SCHEDULE 14A INFORMATION
(Rule 14a-101)
Proxy Statement Pursuant Toto Section 14(A) Of Theof the Securities
Exchange Act Of 1934 (Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential For Use
of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TRINITY INDUSTRIES, INC.
(Name of Registrant as Specified In Its Charter)
J. J. FRENCH, JR., SECRETARY
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)(1)
and 0-11.
1)(1) Title of each class of securities to which transaction
applies:
2)(2) Aggregate number of securities to which transaction
applies:
3)(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: (Note 1)
4)0-11 (set forth
the amount on which the filing fee is calculated and
state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or
schedule and the date of its filing.
1)(1) Amount previously paid:
2)(2) Form, Schedule or Registration Statement No.no.:
3)(3) Filing Party:
4)(4) Date Filed:
_____________________
Note 1: Set forth the amount on which the filing is calculated
and state how it was determined.
Trinity Industries, Inc.
2525 Stemmons Freeway
Dallas, Texas 75207-2401
P. O. Box 568887
Dallas, Texas 75356-8887
(mailing address)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on July 17, 199616, 1997
Notice is hereby given that the Annual Meeting of
Stockholders of Trinity Industries, Inc. (the "Company"), a
Delaware corporation, will be held at the offices of the
Company, 2525 Stemmons Freeway, Dallas, Texas 75207, on
Wednesday, July 17, 1996,16, 1997, at 9:30 a.m., Central Daylight Saving
Time, for the following purposes:
(1) to elect eight (8)ten (10) directors to hold office until the next Annual
Meeting of Stockholders or until their successors are elected and qualified;
(2) to approve an amendment to the Company's 1993 Stock Option and
(2)Incentive Plan; and
(3) to transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on May 31, 199630, 1997 will
be entitled to notice of and to vote at the 19961997 Annual Meeting or any
adjournment thereof, notwithstanding the transfer of any stock on the books of
the Company after such record date. A list of the stockholders will be open
to the examination of any stockholder, for any purpose germane to the 19961997
Annual Meeting, for a period of ten (10) days prior to the meeting at the
Company's offices, 2525 Stemmons Freeway, Dallas, Texas 75207.
You are requested to forward your proxy in order that you will be
represented at the 19961997 Annual Meeting, whether or not you expect to attend in
person. Stockholders who attend the 19961997 Annual Meeting may revoke their
proxies and vote in person, if they so desire.
A Proxy Statement, proxy card and a copy of the Annual Report on the
Company's operations during the fiscal year ended March 31, 1996,1997 accompany
this Notice of Annual Meeting of Stockholders.
By Order of the Board of Directors
J. J. FRENCH, JR.
Secretary
June 11, 199617, 1997
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Trinity Industries, Inc.
2525 Stemmons Freeway
Dallas, Texas 75207-2401
P. O. Box 568887
Dallas, Texas 75356-8887
(mailing address)
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on July 17, 199616, 1997
This Proxy Statement is furnished to the stockholders of Trinity
Industries, Inc. (the "Company") in connection with the solicitation of
proxies by the Board of Directors of the Company to be voted at the Annual
Meeting of Stockholders of the Company to be held at the offices of the
Company, 2525 Stemmons Freeway, Dallas, Texas 75207, on Wednesday, July 17, 1996,16,
1997 at 9:30 a.m., Central Daylight Saving Time (the "1996"1997 Annual Meeting"),
or at any adjournment thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting of Stockholders.
This Proxy Statement and the enclosed form of proxy are being mailed to
stockholders on or about June 11, 1996.17, 1997.
RIGHT TO REVOKE PROXY
Any stockholder giving the proxy enclosed with this Proxy Statement has
the power to revoke such proxy at any time prior to the exercise thereof by
filing with the Company a written revocation at or prior to the 19961997 Annual
Meeting, by executing a proxy bearing a later date or by attending the 19961997
Annual Meeting and voting in person the shares of stock that such stockholder
is entitled to vote. Unless the persons named in the proxy are prevented from
acting by circumstances beyond their control, the proxy will be voted at the
19961997 Annual Meeting and at any adjournment thereof in the manner specified
therein, or if not specified, the proxy will be voted:
(1) FOR the election of the eight (8)ten (10) nominees listed under "Election of
Directors" as nominees of the Company for election as directors to hold office
until the next Annual Meeting of Stockholders or until their successors are
elected and qualified;
(2) FOR the approval of the amendment to the Company's 1993 Stock Option
and (2)Incentive Plan; and
(3) At the discretion of the persons named in the enclosed form of
proxy, on any other matter that may properly come before the 19961997 Annual
Meeting or any adjournment thereof.
BY WHOM AND THE MANNER IN WHICH PROXY IS BEING SOLICITED
The enclosed proxy is solicited by and on behalf of the Board of
Directors of the Company. The expense of the solicitation of proxies for the
19961997 Annual Meeting, including the cost of mailing, will be borne by the
Company. To the extent necessary to assure sufficient representation at the
19961997 Annual Meeting, officers and regular employees of the Company, at no
additional compensation, may request the return of proxies personally, by
telephone, facsimile, mail, or telegram.other method. The extent to which this will be
necessary depends entirely upon how promptly proxies are received.
Stockholders are urged to send in their proxies without delay. The Company
will supply brokers, nominees, fiduciaries and other custodians with proxy
materials to forward to beneficial owners of shares in connection with the
request from the beneficial owners of authority to execute such proxies, and
the Company will reimburse such brokers, nominees, fiduciaries and other
custodians for their expenses in making such distribution. Management has no
knowledge or information that any other person will specially engage any
persons to solicit proxies.
VOTING SECURITIES AND STOCKHOLDERS
The outstanding voting securities of the Company consist entirely of
shares of Common Stock, $1.00 par value per share, each share of which
entitles the holder thereof to one vote. The record date for the
determination of the stockholders entitled to notice of and to vote at the
19961997 Annual Meeting, or any adjournment thereof, has been established by the
Board of Directors as of the close of business on May 31, 1996.30, 1997. At that date,
there were outstanding and entitled to vote 41,612,06242,984,303 shares of Common Stock.
The presence, in person or by proxy, of the holders of record of a
majority of the outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the 19961997
Annual Meeting, but if a quorum should not be present, the meeting may be
adjourned from time to time until a quorum is obtained. All matters to be voted on will be decided by
a majority of the shares represented and voting at the meeting. A holder of Common
Stock will be entitled to one vote per share on each matter properly brought
before the meeting. Cumulative voting is not permitted in the election of
directors.
The proxy card provides space for a stockholder to withhold voting for
any or all nominees for the Board of Directors or to abstain from voting for
any proposal if the stockholder chooses to do so. The election of directors
requires a plurality of the votes cast at the meeting. Each other matter to
be submitted to the stockholders requires the affirmative vote of a majority
of the votes cast at the meeting. For purposes of determining the number of
votes cast with respect to any voting matter, only those cast "for" or
"against" are included. Abstentions and broker non-votes are counted only for
purposes of determining whether a quorum is present at the meeting.
As of May 31, 1996,30, 1997, no person was known by the Company to own
beneficially more than five percent (5%) of the outstanding shares of Common
Stock of the Company, although Cedeexcept as shown in the following table:
Number of Shares
Name and Company, a
central clearinghouseAddress Beneficially Owned Percent of
of Beneficial Owner at May 30, 1997 Class
---------------------------- ----------------- ----------
FMR Corp.(1) 3,656,800 8.5%
82 Devonshire Street
Boston, Massachusetts 02109
_____________
(1) Information regarding FMR Corp. and nominee in New York, New York, was the
record holder of 37,129,130 sharesits affiliates and their beneficial
ownership of the Company's Common Stock
asshares was obtained from the Schedule 13G of
May 31, 1996.FMR dated February 14, 1997.
-2-
The following table shows the number of shares of Common Stock
beneficially owned by each director or nominee, by the Company's
Chief Executive Officer and the next four most highly compensated
executive officers
ofnamed below in the Company serving at the close of the
Company's most recent fiscal yearSummary Compensation Table and by all such directors,
nominees and executive officers as a group, based upon information supplied by
them:
Number of Shares
Beneficially Owned Percent of
Name at April 30, 1996(1)1997(1) Class
------------------ -------------------- ----------
John L. Adams 1,000 *
Ralph A. Banks, Jr. 6,153 *
David W. Biegler 1,6005,364 *
John Dane III 210,954217,413 *
Barry J. Galt 8,25010,160 *
Clifford J. Grum 3,000(2) *
Dean P. Guerin 55,50057,410 *
Jess T. Hay 9,474(3)11,384(3) *
Edmund M. Hoffman 39,771(4)41,681(4) *
Ray J. Pulley 39,800(5)Diana S. Natalicio 1,000 *
John T. Sanford 85,085129,875 *
Mark W. Stiles 12,75021,614 *
Timothy R. Wallace 146,298216,921 *
W. Ray Wallace 1,337,429 3.1%1,505,151 3.4%
Directors and Executive
Officers as a Group 2,043,008 4.8%2,329,571 5.3%
_________
* Less than one percent (1%).
(1) Unless otherwise noted, all shares are owned directly and the owner has
the right to vote the shares, except for shares that officers and
directors have the right to acquire under the Company's stock option plans
as of the record date or within sixty (60) days thereafter, which for
Messrs. Galt, Guerin, Hay and Hoffman and Pulley are 7,5009,410 shares each, for Mr.
Biegler is 3,764 shares and for Messrs. Dane, Sanford, Stiles, Timothy
R. Wallace and W. Ray Wallace are 70,030, 46,699, 12,317, 142,32339,875, 82,191, 17,987, 203,671 and 450,000621,080
shares, respectively. Such numbers for shares that the officers and
directors have right to acquire under the Company's stock option plans
reflect the adjustment resulting from the Company's distribution of its stock
in Halter Marine Group, Inc. Mr. Dane's association with the Company
ceased on March 31, 1997 upon the Company's distribution of its stock of
Halter Marine Group, Inc.; therefore, his options will expire on June 29,
1997, if not exercised.
(2) Shares are owned by Deerfield Corporation of which Mr. Grum is an owner.
(3) Includes 384 shares owned of record by Mr. Hay's wife as custodian for
their daughter in which Mr. Hay disclaims beneficial ownership.
(4) Includes 1,500 shares held by Mr. Hoffman as trustee of a trust in which
Mr. Hoffman disclaims beneficial ownership.
(5) Included 22,300 shares held by NationsBank Texas, N.A., Profit
Sharing Trust over which Mr. Pulley has sole investment power
and also includes 1,500 shares owned by Mr. Pulley's wife.
_____________
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ITEM 1 - ELECTION OF DIRECTORS
At the 19961997 Annual Meeting, eight (8)ten (10) directors are to be elected who
shall hold office until the next Annual Meeting of Stockholders or until their
respective successors are duly elected and qualified. It is the intention of
the persons named in the Company's proxy to vote for the election of each of
the eight (8)ten (10) nominees listed below, unless authority is withheld. All
nominees have indicated a willingness to serve as directors, but if any of
them should decline or be unable to serve as a director, the persons named in
the proxy will vote for the election of another person recommended by the
Board of Directors.
