<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended December 31, 1995
-----------------------------------------------------
Commission File Number 1-7654
---------------------------------------------------------
XTRA CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 06-0954158
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 State Street, Boston, Massachusetts 02109
- -------------------------------------------------------------------------------
(Address of principal executive offices)
(617) 367-5000
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at February 6, 1996
- ----------------------- -------------------------------
Common Stock, Par Value 16,028,167
$.50 Per Share
<PAGE> 2
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information
---------------------
Management Representation . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets
December 31, 1995 and September 30, 1995. . . . . . . . . . . 4
Consolidated Income Statements
For the Three Months Ended
December 31, 1995 and 1994. . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows
For the Three Months Ended
December 31, 1995 and 1994. . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Stockholders' Equity
For the Period September 30, 1994
Through December 31, 1995 . . . . . . . . . . . . . . . . . . 7
Notes to Consolidated Financial Statements. . . . . . . . . . . 8 - 10
Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . 11 - 14
Part II. Other Information
-----------------
Item 4. Submission of Matters to a Vote of Security Holders. . 15
Item 5. Other Matters. . . . . . . . . . . . . . . . . . . . . 16 - 18
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 19
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
------------------------------
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
MANAGEMENT REPRESENTATION
-------------------------
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes, however, that the disclosures are adequate
to make the information presented not misleading.
The Board of Directors carries out its responsibility for the financial
statements included herein through its Audit Committee, composed of
non-employee Directors. During the year, the Committee meets periodically with
both management and the independent public accountants to ensure that each is
carrying out its responsibilities. The independent public accountants have
full and free access to the Audit Committee and meet with its members, with and
without management being present, to discuss auditing and financial reporting
matters.
These financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
Annual Report on Form 10-K.
This financial information reflects, in the opinion of management, all
adjustments consisting of only normal recurring adjustments necessary to
present fairly the results for the interim periods. The results of operations
for such interim periods are not necessarily indicative of the results to be
expected for the full year.
<PAGE> 4
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------------
(MILLIONS OF DOLLARS EXCEPT PER SHARE AND SHARE AMOUNTS)
<CAPTION>
DECEMBER 31,
1995 SEPTEMBER 30,
(UNAUDITED) 1995 (1)
------------ -------------
<S> <C> <C>
Assets
- ------
Cash $ 0.7 $ 6.3
Trade receivables, net 65.6 62.3
Lease contracts receivable 36.9 35.3
Property and equipment, at cost
Revenue equipment 1,851.6 1,812.1
Land, buildings and other 66.7 66.5
-------- -------
1,918.3 1,878.6
Less - Accumulated depreciation (505.0) (480.3)
-------- -------
Net property and equipment 1,413.3 1,398.3
-------- --------
Other assets 25.9 20.8
-------- --------
$1,542.4 $1,523.0
======== ========
Liabilities and Stockholders' Equity
- ------------------------------------
Liabilities
- -----------
Accounts payable $ 5.2 $ 7.5
Accrued interest expense 9.1 11.1
Other accrued expenses 55.3 54.4
Debt 913.5 897.5
Deferred income taxes 201.8 193.7
-------- --------
Total liabilities 1,184.9 1,164.2
-------- --------
Commitments and Contingencies
Stockholders' Equity
- --------------------
Common Stock, par value $.50 per share; authorized:
30,000,000 shares; issued and outstanding;
16,325,867 shares at December 31, 1995
and 16,568,801 at September 30, 1995 8.2 8.3
Capital in excess of par value 97.1 107.6
Retained earnings 254.8 243.4
Cumulative translation adjustment (2.6) (0.5)
-------- --------
Total stockholders' equity 357.5 358.8
-------- --------
$1,542.4 $1,523.0
======== ========
<FN>
(1) Derived from XTRA Corporation's audited September 30, 1995 financial
statements.
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE> 5
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(MILLIONS OF DOLLARS EXCEPT PER SHARE AND SHARE AMOUNTS)
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
------------------
1995 1994
-------- --------
<S> <C> <C>
Revenues $ 112.2 $ 96.3
Operating Expenses
Depreciation on rental equipment 36.3 26.5
Rental equipment operating expense 24.9 20.7
Selling & administrative expense 10.5 8.1
------- -------
71.7 55.3
------- -------
Operating income 40.5 41.0
Interest Expense 16.7 8.3
Foreign Exchange Loss 0.4 -
------- -------
Income from operations before
provision for income taxes 23.4 32.7
Provision for Income Taxes 9.5 13.6
------- -------
Net Income $ 13.9 $ 19.1
======= =======
Net income per share of common stock -
primary and fully diluted $ 0.85 $ 1.12
Weighted average number of fully diluted
common shares outstanding (in thousands) 16,431 17,034
Cash dividends declared $ 0.16 $ 0.14
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE> 6
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------
(MILLIONS OF DOLLARS)
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
----------------------
1995 1994
------- ------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 13.9 $ 19.1
Add non-cash income and expense items:
Depreciation & amortization, net 35.3 25.8
Deferred income taxes 9.0 9.4
Bad debt expense 1.1 1.1
Add other cash items:
Net change in receivables, other assets,
payables and accrued expenses (13.7) (7.4)
Cash receipts from lease contracts receivable 4.4 4.7
Recovery of property and equipment net book value 7.1 3.5
