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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Florida
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59-0739250
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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11690 N.W. 105th Street
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Miami, Florida 33178
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(305) 500-3726
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(Address of principal executive offices, including zip code)
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(Registrant’s telephone number, including area code)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page No.
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Three months ended March 31,
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|||||
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2012
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2011
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|||
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(In thousands, except per share amounts)
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|||||
Lease and rental revenues
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$
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637,858
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579,415
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Services revenue
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678,352
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632,738
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Fuel services revenue
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220,066
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213,223
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Total revenues
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1,536,276
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1,425,376
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Cost of lease and rental
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455,630
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408,515
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Cost of services
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577,948
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537,857
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Cost of fuel services
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215,573
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208,960
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Other operating expenses
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34,249
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34,629
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Selling, general and administrative expenses
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196,019
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173,109
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Gains on vehicle sales, net
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(21,991
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)
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(12,349
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)
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Interest expense
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34,765
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34,419
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Miscellaneous income, net
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(4,480
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)
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(4,142
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)
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Restructuring and other charges, net
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865
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768
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1,488,578
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1,381,766
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Earnings from continuing operations before income taxes
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47,698
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43,610
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Provision for income taxes
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12,822
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17,753
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Earnings from continuing operations
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34,876
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25,857
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Loss from discontinued operations, net of tax
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(555
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)
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(732
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)
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Net earnings
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$
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34,321
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25,125
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Earnings (loss) per common share — Basic
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Continuing operations
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$
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0.68
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0.50
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Discontinued operations
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(0.01
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)
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(0.01
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)
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Net earnings
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$
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0.67
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0.49
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Earnings (loss) per common share — Diluted
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Continuing operations
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$
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0.68
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0.50
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Discontinued operations
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(0.01
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)
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(0.02
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)
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Net earnings
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$
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0.67
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0.48
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Comprehensive income
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$
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61,812
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52,424
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Cash dividends declared per common share
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$
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0.29
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0.27
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March 31,
2012 |
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December 31,
2011 |
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(Dollars in thousands, except per
share amount)
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Assets:
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Current assets:
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Cash and cash equivalents
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$
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113,621
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104,572
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Receivables, net
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789,256
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754,644
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Inventories
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67,283
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65,912
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Prepaid expenses and other current assets
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152,181
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163,045
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Total current assets
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1,122,341
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1,088,173
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Revenue earning equipment, net of accumulated depreciation of $3,523,771 and
$3,462,359, respectively
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5,529,793
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5,049,671
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Operating property and equipment, net of accumulated depreciation of $929,173 and
$911,717, respectively
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625,504
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624,180
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Goodwill
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377,829
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377,306
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Intangible assets
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83,126
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84,820
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Direct financing leases and other assets
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410,049
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393,685
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Total assets
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$
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8,148,642
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7,617,835
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Liabilities and shareholders’ equity:
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Current liabilities:
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Short-term debt and current portion of long-term debt
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$
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586,872
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274,366
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Accounts payable
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720,599
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391,827
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Accrued expenses and other current liabilities
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454,277
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507,630
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Total current liabilities
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1,761,748
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1,173,823
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Long-term debt
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3,006,302
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3,107,779
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Other non-current liabilities
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891,283
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896,587
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Deferred income taxes
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1,117,929
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1,121,493
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Total liabilities
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6,777,262
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6,299,682
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Shareholders’ equity:
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Preferred stock of no par value per share — authorized, 3,800,917; none outstanding,
March 31, 2012 or December 31, 2011
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—
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—
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Common stock of $0.50 par value per share — authorized, 400,000,000; outstanding,
March 31, 2012 — 51,273,569; December 31, 2011 — 51,143,946
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25,637
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25,572
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Additional paid-in capital
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784,108
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769,383
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Retained earnings
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1,101,309
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1,090,363
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Accumulated other comprehensive loss
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(539,674
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)
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(567,165
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)
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Total shareholders’ equity
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1,371,380
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1,318,153
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Total liabilities and shareholders’ equity
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$
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8,148,642
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7,617,835
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Three months ended March 31,
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|||||
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2012
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2011
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(In thousands)
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|||||
Cash flows from operating activities from continuing operations:
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Net earnings
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$
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34,321
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25,125
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Less: Loss from discontinued operations, net of tax
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(555
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)
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(732
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)
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Earnings from continuing operations
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34,876
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25,857
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Depreciation expense
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226,608
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205,937
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Gains on vehicle sales, net
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(21,991
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)
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(12,349
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)
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Share-based compensation expense
|
4,437
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4,105
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Amortization expense and other non-cash charges, net
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9,101
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7,724
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Deferred income tax expense
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14,356
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12,781
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Changes in operating assets and liabilities, net of acquisitions:
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Receivables
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(26,520
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)
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(51,090
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)
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Inventories
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(1,166
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)
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(3,750
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)
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Prepaid expenses and other assets
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(5,644
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)
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(8,174
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)
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Accounts payable
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9,448
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31,408
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Accrued expenses and other non-current liabilities
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(57,229
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)
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|
5,115
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Net cash provided by operating activities from continuing operations
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186,276
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217,564
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Cash flows from financing activities from continuing operations:
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Net change in commercial paper borrowings
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(164,298
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)
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(290,132
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)
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Debt proceeds
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369,920
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|
349,867
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Debt repaid, including capital lease obligations
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(2,784
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)
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(820
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)
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Dividends on common stock
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(14,853
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)
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(13,945
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)
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Common stock issued
|
13,156
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5,222
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Common stock repurchased
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(11,920
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)
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(12,036
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)
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Excess tax benefits from share-based compensation
|
789
|
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|
548
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Debt issuance costs
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(2,211
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)
|
|
(1,732
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)
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Net cash provided by financing activities from continuing operations
|
187,799
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|
|
36,972
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|
|
|
|
|
|
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Cash flows from investing activities from continuing operations:
|
|
|
|
|||
Purchases of property and revenue earning equipment
|
(470,969
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)
|
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(313,218
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)
|
|
Sales of revenue earning equipment
|
91,341
|
|
|
66,150
|
|
|
Sales of operating property and equipment
|
2,898
|
|
|
5,030
|
|
|
Acquisitions
|
(2,076
|
)
|
|
(83,776
|
)
|
|
Collections on direct finance leases
|
15,475
|
|
|
14,828
|
|
|
Changes in restricted cash
|
(2,438
|
)
|
|
(281
|
)
|
|
Net cash used in investing activities from continuing operations
|
(365,769
|
)
|
|
(311,267
|
)
|
|
|
|
|
|
|||
Effect of exchange rate changes on cash
|
1,660
|
|
|
341
|
|
|
Increase (decrease) in cash and cash equivalents from continuing operations
|
9,966
|
|
|
(56,390
|
)
|
|
|
|
|
|
|||
Cash flows from discontinued operations:
|
|
|
|
|||
Operating cash flows
|
(933
|
)
|
|
(1,048
|
)
|
|
Financing cash flows
|
—
|
|
|
11
|
|
|
Investing cash flows
|
—
|
|
|
—
|
|
|
Effect of exchange rate changes on cash
|
16
|
|
|
14
|
|
|
Decrease in cash and cash equivalents from discontinued operations
|
(917
|
)
|
|
(1,023
|
)
|
|
|
|
|
|
|||
Increase (decrease) in cash and cash equivalents
|
9,049
|
|
|
(57,413
|
)
|
|
Cash and cash equivalents at January 1
|
104,572
|
|
|
213,053
|
|
|
Cash and cash equivalents at March 31
|
$
|
113,621
|
|
|
155,640
|
|
|
Preferred
Stock
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||||
|
Amount
|
|
Shares
|
|
Par
|
|
||||||||||||||||
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(Dollars in thousands, except per share amount)
|
|||||||||||||||||||||
Balance at December 31, 2011
|
$
|
—
|
|
|
51,143,946
|
|
|
$
|
25,572
|
|
|
769,383
|
|
|
1,090,363
|
|
|
(567,165
|
)
|
|
1,318,153
|
|
Components of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,321
|
|
|
—
|
|
|
34,321
|
|
||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,803
|
|
|
22,803
|
|
||
Amortization of pension and postretirement items, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,688
|
|
|
4,688
|
|
||
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
61,812
|
|
||||||||
Common stock dividends declared — $0.29 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,908
|
)
|
|
—
|
|
|
(14,908
|
)
|
||
Common stock issued under employee stock option and stock purchase plans
(1)
|
—
|
|
|
352,533
|
|
|
177
|
|
|
12,957
|
|
|
—
|
|
|
—
|
|
|
13,134
|
|
||
Benefit plan stock sales
(2)
|
—
|
|
|
290
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||
Common stock repurchases
|
—
|
|
|
(223,200
|
)
|
|
(112
|
)
|
|
(3,341
|
)
|
|
(8,467
|
)
|
|
—
|
|
|
(11,920
|
)
|
||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
4,437
|
|
|
—
|
|
|
—
|
|
|
4,437
|
|
||
Tax benefits from share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
650
|
|
|
—
|
|
|
—
|
|
|
650
|
|
||
Balance at March 31, 2012
|
$
|
—
|
|
|
51,273,569
|
|
|
$
|
25,637
|
|
|
784,108
|
|
|
1,101,309
|
|
|
(539,674
|
)
|
|
1,371,380
|
|
|
Three months ended
March 31, 2011
|
||
|
(In thousands, except
per share amounts)
|
||
Revenue — As reported
|
$
|
1,425,376
|
|
Revenue — Pro forma
|
$
|
1,463,205
|
|
|
|
||
Net earnings — As reported
|
$
|
25,125
|
|
Net earnings — Pro forma
|
$
|
32,213
|
|
|
|
||
Net earnings per common share:
|
|
||
Basic — As reported
|
$
|
0.49
|
|
Basic — Pro forma
|
$
|
0.63
|
|
|
|
||
Diluted — As reported
|
$
|
0.48
|
|
Diluted — Proforma
|
$
|
0.62
|
|
Company Acquired
|
|
Date Acquired
|
|
Segment
|
|
Purchase Price
|
|
Vehicles
|
|
Contractual Customers
|
Carmenita Leasing, Inc.
|
|
January 10, 2011
|
|
FMS
|
|
$9.0 million
|
|
190
|
|
60
|
The Scully Companies
|
|
January 28, 2011
|
|
FMS/SCS
|
|
$91.0 million
|
|
2,100
|
|
200
|
B.I.T Leasing
|
|
April 1, 2011
|
|
FMS
|
|
$13.8 million
|
|
490
|
|
130
|
|
Three months ended March 31,
|
|||||
|
2012
|
|
2011
|
|||
|
(In thousands)
|
|||||
Pre-tax loss from discontinued operations
|
$
|
(575
|
)
|
|
(747
|
)
|
Income tax benefit
|
20
|
|
|
15
|
|
|
Loss from discontinued operations, net of tax
|
$
|
(555
|
)
|
|
(732
|
)
|
|
March 31,
2012 |
|
December 31,
2011 |
|||
|
(In thousands)
|
|||||
Total assets, primarily deposits
|
$
|
5,042
|
|
|
4,600
|
|
Total liabilities, primarily contingent accruals
|
$
|
7,459
|
|
|
6,502
|
|
|
Three months ended March 31,
|
|||||
|
2012
|
|
2011
|
|||
|
(In thousands)
|
|||||
Stock option and stock purchase plans
|
$
|
2,364
|
|
|
2,247
|
|
Nonvested stock
|
2,073
|
|
|
1,858
|
|
|
Share-based compensation expense
|
4,437
|
|
|
4,105
|
|
|
Income tax benefit
|
(1,484
|
)
|
|
(1,372
|
)
|
|
Share-based compensation expense, net of tax
|
$
|
2,953
|
|
|
2,733
|
|
|
Three months ended March 31,
|
||
|
2012
|
|
2011
|
|
(In thousands)
|
||
Cash awards
|
$597
|
|
460
|
|
Three months ended March 31,
|
|||||
|
2012
|
|
2011
|
|||
|
(In thousands, except per share amounts)
|
|||||
Earnings per share — Basic:
|
|
|
|
|||
Earnings from continuing operations
|
$
|
34,876
|
|
|
25,857
|
|
Less: Distributed and undistributed earnings allocated to nonvested stock
|
(462
|
)
|
|
(405
|
)
|
|
Earnings from continuing operations available to common shareholders — Basic
|
$
|
34,414
|
|
|
25,452
|
|
|
|
|
|
|||
Weighted average common shares outstanding — Basic
|
50,485
|
|
|
50,626
|
|
|
|
|
|
|
|||
Earnings from continuing operations per common share — Basic
|
$
|
0.68
|
|
|
0.50
|
|
|
|
|
|
|||
Earnings per share — Diluted:
|
|
|
|
|||
Earnings from continuing operations
|
$
|
34,876
|
|
|
25,857
|
|
Less: Distributed and undistributed earnings allocated to nonvested stock
|
(460
|
)
|
|
(403
|
)
|
|
Earnings from continuing operations available to common shareholders — Diluted
|
$
|
34,416
|
|
|
25,454
|
|
|
|
|
|
|||
Weighted average common shares outstanding — Basic
|
50,485
|
|
|
50,626
|
|
|
Effect of dilutive options
|
436
|
|
|
385
|
|
|
Weighted average common shares outstanding — Diluted
|
50,921
|
|
|
51,011
|
|
|
|
|
|
|
|||
Earnings from continuing operations per common share — Diluted
|
$
|
0.68
|
|
|
0.50
|
|
|
|
|
|
|||
Anti-dilutive equity awards and market-based restricted stock rights not included above
|
1,453
|
|
|
1,442
|
|
|
December 31, 2011
|
|
Additions
|
|
Cash
Payments
|
|
Foreign
Translation
Adjustments
|
|
March 31, 2012
|
||||||
|
Balance
|
|
|
|
|
Balance
|
|||||||||
|
(In thousands)
|
||||||||||||||
Employee severance and benefits
|
$
|
2,607
|
|
|
—
|
|
|
755
|
|
|
74
|
|
|
1,926
|
|
Contract termination costs
|
2,639
|
|
|
865
|
|
|
384
|
|
|
(97
|
)
|
|
3,023
|
|
|
Total
|
$
|
5,246
|
|
|
865
|
|
|
1,139
|
|
|
(23
|
)
|
|
4,949
|
|
|
March 31,
2012 |
|
December 31,
2011 |
|||
|
(In thousands)
|
|||||
Total minimum lease payments receivable
|
$
|
615,486
|
|
|
561,772
|
|
Less: Executory costs
|
(202,017
|
)
|
|
(181,820
|
)
|
|
Minimum lease payments receivable
|
413,469
|
|
|
379,952
|
|
|
Less: Allowance for uncollectibles
|
(807
|
)
|
|
(903
|
)
|
|
Net minimum lease payments receivable
|
412,662
|
|
|
379,049
|
|
|
Unguaranteed residuals
|
64,499
|
|
|
63,472
|
|
|
Less: Unearned income
|
(101,042
|
)
|
|
(92,637
|
)
|
|
Net investment in direct financing and sales-type leases
|
376,119
|
|
|
349,884
|
|
|
Current portion
|
(72,028
|
)
|
|
(68,896
|
)
|
|
Non-current portion
|
$
|
304,091
|
|
|
280,988
|
|
|
March 31,
2012 |
|
December 31,
2011 |
|||
|
(In thousands)
|
|||||
Very low risk to low risk
|
$
|
153,452
|
|
|
121,836
|
|
Moderate risk
|
198,689
|
|
|
190,070
|
|
|
Moderately high risk to high risk
|
61,328
|
|
|
68,046
|
|
|
|
$
|
413,469
|
|
|
379,952
|
|
|
|
||
|
(In thousands)
|
||
Balance at December 31, 2011
|
$
|
903
|
|
Charged to earnings
|
783
|
|
|
Deductions
|
(879
|
)
|
|
Balance at March 31, 2012
|
$
|
807
|
|
|
March 31, 2012
|
|
December 31, 2011
|
|||||||||||||||
|
Cost
|
|
Accumulated
Depreciation
|
|
Net Book
Value
(1)
|
|
Cost
|
|
Accumulated
Depreciation
|
|
Net Book
Value
(1)
|
|||||||
|
(In thousands)
|
|||||||||||||||||
Held for use:
|
|
|||||||||||||||||
Full service lease
|
$
|
6,326,070
|
|
|
(2,527,246
|
)
|
|
3,798,824
|
|
|
6,010,335
|
|
|
(2,518,830
|
)
|
|
3,491,505
|
|
Commercial rental
|
2,268,130
|
|
|
(666,758
|
)
|
|
1,601,372
|
|
|
2,175,003
|
|
|
(708,052
|
)
|
|
1,466,951
|
|
|
Held for sale
|
459,364
|
|
|
(329,767
|
)
|
|
129,597
|
|
|
326,692
|
|
|
(235,477
|
)
|
|
91,215
|
|
|
Total
|
$
|
9,053,564
|
|
|
(3,523,771
|
)
|
|
5,529,793
|
|
|
8,512,030
|
|
|
(3,462,359
|
)
|
|
5,049,671
|
|
(1)
|
Revenue earning equipment, net includes vehicles acquired under capital leases of
$59.4 million
, less accumulated depreciation of
$15.1 million
, at
March 31, 2012
, and
$60.7 million
, less accumulated depreciation of
$14.4 million
, at
December 31, 2011
.
