exv10w1wb






Exhibit
10.1(b)




SEVERANCE AGREEMENT




     This SEVERANCE AGREEMENT (the “Agreement”) is executed on December 16, 2010 and is effective as
of the date set forth in Section 17 (the “Effective Date”), between Ryder System, Inc., a Florida
corporation (the “Company”), and Art A. Garcia (the “Executive”).



     In consideration of the mutual promises contained herein and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:



1. DEFINITIONS.




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



     (a) “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 Executive participates as of the Termination Date, if and to the extent that the
Executive 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 Executive may be entitled
through the Termination Date, (including but not limited to rights to indemnification under the
Company’s By-laws as in effect from time to time) 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.



     (b) “Base Salary” means the Executive’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 Executive’s behalf to any plan of the Company
under Section 125, 132, 401(k), or any other analogous section of the Code.



     (c) “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 Executive
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 Executive 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 Executive’s Severance Period.



 









 





     (d) “Cause” means: (i) fraud, misappropriation or embezzlement by the Executive
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) material breach by the Executive of the provisions of Section
10 of this Agreement (Restrictive Covenants); (vi) willful failure to perform the Executive’s key
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 within
the two (2) years preceding a Cause determination, “Cause” shall not include subsection (vii) of
the preceding sentence, provided that subsection (vii) shall continue to apply to any terminations
that are deemed to have retroactively occurred pursuant to Section 5(c)(iii). For the purposes of
this Section 1(d), any good faith interpretation by the Company’s Board of Directors (the “Board”)
of the foregoing definition of “Cause” shall be conclusive on the Executive. For purposes of this
Agreement “Cause” shall be determined by the Board or its designee, provided that following a
Change of Control, “Cause” shall be determined by a majority of the Incumbent Board (as defined in
Section 1(e)), or, if there are fewer than three (3) members in the Incumbent Board (excluding the
Executive) at the date of such a determination, by the remaining Incumbent Board members, if any,
and two-thirds of the members of the Board. Any good faith interpretation that satisfies the
foregoing sentence shall be conclusive on the Executive. The Executive shall not have the right to
vote or be counted for purposes of the determination of Cause.



     (e) “Change of Control” Except as provided below, for the purpose of this Agreement, a
“Change of Control” shall be deemed to have occurred if:



          (i) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”)) (a “Person”) becomes the beneficial
owner, directly or indirectly, of thirty percent (30%) or more of the combined voting power of the
Company’s outstanding voting securities ordinarily having the right to vote for the election of
directors of the Company; provided, however, that for purposes of this subparagraph (i), the
following acquisitions shall not constitute a Change of Control: (A) any acquisition by any
employee benefit plan or plans (or related trust) of the Company and its subsidiaries and
affiliates or (B) any acquisition by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of subparagraph (iii) of this Section 1(e); or




          (ii) the individuals who, as of January 1, 2007, constituted the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board, provided that any person
becoming a director subsequent to January 1, 2007 whose election, or nomination for election, was
approved by a vote of the persons comprising at least a majority of the Incumbent Board (other than
an election or nomination of an individual whose initial assumption of office is in connection with
an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the 1934 Act (as in effect on January 23, 2000)) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent Board; or




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          (iii) there is a reorganization, merger or consolidation of the Company (a “Business
Combination”), in each case, unless, following such Business Combination, (A) all or substantially
all of the individuals and entities who were the beneficial owners, respectively, of the Company’s
outstanding common stock and outstanding voting securities ordinarily having the right to vote for
the election of directors of the Company immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then outstanding voting
securities ordinarily having the right to vote for the election of directors, as the case may be,
of the corporation resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination, of the Company’s
outstanding common stock and outstanding voting securities ordinarily having the right to vote for
the election of directors of the Company, as the case may be, (B) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit plan or plans (or
related trust) of the Company or such corporation resulting from such Business Combination and
their subsidiaries and affiliates) beneficially owns, directly or indirectly, 30% or more of the
combined voting power of the then outstanding voting securities of the corporation resulting from
such Business Combination and (C) at least a majority of the members of the board of directors of
the corporation resulting from such Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of the Board, providing for such
Business Combination; or




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




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




     Notwithstanding anything in this Section 1(e) to the contrary, for purposes of Section
5(c)(ii), 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” or a change in the “ownership of a
substantial portion of the assets” under Section 409A of the Code, and the rulings and regulations
issued under that Section.



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



     (g) “Company Entity” has the meaning set forth in Section 15(e).



     (h) “Disability” means (i) the Executive is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period of not less than
twelve (12) months; (ii) the Executive is, by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan of the Company; or (iii)
a determination by the Social Security Administration that the Executive is totally disabled.



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     (i) “Employment Term” means the Executive’s term of employment commencing on the
Effective Date  and ending on the first to occur of the events specified
in Section 4.



     (j) “Equity Compensation Opportunities” means the Executive’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 in favor of the Executive
that is either triggered by the Executive 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 Executive may have received value for his equity
compensation in the Change of Control.



     (k) “Good Reason” only applies within two (2) years following a Change of Control, as
defined in Section 1(e), except as otherwise provided in Section 5(c)(iv), and means the occurrence
of any of the following without the Executive’s consent: (i) any material reduction in the
aggregate value of the Executive’s compensation (consisting of the Executive’s base salary, target
bonus opportunity under the Company’s annual bonus plan or program, cash perquisites, and Equity
Compensation Opportunities); (ii) the Company’s requiring the Executive 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
Executive is based at the time of the Change of Control, except for travel reasonably required in
the performance of his responsibilities (which does not materially exceed the level of travel
required of the Executive in the six (6) month period immediately preceding the Change of Control);
(iii) any failure by the Company to obtain the assumption and agreement to perform under this
Agreement by a successor as contemplated by Section 8; (iv) any failure by the Company to pay into
the Trust(s) the amounts and at the time or times as are required pursuant to the terms of Section
6; or (v) any material and adverse changes in the Executive’s duties and responsibilities. For the
avoidance of doubt, a change in reporting relationship or title shall not constitute “Good Reason.”



     The Executive’s termination of employment shall only constitute a termination for Good Reason
if the Executive terminates employment on or prior to the first anniversary of the date on which
the circumstances providing a basis for such termination initially occurred. In addition, the
Executive’s continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason, until ninety (90) days have elapsed since
the occurrence of the circumstance he would assert constitutes Good Reason, and the Executive has
not provided notice in accordance with Section 1(m) prior to the end of such ninety (90) day
period.



