Document:

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                                                                    Exhibit 10.3

                                                                  Execution Copy

                                SUPPLY AGREEMENT

         THIS SUPPLY AGREEMENT (this "Agreement") is made this 31st day of
                                      ---------
October, 2001 (the "Effective Date"), by and between Hurry, Inc. (formerly known
                    --------------
as Harry's Farmers Market), a Georgia corporation ("HFM"), and Whole Foods
                                                    ---
Market Group, Inc., a Delaware corporation ("Supplier").
                                             --------

         WHEREAS, Supplier and HFM have entered into a certain Asset Purchase
Agreement dated as of August 8, 2001 (the "Purchase Agreement"; terms not
                                           ------------------
otherwise defined herein shall have the meaning ascribed to them in the Purchase
Agreement);

         WHEREAS, pursuant to the Purchase Agreement, Supplier is purchasing
from HFM certain assets including, but not limited to, assets used in the supply
of products to certain retail stores owned by HFM; and

         WHEREAS, as a condition to HFM entering into the Purchase Agreement,
Supplier has agreed to supply HFM with certain food, beverage, floral and other
retail products described on Exhibit A attached hereto and incorporated herein
                             ---------
by this reference (the "Products") under the terms and conditions of this
                        --------
Agreement.

         NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, HFM and Supplier hereby agree as follows:

         1.  Products. During the first year of this Agreement, Supplier shall
             --------
supply to HFM the Products in accordance with the supply and inventory systems
and schedules (the "Systems") utilized by HFM in supplying the Excluded Stores
                    -------
as of the Effective Date. During the first year of this Agreement, the Products
and the supply and distribution schedules shall not be substituted, modified or
otherwise changed, in any material respect, without first obtaining HFM's
written approval of such change, such approval not to be unreasonably withheld.
During the second and third years of this Agreement, if the respective options
of HFM are exercised as described below, Supplier shall supply Products to HFM
in accordance with such supply and inventory systems as Supplier elects to
utilize in its sole discretion, which shall continue to provide a reasonable
method of supply for HFM in accordance with the intent of this Agreement.

         2.  Term. This Agreement shall be in effect for a term of one (1) year
             ----
from the Effective Date ("Term"). However, following each of the first two years
                          ----
of this Agreement, and provided HFM is not then in default hereunder, HFM may,
in its sole discretion, extend the term of this Agreement for one (1) additional
year. The extension of this Agreement by HFM shall be sent to Supplier in
writing no less than 30 days prior to the end any term. This Agreement may also
be terminated earlier pursuant to the provisions of this Agreement.
Notwithstanding anything contained herein, the volume of Products ordered and
the number of orders placed during the Term shall be determined solely by orders
placed pursuant to Section 3.
                   ---------

         3.  Order and Delivery.
             ------------------

             3.1  Orders shall be placed by HFM and sent electronically or by
facsimile to Supplier at the address set forth below (the "Order"). Acceptance
                                                           -----
of any Order is expressly limited to the terms thereof and HFM agrees that the
return of any products will be solely due to defects of such products. HFM shall
have no right for chargebacks to the Supplier, except in the case of product
defects.

             3.2  HFM shall be permitted to utilize Supplier's computerized
inventory replenishment system ("IRS") for all purposes provided by IRS,
                                 ---
including but not limited to the placing of Orders pursuant to this Agreement
and the utilization of the theoretical gross margin tool produced by IRS, as
well as the computerized report manager system (the "Report Manager") and all
related programming. During the term of this Agreement, HFM shall be permitted
to utilize all upgrades, improvements or changes to IRS, the Report Manager and
all related programming. In addition, Supplier agrees to use its best efforts to
continue to support and provide, consistent with normal practice, (i) the
hardware and communications infrastructure to allow HFM access; (ii) the
recording,

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accumulation, storage and archiving of data necessary to report on and provide
an audit trail of HFM's use of the applications; and (iii) HFM reasonable access
to the systems. Following the first year of this Agreement, Supplier shall have
no obligation to continue supporting or maintaining IRS, the Report Manager or
other related progamming described in this Section 3.2. However, in the event
Supplier decides not to continue such support or maintenance, it shall provide
HFM reasonable notice of such discontinuation and allow HFM, at its sole cost
and expense, to continue to utilize, support, maintain and improve such systems
and shall provide HFM reasonable access to the hardware and software necessary
for the continued operations thereof.

             3.3  Products will be shipped F.O.B. Supplier's commissary. The
risk of loss or damage in transit shall be upon HFM. Supplier shall, in the
event of a delay or threat of delay due to any cause in the production or
delivery of the Products hereunder, immediately notify HFM and shall include
with such notice all relevant information with respect to such delay or
threatened delay, including, but not limited to, in the case of actual delay,
Supplier's good faith estimate of when the Products will be available.

         4.  Price. The prices of the Products shall be determined as is
             -----
described on Exhibit A. However, in no event shall HFM be charged for increased
costs other than for normal price increases as may be charged by the provider of
the raw materials, goods and other items being received by Seller, prior to
manufacture or delivery to HFM.

         5.  Payment. Supplier shall invoice HFM for all Products delivered
             -------
under an Order (the "Invoice"). Each Invoice is payable by HFM within fourteen
                     -------
(14) days from the date of the Invoice.

         6.  Quality Control.
             ---------------

             6.1  Packaging. During the first year of this Agreement, the
                  ---------
Products and all packaging used in connection with the Products ("Packaging
                                                                  ---------
Material") shall be of a consistent and high quality which conform to the
--------
standards developed by HFM or developed by Supplier and approved by HFM.
Supplier will use such packaging for the Products as is furnished by HFM or is
in the inventory purchased by Supplier in connection with the Purchase
Agreement. Following the first year of this Agreement, to the extent the
Packaging Material is not furnished by HFM, the Supplier shall be entitled to
reasonably change the Packaging Material in a manner consistent with the quality
of packaging utilized by Supplier in its operations.

             6.2  Inspection. During the first year of this Agreement, Supplier
                  ----------
will cooperate with HFM, at its sole cost and expense, to permit inspections of
Supplier's facilities during the Term to monitor the quality of Products offered
by Supplier, provided HFM gives Supplier 24 hours prior notice of such
inspection and such inspections do not interfere with Supplier's business, as
reasonably determined by Supplier. Supplier shall also provide HFM with
reasonable access to its quality assurance data documentation. Following the
first year of this Agreement, HFM shall be entitled to no more than one such
inspection per calendar quarter.

             6.3  Transition Support. During the first six months of the term of
                  ------------------
this Agreement, HFM will make Bobbie Steinhauer available to Supplier for two
days per week during normal business hours to consult with, and to assist and
support, Supplier in connection with the performance of its duties hereunder. In
the event that Ms. Steinhauer is no longer an employee of, or consultant to,
HFM, then HFM will arrange for other employees reasonably acceptable to Supplier
to be available to Supplier as aforesaid.

         7.  Representations and Warranties of Supplier. Supplier represents and
             ------------------------------------------
warrants, which warranties and representations will survive the Term:

             7.1  that the Products, including food articles, food ingredients,
food packaging and food labeling relating to or comprising the Products or any
part thereof that is supplied by Supplier and delivered, sold or transferred to
HFM hereunder shall be manufactured, stored and delivered in full compliance
with all applicable federal, state and local statutes, rules and regulations
including but not limited to the rules and regulations of the U.S. Food and Drug
Administration (the "Regulations");
                     -----------

                                       -2-

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             7.2 that the Products shall be manufactured, stored and delivered
in accordance with appropriate "Good Manufacturing Practices" or similar
practices that may be promulgated under the Regulations as applicable;

             7.3 that the Products shall not be adulterated or misbranded within
the meaning of the Regulations;

             7.4 that the Products shall not be a food product which may not,
under the Regulations, be introduced into interstate commerce except as provided
therein; and

             7.5 that Supplier is free to enter into this Agreement, that
Supplier's execution of this Agreement has been duly approved by all applicable
corporate procedures, that this Agreement constitutes a legal, valid and binding
obligation of Supplier, and that to Supplier's knowledge this Agreement will not
violate the rights of any third party.