|
|
Fleet
Management
Solutions
|
|
Supply
Chain
Solutions
|
|
Total
|
||||
|
(In thousands)
|
||||||||
Balance at January 1, 2012:
|
|
|
|
|
|
||||
Goodwill
|
$
|
216,559
|
|
|
189,968
|
|
|
406,527
|
|
Accumulated impairment losses
|
(10,322
|
)
|
|
(18,899
|
)
|
|
(29,221
|
)
|
|
|
206,237
|
|
|
171,069
|
|
|
377,306
|
|
|
Purchase accounting adjustments
|
72
|
|
|
97
|
|
|
169
|
|
|
Foreign currency translation adjustment
|
155
|
|
|
199
|
|
|
354
|
|
|
Balance at March 31, 2012:
|
|
|
|
|
|
||||
Goodwill
|
216,786
|
|
|
190,264
|
|
|
407,050
|
|
|
Accumulated impairment losses
|
(10,322
|
)
|
|
(18,899
|
)
|
|
(29,221
|
)
|
|
|
$
|
206,464
|
|
|
171,365
|
|
|
377,829
|
|
|
March 31, 2012
|
|
December 31, 2011
|
|||||||||||||||
|
Accrued
Expenses
|
|
Non-Current
Liabilities
|
|
Total
|
|
Accrued
Expenses
|
|
Non-Current
Liabilities
|
|
Total
|
|||||||
|
(In thousands)
|
|||||||||||||||||
Salaries and wages
|
$
|
62,043
|
|
|
—
|
|
|
62,043
|
|
|
121,087
|
|
|
—
|
|
|
121,087
|
|
Deferred compensation
|
1,508
|
|
|
22,943
|
|
|
24,451
|
|
|
1,405
|
|
|
21,285
|
|
|
22,690
|
|
|
Pension benefits
|
3,140
|
|
|
547,417
|
|
|
550,557
|
|
|
3,120
|
|
|
546,681
|
|
|
549,801
|
|
|
Other postretirement benefits
|
2,842
|
|
|
40,143
|
|
|
42,985
|
|
|
2,838
|
|
|
40,154
|
|
|
42,992
|
|
|
Insurance obligations,
primarily self-insurance
|
119,453
|
|
|
163,660
|
|
|
283,113
|
|
|
120,045
|
|
|
157,390
|
|
|
277,435
|
|
|
Residual value guarantees
|
2,872
|
|
|
693
|
|
|
3,565
|
|
|
3,093
|
|
|
1,125
|
|
|
4,218
|
|
|
Accrued rent
|
13,952
|
|
|
8,138
|
|
|
22,090
|
|
|
4,088
|
|
|
14,686
|
|
|
18,774
|
|
|
Environmental liabilities
|
4,539
|
|
|
9,541
|
|
|
14,080
|
|
|
4,368
|
|
|
9,171
|
|
|
13,539
|
|
|
Asset retirement obligations
|
5,847
|
|
|
12,546
|
|
|
18,393
|
|
|
5,702
|
|
|
12,364
|
|
|
18,066
|
|
|
Operating taxes
|
87,163
|
|
|
—
|
|
|
87,163
|
|
|
81,820
|
|
|
—
|
|
|
81,820
|
|
|
Income taxes
|
3,197
|
|
|
70,011
|
|
|
73,208
|
|
|
4,160
|
|
|
74,147
|
|
|
78,307
|
|
|
Interest
|
25,973
|
|
|
—
|
|
|
25,973
|
|
|
30,410
|
|
|
—
|
|
|
30,410
|
|
|
Deposits, mainly from customers
|
54,621
|
|
|
7,546
|
|
|
62,167
|
|
|
50,951
|
|
|
7,544
|
|
|
58,495
|
|
|
Deferred revenue
|
17,182
|
|
|
138
|
|
|
17,320
|
|
|
20,698
|
|
|
476
|
|
|
21,174
|
|
|
Acquisition holdbacks
|
4,992
|
|
|
—
|
|
|
4,992
|
|
|
7,422
|
|
|
—
|
|
|
7,422
|
|
|
Other
|
44,953
|
|
|
8,507
|
|
|
53,460
|
|
|
46,423
|
|
|
11,564
|
|
|
57,987
|
|
|
Total
|
$
|
454,277
|
|
|
891,283
|
|
|
1,345,560
|
|
|
507,630
|
|
|
896,587
|
|
|
1,404,217
|
|
|
Weighted-Average
Interest Rate
|
|
|
|
|
|
|
|||||||
|
March 31,
2012 |
|
December 31,
2011 |
|
Maturities
|
|
March 31,
2012 |
|
December 31,
2011 |
|||||
|
|
|
|
|
|
|
(In thousands)
|
|||||||
Short-term debt and current portion of long-term debt:
|
|
|
|
|
|
|
|
|
|
|||||
Short-term debt
|
1.44
|
%
|
|
1.45
|
%
|
|
2012
|
|
$
|
4,451
|
|
|
5,091
|
|
Current portion of long-term debt, including capital leases
|
|
|
|
|
|
|
582,421
|
|
|
269,275
|
|
|||
Total short-term debt and current portion of long-term debt
|
|
|
|
|
|
|
586,872
|
|
|
274,366
|
|
|||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|||||
U.S. commercial paper
(1)
|
0.44
|
%
|
|
0.40
|
%
|
|
2016
|
|
239,968
|
|
|
415,936
|
|
|
Canadian commercial paper
(1)
|
1.12
|
%
|
|
—
|
%
|
|
2016
|
|
12,026
|
|
|
—
|
|
|
Global revolving credit facility
|
1.71
|
%
|
|
1.52
|
%
|
|
2016
|
|
21,114
|
|
|
1,000
|
|
|
Unsecured U.S. notes — Medium-term notes
(1)
|
4.28
|
%
|
|
4.49
|
%
|
|
2012-2025
|
|
2,834,647
|
|
|
2,484,712
|
|
|
Unsecured U.S. obligations, principally bank term loans
|
1.66
|
%
|
|
1.78
|
%
|
|
2012-2015
|
|
105,500
|
|
|
105,000
|
|
|
Unsecured foreign obligations
|
2.36
|
%
|
|
2.71
|
%
|
|
2014-2016
|
|
309,302
|
|
|
300,516
|
|
|
Capital lease obligations
|
4.23
|
%
|
|
4.24
|
%
|
|
2012-2018
|
|
46,493
|
|
|
48,047
|
|
|
Total before fair market value adjustment
|
|
|
|
|
|
|
3,569,050
|
|
|
3,355,211
|
|
|||
Fair market value adjustment on notes subject to hedging
(2)
|
|
|
|
|
|
19,673
|
|
|
21,843
|
|
||||
|
|
|
|
|
|
|
3,588,723
|
|
|
3,377,054
|
|
|||
Current portion of long-term debt, including capital leases
|
|
|
|
|
|
|
(582,421
|
)
|
|
(269,275
|
)
|
|||
Long-term debt
|
|
|
|
|
|
|
3,006,302
|
|
|
3,107,779
|
|
|||
Total debt
|
|
|
|
|
|
|
$
|
3,593,174
|
|
|
3,382,145
|
|
(1)
|
We had unamortized original issue discounts of
$8.9 million
and
$8.7 million
at
March 31, 2012
and
December 31, 2011
, respectively.
|
(2)
|
The notional amount of executed interest rate swaps designated as fair value hedges was
$550 million
at
March 31, 2012
and
December 31, 2011
.
|
|
Balance Sheet Location
|
|
Fair Value Measurements
At March 31, 2012 Using
|
|
Total
|
|||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||
|
|
|
(In thousands)
|
|||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||||
Interest rate swap
|
Prepaid expenses and other current assets
|
|
$
|
—
|
|
|
7,080
|
|
|
—
|
|
|
7,080
|
|
Interest rate swaps
|
DFL and other assets
|
|
—
|
|
|
12,593
|
|
|
—
|
|
|
12,593
|
|
|
Investments held in Rabbi Trusts:
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
|
3,192
|
|
|
—
|
|
|
—
|
|
|
3,192
|
|
|
U.S. equity mutual funds
|
|
|
10,640
|
|
|
—
|
|
|
—
|
|
|
10,640
|
|
|
Foreign equity mutual funds
|
|
|
2,973
|
|
|
—
|
|
|
—
|
|
|
2,973
|
|
|
Fixed income mutual funds
|
|
|
4,161
|
|
|
—
|
|
|
—
|
|
|
4,161
|
|
|
Investments held in Rabbi Trusts
|
DFL and other assets
|
|
20,966
|
|
|
—
|
|
|
—
|
|
|
20,966
|
|
|
Total assets at fair value
|
|
|
$
|
20,966
|
|
|
19,673
|
|
|
—
|
|
|
40,639
|
|
|
Balance Sheet Location
|
|
Fair Value Measurements
At December 31, 2011 Using
|
|
Total
|
|||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||
|
|
|
(In thousands)
|
|||||||||||
Assets:
|
|
|
|
|||||||||||
Interest rate swaps
|
DFL and other assets
|
|
$
|
—
|
|
|
21,843
|
|
|
—
|
|
|
21,843
|
|
Investments held in Rabbi Trusts:
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
|
3,783
|
|
|
—
|
|
|
—
|
|
|
3,783
|
|
|
U.S. equity mutual funds
|
|
|
8,850
|
|
|
—
|
|
|
—
|
|
|
8,850
|
|
|
Foreign equity mutual funds
|
|
|
2,526
|
|
|
—
|
|
|
—
|
|
|
2,526
|
|
|
Fixed income mutual funds
|
|
|
3,537
|
|
|
—
|
|
|
—
|
|
|
3,537
|
|
|
Investments held in Rabbi Trusts
|
DFL and other assets
|
|
18,696
|
|
|
—
|
|
|
—
|
|
|
18,696
|
|
|
Total assets at fair value
|
|
|
$
|
18,696
|
|
|
21,843
|
|
|
—
|
|
|
40,539
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||||
Contingent consideration
|
Accrued expenses
|
|
$
|
—
|
|
|
—
|
|
|
1,000
|
|
|
1,000
|
|
Total liabilities at fair value
|
|
|
$
|
—
|
|
|
—
|
|
|
1,000
|
|
|
1,000
|
|
|
Fair Value Measurements
At March 31, 2012 Using
|
|
Total Losses
(2)
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Three months ended
|
||||||
|
(In thousands)
|
||||||||||||
Assets held for sale:
|
|
|
|
|
|
|
|
||||||
Revenue earning equipment:
(1)
|
|
|
|
|
|
|
|
||||||
Trucks
|
$
|
—
|
|
|
—
|
|
|
7,321
|
|
|
$
|
2,381
|
|
Tractors
|
—
|
|
|
—
|
|
|
3,514
|
|
|
471
|
|
||
Trailers
|
—
|
|
|
—
|
|
|
624
|
|
|
507
|
|
||
Total assets at fair value
|
$
|
—
|
|
|
—
|
|
|
11,459
|
|
|
$
|
3,359
|
|
|
Fair Value Measurements
At March 31, 2011 Using
|
|
Total Losses
(2)
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Three months
ended
|
||||||
|
(In thousands)
|
||||||||||||
Assets held for sale:
|
|
|
|
|
|
|
|
||||||
Revenue earning equipment
(1)
|
|
|
|
|
|
|
|
||||||
Trucks
|
$
|
—
|
|
|
—
|
|
|
10,155
|
|
|
$
|
1,689
|
|
Tractors
|
—
|
|
|
—
|
|
|
4,274
|
|
|
689
|
|
||
Trailers
|
—
|
|
|
—
|
|
|
646
|
|
|
661
|
|
||
Total assets at fair value
|
$
|
—
|
|
|
—
|
|
|
15,075
|
|
|
$
|
3,039
|
|
(1)
|
Represents the portion of all revenue earning equipment held for sale that is recorded at fair value, less costs to sell.
|
(2)
|
Total losses represent fair value adjustments for all vehicles held for sale throughout the period for which fair value was less than carrying value.
|
|
|
Maturity date
|
|
Face value of medium-term notes
|
|
Aggregate
notional
amount of interest rate swaps |
|
Fixed interest
rate
|
|
Weighted-average variable
interest rate on hedged debt
as of March 31,
|
||
Issuance date
|
|
|
|
|
|
2012
|
|
2011
|
||||
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
||
May 2011
|
|
June 2017
|
|
$350,000
|
|
$150,000
|
|
3.50%
|
|
1.84%
|
|
NA
|
February 2011
|
|
March 2015
|
|
$350,000
|
|
$150,000
|
|
3.15%
|
|
1.70%
|
|
1.42%
|
February 2008
|
|
March 2013
|
|
$250,000
|
|
$250,000
|
|
6.00%
|
|
2.88%
|
|
2.59%
|
Fair Value Hedging Relationship
|
|
Location of
Gain (Loss)
Recognized in Income
|
|
Three months ended March 31,
|
|||||
|
2012
|
|
2011
|
||||||
|
|
|
|
(In thousands)
|
|||||
Derivatives: Interest rate swaps
|
|
Interest expense
|
|
$
|
(2,170
|
)
|
|
(1,149
|
)
|
Hedged items: Fixed-rate debt
|
|
Interest expense
|
|
2,170
|
|
|
1,149
|
|
|
Total
|
|
|
|
$
|
—
|
|
|
—
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
||||||||||
|
Three months ended March 31,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||||
Pension Benefits
|
|
|
|
|
|
|
|
||||||
Company-administered plans:
|
|
|
|
|
|
|
|
||||||
Service cost
|
$
|
3,907
|
|
|
3,767
|
|
|
$
|
320
|
|
|
347
|
|
Interest cost
|
23,689
|
|
|
24,490
|
|
|
514
|
|
|
669
|
|
||
Expected return on plan assets
|
(24,057
|
)
|
|
(25,859
|
)
|
|
—
|
|
|
—
|
|
||
Amortization of:
|
|
|
|
|
|
|
|
||||||
Transition obligation
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
||
Net actuarial loss (gain)
|
7,861
|
|
|
5,129
|
|
|
(3
|
)
|
|
106
|
|
||
Prior service credit
|
(569
|
)
|
|
(570
|
)
|
|
(58
|
)
|
|
(58
|
)
|
||
|
10,831
|
|
|
6,949
|
|
|
773
|
|
|
1,064
|
|
||
Union-administered plans
|
1,614
|
|
|
1,341
|
|
|
—
|
|
|
—
|
|
||
Net periodic benefit cost
|
$
|
12,445
|
|
|
8,290
|
|
|
$
|
773
|
|
|
1,064
|
|
|
|
|
|
|
|
|
|
||||||
Company-administered plans:
|
|
|
|
|
|
|
|
||||||
U.S.
|
$
|
9,848
|
|
|
7,100
|
|
|
$
|
552
|
|
|
883
|
|
Non-U.S.
|
983
|
|
|
(151
|
)
|
|
221
|
|
|
181
|
|
||
|
10,831
|
|
|
6,949
|
|
|
773
|
|
|
1,064
|
|
||
Union-administered plans
|
1,614
|
|
|
1,341
|
|
|
—
|
|
|
—
|
|
||
|
$
|
12,445
|
|
|
8,290
|
|
|
$
|
773
|
|
|
1,064
|
|
|
Three months ended March 31,
|
|||||
|
2012
|
|
2011
|
|||
|
(In thousands)
|
|||||
Interest paid
|
$
|
37,325
|
|
|
31,429
|
|
Income taxes paid
|
$
|
4,183
|
|
|
5,110
|
|
Changes in accounts payable related to purchases of revenue earning equipment
|
$
|
316,457
|
|
|
134,806
|
|
Operating and revenue earning equipment acquired under capital leases
|
$
|
59
|
|
|
1,153
|
|
|
FMS
|
|
SCS
|
|
Eliminations
|
|
Total
|
|||||||
|
|
|
|
|
|
|
|
|||||||
For the three months ended March 31, 2012
|
|
|
|
|
|
|
|
|||||||
Revenue from external customers
|
$
|
964,363
|
|
|
571,913
|
|
|
—
|
|
|
1,536,276
|
|
||
Inter-segment revenue
|
107,028
|
|
|
—
|
|
|
(107,028
|
)
|
|
—
|
|
|||
Total revenue
|
$
|
1,071,391
|
|
|
571,913
|
|
|
(107,028
|
)
|
|
1,536,276
|
|
||
|
|
|
|
|
|
|
|
|||||||
Segment EBT
|
$
|
50,683
|
|
|
21,871
|
|
|
(6,481
|
)
|
|
66,073
|
|
||
Unallocated CSS
|
|
|
|
|
|
|
(9,506
|
)
|
||||||
Non-service pension costs
|
|
|
|
|
|
|
(8,004
|
)
|
||||||
Restructuring and other charges, net
|
|
|
|
|
|
|
(865
|
)
|
||||||
Earnings from continuing operations before income taxes
|
|
|
|
|
|
|
$
|
47,698
|
|
|||||
|
|
|
|
|
|
|
|
|||||||
Segment capital expenditures
(1), (2)
|
$
|
463,606
|
|
|
$
|
2,837
|
|
|
—
|
|
|
466,443
|
|
|
Unallocated CSS
|
|
|
|
|
|
|
4,526
|
|
||||||
Capital expenditures paid
|
|
|
|
|
|
|
$
|
470,969
|
|
|||||
|
|
|
|
|
|
|
|
|||||||
For the three months ended March 31, 2011
|
|
|
|
|
|
|
|
|||||||
Revenue from external customers
|
$
|
889,616
|
|
|
535,760
|
|
|
—
|
|
|
1,425,376
|
|
||
Inter-segment revenue
|
90,500
|
|
|
—
|
|
|
(90,500
|
)
|
|
—
|
|
|||
Total revenue
|
$
|
980,116
|
|
|
535,760
|
|
|
(90,500
|
)
|
|
1,425,376
|
|
||
|
|
|
|
|
|
|
|
|||||||
Segment EBT
|
$
|
42,376
|
|
|
20,175
|
|
|
(4,904
|
)
|
|
57,647
|
|
||
Unallocated CSS
|
|
|
|
|
|
|
(8,742
|
)
|
||||||
Non-service pension costs
|
|
|
|
|
|
|
(4,527
|
)
|
||||||
Restructuring and other charges, net
|
|
|
|
|
|
|
(768
|
)
|
||||||
Earnings from continuing operations before income taxes
|
|
|
|
|
|
|
$
|
43,610
|
|
|||||
|
|
|
|
|
|
|
|
|||||||
Segment capital expenditures
(1), (2)
|
$
|
301,972
|
|
|
7,099
|
|
|
—
|
|
|
309,071
|
|
||
Unallocated CSS
|
|
|
|
|
|
|
4,147
|
|
||||||
Capital expenditures paid
|
|
|
|
|
|
|
$
|
313,218
|
|
(1)
|
Excludes revenue earning equipment acquired under capital leases.
|
(2)
|
Excludes acquisition payments of
$2.1 million
and
$83.8 million
during the three months ended
March 31, 2012
and
2011
, respectively.
|
Company Acquired
|
|
Date Acquired
|
|
Segment
|
|
Vehicles
|
|
Contractual Customers
|
|
Market
|
Hill Hire plc
|
|
June 8, 2011
|
|
FMS
|
|
13,700
|
|
400
|
|
U.K.
|
B.I.T Leasing
|
|
April 1, 2011
|
|
FMS
|
|
490
|
|
130
|
|
California
|
The Scully Companies
|
|
January 28, 2011
|
|
FMS/SCS
|
|
2,100
|
|
200
|
|
Western U.S.
|
Carmenita Leasing Inc.