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



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          (i) the termination of the Executive’s employment is due to the transfer of his employment
between the Company and a Company Entity, or among the Company and one or more Company Entities; or




          (ii) the termination results from the sale or transfer of all or a material portion of the
operations of the Company or any of its subsidiaries or 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 (a) the Executive’s employment is transferred to the
purchaser or transferee of the Disposed Business on economic terms and conditions of employment
comparable to the economic terms and conditions of employment existing prior to such sale or
transfer or (b) Executive terminates his employment with the Company or any of its subsidiaries or
affiliates notwithstanding that the Executive 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 Board in its sole discretion, on economic terms and conditions
comparable to the economic terms and conditions of employment existing prior to such sale or
transfer and whether an offer of employment was made and whether the terms and conditions of such
offer are economically equivalent for purposes of this subsection shall be determined by the Board
in its discretion; or




          (iii) the termination follows a Change of Control and either (a) the Executive’s employment is
transferred to the purchaser or transferee of the Disposed Business and the obligations of this
Agreement are assumed by the purchaser or transferee or (b) the Executive 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 Executive 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
Agreement, as determined by the Company in its sole discretion.




     In no event shall an “Involuntary Termination” occur if the Executive 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 (ii) and (iii) above, the Company’s
obligations under this Agreement shall terminate immediately and the Executive shall not be
entitled to any amounts or benefits hereunder but shall still be required to comply with Section 10
hereof. This Agreement shall, however, continue in effect if the Executive’s employment is
transferred between or among the Company and Company Entities, as contemplated in subsection (i)
above.



     (m) “Notice of Termination” means written notice (i) specifying the effective date of
the Executive’s termination (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 Executive’s voluntary
termination other than for Good Reason); (ii) solely with respect to the Executive’s terminating
for Good Reason, citing the specific provision of this Agreement 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 Executive 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



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Executive’s employment on account of Disability, its intent to terminate his employment on
account of Disability. A Notice of Termination will, as applicable, be provided by or to the Board.




     (n) “Release” means a severance agreement and general release in a comprehensive form
used by the Company for such purposes at the time of the Executive’s separation from employment (a
copy of such form as in effect on the date this Agreement is executed is attached to this Agreement
by way of example, but the Executive acknowledges that such form may be updated by the Company from
time to time). If the Executive 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 Executive
executes the Release.



     (o) “Release Effective Date” means, if the Executive 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 Executive has not revoked the Release prior to such date, or (ii) the
Termination Date. If the Executive 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 Executive,
or (ii) the Termination Date.



     (p) “Severance Multiple” means a multiple of one and one-half (1 1/2). On or after a
Change of Control, the Severance Multiple shall mean two (2).



     (q) “Severance Period” means a period of one and one-half (1 1/2) years following the
Termination Date. On or after a Change of Control, the Severance Period shall mean a period of two
(2) years following the Termination Date.



     (r) “Specified Employee” means an individual deemed to be a “specified employee” in
accordance with the policies and procedures adopted by the Company and generally includes any
individual who is an officer of the Company.



     (s) “Target Bonus” means the stated target incentive award which the Executive is
eligible to receive under the Company’s annual incentive compensation plan or awards for the year
in which the Termination Date occurs.



     (t) “Termination Date” means the effective date of the termination of the Executive’s
employment with the Company and all subsidiaries or affiliates.



     (u) “Trustee” shall have the meaning ascribed to such term in Section 6 of this
Agreement.



2. POSITION/DUTIES.




     (a) The Company agrees to continue to employ the Executive in the Executive’s capacity as of
the Effective Date and with such title as approved by the Board, subject to the terms and
conditions outlined in this Agreement. The Executive accepts the continuing employment. The
Executive will have those responsibilities, duties, authorities and titles consistent with the
Executive’s status as an officer of the Company as assigned from time to time by the Board, shall
be subject to all rules, policies and procedures of the Company, and shall



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serve in such other executive capacities, without additional compensation, as may be assigned
by the Board from time to time.




     (b) During the Employment Term, the Executive shall devote substantially all of his full
business time (other than vacation and sick leave), energy and skill in the performance of his
duties with the Company. However, this Agreement does not prevent the Executive from (i) managing
his and his family’s personal passive investments, and (ii) participating in charitable, civic,
educational, professional, community or industry affairs or serving on the board of directors of
other companies (subject to the consent of the Board), so long as these activities do not
materially interfere with the performance of his duties or create a potential actual or perceived
conflict of interest or violate Section 10 of this Agreement.



3. PRIOR ARRANGEMENTS.




     The parties agree that, as of the Effective Date, all prior employment, separation, severance,
termination, change of control, or similar agreements, arrangements, or plans whether oral or
written covering the Executive are terminated and superseded and any notice periods with respect to
such terminations are deemed satisfied or explicitly waived.



4. TERMINATION.




     The Executive’s employment and the Employment Term shall terminate on the first of the
following to occur:



     (a) DISABILITY. Upon thirty (30) days’ written notice by the Company to the Executive of
termination due to Disability.



     (b) DEATH. On the date of death of the Executive.



     (c) CAUSE. Immediately upon written notice by the Company to the Executive of a termination
for Cause.



     (d) INVOLUNTARY TERMINATION WITHOUT CAUSE. Upon written notice by the Company to the Executive
of an Involuntary Termination without Cause.



     (e) GOOD REASON ON OR AFTER A CHANGE OF CONTROL. On or after the occurrence of a Change of
Control, upon written notice by the Executive to the Company of a termination for Good Reason,
subject to Section 1(m) and as provided in Section 9.



     (f) VOLUNTARY TERMINATION. Upon notice by the Executive to the Company of the Executive’s
voluntary termination of employment, or on or after a Change of Control, upon notice by the
Executive to the Company of the Executive’s voluntary termination of employment without Good Reason
(which the Company may, in its sole discretion, make effective earlier than the termination date
proposed by the Executive), subject to Section 1(m) and as provided in Section 9.



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5. CONSEQUENCES OF TERMINATION.




     (a) DISABILITY. In the event the Employment Term ends on account of the Executive’s
Disability, the Company shall pay and provide the Executive any Accrued Benefits.



     (b) DEATH. In the event the Employment Term ends due to the Executive’s death, the Company
shall pay and provide Executive’s estate (to the extent that beneficiaries have not been designated
under applicable benefit or compensation plans) any Accrued Benefits.



     (c) INVOLUNTARY TERMINATION WITHOUT CAUSE NOT DUE TO A CHANGE OF CONTROL. In the event of the
Executive’s Involuntary Termination not due to a Change of Control, the Executive shall be entitled
to receive the compensation listed below, subject to his compliance with the terms and conditions
of Section 5(f) (“Additional Terms”).



