6.1(b), 6.1(c), and 6.1(g) shall be paid in a lump sum as soon as practicable following the
Release Effective Date, but in any event no later than March 15 following the calendar year in
which the Change of Control Termination occurs, provided that the Participant shall only be
entitled to this payment if he submits all required documentation by the March 1 following the
calendar year of the Termination Date.



     Notwithstanding anything herein to the contrary: (i) no payments hereunder (other than
Accrued Benefits payable pursuant to their terms) shall be made to a Participant prior to the
Release Effective Date; and (ii) to the extent necessary to comply with Code Section 409A, the
payment terms for any of the severance benefits payable pursuant to Section 6.1 shall be amended to
comply with Code Section 409A.



Section 7




Tax Gross-Up




     7.1 In the event any payment that is either received by the Participant or paid by the Company
on his behalf or any property, or any other benefit provided to him pursuant to the terms of the
Plan or any other arrangement or agreement with the Company or any other person whose payments or
benefits are treated as contingent on a change of ownership or control of the Company (or in the
ownership of a substantial portion of the assets of the Company) or any person affiliated with the
Company or such person (but only if such payment or other benefit is in connection with the
Participant’s employment by the Company) (collectively the “Payment”), is subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by Participant with
respect to such excise tax (such excise tax, together with any such interest and penalties,
hereinafter collectively referred to as the “Excise Tax”), Participant shall be entitled to receive
an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Participant of
all taxes (including any interest or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and penalties imposed with respect thereto)
and the Excise Tax imposed upon the Gross-Up Payment, Participant retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 7 if it
shall be determined that Participant is entitled to a Gross-Up Payment, but that the Payment does
not exceed 110% of the greatest amount that could be paid to Participant without giving rise to any
Excise Tax (the “Safe Harbor Amount”), then no Gross-Up Payment shall be made to Participant and
the amounts payable under this Plan shall be reduced so that the Payment, in the aggregate, is
reduced to the Safe Harbor Amount. The reduction of the amounts payable hereunder, if applicable,
shall be made by first reducing the cash payments under Section 6.1 (other than the Accrued
Benefits), unless an alternative method of reduction is elected by Participant.



13









 





     7.2 All determinations required to be made under this Section 7 including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by a nationally recognized accounting
firm selected by the Company (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and the Participant within ten business days of the receipt of
notice from Participant that there has been a Payment, or such earlier time as is requested by the
Company; provided that for purposes of determining the amount of any Gross-Up Payment, the
Participant shall be deemed to pay federal income tax at the highest marginal rates applicable to
individuals in the calendar year in which any such Gross-Up Payment is to be made and deemed to pay
state and local income taxes at the highest effective rates applicable to individuals in the state
or locality in which the Participant incurs income taxes in the calendar year in which any such
Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes that can be
obtained from deduction of such state and local taxes, taking into account limitations applicable
to individuals subject to federal income tax at the highest marginal rates. All fees and expenses
of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 7, shall be paid by the Company to the Participant (or to the appropriate
taxing authority on the Participant’s behalf) when the applicable tax is due. If the Accounting
Firm determines that no Excise Tax is payable by the Participant, it shall so indicate to the
Participant in writing. Any determination by the Accounting Firm shall be binding upon the Company
and the Participant. As a result of the uncertainty in the application of Section 4999 of the
Code, it is possible that the amount of the Gross-Up Payment determined by the Accounting Firm to
be due to (or on behalf of) the Participant was lower than the amount actually due
(“Underpayment”). In the event that the Company exhausts its remedies pursuant to Section 7.3 and
the Participant thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of Participant.



     7.3 The Participant shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of any Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than ten business days after
the Participant is informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The Participant shall not pay
such claim prior to the expiration of the thirty day period following the date on which it gives
such notice to the Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the Participant in writing prior to
the expiration of such period that it desires to contest such claim,
the Participant shall (i) give the Company any information reasonably requested by the Company
relating to such claim, (ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney reasonably selected by the
Company, (iii) cooperate with the Company in good faith in order to effectively contest such claim
and (iv) permit the Company to participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest. Without limitation on the
foregoing provisions of this Section 7.3, the Company shall control all



14









 







proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing authority in respect
of such claim and may, at its sole option, either direct the Participant to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the Participant agrees to
prosecute such contest to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine; provided,
further, that if the Participant is required to extend the statute of limitations to enable the
Company to contest such claim, the Participant may limit this extension solely to such contested
amount. The Company’s control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Participant shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.