|
|
January 10, 2011
|
|
FMS
|
|
190
|
|
60
|
|
California
|
|
Three months ended March 31,
|
|
Change
|
|||||
|
2012
|
|
2011
|
|
2012/2011
|
|||
|
(In thousands, except per share amounts)
|
|
||||||
Total revenue
|
$
|
1,536,276
|
|
|
1,425,376
|
|
|
8%
|
Operating revenue
(1)
|
1,228,924
|
|
|
1,129,070
|
|
|
9
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Pre-tax earnings from continuing operations
|
$
|
47,698
|
|
|
43,610
|
|
|
9%
|
Earnings from continuing operations
|
34,876
|
|
|
25,857
|
|
|
35
|
|
Net earnings
|
34,321
|
|
|
25,125
|
|
|
37
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Earnings per common share — Diluted
|
|
|
|
|
|
|||
Continuing operations
|
$
|
0.68
|
|
|
0.50
|
|
|
36%
|
Net earnings
|
0.67
|
|
|
0.48
|
|
|
40
|
(1)
|
We use operating revenue, a non-GAAP financial measure, to evaluate the operating performance of our businesses and as a measure of sales activity. FMS fuel services revenue, which is directly impacted by fluctuations in market fuel prices, is excluded from the operating revenue computation as fuel is largely a pass-through to our customers for which we realize minimal changes in profitability during periods of steady market fuel prices. However, profitability may be positively or negatively impacted by rapid changes in market fuel prices during a short period of time as customer pricing for fuel services is established based on market fuel costs. Subcontracted transportation is deducted from total revenue to arrive at operating revenue as subcontracted transportation is typically a pass-through to our customers. We realize minimal changes in profitability as a result of fluctuations in subcontracted transportation. Refer to the section titled “Non-GAAP Financial Measures” for a reconciliation of total revenue to operating revenue.
|
|
Three months ended March 31, 2012
|
||
|
Total
|
|
Operating
|
Organic including price and volume
|
4%
|
|
5%
|
Acquisitions
|
3
|
|
4
|
FMS fuel
|
1
|
|
—
|
Total increase
|
8%
|
|
9%
|
|
Three months ended March 31,
|
|
Change
|
||||||
|
2012
|
|
2011
|
|
2012/2011
|
||||
|
(Dollars in thousands)
|
|
|
||||||
Lease and rental revenues
|
$
|
637,858
|
|
|
$
|
579,415
|
|
|
10%
|
Cost of lease and rental
|
455,630
|
|
|
408,515
|
|
|
12
|
||
Gross margin
|
182,228
|
|
|
170,900
|
|
|
7
|
||
Gross margin %
|
29
|
%
|
|
29
|
%
|
|
|
|
Three months ended March 31,
|
|
Change
|
||||||
|
2012
|
|
2011
|
|
2012/2011
|
||||
|
(Dollars in thousands)
|
|
|
||||||
Services revenue
|
$
|
678,352
|
|
|
$
|
632,738
|
|
|
7%
|
Cost of services
|
577,948
|
|
|
537,857
|
|
|
7
|
||
Gross margin
|
100,404
|
|
|
94,881
|
|
|
6
|
||
Gross margin %
|
15
|
%
|
|
15
|
%
|
|
|
|
Three months ended March 31,
|
|
Change
|
||||||
|
2012
|
|
2011
|
|
2012/2011
|
||||
|
(Dollars in Thousands)
|
|
|
||||||
Fuel services revenue
|
$
|
220,066
|
|
|
$
|
213,223
|
|
|
3%
|
Cost of fuel services
|
215,573
|
|
|
208,960
|
|
|
3
|
||
Gross margin
|
4,493
|
|
|
4,263
|
|
|
5
|
||
Gross margin %
|
2
|
%
|
|
2
|
%
|
|
|
|
Three months ended March 31,
|
|
Change
|
||
|
2012
|
|
2011
|
|
2012/2011
|
|
(In Thousands)
|
|
|
||
Other operating expenses
|
$34,249
|
|
34,629
|
|
(1)%
|
|
Three months ended March 31,
|
|
Change
|
||
|
2012
|
|
2011
|
|
2012/2011
|
|
(Dollars in thousands)
|
|
|
||
Selling, general and administrative expenses (SG&A)
|
$196,019
|
|
173,109
|
|
13%
|
Percentage of total revenue
|
13%
|
|
12%
|
|
|
|
Three months ended March 31,
|
|
Change
|
||
|
2012
|
|
2011
|
|
2012/2011
|
|
(Dollars in thousands)
|
|
|
||
Gains on vehicle sales, net
|
$(21,991)
|
|
(12,349)
|
|
78%
|
|
Three months ended March 31,
|
|
Change
|
||
|
2012
|
|
2011
|
|
2012/2011
|
|
(Dollars in thousands)
|
|
|
||
Interest expense
|
$34,765
|
|
34,419
|
|
1%
|
Effective interest rate
|
4.0%
|
|
5.0%
|
|
|
|
Three months ended March 31,
|
||
|
2012
|
|
2011
|
|
(In thousands)
|
||
Miscellaneous income, net
|
$(4,480)
|
|
(4,142)
|
|
Three months ended March 31,
|
||
|
2012
|
|
2011
|
|
(In thousands)
|
||
Restructuring and other charges, net
|
$865
|
|
768
|
|
Three months ended March 31,
|
|
Change
|
||
|
2012
|
|
2011
|
|
2012/2011
|
|
(Dollars in thousands)
|
|
|||
Provision for income taxes
|
$12,822
|
|
17,753
|
|
(28)%
|
Effective tax rate from continuing operations
|
26.9%
|
|
40.7%
|
|
|
|
Three months ended March 31,
|
||
|
2012
|
|
2011
|
|
(In thousands)
|
||
Loss from discontinued operations, net of tax
|
$(555)
|
|
(732)
|
|
Three months ended March 31,
|
|
Change
|
|||||
|
2012
|
|
2011
|
|
2012/2011
|
|||
|
(Dollars in thousands)
|
|
|
|||||
Revenue:
|
|
|
|
|
|
|||
Fleet Management Solutions
|
$
|
1,071,391
|
|
|
980,116
|
|
|
9%
|
Supply Chain Solutions
|
571,913
|
|
|
535,760
|
|
|
7
|
|
Eliminations
|
(107,028
|
)
|
|
(90,500
|
)
|
|
18
|
|
Total
|
$
|
1,536,276
|
|
|
1,425,376
|
|
|
8%
|
Operating Revenue:
|
|
|
|
|
|
|||
Fleet Management Solutions
|
$
|
792,743
|
|
|
719,011
|
|
|
10%
|
Supply Chain Solutions
|
484,626
|
|
|
452,677
|
|
|
7
|
|
Eliminations
|
(48,445
|
)
|
|
(42,618
|
)
|
|
14
|
|
Total
|
$
|
1,228,924
|
|
|
1,129,070
|
|
|
9%
|
EBT:
|
|
|
|
|
|
|||
Fleet Management Solutions
|
$
|
50,683
|
|
|
42,376
|
|
|
20%
|
Supply Chain Solutions
|
21,871
|
|
|
20,175
|
|
|
8
|
|
Eliminations
|
(6,481
|
)
|
|
(4,904
|
)
|
|
32
|
|
|
66,073
|
|
|
57,647
|
|
|
15
|
|
Unallocated Central Support Services
|
(9,506
|
)
|
|
(8,742
|
)
|
|
9
|
|
Non-service pension costs
|
(8,004
|
)
|
|
(4,527
|
)
|
|
77
|
|
Restructuring and other charges, net
|
(865
|
)
|
|
(768
|
)
|
|
13
|
|
Earnings from continuing operations before income taxes
|
$
|
47,698
|
|
|
43,610
|
|
|
9%
|
|
|
Consolidated
Condensed Statements of Comprehensive Income Line Item
|
|
Three months ended March 31,
|
|||||
Description
|
|
|
2012
|
|
2011
|
||||
|
|
|
|
(In thousands)
|
|||||
Restructuring and other charges, net
|
|
Restructuring
(1)
|
|
$
|
(865
|
)
|
|
(768
|
)
|
Non-service pension costs
|
|
SG&A
|
|
(8,004
|
)
|
|
(4,527
|
)
|
|
|
|
|
|
(8,869
|
)
|
|
(5,295
|
)
|
(1)
|
Restructuring refers to “Restructuring and Other Charges, net” on our Consolidated Condensed Statements of Comprehensive Income.
|
|
Three months ended March 31,
|
|
Change
|
|||||
|
2012
|
|
2011
|
|
2012/2011
|
|||
|
(Dollars in thousands)
|
|
||||||
Full service lease
|
$
|
510,558
|
|
|
483,310
|
|
|
6%
|
Contract maintenance
|
39,921
|
|
|
38,075
|
|
|
5
|
|
Contractual revenue
|
550,479
|
|
|
521,385
|
|
|
6
|
|
Contract-related maintenance
|
53,604
|
|
|
44,696
|
|
|
20
|
|
Commercial rental
|
171,248
|
|
|
135,657
|
|
|
26
|
|
Other
|
17,412
|
|
|
17,273
|
|
|
1
|
|
Operating revenue
(1)
|
792,743
|
|
|
719,011
|
|
|
10
|
|
Fuel services revenue
|
278,648
|
|
|
261,105
|
|
|
7
|
|
Total revenue
|
$
|
1,071,391
|
|
|
980,116
|
|
|
9%
|
Segment EBT
|
$
|
50,683
|
|
|
42,376
|
|
|
20%
|
Segment EBT as a % of total revenue
|
4.7
|
%
|
|
4.3
|
%
|
|
40 bps
|
|
Segment EBT as a % of operating revenue
(1)
|
6.4
|
%
|
|
5.9
|
%
|
|
50 bps
|
(1)
|
We use operating revenue, a non-GAAP financial measure, to evaluate the operating performance of our FMS business segment and as a measure of sales activity. Fuel services revenue, which is directly impacted by fluctuations in market fuel prices, is excluded from our operating revenue computation as fuel is largely a pass-through to customers for which we realize minimal changes in profitability during periods of steady market fuel prices. However, profitability may be positively or negatively impacted by rapid changes in market fuel prices during a short period of time as customer pricing for fuel services is established based on market fuel costs.
|
|
Three Months Ended
|
||
|
March 31, 2012
|
||
|
Total
|
|
Operating
|
Organic including price and volume
|
3%
|
|
4%
|
Acquisitions
|
4
|
|
6
|
FMS fuel
|
2
|
|
—
|
Total increase
|
9%
|
|
10%
|
|
Three months ended March 31,
|
|
Change
|
|||||
|
2012
|
|
2011
|
|
2012/2011
|
|||
|
(Dollars in thousands)
|
|
|
|||||
Rental revenue from non-lease customers
|
$
|
91,745
|
|
|
82,213
|
|
|
12%
|
Rental revenue from lease customers
(1)
|
$
|
79,503
|
|
|
53,444
|
|
|
49%
|
Average commercial rental power fleet size — in service
(2),
(3)
|
29,900
|
|
|
24,500
|
|
|
22%
|
|
Commercial rental utilization — power fleet
|
68.9
|
%
|
|
72.5
|
%
|
|
(360) bps
|
(1)
|
Represents revenue from rental vehicles provided to our existing full service lease customers, generally during peak periods in their operations.
|
(2)
|
Number of units rounded to nearest hundred and calculated using quarterly average unit counts.
|
(3)
|
Fleet size excluding trailers.
|
|
|
|
|
|
|
|
Change
|
|||||
|
March 31, 2012
|
|
December 31, 2011
|
|
March 31, 2011
|
|
Mar. 2012/Dec. 2011
|
|
Mar. 2012/Mar. 2011
|
|||
End of period vehicle count
|
|
|
|
|
|
|
|
|
|
|||
By type:
|
|
|
|
|
|
|
|
|
|
|||
Trucks
(1)
|
70,300
|
|
|
68,400
|
|
|
65,500
|
|
|
3%
|
|
7%
|
Tractors
(2)
|
58,400
|
|
|
55,700
|
|
|
50,800
|
|
|
5
|
|
15
|
Trailers
(3), (4)
|
43,700
|
|
|
43,300
|
|
|
33,400
|
|
|
1
|
|
31
|
Other
|
2,300
|
|
|
2,500
|
|
|
3,100
|
|
|
(8)
|
|
(26)
|
Total
|
174,700
|
|
|
169,900
|
|
|
152,800
|
|
|
3%
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|||
By ownership:
|
|
|
|
|
|
|
|
|
|
|||
Owned
|
171,300
|
|
|
166,500
|
|
|
149,200
|
|
|
3%
|
|
15%
|
Leased
|
3,400
|
|
|
3,400
|
|
|
3,600
|
|
|
—
|
|
(6)
|
Total
|
174,700
|
|
|
169,900
|
|
|
152,800
|
|
|
3%
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|||
By product line:
|
|
|
|
|
|
|
|
|
|
|||
Full service lease
(4)
|
121,700
|
|
|
121,000
|
|
|
111,800
|
|
|
1%
|
|
9%
|
Commercial rental
(4)
|
41,300
|
|
|
39,600
|
|
|
33,200
|
|
|
4
|
|
24
|
Service vehicles and other
|
3,000
|
|
|
3,000
|
|
|
2,800
|
|
|
—
|
|
7
|
Active units
|
166,000
|
|
|
163,600
|
|
|
147,800
|
|
|
1
|
|
12
|
Held for sale
(4)
|
8,700
|
|
|
6,300
|
|
|
5,000
|
|
|
38
|
|
74
|
Total
|
174,700
|
|
|
169,900
|
|
|
152,800
|
|
|
3%
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|||
Customer vehicles under contract maintenance
|
35,600
|
|
|
35,300
|
|
|
33,200
|
|
|
1%
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|||
Quarterly average vehicle count
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
By product line:
|
|
|
|
|
|
|
|
|
|
|||
Full service lease
|
121,500
|
|
|
120,300
|
|
|
111,600
|
|
|
1%
|
|
9%
|
Commercial rental
|
40,500
|
|
|
39,800
|
|
|
30,900
|
|
|
2
|
|
31
|
Service vehicles and other
|
3,000
|
|
|
3,000
|
|
|
2,800
|
|
|
—
|
|
7
|
Active units
|
165,000
|
|
|
163,100
|
|
|
145,300
|
|
|
1
|
|
14
|
Held for sale
|
7,400
|
|
|
5,700
|
|
|
5,200
|
|
|
30
|
|
42
|
Total
|
172,400
|
|
|
168,800
|
|
|
150,500
|
|
|
2
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|||
Customer vehicles under contract maintenance
|
35,400
|
|
|
35,100
|
|
|
33,300
|
|
|
1%
|
|
6%
|
(1)
|
Generally comprised of Class 1 through Class 6 type vehicles with a Gross Vehicle Weight (GVW) up to 26,000 pounds.
|
(2)
|
Generally comprised of over the road on highway tractors and are primarily comprised of Classes 7 and 8 type vehicles with a GVW of over 26,000 pounds.
|
(3)
|
Generally comprised of dry, flatbed and refrigerated type trailers.
|
(4)
|
March 31, 2012 and December 31, 2011 includes 9,400 (6,100 full service lease and 3,300 commercial rental) and 9,500 (6,100 full service lease and 3,400 commercial rental), respectively, of trailers acquired as part of the Hill Hire acquisition.
|
|
|
|
|
|
|
|
Change
|
||
|
March 31,
2012 |
|
December 31,
2011 |
|
March 31,
2011 |
|
Mar. 2012/
Dec. 2011
|
|
Mar. 2012/
Mar. 2011
|
Not yet earning revenue (NYE)
|
3,600
|
|
2,600
|
|
2,200
|
|
38%
|
|
64%
|
No longer earning revenue (NLE):
|
|
|
|
|
|
|
|
|
|
Units held for sale
|
8,700
|
|
6,300
|
|
5,000
|
|
38
|
|
74
|
Other NLE units
|
3,500
|
|
2,600
|
|
2,400
|
|
35
|
|
46
|
Total
|
15,800
|
|
11,500
|
|
9,600
|
|
37%
|
|
65%
|
|
Three months ended March 31,
|
|
Change
|
|||||
|
2012
|
|
2011
|
|
2012/2011
|
|||
|
(Dollars in thousands)
|
|
||||||
Operating revenue:
|
|
|
|
|
|
|||
Automotive
|
$
|
139,695
|
|
|
122,727
|
|
|
14%
|
High-Tech
|
80,341
|
|
|
80,416
|
|
|
—
|
|
Retail & CPG
|
178,763
|
|
|
167,071
|
|
|
7
|
|
Industrial and other
|
85,827
|
|
|
82,463
|
|
|
4
|
|
Total operating revenue
(1)
|
484,626
|
|
|
452,677
|
|
|
7
|
|
Subcontracted transportation
|
87,287
|
|
|
83,083
|
|
|
5
|
|
Total revenue
|
$
|
571,913
|
|
|
535,760
|
|
|
7%
|
|
|
|
|
|
|
|||
Segment EBT
|
$
|
21,871
|
|
|
20,175
|
|
|
8%
|
Segment EBT as a % of total revenue
|
3.8
|
%
|
|
3.8
|
%
|
|
—
|
|
Segment EBT as a % of operating revenue
(1)
|
4.5
|
%
|
|
4.5
|
%
|
|
—
|
|
Memo:
|
|
|
|
|
|
|||
Dedicated services total revenue
|
$
|
328,345
|
|
|
287,925
|
|
|
14%
|
Dedicated services operating revenue
(2)
|
$
|
282,076
|
|
|
249,631
|
|
|
13%
|
Average fleet
|
11,500
|
|
|
10,900
|
|
|
6%
|
|
Fuel costs
(3)
|
$
|
66,813
|
|
|
53,784
|
|
|
24%
|
(1)
|
In SCS transportation management arrangements, we may act as a principal or as an agent in purchasing transportation on behalf of our customer. We record revenue on a gross basis when acting as principal and we record revenue on a net basis when acting as an agent. As a result, total revenue may fluctuate depending on our role in subcontracted transportation arrangements yet our profitability remains unchanged as we typically realize minimal profitability from subcontracting transportation. We deduct subcontracted transportation expense from total revenue to arrive at operating revenue. We use operating revenue and EBT as a percent of operating revenue, non-GAAP financial measures, to evaluate the operating performance of our SCS business segment and as a measure of sales activity and profitability.
|
(2)
|
Operating revenue excludes dedicated subcontracted transportation.
|
(3)
|
Fuel costs are largely a pass-through to customers and therefore have a direct impact on revenue.