Except as specifically set forth above, Supplier makes no warranty regarding the
Products and any implied or statutory warranties not specifically provided
herein are expressly denied. Payment for, inspection of, or receipt of Products
by HFM shall not constitute a waiver of any breach or warranty.

         8.  Representations and Warranties of HFM. HFM represents and warrants,
             -------------------------------------
which warranties and representations will survive the Term, that HFM is free to
enter into this Agreement, that HFM's execution of this Agreement has been duly
approved by all applicable corporate procedures, that this Agreement constitutes
a legal, valid and binding obligation of HFM, and that to HFM's knowledge this
Agreement will not violate the rights of any third party. Acceptance of payment
for Products by Supplier shall not constitute a waiver of any breach or
warranty.

         9.  Widescale Defects/Recall.
             ------------------------

             9.1 Whenever Supplier becomes aware that any ingredient or
component of a Product covered by this Agreement is or may become harmful to
persons or property or that a Product is mislabeled, Supplier shall immediately
give notice thereof to HFM and Supplier shall provide all relevant information
with respect thereto.

             9.2 In the event it is deemed necessary by HFM and Supplier to
recall any quantity of the Product, from any store of HFM or from any consumer,
both parties agree to take such reasonable steps necessary to protect the
interests of the public and to comply diligently with all product recall
procedures established by the Regulations.

             9.3 The parties agree to bear equally all cost and expenses
incurred by the parties in complying with the foregoing recall procedures,
unless such recall is the result of the sole negligence of one of the parties.
In the event a party fails or refuses to comply with the recall of the Product
upon the reasonable request of the other party, the requesting party shall be
authorized to take such action as it deems necessary to recall the Product, and
the non-requesting party shall reimburse the requesting party for its costs and
expenses incurred in such recall procedure. Any such action taken by the
requesting party shall not relieve the non-requesting party of its obligations
or liability hereunder.

         10. Insurance. Supplier agrees to maintain during the Term, general
             ---------
liability insurance, including product liability coverage, in minimum amounts of
$1,000,000.00 per occurrence for damage, injury and/or death to persons and
$1,000,000.00 per occurrence for damage and/or injury to property. Supplier
further agrees to require all of its delivery personnel to be licensed to drive,
whether they are employees or independent contractors. All policies of liability
insurance required to be effected by Supplier shall cover Supplier's employees,
agents, and independent contractors and shall include HFM as an additional
insured. Upon execution of this Agreement, Supplier shall promptly provide HFM
with certificates of insurance evidencing such coverage, and each certificate
shall indicate that the coverage represented thereby shall not be canceled nor
modified until at least thirty (30) days prior notice has been given to HFM.

         11. Default and Termination.
             -----------------------

             11.1 In the event either party:

                                       -3-

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                    (a)  breaches any term or condition of this Agreement that
cannot be cured within fifteen (15) days following receipt of notice of such
breach; or

                    (b)  abuses or misrepresents its status as a supplier and/or
seller of any Product to the detriment of the other party, or

                    (c)  becomes the subject of any proceeding under the
Bankruptcy Act, becomes insolvent or any assignment is made for the benefit of
creditors or a trustee is appointed for all or any portion of the party's
assets, or

                    (d)  fails to comply with any Regulation,

then the non-breaching party, in its sole discretion, may terminate this
Agreement with fifteen (15) days written notice to the breaching party.
Additionally, this Agreement may be terminated:

                    (e)  by HFM upon 30 days' prior written notice given to
Supplier at any time (it being understood that such notice shall contain an
undertaking by HFM to purchase, on the date of termination, any excess inventory
and packaging materials produced or held exclusively for HFM);

                    (f)  by Supplier upon 15 days prior written notice in the
event that HFM is in material breach of its obligations under the Purchase
Agreement which cannot be cured within fifteen (15) days following receipt of
notice of such breach, or, unless there shall be a change of control of HFM. if
HFM's principal stockholder is in material breach under the related Consulting
and Non-Competition Agreement and such breach cannot be cured within fifteen
(15) days following receipt of notice of such breach.

             11.2 Notwithstanding anything to the contrary, in the event the
party's breach is for noncompliance with the Regulations, termination shall be
effective immediately.

             11.3 The failure to terminate the Agreement upon the occurrence of
one or more of these events of default by a party shall not constitute a waiver
or otherwise affect the right of the non-breaching party to terminate the
Agreement as a result of a continuing or subsequent failure or refusal by the
breaching party to comply with any of such obligations. Failure by the
non-breaching party to exercise any of its rights or remedies hereunder or to
insist on strict compliance with any of the terms of this Agreement shall not
constitute a waiver of any of the terms or conditions of this Agreement with
respect to any other or subsequent breach nor shall it constitute a waiver by
the non-breaching party of its rights at any time thereafter to require strict
compliance with the terms of this Agreement.

             11.4 Upon termination, HFM shall pay Supplier any outstanding
undisputed Invoices and shall use their commercially reasonable best efforts to
resolve such disputed invoices as promptly as practicable.

     12.     Confidentiality. Each party acknowledges that during the course of
             ---------------
carrying out this Agreement, it may receive confidential and proprietary
information related to the other party's business, including, without
limitation, recipes and formulations created or provided by the other party
("Confidential Information"). Confidential Information includes any information,
  ------------------------
designs, data or know-how that a party has designated as proprietary and/or
confidential or that, by the nature of the circumstances surrounding the
disclosure, ought to be treated as proprietary and/or confidential; provided,
however, that any information which is otherwise in the public domain shall not
be deemed confidential. Each party acknowledges that such Confidential
Information is the sole and exclusive property of the other party and undertakes
to retain in confidence all Confidential Information. Each party's obligations
under this Section 12 shall survive expiration or termination of this Agreement
and any amendments thereto.

     13.     Indemnity.
             ---------

             13.1 Supplier agrees to indemnify and hold HFM, its officers and
directors, employees or agents, customers and users of the Product, harmless
from all claims, demands, losses, liabilities, suits at law or in equity, costs
and expenses, including reasonable attorney's fees, resulting from (a) injury,
illness and/or death caused, in

                                       -4-

<PAGE>

whole or in part, by contact with, use and/or consumption of the Products,
unless (and then only to the extent) such injury, illness and/or death is caused
by the negligence or misconduct of HFM and (b) breach of any of Supplier's
representations and warranties. In the event of any claim, threatened claim, or
notification that may be the subject of indemnification provided for in this
Section, HFM will give Supplier prompt written notification thereof and, to the
extent the interests of the parties hereto are not adverse to one another,
provide Supplier such reasonable assistance in the response and prosecution of
any defense as Supplier may request, at Supplier's expense. Upon HFM's tendering
any suit to Supplier, Supplier shall defend the same at its sole cost and
expense. If Supplier fails to assume such defense, HFM may defend the action in
the manner it deems appropriate, and Supplier shall pay to HFM all costs,
including reasonable attorneys' fees, incurred by HFM in effecting such defense,
in addition to any sum which HFM may pay by reason of any settlement or judgment
against HFM. The provisions of this Section 13.1, and the indemnity hereunder,
shall survive this Agreement and any performance hereunder.