     7.4 If, after the receipt by the Participant of an amount paid or advanced by the Company
pursuant to this Section 7, the Participant becomes entitled to receive any refund with respect to
a Gross-Up Payment, the Participant shall promptly pay to the Company the amount of such refund
received (together with any interest paid or credited thereon after taxes applicable thereto).



Section 8




Trusts




     In order to ensure in the event of a Change of Control that timely payment will be
made of certain obligations of the Company to the Participant provided for under this Plan, the
Company shall, immediately prior to or in connection with the consummation of a Change of Control,
pay into one or more trust(s) (the “Trust(s)”) established between the Company and any financial
institution with assets in excess of $100 million selected by the Company prior to the Change of
Control, as trustee (the “Trustee”), such amounts and at such time or times as are required in
order to fully pay all cash amounts due the Participant pursuant to Section 6 that are payable or
as are otherwise required pursuant to the terms of the Trust(s), with payment to be made in cash or
cash equivalents. Thereafter, all such payments required to be paid under Section 6 shall be made
out of the Trust(s); provided, however, that the Company shall retain liability for and pay the
Participant any amounts or provide for such other benefits due the Participant under this Plan for
which there are insufficient funds in the Trust(s), for which no funding of the Trust(s) is
required or in the event that the Trustee fails to make such payment to the Participant within the
time frames set forth in this Plan. Prior to the Change of Control, and
to the extent necessary because of a change in the Trustee, after the Change of Control, the
Company shall provide the Participant with the name and address of the Trustee. Nothing in this
Plan shall require the Company to maintain the funding required in this section beyond the first
anniversary of a Change of Control unless, before such first anniversary, the Participant’s
employment has terminated in a manner qualifying him for benefits under Section 6. The Participant
expressly waives any requirement under this Section 8 or otherwise for the Company to fund the
Trust(s) if funding would cause him to be taxed under Code Section 409A(b) or any successor law.



15









 





     For purposes of this Plan, the term “the Company and/or the Trustee” means the Trustee to the
extent the Company has put funds in the Trust(s) and the Company to the extent the Company has not
funded or fully funded the Trust(s); provided, however, that in accordance with subsection (a)
above, the Company shall retain liability for and pay the Participant any amounts or provide for
such other benefits due the Participant under this Plan for which the Trustee fails to make
adequate payment to the Participant within the time frames set forth in this Plan.



Section 9




Restrictive Covenants




     As consideration for the Company’s offer of coverage under this Plan to the Participant and
for other good and valuable consideration, during his employment and upon termination of employment
for any reason, the Participant agrees to comply with the restrictive covenants contained in
Section 9 of this Plan. In addition, receipt of the severance payments and benefits set forth in
Sections 5 and 6 is expressly conditioned upon the Participant’s continued compliance with Section
9.



     9.1 Confidentiality. All documents, records, techniques, business secrets
and other information of the Company, its subsidiaries and affiliates which have or will come into
the Participant’s possession from time to time during the Participant’s affiliation with the
Company and/or any of its subsidiaries or affiliates and which the Company treats as confidential
and proprietary to the Company and/or any of its subsidiaries or affiliates shall be deemed as such
by the Participant and shall be the sole and exclusive property of the Company, its subsidiaries
and affiliates. The Participant agrees that the Participant will keep confidential and not use or
divulge to any other individual or entity any of the Company’s or its subsidiaries’ or affiliates’
confidential information and business secrets, including, but not limited to, such matters as
costs, profits, markets, sales, products, product lines, key personnel, pricing policies,
operational methods, customers, customer requirements, suppliers, plans for future developments,
and other business affairs and methods and other information not readily available to the public.
Additionally, the Participant agrees that upon his termination of employment, irrespective of the
reason for such termination, the Participant shall promptly return to the Company any and all
confidential and proprietary information of the Company and/or its subsidiaries or affiliates that
is in his possession or control.