          (i) The Company shall pay or provide to the Executive the following payments and benefits:





	 	(A)	 	Any Accrued Benefits payable as soon as
practical after the Termination Date, or such other date as their terms
require;
	 
	 	(B)	 	Continued payment of the Executive’s Base
Salary for the applicable Severance Period payable in installments in
accordance with the Company’s standard payroll practices, but no less
frequently than monthly, beginning within sixty (60) days following the
Termination Date (with the first payment to include amounts accrued
between the Termination Date and the first payment date); provided
that, if the sixtieth (60th) day following the Termination Date falls
in the calendar year following the calendar year in which the
Termination Date occurs, payments will not commence prior to the first
day of the calendar year following the calendar year in which the
Termination Date occurs; provided further that, in the event the
Executive is a Specified Employee on the Termination Date, payment
shall be made in accordance with the following provisions:






	 	a.	 	If the aggregate value of the
payments due to the Executive pursuant to this Section
5(c)(i)(B) during the six (6) month period following his
Termination Date does not exceed two (2) times the lesser of:
(x) the Specified Employee’s base salary for the year prior to
the year in which the Termination Date occurs; or (y) the
maximum amount that may be taken into account under a qualified
retirement plan pursuant to Section 401(a)(17) of the Code for
the year in which the Termination Date occurs (such amount, the
“Separation Pay Limit”), the Executive shall receive
continuation of his Base Salary for the Severance Period payable
in installments in accordance with the Company’s




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	 	 	 	standard payroll practices, but no less frequently than
monthly, as set forth above.
	 
	 	b.	 	If the aggregate value of the
payments due to the Executive pursuant to this Section
5(c)(i)(B) during the six (6) month period following his
Termination Date exceeds the Separation Pay Limit, the Executive
shall not receive any payments of continued Base Salary in
excess of the Separation Pay Limit during such six (6) month
period. Any amounts in excess of the Separation Pay Limit which
would have otherwise been paid during the six (6) month period
following the Executive’s Termination Date shall be paid in a
lump sum on the first day following the six-month anniversary of
the Executive’s Termination Date. Beginning with the first
payroll cycle occurring on or after the first day following the
six-month anniversary of the Executive’s Termination Date and
continuing until the end of the Severance Period, the Executive
shall receive continuation payments of the Executive’s Base
Salary in installments in accordance with the Company’s standard
payroll practices, but no less frequently than monthly.
	 
	 	c.	 	For purposes of Section 409A of
the Code, each installment payment of Base Salary made pursuant
to this Section 5(c)(i)(B) shall be treated as a separate
payment of compensation.






	 	(C)	 	A lump sum payment equal to the Executive’s
Target Bonus multiplied by the Severance Multiple, payable on the
Release Effective Date or as soon thereafter as is reasonably
practicable, but in no event shall such payment occur later than March
15 of the calendar year following the year in which the Termination
Date occurs;
	 
	 	(D)	 	Continuation of medical, prescription, dental,
vision and health care reimbursement benefits for the Benefits
Continuation Period for the Executive 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 Executive shall continue to pay to the Company
any applicable contribution amounts that the Executive would otherwise
have to pay for such benefits if the Executive was still employed by
the Company; provided further that if the Executive continues to




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	 	 	 	receive benefits pursuant to this Section 5(c)(i)(D) during a period
of time during which, in the absence of the benefits provided in this
Section 5(c)(i)(D), the Executive would not otherwise be entitled to
COBRA continuation coverage under Section 4980B of the Code, the
Executive shall receive reimbursement for all medical expenses which
are covered by the applicable plans, programs or policies on the date
no later than December 31 of the calendar year immediately following
the calendar year in which the applicable expenses have been
incurred. If the Executive fails to accept available coverage from
another employer or fails to notify the Company (or following a
Change of Control, the Company or the Trustee) within thirty (30)
days of the Executive’s eligibility to receive coverage under another
employer’s plan, the Executive’s coverage under this Section
5(c)(i)(D) shall immediately terminate and the Executive shall cease
to be entitled to any such benefits under this Agreement 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 Executive agrees that the Company may
offset against such reimbursement or deduct such reimbursement from
any payments due to the Executive in full or partial payment of such
reimbursement; provided that no such offset shall be made in
violation of Section 409A of the Code;
	 
	 	(E)	 	The Company shall provide the Executive with
professional outplacement services as determined in the Company’s sole
discretion until the earliest of: (w) six (6) months after the end of
the Severance Period, (x) the date on which the Executive obtains
another full-time job, (y) the date on which the Executive becomes
self-employed, and (z) the date on which the Executive has received all
services or benefits due under the applicable Company-sponsored
outplacement program. The Company will not pay the Executive cash in
lieu of professional outplacement services;
	 
	 	(F)	 	If the Executive is covered by any
Company-sponsored executive life insurance program as of the
Termination Date, the Company shall continue to pay for the Executive’s
coverage until the end of the Severance Period. At the end of the
Severance Period, the Executive will have thirty-one (31) days from the
last day of the Severance Period to convert his life insurance coverage
to an individual policy;
	 
	 	(G)	 	If the Executive 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
Executive’s coverage until the end of the Severance Period. At the




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	 	 	 	end of the Severance Period, the Executive shall be entitled to keep
this policy if he continues to pay the annual premiums; and
	 
	 	(H)	 	Any benefits or rights to which the Executive
is entitled under any of the Company’s stock or equity plans in
accordance with the terms and conditions of those plans.





          (ii) If a Change of Control occurs and the Executive is then receiving, or is entitled to
receive, payments and benefits under Section 5(c)(i) of this Agreement as a result of his
Involuntary Termination without Cause not due to a Change of Control, the Company shall pay to the
Executive in a lump sum, within seven (7) calendar days after the Change of Control, an amount (in
lieu of future installment payments) equal to the present value of all future cash payments due to
the Executive under Section 5(c)(i)(B) of this Agreement using the prime commercial lending rate
published by the Trustee at the time the Change of Control occurs. The Company and the Executive
shall continue to be liable to each other for all of their other respective obligations under this
Agreement. In the event that the Executive was a Specified Employee on his Termination Date, if
the sum of the payments which the Executive previously received in accordance with Section
5(c)(i)(B) and the payment set forth in this Section 5(c)(ii) exceeds the Separation Pay Limit, any
amounts in excess of the Separation Pay Limit shall be paid on the later of (A) the first day
following the six-month anniversary of the Termination Date and (B) within seven (7) calendar days
after the Change of Control. For the avoidance of doubt, in the event that the provisions of this
Section 5(c)(ii) become effective, they shall supersede the provisions of Section 5(c)(i)(B).




          (iii) If a Change of Control occurs and (A) the Executive experienced an Involuntary
Termination within twelve (12) months prior to the date on which the Change of Control occurs and
(B) it is reasonably demonstrated by the Executive 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
in addition to the payments and benefits set forth in Section 5(c)(i), the Executive shall be
entitled to the following: (x) a lump sum payment equal to 50% of the Executive’s Base Salary,
payable as soon as practicable but no later than sixty (60) days following the Change of Control;
provided that if the Executive was a Specified Employee on his Termination Date, such payment shall
be paid on the later of (1) as soon as practicable but no later than sixty (60) days following the
Change of Control and (2) the first day following the six-month anniversary of the Executive’s
Termination Date; (y) the difference between the Target Bonus payment which the Executive would
have received if the Severance Multiple had been two (2) and the Target Bonus amount paid to the
Executive pursuant to Section 5(c)(i)(C), which shall be paid as soon as practicable following the
Change of Control but no later than March 15 of the calendar year following the calendar year in
which the Change of Control occurs; and (z) for purposes of determining the Severance Period for
benefits provided under Sections 5(c)(i)(D), (F), and (G), the Executive’s Severance Period shall
be defined as the twenty-four (24) month period following the Termination Date. Notwithstanding
the foregoing, in the event that (A) a Change of Control occurs and payments and benefits become
payable to the Executive pursuant to this Section 5(c)(iii); and (B) such Change of Control does
not constitute a “change in ownership or effective control” or a change in the “ownership of a
substantial portion of assets” under Section 409A of the Code and the rules and regulations





11











 




issued thereunder, the lump sum payment set forth in (x) above shall be paid on the first
anniversary of the Executive’s Termination Date.