|
|
Three months ended March 31, 2012
|
||
|
Total
|
|
Operating
|
Organic including price and volume
|
4
|
|
3
|
Subcontracted transportation
|
1
|
|
—
|
Fuel cost pass-throughs
|
2
|
|
3
|
Acquisitions
|
1
|
|
1
|
Foreign exchange
|
(1)
|
|
—
|
Total increase
|
7%
|
|
7%
|
|
Three months ended March 31,
|
|
Change
|
|||||
|
2012
|
|
2011
|
|
2012/2011
|
|||
|
(Dollars in thousands)
|
|
||||||
Human resources
|
$
|
5,385
|
|
|
4,657
|
|
|
16%
|
Finance
|
12,813
|
|
|
12,236
|
|
|
5
|
|
Corporate services and public affairs
|
3,347
|
|
|
3,150
|
|
|
6
|
|
Information technology
|
15,940
|
|
|
15,392
|
|
|
4
|
|
Health and safety
|
2,115
|
|
|
1,608
|
|
|
32
|
|
Other
|
8,583
|
|
|
8,275
|
|
|
4
|
|
Total CSS
|
48,183
|
|
|
45,318
|
|
|
6
|
|
Allocation of CSS to business segments
|
(38,677
|
)
|
|
(36,576
|
)
|
|
(6)
|
|
Unallocated CSS
|
$
|
9,506
|
|
|
8,742
|
|
|
9%
|
|
Three months ended March 31,
|
|||||
|
2012
|
|
2011
|
|||
|
(In thousands)
|
|||||
Net cash provided by (used in):
|
|
|
|
|||
Operating activities
|
$
|
186,276
|
|
|
217,564
|
|
Financing activities
|
187,799
|
|
|
36,972
|
|
|
Investing activities
|
(365,769
|
)
|
|
(311,267
|
)
|
|
Effect of exchange rate changes on cash
|
1,660
|
|
|
341
|
|
|
Net change in cash and cash equivalents
|
$
|
9,966
|
|
|
(56,390
|
)
|
|
Three months ended March 31,
|
|||||
|
2012
|
|
2011
|
|||
|
(In thousands)
|
|||||
Net cash provided by operating activities from continuing operations
|
$
|
186,276
|
|
|
217,564
|
|
Sales of revenue earning equipment
|
91,341
|
|
|
66,150
|
|
|
Sales of operating property and equipment
|
2,898
|
|
|
5,030
|
|
|
Collections on direct finance leases
|
15,475
|
|
|
14,828
|
|
|
Total cash generated
|
295,990
|
|
|
303,572
|
|
|
Purchases of property and revenue earning equipment
|
(470,969
|
)
|
|
(313,218
|
)
|
|
Free cash flow
|
$
|
(174,979
|
)
|
|
(9,646
|
)
|
|
Three months ended March 31,
|
|||||
|
2012
|
|
2011
|
|||
|
(In thousands)
|
|||||
Revenue earning equipment:
(1)
|
|
|
|
|||
Full service lease
|
$
|
435,900
|
|
|
112,260
|
|
Commercial rental
|
335,203
|
|
|
317,279
|
|
|
|
771,103
|
|
|
429,539
|
|
|
Operating property and equipment
|
16,323
|
|
|
18,485
|
|
|
Total capital expenditures
|
787,426
|
|
|
448,024
|
|
|
Changes in accounts payable related to purchases of revenue earning equipment
|
(316,457
|
)
|
|
(134,806
|
)
|
|
Cash paid for purchases of property and revenue earning equipment
|
$
|
470,969
|
|
|
313,218
|
|
(1)
|
Capital expenditures exclude non-cash additions of approximately
$0.1 million
and
$1.2 million
during the
three months ended
March 2012
and
2011
, respectively, in assets held under capital leases resulting from the extension of existing operating leases and other additions.
|
|
Short-term
|
|
Long-term
|
|
Outlook
|
Moody’s Investors Service
|
P2
|
|
Baa1
|
|
Stable (affirmed February 2012)
|
Standard & Poor’s Ratings Services
|
A2
|
|
BBB+
|
|
Stable (affirmed August 2011)
|
Fitch Ratings
|
F2
|
|
A –
|
|
Stable (affirmed March 2012)
|
|
(In millions)
|
Global revolving credit facility
|
$627
|
Trade receivables program
|
$175
|
|
Three months ended March 31,
|
|||||
|
2012
|
|
2011
|
|||
|
(In thousands)
|
|||||
Debt balance at January 1
|
$
|
3,382,145
|
|
|
2,747,002
|
|
Cash-related changes in debt:
|
|
|
|
|||
Net change in commercial paper borrowings
|
(164,298
|
)
|
|
(290,132
|
)
|
|
Proceeds from issuance of medium-term notes
|
349,444
|
|
|
349,867
|
|
|
Proceeds from issuance of other debt instruments
|
20,476
|
|
|
—
|
|
|
Other debt repaid, including capital lease obligations
|
(2,784
|
)
|
|
(820
|
)
|
|
Net change from discontinued operations
|
—
|
|
|
11
|
|
|
|
202,838
|
|
|
58,926
|
|
|
Non-cash changes in debt:
|
|
|
|
|||
Fair market value adjustment on notes subject to hedging
|
(2,170
|
)
|
|
(1,149
|
)
|
|
Addition of capital lease obligations
|
59
|
|
|
1,153
|
|
|
Changes in foreign currency exchange rates and other non-cash items
|
10,302
|
|
|
3,184
|
|
|
Total changes in debt
|
211,029
|
|
|
62,114
|
|
|
Debt balance at March 31
|
$
|
3,593,174
|
|
|
2,809,116
|
|
|
March 31,
2012 |
|
% to
Equity
|
|
December 31,
2011 |
|
% to
Equity
|
|||
|
(Dollars in thousands)
|
|||||||||
On-balance sheet debt
|
$
|
3,593,174
|
|
|
262%
|
|
3,382,145
|
|
|
257%
|
Off-balance sheet debt—PV of minimum lease payments and guaranteed residual values under operating leases for vehicles
(1)
|
63,203
|
|
|
|
|
63,960
|
|
|
|
|
Total obligations
|
$
|
3,656,377
|
|
|
267%
|
|
3,446,105
|
|
|
261%
|
(1)
|
Present value (PV) does not reflect payments Ryder would be required to make if we terminated the related leases prior to the scheduled expiration dates.
|
|
Three months ended March 31,
|
|||||
|
2012
|
|
2011
|
|||
|
(In thousands)
|
|||||
Total revenue
|
1,536,276
|
|
|
1,425,376
|
|
|
FMS fuel services and SCS subcontracted transportation
(1)
|
(365,935
|
)
|
|
(344,188
|
)
|
|
Fuel eliminations
|
58,583
|
|
|
47,882
|
|
|
Operating revenue
|
$
|
1,228,924
|
|
|
1,129,070
|
|
(1)
|
Includes intercompany fuel sales.
|
•
|
our expectations as to anticipated revenue and earnings in each business segment, as well as future economic conditions and market demand, including increased demand and favorable revenue in each business segment, higher overall freight volume and increased revenue from recent acquisitions and new business;
|
•
|
our expectations regarding commercial rental pricing trends and fleet utilization;
|
•
|
our expectations of the long-term residual values of revenue earning equipment;
|
•
|
our ability to sell certain revenue earning vehicles throughout the year;
|
•
|
the anticipated levels of NLE vehicles in inventory throughout the year;
|
•
|
our expectations of free cash flow, operating cash flow, total cash generated and capital expenditures for the remainder of 2012;
|
•
|
the adequacy of our accounting estimates and reserves for pension expense, employee benefit plan obligations, depreciation and residual value guarantees, restructuring, accounting changes and income taxes;
|
•
|
the adequacy of our fair value estimates of employee incentive awards under our share-based compensation plans, contingent consideration and total debt;
|
•
|
our beliefs regarding the default risk of our direct financing lease receivables
|
•
|
our ability to fund all of our operating, investing and financial needs for the foreseeable future through internally generated funds and outside funding sources;
|
•
|
the anticipated impact of foreign exchange rate movements;
|
•
|
the anticipated impact of fuel price fluctuations;
|
•
|
our expectations as to return on pension plan assets, future pension expense and estimated contributions;
|
•
|
our expectations regarding the completion and ultimate resolution of tax audits;
|
•
|
our expectations regarding the scope, anticipated outcomes and the adequacy of our loss provisions with respect to certain claims, proceedings and lawsuits;
|
•
|
the anticipated deferral of tax gains on disposal of eligible revenue earning equipment pursuant to our vehicle like-kind exchange program;
|
•
|
our expectations regarding the impact of recently adopted or implemented accounting pronouncements;
|
•
|
our ability to access commercial paper and other available debt financing in the capital markets; and
|
•
|
our expectations regarding the future use and availability of funding sources.
|
•
|
Market Conditions:
|
|
|
|
Changes in general economic and financial conditions in the U.S. and worldwide leading to decreased demand for our services, lower profit margins, increased levels of bad debt and reduced access to credit
|
|
|
|
Decrease in freight demand or setbacks in the recent recovery of the freight recession which would impact both our transactional and variable-based contractual business
|
|
|
|
Changes in our customers’ operations, financial condition or business environment that may limit their need for, or ability to purchase, our services
|
|
|
|
Changes in market conditions affecting the commercial rental market or the sale of used vehicles
|
|
|
|
Volatility in automotive and high-tech volumes and shifting customer demand in the automotive and high-tech industries
|
|
|
|
|
|
|
Changes in current financial, tax or regulatory requirements that could negatively impact the leasing market
|
•
|
Competition:
|
|
|
|
Advances in technology may require increased investments to remain competitive, and our customers may not be willing to accept higher prices to cover the cost of these investments
|
|
|
|
Competition from other service providers, some of which have greater capital resources or lower capital costs
|
|
|
|
Continued consolidation in the markets in which we operate which may create large competitors with greater financial resources
|
|
|
|
Our inability to maintain current pricing levels due to economic conditions, demand for services, customer acceptance or competition
|
•
|
Profitability:
|
|
|
|
Our inability to obtain adequate profit margins for our services
|
|
|
|
Lower than expected sales volumes or customer retention levels
|
|
|
|
Our inability to integrate acquisitions as projected, achieve planned synergies, anticipate costs and liabilities or retain customers of companies we acquire
|
|
|
|
Lower full service lease sales activity
|
|
|
|
Loss of key customers in our SCS business segments
|
|
|
|
Our inability to adapt our product offerings to meet changing consumer preferences on a cost-effective basis
|
|
|
|
The inability of our legacy information technology systems to provide timely access to data
|
|
|
|
Sudden changes in fuel prices and fuel shortages
|
|
|
|
Higher prices for vehicles, diesel engines and fuel as a result of exhaust emissions standards enacted over the last few years
|
|
|
|
Our inability to successfully implement our asset management initiatives
|
|
|
|
Our key assumptions and pricing structure of our SCS contracts prove to be invalid
|
|
|
|
Increased unionizing, labor strikes, work stoppages and driver shortages
|
|
|
|
Difficulties in attracting and retaining drivers due to driver shortages, which may result in higher costs to procure drivers and higher turnover rates affecting our customers
|
|
|
|
Our inability to manage our cost structure
|
|
|
|
Our inability to limit our exposure for customer claims
|
|
|
|
Unfavorable or unanticipated outcomes in legal proceedings
|
•
|
Financing Concerns:
|
|
|
|
Higher borrowing costs and possible decreases in available funding sources caused by an adverse change in our debt ratings
|
|
|
|
Unanticipated interest rate and currency exchange rate fluctuations
|
|
|
|
Negative funding status of our pension plans caused by lower than expected returns on invested assets and unanticipated changes in interest rates
|
|
|
|
Withdrawal liability as a result of our participation in multi-employer plans
|
|
|
|
Instability in U.S. and worldwide credit markets, resulting in higher borrowing costs and/or reduced access to credit
|
•
|
Accounting Matters:
|
|
|
|
Impact of unusual items resulting from ongoing evaluations of business strategies, asset valuations, acquisitions, divestitures and our organizational structure
|
|
|
|
Reductions in residual values or useful lives of revenue earning equipment
|
|
|
|
Increases in compensation levels, retirement rate and mortality resulting in higher pension expense; regulatory changes affecting pension estimates, accruals and expenses
|
|
|
|
Increases in healthcare costs resulting in higher insurance costs
|
|
|
|
Changes in accounting rules, assumptions and accruals
|
|
|
|
Impact of actual insurance claim and settlement activity compared to historical loss development factors used to project future development
|
•
|
Other risks detailed from time to time in our SEC filings
|
|
Total Number
of Shares
Purchased
(1)
|
|
Average Price
Paid per Share
|
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Programs
|
|
Maximum
Number of
Shares That May
Yet Be
Purchased
Under the
Anti-Dilutive
Program
(2)
|
|||||
January 1 through January 31, 2012
|
1,970
|
|
|
$
|
55.92
|
|
|
—
|
|
|
2,000,000
|
|
February 1 through February 29, 2012
|
143,482
|
|
|
53.38
|
|
|
140,000
|
|
|
1,860,000
|
|
|
March 1 through March 31, 2012
|
85,930
|
|
|
53.35
|
|
|
83,200
|
|
|
1,776,800
|
|
|
Total
|
231,382
|
|
|
$
|
53.39
|
|
|
223,200
|
|
|
|
(1)
|
During the three months ended
March 31, 2012
, we purchased an aggregate of 8,182 shares of our common stock in employee-related transactions. Employee-related transactions may include: (i) shares of common stock delivered as payment for the exercise price of options exercised or to satisfy the option holders’ tax withholding liability associated with our share-based compensation programs and (ii) open-market purchases by the trustee of Ryder’s deferred compensation plans relating to investments by employees in our stock, one of the investment options available under the plans.
|
(2)
|
In December 2011, our Board of Directors authorized a share repurchase program intended to mitigate the dilutive impact of shares issued under our various employee stock, stock option and employee stock purchase plans. Under the December 2011 program, management is authorized to repurchase shares of common stock in an amount not to exceed the number of shares issued to employees under the Company’s various employee stock, stock option and employee stock purchase plans from December 1, 2011 through December 13, 2013. The December 2011 program limits aggregate share repurchases to no more than 2 million shares of Ryder common stock. Share repurchases of common stock are made periodically in open-market transactions and are subject to market conditions, legal requirements and other factors. Management established prearranged written plans for the Company under Rule 10b5-1 of the Securities Exchange Act of 1934 as part of the December 2011 program, which allow for share repurchases during Ryder’s quarterly blackout periods as set forth in the trading plan. For the three months ended
March 31, 2012
, we repurchased and retired 223,200 shares under this program at an aggregate cost of $11.9 million.
|
10.1(a)
|
|
|
Terms and Conditions applicable to the 2012 Non-Qualified Stock Options granted under the Ryder System, Inc. 2005 Equity Compensation Plan.
|
|
|
|
|
10.1(b)
|
|
|
Terms and Conditions applicable to the 2012 Non-Qualified Stock Options granted to the Company's Chief Executive Officer under the Ryder System, Inc. 2005 Equity Compensation Plan.
|
|
|
|
|
10.2(a)
|
|
|
Terms and Conditions applicable to the 2012 Performance-Based Restricted Stock Rights granted under the Ryder System, Inc. 2005 Equity Compensation Plan.
|
|
|
|
|
10.2(b)
|
|
|
Terms and Conditions applicable to the 2012 Performance-Based Restricted Stock Rights granted to the Company's Chief Executive Officer under the Ryder System, Inc. 2005 Equity Compensation Plan.
|
|
|
|
|
10.3(a)
|
|
|
Terms and Conditions applicable to the 2012 Performance-Based Cash Awards granted under the Ryder System, Inc. 2005 Equity Compensation Plan.
|
|
|
|
|
10.3(b)
|
|
|
Terms and Conditions applicable to the 2012 Performance-Based Cash Awards granted to the Company's Chief Executive Officer under the Ryder System, Inc. 2005 Equity Compensation Plan.
|
|
|
|
|
10.4
|
|
|
Terms and Conditions applicable to the 2012 Restricted Stock Rights granted under the Ryder System, Inc. 2005 Equity Compensation Plan.
|
|
|
|
|
10.14(a)
|
|
|
Amendment No. 1 dated as of April 20, 2012 to Global Revolving Credit Agreement, by and among Ryder System, Inc., certain Ryder System, Inc. subsidiaries, and the lenders and agents named therein.
|
|
|
|
|
31.1
|
|
|
Certification of Gregory T. Swienton pursuant to Rule 13a-14(a) or Rule 15d-14(a).
|
|
|
||
31.2
|
|
|
Certification of Art A. Garcia pursuant to Rule 13a-14(a) or Rule 15d-14(a).
|
|
|
||
32
|
|
|
Certification of Gregory T. Swienton and Art A. Garcia pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350.
|
|
RYDER SYSTEM, INC.
|
|
|
(Registrant)
|
|
|
|
|
Date: April 24, 2012
|
By:
|
/s/ Art A. Garcia
|
|
|
Art A. Garcia
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer and
Duly Authorized Officer)
|
|
|
|
Date: April 24, 2012
|
By:
|
/s/ Cristina A. Gallo-Aquino
|
|
|
Cristina A. Gallo-Aquino
|
|
|
Vice President and Controller
(Principal Accounting Officer)
|
1.
|
General
. The Option represents the right to purchase Shares on the terms and conditions set forth herein and in the Plan, the applicable terms, conditions and other provisions of which are incorporated by reference herein. A copy of the Plan and the documents that constitute the "Prospectus" for the Plan under the Securities Act of 1933, have been delivered to the Participant prior to or along with delivery of the Notification. In the event there is an express conflict between the provisions of the Plan and those set forth in these terms and conditions, the terms and conditions of the Plan shall govern.
|
2.
|
Exercisability of Option
. Subject to Sections 4 and 5 below, the Option shall vest and become exercisable pursuant to the vesting schedule set forth in the Notification and shall remain exercisable until the expiration date set forth in the Notification, or such other expiration date designated by the Committee pursuant to Section 7 of the Plan (the “Expiration Date”).
|
3.
|
Exercise Procedures.
The Option, to the extent exercisable, may be exercised by delivering to the Company’s stock administrator, notice of intent to exercise in the manner designated by the stock administrator on behalf of the Company which may vary based on the Participant’s position with the Company. Payment of the aggregate exercise price and applicable withholding taxes shall be made in the manner designated by the stock administrator on behalf of the Company.
|
4.
|
Termination of Option; Forfeiture.