     The Participant agrees that the terms and provisions of this Plan, as well as any and all
incidents leading to or resulting from this Plan, are confidential and may not be discussed with
anyone other than his spouse, domestic partner, attorney or tax advisor without the prior written
consent of the Company’s Chief Human Resources Officer, except as required by law. In the event
that the Participant is subpoenaed, or asked to provide confidential information or to testify as a
witness or to produce documents in any existing or potential legal or administrative or other
proceeding or investigation formal or informal related to the Company, to the extent permitted by
applicable law, the Participant will promptly notify the Company of such subpoena or request and
will, if requested, meet with the Company for a reasonable period of time prior to any such
appearance or production.



16









 





     9.2 Non-Competition. During the Participant’s employment with the Company, and
thereafter during the Participant’s Severance Period, if any, the Participant shall not, without
the prior written consent of the Board, directly or indirectly engage or become a partner,
director, officer, principal, employee in the same or similar capacity as the Participant worked
for the Company, consultant, investor, creditor or stockholder in/for any business, proprietorship,
association, firm or corporation not owned or controlled by the Company or its subsidiaries or
affiliates which is engaged or proposes to engage or hereafter engages in a business competitive
directly or indirectly with the business conducted by the Company or any of its subsidiaries or
affiliates in any geographic area the Participant worked in or had responsibility over the previous
twelve (12) month period; provided, however, that the Participant is not prohibited from owning one
percent (1%) or less of the outstanding capital stock of any corporation whose stock is listed on a
national securities exchange.



     The Participant and the Company have attempted to limit the Participant’s right to compete
only to the extent necessary to protect the Company’s legitimate business interests. The
Participant and the Company recognize however, that reasonable people may differ in making such a
determination. Consequently, the Participant and the Company agree that if the scope or
enforceability of this Plan is in any way disputed at any time, a court may modify and enforce this
Plan to the extent it believes to be reasonable under the circumstances.



     9.3 Non-Solicitation. During the Participant’s employment with the Company
or any subsidiary or affiliate, and thereafter during the longer of (i) the Severance Period, if
any, or (ii) twelve (12) months following the Participant’s Termination Date (irrespective of the
reason for the Participant’s termination and without any reduction or modification), the
Participant shall not, directly or indirectly, in any manner or capacity whatsoever, either on the
Participant’s own account or for any person, firm or company:




     (a) take away, interfere with relations with, divert or attempt to divert from the Company any
business with any customer or account: (x) which was a customer on the last day of the
Participant’s employment and/or has been solicited or serviced by the Company within one (1) year
prior to the last day of the Participant’s employment; and (y) with which the Participant had any
contact or association, or which was under the supervision of the Participant, or the identity of
which was learned by the Participant, as a result of the Participant’s employment with the Company,
or




     (b) solicit, interfere with or induce, or attempt to induce, any employee or independent
contractor of the Company or any of its subsidiaries or affiliates to leave his employment or
service with the Company or to breach his employment agreement or other agreement, if any.



     9.4 Inventions and Discoveries. The Participant acknowledges that all ideas,
discoveries, inventions and improvements which are made, conceived or reduced to practice by the
Participant and every item of knowledge relating to the Company’s business interests (including
potential business interests) gained by the Participant during the Participant’s employment are the
sole and absolute property of the Company, and the Participant shall promptly disclose and hereby
irrevocably assigns all his right, title and interest in and to all such ideas, discoveries,
inventions, improvements and knowledge to the Company for its sole use and benefit, without
additional compensation, and shall communicate to the Company, without cost or delay, and without
publishing the same, all available information relating thereto. The Participant also hereby
waives all claims to moral rights in any such



17









 







ideas, discoveries, inventions, improvements and
knowledge. The provisions of this Section 9 shall apply whether such ideas, discoveries,
inventions or knowledge are conceived, made, gained or reduced to practice by the Participant alone
or with others, whether during or after usual working hours, whether on or off the job, whether
applicable to matters directly or indirectly related to the Company’s business interests (including
potential business interests), and whether or not within the specific realm of the Participant’s
duties. Any of the Participant’s ideas, discoveries, inventions and improvements relating to the
Company’s business interests or potential business interests and conceived, made or reduced to
practice during the Severance Period shall for the purpose of this Plan, be deemed to have been
conceived, made or reduced to practice before the end of the Participant’s employment. The
Participant shall, upon request of the Company, and without further compensation by the Company but
at the expense of the Company, at any time during or after his employment with the Company, sign
all instruments and documents requested by the Company and otherwise cooperate with the Company and
take any actions which are or may be necessary to protect the Company’s right to such ideas,
discoveries, inventions, improvements and knowledge, including applying for, obtaining and
enforcing patents, copyrights and trademark registrations thereon in any and all countries. To the
extent this Section shall be construed in accordance with the laws of any state which precludes a
requirement to assign certain classes of inventions made by an employee, this Section shall be
interpreted not to apply to any invention which a court rules and/or the Company agrees falls
within such classes.