------ ------
Net cash provided by operating activities 57.1 56.2
------ ------
Cash Flows for Investing Activities:
Additions to property and equipment (61.2) (48.3)
Acquisition of certain net assets of Matson Leasing Co, Inc. (4.4) -
------ ------
Cash used for investing activities (65.6) (48.3)
------ ------
Cash Flows for Financing Activities:
Borrowings of long-term debt 102.9 -
Payments of long-term debt (86.9) (44.8)
Repurchase of common stock (10.6) -
Dividends paid (2.5) (2.4)
------ ------
Cash (used for)/provided by financing activities 2.9 (47.2)
------ ------
Net increase in cash (5.6) (39.3)
====== ======
Cash at beginning of period 6.3 43.2
====== ======
Cash at end of period 0.7 3.9
====== ======
Total Interest Paid $ 18.2 $ 6.4
====== ======
Total Income Taxes Paid (net of refunds) $ (1.5) $ 3.5
====== ======
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE> 7
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(MILLIONS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<CAPTION>
Common
Stock Capital in Cumulative
$.50 Excess of Retained Translation
Par Value Par Value Earnings Adjustment
--------- --------- -------- -----------
<S> <C> <C> <C> <C>
Balance at September 30, 1994 $ 8.4 $125.4 $ 196.6 $ 0.1
Net income - - 57.3 -
Common Stock cash dividends
declared at $.62 per share - - (10.5) -
Options exercised and related tax benefits 0.1 2.0 - -
Common stock repurchased (0.2) (19.8)
Translation adjustment - - - (0.6)
----- ------ ------- -----
Balance at September 30, 1995 $ 8.3 $107.6 $ 243.4 $(0.5)
Net income - - 13.9 -
Common Stock cash dividends
declared at $.16 per share - - (2.5) -
Common stock repurchased (0.1) (10.5)
Translation adjustment - - - (2.1)
----- ------ ------- -----
Balance at December 31, 1995 $ 8.2 $ 97.1 $ 254.8 $(2.6)
===== ====== ======= =====
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE> 8
XTRA CORPORATION AND SUBSIDIARIES
----------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(1) The consolidated financial statements include the accounts of XTRA
Corporation and its wholly-owned subsidiaries (the "Company"). All
material intercompany accounts and transactions have been eliminated.
Certain amounts in prior period financial statements have been
reclassified to be consistent with the current periods' presentation.
(2) The effective income tax rates used in the interim financial statements
are estimates of the fiscal years' rates. The effective income tax rate
for fiscal 1995 was approximately 42%. For the three months ended
December 31, 1995, the Company has recorded a provision for income taxes
using an estimated effective income tax rate of approximately 41%. The
Company's effective income tax rate for fiscal 1995 and its estimated
effective income tax rate for fiscal 1996 are higher than the statutory
U.S. Federal income tax rate due primarily to state income taxes.
(3) The Company's long-term debt includes a current portion of $54 million at
December 31, 1995 and $56 million at September 30, 1995.
(4) In June 1995, the Company acquired certain net assets of Matson Leasing
Company, Inc., a major lessor of marine container equipment which at that
time operated a rental fleet of approximately 170,000 twenty-foot
equivalent units. Total consideration for the assets approximated $360
million in cash and included $10 million for recently purchased containers
and a final payment of approximately $4 million made in the first quarter
of fiscal 1996. The transaction was accounted for as a purchase.
<TABLE>
The unaudited pro forma condensed consolidated income statement of the
Company, as if Matson Leasing Company, Inc. had been acquired on
October 1, 1994 is as follows:
<CAPTION>
For the three months ended December 31, 1994
----
<S> <C>
(Millions of dollars except per share amount)
Revenues $114.0
Net income 20.4
Fully diluted earnings per common share $ 1.20
</TABLE>
<PAGE> 9
(5) XTRA's Corporation's wholly-owned subsidiary, XTRA Missouri, Inc., is a
holding company which owns the stock of XTRA, Inc. and also manages the
Company's office space. Both XTRA Corporation's and XTRA Missouri, Inc.'s
assets consist substantially of the aggregate assets, liabilities,
earnings and equity of XTRA, Inc. Therefore, the Company's management has
determined that separate financial statement disclosure of XTRA Missouri,
Inc. is not material to investors. In addition, XTRA Corporation and XTRA
Missouri, Inc are jointly and severally liable on the guarantee of the
debt of XTRA, Inc.
<TABLE>
The condensed consolidated financial data for XTRA, Inc., a wholly-owned
subsidiary of XTRA Missouri, Inc. included in the XTRA Corporation
consolidated balance sheets dated December 31, 1995 and September 30, 1995
and income statements for the three months ended December 31, 1995 and
1994 is summarized below:
<CAPTION>
BALANCE SHEET DATA: December 31, September 30,
(Millions of dollars) 1995 1995
------------ -------------
<S> <C> <C>
Receivables, net $ 102.4 $ 97.7
Property and equipment, net 1,410.6 1,395.5
Other assets 26.5 27.0
-------- --------
Total assets $1,539.5 $1,520.2
======== ========
Debt $ 913.5 $ 897.5
Deferred income taxes 201.8 193.7
Other liabilities 73.2 76.5
-------- --------
Total liabilities 1,188.5 1,167.7
-------- --------
Stockholders' equity 351.0 352.5
-------- --------
Total liabilities and stockholders' equity $1,539.5 $1,520.2
======== ========
</TABLE>
<PAGE> 10
<TABLE>
Income Statement Data:
----------------------
(Millions of dollars)
<CAPTION>
For the three months ended December 31, 1995 1994
------ -----
<S> <C> <C>
Revenues $112.2 $96.3
Income before provision for income taxes 23.4 32.7
Net income 13.9 19.1
</TABLE>
<PAGE> 11
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The discussion below may contain certain forward-looking statements,
such as estimates of economic and industry conditions, equipment utilization
and capital expenditures. Actual results may vary from those contained in such
forward-looking statements. See "Cautionary Statements for Purposes of the
'Safe Harbor' Provisions of the Private Securities Litigation Act of 1995"
contained in Part II, Item 5.