The Board of Directors recommends you vote FOR the election of each of
the eight (8)ten (10) nominees to the Board of Directors set forth below.
Nominees
- -------------------------------------------------------------------------------------------------------------------------------------------------
W. Ray Wallace, 73.74. Director since 1956. Chairman President and Chief Executive
Officer of the Company. He is the father of Timothy R. Wallace, a director
Group Viceand President of the Company,Company.
- -------------------------------------------------------------------------------
John L. Adams, 52. Director since 1996. Member of the Audit Committee and of
the Corporate Development and Finance Committee. Mr. Adams is Chairman and
Chief Executive Officer Metroplex Region of Texas Commerce Bank -- Dallas,
Texas. He is also Vice Chairman of the Railcars segmentBoard of Texas Commerce Bank National
Association, a national bank providing banking services in various Texas
cities. He serves as a director of Phillips Gas Company, a leading purchaser,
producer, gatherer and LPG Containers
division.seller of natural gas, Texas Utilities Company
(Advisory Director), a public utility holding company, and Zale Lipshy
University Medical Center, in addition to service on the Board of Directors of
several public and private charitable organizations.
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David W. Biegler, 49.50. Director since 1992. MemberChairman of the CompensationCorporate
Governance and Nominating Committee and a member of the Human Resources
Committee. Mr. Biegler is the Chairman, President and Chief Executive Officer
and a director of ENSERCH Corporation, an integrated natural gas company
engaged principally in natural gas transmission and distribution, electric
power development and other energy related activities. He is alsoa director and
former Chairman and Chief Executive Officer and a director of Enserch Exploration, Inc., a
company engaged in oil and gas exploration and production, and a director of
Texas Commerce Bank, National Association, a national
bank.
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Barry J. Galt, 62.63. Director since 1988. Member of the Audit Committee and of
the Corporate Development and Finance Committee. Mr. Galt is the Chairman President, and
Chief Executive Officer and a director of Seagull Energy Corporation, a
diversified energy company engaged in oil and gas exploration and development,
as well as natural gas transportation, processing, marketing and distribution. He is also a director of
Standard Insurance Company, a mutual life insurance company, and a director of
Texas Commerce Bank, National Association, a national bank.
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Clifford J. Grum, 61.62. Director since 1995. Member of the Audit Committee and
of the Human Resources Committee. Mr. Grum is Chairman and Chief Executive
Officer and a director of Temple-Inland, Inc., a holding company with
interests in corrugated containers, bleached paperboard, building products,
timber and timberlands, and financial services. He is also a director of
Cooper Industries, Inc., a company engaged in the businesses of electrical
products, tools and hardware, and automotive products and a director of
Tupperware Corporation, a multinational consumer products company.
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-4-
Dean P. Guerin, 74.75. Director since 1965. Chairman of the CompensationCorporate
Development and Finance Committee and Membera member of the AuditCorporate Governance and
Nominating Committee. Mr. Guerin's principal occupation is investments. Mr.
Guerin is a director of Lone Star Technologies, Inc., engaged in oil country
tubular goods, and banking, and a director of Seagull Energy Corporation, a diversified
energy company.
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Jess T. Hay, 65.66. Director since 1965. MemberChairman of the CompensationHuman Resources
Committee and member of the Corporate Governance and Nominating Committee.
Mr. Hay is Chairman of Texas Foundation for Higher Education and of HCB
Enterprises, Inc., a private investment firm. Prior to retirement on December
31, 1994, Mr. Hay was Chairman and Chief Executive Officer of Lomas Financial
Corporation, a diversified financial services company engaged principally in
mortgage banking and real estate lending, and of Lomas Mortgage USA, a
mortgage banking institution. Mr. Hay is a director of The
DialViad Corp., which is
primarily involved in consumer products,
services, transportation, manufacturingtravel, trade exhibits, and financial services, a
director of Exxon Corporation, a diversified energy company engaged
principally in the exploration, production and marketing of petroleum
products, and a director of SBC Communications, Inc., a telephone and wireless
communications company.
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Edmund M. Hoffman, 74.75. Director since 1957. Chairman of the Audit Committee
and member of the Corporate Development and Finance Committee. Mr. Hoffman's
principal occupation is investments, primarily in the soft drink bottling and
full line vending business. Mr. Hoffman is also a director of Coca-Cola Bottling
Group (Southwest) Inc., a distributor for Coca-Cola products.
- -------------------------------------------------------------------------------------------------------------------------------------------------
Diana S. Natalicio, 57. Director since 1996. Member of the Human Resources
Committee and of the Corporate Governance and Nominating Committee. President
of the University of Texas at El Paso. Dr. Natalicio is a director of ENSERCH
Corporation, an integrated natural gas company engaged principally in natural
gas transmission and distribution, electric power development and other energy
related activities. She was appointed by President Bush to the Commission on
Educational Excellence for Hispanic Americans and by President Clinton to the
National Science Board, currently serving as its Vice-Chair.
- -------------------------------------------------------------------------------
Timothy R. Wallace, 42.43. Director since 1992. Mr. Wallace is a
Group Vice President of the Company and the Chairman of the
Railcars segment and LPG Containers division of the
Company. He is the son of Mr. W. Ray Wallace, a director and the Chairman,
President and Chief Executive Officer of the Company. - ------------------------------------------------------------------
Board MeetingsMr. Wallace is a director of Viad
Corp. which is primarily involved in travel, trade exhibits and Committeesfinancial
services.
BOARD MEETINGS AND COMMITTEES
The directors hold regular quarterly meetings, in addition to the meeting
immediately following the Annual Meeting of Stockholders, attend special
meetings, as required, and spend such time on the affairs of the Company as
their duties require. During the fiscal year ended March 31, 1996,1997, the Board
of Directors held five (5) meetings. All directors of the Company attended at
least seventy-five percent (75%) of the meetings of the Board of Directors and
the committees on which they served during the fiscal year ended March 31,
1996.1997.
During most of the fiscal year ended March 31, 1997, there were only two
committees, those being an Audit Committee and a Compensation Committee. The
members of the Audit Committee were Messrs. Barry J. Galt, Chairman, Clifford
J. Grum and Edmund M. Hoffman. The members of the Compensation Committee were
Messrs. Jess T. Hay, Chairman, David W. Biegler and Dean P. Guerin. The Board
of Directors has anon March 13, 1997 reorganized its committees into four (4)
committees. The committees described below and their functions are those
resulting from the March 13, 1997 meeting, unless the context clearly
indicates otherwise.
-5-
The Audit Committee consistingconsists of Messrs. Adams, Galt, Grum Guerin and Hoffman.
The Audit Committee reviews with management, the director of internal auditing
and the independent accountants the Company's financial statements, the
accounting principles applied in their preparation, the scope of the audit,
any comments made by the independent accountants upon the financial condition
of the Company and its accounting controls and procedures, and such other
matters as the Audit Committee deems appropriate, and the Audit Committee
reviews with management such matters relating to compliance with corporate
policies and internal controls as the Audit Committee deems appropriate. The
Audit Committee met three (3)two (2) times during the fiscal year ended March 31, 1996.1997.
The Audit Committee's functions include:Human Resources Committee consists of Messrs. Biegler, Grum, Hay and
Dr. Natalicio. The duties of the Human Resources Committee generally are to
(a) makingdetermine and/or recommend the compensation structure for the Company and
its subsidiaries, (b) make recommendations to the Board of Directors foras to the
engagement or dischargesalary of the independent auditors, (b) reviewingChief Executive Officer, and set the plan and resultssalaries of other senior
executives of the audit engagementCompany, (c) grant options, shares of stock, stock units and
such other benefits as may be permitted under the Company's stock related
benefit plan or plans to such officers and employees as the Committee may
designate, and report all such grants to the Board of Directors, (d) review
with the independent auditors, (c) reviewingChief Executive Officer, no less frequently than once a year, the
degree of independence of the independent auditors, (d) approving
the services performed by the independent auditors, (e) considering
the range of auditdepth and other fees and (f) reviewing the adequacyquality of the Company's systemmanagement and succession plans related to
each critical operating position of internal controls.
Thethe Company, (e) design, recommend to the
Board for approval and administer long, intermediate and short-term incentive
compensation plans of the Company, (f) review and recommend to the Board the
adoption and, where applicable, amendment of employee benefit plans, (g)
administer, interpret, amend (where applicable), and carry out such other
duties with respect to the Company's employee benefit plans, as may be
authorized or called for by such plans or the Board of Directors, also has a(h) be kept
informed as to administration and management matters in respect of the
Company's qualified pension plans, and (i) make such other reports and
recommendations to the Board of Directors from time to time as the Committee
may deem appropriate. The Human Resources Committee succeeded to the
principal duties of the Compensation Committee
consisting of Messrs. Biegler, Guerin, Hay and Pulley.Committee. The Compensation Committee
which met four (4) timesone (1) time during the fiscal year ended March 31, 1996, determines1997.
The Corporate Governance and Nominating Committee consists of Messrs.
Biegler, Guerin and Hay and Dr. Natalicio. The duties of the base salaryCorporate
Governance and incentiveNominating Committee generally are to (a) recommend to the
Board of Directors the director nominees proposed each year in the Company's
proxy statement for election by the Company stockholders, (b) review the
qualifications of, and recommend to the Board, candidates to fill Board
vacancies as they may occur, (c) consider suggestions from stockholders and
other sources regarding possible candidates for director, (d) define and
recommend to the Board appropriate guidelines and criteria regarding the
qualifications of candidates for director of the Company, (e) review and from
time to time propose changes (as and if appropriate) in the compensation arrangementsand
benefits of non-employee directors of the Company, (f) review and from time to
time propose changes (as and to the extent deemed appropriate by the
Committee) in the Company's system of corporate governance, and (g) make such
other reports and recommendations to the Board of Directors from time to time
as the Committee may deem appropriate. The Corporate Governance and
Nominating Committee is new, being established as a part of the reorganization
of the committee structure of the Board of Directors at its meeting on May 13,
1997. The Corporate Governance and Nominating Committee did not meet during
the fiscal year ended March 31, 1997.
The Corporate Development and Finance Committee consists of Messrs.
Adams, Galt, Guerin and Hoffman. The duties of the Corporate Development and
Finance Committee generally are to (a) provide direction for the assessment of
future acquisition opportunities, (b) review specific plans regarding
significant acquisitions or dispositions of businesses or assets, (c)
authorize, subject to limits imposed by the Board of Directors, an investment
in (or sale of) or acquisition of (or disposition of) another company, or the
entry into (or termination of) a partnership, joint venture, or similar
investments, or a financial guarantee or appropriations to subsidiaries of the
Company for any of the foregoing purposes, and (d) make such reports and
recommendations to the grantingBoard of benefitsDirectors from time to time as the Committee
may deem appropriate. In addition, the Corporate Development and Finance
Committee shall (1) periodically review the financial status of the Company,
(2) consult with the officers of the Company and senior managementthe Board of its subsidiaries.