     9.5 Non-Disparagement and Cooperation. The Participant agrees not to make any remarks
disparaging the conduct or character of the Company or any of its subsidiaries or affiliates, their
current or former agents, employees, officers, directors, successors or assigns (“Ryder Parties”),
except as may be necessary in the performance of his duties or as is otherwise required by law. The
Participant agrees to cooperate with the Company in the investigation, defense or prosecution of
any claims or actions now in existence or that may be brought in the future against or on behalf of
the Company. Such cooperation shall include meeting with representatives of the Company upon
reasonable notice at reasonable times and locations to prepare for discovery or any mediation,
arbitration, trial, administrative hearing or other
proceeding or to act as a witness. The Company shall reimburse the Participant for travel
expenses approved by the Company or its subsidiaries or affiliates incurred in providing such
assistance. The Participant shall notify the Company if the Participant is asked to assist,
testify or provide information by or to any person, entity or agency in any such proceeding or
investigation. Nothing in this provision is intended to or should be construed to prevent the
Participant from providing truthful information to any person or entity as required by law or his
fiduciary obligations.



     9.6 Specific Remedy. The Participant acknowledges and agrees that if he commits a
material breach of the Covenant of Confidentiality or, if applicable, the Covenant Against
Competition, the Covenant of Non-Solicitation, or the Covenant of Non-Disparagement and
Cooperation, the Company shall have the right to have the covenant specifically enforced



18









 







through an
injunction or otherwise, without any obligation that the Company post a bond or prove actual
damages, by any court having appropriate jurisdiction on the grounds that any such breach will
cause irreparable injury to the Company, without prejudice to any other rights and remedies that
Company may have for a breach of this Plan, and that money damages will not provide an adequate
remedy to the Company. The Participant further acknowledges and agrees that the Covenant of
Confidentiality, the Covenant Against Competition, the Covenant of Non-Solicitation, and the
Covenant of Non-Disparagement and Cooperation contained in this Plan are intended to protect the
Company’s business interests and goodwill, are fair, do not unreasonably restrict his future
employment and business opportunities, and are commensurate with the arrangements set out in this
Plan and with the other terms and conditions of the Participant’s employment. In addition, in
executing this Plan, the Participant makes an election to receive severance pay and benefits
pursuant to Section and is subject to the covenants above, therefore, the Participant shall have no
right to return any amounts or benefits that are already paid or to refuse to accept any amounts or
benefits that are payable in the future in lieu of his specific performance of his obligations
under the covenants above.



Section 10




Offset




     Participants in the Plan shall not be entitled to receive any other severance, notice, change
of control or termination payments or benefits (or notice in lieu of severance) from the Company.
In addition, the Participant’s benefits under the Plan will be reduced by the amount of any other
severance or termination payments, or pay in lieu of notice, payable by the Company to the
Participant on account of his employment, or termination of employment, with the Company,
including, but not limited to, (i) any payments required to be paid by the Company to the
Participant under any other program, policy, practice, or Plan, or (ii) any federal, state,
national, municipal, provincial, commonwealth or local law (including any payment pursuant to the
Worker Adjustment Retraining and Notification Act or any national, State, local, provincial,
municipal, or commonwealth equivalent). A Participant must notify the Plan Administrator if he
receives any such payments. Notwithstanding anything to the contrary in this Section 10, no
severance payment paid or payable to a Participant, after giving effect to the provisions of this
Section 10, shall be less than one week of Participant’s Base Salary.



Section 11




Cessation of Participation in Employer Plans




     Except as otherwise provided herein, a Participant, as of his Termination Date, shall cease to
participate in and shall cease to be treated as an employee of the Company for all purposes under
the employee benefit plans of the Company, including, without limitation, all retirement, welfare,
incentive, bonus and other similar plans, policies, programs and arrangements maintained for
employees of the Company. Each such Participant’s rights under any such plan, policy, program or
arrangement shall be governed by the terms and conditions of each thereof, as in effect on such
Termination Date.