The Three Months Ended December 31, 1995
- ----------------------------------------
Versus the Three Months Ended December 31, 1994:
- ------------------------------------------------
This discussion includes the marine container operating results for the
three months ended December 31, 1995 and accordingly, these results may not be
comparable to the three months ended December 31, 1994 due to the completion of
the acquisition of Matson Leasing Company, Inc. on June 30, 1995.
Revenues and Changes in Business Conditions
- -------------------------------------------
Revenues are generated by leasing over-the-road trailers, marine
containers, intermodal trailers, chassis and domestic containers. Revenues
are a function of lease rates and working units; the latter depends on fleet
size and equipment utilization.
Revenues increased by 17% or $15.9 million for the three months ended
December 31, 1995 over the same period a year ago, primarily due to the
acquisition of the marine container business. Partially offsetting the
increase was a decrease in revenues derived from intermodal trailers due to
reduced demand attributable to the softening economy, an increased supply of
equipment and shifting traffic trends in the industry. Through the first
quarter of fiscal 1995, the Company experienced record demand for its
transportation equipment as a result of favorable industry conditions and a
growing economy. Beginning in the second quarter of fiscal 1995, as a result
of decreased levels of domestic freight, truckers began competing more
aggressively, thus diverting some intermodal freight to over-the-road. In
addition, the peso devaluation, which began in December 1994, has caused a
severe reduction in the southbound freight traffic into Mexico.
<PAGE> 12
In the first quarter of fiscal 1996, the transportation industry did
not experience the moderate growth seen in the domestic economy. Weak consumer
spending in the retail sector, combined with softness in the auto industry and
in housing starts, impacted the levels of over-the-road and intermodal freight.
The Company's intermodal utilization, and to a more limited extent, its
over-the-road utilization, have been negatively impacted by these factors as
well as an increase in equipment supply in the industry.
The following table sets forth average equipment utilization (dollar
weighted in each type of equipment) and average fleet size in units (including
units leased in under operating leases) during the three months ended
December 31:
1995 1994
---- ----
Utilization 85% 94%
Units 265,000 128,000
The increase in average fleet size in units is primarily attributable
to the acquisition of the marine container business on June 30, 1995. The
decline in utilization is attributable to the significant reduction of
intermodal trailer utilization and to a lesser extent, over-the-road trailer
utilization due to factors mentioned above.
Historically, the Company's second and third quarters reflect the
seasonality of the transportation business and represent a period of lower
utilization and hence profitability. For the three months ended
December 31, 1995, the Company did not achieve the record levels of
utilization experienced in the same period of the prior year due to the
economic and industry conditions discussed above. These conditions have
continued into the early portion of the second quarter of fiscal 1996 and
equipment utilization continues to be lower than the same period of the prior
year. Therefore, equipment utilization levels for the entire second quarter of
fiscal 1996 are not expected to approach the levels of the second quarter of
fiscal 1995.
Operating Expenses
- ------------------
Total operating expenses increased by 30% or $16.4 million from the
same period of fiscal 1995 primarily due to higher depreciation expense which
increased by 37% or $9.8 million. The increased depreciation resulted
primarily from the addition of the marine container fleet as well as an
increase in the fleet of over-the-road trailers. In addition, rental equipment
operating expenses and selling and administrative expenses increased 20% and
30% or $4.2 and $2.4 million, respectively, principally due to costs related
to the marine container business.
<PAGE> 13
Interest Expense
- ----------------
Interest expense increased by 101% or $8.4 million for the three months
ended December 31, 1995, due primarily to an increase in average net debt
outstanding partially offset by a decrease in average interest rates.
Foreign Exchange Loss
- ---------------------
Foreign exchange loss of $.4 million for the three months ended
December 31, 1995 is attributable to the translation of certain liabilities of
the Company's intermodal and over-the-road businesses. This loss is a result of
the decreasing value of the Canadian dollar versus the US dollar during the
quarter.
Income Before Provision for Income Taxes
- ----------------------------------------
Pretax earnings decreased 28% or $9.3 million for the three months
ended December 31, 1995 over the same period a year ago primarily due to
decreased demand for intermodal trailers, and to a lesser extent over-the-road
trailers and as a result of the Company's high percentage of fixed costs.
Partially offsetting this was increased profitability resulting from the
acquisition of the marine container business.
Provision for Income Taxes
- --------------------------
The effective income tax rates used in the interim financial statements
are estimates of the fiscal years' rates. The effective income tax rate for
fiscal 1995 was approximately 42%. For the three months ended
December 31, 1995, the Company has recorded a provision for income taxes using
an estimated effective income tax rate of approximately 41%. The Company's
effective income tax rate for fiscal 1995 and its estimated effective income
tax rate for fiscal 1996 are higher than the statutory U.S. Federal income tax
rate due primarily to state income taxes.
Liquidity and Capital Resources
- -------------------------------
During the three months ended December 31, 1995, the Company generated
cash flows from operations of $57 million. During the same period, XTRA
invested $66 million in property and equipment, paid dividends of $3 million
and repurchased common stock of $11 million. Net debt outstanding (debt less
cash) increased $22 million.
As of January 31, 1996, committed capital expenditures for fiscal 1996
amounted to
<PAGE> 14
approximately $137 million. The Company may increase capital spending in 1996
as conditions warrant. However, given current industry conditions, it is
unlikely that spending for new equipment excluding acquisitions will approach
the 1995 capital expenditure level of approximately $340 million and may be
significantly less.