             13.2  HFM agrees to indemnify and hold Supplier, its officers and
directors, employees or agents, customers and users of the Product, harmless
from all claims, demands, losses, liabilities, suits at law or in equity, costs
and expenses, including reasonable attorney's fees, resulting from (a) injury,
illness and/or death caused, in whole or in part, by contact with, use and/or
consumption of the Products, but only to the extent such injury, illness and/or
death is caused by the negligence or misconduct of HFM and (b) the breach of any
of HFM's representations and warranties. In the event of any claim, threatened
claim, or notification that may be the subject of indemnification provided for
in this Section, Supplier will give HFM prompt written notification thereof and,
to the extent the interests of the parties hereto are not adverse to one
another, provide HFM such reasonable assistance in the response and prosecution
of any defense as HFM may request, at HFM's expense. Upon Supplier's tendering
any suit to HFM, HFM shall defend the same at its sole cost and expense. If HFM
fails to assume such defense, Supplier may defend the action in the manner it
deems appropriate, and HFM shall pay to Supplier all costs, including reasonable
attorneys' fees, incurred by Supplier in effecting such defense, in addition to
any sum which Supplier may pay by reason of any settlement or judgment against
Supplier. The provisions of this Section 13.2, and the indemnity hereunder,
shall survive this Agreement and any performance hereunder.

     14.     Miscellaneous Provisions.
             ------------------------

             14.1  Independent Contractor Relationship. Supplier and HFM are
                   -----------------------------------
independent contracting parties, and this Agreement does not create the
relationship of principal and agent, partners, joint ventures or employer and
employee between HFM and Supplier. Supplier shall have no authority to bind or
otherwise obligate HFM in any manner nor shall Supplier represent to anyone that
it has a right to do so.

             14.2  Severability. If any provision of this Agreement is held to
                   ------------
be illegal, invalid, or unenforceable, such provision shall be fully severable,
and this Agreement shall be construed and enforced as if such illegal, invalid
or unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance; and in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible that is
legal, valid and enforceable.

             14.3  Entire Agreement. This Agreement and the exhibits hereto
                   ----------------
contain the complete agreement among the parties with respect to the
transactions contemplated hereby and supersede all prior agreements and
understandings, oral or written, among the parties with respect to such
transactions. Section and other headings are for reference purposes only and
shall not affect the interpretation or construction of this Agreement. The
parties hereto have not made any representation or warranty except as expressly
set forth in this Agreement or in any certificate or schedule delivered pursuant
hereto.

             14.4  Amendments in Writing. Neither the Agreement nor any of its
                   ---------------------
provisions may be waived, modified or amended except by an instrument in writing
signed by the parties to this Agreement.

             14.5  Assignment. This Agreement may not be assigned by the
                   ----------
Supplier without the written consent of HFM; provided, however, that the
Supplier shall be entitled to assign this Agreement to any subsidiary of
Supplier so long as the Supplier remains liable for the obligations of Supplier
hereunder. Subject to the preceding

                                       -5-

<PAGE>

sentence, this Agreement and the rights, interests and obligations hereunder
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns.

               14.6  Applicable Law. This Agreement shall be governed by, and
                     --------------
construed in accordance with, the laws of the State of Delaware.

               14.7  Force Majeure. Neither party shall be liable for defaults
                     -------------
or delays or non-performance of any covenant, agreement, work, service, or other
act required under this Agreement to be performed by such party, if such delay
or hindrance is due to strikes, lockouts, failure of power or other utilities,
injunction or other court or administrative order, governmental law or
regulations which prevent or substantially interfere with the required
performance, condemnations, riots, insurrections, martial law, civil commotion,
war, fire, flood, earthquake., or other casualty, acts of God, or other causes
not within the control of such party. The performance of any covenant,
agreement, work, service, or other act shall be excused for the period of delay
and the period for the performance of the same shall be extended by such period.

               14.9  Remedies. No right, remedy or election given by any term of
                     --------
this Agreement shall be deemed exclusive but each shall be cumulative with all
other rights, remedies and elections available at law or in equity. Except for
third party claims described in Section 13 hereof, the sole remedy available to
a non-breaching party arising from the breach of this Agreement shall be
termination of this Agreement and recovery of any out-of-pocket expenses of the
non-breaching party, after reasonable mitigation of damages. Other than for
damages or claims as relate to injury, illness and/or death caused, in whole or
in part, by contact with, use and/or consumption of the Products, in no event
shall any party be liable for consequential damages, lost profits, punitive
damages or other speculative damages.

               14.10 Notices. All notices, demands, requests or other
                     -------
communications that may be or are required to be given, served or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by a reputable overnight courier
service or by hand delivery or facsimile transmission, addressed as follows:

    (i)  If to HFM:        1180 Upper Hembree Road
                           Roswell, Georgia 30076
                           Attn: President
                           Fax: 770-664-4920

                           with a copy to:

                           Alston & Bird LLP
                           One Atlantic Center
                           1201 West Peachtree Street
                           Atlanta, Georgia 30309
                           Fax: 404-881-7777
                           Attn: John L. Latham, Esq.

    (ii) If to Purchaser:  601 N. Lamar Blvd., Suite 300
                           Austin, Texas 78703
                           Attn: Chief Financial Officer
                           Fax: 512-477-1069

                           with a copy to:

                           Hallett & Perrin
                           717 N. Harwood, 14/th/ Floor
                           Dallas, Texas 75201
                           Attn: Bruce H. Hallett
                           Fax: 214-953-0576

                                       -6-

<PAGE>

Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served, or sent.
Each notice, demand, request or communication that is mailed, delivered, or
transmitted in the manner described above shall be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt, fax confirmation
sheet or the affidavit of courier or messenger being deemed conclusive evidence
of such delivery) or at such time as delivery is refused by the addressee upon
presentation.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.

         HURRY, INC.                            WHOLE FOODS MARKET GROUP, INC.

         By:      /s/ Harry A. Blazer           By:      /s/ Jim Sud
              ------------------------------         ---------------------------

         Name:    Harry A. Blazer               Name:    Jim Sud
                ----------------------------           -------------------------

         Title:   President                     Title:   VP
                ----------------------------           -------------------------

                                       -7-<PAGE>

                                                                 Exhibit 10.4(f)

                              RYDER SYSTEM, INC.
                           1995 STOCK INCENTIVE PLAN
                       (as amended through May 4, 2001)

1.   Purpose.
     -------

The purpose of this Plan is to enable the Company to recruit and retain those
key executives most responsible for the Company's continued success and
progress, and by offering comparable incentives, to compete with other
organizations in attracting, motivating and retaining such executives, thereby
furthering the interests of the Company and its shareholders by giving such
executives a greater personal stake in and commitment to the Company and its
future growth and prosperity.

2.   Definitions.
     -----------

For the purpose of this Plan:

     (a)  The term "Award" shall mean and include any Stock Option, SAR, Limited
SAR, Performance Unit or Restricted Stock Right granted under this Plan.

     (b)  During the three (3) year period following a Change of Control, the
term "cause" as used in Section 7 and Section 14(a) of this Plan with respect to
any Stock Option shall mean (i) an act or acts of fraud, misappropriation or
embezzlement on the Grantee's part which result in or are intended to result in
his personal enrichment at the expense of the Company, (ii) conviction of a
felony, (iii) conviction of a misdemeanor involving moral turpitude, or (iv)
willful failure to report to work for more than thirty (30) continuous days not
supported by a licensed physician's statement, all as determined only by a
majority of the Incumbent Board or the Committee, as the case may be.