19









 





Section 12




Administration




     12.1 Plan Interpretation and Benefit Determinations. The Plan is administered and
operated by the Plan Administrator who has complete authority, with respect to matters within its
jurisdiction, in its sole and absolute discretion, to construe the terms of the Plan (and any
related or underlying documents or policies), and to determine the eligibility for, and amount of,
severance benefits due under this Plan to Participants and their beneficiaries. All such
interpretations and determinations (including factual determinations) of the Plan Administrator
shall be final and binding upon all parties and persons affected thereby. The Plan Administrator
may appoint one or more individuals and delegate such of its powers and duties as it deems
desirable to any such individual(s), in which case every reference herein made to the Plan
Administrator shall be deemed to mean or include the appointed individual(s) as to matters within
their jurisdiction.



     12.2 Benefit Claims. A Participant or his beneficiary (if applicable) may file a
written claim with the Plan Administrator with respect to his rights to receive a benefit from the
Plan. The Participant will be informed of the decision of the Plan Administrator with respect to
the claim within 90 days after it is filed. Under special circumstances, the Plan Administrator
may require an additional period of not more than 90 days to review a claim. If this occurs, the
Participant will be notified in writing as to the length of the extension, the reason for the
extension, and any other information needed in order to process the claim. If the Participant is
not notified within the 90-day (or 180-day, if so extended) period, he may consider the claim to be
denied.



     If a claim is denied, in whole or in part, the Participant will be notified in writing of the
specific reason(s) for the denial, the exact plan provision(s) on which the decision was based,
what additional material or information is relevant to his case, and what procedure the Participant
should follow to get the claim reviewed again. The Participant then has sixty (60) days to appeal
the decision to the Plan Administrator.



     The appeal must be submitted in writing to the Plan Administrator. A Participant may request
to review pertinent documents, and may submit a written statement of issues and comments. A
decision as to a Participant’s appeal will be made within sixty (60) days after the appeal is
received. Under special circumstances, the Plan Administrator may require an additional period of
not more than 60 days to review an appeal. If this occurs, the Participant will be notified in
writing as to the length of the extension, not to exceed 120 days from the day on which the appeal
was received.



     If a Participant’s appeal is denied, in whole or in part, he will be notified in writing of
the specific reason(s) for the denial and the exact plan provision(s) on which the decision was
based. The decision on an appeal of the Plan Administrator will be final and binding on all
parties and persons affected thereby. If a Participant is not notified within the 60-day (or
120-day, if so extended) period, he may consider the appeal as denied.



20









 





Section 13




Miscellaneous




     13.1 Tax Withholding. The Company may withhold from any and all amounts payable under
this Plan such federal, state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation.



     13.2 Unfunded Plan. The Plan is unfunded. The Company shall pay the full cost of the
Plan out of its general assets, to the extent not satisfied by the Trust.



     13.3 Not a Contract of Employment. The Plan shall not be deemed to constitute a
contract of employment, or to impose on the Company any obligation to retain any Participant as an
employee, to continue any Participant’s current employment status or to change any employment
policies of the Company; nor shall any provision hereof restrict the right of the Company to
discharge any of its employees or restrict the right of any such employee to terminate his
employment with the Company.



     13.4 Successors.




     (a) This Plan is personal to the Participant and the Participant does not have the right to
assign this Plan or any interest herein.




     (b) This Plan shall inure to the benefit of and be binding upon the Company and its
successors. As used in this Plan, “the Company” shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes and agrees to perform this
Plan by operation of law, or otherwise.



     13.5 Full Settlement. Except as specifically provided otherwise in this Plan, the
Company’s obligation to make the payments provided for herein and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including, without limitation,
any setoff, counterclaim, recoupment, defense or other right which the Company may have
against the Participant or others. The Participant shall not be obligated to seek other
employment by way of mitigation of the amounts payable to the Participant under any of the
provisions of this Plan nor, except as specifically provided otherwise in this Plan, shall the
amount of any payment provided for under this Plan be reduced by any compensation or benefits
earned by the Participant as the result of employment by another employer after the Termination
Date.