On January 25, 1996, XTRA's Board of Directors raised the regular
quarterly cash dividend from $.16 to $.18 per share and declared a quarterly
cash dividend of $.18 per share, payable on February 29, 1996, to stockholders
of record on February 15, 1996.
From October 1, 1995 to January 31, 1996, the Company had repurchased
$23 million of its common stock pursuant to its $100 million common stock
repurchase program. Since the implementation of the program in fiscal 1995,
the Company has repurchased $43 million.
From October 1, 1995 to January 31, 1996, the Company sold $105 million
in Medium-Term Notes with a weighted average life of 6.7 years and an average
interest rate of 6.2%.
The Company recently filed a Shelf Registration Statement bringing its
total available registered securities to approximately $740 million. The Shelf
Registration consists of Preferred Stock and Common Stock, and Senior and
Subordinated debt securities.
On January 31, 1996, the Company had $99 million of unused credit
available under its Revolving Credit Agreement.
<PAGE> 15
Part II - OTHER INFORMATION
----------------------------
Item 4 - Submission of Matter to a Vote of Security Holders
- ------------------------------------------------------------
<TABLE>
At the 1996 Annual Meeting of Stockholders held on January 25, 1996, at
which a quorum was present, the stockholders re-elected eight of the incumbent
Directors and approved the following proposal by the number of shares of common
stock as noted:
(1) Nominees for the office of Director:
<CAPTION>
Number of Shares
-----------------------------
Voted For Withheld
------------ ------------
<S> <C> <C>
Gilbert Butler 14,733,874 42,217
J. Russell Duncan 14,722,807 53,284
Robert M. Gintel 14,739,553 36,538
Robert B. Goergen 14,741,636 34,455
Herbert C. Knortz 14,729,343 46,748
Francis J. Palamara 14,726,356 49,735
Lewis Rubin 14,739,803 36,288
Martin L. Solomon 14,741,320 34,771
</TABLE>
<TABLE>
<CAPTION>
Number of Shares Voted
-----------------------------------
For Against Abstain
---------- --------- -------
<S> <C> <C> <C>
(2) To approve the amendment to the
Company's 1987 Stock Incentive
Plan to increase from 100,000 to
200,000 the number of shares for
which options may be granted to
any individual in any calendar
year pursuant to awards granted
under the Plan. 13,631,950 1,084,382 59,758
</TABLE>
<PAGE> 16
Part II - OTHER INFORMATION
Item 5 - Other Matters
CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The Company may occasionally make forward-looking statements and estimates
such as forecasts and projections of the Company's future performance or
statements of management's plans and objectives. These forward-looking
statements may be contained in, among other things, SEC filings and press
releases made by the Company and in oral statements made by the officers of the
Company. Actual results could differ materially from those in such
forward-looking statements. Therefore, no assurances can be given that the
results in such forward-looking statements will be achieved. Important factors
that could cause the Company's actual results to differ from those contained in
such forward-looking statements include, among others, the factors mentioned
below.
VARIABLE REVENUES AND FIXED OPERATING EXPENSES:
The Company's revenues are variable due to their dependence on the level of
domestic and international economic activity. In addition, the Company has a
high percentage of fixed operating expenses, including depreciation, a portion
of rental equipment operating expense and selling and administrative expenses.
As a result, the Company's pretax profits are cyclical. If domestic or global
economic activity remains slow, operating margins may be adversely affected.
See below for further discussion.
Variability of Revenues:
The Company's revenues are variable and are based on lease rates, utilization,
supply of and demand for equipment. See below for further discussion.
Lease Rates:
Lease rates depend on the type of lease, length of term, maintenance provided
and the type and age of the equipment. Future lease rates may increase or
decrease depending on competition, economic conditions and other factors.
<PAGE> 17
Utilization:
Utilization is the ratio of revenue earning units to the total fleet.
Utilization is directly impacted by the level of economic activity in North
America, world trade activity, the supply of and demand for available
equipment, the actions of competitors and other factors in the freight
transportation industry.
Supply of Equipment:
New equipment, supplied by a number of manufacturers, is built to the Company's
specifications and reflects industry standards and customer needs. There is
often a considerable amount of time between when an order is placed and when
the equipment is delivered. In addition, it is difficult to accurately
predict demand for the Company's equipment in future periods. As a result, the
Company's performance in a given period may be adversely affected either
because of its inability to quickly increase fleet size (because of extended
back orders) to take advantage of unexpectedly strong demand, or to quickly
reduce fleet size in order to react to reduced demand.
Demand:
Demand for equipment is affected by economic factors, equipment supply and
shifting traffic trends in the industry. A softening domestic or international
economy may result in lower levels of freight shipments. Shifting traffic
trends in the industry, such as truckers competing more aggressively may divert
some intermodal freight to over-the-road. Other items affecting demand which
may impact leasing needs can include severe adverse weather conditions such as
floods or snow storms or strikes by transportation unions.
Operating Expenses:
The Company's operating expenses consist of a high percentage of fixed costs
and can change profitability as revenues fluctuate due to increases and
decreases in utilization and/or lease rates. The fixed costs include
depreciation, a portion of rental equipment operating expense and selling and
administrative expenses. As a result, income from operations can be cyclical.
If revenues decline in any period, operating margins may change from those
reported in prior periods due to the fixed nature of a significant portion of
the Company's expenses.