The CompensationDirectors in
regard to significant matters involving the finances of the Company, (3)
review financial policy and procedures and make such recommendations in regard
thereto as the Committee also determines,may deem appropriate, (4) approve guidelines for the
investment of the Company's cash reserves, and (5) recommend for approval by
the Board of Directors (i) the amount and record date of dividends, (ii) the
Company's annual budget (including, but not limited to, revenue, net income,
and capital expenditure objectives) and an acceptable range for the debt to
equity ratio of the Company, and (iii) Registration Statements to be filed
with the SEC in connection with the Company's stock optionsecurities issuances. The
Corporate Development and incentive plans, the persons to whom
awards are granted, the type of awards, the number of shares
covered by the awards, whether stock appreciation rights are
granted, the option vesting schedule and, if other than an
incentive stock option for purposesFinance Committee is new, being established as a
part of the Internal Revenue Code,reorganization of the option exercise price. See "Executive Compensation and Other
Matters - Stock Option Plans" below.
The entireCommittee structure of the Board of
Directors acts as a nominating committee.
Compensation of Directorsat its meeting on March 13,1997. The Corporate Development and
Finance Committee did not meet during the fiscal year ended March 31, 1997.
-6-
COMPENSATION OF DIRECTORS
During the fiscal year ended March 31, 1996,1997, each director received
$1,250 for each director's meeting attended and reimbursement for reasonable
out-of-pocket expenses. In addition, each director who is not a compensated
officer or employee of the Company or its subsidiaries received a fee of
$30,000 per year for serving as a director (and the Chairman of the Audit
Committee and the Chairman of the Compensation Committee received an
additional $2,000 per year in those capacities) and $1,250 for each Audit
Committee or Compensation Committee meeting attended. Under the Deferred Plan
for Director Fees adopted by the Board of Directors on June 13, 1996, each
director is permitted to elect, on or before each Annual Meeting of Directors,
to defer the receipt of all or a specified portion of the fees to be paid to
him or her. If deferral is elected, the amounts that would otherwise be paid
to him or her in cash during the ensuing fiscal year is credited to an account
on the books of the Company and treated as if invested either at the prime
rate of interest as announced from time to time by Texas Commerce Bank in
Dallas, Texas or, at the director's prior election, in units of the Company's
Common Stock at the closing price on the New York Stock Exchange on the date
that a payment is credited to the director's account. If deemed invested in
units of the Company's Common Stock, the stock units are credited with amounts
equivalent to dividends paid on the Company's Common Stock. Upon ceasing to
serve as a director, the value of the account will be paid to the director in
annual installments not exceeding ten (10) years, according to the director's
prior election.
Each outside director (other than Messrs. Biegler and Grum) holdshas been granted an option to purchase 7,500 shares
of the Company's Common StockStock. The option exercise price at anMarch 31, 1997 of
the options granted to Messrs. Galt, Guerin, Hay and Hoffman was $22.50 per
share. The option exercise prices at March 31, 1997 of the options granted to
Mr. Biegler, Mr. Grum, Mr. Adams, and Dr. Natalicio was $33.50, $35.00,
$32.125, and $32.125, respectively. The option exercise price of $22.50 per share,each option
granted to the outside directors is the market value of the Company's Common
Stock at the time of the grant. These options were
granted pursuant to the Company's 1989 Stock Option Plan that was
approved by the stockholders at the Annual Meeting on July 19,
1989. Mr. Biegler holds an option to purchase 7,500 shares of the
Company's Common Stock at an option exercise price of $33.50 per
share, the market price of the Company's Common Stock at the time
of the grant, to him under the Company's 1993 Stock Optionas adjusted for stock splits and Inventive Plan that was approved by the stockholders at the Annual
Meeting on July 21, 1993.other
extraordinary property distributions.
The Company also has a Directors' Retirement Plan that was adopted on December
11, 1986. The plan is an unfunded arrangement through which monthly payments
will be paid to members of the Board of Directors who are not employees of the
Company upon retirement, disability or death while serving as a director on or
after December 11, 1986. The payments will be made to the director and/or his
designated beneficiary for a ten-yearten (10) year period. The amount of each monthly
payment will be equal to one-twelfth (1/12) of a percentage of the annual
retainer paid to such director in the year of his retirement, disability or
death while serving as a director. The applicable percentage is dependent
upon the number of years of service as a member of the Board of Directors. If
the director has less than five (5) years of service, the applicable
percentage is zero. If the director has five (5) years of service, the
applicable percentage is fifty percent (50%). The applicable percentage
increases at the rate of ten percent (10%) for each year of service thereafter
and reaches one hundred percent (100%) after ten (10) years of service as a
director. However, notwithstanding the number of years of service, a
director's applicable percentage will be one hundred percent (100%) in the
event of a Change in Control of the Company. For purposes of this Proxy
Statement, a "Change in Control" is deemed to have occurred if (i) any person
becomes the beneficial owner, directly or indirectly, of securities of the
Company (other than directly from the Company of its affiliates) representing
thirty percent (30%) or more of the combined voting power of the Company's
then outstanding securities,
-7-
(ii) a majority of the number of directors serving on the Board of Directors
no longer consists of the existing directors and any new director (other than
a director whose initial assumption of office is in connection with an actual
or threatened election contest) whose appointment or election by the Board of
Directors or nomination for election by the stockholders of the Company was
approved or recommended by a vote of at least two-thirds of the directors then
still in office who are the existing directors or whose appointment, election
or nomination for election was previously so approved or recommended, (iii) a
merger or consolidation in whichof the Company with any other company unless the
Company's stockholders immediately after the merger or consolidation represent
at least sixty percent (60%) of the combined voting power of the Company or
such surviving entity or any parent thereof or (iv) the stockholders approve a
plan of complete liquidation or dissolution of the Company or there is
notconsummated an agreement for the surviving
corporation, (ii) a sale by the Company of all or substantially
all of its assets other than a sale or disposition to an entity, at least
sixty percent (60%) of the assetscombined voting power of which is owned by
stockholders of the Company (iii) a sale of sharesin substantially the same proportions as their
ownership of the Company's Common
Stock in which another corporation, person or entity acquires fifty
percent (50%) or more ofCompany immediately prior to the outstanding Common Stock or (iv) the
acquisition of fifty percent (50%) or more of the outstanding
shares of the Company's Common Stock as a result of any tender or
exchange offer.sale.
EXECUTIVE COMPENSATION AND OTHER MATTERS
Cash Compensation
The following table sets forth information for the Company's fiscal years
ended March 31, 1997, 1996 1995 and 1994,1995, with regard to the compensation for their
services to the Company and its subsidiaries in all capacities of the Chief
Executive Officer and each of the other four (4) most highly compensated
executive officers serving the Company at the close of the Company's most
recently completed fiscal year:year and of Mr. John Dane III, Chairman, President
and Chief Executive Officer of Halter Marine Group, Inc., of which all stock
owned by the Company was distributed to the Company's stockholders on March
31, 1997.
SUMMARY COMPENSATION TABLE
Annual
Compensation Long Term
Compensation
Compen-
sation All
--------- Other--------------------
Name and Year Other Restricted Stock Compen-All
Principal Position Annual Stock Option sation Other
Year Salary Bonus Compen- Awards Awards Compen-
sation (Shares) (Shares) sation
W. Ray Wallace - Chairman & 1997 $1,000,000 $2,495,430 $524,315 - 75,000 $28,164
Chief Executive Officer 1996 $1,000,000 $2,033,372 $441,730$455,006 - - $25,414
President & Chief Executive Officer
1995 $1,000,000 $2,000,000 $289,227$450,000 - $25,414
1994 $900,000 $1,557,203 $211,367 - $28,312$25,414
Timothy R. Wallace - Group Vice1997 $475,000 $593,750 $106,875 3,000 50,000 $25,022
President 1996 $475,000 $373,540 $84,854 - - $25,084
President & Chairman of Railcars
1995 $295,000 $348,041 $64,304 - $23,464
segment and LPG Containers division 1994 $275,000 $197,643 - - $24,854$23,464
John T. Sanford - Senior1997 $380,000 $452,314 $83,231 2,500 35,000 $17,484
Executive Vice President 1996 $380,000 $329,498 $70,950 - 13,202 $18,309
President and Group Vice President &
1995 $270,000 $105,111 $37,511 - 14,085 $17,559
Chairman of Construction Products 1994 $260,000 $112,580Ralph A. Banks, Jr. 1997 $280,000 $40,000 - - $17,253
and Metal Components segments- $4,500
Senior Vice President 1996 $280,000 $35,000 - - - $4,500
1995 $280,000 $25,000 - - - $4,500
Mark W. Stiles -1997 $275,000 $69,222 $34,422 2,000 15,000 $8,641
Group Vice President 1996 $275,000 $295,130 $57,013 - - $5,599
President and President of
1995 $165,000 $90,503 $25,550 - 1,500 $6,166
Construction Products division 1994 $155,000 $155,000 - - $5,769
John Dane III 1997 $491,667 $415,800 $134,947 - Group Vice27,682 $18,312
Chairman, President and Chief 1996 $450,000 $36,810 $48,681 - - $19,699
& PresidentExecutive Officer of Marine ProductsHalter 1995 $265,000 $116,017 $38,102 - 13,030 $18,425
segment 1994 $250,000 $336,325 - - $19,273Marine Group, Inc.
-8-
AnnualAn incentive bonuses arebonus is paid only upon the achievement of a predetermined financial goal set for each
executive by the Human Resources Committee (formerly, the Compensation CommitteeCommittee) at the beginning
of the fiscal year. All or a portionThe Committee also predetermines at the beginning of each fiscal year whether the
incentive bonus is paid within ninety
(90) days after the closeamount of the Company's fiscal year. If
theany incentive bonus earned exceedsin excess of a certain percentage of base salary (ranging from
twenty-five percent (25%) in the case of some executives to fifty percent (50%) in the case of other
executives), will be paid within ninety (90) days after the close of the fiscal year or, in the discretion of
the Committee, deferred and paid in equal annual installments up to three (3) years after the close of the
fiscal year. The Committee elected not to defer any of the incentive bonus amountearned for fiscal 1997;
however, the Committee elected to defer and pay the incentive bonus earned for fiscal 1996 in excess of
the applicable percentage is deferred and is payable in two (2),
or subsequent annual installments, and for fiscal 1995, in three (3)
subsequent annual installments. If the caseCommittee elects to defer the payment of ana portion of the incentive
bonus, earned prior to fiscal
1996, three (3), equal annual installments in the succeeding
years, providedexecutive will forfeit the deferred portion if the executive's employment with the Company has not beenis
terminated prior to payment for any reason other than death, disability, retirement or a change of control
of the Company. The amounts shown for bonusincentive bonuses in the foregoing table include the amounts
deferred installmentsand payable to the executive in the succeeding years if still employed by the
Company at that timeyears. The amounts deferred for fiscal 1997, 1996
and 1995, respectively, were in fiscal 1996, 1995$-0-, $1,016,686 and 1994,
respectively, $1,016,686, $1,500,000 and $1,107,203 for Mr. W. Ray Wallace, $-0-, $186,770
$259,541 and $115,143$259,541 for Mr. Timothy R. Wallace, $-0-, $164,749 $24,111 and $34,580$24,111 for Mr. Sanford, $-0-, $-0- and
$-0- for Mr. Banks, $-0-, $147,565 $41,003 and $108,500$41,003 for Mr. Stiles and $207,900, $18,405 $58,008 and $168,162$58,008 for
Mr. Dane.