          (iv) If a Change of Control occurs and (A) the Executive’s employment was voluntarily
terminated within twelve (12) months prior to the date on which the Change of Control occurs; (B)
such termination would have constituted a termination for Good Reason if it had occurred within two
(2) years following the Change of Control; and (C) it is reasonably demonstrated by the Executive
that the circumstances which would have caused the occurrence of Good Reason either (a) were at the
request of a third party who had 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
Executive shall be entitled to the following (based on a Severance Multiple of two (2) and a
Severance Period of twenty-four (24) months from the Termination Date):





	 	(A)	 	A lump sum payment equal to the Executive’s
Base Salary multiplied by the Severance Multiple payable within sixty
(60) days following the Change of Control; provided that, if the
sixtieth (60th) day following the Change of Control falls in the
calendar year following the calendar year in which the Change of
Control occurs, payment will not be made prior to the first day of the
calendar year following the calendar year in which the Change of
Control occurs; provided further that, if the Executive is a Specified
Employee on the Termination Date, any amounts in excess of the
Separation Pay Limit shall be paid to the Executive in a lump sum on
the later of (x) the first day following the six-month anniversary of
the Termination Date and (y) within sixty (60) days following the
Change of Control. In the event that (i) a Change of Control occurs
and payments and benefits become payable to the Executive pursuant to
this Section 5(c)(iv); and (ii) such Change of Control does not
constitute a “change in ownership or effective control” or a change in
the “ownership of a substantial portion of assets” under Section 409A
of the Code and the rules and regulations thereunder, the lump sum
payment set forth herein shall be paid on the first anniversary of the
Executive’s Termination Date; and
	 
	 	(B)	 	A lump sum payment equal to the Target Bonus
multiplied by the Severance Multiple, payable on the Release Effective
Date or as soon thereafter as is practicable, but no later than March
15 of the calendar year following the calendar year in which the Change
of Control occurs; and
	 
	 	(C)	 	Continuation of medical, prescription, dental,
vision and health care reimbursement benefits for the remainder of the
Benefits Continuation Period for the Executive and his family through
COBRA, in accordance with the applicable plans, programs or policies,
if any, of the Company or its successor, and on such terms




12









 






	 	 	 	applicable to comparably situated active employees during such period
(which shall offset the Company’s COBRA obligation, if any); provided
that the Executive shall continue to pay to the Company any
applicable contribution amounts that the Executive would otherwise
have to pay for such benefits if the Executive was still employed by
the Company; provided further that if the Executive continues to
receive benefits pursuant to this Section 5(c)(iv)(C) during a period
of time during which, in the absence of the benefits provided in this
Section 5(c)(iv)(C), the Executive would not otherwise be entitled to
COBRA continuation coverage under Section 4980B of the Code, the
Executive shall receive reimbursement for all medical expenses which
are covered by the applicable plans, programs or policies on the date
no later than December 31 of the calendar year immediately following
the calendar year in which the applicable expenses have been
incurred. If the Executive fails to accept available coverage from
another employer or fails to notify the Company (or the Trustee)
within thirty (30) days of the Executive’s eligibility to receive
coverage under another employer’s plan, the Executive’s coverage
under this Section 5(c)(iv)(C) shall immediately terminate and the
Executive shall cease to be entitled to any such benefits under this
Agreement 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 Executive
agrees that the Company may offset against such reimbursement or
deduct such reimbursement from any payments due to the Executive in
full or partial payment of such reimbursement; provided that, no such
offset shall be made in violation of Section 409A of the Code; and
	 
	 	(D)	 	A lump sum payment equal to the value of the
Company-sponsored outplacement program maintained by the Company
immediately prior to the Change of Control, based on the Executive’s
management level as of the Termination Date, which shall be paid within
sixty (60) days following the Change of Control; provided that, if the
sixtieth (60th) day following the Change of Control falls in the
calendar year following the calendar year in which the Change of
Control occurs, payment will not be made prior to the first day of the
calendar year following the calendar year in which the Change of
Control occurs; provided further that, if the Executive is a Specified
Employee on the Termination Date, such amount shall be paid on the
later of (x) within sixty (60) days following the Change of Control and
(y) the first day following the six-month anniversary of the
Termination Date. In the event that (i) a Change of Control occurs and
payments and benefits become payable to the Executive pursuant to this
Section 5(c)(iv); and (ii) such Change of Control does not




13









 






	 	 	 	constitute a “change in ownership or effective control” or a change
in the “ownership of a substantial portion of assets” under Section
409A of the Code and the rules and regulations thereunder, the lump
sum payment set forth herein shall be paid on the first anniversary
of the Executive’s Termination Date; and
	 
	 	(E)	 	If the Executive 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 Executive’s coverage until the end of the Severance Period. At
the end of the Severance Period, the Executive will have thirty-one
days (31) from the last day of the Severance Period to convert his life
insurance coverage to an individual policy; and
	 
	 	(F)	 	If the Executive 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 Executive’s coverage until the end of the Severance
Period. At the end of the Severance Period, the Executive shall be
entitled to keep this policy if he continues to pay the annual
premiums; and
	 
	 	(G)	 	Any benefits or rights to which the Executive
is entitled under any of the Company’s stock or equity plans in
accordance with the terms and conditions of any such plans.
	 
	 	(H)	 	For the avoidance of doubt, no payments or
benefits payable to the Executive pursuant to this Section 5(c)(iv)
shall continue beyond the end of the second calendar year following the
calendar year in which the Termination Date occurs.
	 
	 	(I)	 	The Executive shall not be entitled to any
payments or benefits pursuant to this Section 5(c)(iv), unless prior to
the Executive’s Termination Date, the Executive had given the Company
notice of the circumstances forming the basis of termination for Good
Reason and an opportunity to cure such circumstances in accordance with
Sections 1(k) and (m).





     On the Termination Date, the Executive shall no longer be eligible to participate in any
Company plan, program or policy, other than those described in Section 5(c) including, but not
limited to, the Company’s long-term incentive plan, short-term disability plan, long-term
disability plan, employee stock purchase plan, and business travel accident plan.



     (d) TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION. If the Executive’s employment is
terminated (i) by the Company for Cause, or (ii) voluntarily by the Executive (other than for Good
Reason on or after a Change of Control), the Company shall pay or provide to the Executive the
Accrued Benefits.