Notwithstanding the vesting and expiration dates set forth in the Notification, the Option will terminate upon or following the termination of the Participant’s employment with the Company and its Subsidiaries as described below. For purposes of these terms and conditions, a Participant shall not be deemed to have terminated his or her employment with the Company and its Subsidiaries if he or she is then employed by the Company or another Subsidiary without a break in service.
|
(a)
|
Resignation by the Participant or Termination by the Company or a Subsidiary other than for Cause
: The unvested portion of the Option will immediately terminate on the Participant’s last day of employment. The vested portion of the Option will terminate at 12:01 a.m. on the 91st day following the Participant’s last day of employment (but not later than the Expiration Date), provided that if the Participant dies during such 90 day period, such portion of the Option will terminate no earlier than 12:01a.m. on the first anniversary of the date of death (but not later than the Expiration Date) and provided
|
(b)
|
Retirement
: If a Participant’s employment terminates for any reason (other than for Cause, death or Disability) at a time when he or she is eligible for Retirement, then the unvested portion of the Option will immediately terminate on the Participant’s last day of employment, and the vested portion of the Option will terminate upon the Expiration Date.
|
(c)
|
Termination due to Death
: The unvested portion of the Option will immediately terminate on the date of death, and the vested portion of the Option will expire upon the Expiration Date. Following the Participant’s death, the right to exercise such vested portion will pass to the Participant’s Beneficiary.
|
(d)
|
Termination due to Disability
: The unvested portion of the Option that would otherwise have become vested during the three (3) years following Disability will continue to vest as scheduled (without regard to subsequent status changes). The vested portion of the Option, including the portion that becomes vested pursuant to the preceding sentence, will expire upon the Expiration Date.
|
(e)
|
Termination for Cause
: Notwithstanding the foregoing provisions of this Section 4, the entire Option, including the vested portion, will terminate immediately upon the Participant’s termination of employment. To the extent the Participant exercised any portion of the Option during the one year period immediately prior to the date of such termination of employment for Cause, the Company shall have the right to reclaim and receive from the Participant all Shares delivered to the Participant upon such exercise, or to the extent the Participant has transferred such Shares, the after-tax equivalent value thereof (as of the date the Shares were transferred by the Participant) in cash, and in each case upon receipt thereof, the Company shall return the exercise price paid by the Participant.
|
(f)
|
Proscribed Activity
: If, during the Proscribed Period but prior to a Change in Control, the Participant engages in a Proscribed Activity, then any portion of the Option still outstanding shall terminate and the Company shall have the right to reclaim and receive from the Participant all Shares delivered to the Participant upon the exercise of the Option during the one year period immediately prior to, or at any time following, the date of the Participant’s termination of employment, or to the extent the Participant has transferred
|
5.
|
Change in Control.
Notwithstanding anything contained herein to the contrary, unless otherwise determined by the Committee prior to a Change in Control, the Option will become fully vested and exercisable immediately prior to a Change in Control, and, to the extent the Option is not cancelled upon such Change in Control pursuant to Section 7 of the Plan, it shall remain outstanding until the Expiration Date, but subject to earlier termination under the circumstances described in Section 4(e) and (f) above. For purposes of this Section 5, the term Option shall refer only to those Options that are outstanding at the time of the Change in Control and not to any unvested Options that are terminated pursuant to Section 4 above, provided that, if (i) the Participant’s employment was terminated by the Company other than for Cause or Disability during the 12 month period prior to the Change in Control, (ii) during such 12 month period, the Participant does not engage in a Proscribed Activity, and (iii) the Committee determines, in its sole and absolute discretion, that the decision related to such termination was made in contemplation of the Change in Control, within 30 days following the Change in Control, with respect to any portion of the Option which the Participant forfeited upon the Participant’s termination of employment, the Participant shall receive a lump sum cash payment per Share equal to the positive difference, if any, between the Fair Market Value of a Share on the date that the Change in Control occurs, and the exercise price per Share subject to the Option.
|
6.
|
U.S. Federal, State and Local Income Withholding.
The Option will be treated as a non-qualified stock option, and therefore will be treated as wages and subject to withholding taxes and reporting. The Option may not be exercised unless the Participant makes arrangements satisfactory to the Company to ensure that its withholding tax obligations will be satisfied. This Section 6 shall only apply with respect to the Company’s U.S. federal, state, and local income tax withholding obligations. The Company may satisfy any tax obligations it may have in any other jurisdiction in any manner it deems, in its sole and absolute discretion, to be necessary or appropriate.
|
7.
|
Definitions
.
|
(a)
|
“Cause” shall have the meaning set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, or, if none exists, shall mean a determination of “Cause” under any applicable Severance Plan, as in effect on the date of grant of the Option. Notwithstanding the foregoing, unless otherwise set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, during the one year period following a Change in Control, in no event shall a failure to meet performance expectations constitute Cause unless such failure was willful.
|
(b)
|
“Change in Control” occurs when:
|
(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
|
(ii)
|
the individuals who, as of January 1, 2007, constituted the Board of Directors of the Company (the “Board” generally and as of January 1, 2007 the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to January 1, 2007 whose election, or nomination for election, was approved by a vote of the persons comprising at least a majority of the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act (as in effect on January 23, 2000)) shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board; or
|
(iii)
|
there is a reorganization, merger or consolidation of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Company’s outstanding Shares 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 Shares 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
|
(c)
|
“Disability” means (i) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be
|
(d)
|
“Proscribed Activity” means any of the following:
|
(i)
|
the Participant’s breach or violation of (A) any written agreement between the Participant and the Company or any of its Subsidiaries, including any agreement relating to nondisclosure, noncompetition, nonsolicitation and/or nondisparagement, or (B) any legal obligation it may have to the Company;
|
(ii)
|
the Participant’s direct or indirect unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary, 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;
|
(iii)
|
the Participant’s direct or indirect engaging or becoming 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 which is engaged or proposes to engage in a business competitive directly or indirectly with the business conducted by the Company or its Subsidiaries in any geographic area where such business of the Company or its Subsidiaries is conducted, provided that the Participant’s investment in one percent (1%) or less of the outstanding capital stock of any corporation whose stock is listed on a national securities exchange shall not be treated as a Proscribed Activity;
|
(iv)
|
the Participant’s direct or indirect, either on the Participant's own account or for any person, firm or company, soliciting, interfering with or inducing, or attempting to induce, any employee of the Company or any of its Subsidiaries to leave his or her employment or to breach his or her employment agreement;
|
(v)
|
the Participant’s direct or indirect taking away, interfering with relations with, diverting or attempting to divert from the Company or any Subsidiary any business with any customer of the Company or any Subsidiary, including (A) any customer that has been solicited or serviced by the Company within one (1) year prior to the date of termination of Participant’s employment with the Company and (B) any customer with which the Participant has had contact or association, or which was under the supervision of Participant, or the identity of which was learned by the Participant as a result of Participant’s employment with the Company;
|
(vi)
|
the Participant’s making of any remarks disparaging the conduct or character of the Company or any of its Subsidiaries, or their current or former agents, employees, officers, directors, successors or assigns; or
|
(vii)
|
the Participant’s failure to cooperate with the Company or any Subsidiary, for no additional compensation (other than reimbursement of expenses), in any litigation or administrative proceedings involving any matters with which the Participant was involved during the Participant’s employment with the Company or any Subsidiary.
|
(e)
|
“Proscribed Period” means the period beginning on the date of termination of Participant’s employment and ending on the later of (A) the one year anniversary of such termination date or (B) if the Participant is entitled to severance benefits in the form of salary continuation, the date on which salary continuation is no longer payable to the Participant.
|
(f)
|
“Retirement” means termination of employment for any reason (other than for Cause or by reason of death or Disability) upon or following attainment of age 55 and completion of 10 years of service, or upon or following attainment of age 65 without regard to years of service; provided that, Retirement shall not be deemed to occur unless such termination of service constitutes a separation from service, as defined by Section 409A of the Code.
|
8
.
|
Other Benefits
.
No amount accrued or paid under this Award shall be deemed compensation for purposes of computing a Participant's benefits under any retirement plan of the Company or its Subsidiaries, nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the Participant’s level of compensation.
|
1.
|
General
. The Option represents the right to purchase Shares on the terms and conditions set forth herein and in the Plan, the applicable terms, conditions and other provisions of which are incorporated by reference herein.
A copy of the Plan and the documents that constitute the "Prospectus" for the Plan under the Securities Act of 1933, have been delivered to the Participant prior to or along with delivery of the Notification. In the event there is an express conflict between the provisions of the Plan and those set forth in these terms and conditions, the terms and conditions of the Plan shall govern.
|
2.
|
Exercisability of Option
. Subject to Sections 4 and 5 below, the Option shall vest and become exercisable pursuant to the vesting schedule set forth in the Notification and shall remain exercisable until the expiration date set forth in the Notification, or such other expiration date designated by the Committee pursuant to Section 7 of the Plan (the “Expiration Date”).
|
3.
|
Exercise Procedures.
The Option, to the extent exercisable, may be exercised by delivering to the Company’s stock administrator, notice of intent to exercise in the manner designated by the stock administrator on behalf of the Company which may vary based on the Participant’s position with the Company. Payment of the aggregate exercise price and applicable withholding taxes shall be made in the manner designated by the stock administrator on behalf of the Company.
|
4.
|
Termination of Option; Forfeiture.
Notwithstanding the vesting and expiration dates set forth in the Notification, the Option will terminate upon or following the termination of the Participant’s employment or service with the Company and its Subsidiaries as described below. For purposes of these terms and conditions, the Participant shall not be deemed to have terminated his employment with the Company and its Subsidiaries if he is then employed by the Company or another Subsidiary without a break in service.
|
(a)
|
Resignation by the Participant or Termination by the Company or a Subsidiary other than for Cause
: The unvested portion of the Option will immediately terminate on
|
(b)
|
Retirement
: If the Participant’s employment terminates for any reason (other than for Cause, death or Disability) at a time when he is eligible for Retirement, then the unvested portion of the Option will immediately terminate on the Participant’s last day of employment, and the vested portion of the Option will terminate upon the Expiration Date.
|
(c)
|
Termination due to Death
: The unvested portion of the Option will immediately terminate on the date of death, and the vested portion of the Option will expire upon the Expiration Date. Following the Participant’s death, the right to exercise such vested portion will pass to the Participant’s Beneficiary.
|
(d)
|
Termination due to Disability
: The unvested portion of the Option that would otherwise have become vested during the three (3) years following Disability will continue to vest as scheduled (without regard to subsequent status changes). The vested portion of the Option, including the portion that becomes vested pursuant to
|
(e)
|
Termination for Cause
: Notwithstanding the foregoing provisions of this Section 4, the entire Option, including the vested portion, will terminate immediately upon the Participant’s termination of employment. To
the extent the Participant exercised any portion of the Option during the one year period immediately prior to the date of such termination of employment for Cause, the Company shall have the right to reclaim and receive from the Participant all Shares delivered to the Participant upon such exercise, or to the extent the Participant has transferred such Shares, the after-tax equivalent value thereof (as of the date the Shares were transferred by the Participant) in cash, and in each case upon receipt thereof, the Company shall return the exercise price paid by the Participant.
|
(f)
|
Proscribed Activity
: If,
during the Proscribed Period but prior to a Change in Control, the Participant engages in a Proscribed Activity, then any portion of the Option still outstanding shall terminate and the Company shall have the right to reclaim and receive from the Participant all Shares delivered to the Participant upon the exercise of the Option during the one year period immediately prior to, or at any time following, the date of the Participant’s termination of employment or service, or to the extent the Participant has transferred such Shares, the after-tax equivalent value thereof (as of the date the Shares were transferred by the Participant) in cash, and in each case upon receipt thereof, the Company shall return the exercise price paid by the Participant.
|
5.
|
Change in Control.
Notwithstanding anything contained herein to the contrary, unless otherwise determined by the Committee prior to a Change in Control, the Option will become fully vested and exercisable immediately prior to a Change in Control, and, to the extent the Option is not cancelled upon such Change in Control pursuant to Section 7 of the Plan, it shall remain outstanding until the Expiration Date, but subject to earlier termination under the circumstances described in Section 4(e) and (f) above. For purposes of this Section 5, the term Option shall refer only to those Options that are outstanding at the time of the Change in Control and not to any unvested Options that are terminated pursuant to Section 4 above, provided that, if
(i) the
Participant’s employment or service was terminated by the Company other than for Cause or Disability during the 12 month period prior to the Change in Control, (ii) during such 12 month period, the Participant does not engage in a Proscribed Activity, and (iii)
the Committee determines, in its sole and absolute discretion, that
the decision related to such termination was made in contemplation of the Change in Control,
within 30 days following the Change in Control, with respect to any portion of the Option which the Participant forfeited upon the Participant’s termination of employment or service, the Participant shall receive a lump sum cash payment per Share equal to the positive difference, if any, between the Fair Market Value of a Share on the date that the Change in Control occurs, and the exercise price per Share subject to the Option.
|
6.
|
U.S. Federal, State and Local Income Withholding.
The Option will be treated as a non-qualified stock option, and therefore will be treated as wages and subject to withholding taxes and reporting. The Option may not be exercised unless the Participant makes arrangements satisfactory to the Company to ensure that its withholding tax obligations will be satisfied. This Section 6 shall only apply with respect to the Company’s U.S. federal, state, and local income tax withholding obligations. The Company may satisfy any tax
|
7.
|
Definitions
.
|
(a)
|
“Cause” shall have the meaning set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, or, if none exists, shall mean a determination of “Cause” under any applicable Severance Plan, as in effect on the date of grant of the Option. Notwithstanding the foregoing, unless otherwise set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, during the one year period following a Change in Control, in no event shall a failure to meet performance expectations constitute Cause unless such failure was willful.
|
(b)
|
“Change in Control” occurs when:
|
(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) below; or
|
(ii)
|
the individuals who, as of January 1, 2007, constituted the Board of Directors of the Company (the “Board” generally and as of January 1, 2007 the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to January 1, 2007 whose election, or nomination for election, was approved by a vote of the persons comprising at least a majority of the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act (as in effect on January 23, 2000)) shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board; or
|
(iii)
|
there is a reorganization, merger or consolidation of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Company’s outstanding Shares 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
|
(iv)
|
there is a liquidation or dissolution of the Company approved by the shareholders; or
|
(c)
|
“Disability” means
(i) the Participant 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 12 months; (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan of the Company; or (iii) a determination by the Social Security Administration that a Participant is totally disabled.
|
(d)
|
“Proscribed Activity” means any of the following:
|
(i)
|
the Participant’s breach or violation of (A) any written agreement between the Participant and the Company or any of its Subsidiaries, including any agreement relating to nondisclosure, noncompetition, nonsolicitation and/or nondisparagement, or (B) any legal obligation it may have to the Company;
|
(ii)
|
the Participant’s direct or indirect unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary, including, but not limited to, such matters as costs, profits, markets, sales, products, product lines, key personnel, pricing policies, operational
|
(iii)
|
the Participant’s direct or indirect engaging or becoming 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 which is engaged or proposes to engage in a business competitive directly or indirectly with the business conducted by the Company or its Subsidiaries in any geographic area where such business of the Company or its Subsidiaries is conducted, provided that the Participant’s investment in one percent (1%) or less of the outstanding capital stock of any corporation whose stock is listed on a national securities exchange shall not be treated as a Proscribed Activity;
|
(iv)
|
the Participant’s direct or indirect, either on the Participant's own account or for any person, firm or company, soliciting, interfering with or inducing, or attempting to induce, any employee of the Company or any of its Subsidiaries to leave his or her employment or to breach his or her employment agreement;
|
(v)
|
the Participant’s direct or indirect taking away, interfering with relations with, diverting or attempting to divert from the Company or any Subsidiary any business with any customer of the Company or any Subsidiary, including (A) any customer that has been solicited or serviced by the Company within one (1) year prior to the date of termination of Participant’s employment or service with the Company and (B) any customer with which the Participant has had contact or association, or which was under the supervision of Participant, or the identity of which was learned by the Participant as a result of Participant’s employment or service with the Company;
|
(vi)
|
the Participant’s making of any remarks disparaging the conduct or character of the Company or any of its Subsidiaries, or their current or former agents, employees, officers, directors, successors or assigns; or
|
(vii)
|
the Participant’s failure
to cooperate with the Company or any Subsidiary, for no additional compensation (other than reimbursement of expenses), in any litigation or administrative proceedings involving any matters with which the Participant was involved during the Participant’s employment or service with the Company or any Subsidiary
.
|
(e)
|
“Proscribed Period” means the period beginning on the date of termination of Participant’s employment or service and ending on the later of (A) the one year anniversary of such termination date or (B) if the Participant is entitled to severance benefits in the form of salary continuation, the date on which salary continuation is no longer payable to the Participant.
|
(f)
|
“Retirement” means termination of employment for any reason (other than for Cause or by reason of death or Disability) upon or following attainment of age 55 and completion of 10 years of service, or upon or following attainment of age 65 without regard to years of service; provided that, Retirement shall not be deemed to occur unless such termination of service constitutes a separation from service, as defined by Section 409A of the Code.
|
8
.
|
Other Benefits
.
No amount accrued or paid under this Award shall be deemed compensation for purposes of computing the Participant's benefits under any retirement plan of the Company or its Subsidiaries, nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the Participant’s level of compensation.
|
1.
|
General
. Each PBRSR represents the right to receive one Share on a future date based upon the attainment of certain financial performance goals and continued employment, on the terms and conditions set forth herein, in the Notification and in the Plan, the applicable terms, conditions and other provisions of which are incorporated by reference herein (collectively, the “Award Documents”). A copy of the Plan and the documents that constitute the “Prospectus” for the Plan under the Securities Act of 1933, have been delivered to the Participant prior to or along with delivery of the Notification. In the event there is an express conflict between the provisions of the Plan and those set forth in any other Award Document, the terms and conditions of the Plan shall govern. It is intended that the PBRSRs qualify as “performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), including any successor provisions and regulations.
|
2.
|
Financial Performance Goals
.
|
3.
|
Delivery of Shares
. Provided that the Participant remained continuously employed through the end of the Three-Year Performance Period (but subject to Section 4 below), the number of Shares equal to the number of Accrued PBRSRs, net of the number of Shares necessary to satisfy applicable withholding taxes, will be transferred to an account held in the name of the Participant by the Company’s independent stock plan administrator and the Participant will receive notice of such transfer together with all relevant account details. Such transfer will occur as soon as practicable after the Committee has approved the Company’s TSR Percentile for the Third Performance Period on or following January 1, 2015, provided that in no event shall the transfer be made after March 15, 2015, unless administratively impracticable to do so.
|
4.
|
Termination of PBRSRs; Forfeiture.