     13.6 Attorney’s Fees. To the fullest extent permitted by law, the Company shall
promptly pay upon submission of statements all legal and other professional fees, costs of
litigation, prejudgment interest, and other expenses incurred in connection with any dispute
concerning payments, benefits and other entitlements which the Participant may have under Sections
5.1 or 6.1 subject to a cap of $15,000; provided, however, the Company shall be reimbursed by the
Participant for (i) the fees and expenses advanced in the event the Participant’s claim is, in a
material manner, in bad faith or frivolous and the arbitrator or court, as applicable, determines
that the reimbursement of such fees and expenses is appropriate, or (ii)



21









 







to the extent that the
arbitrator or court, as appropriate, determines that such legal and other professional fees are
clearly and demonstrably unreasonable.



     13.7 Code Section 409A.




     (a) Notwithstanding anything herein to the contrary, this Plan shall be construed and
interpreted in a manner so as not to trigger adverse tax consequences under Section 409A of the
Code and the rulings and regulations issued thereunder. The Company may amend this Plan in any
manner necessary to comply with Code Section 409A or any other applicable laws, with or without the
consent of the Participant. Furthermore, to the extent necessary to comply with Code Section 409A,
the payment terms for any of the payments or benefits payable hereunder shall be amended without
the Participant’s consent to comply with Code Section 409A.




     (b) Notwithstanding any provision to the contrary in this Plan, no payment or no Company-paid
insurance coverage to which the Participant otherwise would become entitled under this Plan shall
be made or provided prior to the earlier of (i) the expiration of the six (6)-month period measured
from the date of the Participant’s “separation from service” with the Company (as such term is
defined in Treasury Regulations issued under Code Section 409A) or (ii) the date of the
Participant’s death, if the Participant is deemed at the time of such separation from service to
be a “key employee” within the meaning of that term under Code Section 416(i) and such delayed
commencement is otherwise required in order to avoid a prohibited distribution under Code Section
409A(a)(2). Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all
payments and benefits deferred pursuant to this Section (whether they would have otherwise been
payable in a single sum or in installments in the absence of such deferral) shall be paid or
reimbursed to the Participant in a lump sum, and any remaining payments and benefits due under this
Plan shall be paid or provided in accordance with the normal payment dates specified for them
herein.



     13.8 Choice of Law and Jury Trial Waiver. The validity, interpretation,
construction, and performance of this Plan shall be governed by the laws of the State of Florida
without regard to its conflicts of law principles. The Parties agree that any suit, action or
other legal proceeding that is commenced to resolve any matter arising under or relating to any
provision of this Plan shall be commenced only in a court of the State of Florida (or, if
appropriate, a federal court located within the State of Florida), in either case located in Miami,
Florida, and the Parties consent to the jurisdiction of such court. The parties hereto accept the
exclusive jurisdiction and venue of those courts for the purpose of any such suit, action or
proceeding. The Company and the Participant each irrevocably waive any right to a trial by jury in
any action, suit or other legal proceeding arising under or relating to any provision of this Plan.



     13.9 Effect of Invalidity of Provision. If any provision of the Plan is held invalid
or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof,
and such provision shall, to the extent possible, be modified in such manner as to be valid and
enforceable but so as to most nearly retain the intent of the Company. If such modification is not
possible, the Plan shall be construed and enforced as if such provision had not been included in
the Plan.



22









 





     13.10 Effect of Plan. The Plan supersedes any and all prior severance arrangements,
policies, plans or practices of the Company and its predecessors (whether written or unwritten) and
further supersedes any nondisclosure, nonsolicitation, inventions and/or noncompetition agreements
covering the Participants; provided, however, that any rights to indemnification, all stock options
or other equity granted to the Participant prior to the Effective Date, and all agreements relating
thereto shall remain in full force and effect in accordance with their terms except as otherwise
modified herein.



     13.11 Records. The records of the Company with respect to employment history, Base
Salary, absences, and all other relevant matters shall be conclusive for all purposes of this Plan.



     13.12 Non-transferability. In no event shall the Company make any payment under this
Plan to any assignee or creditor of a Participant, except as otherwise required by law. Prior to
the time of a payment hereunder, a Participant shall have no rights by way of anticipation or
otherwise to assign or otherwise dispose of any interest under this Plan, nor shall rights be
assigned or transferred by operation of law.



     13.13 Other Benefits. No amount accrued or paid under this Plan shall be deemed
compensation for purposes of computing a Participant’s benefits under any retirement plan of the
Company or its subsidiaries, nor affect any benefits under any other benefit plan now or
subsequently in effect under which the availability or amount of benefits is related to the
Participant’s level of compensation.