     (c)  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 twenty percent (20%) or more of the combined voting power of RSI's
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI; 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 RSI 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 2(c); or

          (ii) the individuals who, as of August 18, 1995, constituted the Board
of Directors of RSI (the "Board" generally and as of August 18, 1995 the
"Incumbent Board") cease for any reason to constitute at least two-thirds (2/3)
of the Board, provided that any person becoming a director subsequent to August
18, 1995 whose election, or nomination for election, was approved by a vote of
the persons comprising at least two-thirds (2/3) 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
<PAGE>

          (iii) there is a reorganization, merger or consolidation of RSI (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 RSI's outstanding Common Stock and
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI 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 RSI or all
or substantially all of RSI'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 RSI's outstanding Common
Stock and outstanding voting securities ordinarily having the right to vote for
the election of directors of RSI, 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 RSI or such corporation resulting from such
Business Combination and their subsidiaries and affiliates) beneficially owns,
directly or indirectly, 20% 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 two-thirds (2/3) 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 RSI approved by the
shareholders; or

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

If a Change of Control occurs and if a Grantee's employment is terminated prior
to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Grantee that such termination of employment (A) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change of Control or (B) otherwise arose in connection with or in anticipation
of a Change of Control, a Change of Control shall be deemed to have
retroactively occurred on the date immediately prior to the date of such
termination of employment.

     (d)  The term "Code" shall mean the Internal Revenue Code of 1986 as it may
be amended from time to time.

     (e)  The term "Committee" shall mean the Compensation Committee of the
Board of Directors of RSI constituted as provided in Section 5 of this Plan.

     (f)  The term "Common Stock" shall mean the common stock of RSI as from
time to time constituted.

     (g)  The term "Company" shall mean RSI and its Subsidiaries.

     (h)  The term "Disability" shall mean total physical or mental disability
of a Grantee as determined by the Committee upon the basis of such evidence as
the Committee in its discretion deems necessary and appropriate.

     (i)  The term "Employee" shall mean a full-time salaried employee of RSI or
any Subsidiary (which term shall include salaried officers).

     (j)  The term "Fair Market Value" shall mean, with respect to the Common
Stock, the mean between the highest and lowest sale price for shares as reported
by the composite transaction reporting system for securities listed on the

<PAGE>

New York Stock Exchange on the date as of which such determination is being made
or on the most recently preceding date on which there was such a sale.

     (k)  The term "Grantee" shall mean an Employee who is selected by the
Committee to receive an Award under this Plan and in the case of a deceased
Employee shall mean the beneficiary of the Employee.

     (l)  The term "Incentive Stock Option" shall mean a Stock Option granted
under this Plan or a previously granted Stock Option that is re-designated by
the Committee as an Incentive Stock Option which is intended to constitute an
incentive stock option within the meaning of Section 422(b) of the Code.

     (m)  The term "Limited SAR" shall mean a Limited Stock Appreciation Right
granted by the Committee pursuant to Section 9 of this Plan.

     (n)  The term "Non-employee Director" shall mean any person who qualifies
as a non-employee director as defined in Rule 16b-3, as promulgated under the
1934 Act, or any successor definition.

     (o)  The term "Non-qualified Stock Option" shall mean a Stock Option
granted under this Plan which is not intended to qualify under Section 422(b) of
the Code.

     (p)  The term "Offer" shall mean any tender offer or exchange offer for
Shares, other than one made by the Company, including all amendments and
extensions of any such Offer.

     (q)  The term "Option" shall mean any stock option granted under this Plan.

     (r)  The term "Performance Goals" shall have the meaning set forth in
Section 10(c) of this Plan.

     (s)  The term "Performance Period" shall have the meaning set forth in
Section 10(d) of this Plan.

     (t)  The term "Performance Units" shall mean Performance Units granted by
the Committee pursuant to Section 10 of this Plan.

     (u)  The term "Plan" shall mean the Ryder System, Inc. 1995 Stock Incentive
Plan as the same shall be amended.

     (v)  The term "Price" shall mean, upon the occurrence of a Change of
Control, the excess of the highest of:

          (i)   the highest closing price of the Common Stock reported by the
composite transaction reporting system for securities listed on the New York
Stock Exchange within the sixty (60) days preceding the date of exercise;

          (ii)  the highest price per share of Common Stock included in a filing
made by any Person on any Schedule 13D pursuant to Section 13(d) of the 1934 Act
as paid within the sixty (60) days prior to the date of such report; and

          (iii) the value of the consideration to be received by the holders of
Common Stock, expressed on a per share basis, in any transaction referred to in
subparagraph (iii), (iv) or (v) of Section 2(c), with all noncash consideration
being valued in good faith by the Incumbent Board; over the purchase price per
Share at which the related Option is exercisable as applicable, except that
Incentive Stock Options and, if and to the extent required in order for the
related Option to be treated as an Incentive Stock Option, SARs and Limited SARs
granted with respect to Incentive Stock Options, are limited to the spread
between the Fair Market Value of Common Stock on the date of exercise and the
<PAGE>

purchase price per Share at which the related Option is exercisable.

     (w)  The term "Restricted Period" shall have the meaning set forth in
Section 11(a) of this Plan.

     (x)  The term "RSI" shall mean Ryder System, Inc.

     (y)  The term "Restricted Stock Rights" shall mean a Restricted Stock Right
granted by the Committee pursuant to Section 11 of this Plan.

     (z)  The term "Retirement" shall mean retirement under the provisions of
the various retirement plans of the Company (whichever is appropriate to a
particular Grantee) as then in effect, or in the absence of any such retirement
plan being applicable, as determined by the Committee.

     (aa) The term "SAR" shall mean a Stock Appreciation Right granted by the
Committee pursuant to the provisions of Section 8 of this Plan.

     (bb) The term "Shares" shall mean shares of the Common Stock and any shares
of stock or other securities received as a result of the adjustment provided for
in Section 12 of this Plan.

     (cc) The term "Spread" with respect to a SAR shall have the meaning set
forth in Section 8(b) of this Plan, and with respect to a Limited SAR, the
meanings set forth in Sections 9(c) and 9(d) of this Plan.

     (dd) The term "Stock Option" shall mean any stock option granted under this
Plan.

     (ee) The term "Subsidiary" shall mean any corporation, other than RSI, or
other form of business entity more than fifty percent (50%) of the voting
interest of which is owned or controlled, directly or indirectly, by RSI and
which the Committee designates for participation in this Plan.

     (ff) The term "Termination Date" shall mean the date that a Grantee ceases
to be employed by RSI or any Subsidiary for any reason; provided, however, it
shall mean the end of any severance period applicable to a Grantee with respect
to any Non-qualified Stock Options held by such Grantee.

     (gg) The term "Year" shall mean a calendar year.

3.   Shares of Stock Subject to this Plan.
     ------------------------------------

     (a)  Subject to the provisions of Paragraph (b) of this Section 3, no more
than 11,800,000 Shares shall be issuable pursuant to grants under this Plan.
Shares issued pursuant to this Plan may be either authorized but unissued or
reacquired Shares purchased on the open market or otherwise.

     (b)  In the event any Stock Option or Restricted Stock Right expires or
terminates unexercised or any Restricted Stock Right is forfeited or cancelled,
the number of Shares subject to such Stock Option or Restricted Stock Right
shall again become available for issuance under this Plan, subject to the
provisions of Sections 7(a), 8(a), 9(b) and 10(i) of this Plan.

     (c)  No Grantee shall be eligible to receive any Stock Option or series of
Stock Options covering, in the aggregate, more than 500,000 Shares in any
calendar year during the term of this Plan.
<PAGE>

     (d)  The combined amount of Restricted Stock Rights and Performance Units
granted by the Committee during the term of this Plan shall not exceed One
Million Shares.

4.   Participation.
     -------------

Awards under this Plan shall be limited to key executive Employees selected from
time to time by the Committee.