An amount equal to fifteen percent (15%) of the salary and incentive bonus of Mr. W. Ray Wallace, and
amounts equal to ten percent (10%) of the salaries and incentive bonuses of Messrs. Timothy R. Wallace,
Sanford, Stiles and Dane, are set aside annually pursuant to the long term deferred compensation plans for
them.
All Other Compensation consists principally of the matching amounts under the Company's Supplemental
Retirement Plan and Section 401(k) Plan (described below under "Retirement Plans"), automobile
allowances, reimbursements for medical insurance premiums and, in the case of Messrs. W. Ray Wallace
and Timothy R. Wallace, directors' fees.
Does not include a special bonus of $442,000 awarded to Mr. Dane by the Board of Directors of Halter
Marine Group, Inc. on April 2, 1997, after Trinity had distributed to its stockholders all of its stock of
Halter Marine Group, Inc. and after the officers of Trinity had ceased to serve as directors.
Stock Option Plans
The Company's 1993 Stock Option and Incentive Plan (the "1993 Plan")
that was approved by the stockholders at the Annual Meeting held on July 21,
1993 permits the grant of stock options, stock appreciation rights, restricted
stock, performance and other stock related awards. The 1993 stock option planPlan terminated
the Company's earlier 1989 stock option plan which in turn had terminated the
Company's 1983 stock option plan, except in each case for options granted and
outstanding under the prior plans. Stock options that expire, terminate or
are surrendered unexercised under the prior plans are available for further
award under the 1993 plan.Plan. At April 30, 1996,1997, options were granted and
outstanding under the 1993 planPlan on 919,1241,365,204 shares of the Company's Common
Stock, under the 1989 plan on 647,881972,909 shares, and under the 1983 plan on
109,28285,573 shares.
One of the goals of the 1993 Plan is to make the key executives to whom
options are granted long term stockholders of the Company in order that their
long range economic interests will be more directly aligned with the long term
economic interests of the Company's stockholders. Further, the awards are
designed to retain and develop a strong management team who will be dependent
upon value created for the Company's stockholders for an accumulation of
significant personal wealth. The Compensationprovisions of the 1993 Plan may be modified
or amended at any time or from time to time by the Board of Directors;
provided, however, no option at any time outstanding may be impaired or
canceled without the consent of the holder thereof, and no amendment can
increase the maximum number of shares subject to the plan, reduce the option
exercise price of shares contrary to the provisions of the plan or materially
modify the requirements as to eligibility for participation in the plan,
without stockholder approval.
-9-
The Human Resources Committee of the Board of Directors determines the
officers and key employees to whom options are granted, the type of options,
the number of shares covered by such options, the option vesting schedule and,
if other than an incentive stock option for purposes of the Internal Revenue
Code, the option exercise price. In the case of incentive stock options, the
Internal Revenue Code requires that the option exercise price must not be less
than the fair market value of the stock at the time that the option is granted
and, in the case of any employee owning directly or indirectly more than ten
percent (10%) of the total outstanding Common Stock, the option exercise price
for an incentive stock option must be at least one hundred ten percent (110%)
of the fair market value. Options become exercisable as set forth in the
option agreements pursuant to which they are issued, but in no event are
incentive stock options exercisable after the expiration of ten (10) years
from the date of grant (or, in the case of an employee owning directly or
indirectly more than ten percent (10%) of the total outstanding Common Stock,
five (5) years from the date of grant). Regardless of any vesting schedule
contained in an option agreement, the plan provides for the acceleration of
vesting in certain events, including the optionee's death, disability or
retirement, the dissolution or liquidationa Change in Control of the Company, certain reorganizationsCompany. For the definition of
the Company or the
acquisitionChange in Control, see Compensation of fifty percent (50%) or more of the Company's
outstanding Common Stock as a result of a tender or exchange offer
other than by the Company.Directors" above. All rights to
exercise an option terminate immediately upon an employee's discharge for
cause, ten (10) days after an employee's resignation, three (3) months after
an employee's disability, twelve (12) months after an employee's death and
three (3) years (or three (3) months in case of incentive
stock options) after the employee's retirement. All stock appreciation
rights and limited stock appreciation rights, if any, terminate immediately
upon cessation of employment, regardless of the reason for such cessation.
Recipients of options may pay the option exercise price in cash or by
delivering to the Company shares of the Company's Common Stock already owned
by the optionee having a fair market value equal to the option exercise
price. WhenIn certain instances, when the optionee surrenders stock already owned
by him in payment of the exercise price, the optionee will be granted except in limited instances, a new
option on shares equal in number to those surrendered at an option exercise
price that is the fair market value of the Company's Common Stock on the date
of the new grant and exercisable no earlier than six (6) months after the date
of such new grant. An optionee also may elect to satisfy the income tax
withholding requirement upon the exercise of a nonincentive stock option
either by payment of the amount of such withholding obligation in cash or
through the retention by the Company of a number of shares of Common Stock out
of the shares being purchased with a fair market value equal to the amount of
the withholding obligation, but no new option is awarded for the shares
retained to satisfy the employee's income tax withholding requirement.
The provisions of the 1993 plan may be modified or amended at
any time or from time to time by the Board of Directors; provided,
however, no option at any time outstanding may be impaired or
canceled without the consent of the holder thereof, and no
amendment can increase the maximum number of shares subject to the
plan, reduce the option exercise price of shares contrary to the
provisions of the plan or materially modify the requirements as to
eligibility for participation in the plan, without stockholder
approval.
One of the goals of the 1993 plan is to make the key
executives to whom options are granted long term stockholders of
the Company in order that their long range economic interests will
be more directly aligned with the long term economic interests of
the Company's stockholders. Further, the awards are designed to retain and develop a strong
management team who will be dependent upon value created for the Company's
stockholders for an accumulation of significant personal wealth.
All stock options
granted by the Company after the adoption of the 1993 plan have
been granted under the Company's Executive Stock Ownership Program,
other than options granted to Mr. W. Ray Wallace and "reload
options", i.e., options granted to an optionee for the number of
shares previously owned that the optionee surrendered in payment of
the exercise price of a stock option. Options granted under the
Company's Executive Stock Ownership Program become exercisable only
in annual installments over a period of eight (8) years and must be
exercised before ten (10) years from the date of the grant. More
importantly, the shares acquired pursuant to the exercise of the
option are restricted in respect to their transferability and are
not transferable from the date of the exercise until the expiration
of five (5) years thereafter, when fifty percent (50%) of the
shares become transferable, and until the expiration of ten years
thereafter, when the balance of the shares become transferable,
except upon death, disability or normal retirement or a change in
the control of the Company, or with the consent of the Compensation
Committee (which consent will only be granted upon special request
in case of hardship, to purchase a home, to pay for a child's
education or for any other reason deemed appropriate by the
Compensation Committee).-10-
The following table contains information concerning the grant of stock
options with respect to fiscal 19961997 to each of the executives named in the
Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAROption Grants In Last Fiscal Year
Individual Grants
--------------------------------------------------------
Percent
of
Total Potential Realizable Value
Options at Assumed Annual
Granted Market Rates of Stock Price
to Exercise Price Appreciation For Option Term
Employ- or on ---------------------------------
ees in Base Date At 5% At 10%
Options Fiscal Price of Expiration Annual Annual
Name Granted Year ($/Sh) Grant Date Growth Growth
All Stockholders'
Stock appreciation N/A N/A N/A N/A N/A $978,000,000 $2,478,000,000$821,368,000 $2,081,519,000
W. Ray Wallace 75,000 15.6% $31.50 $31.50 03/21/07 $1,486,000 $3,765,000
Timothy R. Wallace 50,000 10.4% $31.50 $31.50 03/21/07 $991,000 $2,510,000
John T. Sanford 14,925 3.1% $33.50 $33.50 04/13/03 $314,000 $797,000
35,000 7.3% $31.50 $31.50 03/21/07 $693,000 $1,757,000
Ralph A. Banks, Jr. - - - - - - -
Timothy R. Wallace - - - - - - -
John T. Sanford 13,202 - $37,875 $37,875 04/13/03 $314,000 $797,000
Mark W. Stiles - - - - - - -500 0.1% $36.00 $36.00 04/13/03 $11,000 $29,000
1,108 0.2% $37.50 $37.50 04/13/03 $26,000 $66,000
15,000 3.1% $31.50 $31.50 03/21/07 $297,000 $753,000
John Dane III - - - - - - -27,682 5.8% $36.125 $36.125 06/29/97 $629,000 $1,594,000
The Company has not granted any stock appreciation rights.
These stock options shown inwere original grants pursuant to the table1993 Plan.
These stock options were granted pursuant to the reload provisions of the 1993 plan. ThePlan.
These options would have expired on April 13, 2003, but Mr. Dane's association with the Company
has not
granted any stock appreciation rights but most ofterminated upon the Company's distribution to its stockholders of all stock option agreements provide that the option may
be surrendered for cash for the difference between the then
market value of the shares and the option exercise price
within thirty (30) days after the acquisition of fifty percent
(50%) of the Company's Common Stock pursuantHalter Marine Group, Inc.
Therefore, these options, as well as all other employee stock options granted to a tender or
exchange offer other than one made by the Company.Mr. Dane, will expire on
June 29, 1997.
-11-
The table below sets forth information concerning each exercise of stock
options by each of the named executive officers during the most recently
completed fiscal year and the number of exercisable and unexercisable stock
options held by them and the fiscal year-end value of the exercisable and
unexercisable options.
Aggregated Option Exercises In Last Fiscal Year And FY-End Option Values
Value of
Number of Unexercised
Unexercised in-the-Money
Shares Options at Fiscal Options at Fiscal
Acquired Value Year-End Year-End
Name on Realized
Exercise Exercisable/ Exercisable/
Unexercisable Unexercisable
W. Ray Wallace - - 450,000 $6,181,253
75,000 $515,625465,000 $4,311,878
135,000 $22,500
Timothy R. Wallace 26,427 $579,922 142,323 $1,839,782
101,250 $881,0916,249 $101,546 143,574 $1,187,311
143,750 $347,653
John T. Sanford 58,088 $1,057,238 46,699 $322,620
101,250 $881,09122,368 $196,565 65,506 $263,180
128,750 $347,653
Ralph A. Banks, Jr. 4,500 $62,750 - $-
- $-
Mark W. Stiles - - 12,317 $99,539
20,250 $176,2183,733 $45,928 10,584 $41,832
34,858 $69,531
John Dane III - - 70,030 $597,874
101,250 $881,09184,500 $1,009,387 13,030 $-
121,432 $347,653
Career Stock Awards
In fiscal 1997, the Company granted under the 1993 Plan career stock
awards to certain executive officers and key employees. The recipients of the
awards were given shares of Common Stock of the Company that were issued in
their respective names. Each recipient receives dividends and other
distributions on his shares when and if paid by the Company and is entitled to
vote his shares on any matter submitted to a vote of the holders of the Common
Stock of the Company. However, the shares so awarded to a recipient may not
be sold, transferred, pledged or in any manner alienated except upon the
recipient's retirement at age 65 (or earlier retirement, with the approval of
the Human Resources Committee), death or disability or except upon a Change in
Control of the Company. For the definition of Change in Control, see
"Compensation of Directors" above. If the employment of the recipient is
terminated for any reason other than death or disability prior to the
recipient's retirement, then absent a merger, consolidation or change of
control of the Company, the shares of stock so awarded to the recipient are
forfeited to the Company as of the date of the recipient's termination of
employment.