The PBRSRs will be cancelled upon the termination of the Participant’s employment with the Company and its Subsidiaries as described below.
|
(a)
|
Resignation by the Participant or Termination by the Company or a Subsidiary
: Except as provided in subsection (b) below, upon any termination of a Participant’s employment with the Company and its Subsidiaries prior to the end of the Three-Year Performance Period, all outstanding PBRSRs, whether or not accrued, will be forfeited and the Participant will not have any right to delivery of Shares. In addition, even if a Participant remains employed through the end of the Three-Year Performance Period, if the Participant’s employment is subsequently terminated by the Company or a Subsidiary for Cause, the right to any undelivered Shares shall be forfeited, and the Company shall have the right to reclaim and receive from the Participant any Shares delivered to the Participant pursuant to Section 3 within the one year period before the date of the Participant’s termination of employment, or to the extent the Participant has transferred such Shares, the equivalent after-tax value thereof (as of the date the Shares were transferred by the Participant) in cash.
|
(b)
|
Termination by reason of Death, Disability or Retirement
: If a Participant’s employment terminates due to death, Disability or Retirement prior to the end of the Three-Year Performance Period, the Participant (or his or her Beneficiary, in the event of death) will be entitled to receive a pro-rata number of Shares that would have been delivered pursuant to Section 3 had the Participant remained employed through the end of the Three-Year Performance Period, based on the number of days during the Three-Year Performance Period that the Participant is considered to be an active employee as determined by the Company, payable at the time and manner specified in Section 3 above.
|
(c)
|
Proscribed Activity
: If, during the Proscribed Period but prior to a Change of Control, the Participant engages in a Proscribed Activity, then the Company shall have the right to reclaim and receive from the Participant all Shares delivered to the Participant pursuant to Section 3 during the one year period immediately prior to, or at any time following, the date of the Participant’s termination of employment, or to the extent the Participant has transferred such Shares, the after-tax equivalent value thereof (as of the date the Shares were transferred by the Participant) in cash.
|
5.
|
Change of Control
.
Notwithstanding anything contained herein to the contrary, unless otherwise
|
6.
|
Rights as a Shareholder; Dividend Equivalents.
The Participant will not have the rights of a shareholder of the Company with respect to Shares subject to the PBRSRs until such Shares are actually delivered to the Participant. At the time Shares are delivered to the Participant pursuant to Section 3, the Company will make a cash payment equal to the product of (i) the number of Accrued PBRSRs, and (ii) the aggregate dividends paid on a Share during the Three-Year Performance Period.
|
7.
|
U.S. Federal, State and Local Income Tax Withholding.
The
PBRSRs will not be taxable until the Shares are delivered. The Shares when delivered will be taxable to the Participant at their then Fair Market Value as ordinary income, subject to wage-based withholding and reporting. The Company will first satisfy this withholding obligation by reducing the performance-based cash, if any, to be paid at the time of such delivery in an amount sufficient to satisfy the withholding obligations. If, after the Company has reduced all of the performance-based cash, there are still withholding tax obligations due, the Company will reduce the number of Shares to be delivered to the Participant in an amount sufficient to satisfy the balance of the withholding obligations due (based on the Fair Market Value of the Shares on the vesting date for the related PBRSRs). The payment of cash dividend equivalents will be taxable to the Participant as ordinary income when paid, subject to wage-based withholding and reporting. This Section 7 shall only apply with respect to the Company’s U.S. federal, state and local income tax withholding obligations. The Company may satisfy any tax obligations it may have in any other jurisdiction in any manner it deems, in its sole and absolute discretion, to be necessary or appropriate.
|
8.
|
Statute of Limitations and Conflicts of Laws.
All rights of action by, or on behalf of the Company or by any shareholder against any past, present, or future member of the Board of Directors, officer, or employee of the Company arising out of or in connection with the PBRSRs or the Award Documents, must be brought within three years from the date of the act or omission in respect of which such right of action arises. The PBRSRs and the Award Documents shall be governed by the laws of the State of Florida, without giving effect to principles of conflict of laws, and construed accordingly.
|
9.
|
No Employment Right
.
Neither the grant of the PBRSRs nor any action taken hereunder shall be construed as giving any employee or any Participant any right to be retained in the employ of the Company. The Company is under no obligation to grant PBRSRs hereunder. Nothing contained in the Award Documents shall limit or affect in any manner or degree the normal and usual powers of management, exercised by the officers and the Board of Directors or committees thereof, to change the duties or the character of employment of any employee of the Company or to remove the individual from the employment of the Company at any time, all of which rights and powers are expressly reserved.
|
10.
|
No Assignment
.
A Participant’s rights and interest under the PBRSRs may not be assigned or transferred, except as otherwise provided herein, and any attempted assignment or transfer shall be null and void and shall extinguish, in the Company’s sole discretion, the Company’s obligation under the PBRSRs or the Award Documents.
|
11.
|
Unfunded Plan
.
Any shares or other amounts owed under the PBRSRs 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 delivery or payment of any earned amounts.
|
12.
|
Definitions
.
|
(a)
|
“Accrual Percentage” means the percentage of the PBRSRs that accrue at the end of each Performance Period pursuant to Section 2.
|
(b)
|
“Accrued PBRSRs” means the sum, for each Performance Period, of the Accrual Percentage for each Performance Period times one-third of the number of PBRSRs subject to an Award as set forth in the Notification.
|
(c)
|
“Cause” shall have the meaning set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, or, if none exists, shall mean a determination of “Cause” under any applicable Severance Plan, as in effect on the date of grant of the PBRSRs. Notwithstanding the foregoing, unless otherwise set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, during the one year period following a Change of Control, in no event shall a failure to meet performance expectations constitute Cause unless such failure was willful.
|
(d)
|
“Change of Control” occurs when:
|
(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 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) below;
|
(ii)
|
the individuals who, as of January 1, 2007, constituted the Board of Directors of the Company (the “Board” generally and as of January 1, 2007 the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to January 1, 2007 whose election, or nomination for election, was approved by a vote of the persons comprising at least a majority of the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) (as in effect on January 23, 2000)) shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board;
|
(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 Shares 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 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 Shares and outstanding voting securities ordinarily having the right
|
(iv)
|
there is a liquidation or dissolution of the Company approved by the shareholders; or
|
(e)
|
“Company TSR” means the Company’s Total Shareholder Return for a Performance Period
|
(f)
|
“Company’s TSR Percentile” means, for any Performance Period, the percentile measured on the last trading day of the Performance Period in which the Company TSR falls as compared to the Total Shareholder Return of the companies included in the S&P 500 Composite Index as of the last trading day of such Performance Period. The Company’s TSR Percentile will be approved by the Committee as soon as practicable following the end of each Performance Period.
|
(g)
|
“Disability” means (i) the Participant 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 12 months; (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan of the Company; or (iii) a determination by the Social Security Administration that a Participant is totally disabled.
|
(h)
|
“First Performance Period” means the period from January 1, 2012 through December 31, 2012.
|
(i)
|
“Performance Period” means the First Performance Period, the Second Performance Period, or Third Performance Period, as applicable.
|
(j)
|
“Proscribed Activity” means any of the following:
|
(i)
|
the Participant’s breach of any written agreement between the Participant and the Company or any of its Subsidiaries, including any agreement relating to nondisclosure, noncompetition, nonsolicitation and/or nondisparagement;
|
(ii)
|
the Participant’s direct or indirect unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary, including, but not limited to, such matters as costs, profits, markets, sales, products, product lines,
|
(iii)
|
the Participant’s direct or indirect engaging or becoming 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 which is engaged or proposes to engage in a business competitive directly or indirectly with the business conducted by the Company or its Subsidiaries in any geographic area where such business of the Company or its Subsidiaries is conducted, provided that the Participant’s investment in 1% or less of the outstanding capital stock of any corporation whose stock is listed on a national securities exchange shall not be treated as a Proscribed Activity;
|
(iv)
|
the Participant’s direct or indirect, either on the Participant’s own account or for any person, firm or company, soliciting, interfering with or inducing, or attempting to induce, any employee of the Company or any of its Subsidiaries to leave his or her employment or to breach his or her employment agreement;
|
(v)
|
the Participant’s direct or indirect taking away, interfering with relations with, diverting or attempting to divert from the Company or any Subsidiary any business with any customer of the Company or any Subsidiary, including (A) any customer that has been solicited or serviced by the Company within one year prior to the date of termination of Participant’s employment with the Company and (B) any customer with which the Participant has had contact or association, or which was under the supervision of Participant, or the identity of which was learned by the Participant as a result of Participant’s employment with the Company;
|
(vi)
|
the Participant’s making of any remarks disparaging the conduct or character of the Company or any of its Subsidiaries, or their current or former agents, employees, officers, directors, successors or assigns; or
|
(vii)
|
the Participant’s failure to cooperate with the Company or any Subsidiary, for no additional compensation (other than reimbursement of expenses), in any litigation or administrative proceedings involving any matters with which the Participant was involved during the Participant’s employment with the Company or any Subsidiary.
|
(k)
|
“Proscribed Period” means the period beginning on the date of termination of Participant’s employment and ending on the later of (A) the one year anniversary of such termination date or (B) if the Participant is entitled to severance benefits in the form of salary continuation, the date on which salary continuation is no longer payable to the Participant.
|
(l)
|
“Retirement” means termination of employment for any reason (other than for Cause or by reason of death or Disability) upon or following attainment of age 55 and completion of 10 years of service, or upon or following attainment of age 65 without regard to years of service; provided that, Retirement shall not be deemed to occur unless such termination of service constitutes a separation from service, as defined by Section 409A of the Code.
|
(m)
|
“Second Performance Period” means the period from January 1, 2012 through December 31, 2013.
|
(n)
|
“Third Performance Period” means the period from January 1, 2012 through December 31, 2014.
|
(o)
|
“Three-Year Performance Period” means the period from January 1, 2012 through December 31, 2014.
|
(p)
|
“Total Shareholder Return” means the percentage change in the closing stock pricefrom the immediately preceding trading day prior to the first day of the Performance Period through the last day of the applicable Performance Period (or immediately preceding trading day if such day is not a trading day) assuming reinvestment of dividends on the ex-dividend date.
|
13
.
|
Other Benefits
.
No amount accrued or paid under the PBRSRs shall be deemed compensation for purposes of computing a Participant’s benefits under any retirement plan of the Company or its Subsidiaries, nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the Participant’s level of compensation.
|
1.
|
General
. Each PBRSR represents the right to receive one Share on a future date based upon the attainment of certain financial performance goals and continued employment or service,
on the terms and conditions set forth herein, in the Notification and in the Plan, the applicable terms, conditions and other provisions of which are incorporated by reference herein (collectively, the “Award Documents”).
A copy of the Plan and the documents that constitute the “Prospectus” for the Plan under the Securities Act of 1933, have been delivered to the Participant prior to or along with delivery of the Notification. In the event there is an express conflict between the provisions of the Plan and those set forth in any other Award Document, the terms and conditions of the Plan shall govern.
It is intended that the PBRSRs qualify as “performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), including any successor provisions and regulations.
|
2.
|
Financial Performance Goals
.
|
3.
|
Delivery of Shares
. Provided that the Participant remained continuously employed through the end of the Three-Year Performance Period (but subject to Section 4 below), the number of Shares equal to the number of Accrued PBRSRs, net of the number of Shares necessary to satisfy applicable withholding taxes, will be transferred to an account held in the name of the Participant by the Company’s independent stock plan administrator and the Participant will receive notice of such transfer together with all relevant account details. Such transfer will occur as soon as practicable after the Committee has approved the Company’s TSR Percentile for the Third Performance Period on or following January 1, 2015, provided that in no event shall the transfer be made after March 15, 2015, unless administratively impracticable to do so.
|
4.
|
Termination of PBRSRs; Forfeiture.
The PBRSRs
will be cancelled upon the termination of the Participant’s employment with the Company and its Subsidiaries as described below.
|
(a)
|
Resignation by the Participant or Termination by the Company or a Subsidiary
: Except as provided in subsection (b) below, upon any termination of the Participant’s employment with the Company and its Subsidiaries prior to the end of the Three-Year Performance Period, a
ll outstanding PBRSRs, whether or not accrued, will be forfeited and the Participant will not have any right to delivery of Shares. In addition, even if the Participant remains employed through the end of the Three-Year Performance Period, if the Participant’s employment is subsequently terminated by the Company or a Subsidiary for Cause, the right to any undelivered Shares shall be forfeited, and the Company shall have the right to reclaim and receive from the Participant any Shares delivered to the Participant pursuant to Section 3 within the one year period before the date of the Participant’s termination of employment, or to the extent the Participant has transferred such Shares, the equivalent after-tax value thereof (as of the date the Shares were transferred by the Participant) in cash.
|
(b)
|
Termination by reason of Death, Disability or Retirement
: If the Participant’s employment terminates due to death, Disability or Retirement prior to the end of the Three-Year Performance Period, the Participant
(or his or her Beneficiary, in the event of death) will be entitled to receive a pro-rata number of Shares that would have been delivered pursuant to Section 3 had the Participant remained employed through the end of the Three-Year Performance Period, based on the number of days during the Three-Year Performance Period that the Participant is considered to be an active employee as determined by the Company, payable at the time and manner specified in Section 3 above.
|
(c)
|
Proscribed Activity
: If,
during the Proscribed Period but prior to a Change of Control, the Participant engages in a Proscribed Activity, then the Company shall have the right to reclaim and receive from the Participant all Shares delivered to the Participant pursuant to Section 3 during the one year period immediately prior to, or at any time following, the date of the Participant’s termination of employment, or to the extent the Participant has transferred such Shares, the after-tax equivalent value thereof (as of the date the Shares were transferred by the Participant) in cash.
|
5.
|
Change of Control
.
Notwithstanding anything contained herein to the contrary, unless otherwise determined by the Committee prior to a Change of Control which occurs during the Performance Period, immediately prior to any such Change of Control, each Participant shall be entitled to delivery of a number of Shares equal to the sum of (a) with respect to each completed Performance Period, the number of Accrued PBRSRs at the time of the Change of Control, and (b) with respect to each uncompleted Performance Period, the number of PBRSRs that would have become Accrued PBRSRs at the end of each such Performance Period had the Company’s TSR Percentile been at the 50th percentile.
Upon the occurrence of a Change of Control, all Shares subject to Accrued PBRSRs, will be delivered to the Participant in accordance with Section 3 above; provided that such Change of Control constitutes a change “in ownership” or “effective control” or a change in the “ownership of a substantial portion of the assets” of the Company under Section 409A of the Code and the rulings and regulations issued thereunder (any such transaction, a “409A Compliant CIC”). In the event that such Change of Control does not constitute a 409A Compliant CIC (any such transaction, a “Non-409A Compliant CIC”), to the extent that the Accrued PBRSRs are no longer subject to a substantial risk of forfeiture, each Accrued PBRSR will be converted into a right to receive a cash payment equal to the Fair Market Value of a Share on the date on which the Change of Control occurs. Such cash payment will be distributed to the Participant on the earlier of the otherwise applicable distribution date set forth in Section 3 above and the Participant’s
separation from service (as defined by Section 409A of the Code).
|
6.
|
Rights as a Shareholder; Dividend Equivalents.
The Participant will not have the rights of a shareholder of the Company with respect to Shares subject to the PBRSRs until such Shares are actually delivered to the Participant. At the time Shares are delivered to the Participant pursuant to Section 3, the Company will make a cash payment equal to the product of (i) the number of Accrued PBRSRs, and (ii) the aggregate dividends paid on a Share during the Three-Year Performance Period.
|
7.
|
U.S. Federal, State and Local Income Tax Withholding.
The
PBRSRs will not be taxable until the Shares are delivered. The Shares when delivered will be taxable to the Participant at their then Fair Market Value as ordinary income, subject to wage-based withholding and reporting. The Company will first satisfy this withholding obligation by reducing the performance-based cash, if any, to be paid at the time of such delivery in an amount sufficient to satisfy the withholding obligations. If, after the Company has reduced all of the performance-based cash, there are still withholding tax obligations due, the Company will reduce the number of Shares to be delivered to the Participant in an amount sufficient to satisfy the balance of the withholding obligations due (based on the Fair Market Value of the Shares on the vesting date for the related PBRSRs). The payment of cash dividend equivalents will be taxable to the Participant as ordinary income when paid, subject to wage-based withholding and reporting. This Section 7 shall only apply with respect to the Company’s U.S. federal, state and local income tax withholding obligations. The Company may satisfy any tax obligations it may have in any other jurisdiction in any manner it deems, in its sole and absolute discretion, to be necessary or appropriate.
|
8.
|
Statute of Limitations and Conflicts of Laws.
All rights of action by, or on behalf of the Company or by any shareholder against any past, present, or future member of the Board of Directors, officer, or employee of the Company arising out of or in connection with the PBRSRs or the Award Documents, must be brought within three years from the date of the act or omission in respect of which such right of action arises. The PBRSRs and the Award Documents shall be governed by the laws of the State of Florida, without giving effect to principles of conflict of laws, and construed accordingly.
|
9.
|
No Employment Right
.
Neither the grant of the PBRSRs nor any action taken hereunder shall be construed as giving any employee or the Participant any right to be retained in the employ or service of the Company. The Company is under no obligation to grant PBRSRs hereunder. Nothing contained in the Award Documents shall limit or affect in any manner or degree the normal and usual powers of management, exercised by the officers and the Board of Directors or committees thereof, to change the duties or the character of employment of any employee of the Company or to remove the individual from the employment of the Company at any time, all of which rights and powers are expressly reserved.
|
10.
|
No Assignment
.
The Participant’s rights and interest under the PBRSRs may not be assigned or transferred, except as otherwise provided herein, and any attempted assignment or transfer shall be null and void and shall extinguish, in the Company’s sole discretion, the Company’s obligation under the PBRSRs or the Award Documents.
|
11.
|
Unfunded Plan
.