14









 





     (e) TERMINATION DUE TO A CHANGE OF CONTROL. If, within the two (2) year period commencing on a
Change of Control of the Company, (A) the Executive experiences an Involuntary Termination, or (B)
the Executive terminates his employment with the Company or a Company Entity for Good Reason, the
Executive shall be entitled to receive the compensation and benefits listed below, subject to his
compliance with the terms of Section 5(f):



          (i) The Company shall pay or provide to the Executive the following payments and benefits:





	 	(A)	 	Any Accrued Benefits payable as soon as
practical after the Termination Date;
	 
	 	(B)	 	A lump sum payment equal to the Executive’s
Base Salary multiplied by the Severance Multiple payable within sixty
(60) days following the Termination Date; provided that, if the
sixtieth (60th) day following the Termination Date falls in the
calendar year following the calendar year in which the Termination Date
occurs, payment will not be made prior to the first day of the calendar
year following the calendar year in which the Termination Date occurs;
provided further that, if the Executive is a Specified Employee on the
Termination Date, any amounts payable under this Section 5(e)(i)(B) in
excess of the Separation Pay Limit shall be paid to the Executive in a
lump sum on the first day following the six-month anniversary of the
Termination Date;
	 
	 	(C)	 	A lump sum payment equal to the Target Bonus
multiplied by the Severance Multiple, payable on the Release Effective
Date or as soon thereafter as is practicable, but no later than March
15 of the calendar year following the calendar year in which the
Termination Date occurs;
	 
	 	(D)	 	Continuation of medical, prescription, dental,
vision and health care reimbursement benefits for the Benefits
Continuation Period for the Executive and his family through COBRA, in
accordance with the applicable plans, programs or policies, if any, of
the Company or its successor, 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
Executive shall continue to pay to the Company any applicable
contribution amounts that the Executive would otherwise have to pay for
such benefits if the Executive was still employed by the Company;
provided further that if the Executive continues to receive benefits
pursuant to this Section 5(e)(i)(D) during a period of time during
which, in the absence of the benefits provided in this Section
5(e)(i)(D), the Executive would not otherwise be entitled to COBRA
continuation coverage under Section 4980B of the Code, the Executive
shall receive




15









 






	 	 	 	reimbursement for all medical expenses which are covered by the
applicable plans, programs or policies on the date no later than
December 31 of the calendar year immediately following the calendar
year in which the applicable expenses have been incurred. If the
Executive fails to accept available coverage from another employer or
fails to notify the Company (or the Trustee) within thirty (30) days
of Executive’s eligibility to receive coverage under another
employer’s plan, the Executive’s coverage under this Section
5(e)(i)(D) shall immediately terminate and the Executive shall cease
to be entitled to any such benefits under this Agreement 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 Executive agrees that the Company may
offset against such reimbursement or deduct such reimbursement from
any payments due to the Executive in full or partial payment of such
reimbursement; provided that, no such offset shall be made in
violation of Section 409A of the Code;
	 
	 	(E)	 	The Company (or the Trustee) shall pay to the
Executive in a lump sum an amount equal to the value of the
Company-sponsored outplacement program maintained by the Company
immediately prior to the Change of Control, based on the Executive’s
management level as of the Termination Date, which shall be paid within
sixty (60) days following the Termination Date; provided that, if the
sixtieth (60th) day following the Termination Date falls in the
calendar year following the calendar year in which the Termination Date
occurs, payment will not be made prior to the first day of the calendar
year following the calendar year in which the Termination Date occurs;
provided further that, if the Executive is a Specified Employee on the
Termination Date, such amount shall be paid on the first day following
the six-month anniversary of the Termination Date;
	 
	 	(F)	 	If the Executive 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 Executive’s coverage until the end of the Severance Period. At
the end of the Severance Period, the Executive will have thirty-one
(31) days from the last day of the Severance Period to convert his life
insurance coverage to an individual policy;
	 
	 	(G)	 	If the Executive 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 Executive’s coverage until the end of the Severance
Period. At the end of the Severance Period, the Executive shall be




16









 






	 	 	 	entitled to keep this policy if he continues to pay the annual
premiums; and
	 
	 	(H)	 	Any benefits or rights to which the Executive
is entitled under any of the Company’s stock or equity plans in
accordance with the terms and conditions of any such plans.





          (ii) In the event that the Executive becomes entitled to payments and benefits pursuant to
Section 5(e)(i) in connection with a Change of Control that does not constitute a “change in
ownership or effective control” or a change in the “ownership of a substantial portion of the
assets” under Section 409A of the Code, and the rulings and regulations issued thereunder, the
payments and benefits set forth in Sections 5(e)(i)(B), (C), (D), (F), and (G) herein (in each
case, based on a Severance Period of two (2) years from the Termination Date and a Severance
Multiple of two (2)), shall be paid in accordance with the schedule set forth in Section 5(c)(i),
except as otherwise provided in this Section 5(e)(ii). In addition, the services set forth in
Section 5(c)(i)(E) (based on a Severance Period of eighteen (18) months) shall be provided in lieu
of the payment set forth in Section 5(e)(i)(E). Notwithstanding the foregoing, with respect to the
payment set forth in Section 5(e)(i)(B), an amount equal to the lesser of (x) the Separation Pay
Limit or (y) the amount set forth in Section 5(e)(i)(B) shall be paid to the Executive on the
Release Effective Date or as soon thereafter as is practicable, but no later than sixty (60) days
following the Termination Date. In the event that the amount set forth in Section 5(e)(i)(B)
exceeds the Separation Pay Limit, any excess amounts shall be paid at the time they would have
otherwise been paid pursuant to Section 5(c)(i)(B).




     On the Termination Date, the Executive shall no longer be eligible to participate in any
Company plan, program or policy, other that those described in this Section 5(e)(i) including, but
not limited to, the Company’s long-term incentive plan, short-term disability plan, long-term
disability plan, employee stock purchase plan, and business travel accident plan.



          (iii) Effect of Section 280G on Payments.





	 	(A)	 	Reduction in Payments. In the event any Payment
(as defined below) would constitute an “excess parachute payment”
within the meaning of Section 280G of the Code, the Company shall
reduce (but not below zero) the aggregate present value of the Payments
under this Agreement to the Reduced Amount (as defined below), if
reducing the Payments under this Agreement will provide the Executive
with a greater net after-tax amount than would be the case if no
reduction was made.
	 
	 	(B)	 	Determining Net After-Tax Amounts. In
determining whether a reduction in Payments under this Agreement will
provide the Executive with a greater net after-tax amount, the
following computations shall be made:






	 	a.	 	The net after-tax benefit to the
Executive without any reduction in Payments shall be determined
by reducing the




17









 






	 	 	 	Payments by the amount of federal, state, local and other
applicable taxes (including the Excise Tax (as defined
below)) applicable to the Payments. For these purposes, the
tax rates shall be determined using the maximum marginal rate
applicable to such Executive for each year in which the
Payments shall be paid.
	 
	 	b.	 	The net after-tax benefit to the
Executive with a reduction in the Payments to the Reduced Amount
shall be determined by applying the tax rates under Section
5(e)(iii)(B)(a), with the exception of the Excise Tax.