-12-
The following table sets forth each long-term incentive plan award (the
career stock awards) made during fiscal 1997 to each of the executives named
in the Summary Compensation Table .
Long-Term Incentive Plans -- Awards in Last Fiscal year
Performance
Number of Or Other
Shares, Period Until
Units Or Maturation
Name Year Other Rights Or Payout (1)
W. Ray Wallace 1997 - -
1996 - -
1995 - -
Timothy R. Wallace 1997 3,000 12/30/2018
1996 - -
1995 - -
John T. Sanford 1997 2,500 05/18/2017
1996 - -
1995 - -
Ralph A. Banks, Jr. 1997 - -
1996 - -
1995 - -
Mark W. Stiles 1997 2,000 11/03/2013
1996 - -
1995 - -
John Dane III 1997 - -
1996 - -
1995 - -
(1) The date of maturation shown in the above table is the date when the
person will attain age 65. The shares may not be sold, transferred,
pledged or in any manner alienated except upon the recipient's retirement
at age 65 (or earlier with the approval of the Human Resources Committee),
death or disability or except upon a merger, consolidation or change of
control of the Company. If the employment of the recipient is terminated
for any reason other than death or disability prior to the recipient's
retirement, then absent a merger, consolidation or change of control of
the Company, the shares of stock are forfeited to the Company as of the
date of termination of employment.
Retirement Plans
The Company has noncontributory, defined benefit retirement and death
benefit plans which are available to all eligible employees who have completed
specified periods of employment. The benefits of the plans are funded by
periodic contributions to retirement trusts that invest the Company's
contributions and earnings thereon in order to pay the benefits to the
employees. The plans provide for the payment of monthly retirement benefits
determined under a calculation based on credited years of service and/or a
participant's compensation. Retirement benefits are paid to participants upon
normal retirement at the age of 65 or later, or upon early retirement. The
plans also provide for the payment of certain disability and death
benefits. The Company has also adopted a Supplemental Pension Plan that
permits the payment of supplemental benefits to certain employees whose annual
benefits under the foregoing retirement plan would exceed those permitted by
the Internal Revenue Code of 1986, as amended (the "Code"). The Supplemental
Pension Plan provides that if at any time the amount of the annual retirement
benefit which would otherwise be payable under the Company's pension plan is
or becomes limited by reason of compliance with the Code, such person shall be
entitled to receive a supplemental pension benefit equal to the difference
between the benefit that such person receives under the Company's pension plan
and the benefit that such person would have received if such limitation had
not been in effect. The benefits are payable from the general assets of the
Company.
-13-
The following table reflects the estimated aggregate annual benefits,
computed on the basis of a monthly benefit payable for ten (10) years certain
and life thereafter, payable under such plans to a fully vested executive officerparticipant of
the Company upon retirement at age 65 after 10, 20, 30 and 40 credited years
of service at the annual remuneration levels set forth in the table.
Pension Plan Table
Remuneration Years of Service
Remuneration
10 20 30 40
$100,000 $9,760 $19,520 $29,290 $39,040
$150,000 14,760 29,520 44,280 59,040
$200,000 19,760 39,520 59,280 79,040
$250,000 24,760 49,520 74,280 99,040$24,760 $49,520 $74,280 $99,040
$300,000 29,760 59,520 89,280 119,040$29,760 $59,520 $89,280 $119,040
$350,000 34,760 69,520 104,280 139,040$34,760 $69,520 $104,280 $139,040
$400,000 39,760 79,520 119,280 159,040$39,760 $79,520 $119,280 $159,040
$450,000 44,760 89,520 134,280 179,040$44,760 $89,520 $134,280 $179,040
$500,000 49,760 99,520 149,280 199,040$49,760 $99,520 $149,280 $199,040
$550,000 54,760 109,520 164,280 219,040$54,760 $109,520 $164,280 $219,040
$600,000 59,760 119,520 179,280 239,040$59,760 $119,520 $179,280 $239,040
$650,000 64,760 129,520 194,280 259,040$64,760 $129,520 $194,280 $259,040
$700,000 69,760 139,520 209,280 279,040$69,760 $139,520 $209,280 $279,040
$750,000 74,760 149,520 224,280 299,040$74,760 $149,520 $224,280 $299,040
$800,000 79,760 159,520 239,280 319,040$79,760 $159,520 $239,280 $319,040
$850,000 84,760 169,520 254,280 339,040$84,760 $169,520 $254,280 $339,040
$900,000 $89,760 $179,520 $269,280 $359,040
$950,000 $94,760 $189,520 $284,280 $379,040
$1,000,000 $99,760 $199,520 $299,280 $399,040
$1,050,000 $104,760 $209,520 $314,280 $419,040
$1,100,000 $109,760 $219,250 $329,280 $439,040
The compensation covered under those plans is the same as the salary and
bonus reported earlier in the Summary Compensation Table. The annual benefits
shown are not subject to any deduction for Social Security benefits or other
offset amounts. The five (5)
executive officers named in the Summary Compensation Table above
haveMr. Timothy R. Wallace has 22 credited years of service under
the plans under which they are
covered as follows: Mr. Timothy R. Wallace has 21 years;he is covered; Mr. Sanford has 12 years;13 years and Mr. Stiles
has 4 years; and Mr. Dane has 95 years. Mr.Messrs. W. Ray Wallace and Ralph A. Banks, Jr. began receiving
pension payments at age 65 of $126,933 and $76,848, respectively, per year
from the Company's regular retirement plan.
-14-
The Company also is obligated to pay supplemental retirement benefits to
Mr. W. Ray Wallace, Chairman, President and Chief Executive Officer of the
Company, under an agreement made by the Company in 1990 which provides that
the Company will supplement, commencing at his actual retirement, his other
retirement benefits from the Company so that his aggregate retirement benefits
from the Company will equal eighty percent (80%) of the average of his annual
cash compensation earned during his most highly compensated five (5) consecutive
years of employment. At March 31, 1996,1997, the estimated annual benefit payable
to him upon his retirement under this unfunded supplemental retirement program
was $1,838,000.$2,293,000.
The Company maintains a Section 401(k) plan that permits employees to
elect to set aside up to ten percent (10%) of their compensation (subject to
the maximum limit on the amount of compensation permitted by the Code to be
deferred for this purpose) in a trust to pay future retirement benefits. The
Company matches fifty percent (50%) of the lesser of (i) the amount that the
employee elects to set aside for this purpose or (ii) six percent (6%) of the
employee's compensation. The Company also maintains a similar plan for its
"highly compensated employees", as defined in the Code. The highly
compensated employees are not limited as to the percentage of their
compensation which may be contributed to the plan; however, the Company only
matches the lesser of (i) the amount that the employee elects to set aside for
this purpose or (ii) six percent (6%) of the employee's compensation (but the
Company never contributes more than it would have contributed if the "highly
compensated employees" had participated in the Section 401(k) plan).
Participation in the Section 401(k) plan by all such "highly compensated
employees" would have an adverse effect on the Section 401(k) plan.
Contributions under the latter plan are also made to a trust, but unlike the
contributions by the Company to the trust created pursuant to the Section
401(k) plan (which are deductible by the Company when paid to the trust), the
contributions of the Company to the trust for the "highly compensated
employees" are not deductible by the Company for federal income tax purposes
until such amounts are paid out by the trust. Further, the assets of the
trust created under the plan for the "highly compensated employees" are
considered part of the general assets of the Company that can be attached by
its creditors.
Change of Control Agreements
On June 8, 1989, the Board of Directors authorized agreements with each
of the executive officers named in the Summary Compensation Table above and
others to provide certain severance benefits to them in the event of a
termination of employment following a change of control (as defined in the
agreements) of the Company. Each agreement provides that if there is a change
of control of the Company and if the Company terminates the executive's
employment other than as a result of the executive's death, disability or
retirement, or for cause (as defined in the agreements), or if the executive
terminates his employment for good reason (as defined in the agreements), then
the Company will pay to such executive a lump sum equal to three (3) times the
amount of the executive's base salary and bonus paid by the Company and its
subsidiaries to the executive during the twelve (12) months prior to
termination or, if higher, the twelve (12) months prior to the change of
control of the Company.
The severance benefits provided by the agreements also include certain
fringe benefits to which each executive would have been entitled if the
executive had continued in the employment of the Company for thirty-six (36)
months after the executive's termination, and a supplemental benefit based on
the Company's retirement plan, which benefit is payable in a series of cash
payments.
The agreements further provide that if any payment to which the executive
is entitled would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended, then the Company will pay to the
executive an additional amount so that the net amount retained by the
executive is equal to the amount that otherwise would be payable to the
executive if no such excise tax had been imposed.
-15-
Report of the CompensationHuman Resources Committee on Executive Compensation
The following report is submitted by the CompensationHuman Resources Committee for
inclusion in this Proxy Statement pursuant to the rules of the Securities and
Exchange Commission:Commission with respect to Executive Compensation:
The Company's executive compensation program is administered by the CompensationHuman
Resources Committee appointed by("the Committee") of the Board of Directors
andDirectors. The
Committee, which is composed entirely of independent outside directors. The Compensation
Committeedirectors, is
responsible for setting and overseeing the administration of policypolicies that
governsgovern the compensation of the Company's executives. It establishes the base
salary, the incentive compensation, the deferred compensation, and the stock
options ofand other stock based awards for each Corporate officer and certain
key operating officers of the Company.
It is the Compensation Committee's policy to provide a competitive and comprehensive
compensation program to attract, motivate, reward and retain the key
executives needed to enhance the profitability of the Company and to create
value for its stockholders. The Compensation Committee believes that the Company's
executive compensation should consist of competitive base salaries and
incentive compensation plans that reward both short and long term
performance. The key components of the Company's executive compensation
program in the last fiscal year were a base salary, incentive compensation,
and in some cases, deferred compensation.compensation, stock options and restricted stock
awards. The Compensation Committee periodically reviews each component of the Company's
executive compensation program to ensure that pay levels and incentive
opportunities are competitive, directly linked to performance and aligned with
the interest of stockholders. The Compensation Committee determines each executive's
compensation based upon past and expected future performance, the executive's
responsibilities within the Company, and the executive's value to the Company
as determined by the Committee.
Base Salary
The Compensation Committee each year reviews each executive's performance and
establishes each executive's base salary based upon past and expected future
performance, and the executive's responsibilities within the Company. The CompensationIn
fixing base salaries, the Committee also considers a survey of salaries of senior
executives of other comparable companies as reflected in a survey provided by
an independent outside consultant.