CAPITAL NEEDS:
The acquisition of new equipment, both for growth as well as replacement of
older equipment, is capital intensive. In addition, over the past several
years, the Company has grown its fleet
<PAGE> 18
through acquisitions of other companies such as Strick Lease and Matson Leasing
Company, Inc., requiring additional capital. While the Company generally has
had available a variety of sources to finance such expenditures and acquisitions
at favorable rates or terms, the availability of such capital depends heavily
upon prevailing market conditions, the Company's capital structure and its
credit ratings. No assurances can be given that financing will continue to be
available at attractive rates or with covenants that are not more restrictive
than the Company's current debt covenants.
INTEREST RATES:
Over the past several years, interest rates have remained at historically low
levels. Because of the Company's heavy dependence upon external financing to
fund its capital needs and acquisitions, the level of interest rates directly
effects the Company's profitability. The Company attempts to moderate the
effect of changing interest rates by maintaining a high percentage of its debt
with fixed rates. However, an increase in interest rates or a downgrading in
the Company's debt ratings would adversely impact the cost of new borrowings,
thereby adversely effecting its profitability.
FOREIGN EXCHANGE RATES:
A portion of the Company's North American over-the-road and intermodal business
is transacted in local currencies. As a result, the Company's financial
results are subject to foreign exchange rate fluctuations.
ACQUISITIONS:
Over the past years, the Company has used acquisitions of fleets operated by
other companies to help grow its business. In order for the Company to take
advantage of favorable acquisition opportunities as they are presented, it may
be necessary for the Company to significantly increase its debt leverage ratios
which could adversely effect its credit ratings. Also, the ability of the
Company to take advantage of acquisition opportunities will depend on the
availability of capital. See above for discussion.
<PAGE> 19
Part II - OTHER INFORMATION
---------------------------
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
- --- --------
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
3(b) Amended and Restated By-Laws of XTRA Corporation, as amended
through January 24, 1996
10.1 1987 Stock Incentive Plan, as amended through November 16, 1995
11.1 Statement of the calculation of earnings per share for the three
months ended December 31, 1995 and 1994
12.1 Statement of the calculation of earnings to fixed charges for
the three months ended December 31, 1995 and 1994 for XTRA
Corporation
12.2 Statement of the calculation of earnings to fixed charges for
the three months ended December 31, 1995 and 1994 for XTRA,
Inc.
27.0 Financial Data Schedule
</TABLE>
(b) Reports of Form 8-K
- --- -------------------
On January 29, 1996, a Current Report on Form 8-K was filed by the Company
to disclose certain financial information for the fiscal first quarter ended
December 31, 1995.
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
XTRA CORPORATION
---------------------------------
(Registrant)
Date: February 14, 1996 /s/ Michael J. Soja
------------------ ---------------------------------
Michael J. Soja
Vice President and
Chief Financial Officer
Date: February 14, 1996 /s/ Robert B. Blakeley
------------------ ---------------------------------
Robert B. Blakeley
Controller and
Chief Accounting Officer
<PAGE> 21
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
3(b) Amended and Restated By-Laws of XTRA Corporation, as amended
through January 24, 1996
10.1 1987 Stock Incentive Plan, as amended through November 16, 1995
11.1 Statement of the calculation of earnings per share for the three
months ended December 31, 1995 and 1994
12.1 Statement of the calculation of earnings to fixed charges for
the three months ended December 31, 1995 and 1994 for XTRA
Corporation
12.2 Statement of the calculation of earnings to fixed charges for
the three months ended December 31, 1995 and 1994 for XTRA,
Inc.
27.0 Financial Data Schedule
</TABLE>
<PAGE> 1
Exhibit 3(b)
BY-LAWS
OF
XTRA CORPORATION
SECTION 1 LAW, CERTIFICATE OF INCORPORATION
AND BY-LAWS
1.1 These by-laws are subject to the certificate of incorporation of the
corporation. In these by-laws, references to law, the certificate of
incorporation and bylaws mean the law, the provisions of the certificate of
incorporation and the by-laws as from time to time in effect, and capitalized
terms defined in the certificate of incorporation are used with the meanings
set forth therein.
Section 2. STOCKHOLDERS
2.1 ANNUAL MEETING. The annual meeting of stockholders shall be held at
10:00 a.m. on the last or second to last business day of January in each year
which is not a Monday or a Friday, or at such other date and time as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting, at which they shall elect a board of directors and transact
such other business as may be required by law or these by-laws or as may
properly come before the meeting. The actual date of the annual meeting shall
be publicly announced each year after the date thereof has been set by the
board.
2.2 SPECIAL MEETINGS. A special meeting of the stockholders (i) may be
called at any time by the chairman of the board, if any, the president or the
board of directors, and (ii) shall be called by the secretary, or in the case
of the death, absence, incapacity or refusal of the secretary, by an assistant
secretary or some other officer, upon receipt of an application of (a) the
holder or holders of twenty percent (20%) of the shares issued and outstanding
entitled to notice of, and to vote at, a meeting of stockholders, or (b) a
majority of the directors then in office. Any such application shall state the
purpose or purposes of the proposed meeting. Any such call shall state the
place, date, hour, and purposes of the meeting and shall be given within
fifteen (15) days of receipt of the application for such special meeting.
Business transacted at any special meeting shall be limited to the purpose or
purposes thereof stated in the notice of such special meeting.
2.3 PLACE OF MEETING. All meetings of the stockholders for the election
of directors or for any other purpose shall be held at such place within or
without the State of Delaware
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as may be determined from time to time by the chairman of the board, if any,
the president or the board of directors. Any adjourned session of any meeting
of the stockholders shall be held at the place designated in the adjournment.