	 	(C)	 	Reduction Methodology. In the event a
reduction in the Payments to the Reduced Amount will provide the
Executive with a greater net after-tax amount, the following shall
apply:






	 	a.	 	Reduction of payments. The
reduction in the Payments shall be made first by reducing as
applicable, but not below zero, the cash payments under Sections
5(c)(i)(B), 5(c)(iv)(A), and 5(e)(i)(B). In the event that such
payments are installment payments, each such installment payment
shall be reduced pro-rata. The cash payments under Sections
5(c)(i)(C), 5(c)(iv)(B), and 5(e)(i)(C) shall be reduced next,
as applicable, but not below zero. In the event that following
reduction of the amounts set forth in the preceding sentence,
additional amounts payable to the Executive must be reduced, any
payments due to the Executive pursuant to the Company’s equity
plans shall be reduced on a pro-rata basis, but not below zero.
	 
	 	b.	 	Restrictions. Only amounts
payable under this Agreement shall be reduced pursuant to this
Section 5(e)(iii). Any reduction shall be made in a manner
consistent with the requirements of Section 409A of the Code.






	 	(D)	 	Definitions. For purposes of Section
5(e)(iii), the following definitions shall apply.






	 	a.	 	“Payment” shall mean an amount
that is received by the Executive or paid by the Company on his
behalf, or represents any property, or any other benefit
provided to the Executive under this Agreement or under any
other plan, arrangement or agreement with the Company or any
other person, and such amount is treated as contingent on a
change in control, as provided under Section 280G of the Code.




18









 






	 	b.	 	“Reduced Amount” shall mean an
amount, as determined under Section 280G of the Code, which does
not cause any Payment to be subject to the Excise Tax.
	 
	 	c.	 	“Excise Tax” shall mean the
excise tax imposed under Section 4999 of the Code.






	 	(E)	 	Determination of Reduction. All determinations
required to be made under this Section 5(e)(iii) shall be made by a
nationally recognized accounting (or compensation and benefits
consulting ) firm selected by the Company (the “Accounting Firm”) which
shall provide detailed supporting calculations both to the Company and
the Executive within ten (10) business days of the Change in Control.
Any such determination by the Accounting Firm shall be binding upon the
Company and the Executive. All fees and expenses of the Accounting
Firm shall be borne solely by the Company.





     (f) ADDITIONAL TERMS



          (i) Within fifty (50) days following the Termination Date, the Executive shall execute and
agree to be bound by a Release of the Company in a form prepared by the Company, which will
include, inter alia, the Executive’s general release of known and unknown claims, prior to and as a
condition of receiving any payments or benefits (other than the Accrued Benefits) pursuant to this
Agreement. If applicable, the Release shall contain provisions required by federal, state or local
law (e.g., the Older Worker’s Benefit Protection Act) to effectuate a general release of all
claims. Notwithstanding anything herein to the contrary, no payments or continued benefits on
account of termination of employment hereunder (other than any Accrued Benefits payable in
accordance with their terms) shall be made to the Executive prior to the Release Effective Date.
In the event that the Executive does not execute the Release within fifty (50) days following the
Termination Date or the Release Effective Date does not occur within sixty (60) days following the
Termination Date, the Executive shall not be entitled to any payments or benefits hereunder (other
than the Accrued Benefits payable pursuant to their terms); provided that, if the Executive becomes
entitled to payments and benefits pursuant to Section 5(c)(iv), the Executive shall not be entitled
to any payments or benefits hereunder in the event the Executive does not execute the Release
within fifty (50) days following the Change of Control or the Release Effective Date does not occur
within sixty (60) days following the date of the Change of Control.




          (ii) As consideration for the Company’s offer of this Agreement to the Executive and for other
good and valuable consideration, during his employment and upon termination of employment for any
reason, the Executive agrees to comply with the restrictive covenants contained in Section 10 of
this Agreement. In addition, receipt of the severance payments and benefits set forth in Section 5
is expressly conditioned upon the Executive’s continued compliance with Section 10. If the
Executive is receiving severance payments and/or benefits under Section 5, and (A) if the Executive
is reemployed by the Company (or any subsidiary, affiliate or successor) or breaches this Agreement
or the Release, or (B) if the





19











 




Company (or any subsidiary, affiliate or successor) discovers information that would have
permitted the Company to terminate the Executive for Cause or if the Company or any subsidiary,
affiliate or successor discovers a breach of Section 10, severance payments and benefits shall
immediately cease with respect to such termination. If the severance payments and benefits cease
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 Executive 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, and the Executive shall no
longer be entitled to any severance payments and benefits with respect to such termination. If
severance payments and benefits cease because of a Cause determination or a breach of Section 10,
the Company (or any subsidiary or successor) shall have the right to require that the Executive
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.




          (iii) Upon termination of employment for any reason, the Executive agrees to promptly return
all Company property that has come into his possession or control, including, without limitation,
computer equipment (including, without limitation, computer hardware, laptop and other computers,
software and printers, wireless handheld devices, cellular telephones, pagers, etc.), client and
customer information, client and customer lists, employee lists, Company files, notes, contracts,
records, business plans, financial information, specifications, computer-recorded information,
tangible property, credit cards, entry cards, identification badges, keys, and any other materials
of any kind which contain or embody, in whole or in part, any proprietary or confidential material
of the Company (and all reproductions thereof), except that Company property shall not include
items, if any, listed in a written document signed by the Executive and the Company at or before
the time of the Executive’s termination from employment as items to be retained by the Executive.
The Executive further agrees that he will leave intact all electronic Company documents, including
those which the Executive developed or helped develop during his employment, and that he will
promptly cancel all accounts for his benefit, if any, in the Company’s name including, without
limitation, credit cards, telephone charge cards, cellular telephone accounts, pager accounts, and
computer accounts.




          (iv) Upon any termination of employment, upon the request of the Company, the Executive shall
resign in writing, from all offices, directorships and fiduciary positions of the Executive in
which the Executive is serving.




          (v) The Executive agrees that, following his Termination Date, except as set forth herein, he
shall not be eligible for or entitled to any other incentive compensation award, including any pro
rata incentive compensation award, pursuant to the Company’s and/or its subsidiaries’ or
affiliates’ incentive compensation plans. The Executive’s agreement to this provision is a material
consideration for the Company’s executing this Agreement.




     (g) In the event of the Executive’s termination for death or Disability, the Executive and, to
the extent applicable, his legal representatives, executors, heirs, legatees and beneficiaries
shall have no rights under this Agreement, other than the right to Accrued Benefits, and their sole



20









 




recourse, if any, shall be under the death or disability provisions of the plans, programs,
policies and practices of the Company and/or its subsidiaries and affiliates, as applicable to the
Executive. If the Executive dies prior to payment of all severance benefits to which he is
entitled, all Company obligations under the Agreement shall cease except for the Accrued Benefits
(if unpaid at the time of death).