5.   Administration.
     --------------

This Plan shall be administered by the Compensation Committee of the Board of
Directors of RSI which shall consist of two or more members of the Board of
Directors, each of whom shall be a Non-employee Director. All members of the
Committee shall be "outside directors" as defined or interpreted for purposes of
Section 162(m) of the Code. The Committee shall have plenary authority, subject
to the express provisions of this Plan, to (i) select Grantees; (ii) establish
and adjust Performance Goals and Performance Periods for Performance Units;
(iii) determine the nature, amount, time and manner of payment of Awards made
under this Plan, and the terms and conditions applicable thereto; (iv) interpret
this Plan; (v) prescribe, amend and rescind rules and regulations relating to
this Plan; (vi) determine whether and to what extent Stock Options previously
granted under this Plan shall be redesignated as Incentive Stock Options and, in
this connection, amend any Stock Option Agreement or make or authorize any
reports or elections or take any other action to the extent necessary to
implement the redesignation of any Stock Option as an Incentive Stock Option,
provided that any redesignation of a previously granted Stock Option as an
Incentive Stock Option shall not be effective unless and until consented to by
the Grantee; and (vii) make all other determinations deemed necessary or
advisable for the administration of this Plan. The Committee's determination on
the foregoing matters shall be conclusive. A majority of the Committee shall
constitute a quorum, and the acts of a majority of the members present at any
meeting at which a quorum is present, or acts approved in writing by all members
of the Committee without a meeting, shall be the acts of the Committee.
Notwithstanding anything to the contrary contained herein, neither the Board of
Directors of RSI nor the Committee shall be permitted to re-price any Stock
Options once they have been granted.

6.   Awards.
     ------

Subject to the provisions of Section 3 of this Plan, the Committee shall
determine Awards taking into consideration, as it deems appropriate, the
responsibility level and performance of each Grantee. The Committee may grant
the following types of Awards: Stock Options pursuant to Section 7 hereof, SARs
pursuant to Section 8 hereof, Limited SARs pursuant to Section 9 hereof,
Performance Units pursuant to Section 10 hereof and Restricted Stock Rights
pursuant to Section 11 hereof. Unless otherwise determined by the Committee, a
Grantee may not be granted in any Year both (i) a Restricted Stock Right and
(ii) a Stock Option, SAR, Limited SAR or Performance Unit.

7.   Stock Options.
     -------------

     (a)  The Committee from time to time may grant Stock Options either alone
or in conjunction with and related to SARs, Limited SARs and/or Performance
Units to key executive Employees selected by the Committee as being eligible
therefor. The Stock Options may be of two types, Incentive Stock Options and
Non-qualified Stock Options. Each Stock Option shall cover such number of Shares
and shall be on such other terms and conditions not inconsistent with this Plan
as the Committee may determine and shall be evidenced by a Stock Option
Agreement setting forth such terms and conditions executed by the Company and
the Grantee. The Committee shall determine the number of Shares subject to each
Stock Option. The number of Shares subject to an outstanding Stock Option shall
<PAGE>

be reduced on a one for one basis to the extent that any related SAR, Limited
SAR or Performance Unit is exercised and such Shares shall not again become
available for issuance pursuant to this Plan.

          In the case of Stock Options, the aggregate Fair Market Value
(determined as of the date of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by an Employee during
any Year under this Plan or any other plan of the Company shall not exceed
$100,000. To the extent, if any, that the Fair Market Value of such Common Stock
with respect to which Incentive Stock Options are exercisable exceeds $100,000,
such Incentive Stock Options shall be treated as separate Non-qualified Stock
Options. For purposes of the two immediately preceding sentences of this
subparagraph (a), Stock Options shall be taken into account in the order in
which they were granted.

     (b)  Unless the Committee shall determine otherwise, each Stock Option may
be exercised only if the Grantee has been continuously employed by RSI or any
Subsidiary for a period of at least one (1) year commencing on the date the
Stock Option is granted; provided, however, that this provision shall not apply
in the event of a Change of Control.

     (c)  Each Stock Option shall be for such term (but, in no event for greater
than seven years) and shall be exercisable in such installments as shall be
determined by the Committee at the time of grant of the Stock Option.

          The Committee may, at any time, provide for the acceleration of
installments or any part thereof.

     (d)  The price per Share at which Shares may be purchased upon the exercise
of a Stock Option shall be determined by the Committee on the grant of the Stock
Option, but such price shall not be less than one hundred percent (100%) of the
Fair Market Value on the date of grant of the Stock Option. If a Grantee owns
(or is deemed to own under applicable provisions of the Code and rules and
regulations promulgated thereunder) more than ten percent (10%) of the combined
voting power of all classes of the stock of the Company and a Stock Option
granted to such Grantee is intended to qualify as an Incentive Stock Option, the
Incentive Stock Option price shall be no less than one hundred and ten percent
(110%) of the Fair Market Value of the Common Stock on the date the Incentive
Stock Option is granted and the term of such Incentive Stock Option shall be no
more than five years.

     (e)  Except as provided in Paragraphs (h) and (l) of this Section 7, no
Stock Option may be exercised unless the Grantee, at the time of exercise, is an
Employee and has continuously been an Employee of RSI or any Subsidiary since
the grant of such Stock Option. A Grantee shall not be deemed to have terminated
his period of continuous employ with RSI or any Subsidiary if he leaves the
employ of RSI or any Subsidiary for immediate reemployment with RSI or any
Subsidiary.

     (f)  To exercise a Stock Option, the Grantee shall (i) give written notice
to the Company in form satisfactory to the Committee indicating the number of
Shares which he elects to purchase, (ii) deliver to the Company payment of the
full purchase price of the Shares being purchased (A) in cash or a certified or
bank cashier's check payable to the order of the Company, or (B) with the
approval of the Committee, in Shares of the Common Stock having a Fair Market
Value on the date of exercise equal to the purchase price, or a combination of
the foregoing having an aggregate Fair Market Value equal to such purchase
price, and (iii) deliver to the Secretary of the Company such written
representations, warranties and covenants as the Company may require under
Section 16(a) of this Plan.

     (g)  A Grantee of any Stock Option shall not have any rights as a
shareholder until the close of business on the date on which the Stock Option
has been exercised.
<PAGE>

     (h)  Notwithstanding any other provision of this Plan, unless otherwise
determined by the Committee prior to a Change of Control, in the event of a
Change of Control, each Stock Option not previously exercised or expired under
the terms of this Plan shall become immediately exercisable in full and shall
remain exercisable to the full extent of the Shares available thereunder,
regardless of any installment provisions applicable thereto, for the remainder
of its term, unless Section 14(a) of this Plan applies or the Grantee has been
terminated for cause, in which case the Stock Options shall automatically
terminate as of the Incumbent Board's determination pursuant to Section 14(a) or
the Grantee's Termination Date, as appropriate.

     (i)  If the Committee so determines prior to or during the thirty (30) day
period following the occurrence of a Change of Control, Grantees of Stock
Options not otherwise exercised or expired under the terms of this Plan as to
which no SARs or Limited SARs are then exercisable may, in lieu of exercising,
require RSI to purchase for cash all such Stock Options or portions thereof for
a period of sixty (60) days following the occurrence of a Change of Control at
the Price specified in Section 2(v).

     (j)  Any determination made by the Committee pursuant to Section 7(h) or
7(i) may be made as to all eligible Stock Options or only as to certain of such
Stock Options specified by the Committee. Once made, any determination by the
Committee pursuant to Section 7(h) or 7(i) shall be irrevocable.