Any shares or other amounts owed under the PBRSRs 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 delivery or payment of any earned amounts.
|
12.
|
Definitions
.
|
(a)
|
“Accrual Percentage” means the percentage of the PBRSRs that accrue at the end of each Performance Period pursuant to Section 2.
|
(b)
|
“Accrued PBRSRs” means the sum, for each Performance Period, of the Accrual Percentage for each Performance Period times one-third of the number of PBRSRs subject to an Award as set forth in the Notification.
|
(c)
|
“Cause” shall have the meaning set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, or, if none exists, shall mean a determination of “Cause” under any applicable Severance Plan, as in effect on the date of grant of the PBRSRs. Notwithstanding the foregoing, unless otherwise set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, during the one year period following a Change of Control, in no event shall a failure to meet performance expectations constitute Cause unless such failure was willful.
|
(d)
|
“Change of Control” occurs when:
|
(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 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
|
(ii)
|
the individuals who, as of January 1, 2007, constituted the Board of Directors of the Company (the “Board” generally and as of January 1, 2007 the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to January 1, 2007 whose election, or nomination for election, was approved by a vote of the persons comprising at least a majority of the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) (as in effect on January 23, 2000)) shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board;
|
(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 Shares 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 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 Shares 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;
|
(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.
|
(e)
|
“Company TSR” means the Company’s Total Shareholder Return for a Performance
|
(f)
|
“Company’s TSR Percentile” means, for any Performance Period, the percentile
measured on the last trading day of the Performance Period
in which the Company TSR falls as compared to the Total Shareholder Return of the companies included in the S&P 500 Composite Index as of the last trading day of such Performance Period. The Company’s TSR Percentile will be approved by the Committee as soon as practicable following the end of each Performance Period.
|
(g)
|
“Disability” means (i) the Participant 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 12 months; (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan of the Company; or (iii) a determination by the Social Security Administration that a Participant is totally disabled.
|
(h)
|
“First Performance Period” means the period from January 1, 2012 through December 31, 2012.
|
(i)
|
“Performance Period” means the First Performance Period, the Second Performance Period, or Third Performance Period, as applicable.
|
(j)
|
“Proscribed Activity” means any of the following:
|
(i)
|
the Participant’s breach of any written agreement between the Participant and the Company or any of its Subsidiaries, including any agreement relating to nondisclosure, noncompetition, nonsolicitation and/or nondisparagement;
|
(ii)
|
the Participant’s direct or indirect unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary, 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;
|
(iii)
|
the Participant’s direct or indirect engaging or becoming 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 which is engaged or proposes to engage in a business competitive directly or indirectly with the business conducted by the Company or its Subsidiaries in any geographic area where such business of the Company or its Subsidiaries is conducted, provided that the Participant’s investment in 1% or less of the outstanding capital stock of any corporation whose stock is listed on a national securities exchange shall not be treated as a Proscribed Activity;
|
(iv)
|
the Participant’s direct or indirect, either on the Participant’s own account or for any person, firm or company, soliciting, interfering with or inducing, or attempting to induce, any employee of the Company or any of its Subsidiaries to leave his or her employment or to breach his or her employment agreement;
|
(v)
|
the Participant’s direct or indirect taking away, interfering with relations with, diverting or attempting to divert from the Company or any Subsidiary any business with any customer of the Company or any Subsidiary, including (A) any customer that has been solicited or serviced by the Company within one year prior to the date of termination of Participant’s employment or service with the Company and (B) any customer with which the Participant has had contact or association, or which was under the supervision of Participant, or the identity of which was learned by the Participant as a result of Participant’s employment or service with the Company;
|
(vi)
|
the Participant’s making of any remarks disparaging the conduct or character of the Company or any of its Subsidiaries, or their current or former agents, employees, officers, directors, successors or assigns; or
|
(vii)
|
the Participant’s failure
to cooperate with the Company or any Subsidiary, for no additional compensation (other than reimbursement of expenses), in any litigation or administrative proceedings involving any matters with which the Participant was involved during the Participant’s employment or service with the Company or any Subsidiary
.
|
(k)
|
“Proscribed Period” means the period beginning on the date of termination of Participant’s employment or service and ending on the later of (A) the one year anniversary of such termination date or (B) if the Participant is entitled to severance benefits in the form of salary continuation, the date on which salary continuation is no longer payable to the Participant.
|
(l)
|
“Retirement” means termination of employment for any reason (other than for Cause or by reason of death or Disability) upon or following attainment of age 55 and completion of 10 years of service, or upon or following attainment of age 65 without regard to years of service; provided that, Retirement shall not be deemed to occur unless such termination of service constitutes a separation from service, as defined by Section 409A of the Code.
|
(m)
|
“Second Performance Period” means the period from January 1, 2012 through December 31, 2013.
|
(n)
|
“Third Performance Period” means the period from January 1, 2012 through December 31, 2014.
|
(o)
|
“Three-Year Performance Period” means the period from January
1, 2012 through December 31, 2014.
|
(p)
|
“Total Shareholder Return” means the percentage change in the closing stock pricefrom the immediately preceding trading day prior to the first day of the Performance Period through the last day of the applicable Performance Period (or immediately preceding trading day if such day is not a trading day) assuming reinvestment of dividends on the ex-dividend date.
|
13
.
|
Other Benefits
.
No amount accrued or paid under the PBRSRs shall be deemed compensation for purposes of computing the Participant’s benefits under any retirement plan of the Company or its Subsidiaries, nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the Participant’s level of compensation.
|
1.
|
General
. Each PBCA represents the right to receive a cash payment on a future date based upon the attainment of certain financial performance goals and continued employment, on the terms and conditions set forth herein, in the Notification and in the Plan, the applicable terms, conditions and other provisions of which are incorporated by reference herein (collectively, the “Award Documents”). A copy of the Plan and the documents that constitute the “Prospectus” for the Plan under the Securities Act of 1933, have been delivered to the Participant prior to or along with delivery of the Notification. In the event there is an express conflict between the provisions of the Plan and those set forth in any other Award Document, the terms and conditions of the Plan shall govern. It is intended that the PBCAs qualify as “performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), including any successor provisions and regulations.
|
2.
|
Financial Performance Goals
.
|
3.
|
Payment of Award
. Provided that the Participant remained continuously employed through the end of the Three-Year Performance Period (but subject to Section 4 below), a cash payment equal to the Accrued PBCA, less applicable withholding taxes, will be made to the Participant. Such payment will be made as soon as practicable after the Committee has approved the Company’s TSR Percentile for the Third Performance Period on or following January 1, 2015, provided that in no event shall the payment be made after March 15, 2015, unless administratively impracticable to do so.
|
4.
|
Termination of PBCAs; Forfeiture.
The PBCAs will be cancelled upon the termination of the Participant’s employment with the Company and its Subsidiaries as described below.
|
(a)
|
Resignation by the Participant or Termination by the Company or a Subsidiary
: Except as provided in subsection (b) below, upon any termination of a Participant’s employment with the Company and its Subsidiaries prior to the end of the Three-Year Performance Period, all outstanding PBCAs, whether or not accrued, will be forfeited and the Participant will not have any right to any payment in respect thereof. In addition, even if a Participant remains employed through the end of the Three-Year Performance Period, if the Participant’s employment is subsequently terminated by the Company or a Subsidiary for Cause, the right to any payment shall be forfeited, and the Company shall have the right to reclaim and receive from the Participant any payment in respect of PBCAs made to the Participant pursuant to Section 3 within the one year period before the date of the Participant’s termination of employment.
|
(b)
|
Termination by reason of Death, Disability or Retirement
: If a Participant’s employment terminates due to death, Disability or Retirement prior to the end of the Three-Year Performance Period, the Participant (or his or her Beneficiary, in the event of death) will be entitled to receive a pro-rata portion of the cash payment that would have been paid pursuant to Section 3 had the Participant remained employed through the end of the Three-Year Performance Period, based on the number of days during the Three-Year Performance Period that the Participant is considered to be an active employee as determined by the Company, payable at the time and manner specified in Section 3 above.
|
(c)
|
Proscribed Activity
: If, during the Proscribed Period but prior to a Change of Control, the Participant engages in a Proscribed Activity, then the Company shall have the right to reclaim and receive from the Participant all cash paid to the Participant pursuant to Section 3 during the one year period immediately prior to, or at any time following, the date of the Participant’s termination of employment.
|
5.
|
U.S. Federal, State and Local Income Tax Withholding.
Any payment made pursuant to the PBCAs will be taxable to the Participant when paid as ordinary income, subject to wage-based withholding and reporting. The Company will satisfy this withholding obligation by reducing the cash to be paid in an amount sufficient to satisfy the withholding obligations. However, if the cash is paid with performance-based restricted stock (“PBRSRs”), the amount of the cash to be paid may be further reduced in an amount sufficient to satisfy the PBRSR withholding obligations due (based on the Fair Market Value of the Shares on the vesting date for the related PBRSRs). This Section 6 shall only apply with respect to the Company’s U.S. federal, state and local income tax withholding obligations. The Company may satisfy any tax obligations it may have in any other jurisdiction in any manner it deems, in its sole and absolute discretion, to be necessary or appropriate.
|
6.
|
Statute of Limitations and Conflicts of Laws.
All rights of action by, or on behalf of the Company or by any shareholder against any past, present, or future member of the Board of Directors, officer, or employee of the Company arising out of or in connection with the PBCAs or the Award Documents, must be brought within three years from the date of the act or omission in respect of which such right of action arises. The PBCAs and the Award Documents shall be governed by the
|
7.
|
No Employment Right
.
Neither the grant of the PBCAs nor any action taken hereunder shall be construed as giving any employee or any Participant any right to be retained in the employ of the Company. The Company is under no obligation to grant PBCAs hereunder. Nothing contained in the Award Documents shall limit or affect in any manner or degree the normal and usual powers of management, exercised by the officers and the Board of Directors or committees thereof, to change the duties or the character of employment of any employee of the Company or to remove the individual from the employment of the Company at any time, all of which rights and powers are expressly reserved.
|
8.
|
No Assignment
.
A Participant’s rights and interest under the PBCAs may not be assigned or transferred, except as otherwise provided herein, and any attempted assignment or transfer shall be null and void and shall extinguish, in the Company’s sole discretion, the Company’s obligation under the PBCAs or the Award Documents.
|
9.
|
Unfunded Plan
.
Any amounts owed under the PBCAs 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 payment of any earned amounts.
|
10.
|
Definitions
.
|
(a)
|
“Accrual Percentage” means the percentage of the PBCAs that accrue at the end of each Performance Period pursuant to Section 2.
|
(b)
|
“Accrued PBCA” means the sum, for each Performance Period, of the Accrual Percentage for each Performance Period times one-third of the dollar amount specified in the Notification.
|
(c)
|
“Cause” shall have the meaning set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, or, if none exists, shall mean a determination of “Cause” under any applicable Severance Plan, as in effect on the date of grant of the PBCAs. Notwithstanding the foregoing, unless otherwise set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, during the one year period following a Change of Control, in no event shall a failure to meet performance expectations constitute Cause unless such failure was willful.
|
(d)
|
“Change of Control” occurs when:
|
(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 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
|
(ii)
|
the individuals who, as of January 1, 2007, constituted the Board of Directors of the Company (the “Board” generally and as of January 1, 2007 the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to January 1, 2007 whose election, or nomination for election, was approved by a vote of the persons comprising at least a majority of the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) (as in effect on January 23, 2000)) shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board;
|
(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 Shares 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 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 Shares 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;
|
(iv)
|
there is a liquidation or dissolution of the Company approved by the shareholders; or
|
(e)
|
“Company TSR” means the Company’s Total Shareholder Return for a Performance Period
|
(f)
|
“Company’s TSR Percentile” means, for any Performance Period, the percentile measured on the last trading day of the Performance Period in which the Company TSR falls as
|
(g)
|
“Disability” means (i) the Participant 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 12 months; (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan of the Company; or (iii) a determination by the Social Security Administration that a Participant is totally disabled.
|
(h)
|
“First Performance Period” means the period from January 1, 2012 through December 31, 2012.
|
(i)
|
“Performance Period” means the First Performance Period, the Second Performance Period, or Third Performance Period, as applicable.
|
(j)
|
“Proscribed Activity” means any of the following:
|
(i)
|
the Participant’s breach of any written agreement between the Participant and the Company or any of its Subsidiaries, including any agreement relating to nondisclosure, noncompetition, nonsolicitation and/or nondisparagement;
|
(ii)
|
the Participant’s direct or indirect unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary, 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;
|
(iii)
|
the Participant’s direct or indirect engaging or becoming 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 which is engaged or proposes to engage in a business competitive directly or indirectly with the business conducted by the Company or its Subsidiaries in any geographic area where such business of the Company or its Subsidiaries is conducted, provided that the Participant’s investment in 1% or less of the outstanding capital stock of any corporation whose stock is listed on a national securities exchange shall not be treated as a Proscribed Activity;
|
(iv)
|
the Participant’s direct or indirect, either on the Participant’s own account or for any person, firm or company, soliciting, interfering with or inducing, or attempting to induce, any employee of the Company or any of its Subsidiaries to leave his or her employment or to breach his or her employment agreement;
|
(v)
|
the Participant’s direct or indirect taking away, interfering with relations with, diverting or attempting to divert from the Company or any Subsidiary any business with any customer of the Company or any Subsidiary, including (A) any customer that has been solicited or serviced by the Company within one year prior to the date of termination of Participant’s employment with the Company and (B) any customer with which the Participant has had contact or association, or which was under the supervision of Participant, or the identity of which was learned by the Participant as a result of Participant’s employment with the Company;
|
(vi)
|
the Participant’s making of any remarks disparaging the conduct or character of the Company or any of its Subsidiaries, or their current or former agents, employees, officers, directors, successors or assigns; or
|
(vii)
|
the Participant’s failure to cooperate with the Company or any Subsidiary, for no additional compensation (other than reimbursement of expenses), in any litigation or administrative proceedings involving any matters with which the Participant was involved during the Participant’s employment with the Company or any Subsidiary.
|
(k)
|
“Proscribed Period” means the period beginning on the date of termination of Participant’s employment and ending on the later of (A) the one year anniversary of such termination date or (B) if the Participant is entitled to severance benefits in the form of salary continuation, the date on which salary continuation is no longer payable to the Participant.
|
(l)
|
“Retirement” means termination of employment for any reason (other than for Cause or by reason of death or Disability) upon or following attainment of age 55 and completion of 10 years of service, or upon or following attainment of age 65 without regard to years of service; provided that, Retirement shall not be deemed to occur unless such termination of service constitutes a separation from service, as defined by Section 409A of the Code.
|
(m)
|
“Second Performance Period” means the period from January 1, 2012 through December 31, 2013.
|
(n)
|
“Third Performance Period” means the period from January 1, 2012 through December 31, 2014.
|
(o)
|
“Three-Year Performance Period” means the period from January 1, 2012 through December 31, 2014.
|
(p)
|
“Total Shareholder Return” means the percentage change in the closing stock price from the immediately preceding trading day prior to the first day of the Performance Period through the last day of the applicable Performance Period (or immediately preceding trading day if such day is not a trading day) assuming reinvestment of dividends on the ex-dividend date.
|
11
.
|
Other Benefits
.
No amount accrued or paid under the PBCAs shall be deemed compensation for purposes of computing a Participant’s benefits under any retirement plan of the Company or its Subsidiaries, nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the Participant’s level of compensation.
|
1.
|
General
. Each PBCA represents the right to receive a cash payment on a future date based upon the attainment of certain financial performance goals and continued employment or service,
on the terms and conditions set forth herein, in the Notification and in the Plan, the applicable terms, conditions and other provisions of which are incorporated by reference herein (collectively, the “Award Documents”).
A copy of the Plan and the documents that constitute the “Prospectus” for the Plan under the Securities Act of 1933, have been delivered to the Participant prior to or along with delivery of the Notification. In the event there is an express conflict between the provisions of the Plan and those set forth in any other Award Document, the terms and conditions of the Plan shall govern.
It is intended that the PBCAs qualify as “performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), including any successor provisions and regulations.
|
2.
|
Financial Performance Goals
.
|
3.
|
Payment of Award
. Provided that the Participant remained continuously employed through the end of the Three-Year Performance Period (but subject to Section 4 below), a cash payment equal to the Accrued PBCA, less applicable withholding taxes, will be made to the Participant. Such payment will be made as soon as practicable after the Committee has approved the Company’s TSR Percentile for the Third Performance Period on or following January 1, 2015, provided that in no event shall the payment be made after March 15, 2015, unless administratively impracticable to do so.
|
4.
|
Termination of PBCAs; Forfeiture.
The PBCAs
will be cancelled upon the termination of the Participant’s employment with the Company and its Subsidiaries as described below.
|
(a)
|
Resignation by the Participant or Termination by the Company or a Subsidiary
: Except as provided in subsection (b) below, upon any termination of a Participant’s employment with the Company and its Subsidiaries prior to the end of the Three-Year Performance Period, a
ll outstanding PBCAs, whether or not accrued, will be forfeited and the Participant will not have any right to any payment in respect thereof. In addition, even if a Participant remains employed through the end of the Three-Year Performance Period, if the Participant’s employment is subsequently terminated by the Company or a Subsidiary for Cause, the right to any payment shall be forfeited, and the Company shall have the right to reclaim and receive from the Participant any payment in respect of PBCAs made to the Participant pursuant to Section 3 within the one year period before the date of the Participant’s termination of employment.
|
(b)
|
Termination by reason of Death, Disability or Retirement
: If a Participant’s employment terminates due to death, Disability or Retirement prior to the end of the Three-Year Performance Period, the Participant
(or his or her Beneficiary, in the event of death) will be entitled to receive a pro-rata portion of the cash payment that would have been paid pursuant to Section 3 had the Participant remained employed through the end of the Three-Year Performance Period, based on the number of days during the Three-Year Performance Period that the Participant is considered to be an active employee as determined by the Company, payable at the time and manner specified in Section 3 above.
|
(c)
|
Proscribed Activity
: If,
during the Proscribed Period but prior to a Change of Control, the Participant engages in a Proscribed Activity, then the Company shall have the right to reclaim and receive from the Participant all cash paid to the Participant pursuant to Section 3 during the one year period immediately prior to, or at any time following, the date of the Participant’s termination of employment.
|
5.
|
Change of Control
.
Notwithstanding anything contained herein to the contrary, unless otherwise determined by the Committee prior to a Change of Control which occurs during the Performance Period, immediately prior to any such Change of Control, each Participant shall be entitled to a cash payment equal to the sum of (a) with respect to each completed Performance Period, the Accrued PBCA at the time of the Change of Control, and (b) with respect to each uncompleted Performance Period, the amount that would have become Accrued PBCA at the end of each such Performance Period had the Company’s TSR Percentile been at the 50th percentile.