6. TRUSTS




     (a) 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 Executive provided for under this Agreement, the Company
shall, immediately prior to or in connection with the consummation of a Change of Control,
irrespective of whether the Change of Control constitutes a “change in ownership or effective
control” or a change in the “ownership of a substantial portion of the assets” under Section 409A
of the Code, and the rulings and regulations issued thereunder, 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 Executive hereunder 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 hereunder shall be made out of the Trust(s); provided, however, that the
Company shall retain liability for and pay the Executive any amounts or provide for such other
benefits due the Executive under this Agreement 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 Executive within the time frames set forth in this Agreement. 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 Executive with the name and address of the
Trustee. Nothing in this Agreement shall require the Company to maintain the funding required in
this Section beyond the second anniversary of a Change of Control unless, before such second
anniversary, the Executive’s employment has terminated in a manner qualifying him for benefits
hereunder. The Executive expressly waives any requirement under this Section 6 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.



     (b) For purposes of this Agreement, 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). However, in accordance with subsection (a)
above, the Company shall retain liability for and pay the Executive any amounts or provide for such
other benefits due the Executive under this Agreement for which the Trustee fails to make adequate
payment to the Executive within the time frames set forth in this Agreement.



7. INVENTIONS AND IMPROVEMENTS.




     The Executive acknowledges that all ideas, discoveries, inventions and improvements which are
made, conceived or reduced to practice by the Executive and every item of knowledge relating to the
Company’s business interests (including potential business interests) gained by the Executive
during the Employment Term are the sole and absolute property of the Company, and



21









 




the Executive 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 Executive also hereby waives all claims to moral rights in any such ideas,
discoveries, inventions, improvements and knowledge. The provisions of this Section 7 shall apply
whether such ideas, discoveries, inventions or knowledge are conceived, made, gained or reduced to
practice by the Executive 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 Executive’s duties. Any of the Executive’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
Agreement, be deemed to have been conceived, made or reduced to practice before the end of the
Employment Term. The Executive 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.




8. NO ASSIGNMENTS.




     This Agreement shall not be assignable by the Executive. This Agreement shall be assignable by
the Company only by merger or in connection with the sale or other disposition of a substantial
portion of the assets of the Company. This Agreement shall inure to the benefit and be binding upon
the personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees, legatees and permitted assignees of the parties hereto. The Company shall require any
successor to all or substantially all of the business and/or assets of the Company, whether
directly or indirectly, by purchase, merger, consolidation, acquisition of stock, or otherwise,
expressly to assume and agree to perform this Agreement in the same manner and to the same extent
as the Company would be required to perform if no such succession had taken place, by a written
agreement in form and substance reasonably satisfactory to the Executive, delivered to the
Executive within five (5) business days after such succession. As used in this Agreement, “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 Agreement by operation of law, or otherwise.



22









 





9. NOTICE.




     All notices and other communications hereunder, shall be in writing and shall be given to the
other party by hand delivery, by overnight express mail or other guaranteed delivery service, or by
registered or certified mail, return receipt requested, postage prepaid, addressed as follows:



     If to the Executive: at the Executive’s last address appearing in the payroll/personnel
records of the Company.



          If to the Company:




               Ryder System, Inc.



               11690 N.W. 105th Street



               Miami, Florida 33178-1103



               Attention: General Counsel



     or to such other address as either party shall have furnished to the other in writing. Notice
and communications shall be effective on the earliest of (i) when actually received by the
addressee, (ii) as indicated by an overnight or other receipt, and (iii) the third business day
after the notice is dispatched.



10. RESTRICTIVE COVENANTS.




     (a) COVENANT OF CONFIDENTIALITY. All documents, records, techniques, business secrets and
other information of the Company, its subsidiaries and affiliates which have or will come into the
Executive’s possession from time to time during the Executive’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
Executive and shall be the sole and exclusive property of the Company, its subsidiaries and
affiliates. The Executive agrees that he 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
Executive agrees that upon his termination of employment, irrespective of the reason for such
termination, he shall promptly return to the Company all confidential and proprietary information
of the Company and/or its subsidiaries or affiliates that is in his possession.



     The Executive agrees that the terms and provisions of this Agreement, as well as any and all
incidents leading to or resulting from this Agreement, 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 Board, except as required by law. In the event that the Executive



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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 Executive 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.




     (b) COVENANT AGAINST COMPETITION. During the Executive’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 Executive’s Termination Date (irrespective of the reason for
the Executive’s termination and without any reduction or modification), the Executive shall not,
without the prior written consent of the Board directly or indirectly engage or become a partner,
director, officer, principal, employee, 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 in which the Company is or was engaged in or
actively planning to engage in business as of the Executive’s Termination Date or during the
previous twelve (12) month period; provided, however, that the Executive 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.



     (c) COVENANT OF NON-SOLICITATION. During the Executive’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 Executive’s Termination Date (irrespective of the reason for
the Executive’s termination and without any reduction or modification), the Executive shall not,
directly or indirectly, in any manner or capacity whatsoever, either on the Executive’s own account
or for any person, firm or company:



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




          (ii) 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.




     (d) COVENANT OF NON-DISPARAGEMENT AND COOPERATION. The Executive 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




24











 




of his duties or as is otherwise required by law. The Executive 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 Executive for travel
expenses approved by the Company or its subsidiaries or affiliates incurred in providing such
assistance. The Executive shall notify the Company if the Executive 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 Executive from
providing truthful information to any person or entity as required by law or his fiduciary
obligations.




     (e) SPECIFIC REMEDY. The Executive acknowledges and agrees that if the Executive 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 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 Agreement, and that money damages will not provide an
adequate remedy to the Company. The Executive 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 Agreement 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
Agreement and with the other terms and conditions of the Executive’s employment. In addition, in
executing this Agreement, the Executive makes an election to receive severance pay and benefits
pursuant to Section 5 and is subject to the covenants above, therefore, the Executive 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.



     (f) SURVIVAL OF PROVISIONS. The obligations contained in this Section 10 shall survive the
termination or expiration of the Executive’s employment with the Company for any reason (including
Section 5(d) hereof) and shall be fully enforceable thereafter. If it is determined by a court of
competent jurisdiction that any restriction in this Section 10 is excessive in duration or scope or
extends for too long a period of time or over too great a range of activities or in too broad a
geographic area or is unreasonable or unenforceable under the laws of the State of Florida, it is
the intention of the parties that such restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the laws of the State of Florida.



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11. NO MITIGATION/NO OFFSET.




     In the event of any termination of employment under this Agreement, the Executive shall be
under no obligation to seek other employment and there shall be no offset against any amounts due
the Executive under this Agreement on account of any remuneration attributable to any subsequent
employment that the Executive may obtain. The amounts payable hereunder shall not be subject to
setoff, counterclaim, recoupment, defense or other rights which the Company may have against the
Executive or others, except as specifically set forth in Sections 5(c)(i)(D), 5(c)(iv)(C),
5(e)(i)(D), 5(f), 10, and 15, or upon obtaining by the Company of a final unappealable judgment
against the Executive, in each case to the extent permitted by Section 409A of the Code.