     (k)  The Company intends that this Section 7 shall comply with the
requirements of Rule 16b-3 under the 1934 Act (the "Rule") during the term of
this Plan. Should any provision of this Section 7 not be necessary to comply
with the requirements of the Rule, or should any additional provisions be
necessary for this Section 7 to comply with the requirements of the Rule, the
Committee may amend this Plan or any Stock Option agreement to add to or modify
the provisions thereof accordingly.

     (l)  Notwithstanding any of the provisions of this Section 7, a Stock
Option shall in all cases terminate and not be exercisable after the expiration
of the term of the Stock Option established by the Committee. Except as provided
in Section 7(h), Stock Options shall be exercisable after the Grantee ceases to
be employed by RSI or any Subsidiary as follows, unless otherwise determined by
the Committee:

          (i)   In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of Disability, (A) any Non-qualified Stock Option not
previously exercised or expired shall continue to vest and be exercisable during
the three (3) year period following the Grantee's Termination Date, and to the
extent it is exercisable at the expiration of such three (3) year period, it
shall continue to be exercisable by such Grantee or such Grantee's legal
representatives, heirs or legatees for the term of such Non-qualified Stock
Option, and (B) any Incentive Stock Option shall, to the extent it was
exercisable on the Termination Date, continue to be exercisable by such Grantee
or such Grantee's legal representatives, heirs or legatees for the term of such
Incentive Stock Option; provided, however, that in order to qualify for the
special tax treatment afforded by Section 421 of the Code, Incentive Stock
Options must be exercised within the three (3) month period commencing on the
Termination Date (the exercise period shall be one (1) year in the case of
termination by reason of disability, within the meaning of Section 22(e)(3) of
the Code). Incentive Stock Options not exercised within such three (3) month
period shall be treated as Non-qualified Stock Options.

          (ii)  In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of death, any Stock Option shall, to the extent it was
exercisable on the Termination Date, continue to be exercisable by such
Grantee's legal representatives, heirs or legatees for the term of such Stock
Option.

          (iii) Except as otherwise provided in subparagraph (i) or (ii) above,
in the event that a Grantee ceases to be employed by RSI or any Subsidiary for
any reason other than termination for cause, any Stock Option shall, to the
extent it was exercisable on the Termination Date, continue to be exercisable
for a period of three (3) months commencing on the Termination Date and shall
<PAGE>

terminate at the expiration of such period; provided, however, that in the event
of the death of the Grantee during such three (3) month period, such Stock
Option shall, to the extent it was exercisable on the Termination Date, be
exercisable by the Grantee's personal representatives, heirs or legatees for a
period of one (1) year commencing on the date of the Grantee's death and shall
terminate at the expiration of such period.

     (m)  Except as otherwise provided in Section 7, a Stock Option shall
automatically terminate as of the Termination Date, provided that if a Grantee's
employment is interrupted by reason of Disability or a leave of absence (as
determined by the Committee) the Committee may permit the exercise of some or
all of the Stock Options granted on such terms and for such period of time as it
shall determine.

8.   Stock Appreciation Rights.
     -------------------------

     (a)  The Committee shall have authority in its discretion to grant a SAR to
any Grantee of a Stock Option with respect to all or some of the Shares covered
by such Stock Option. Each SAR shall be on such terms and conditions not
inconsistent with this Plan as the Committee may determine and shall be
evidenced by a SAR Agreement setting forth such terms and conditions executed by
the Company and the holder of the SAR. A SAR may be granted either at the time
of grant of a Stock Option or at any time thereafter during its term. A SAR may
be granted to a Grantee irrespective of whether such Grantee has a Limited SAR.
Each SAR shall be exercisable only if and to the extent that the related Stock
Option is exercisable. Upon the exercise of a SAR, the related Stock Option
shall cease to be exercisable to the extent of the Shares with respect to which
such SAR is exercised and shall be considered to have been exercised to that
extent for purposes of determining the number of Shares available for the grant
of further Awards pursuant to this Plan. Upon the exercise or termination of a
Stock Option, the SAR related to such Stock Option shall terminate to the extent
of the Shares with respect to which such Stock Option was exercised or
terminated.

     (b)  The term "Spread" as used in this Section 8 shall mean, with respect
to the exercise of any SAR, an amount equal to the product computed by
multiplying (i) the excess of (A) the Fair Market Value per Share on the date
such SAR is exercised over (B) the purchase price per Share at which the related
Stock Option is exercisable by (ii) the number of Shares with respect to which
such SAR is being exercised, provided; however, that the Committee may at the
grant of any SAR limit the maximum amount of the Spread to be paid upon the
exercise thereof.

     (c)  Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a SAR may be exercised only
when there is a positive Spread, that is, when the Fair Market Value per Share
exceeds the purchase price per Share at which the related Stock Option is
exercisable. Upon the exercise of a SAR, the Committee shall pay to the Grantee
exercising the SAR an amount equivalent to the Spread. The Committee shall have
the sole and absolute discretion to determine whether payment for such SAR will
be made in cash, Shares or a combination of cash and Shares, provided, that any
Shares used for payment shall be valued at their Fair Market Value on the date
of the exercise of the SAR.

     (d)  The Company intends that this Section 8 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 8 not be necessary to comply with the requirements of the Rule or
should any additional provisions be necessary for this Section 8 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.

     (e)  To exercise a SAR, the Grantee shall (i) give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which such holder is exercising the SAR and (ii)
<PAGE>

deliver to the Company such written representations, warranties and covenants as
the Company may require under Section 16(a) of this Plan.

     (f)  A person exercising a SAR shall not be treated as having become the
registered owner of any Shares issued on such exercise until such Shares are
issued.

     (g)  The exercise of a SAR shall reduce the number of Shares subject to the
related Stock Option on a one for one basis.

9.   Limited SARs.
     ------------

     (a)  The Committee shall have authority in its discretion to grant a
Limited SAR to the holder of any Stock Option with respect to all or some of the
Shares covered by such Stock Option; provided, however, that in the case of
Incentive Stock Options, the Committee may grant Limited SARs only if and to the
extent that the grant of such Limited SARs is consistent with the treatment of
the Stock Option as an Incentive Stock Option. Each Limited SAR shall be on such
terms and conditions not inconsistent with this Plan as the Committee may
determine and shall be evidenced by a Limited SAR Agreement setting forth such
terms and conditions executed by the Company and the holder of the Limited SAR.
A Limited SAR may be granted to a Grantee irrespective of whether such Grantee
has a SAR.

     (b)  Limited SARs may be exercised only during the sixty (60) day period
commencing after the occurrence of a Change of Control.

          Each Limited SAR shall be exercisable only if and to the extent that
the related Option is exercisable. Upon the exercise of a Limited SAR, the
related Stock Option shall cease to be exercisable to the extent of the Shares
with respect to which such Limited SAR is exercised, and the Stock Option shall
be considered to have been exercised to that extent for purposes of determining
the number of Shares available for the grant of further Awards pursuant to this
Plan. Upon the exercise or termination of an Option, the Limited SAR with
respect to such Option shall terminate to the extent of the Shares with respect
to which the Option was exercised or terminated.

     (c)  For any Limited SAR, the term "Spread" as used in this Section 9 shall
mean an amount equal to the product computed by multiplying (A) the Price
specified in Section 2(v) by (B) the number of Shares with respect to which such
Limited SAR is being exercised.

     (d)  Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a Limited SAR may be
exercised only when there is a positive Spread, that is, when the Fair Market
Value per Share exceeds the purchase price per Share at which the related Stock
Option is exercisable. Upon the exercise of a Limited SAR, the holder thereof
shall receive an amount in cash equal to the Spread.

     (e)  Notwithstanding any other provision of this Plan, no SAR or
Performance Unit may be exercised with respect to any Stock Option at a time
when any Limited SAR with respect to such Stock Option held by the Grantee of
such SAR or Performance Unit may be exercised.