Base
salaries are determined each year for each executive of the
Company. Base salaries for the Chief Executive Officer and each of
the other four most highly compensated officers for the fiscal
years ending March 31, 1996, 1995 and 1994, are shown in the
Summary Compensation Table.
Incentive Compensation
TheIncentive bonuses awarded annually to the Company's annual incentive bonuses of its executive officers
and key operating officers are tied to the Company's success in achieving
significant performance goals. An incentive bonus is determined for each
executive upon the basis of the achievement of certain financial goals set
each year by the Compensation Committee at the beginning of the year. The Company's
corporate executives' performance targets are directly related to the
Company's consolidated income before federal income tax; and targets of
division executives responsible for the operation of a division or segment of
the Company are directly related to the operating profits achieved by that
division or segment. The performance goals are predetermined by the CompensationHuman
Resource Committee on the basis of the Company's past performance and
anticipated future performance. In the case of both corporate and division
executives, the total amount of incentive compensation that may be earned by
any executive in any year is limited to a predetermined maximum percentage of
his or her base salary.
Stock Options, Restricted Stock Grants and Deferred Compensation
Long-term incentive awards provided by the stockholder-approved 1993
Stock Option and Incentive Plan are designed to develop and retain strong
management through stock ownership, deferred compensation, stock options and
other stock based incentive awards.
Stock options historically have been and in fiscal 1997 were the primary
long-term incentive granted to 12 executive officers, 12 key operating
officers and approximately 60 key employees in fiscal 1997. Options to
purchase a total of 480,456 shares were granted in fiscal 1997. The long term incentive elementCommittee
believes that a significant portion of senior executives' compensation should
be dependent on value created for the shareholders. Options are an excellent
vehicle to accomplish this by tying the executives' interest directly to the
shareholders' interests. Options are granted at the fair market value of the
Company's management
compensation programCommon Stock on the date of grant and vest in annual increments over
five to eight years after such date if the optionee is generallystill employed or vest
fully at the date of normal retirement.
-16-
The number of options that the Committee grants to executive officers is
based on individual performance and level of responsibility. The award level
must be sufficient in size to provide a strong incentive for executives to
work for long-term business interests and become meaningful owners of the
formbusiness. The number of stock option
grants. The Committee's objectiveoptions currently held by an executive is tonot a
factor in determining individual grants since such a factor would create an
opportunity for
officersincentive to exercise options and othersell the shares.
A limited number of senior executives also received grants of Career
Shares in 1997. Career Shares are shares of the Company's Common Stock
granted with a restriction designed to promote long-term retention, as well as
superior long-term performance, of key employeesstrategic and operating management.
These restrictions generally expire after the executive reaches normal
retirement age. The number of Career Shares granted to senior executives also
recognizes the increased responsibility and complexity of senior positions.
Individual grants are based on personal contribution and level of
responsibility within the organization. The number of shares currently held
by an executive is not a factor in determining individual grants since Career
Shares are primarily designed to promote long-term retention and steadily
increasing stock ownership by the Company's key executives. A total of 20,000
Career Shares were granted to 14 key executives in 1997.
To encourage the retention of certain key and strategically important
executives focused on continuous improvement and growth of the Company, to acquire a
proprietary interest in the
Company that aligns the executive's
interest with the interest of the Company's stockholders.
In April, 1993, the Compensation Committee made awards under
the Executive Stock Ownership Program of nonqualified stock options
on a larger number of shares that typically had been granted in
previous years and provided for a ratable exercise over an eight
year period (instead of the usual five years) and also provided
that the shares acquired upon exercise would be subject to
restrictions on transferability for periods after exercise of five
years (when restrictions would lapse on fifty percent of the
shares) and ten years (when restrictions would lapse on the other
fifty percent of the shares), except in the case of the death,
disability or retirement or a change in control of the Company or
with the consent of the Compensation Committee. Consequently, the
Compensation Committee did not award any stock options to
executives in the fiscal year ended March 31, 1996, other than
reload options.
Commencing April 1, 1994, the Companyhas established a deferred compensation plan for certain key officers
of the Company other
than Mr.including Messrs. Timothy R. Wallace, John T. Sanford and Mark
W. Ray Wallace, Chairman, President and Chief Executive
Officer.Stiles. Under the deferred compensation plan, an amount equal to ten
percent (10%) of theeach participant's annual base salary and incentive
compensation is accrued to his deferred account on the books of the Company, together withCompany.
All such deferrals bear interest at the prime rate of a specified national bank,from time to be paid, as
determined by the Board of Directors of the Company after
consultation with the participant in annual installments over five
years or other periods as determined by the Board of Directors.
Payment of the deferred compensation commences one year and one day
after the participant's termination of employment with the Company.
If the participant dies, the installments are paid to his or her
designated beneficiary. The installment payments terminate if the
participant, without the prior written consent of the Company,
directly or indirectly, becomes or serves as an officer, employee,
owner or partner of any business which competes in a material
manner with the Company.time at Texas
Commerce Bank.
Chief Executive Officer Compensation
The base salary, incentive compensation and stock option grants to Mr. W.
Ray Wallace, the Company's Chief Executive Officer, are set within the
philosophy and policies enunciated above for all other executives of the
Company.
His base salary in Fiscal 1996fiscal 1997 was fixed by the Committee after reviewing
the performance of the Company in Fiscal 1995,fiscal 1996, after considering the
positioning of the Company for future years, and after assessing Mr. Wallace's
past and ongoing personal performance in the position of Chief Executive
Officer. There was no change in his base salary for fiscal 1997. The
Compensation
Committee did not follow any set formula in making such determination, but
considered, among other things, the report of a nationally recognized
consulting firm employed to survey the compensation of chief executive
officers of other companies, with particular emphasis on companies with sales
volumes comparable to that of the Company.
Mr. Wallace's incentive compensation in Fiscal 1996fiscal 1997 was derived from a
formula directly related to the Company's pretax income from continuing and
discontinued operations, which in Fiscal 1996fiscal 1997 totaled $186$223 million, up from
$147$186 million in Fiscal 1995.fiscal 1996. His incentive compensation for the year is
payable fifty (50%) percent currently and fifty (50%) percent in
two (2) equal annual installments commencing in April, 1997.currently.
Mr. Wallace also has a long term deferred compensation plan with respect tounder which
the Company sets asideawards annually an amount equal to fifteen percent (15%) of Mr.
Wallace's combined salary and bonusincentive compensation in each fiscal year.
These deferrals bear interest at the prime rate from time to time at Texas
Commerce Bank.
-17-
Pursuant to an agreement between the Company and Mr. Wallace dated July
18, 1990, the Company is obligated to supplement his pension plan and other
retirement benefits from the Company so that the aggregate amount of all his
retirement benefits from the Company will equal eighty percent (80%) of his
average annual compensation for the five (5) consecutive years in which he was
most highly compensated by the Company.
Dean P. Guerin,Conclusion
The Committee believes that the Company's compensation policies and
practices are appropriately designed to attract, retain and motivate key
executives to guide the Company in the future and to produce results which
will enhance the Company's long-term prospects, thereby ultimately enriching
shareholder values.
Jess T. Hay, Chairman David W. Biegler, Member
CompensationHuman Resource Committee Jess T. Hay,Clifford J. Grum, Member
Ray J. Pulley,Diana Natalicio, Member
Compensation Committee Interlocks and Insider Participation
No member ofwho served during the Company's fiscal year ended March 31,
1997 on either the current Human Resources Committee or the former
Compensation Committee is a current or former officer or employee of the
Company or any of its subsidiaries. Mr.
W. Ray Wallace was, until April 1995, prior to Mr. Biegler's membershipDuring the Company's fiscal year ended
March 31, 1997, no executive officer of the Company served as a member of a
compensation committee (or other board committee performing equivalent
functions) or as a director of any other entity which has an executive officer
serving on either the current Human Resources Committee or former Compensation
Committee of the Company, a director of ENSERCH
Corporation and a member of its Audit Committee and the Chairman of
its Compensation Committee, of which Mr. Biegler, a director of the
Company, is the Chairman, President and Chief Executive Officer.
The members of the Board of Directors of the Company were fully
informed of this relationship.
Performance GraphCompany.
PERFORMANCE GRAPH
The following graph shows a comparison of the five (5) year cumulative
return (assuming reinvestment of any dividends) for the Company, the New York
Stock Exchange Index and the Dow Jones Transportation Equipment Index. The
sources for the information contained in this table in respect to the return
for the Company and for the Dow Jones Transportation Equipment Index are
STAR Services, Inc.Research Data Group and, in respect to the New York Stock Exchange Index, is
Media General Financial Services.
-18-
[Appearing at this point is a performance graph comparing the
five (5) year cumulative return (assuming reinvestment of any
dividends) for the Company, the New York Stock Exchange Index and
the Dow Jones Transportation Equipment Index, with the following
plot points expressed in dollars:
1991
1992 1993 1994 1995 1996 1997
Trinity 100 116 184 233 233 222159 201 201 192 170
DJ Transport. 100 120 138 124 131 157 181 162 190156
NYSE Index 100 110 126 131 146 190]115 119 133 173 202]
ITEM 2 - AMENDMENT OF 1993 STOCK OPTION AND INCENTIVE PLAN
The following proposal will be offered by the Board of Directors: The
Board of Directors recommends that you vote FOR this proposal.
RESOLVED, that the stockholders of the Company hereby approve an
amendment to the 1993 Stock Option and Incentive Plan to add the following new
Section 24:
24. Maximum Compensation of an Employee. Notwithstanding the
foregoing provisions of this Plan, on and after July 16, 1997 the maximum
number of Shares for which grants of stock options and Stock Appreciation
Rights may be made to an employee in any fiscal year of the Company shall
not exceed one-half of one percent (0.5%) of the total number of Shares
of the Company outstanding on March 31, 1997, and the exercise price of any
stock option or Stock Appreciation Right granted on and after July 16,
1997 shall in no event be less than the Fair Market Value of the Shares
at the time of the grant. The sole purpose of this proposed amendment to
the 1993 Plan is to entitle the Company to continue to deduct the compensation
expense resulting from stock option exercises (and if and when granted,
exercises of stock appreciation rights) by certain executives for federal
income tax purposes. In order for the Company to continue to receive this tax
deduction, Treasury Regulations Section 1.162-27 issued on December 20, 1995
with respect to Internal Revenue Code Section 162(m) requires that the 1993
Plan be amended, and that the amendment be submitted to stockholders, to limit
the maximum number of shares for which stock options or rights may be granted
to any employee during a specified period so as to enable stockholders to "...
calculate the maximum amount that would be attributable to the exercise of
options on the basis of their assumptions as to the future stock price." The
proposed amendment is intended to comply with this requirement by providing a
maximum number of shares of Common Stock of the Company for which stock
options and stock appreciation rights may be granted to any employee in any
fiscal year at an exercise price at not less than the fair market value of the
shares at the time of the grant.
-19-
The Human Resources Committee (formerly, the Compensation Committee and
hereinafter referred to as the "Committee") has historically granted
individual awards that have been significantly less than the maximum number of
shares which may be awarded under the proposed amendment to the 1993 Plan.