2.4 NOTICE OF MEETINGS. Except as otherwise provided by law, a written
notice of each meeting of stockholders stating the place, day and hour thereof
and, in the case of a special meeting, the purposes for which the meeting is
called, shall be given not less then ten nor more than sixty days before the
meeting, to each stockholder entitled to vote thereat, and to each stockholder
who, by law, by the certificate of incorporation or by these by-laws, is
entitled to notice, by leaving such notice with him or at his residence or
usual place of business, or by depositing it in the United States mail, postage
prepaid, and addressed to such stockholder at his address as it appears in the
records of the corporation. Such notice shall be given by the secretary, or by
an officer or person designated by the board of directors, or in the case of a
special meeting by the officer calling the meeting. As to any adjourned
session of any meeting of stockholders, notice of the adjourned meeting need
not be given if the time and place thereof are announced at the meeting at
which the adjournment was taken except that if the adjournment is for more than
thirty days or if after the adjournment a new record date is set for the
adjourned session, notice of any such adjourned session of the meeting shall be
given in the manner heretofore described. No notice of any meeting of
stockholders or any adjourned session thereof need be given to a stockholder if
a written waiver of notice, executed before or after the meeting or such
adjourned session by such stockholder, is filed with the records of the meeting
or if the stockholder attends such meeting without objecting at the beginning
of the meeting to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any meeting of the stockholders or any adjourned session thereof
need be specified in any written waiver of notice.
2.5 BUSINESS AT STOCKHOLDER MEETINGS. Unless otherwise determined by the
board of directors prior to a meeting of the stockholders, the officer
presiding at such meeting, determined in accordance with these by-laws, shall
determine the order of business and shall have the authority in his discretion
to regulate the conduct of such meeting, including, without limitation, to
impose restrictions on the persons (other than stockholders of the corporation
or their duly appointed proxies) who may attend such meeting, to regulate and
restrict the making of statements or asking of questions at such meeting and to
cause the removal from such meeting of any person who has disrupted or appears
likely to disrupt the proceedings at such meeting. At a meeting of the
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before a meeting of
stockholders, business must be (a) specified in the notice of meeting (or any
supplement thereto) given as provided in these by-laws, (b) otherwise properly
brought before the meeting by or at the direction of a majority of the board of
directors then in office, or (c) in the case of an annual meeting of
stockholders, otherwise properly brought before such meeting by a stockholder.
For business to be properly brought before an annual meeting by a stockholder,
the stockholder must have given timely notice thereof in writing to the
secretary of the corporation and the stockholder must be a stockholder of
record at the time such notice is given. For the notice to be timely in the
case of
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<PAGE> 3
an annual meeting, such notice must be delivered to or mailed and received at
the principal executive offices of the corporation not less than 90 days prior
to the first anniversary of the date of the last annual meeting of
stockholders. A stockholder's notice to the secretary shall set forth as to
each matter the stockholder proposes to bring before the meeting (a) a brief
description of the business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, (b) the name and address,
as they appear on the corporation's books, of the stockholder proposing such
business, (c) the class and number of shares of the corporation which are
beneficially owned by the stockholder, and (d) any material financial interest
of the stockholder in such business. The business desired to be brought before
the meeting by a stockholder shall be stated in the notice of such meeting or
any supplemental notice thereof. Notwithstanding anything in these by-laws to
the contrary, no business shall be conducted at any meeting except in
accordance with the procedures set forth in this Section 2.5. The chairman of
the meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the meeting and in accordance
with the provisions of this Section 2.5, including the specific basis for such
determination, and if he should so determine, any such business not properly
brought before the meeting shall not be transacted. Notwithstanding the
foregoing provisions of this Section 2.5, a stockholder shall also comply with
all applicable requirements of the Securities Exchange Act of 1934, as amended,
and any successor law and the rules and regulations thereunder with respect to
the matters set forth in this section.
2.6 QUORUM OF STOCKHOLDERS. At any meeting of the stockholders a quorum
as to any matter shall consist of a majority of the votes entitled to be cast
on the matter, except where a larger quorum is required by law, by the
certificate of incorporation or by these by-laws. Any meeting may be adjourned
from time to time by a majority of the votes properly cast upon the question,
whether or not a quorum is present. If a quorum is present at an original
meeting, a quorum need not be present at an adjourned session of that meeting.
2.7 ACTION BY VOTE. When a quorum is present at any meeting, a plurality
of the votes properly cast for election to any office shall elect to such
office and a majority of the votes properly cast upon any question other than
an election to an office shall decide the question, except when a larger vote
is required by law, by the certificate of incorporation or by these by-laws.
No ballot shall be required for any election unless requested by a stockholder
present or represented at the meeting and entitled to vote in the election.
2.8 NO ACTION WITHOUT A MEETING. Any action required or permitted to be
taken by the stockholders of the corporation must be effected at an annual or
special meeting of the stockholders of the corporation and may not be effected
by any consent in writing by such stockholders.
2.9 PROXY REPRESENTATION. Every stockholder may authorize another person
or persons to act for him by proxy in all matters in which a stockholder is
entitled to participate, whether by waiving notice of any meeting, or objecting
to or voting or participating at a meeting. Every proxy must be signed by the
stockholder or by his attorney in-fact. No proxy
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<PAGE> 4
shall be voted or acted upon after three years from its date unless such proxy
provides for a longer period. A duly executed proxy shall be irrevocable if it
states that it is irrevocable and, if, and only as long as, it is coupled with
an interest sufficient in law to support an irrevocable power. A proxy may be
made irrevocable regardless of whether the interest with which it is coupled is
an interest in the stock itself or an interest in the corporation generally.