     (f)  The Company intends that this Section 9 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 9 not be necessary to comply with the requirements of the Rule, or
should any additional provisions be necessary for this Section 9 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
<PAGE>

     (g)  To exercise a Limited SAR, the holder shall give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which he is exercising the Limited SAR.

     (h)  The exercise of a Limited SAR shall reduce on a one for one basis the
number of Shares subject to the related Stock Option.

10.  Performance Units.
     -----------------

     (a)  In conjunction with the granting of Stock Options under this Plan, the
Committee may grant Performance Units relating to such Stock Options; provided,
however, that in the case of Incentive Stock Options, the Committee may grant
Performance Units only if and to the extent that the grant of such Performance
Units is consistent with the treatment of the Stock Option as an Incentive Stock
Option. Each grant of Performance Units shall cover such number of Shares and
shall be on such other terms and conditions not inconsistent with this Plan as
the Committee may determine and shall be evidenced by a Performance Unit
Agreement setting forth such terms and conditions executed by the Company and
the Grantee of the Performance Units. The number of Performance Units granted
shall be equal to a specified number of Shares subject to the related Stock
Options. The Committee shall value such Units to the extent that Performance
Goals are achieved; provided, however, that in no event shall the value per
Performance Unit exceed one hundred and fifty percent (150%) of the purchase
price per Share at which the related Stock Option is exercisable.

     (b)  The Committee shall have full and final authority to establish
Performance Goals for each Performance Period on the basis of such criteria, and
the attainment of such objectives, as the Committee may from time to time
determine. In setting Performance Goals, the Committee may take into
consideration such matters which it deems relevant and such financial and other
criteria including but not limited to projected cumulative compounded rate of
growth in earnings per Share and average return on equity. During any
Performance Period, the Committee shall have the authority to adjust Performance
Goals for the Performance Period as it deems equitable in recognition of
extraordinary or nonrecurring events experienced by the Company during the
Performance Period including, but not limited to, changes in applicable
accounting rules or principles or changes in the Company's methods of accounting
during the Performance Period or significant changes in tax laws or regulations
which affect the financial results of the Company.

     (c)  The term "Performance Goals" as used in this Section 10 shall mean the
performance objectives established by the Committee for the Company for a
Performance Period for the purpose of determining if, as well as the extent to
which, a Performance Unit shall be earned.

     (d)  The term "Performance Period" as used in this Section 10 shall mean
the period of time selected by the Committee (which period shall be not more
than five nor less than three years) commencing on January 1 of the Year in
which the grant of Performance Units is made, during which the performance of
the Company is measured for the purpose of determining the extent to which
Performance Units have been earned.

     (e)  Performance Units shall be earned to the extent that Performance Goals
and other conditions established in accordance with Paragraph (b) of this
Section 10 are met. The Company shall promptly notify each Grantee of the extent
to which Performance Units have been earned by such Grantee. A Performance Unit
may be exercised only during the period following such notice and prior to
expiration of the related option. Performance Units which have been earned shall
be paid after exercise by the Grantee pursuant to Paragraph (h) of this Section
10. The Committee shall have the sole and absolute discretion to determine
whether payment for such Performance Unit will be made in cash, Shares or a
combination of cash and Shares, provided that any Shares used for payment shall
be valued at their Fair Market Value on the date of the exercise of the
Performance Unit.
<PAGE>

     (f)  Unless otherwise determined by the Committee, in the event that a
Grantee of Performance Units ceases to be employed by RSI or any Subsidiary
during the term of the related Stock Option, the Performance Units held by him
shall be exercisable only to the extent the related Stock Option is exercisable
and shall be forfeited to the extent that the related Stock Option was not
exercisable on the Termination Date.

     (g)  The Company intends that this Section 10 shall comply with the
requirements of Section 16(b) of the 1934 Act and the rules thereunder, as from
time to time in effect, including the Rule. Should any provision of this Section
10 not be necessary to comply with the requirements of said Section 16(b) and
the rules thereunder or should any additional provision be necessary for this
Section 10 to comply with the requirements of Section 16(b) and the rules
thereunder, the Committee may amend this Plan or any Award agreement to add to
or modify the provisions thereof accordingly.

     (h)  To exercise Performance Units, the Grantee shall give written notice
to the Company in form satisfactory to the Committee addressed to the Secretary
of the Company specifying the number of Shares with respect to which he is
exercising Performance Units.

     (i)  The exercise of Performance Units shall reduce on a one for one basis
the number of Shares subject to the related Stock Option.

11.  Restricted Stock Rights.
     -----------------------

     (a)  The Committee from time to time may grant Restricted Stock Rights to
key executive Employees selected by the Committee as being eligible therefor,
which would entitle a Grantee to receive a stated number of Shares subject to
forfeiture of such Rights if such Grantee failed to remain continuously in the
employ of RSI or any Subsidiary for the period stipulated by the Committee (the
"Restricted Period").

     (b)  Restricted Stock Rights shall be subject to the following restrictions
and limitations:

          (i)  The Restricted Stock Rights may not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of;

          (ii) Except as otherwise provided in Paragraph (d) of this Section 11,
the Restricted Stock Rights and the Shares subject to such Restricted Stock
Rights shall be forfeited and all rights of a Grantee to such Restricted Stock
Rights and Shares shall terminate without any payment of consideration by the
Company if the Grantee fails to remain continuously as an Employee of RSI or any
Subsidiary for the Restricted Period. A Grantee shall not be deemed to have
terminated his period of continuous employment with RSI or any Subsidiary if he
leaves the employ of RSI or any Subsidiary for immediate reemployment with RSI
or any Subsidiary.

     (c)  The Grantee of Restricted Stock Rights shall not be entitled to any of
the rights of a holder of the Common Stock with respect to the Shares subject to
such Restricted Stock Rights prior to the issuance of such Shares pursuant to
this Plan. During the Restricted Period, for each Share subject to a Restricted
Stock Right, the Company will pay the holder an amount in cash equal to the cash
dividend declared on a Share during the Restricted Period on or about the date
the Company pays such dividend to the stockholders of record.

     (d)  In the event that the employment of a Grantee terminates by reason of
death, Disability or Retirement, such Grantee shall be entitled to receive the
number of Shares subject to the Restricted Stock Right multiplied by a fraction
(x) the numerator of which shall be the number of days between the date of grant
<PAGE>

of such Restricted Stock Right and the date of such termination of employment,
and (y) the denominator of which shall be the number of days in the Restricted
Period, provided, however, that any fractional Share shall be cancelled. If a
Grantee's employment is interrupted by reason of Disability or a leave of
absence (as determined by the Committee), then the Committee may permit the
delivery of the Shares subject to the Restricted Stock Right in such amounts as
the Committee may determine.

     (e)  Notwithstanding Paragraphs (a) and (b) of this Section 11, unless
otherwise determined by the Committee prior to the occurrence of a Change of
Control, in the event of a Change of Control all restrictions on Restricted
Stock shall expire and all Shares subject to Restricted Stock Rights shall be
issued to the Grantees. Additionally, the Committee may, at any time, provide
for the acceleration of the Restricted Period and of the issuance of all or part
of the Shares subject to Restricted Stock Rights. Any determination made by the
Committee pursuant to this Section 11(e) may be made as to all Restricted Stock
Rights or only as to certain Restricted Stock Rights specified by the Committee.
Once made, any determination by the Committee pursuant to this Section 11(e)
shall be irrevocable.

     (f)  When a Grantee shall be entitled to receive Shares pursuant to a
Restricted Stock Right, the Company shall issue the appropriate number of Shares
registered in the name of the Grantee.