Further, the exercise price of the stock options awarded by the Committee
always have been at the fair market value of the shares at the time of the
grant. This amendment is not intended to result in compensation above the
level that would otherwise be provided. If this amendment is not approved,
the 1993 Plan will continue in effect in its present form. The Board of
Directors has made no determination as to what action, if any, will be taken
with respect to this matter if the amendment is not approved by the
stockholders.
Copies of the 1993 Plan as currently in effect will be provided to
stockholders without charge upon written request to Mr. F. Dean Phelps, Jr.,
Vice President, Trinity Industries, Inc., P.O. Box 568887, Dallas, TX 75356-
8887 or upon telephone request to him at (214) 631-4420.
Summary of 1993 Plan
The 1993 Plan permits the grant of any or all of the following types of
awards: (1) stock options, including incentive stock options; (2) stock
appreciation rights, in tandem with stock options or freestanding; (3)
restricted stock; (4) performance awards; (5) dividend equivalent rights, in
tandem with other awards or freestanding; and (6) other awards based on,
payable in, or otherwise related to Common Stock of the Company. The 1993
Plan was originally approved by shareholders on July 21, 1993. It may be
terminated by the Board of Directors at any time.
The 1993 Plan provides that the maximum number of shares of Common Stock
with respect to which awards may be granted pursuant to the 1993 Plan is
1,778,933 shares. As awards under the 1993 Plan or stock options granted
under prior plans expire, terminate or are surrendered unexercised, the shares
underlying such awards and options are available for further awards under the
1993 Plan. Under the proposed amendment, the maximum number of shares for
which stock options and stock appreciation rights can be awarded on and after
July 15, 1997 would be limited to one-half of one percent (0.5%) of the shares
of Common Stock of the Company outstanding on March 31, 1997.
The 1993 Plan is administered by the Committee. The Committee currently
consists of four outside directors, none of whom receive remuneration from the
Company or its affiliates in any capacity other than as a director. The Plan
requires that the committee named by the Board of Directors to administer the
1993 Plan must consist of not less than three (3) members of the Board of
Directors.
The Committee determines the persons to whom awards are granted, the type
of award, and, if applicable, the number of shares to be covered by the
award. The persons eligible to receive awards is limited to employees who are
either directors or officers of the Company or one of its affiliates or who
are in managerial or other key positions in the Company or one of its
affiliates. In making the determination as to person to whom awards are
granted, the Committee considers the position and responsibilities of the
person, his or her importance to the Company and its affiliates, the duties of
such person, his or her past, present and potential contributions to the
growth and success of the Company and its affiliates, and such other factors
as the Committee deems relevant in connection with accomplishing the purposes
of the 1993 Plan.
Stock Options. The Committee may grant either an
incentive stock option (as that term is used in Section 422 of the Internal
Revenue Code of 1986) or any other stock option. In the case of an incentive
stock option, the option exercise price must be not less than one hundred
percent (100%) of the last reported sales price of the Company's Common Stock
on the New York Stock Exchange on the date of grant and, in case of any
employee owning more than ten percent (10%) of the total outstanding Common
Stock, the option price of an incentive stock option must be at least one
hundred ten percent (110%) of the last reported sales price. If the proposed
amendment is approved by stockholders, no stock option granted on or after
July 15, 1997 will have an exercise price that is less than one hundred
percent (100%) of the last reported sale price of the Company's Common Stock
on the New York Stock Exchange on the date of grant. Recipients of stock
options may pay the option exercise price in cash or by delivering to the
Company shares of the Company's Common Stock already owned by the optionee
having a fair market value equal to the aggregate option exercise price.
-20-
If an optionee delivers shares of Common Stock of the Company already
owned by the optionee in full or partial payment of the exercise price for any
stock option granted under the 1993 Plan or any prior stock option plan of the
Company, the Committee may authorize the automatic grant of a new option (a
"Reload Option") for the same number of shares as the number of shares of
Common Stock surrendered in full or partial payment of the option exercise
price of the underlying stock option being exercised. The option exercise
price of the Reload Option will be the last reported sale price of the
Company's Common Stock on the New York Stock Exchange on the date of the
exercise of the underlying stock option. A Reload Option cannot be exercised
earlier than six (6) months from the date of its grant nor later than the time
when the underlying option exercised by the surrender of the already owned
shares could have been last exercised. The Committee may impose additional
terms, conditions and restrictions on any Reload Option and the shares
acquired upon the exercise of the Reload Option. Stock options will be
exercisable as set forth in the option agreements pursuant to which they are
issued, but in no event are incentive stock options exercisable after the
expiration of ten (10) years from the date of grant (or, in the case of an
employee owning more than ten percent (10%) of the total outstanding Common
Stock, five (5) years from the date of grant). Regardless of any vesting
schedule contained in an option agreement, the 1993 Plan provides for the
acceleration of the vesting of stock options in certain events, including the
optionee's death, disability or retirement, or a Change in Control of the
Company. See "Compensation of Directors" above for the definition of "Change
in Control". All rights to exercise a stock option terminate immediately if
an optionee is discharged for cause, after ten (10) days in the event of an
optionee's resignation, after three (3) months in the case of an optionee's
disability, after twelve (12) months in the case of an optionee's death, and
after three (3) years in case of the optionee's retirement. Options are not
transferrable other than by will or the laws of descent and distribution,
except that with the approval of the Committee, an option that is not an
incentive stock option may be transferred to a trust for the benefit of one
(1) or more members of the immediate family of the optionee.
The Company is of the opinion that a person receiving a stock option will
not realize any compensation income under the Internal Revenue Code upon the
grant of the option. However, he or she will realize compensation income at
the time of exercise (except for options which are incentive stock options or
where restricted stock is acquired upon the exercise of the option) in the
amount of the difference between the option exercise price and the fair market
value on the date of exercise. The Company is also of the opinion that for
its federal income tax purposes, the Company will be entitled to a deduction
equal to the amount of compensation income realized by optionee at the time of
exercise. In the case of incentive stock options, although no compensation
income is realized upon exercise, the excess of the fair market value on the
date of exercise over the option price is included in alternative minimum
taxable income for alternative minimum tax purposes.
Stock Appreciation Rights. A stock appreciation right may be granted in
conjunction with or independent of a stock option. A stock appreciation
right is the right to receive an amount equal to the excess of the fair market
value of a share of the Company's Common Stock on the date of exercise over
the exercise price, i.e., the fair market value of a share of Common Stock on
the date of grant (or other value specified in the agreement granting the
stock appreciation right). A stock appreciation right granted in tandem with
a stock option will require the holder, upon exercise, to surrender the
related stock option, or a portion thereof, with respect to the number of
shares as to which such stock appreciation right is exercised. If the
proposed amendment is approved by stockholders, no stock appreciation right
granted on or after July 15, 1997 will have an exercise price that is less
than one hundred percent (100%) of the last reported sale price of the
Company's Common Stock on the New York Stock Exchange on the date of the grant.
A stock appreciation right granted independent of a stock option will be
exercisable as determined by the Committee. An independent stock appreciation
right will entitle the holder, upon exercise, to receive payment as described
above either in cash or in shares of Common Stock of the Company, or a
combination thereof, as specified in the grant of the stock appreciation
right. The Committee may limit the amount payable upon exercise of any Stock
Appreciation Right. Any such limitation will be specified in the grant.
-21-
In the case of a stock appreciation right granted either independent of
or in conjunction with a stock option, the Company is of the opinion that the
person to whom the stock appreciation right is granted will not realize any
compensation income at the time of the grant. However, the cash, or in case
of shares delivered pursuant to the exercise of any such stock appreciation
right, the fair market value of the shares, will be treated as compensation
income of the grantee at the time of exercise, and the Company will be
entitled to a federal income tax deduction in the amount of the compensation
income realized by the grantee of the stock appreciation right at the time of
exercise.
Restricted Stock. An award of restricted stock may be granted under the
1993 Plan, either at no cost to the recipient or for such cost as may be
required by law or otherwise as determined by the Committee. The terms and
conditions of the restricted stock will be specified at the time of the
grant. Restricted stock may not be disposed of by the recipient until the
restrictions specified in the award expire. The Committee will determine at
the time of the award what rights, if any, the person to whom an award of
restricted stock is made will have with respect to restricted stock during the
restriction period, including the right to vote the shares and the right to
receive any dividends or other distributions applicable to the shares.
In the case of restricted stock, the Company is of the opinion that the
recipient will realize compensation income in an amount equal to the fair
market value of such stock less any amount paid for such stock at a time when
the employee's rights with respect to such stock are no longer subject to a
substantial risk of forfeiture. However, the recipient may make a special
election provided in the Internal Revenue Code to be taxed at the time of the
receipt of the award (as if the restrictions did not exist) but he or she will
not be allowed any deduction if the restricted stock is later forfeited.
Dividends, if any, paid to the holder of the restricted stock award during the
restriction period will be taxable as compensation income (or as dividend
income if the election referred to in the preceding sentence has been made).
The Company is also of the opinion that, subject to the limitations of
Internal Revenue Code Section 162(m), it will be entitled to a federal income
deduction at the time and equal to the amount that compensation income is
realized by the recipient of the restricted stock.
Performance Awards. A performance award may be granted under the 1993
Plan, either at no cost to the recipient or for such cost as may be required
by law or as otherwise determined by the Committee. Performance awards may
take the form of performance shares, or of performance units or rights valued
by reference to the value of Common Stock of the Company or by reference to
some other formula or method. Any performance award may require attainment of
performance criteria within a specified period in order for the award to be
earned. Performance awards, when and if payable, may be paid in cash, stock,
other consideration, or a combination thereof. If the Committee determines,
in its sole discretion, that the established performance measures or
objectives are no longer suitable to Company objectives because of a change in
the Company's business, operations, corporate structure, or for other reasons
that the Committee deems satisfactory, the Committee may modify the
performance measures or objectives and/or the performance period.
The Company is of the opinion that the recipient of a performance award
will realize compensation income when the recipient's rights with respect to
such award are no longer subject to a substantial risk of forfeiture in an
amount equal to the excess of the fair market value of such award at that time
over the amount, if any, paid for such award, unless the recipient makes a
special election provided in the Internal Revenue Code. The Company is also
of the opinion that, subject to the limitations of Internal Revenue Code
Section 162(m), it will be entitled to a federal income tax deduction at the
time and equal to the amount that compensation income is realized by the
recipient of the performance award.
Dividend Equivalent Rights and Interest Equivalents. A dividend
equivalent right gives the recipient the right to receive credits for
dividends that would be paid if the recipient held a specified number of
shares of Common Stock of the Company. A dividend equivalent right may be
granted as a component of another award or as a freestanding award. Dividend
equivalents credited to the holder of a dividend equivalent right may be paid
currently or be deemed to be reinvested in additional shares (which may
thereafter accrue additional dividend equivalents) at fair market value at the
time of deemed reinvestment. Dividend equivalent rights may be settled in
cash, shares, or a combination thereof, in a single payment or in
installments, as specified in the award.