The authorization of a proxy may but need not be limited to specified action,
provided, however, that if a proxy limits its authorization to a meeting or
meetings of stockholders, unless otherwise specifically provided such proxy
shall entitle the holder thereof to vote at any adjourned session but shall not
be valid after the final adjournment thereof.
2.10 INSPECTORS. The directors or the person presiding at the meeting
may, but need not, appoint one or more inspectors of election and any
substitute inspectors to act at the meeting or any adjournment thereof. Each
inspector, before entering upon the discharge of his duties, shall take and
sign an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The inspectors,
if any, shall determine the number of shares of stock outstanding and the
voting power of each, the shares of stock represented at the meeting, the
existence of a quorum, the validity and effect of proxies, and shall receive
votes or ballots, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes or ballots,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all stockholders. On request of the person presiding at
the meeting, the inspectors shall make a report in writing of any challenge,
question or matter determined by them and execute a certificate of any fact
found by them.
2.11 LIST OF STOCKHOLDERS. The secretary shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting, arranged in alphabetical order
and showing the address of each stockholder and the number of shares registered
in his name. The stock ledger shall be the only evidence as to who are
stockholders entitled to examine such list or to vote in person or by proxy at
such meeting.
Section 3. BOARD OF DIRECTORS
3.1 NUMBER AND TENURE. The number of directors which shall constitute
the whole board shall be not less than five nor more than twelve in number.
Within the foregoing limits, the board of directors shall determine the number
of directors and the number of directors may be increased at any time or from
time to time by the directors by vote of a majority of the directors then in
office.
Except as otherwise provided by law, by the certificate of incorporation
or by these by-laws, each director shall hold office until a successor is
elected and qualified, or until such director sooner dies, resigns, is removed
or replaced.
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<PAGE> 5
3.2 NOTICE OF STOCKHOLDER NOMINEES. Only persons who are nominated in
accordance with the procedures set forth in this Section 3.2 shall be eligible
for election as directors at an annual meeting of stockholders or at a special
meeting of stockholders called for the purpose of electing directors.
Nominations of persons for election to the board of directors of the
corporation may be made at an annual meeting of stockholders by or at the
direction of the board of directors or by any stockholder of the corporation
entitled to vote for the election of directors at such annual meeting who
complies with the notice procedures set forth in this Section and such
nominations, other than those made by or at the direction of the board of
directors, shall be made pursuant to timely notice in writing to the secretary
of the corporation. For the notice to be timely in the case of an annual
meeting of stockholders, a stockholder's notice shall be delivered to or mailed
and received at the principal executive offices of the corporation not less
than 90 days prior to the first anniversary of the date of the last annual
meeting of stockholders. A stockholder's notice shall set forth (a) as to each
person whom the stockholder proposes to nominate for election or re-election as
a director, (i) the name, age, business address and residence address of such
person, (ii) the principal occupation or employment of such person, (iii) the
class and number of shares of the corporation which are beneficially owned by
such person and (iv) any other information relating to such person that is
required to be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange At of 1934, as amended or any successor regulation
(including without limitation such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected); and
(b) as to the stockholder giving the notice (i) the name and address, as they
appear on the corporation's books, of such stockholder and (ii) the class and
number of shares of the corporation which are beneficially owned by such
stockholder. The information required by the preceding sentence with respect
to (i) the person or persons nominated for election to the board of directors,
and (ii) the stockholder or stockholders giving the notice and making such
nomination, shall be stated in the notice of the meeting or any supplemental
notice thereof. At the request of the board of directors any person nominated
by the board of directors for election as a director shall furnish to the
secretary of the corporation that information required to be set forth in a
stockholder's notice of nomination which pertain to the nominee. No person
shall be eligible for election as a director of the corporation unless
nominated in accordance with the procedures set forth in this Section. The
chairman of the meeting shall, if the facts warrant, determine and declare to
the meeting that a nomination was not made in accordance with the procedures
prescribed by the by-laws, including the specific basis for such determination,
and if he should so determine, the defective nomination shall be disregarded.
Notwithstanding the foregoing provisions of this Section, a stockholder shall
also comply with all applicable requirements of the Securities Exchange Act of
1934, as amended, or any successor law and the rules and regulations thereunder
with respect to the matters set forth in this Section.
3.3 POWERS. The business and affairs of the corporation shall be managed
by or under the direction of the board of directors who shall have and may
exercise all the powers of the corporation and do all such lawful acts and
things as are not by law, the certificate of incorporation or these by-laws
directed or required to be exercised or done by
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the stockholders.
3.4 VACANCIES. Vacancies on the board of directors and any newly created
directorships resulting from any increase in the number of directors may be
filled by a majority of the directors then in office, although less than a
quorum or by a sole remaining director. Any director or directors so chosen
shall hold office until the next annual meeting of the stockholders and until
their successors shall be duly elected and shall qualify or until their earlier
death, or resignation, removal or replacement. The directors shall have and
may exercise all their powers notwithstanding the existence of one or more
vacancies in their number, subject to any requirements of law or of the
certificate of incorporation, or of these by-laws as to the number of directors
required for a quorum or for any vote or other actions.