12. ATTORNEY’S FEES.




     To the fullest extent permitted by law, the Company shall promptly pay, upon submission of
statements, one-half of all legal and other professional fees, costs of litigation, prejudgment
interest, and other expenses in excess of $10,000 in the aggregate incurred in connection with any
dispute concerning payments, benefits and other entitlements which the Executive may have under
Section 5(c) or 5(e), up to an amount not exceeding $15,000 in the aggregate from the Company;
provided, however, the Company shall be reimbursed by the Executive (i) for the fees and expenses
advanced in the event the Executive’s claim is, in a material manner, in bad faith or frivolous and
the court determines that the reimbursement of such fees and expenses is appropriate, or (ii) to
the extent that the court determines that such legal and other professional fees are clearly and
demonstrably unreasonable. Any payments made pursuant to this Section 12 shall be limited to
expenses incurred on or prior to December 31 of the second calendar year following the calendar
year in which the Termination Date occurs, and any payments by the Company made pursuant to this
Section 12 shall be made on or prior to December 31 of the third calendar year following the
calendar year in which the Termination Date occurs.



13. LIABILITY INSURANCE.




     The Company shall cover the Executive under directors and officers liability insurance in the
same amount and to the same extent, if any, as the Company covers its other officers and directors.



14. WITHHOLDING.




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



15. CODE SECTION 409A




     (a) CONSTRUCTION AND INTERPRETATION. This Agreement 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 Agreement in any manner necessary to
comply with Code Section 409A or any successor law, without the consent of the Executive.
Furthermore, to the extent necessary to



26









 




comply with Code Section 409A, the payment terms for any of the payments or benefits payable
hereunder may be delayed without the Executive’s consent to comply with Code Section 409A.




     (b) SEPARATION FROM SERVICE REQUIREMENTS. Notwithstanding anything herein to the contrary,
the Executive shall not be entitled to any payments or benefits pursuant to this Agreement in the
event that his termination of employment does not constitute a “separation from service” as defined
by Section 409A of the Code and the regulations issued thereunder. For purposes of determining
whether a “separation from service”, as defined by Section 409A of the Code, has occurred, pursuant
to Treas. Reg. §1.409A-1(h)(3), the Company has elected to use “at least 80 percent” each place it
appears in Sections 1563(a)(1), (2), and (3) of the Code and in Treas. Reg. §1.414(c)-2.



     (c) DELAYED COMMENCEMENT OF BENEFITS. If the Executive is a Specified Employee at the time of
his Termination Date, and the deferral of the commencement of any payments or benefits otherwise
payable hereunder is necessary in order to prevent any accelerated or additional tax under Section
409A of the Code, then, to the extent permitted by Section 409A of the Code, the Company will defer
the commencement of the payment of any such payments or benefits hereunder until the first day
following the six-month anniversary of the Termination Date (or the earliest date as is permitted
under Section 409A of the Code). If any payments or benefits are deferred due to such
requirements, (whether they would have otherwise been payable in a single sum or in installments in
the absence of such deferral) they shall be paid or reimbursed to the Executive in a lump sum on
the first day following the six-month anniversary of the Termination Date, and any remaining
payments and benefits due under this Agreement shall be paid or provided in accordance with the
normal payment dates specified for them herein.



     (d) PAYMENTS AND REIMBURSEMENTS. Except as otherwise provided herein, any reimbursements or
in-kind benefits provided under this Agreement shall be made or provided in accordance with the
requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any
reimbursement is for expenses incurred during the period of time specified in this Agreement (or,
if no such period is specified, the Executive’s lifetime), (ii) the amount of expenses eligible for
reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses
eligible for reimbursement, or in kind benefits to be provided, in any other calendar year, (iii)
the reimbursement of an eligible expense will be made no later than the last day of the calendar
year following the year in which the expense is incurred, and (iv) the right to reimbursement or in
kind benefits is not subject to liquidation or exchange for another benefit. In addition, for
purposes of the limitations on nonqualified deferred compensation under Section 409A, each payment
of compensation under this Agreement shall be treated as a separate payment of compensation for
purposes of applying the Section 409A deferral election rules and the exclusion from Section 409A
for certain short-term deferral amounts and separation pay. Notwithstanding any other provision
set forth herein, any payments which are intended to constitute separation pay due to an
involuntary separation from service in accordance with Treas. Reg. §1.409A-1(b)(9)(iii) shall be
paid no later than the last day of the second calendar year following the calendar year in which
the Termination Date occurs.



     (e) COMPANY ENTITY. For purposes of this Agreement, Company Entity means any member of a
controlled group of corporations or a group of trades or businesses under



27









 




common control of which the Company is a member; for purposes of this Section 15(e), a
“controlled group of corporations” means a controlled group of corporations as defined in Section
414(b) of the Code and a “group of trades or businesses under common control” means a group of
trades or businesses under common control as defined in Section 414(c) of the Code, without any
modifications.




16. SECTION HEADINGS.




     The Section headings used in this Agreement are included solely for convenience and shall not
affect, or be used in connection with, the interpretation of this Agreement.



17. EFFECTIVE DATE; ENTIRE AGREEMENT.




     This Agreement shall become effective on the date hereof. Except as the parties may evidence
on a Schedule A to be attached to this Agreement and signed by the Executive and the Company after
the date this Agreement is executed, from and after the Effective Date, this Agreement contains the
entire understanding and agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and undertakings,
whether written or oral, with respect thereto including, without limitation, any offer letters or
employment agreements, or severance or change in control agreements, policies, plans or practices,
and any nondisclosure, nonsolicitation, inventions and/or noncompetition agreements between the
parties; provided, however, that any rights to indemnification, all stock options or other equity
granted to the Executive 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.



18. CHOICE OF LAW; JURISDICTION; JURY TRIAL WAIVER.




     The validity, interpretation, construction, and performance of this Agreement 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 Agreement 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 Executive each hereby
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 Agreement.



19. SEVERABILITY.




     The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof.



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20. COUNTERPARTS.




     This Agreement may be executed in several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same instruments.



21. MISCELLANEOUS.




     From and after the execution of this Agreement, no provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and the Chair of the Compensation Committee of the Board,
except as provided in Section 15 above regarding Code Section 409A. No waiver by either party at
any time of any breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements
or representations, oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in this Agreement.



22. GENDER.




     All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular
or plural as the identity of the person or persons may require.



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     IN WITNESS WHEREOF, the Executive has hereunto set his hand and the Company has caused these
presents to be executed in its name on its behalf, and its corporate seal to be hereunto affixed
and attested by its assistant secretary, all as of the day and year first above written.




	 	 	 	 	 	 	 	 	 
	/s/ Fran Hoskin
	 	 	 	/s/ Art A. Garcia	 	 	 	 
	 	 	 	 	 	 	 
	Witness
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	SAP Number	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	RYDER SYSTEM, INC.

(the “Company”)	 	 
	/s/ David M. Beilin
	 	 	 	 	 	 	 	 
	 

Asst. Secretary

	 	 	 	 	 	 	 	 
	(Seal)

	 	 	 	By:	 	/s/ Gregory T. Swienton	 	 
	 

	 	 	 	 	 	 

Gregory T. Swienton
	 	 
	 

	 	 	 	 	 	Chief Executive Officer	 	 







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