12.  Dilution and Other Adjustments.
     ------------------------------

If there shall be any change in the Shares subject to this Plan or any Award
granted under this Plan as a result of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other change in the corporate
structure, adjustments may be made by the Committee, as it may deem appropriate,
in the aggregate number and kind of Shares subject to this Plan or to any
outstanding Award, and in the terms and provisions of this Plan and any Awards
granted hereunder, in order to reflect, on an equitable basis, any such change
in the Shares contemplated by this Section 12, provided however, that neither
the Board of Directors of RSI nor the Committee shall be permitted to re-price
any Stock Options once they have been granted. Any adjustment made by the
Committee pursuant to this Section 12 shall be conclusive and binding upon the
Grantee, the Company and any other related person.

13.  Substitute Options.
     ------------------

Incentive and/or Non-qualified Stock Options may be granted under this Plan from
time to time in substitution for either incentive or non-qualified stock options
or both held by employees of other corporations who are about to become
employees of the Company as the result of a merger, consolidation or
reorganization of the employing corporation with the Company, or the acquisition
by the Company of the assets of the employing corporation, or the acquisition by
the Company of stock of the employing corporation as the result of which it
becomes a Subsidiary of the Company. The terms and conditions of the Stock
Options so granted may vary from the terms and conditions set forth in this Plan
to such extent as the Committee at the time of grant may deem appropriate to
conform, in whole or in part, to the provisions of the stock options in
substitution for which they are granted, but, in the event that the option for
which a substitute Stock Option is being granted is an incentive stock option,
no variation shall adversely affect the status of any substitute Stock Option as
an incentive stock option under the Code.

14.  Miscellaneous Provisions.
     ------------------------

     (a) Notwithstanding any other provision of this Plan, no Stock Option, SAR,
Limited SAR or Restricted Stock Right granted hereunder may be exercised nor
shall any payment in respect of any Performance Unit granted hereunder be made
and all rights of the Grantee thereof, or of the Grantee's legal
representatives, heirs or legatees, shall be forfeited if, prior to the time of
such exercise or payment, the Committee (or in the event of a Change of Control,
the Incumbent Board) determines that the Grantee has (i) used for profit or
disclosed confidential information or trade secrets of the Company to

<PAGE>

unauthorized persons, or (ii) breached any contract with, or violated any legal
obligation to, the Company, or (iii) engaged in any other activity which would
constitute grounds for termination for cause of the Grantee by the Company. The
Committee (or the Incumbent Board) shall give a Grantee written notice of such
determination prior to making any such forfeiture. The Committee (or the
Incumbent Board) may waive the conditions of this Paragraph in full or in part
if, in its sole judgment, such waiver will have no substantial adverse effect
upon the Company. The determination of the Committee (or the Incumbent Board) as
to the occurrence of any of the events specified above and to the forfeiture, if
any, shall be conclusive and binding upon the Grantee, the Company and any other
related person.

     (b)  The Grantee of an Award shall have no rights as a stockholder with
respect thereto, except as otherwise expressly provided in this Plan, unless and
until certificates for Shares are issued.

     (c)  No Award or any rights or interests therein shall be assignable or
transferable by the Grantee except by will or the laws of descent and
distribution. During the lifetime of the Grantee, an Award shall be exercisable
only by the Grantee or the Grantee's guardian or legal representative.

     (d)  The Company shall have the right to deduct from all Awards granted
hereunder to be distributed in cash any Federal, state, local or foreign taxes
required by law to be withheld with respect to such cash payments. In the case
of Awards to be distributed in Shares, the holder or other person receiving such
Common Stock shall be required, as a condition of such distribution, either to
pay to the Company at the time of distribution thereof the amount of any such
taxes which the Company is required to withhold with respect to such Shares or
to have the number of the Shares, valued at their Fair Market Value on the date
of distribution, to be distributed reduced by an amount equal to the value of
such taxes required to be withheld.

     (e)  No Employee shall have any claim or right to be granted an Award under
this Plan, nor having been selected as a Grantee for one Year, any right to be a
Grantee in any other Year. Neither this Plan nor any action taken hereunder
shall be construed as giving any Grantee any right to be retained in the employ
of RSI or any Subsidiary, and the Company expressly reserves its right at any
time to dismiss any Grantee with or without cause.

     (f)  The costs and expense of administering this Plan shall be borne by the
Company and not charged to any Award nor to any Grantee.

     (g)  This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under this Plan, and payment of Awards
shall be subordinate to the claims of the Company's general creditors.

     (h)  Whenever used in this Plan, the masculine gender shall include the
feminine or neuter wherever necessary or appropriate and vice versa and the
singular shall include the plural and vice versa.

     (i)  With respect to Grantees subject to Section 16 of the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of this Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Committee. Moreover, in the event this Plan does not include a provision
required by Rule 16b-3 to be stated herein, such provision (other than one
relating to eligibility requirements, or the price and amount of Awards) shall
be deemed automatically to be incorporated by reference into this Plan insofar
as Grantees subject to Section 16 are concerned.

<PAGE>

15.  Indemnification of the Committee.
     --------------------------------

Service on the Committee shall constitute service as a director of the Company
and members of the Committee shall be entitled to indemnification, advancement
of expenses and reimbursement as directors of the Company pursuant to its
Restated Articles of Incorporation, By-Laws, resolutions of the Board of
Directors of RSI or otherwise.

16.  Compliance with Law.
     -------------------

     (a)  Each Grantee, to permit the Company to comply with the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable blue sky or state
securities laws, shall represent in writing to the Company at the time of the
grant of an Award and at the time of the issuance of any Shares thereunder that
such Grantee does not contemplate and shall not make any transfer of any Shares
to be acquired under an Award except in compliance with the 1933 Act and such
Grantee shall enter into such agreements and make such other representations as,
in the opinion of counsel to the Company, shall be sufficient to enable the
Company legally to issue the Shares without registration thereof under the 1933
Act. Certificates representing Shares to be acquired under Awards shall bear
legends as counsel for the Company may indicate are necessary or appropriate to
accomplish the purposes of this Section 16.

     (b)  If at any time the Committee shall determine that the listing,
registration or qualification of the Shares subject to any Award upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of or issuance of Shares under
such Award, such Shares shall not be issued unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.

17.  Amendment of the Plan.
     ---------------------

The Committee may at any time (i) terminate this Plan or (ii) modify or amend
this Plan in any respect, except that, to the extent required to maintain the
qualification of this Plan under Section 16 of the 1934 Act, or as otherwise
required to comply with applicable law or the regulations of any stock exchange
on which the Shares are listed, the Committee may not, without shareholder
approval, (A) materially increase the benefits accruing to Grantees under this
Plan, (B) materially increase the number of securities which may be issued under
this Plan or (C) materially modify the requirements as to eligibility for
participation in this Plan. Should this Plan require amendment to maintain full
legal compliance because of rules, regulations, opinions or statutes issued by
the SEC, the U.S. Department of the Treasury or any other governmental or
governing body, then the Committee or the Board may take whatever action,
including but not limited to amending or modifying this Plan, is necessary to
maintain such compliance. The termination or any modification or amendment of
this Plan shall not, without the consent of any Grantee involved, adversely
affect his rights under an Award previously granted to him.

18.  Effective Date and Term of the Plan.
     -----------------------------------

     (a)  This Plan shall become effective on May 5, 1995, subject to the
approval of the shareholders of RSI.

     (b)  Unless previously terminated in accordance with Section 17 of this
Plan, this Plan shall terminate on the close of business on May 4, 2005, after
which no Awards shall be granted under this Plan. Such termination shall not
affect any Awards granted prior to such termination.

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