Such cash payment shall be made within 30 days following the Change of Control; provided that such Change of Control constitutes a change “in ownership” or “effective control” or a change in the “ownership of a substantial portion of the assets” of the Company under Section 409A of the Code and the rulings and regulations issued thereunder (any such transaction, a “409A Compliant CIC”). In the event that such Change of Control does not constitute a 409A Compliant CIC (any such transaction, a “Non-409A Compliant CIC”), to the extent that the Accrued PBCA is no longer subject to a substantial risk of forfeiture, the Accrued PBCA will be converted into a right to receive a cash payment. Such cash payment will be distributed to the Participant on the earlier of the otherwise applicable distribution date set forth in Section 3 above and the Participant’s
separation from service (as defined by Section 409A of the Code).
|
6.
|
U.S. Federal, State and Local Income Tax Withholding.
Any payment made pursuant to the PBCAs will be taxable to the Participant when paid as ordinary income, subject to wage-based withholding and reporting. The Company will satisfy this withholding obligation by reducing the cash to be paid in an amount sufficient to satisfy the withholding obligations. However, if the cash is paid with performance-based restricted stock (“PBRSRs”), the amount of the cash to be paid may be further reduced in an amount sufficient to satisfy the PBRSR withholding obligations due (based on the Fair Market Value of the Shares on the vesting date for the related PBRSRs). This Section 6 shall only apply with respect to the Company’s U.S. federal, state and local income tax withholding obligations. The Company may satisfy any tax obligations it may have in any other jurisdiction in any manner it deems, in its sole and absolute discretion, to be necessary or appropriate.
|
7.
|
Statute of Limitations and Conflicts of Laws.
All rights of action by, or on behalf of the Company or by any shareholder against any past, present, or future member of the Board of Directors, officer, or employee of the Company arising out of or in connection with the PBCAs or the Award Documents, must be brought within three years from the date of the act or omission in respect of which such right of action arises. The PBCAs and the Award Documents shall be governed by the laws of the State of Florida, without giving effect to principles of conflict of laws, and construed accordingly.
|
8.
|
No Employment Right
.
Neither the grant of the PBCAs nor any action taken hereunder shall be construed as giving any employee or the Participant any right to be retained in the employ or service of the Company. The Company is under no obligation to grant PBCAs hereunder. Nothing contained in the Award Documents shall limit or affect in any manner or degree the normal and usual powers of management, exercised by the officers and the Board of Directors or committees thereof, to change the duties or the character of employment of any employee of the Company or to remove the individual from the employment of the Company at any time, all of which rights and powers are expressly reserved.
|
9.
|
No Assignment
.
The Participant’s rights and interest under the PBCAs may not be assigned or transferred, except as otherwise provided herein, and any attempted assignment or transfer shall be null and void and shall extinguish, in the Company’s sole discretion, the Company’s obligation under the PBCAs or the Award Documents.
|
10.
|
Unfunded Plan
.
Any amounts owed under the PBCAs 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 payment of any earned amounts.
|
11.
|
Definitions
.
|
(a)
|
“Accrual Percentage” means the percentage of the PBCAs that accrue at the end of
|
(b)
|
“Accrued PBCA” means the sum, for each Performance Period, of the Accrual Percentage for each Performance Period times one-third of the dollar amount specified in the Notification.
|
(c)
|
“Cause” shall have the meaning set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, or, if none exists, shall mean a determination of “Cause” under any applicable Severance Plan, as in effect on the date of grant of the PBCAs. Notwithstanding the foregoing, unless otherwise set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, during the one year period following a Change of Control, in no event shall a failure to meet performance expectations constitute Cause unless such failure was willful.
|
(d)
|
“Change of Control” occurs when:
|
(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 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) below;
|
(ii)
|
the individuals who, as of January 1, 2007, constituted the Board of Directors of the Company (the “Board” generally and as of January 1, 2007 the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to January 1, 2007 whose election, or nomination for election, was approved by a vote of the persons comprising at least a majority of the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) (as in effect on January 23, 2000)) shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board;
|
(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 Shares and outstanding voting securities ordinarily having the right to vote for the election of directors of the Company immediately prior to such
|
(iv)
|
there is a liquidation or dissolution of the Company approved by the shareholders; or
|
(e)
|
“Company TSR” means the Company’s Total Shareholder Return for a Performance Period
|
(f)
|
“Company’s TSR Percentile” means, for any Performance Period, the percentile
measured on the last trading day of the Performance Period
in which the Company TSR falls as compared to the Total Shareholder Return of the companies included in the S&P 500 Composite Index as of the last trading day of such Performance Period. The Company’s TSR Percentile will be approved by the Committee as soon as practicable following the end of each Performance Period.
|
(g)
|
“Disability” means (i) the Participant 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 12 months; (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan of the Company; or (iii) a determination by the Social Security Administration that a Participant is totally disabled.
|
(h)
|
“First Performance Period” means the period from January 1, 2012 through December 31, 2012.
|
(i)
|
“Performance Period” means the First Performance Period, the Second Performance Period, or Third Performance Period, as applicable.
|
(j)
|
“Proscribed Activity” means any of the following:
|
(i)
|
the Participant’s breach of any written agreement between the Participant and the Company or any of its Subsidiaries, including any agreement relating to nondisclosure, noncompetition, nonsolicitation and/or nondisparagement;
|
(ii)
|
the Participant’s direct or indirect unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary, 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;
|
(iii)
|
the Participant’s direct or indirect engaging or becoming 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 which is engaged or proposes to engage in a business competitive directly or indirectly with the business conducted by the Company or its Subsidiaries in any geographic area where such business of the Company or its Subsidiaries is conducted, provided that the Participant’s investment in 1% or less of the outstanding capital stock of any corporation whose stock is listed on a national securities exchange shall not be treated as a Proscribed Activity;
|
(iv)
|
the Participant’s direct or indirect, either on the Participant’s own account or for any person, firm or company, soliciting, interfering with or inducing, or attempting to induce, any employee of the Company or any of its Subsidiaries to leave his or her employment or to breach his or her employment agreement;
|
(v)
|
the Participant’s direct or indirect taking away, interfering with relations with, diverting or attempting to divert from the Company or any Subsidiary any business with any customer of the Company or any Subsidiary, including (A) any customer that has been solicited or serviced by the Company within one year prior to the date of termination of Participant’s employment or service with the Company and (B) any customer with which the Participant has had contact or association, or which was under the supervision of Participant, or the identity of which was learned by the Participant as a result of Participant’s employment or service with the Company;
|
(vi)
|
the Participant’s making of any remarks disparaging the conduct or character of the Company or any of its Subsidiaries, or their current or former agents, employees, officers, directors, successors or assigns; or
|
(vii)
|
the Participant’s failure
to cooperate with the Company or any Subsidiary, for no additional compensation (other than reimbursement of expenses), in any litigation or administrative proceedings involving any matters with which the Participant was involved during the Participant’s employment or service with the Company or any Subsidiary
.
|
(k)
|
“Proscribed Period” means the period beginning on the date of termination of Participant’s employment or service and ending on the later of (A) the one year anniversary of such termination date or (B) if the Participant is entitled to severance benefits in the form of salary continuation, the date on which salary continuation is no longer payable to the Participant.
|
(l)
|
“Retirement” means termination of employment for any reason (other than for Cause or by reason of death or Disability) upon or following attainment of age 55 and completion of 10 years of service, or upon or following attainment of age 65 without regard to years of service; provided that, Retirement shall not be deemed to occur unless such termination of service constitutes a separation from service, as defined by Section 409A of the Code.
|
(m)
|
“Second Performance Period” means the period from January 1, 2012 through December 31, 2013.
|
(n)
|
“Third Performance Period” means the period from January 1, 2012 through December 31, 2014.
|
(o)
|
“Three-Year Performance Period” means the period from January
1, 2012 through December 31, 2014.
|
(p)
|
“Total Shareholder Return” means the percentage change in the closing stock price from the immediately preceding trading day prior to the first day of the Performance Period through the last day of the applicable Performance Period (or immediately preceding trading day if such day is not a trading day) assuming reinvestment of dividends on the ex-dividend date.
|
11
.
|
Other Benefits
.
No amount accrued or paid under the PBCAs shall be deemed compensation for purposes of computing the Participant’s benefits under any retirement plan of the Company or its Subsidiaries, nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the Participant’s level of compensation.
|
1.
|
General
. Each RSR represents the right to receive one Share on a future date; on the terms and conditions set forth herein, in the Notification and in the Plan, the applicable terms, conditions and other provisions of which are incorporated by reference herein (collectively, the “Award Documents”). A copy of the Plan and the documents that constitute the “Prospectus” for the Plan under the Securities Act of 1933, have been delivered to the Participant prior to or along with delivery of the Notification. In the event there is an express conflict between the provisions of the Plan and those set forth in any other Award Document, the terms and conditions of the Plan shall govern.
|
2.
|
Delivery of Shares
. Subject to Sections 3 and 4 below, the RSRs will vest pursuant to the vesting schedule set forth in the Notification Letter, provided the Participant is, on the relevant vesting date, and has been from the date of grant of the RSRs to the relevant vesting date, continuously employed by the Company or one of its Subsidiaries. For purposes of these terms and conditions, the Participant shall not be deemed to have terminated his or her employment with the Company and its Subsidiaries if he or she is then employed by the Company or another Subsidiary without a break in service.
|
3.
|
Termination of RSRs; Forfeiture.
The RSRs will be cancelled upon or following the termination of the Participant’s employment with the Company and its Subsidiaries as described below.
|
(a)
|
Resignation by the Participant or Termination by the Company or a Subsidiary
: All
|
(b)
|
Termination by Reason of Death, Disability or Retirement
: A prorated portion of the RSRs shall vest, calculated as follows: (A) the total number of RSRs awarded, multiplied by a fraction (and rounded down to the nearest whole Share), the numerator of which shall be the number of days from the date of grant of the RSRs to the date of death, Disability or Retirement, as the case may be, and the denominator of which shall be the number of days from the date of grant of the RSRs to the last scheduled vesting date for the RSRs set forth in the Notification Letter, less (B) the number of RSRs already vested at the time of the Participant’s death, Disability or Retirement, as the case may be. Shares equal to the prorated number of RSRs that so vest will be delivered to the Participant (or his or her Beneficiary, in the event of death) within 10 days following the date of death, Disability or Retirement, as the case may be.
|
(c)
|
Proscribed Activity
: If, during the Proscribed Period but prior to a Change of Control, the Participant engages in a Proscribed Activity, then the Company shall have the right to reclaim and receive from the Participant all Shares delivered to the Participant pursuant to Section 2 during the one year period immediately prior to, or at any time following, the date of the Participant’s termination of employment, or to the extent the Participant has transferred such Shares, the after-tax equivalent value thereof (as of the date the Shares were transferred by the Participant) in cash.
|
4.
|
Change of Control
.
Notwithstanding anything contained herein to the contrary, unless otherwise determined by the Committee prior to a Change of Control, all outstanding RSRs will become fully vested immediately prior to any such Change of Control. Upon the occurrence of a Change of Control, all Shares subject to RSRs, which are no longer subject to a substantial risk of forfeiture, will be delivered to the Participant in accordance with Section 2 above; provided that such Change of Control constitutes a change “in ownership” or “effective control” or a change in the “ownership of a substantial portion of the assets” of the Company under Section 409A of the Code and the rulings and regulations issued thereunder (any such transaction, a “409A Compliant CIC”). In the event that such Change of Control does not constitute a 409A Compliant CIC (any such transaction, a “Non-409A Compliant CIC”), to the extent that the RSRs are no longer subject to a substantial risk of forfeiture, each RSR will be converted into a right to receive a cash payment equal to the Fair Market Value of a Share on the date on which the Change of Control occurs. Such cash payment will be distributed to the Participant on the earlier of the otherwise applicable distribution date set forth in the Notification Letter and the Participant’s
separation from service (as defined by Section 409A of the Code).
|
5.
|
Rights as a Shareholder; Dividend Equivalents.
The Participant will not have the rights of a shareholder of the Company with respect to Shares subject to the RSRs until such Shares are actually delivered to the Participant. At the time Shares are delivered to the Participant pursuant to Section 2, the Company will make a cash payment equal to the product of (i) the number of Shares delivered, and (ii) the aggregate dividends paid on a Share during the period from the date of grant of the award until the date the Shares are delivered.
|
6.
|
U.S. Federal, State and Local Income Tax Withholding.
The
RSRs will not be taxable until the Shares are delivered. The Shares when delivered will be taxable to the Participant at their then Fair Market Value as ordinary income, subject to wage-based withholding and reporting. The Company will satisfy this withholding obligation by reducing the number of Shares to be delivered to the Participant in an amount sufficient to satisfy the withholding obligations due (based on the Fair Market Value of the Shares on the vesting date for the related RSRs), provided that the Participant may elect to satisfy all or part of the withholding tax obligation in cash or its equivalent by (i) delivering to the Company a written election form satisfactory to the Company to that effect prior to the vesting date for the related RSRs and (ii) delivering the cash or cash equivalent to the Company no later than the vesting date for the related RSRs. The payment of cash dividend equivalents will be taxable to the Participant as ordinary income when paid, subject to wage-based withholding and reporting. This Section 6 shall only apply with respect to the Company’s U.S. federal, state and local income tax withholding obligations. The Company may satisfy any tax obligations it may have in any other jurisdiction in any manner it deems, in its sole and absolute discretion, to be necessary or appropriate.
|
7.
|
Statute of Limitations and Conflicts of Laws
.
All rights of action by, or on behalf of the Company or by any shareholder against any past, present, or future member of the Board of Directors, officer, or employee of the Company arising out of or in connection with the RSRs or the Award Documents, must be brought within three years from the date of the act or omission in respect of which such right of action arises. The RSRs and the Award Documents shall be governed by the laws of the State of Florida, without giving effect to principles of conflict of laws, and construed accordingly.
|
8.
|
No Employment Right
.
Neither the grant of the RSRs nor any action taken hereunder shall be
|
9.
|
No Assignment
.
A Participant’s rights and interest under the RSRs may not be assigned or transferred, except as otherwise provided herein, and any attempted assignment or transfer shall be null and void and shall extinguish, in the Company’s sole discretion, the Company’s obligation under the RSRs or the Award Documents.
|
10.
|
Unfunded Plan
.
Any shares or other amounts owed under the RSRs 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 delivery or payment of any earned amounts.
|
11.
|
Definitions
.
|
(a)
|
“Cause” shall have the meaning set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, or, if none exists, shall mean a determination of “Cause” under any applicable Severance Plan, as in effect on the date of grant of the RSRs. Notwithstanding the foregoing, unless otherwise set forth in any individual, valid, written agreement between the Participant and the Company or any Subsidiary, during the one year period following a Change of Control, in no event shall a failure to meet performance expectations constitute Cause unless such failure was willful.
|
(b)
|
“Change of Control” occurs when:
|
(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 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) below;
|
(ii)
|
the individuals who, as of January 1, 2007, constituted the Board of Directors of the Company (the “Board” generally and as of January 1, 2007 the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to January 1, 2007, whose election, or nomination for election, was approved by a vote of the persons comprising at least a majority of the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act (as in effect on January 23, 2000)) shall be, for purposes of this Plan, considered as though such person were a member of the
|
(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 Shares 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 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 Shares 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;
|
(iv)
|
there is a liquidation or dissolution of the Company approved by the shareholders; or
|
(c)
|
“Disability” means (i) the Participant 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 12 months; (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan of the Company; or (iii) a determination by the Social Security Administration that a Participant is totally disabled.
|
(d)
|
“Proscribed Activity” means any of the following:
|
(i)
|
the Participant’s breach of any written agreement between the Participant and the Company or any of its Subsidiaries, including any agreement relating to nondisclosure, noncompetition, nonsolicitation and/or nondisparagement;
|
(ii)
|
the Participant’s direct or indirect unauthorized use or disclosure of confidential
|
(iii)
|
the Participant’s direct or indirect engaging or becoming 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 which is engaged or proposes to engage in a business competitive directly or indirectly with the business conducted by the Company or its Subsidiaries in any geographic area where such business of the Company or its Subsidiaries is conducted, provided that the Participant’s investment in 1% or less of the outstanding capital stock of any corporation whose stock is listed on a national securities exchange shall not be treated as a Proscribed Activity;
|
(iv)
|
the Participant’s direct or indirect, either on the Participant’s own account or for any person, firm or company, soliciting, interfering with or inducing, or attempting to induce, any employee of the Company or any of its Subsidiaries to leave his or her employment or to breach his or her employment agreement;
|
(v)
|
the Participant’s direct or indirect taking away, interfering with relations with, diverting or attempting to divert from the Company or any Subsidiary any business with any customer of the Company or any Subsidiary, including (A) any customer that has been solicited or serviced by the Company within one year prior to the date of termination of Participant’s employment with the Company and (B) any customer with which the Participant has had contact or association, or which was under the supervision of Participant, or the identity of which was learned by the Participant as a result of Participant’s employment with the Company;
|
(vi)
|
the Participant’s making of any remarks disparaging the conduct or character of the Company or any of its Subsidiaries, or their current or former agents, employees, officers, directors, successors or assigns; or
|
(vii)
|
the Participant’s failure to cooperate with the Company or any Subsidiary, for no additional compensation (other than reimbursement of expenses), in any litigation or administrative proceedings involving any matters with which the Participant was involved during the Participant’s employment with the Company or any Subsidiary.
|
(e)
|
“Proscribed Period” means the period beginning on the date of termination of Participant’s employment and ending on the later of (A) the one year anniversary of such termination date or (B) if the Participant is entitled to severance benefits in the form of salary continuation, the date on which salary continuation is no longer payable to the Participant.
|
(f)
|
“Retirement” means termination of employment for any reason (other than for Cause or by reason of death or Disability) upon or following attainment of age 55 and completion of 10 years of service, or upon or following attainment of age 65 without regard to years of service; provided that, Retirement shall not be deemed to occur unless such termination of service constitutes a separation from service, as defined by Section 409A of the Code.
|
12
.
|
Other Benefits
.
No amount accrued or paid under the RSRs shall be deemed compensation for purposes of computing a Participant’s benefits under any retirement plan of the Company or its Subsidiaries, nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the Participant’s level of compensation.
|
11.
|
Accumulated other comprehensive income or loss associated $
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Ryder System, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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April 24, 2012
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/s/ Gregory T. Swienton
|
|
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Gregory T. Swienton
Chairman and Chief Executive Officer
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1.
|
I have reviewed this quarterly report on Form 10-Q of Ryder System, Inc.;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 24, 2012
|
/s/ Art A. Garcia
|
|
|
Art A. Garcia
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Gregory T. Swienton
|
|
Gregory T. Swienton
Chairman and Chief Executive Officer
|
|
April 24, 2012
|
|
/s/ Art A. Garcia
|
|
Art A. Garcia
Executive Vice President and Chief Financial Officer
|
|
April 24, 2012
|
|