-22-
In the case of a dividend equivalent right, the Company is of the opinion
that the recipient of the dividend equivalent right will realize compensation
income in an amount equal to the cash or fair market value of the shares as
and when the same becomes payable to the recipient. The Company is also of
the opinion that, subject to the limitations of Internal Revenue Code Section
162(m), it will be entitled to a federal income tax deduction at the time and
equal to the amount that compensation income is realized by the recipient.
Other Awards. Other forms of award based upon, payable in, or otherwise
related in whole or in part to Common Stock of the Company may be granted
under the 1993 Plan if the Committee determines that such awards are
consistent with the purposes and restrictions of the 1993 Plan. The terms and
conditions of such awards shall be specified by the grant. Such awards shall
be granted for no cash consideration, for such minimum consideration as may be
required by applicable law, or for such other consideration as may be
specified by the Committee. The federal income tax consequences of such other
awards will depend upon the form that such awards may take.
Adjustments upon Changes in Capitalization. The number of shares subject
to an award will be adjusted for any subdivision or consolidation of shares of
Common Stock of the Company or upon stock dividends payable in stock of the
Company or in case of any change from par value stock to stock of a different
par value or without par value or, in the discretion of the Board of
Directors, any distribution by the Company of shares of stock of another
corporation.
Amendments. All provisions of the 1993 Plan (including any award under
the plan) may at any time or from time to time be modified or amended by the
Board of Directors. However, no outstanding award may be adversely modified,
impaired or canceled without the consent of the holder thereof, and the 1993
Plan cannot be amended, without stockholder approval, to increase the maximum
number of shares subject to the 1993 Plan, or to materially modify the
requirements as to eligibility for participation in the 1993 Plan or
materially increase the benefits accruing to persons eligible to participate
in the 1993 Plan, or if stockholder approval is necessary in order to comply
with Rule 16b-3 under the Securities Exchange Act of 1934 or to comply with
any other applicable law, regulation, or listing requirement or to qualify for
an exemption or characterization deemed desirable by the Company's Board of
Directors.
Termination. The 1993 Plan will terminate only by resolution of the
Board of Directors. However, no incentive stock option may be granted under
the 1993 Plan after April 12, 2003.
The awards that the Committee will grant to persons eligible to receive
awards under the 1993 Plan is not currently determinable. Information
regarding stock options and restricted stock awarded to the executive officers
named in the Summary Compensation Table is set forth on pages 10, 11 and 12 of
the proxy statement. At April 30, 1997, options were granted and outstanding
under the 1993 Plan on 1,634,781 shares.
At March 31, 1997, 43,046,363 shares of Common Stock of the Company were
outstanding. The closing price of a share of Common Stock of the Company on
the New York Stock Exchange consolidated tape on May 30, 1997 was 29.875.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who own more than ten
percent (10%) of the Company's Common Stock to file initial reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). These reports are also filed with the New York Stock Exchange and a
copy of each report is furnished to the Company.
-23-
Additionally, SEC regulations require that the Company identify any
individuals for whom one of the referenced reports was not filed on a timely
basis during the most recent fiscal year. To the Company's knowledge, based
solely on review of reports furnished to it and written representations that
no other reports were required during and with respect to the fiscal year
ended March 31, 1996,1997, each individual who was required to file such reports
during the fiscal year complied with the applicable filing requirements.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, or a predecessor of that firm,
have been the auditors of the accounts of the Company each year since 1958,
including the fiscal year ended March 31, 1996.1997. It is anticipated that
representatives of Ernst & Young LLP will be present at the 19961997 Annual
Meeting, will have the opportunity to make a statement if they so desire and
will be available to respond to appropriate questions raised at the 19961997
Annual Meeting or submitted to them in writing before the 19961997 Annual Meeting.
Ernst & Young LLP has informed the Company that it does not have any
direct financial interest in the Company and that it has not had any direct
connection with the Company in the capacity of promoter, underwriter,
director, officer or employee.
As is customary, auditors for the current fiscal year will be appointed
by the Board of Directors at their meeting immediately following the 19961997
Annual Meeting upon recommendation of the Audit Committee.
OTHER MATTERS
Management of the Company is not aware of other matters to be presented
for action at the 1997 Annual Meeting; however, if other matters are presented
for action, it is the intention of the persons named in the accompanying form
of proxy to vote in accordance with their judgment on such matters.
STOCKHOLDER PROPOSALS
Stockholders' proposals to be presented at the 19971998 Annual Meeting of
Stockholders, for inclusion in the Company's Proxy Statement and form of proxy
relating to the meeting, must be received by the Company at its offices in
Dallas, Texas, addressed to the Secretary of the Company, not later than
February 11, 1997.
OTHER MATTERS
Management17, 1998. Upon timely receipt of any such proposal, the Company will
determine whether or not to include such proposal in the proxy statement and
proxy in accordance with applicable regulations and provisions governing the
solicitation of proxies.
Under the Bylaws of the Company, stockholders entitled to vote in the
election of directors may nominate one or more persons for election as
directors only if notice in writing to the Secretary of the Company of such
stockholder's intent to make such nomination or nominations has been delivered
to, or mailed and received at, the principal office of the Company not less
than sixty (60) days nor more than ninety (90) days prior to the anniversary
date of the immediately preceding annual meeting. Such notice must set forth
(a) as to each person whom the stockholder proposes to nominate for election
as a director, (i) the name, age, business address and residence address of
the person, (ii) the principal occupation or employment of the person, (iii)
the class and number of shares of capital stock of the corporation which are
beneficially owned by the person, and (iv) any other information relating to
the person that is not aware of other mattersrequired to be presenteddisclosed in solicitations for actionproxies for
election of directors pursuant to Rule 14a under the Securities Exchange Act
of 1934, as amended; and (b) as to the stockholder giving the notice, (i) the
name and record address of the stockholder, (ii) the class and number of
shares of capital stock of the corporation which are beneficially owned by the
stockholder, (iii) a description of all arrangements or understandings between
such stockholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made by
such stockholder, (iv) a representation that such stockholder intends to
appear in person or by proxy at the 1996 Annual Meeting; however, if any
such other matters are presented for action, it is the intention ofmeeting to nominate the persons named in
its notice and (v) any other information relating to such stockholder that
would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election
of directors pursuant to Section 14 of the accompanying formExchange Act and the rules and
regulations promulgated thereunder. The Company may require any proposed
nominee to furnish such other information as may reasonably be required by the
Company to determine the eligibility of proxysuch proposed nominee to voteserve as
director. No person is eligible for election as a director of the Company
unless nominated in accordance with their judgment on such matters.
It is important that proxies be returned promptly to avoid
unnecessary expense. Therefore, stockholders are urged, regardless
of the number of shares owned, to date, sign and return the
enclosed proxyprocedures set forth in the enclosed business reply envelope.
By Order of the Board of Directors
J. J. FRENCH, JR.
Secretary
June 11, 1996Bylaws.
-24-
REPORT ON FORM 10-K
Upon written request from any stockholder of record at May 31,
199630, 1997 (or
any beneficial owner representing that he is or was entitled to vote at the
19961997 Annual Meeting), the Company will furnish to such stockholder, without
charge, its Annual Report on Form 10-K for the fiscal year ended March 31,
1996,1997, as filed with the Securities and Exchange Commission, including
financial statements. The Company may impose a reasonable fee for its
expenses in connection with providing exhibits referred to in such Form 10-K,
if the full text of such exhibits is specifically requested. Requests should
be directed to: Mr. F. Dean Phelps, Jr., Vice President, Trinity Industries,
Inc., P. O. Box 568887, Dallas, Texas 75356-8887.
[FRONT SIDE OF PROXY CARD]It is important that proxies be returned promptly to avoid unnecessary
expense. Therefore, stockholders are urged, regardless of the number of
shares owned, to date, sign and return the enclosed proxy in the enclosed
business reply envelope.
By Order of the Board of Directors
J. J. FRENCH, JR.
Secretary
June 17, 1997
TRINITY INDUSTRIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - July 17, 199616, 1997
The undersigned hereby appoints J. J. French, Jr., W. Ray
Wallace and Dean P. Guerin and each of them with full power of
substitution, attorneys, agents and proxies of the undersigned
to vote as directed below the shares of stock which the
undersigned would be entitled to vote, if personally present,
at the Annual Meeting of Stockholders of Trinity Industries,
Inc. to be held at its offices, 2525 Stemmons Freeway, Dallas,
Texas 75207, on Wednesday, July 17, 199616, 1997 at 9:30 a.m. Central
Daylight Saving Time, and at any adjournment or adjournments
thereof. If more than one of the above attorneys shall be
present in person or by substitution at such meeting or at any
adjournment thereof, the majority of said attorneys so present
and voting, either in person or by substitution, shall exercise
all of the powers hereby given. The undersigned hereby revokes
any proxy or proxies heretofore given to vote upon or act with
respect to such shares of stock and hereby ratifies and
confirms all that said attorneys, their substitutes, or any of
them, may lawfully do by virtue hereof.
(1) Election of eight (8) Directors: David W. Biegler,
Barry J. Galt, Clifford J. Grum, Dean P. Guerin, Jess T. Hay,
Edmund M. Hoffman, Timothy R. Wallace and W. Ray Wallace.
___
/___/ FOR all nominees listed above (except as marked to the
contrary)
___
/___/ WITHHOLD AUTHORITY to vote for all nominees listed above
INSTRUCTION: To withhold authority to vote for one or more,
but not all, of the above-named nominees, check the box before
"FOR" and indicate your desire to withhold such authority by
drawing a line through the name(s) of such nominee(s).
(2) In their discretion on such other matters as may properly
come before the meeting.
(Please sign on reverse side)
[BACK SIDE OF PROXY CARD]
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE ABOVE NAMED
NOMINEES FOR DIRECTOR.
Signature(s): _____________________
_____________________
Date Signed: _____________________DIRECTOR AND FOR THE APPROVAL OF THE AMENDMENT TO
THE COMPANY'S 1993 STOCK OPTION AND INCENTIVE PLAN.
(Continued and to be marked, dated and signed on reserve side)
TRINITY INDUSTRIES, INC.
P.O. BOX 11369
NEW YORK, N.Y. 10203-0369
(1) Election of ten (10) Directors:
FOR all nominees [ ] WITHHOLD AUTHORITY to vote [ ] EXCEPTIONS [ ]
listed below for all nominees listed below.
Nominees: John L. Adams, David W. Biegler, Barry J. Galt, Clifford J. Grum,
Dean P. Guerin, Jess T. Hay, Edmund M. Hoffman, Diana S. Natalicio,
Timothy R. Wallace and W. Ray Wallace.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and strike a line through that nominee's name.)
(2) Approval of the amendment to the Company's (3) In their discretion on such
1993 Stock Option and Incentive Plan. their matters as may properly
come before the meeting.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Change of Address and
or Comments Mark Here [ ]
Please sign exactly as your name
appears on the proxy. If your stock
is jointly owned, both parties must
sign. Fiduciaries and representatives
should so indicate when signing, and
when more than one is named, a
majority should sign. If signed by a
corporation, its seal should be
affixed.
DATED:____________________________
__________________________________
SIGNATURE
__________________________________
SIGNATURE
VOTES MUST BE INDICATED [ ]
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY (x) in Black or Blue ink.
IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.