Section 14




Amendment or Termination of the Plan




     The Plan may be amended or terminated, in whole or in part, (i) at any time, with or without
prior notice to Participants, by action of the Committee or its designees in order to
comply with applicable laws, rules and regulations and (ii) at any time with notice to
Participants by action of the Committee.



Section 15




Required Information




     15.1 Participants’ Rights Under ERISA. A Participant in the Plan is entitled to
certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA).
ERISA provides that all Plan participants shall be entitled to:




     - Examine, without charge, at the Plan Administrator’s office, all Plan documents, and
copies of all documents filed by the Plan with the U.S. Department of Labor, such as
detailed annual reports and Plan descriptions.




     - Obtain copies of Plan documents and other Plan information upon written request to
the Plan Administrator. The Plan Administrator may make a reasonable charge for the copies.



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     - Receive a summary of the Plan’s annual financial report if the Plan covers 100 or
more people. The Plan Administrator is required by law to furnish each Participant with a
copy of this summary annual report.



     In addition to creating rights for Plan participants, ERISA imposes duties upon the people who
are responsible for the operation of the Plan. The people who operate the Plan, called
“fiduciaries” of the Plan, have a duty to do so prudently and in the interest of Plan participants
and beneficiaries. No one, including the Company or any other person, may fire a Participant or
otherwise discriminate against him in any way to prevent him from obtaining a welfare benefit or
exercising his rights under ERISA. If a Participant’s claim for a benefit is denied in whole or in
part, he must receive a written explanation of the reason for the denial. The Participant has the
right to have the Plan review and reconsider his claim. Under ERISA, there are steps a Participant
can take to enforce the above rights.



     For instance, if a Participant requests materials from the Plan and does not receive them
within 30 days, he may file suit in a federal court. In such a case, the court may require the
Plan Administrator to provide the materials and pay the Participant up to $110 a day until the he
receives the materials, unless the materials were not sent because of reasons beyond the control of
the Plan Administrator.



     If the Participant’s claim for benefits is denied or ignored, in whole or in part, he may file
suit in a state or federal court. If a Participant is discriminated against for asserting his
rights, he may seek assistance from the U.S. Department of Labor, or may file suit in a federal
court. The court will decide who should pay court costs and legal fees. If the Participant is
successful, the court may order the person the Participant sued to pay these costs and fees. If
the Participant loses, the court may order him to pay these costs and fees, for example, if it
finds the Participant’s claim is frivolous. If a Participant has any questions about the Plan,
should contact the Plan Administrator. If the Participant has any questions about this statement
or about his
rights under ERISA, he should contact the nearest office of the Employee Benefits Security
Administration, U.S. Department of Labor, listed in the telephone directory or the Division of
Technical Assistance and Inquires, Employee Benefits Security Administration, U.S. Department of
Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.



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     15.2 Other Important Facts.



	 	 	 
	OFFICIAL NAME OF THE PLAN:

	 	Ryder System, Inc. Executive Severance Plan
	 
	 	 
	SPONSOR:

	 	Ryder System, Inc.
	 

	 	11690 NW 105th Street
	 

	 	Miami, Florida 33178-1103
	 

	 	(305) 500-3726
	 
	 	 
	EMPLOYER IDENTIFICATION
	 	 
	NUMBER (EIN):

	 	59-0739250
	 
	 	 
	PLAN NUMBER:

	 	[___]
	 
	 	 
	TYPE OF PLAN:

	 	Employee Welfare Severance Benefit Plan
	 
	 	 
	END OF PLAN YEAR:

	 	December 31
	 
	 	 
	TYPE OF ADMINISTRATION:

	 	Employer Administered
	 
	 	 
	PLAN ADMINISTRATOR:

	 	Ryder’s Chief Human Resources Officer
	 

	 	11690 NW 105th Street
	 

	 	Miami, Florida 33178-1103
	 
	 	 
	EFFECTIVE DATE:

	 	January 1, 2007






     The Plan Administrator keeps records of the Plan and is responsible for the administration of
the Plan. The Plan Administrator will also answer any questions you may have about the Plan.



     Service of legal process may be made upon the Plan Administrator.



     No individual may, in any case, become entitled to additional benefits or other rights under
this Plan after the Plan is terminated. Under no circumstances, will any benefit under this Plan
ever vest or become nonforfeitable.




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