3.5 COMMITTEES. Subject to Section 3.6, the board of directors may, by
vote of a majority of the whole board, (a) designate, change the membership of
or terminate the existence of any committee or committees, each committee to
consist of one or more of the directors; (b) designate one or more directors as
alternate members of any such committee who may replace any absent or
disqualified member at any meeting of the committee; and (c) determine the
extent to which each such committee shall have and may exercise the powers of
the board of directors in the management of the business and affairs of the
corporation, including the power to authorize the seal of the corporation to be
affixed to all papers which require it and the power and authority to declare
dividends or to authorize the issuance of stock; excepting, however, such
powers which by law, by the certificate of incorporation or by these by-laws
they are prohibited from so delegating. Except as the board of directors may
otherwise determine, any committee may make rules for the conduct of its
business, but unless otherwise provided by the board or such rules, its
business shall be conducted as nearly as may be in the same manner as is
provided by these by-laws for the conduct of business by the board of
directors. Each committee shall report to the board of directors upon request.
3.6 EXECUTIVE COMMITTEE. The board of directors shall, by vote of a
majority of the whole board, elect from its own number an executive committee,
to consist of not less than two members in addition to the chief executive
officer, and may from time to time designate or alter, within the limits
permitted by this Section 3.6, the duties and powers of such committee, or
change its membership.
The executive committee shall have and may exercise all the powers and
authority of the board of directors in the management of the business and
affairs of the corporation to the fullest extent permitted by Section 141 of
the Delaware General Corporation Law, and may authorize the seal of the
corporation to be affixed to all papers which may require it, including the
power and authority to declare a dividend, to authorize the issuance of stock
and to adopt a certificate of ownership and merger. Each member of the
executive committee shall hold office until the first meeting of the board of
directors following the next annual meeting of the stockholders and until his
successor is elected and qualified, or until he sooner dies, resigns, is
removed, is replaced by change of membership, or becomes disqualified by
ceasing to be a
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director. One-third of the members of the executive committee then in office,
but in no case less than two members, shall constitute a quorum for the
transaction of business, but any meeting may be adjourned from time to time by
a majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.
3.7 REGULAR MEETINGS. Regular meetings of the board of directors may be
held without call or notice at such places within or without the State of
Delaware and at such times as the board may from time to time determine,
provided that notice of the first regular meeting following any such
determination shall be given to absent directors. A regular meeting of the
directors may be held without call or notice immediately after and at the same
place as the annual meeting of stockholders.
3.8 SPECIAL MEETINGS. Special meetings of the board of directors may be
held at any time and at any place within or without the State of Delaware
designated in the notice of the meeting, when called by the chairman of the
board or by a majority of the directors then in office, reasonable notice
thereof being given to each director by the secretary or by the chairman.
3.9 NOTICE. It shall be reasonable and sufficient notice to a director
to send notice by mail at least two days or by telegram at least the day before
the meeting addressed to him at his usual or last known business or residence
address or to give notice to him in person or by telephone at least the day
before the meeting. Notice of a meeting need not be given to any director if a
written waiver or notice, executed by him before or after the meeting, is filed
with the records of the meeting, or to any director who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
3.10 QUORUM. Except as may be otherwise provided by law, by the
certificate of incorporation or by these by-laws, at any meeting of the
directors a majority of the directors then in office shall constitute a quorum.
Any meeting may be adjourned from time to time by a majority of the votes cast
upon the question, whether or not a quorum is present, and the meeting may be
held as adjourned without further notice.
3.11 ACTION BY VOTE. Except as may be otherwise provided by law, by the
certificate of incorporation or by these by-laws, when a quorum is present at
any meeting the vote of a majority of the directors present shall be the act of
the board of directors.
3.12 ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the board of directors or a committee thereof may be
taken without a meeting if all the members of the board or of such committee,
as the case may be, consent thereto in writing, and such writing or writings
are filed with the records of the meetings of the board or of such committee.
Such consent shall be treated for all purposes as the act of the board or of
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such committee, as the case may be.
3.13 PARTICIPATION-IN MEETINGS BY CONFERENCE TELEPHONE. Members of the
board of directors, or any committee designated by such board, may participate
in a meetings of such board or committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other or by any other means permitted by law. Such
participation shall constitute presence in person at such meeting.
3.14 COMPENSATION. In the discretion of the board of directors, each
director may be paid such fees for his services as director and as a committee
member and be reimbursed for his reasonable expenses incurred in the
performance of his duties as director and as a committee member as the board of
directors from time to time may determine. Nothing contained in this section
shall be construed to preclude any director from serving the corporation in any
other capacity and receiving reasonable compensation therefor.
3.15 INTERESTED DIRECTORS AND OFFICERS.
(a) No contract or transaction between the corporation and one or more of
its directors or officers, or between the corporation and any other
corporation, partnership, association, or other organization in which one or
more of the corporation's directors or officers are directors or officers, or
have a financial interest, shall be void or voidable solely for this reason, or
solely because the director or officer is present at or participates in the
meeting of the board or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such purpose,
if:
(1) The material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the board of
directors or the committee, and the board or committee in good faith authorizes
the contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or
(2) The material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the corporation
as of the time it is authorized, approved or ratified, by the board of
directors, a committee thereof, or the stockholders.
(b) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.
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Section 4. OFFICERS AND AGENTS
4.1 ENUMERATION; QUALIFICATION. The board of directors shall elect the
officers of the corporation, which shall include a President and a Secretary,
and may include, by election or appointment, a Chairman of the Board, a Vice
Chairman of the Board, one or more Vice-Presidents (any one or more of whom may
be given an additional designation of rank or function), a Treasurer and such
assistant secretaries, such assistant treasurers and such other officers as the
board of directors may from time to time deem proper. The corporation may also
have such agents, if any, as the board of directors from time to time may in
its discretion choose. Any officer may be but none need be a director or
stockholder. Each officer shall have such powers and duties as may be
prescribed by these By-Laws and as may be assigned by the board of directors.
Any two or more offices may be held by the same person except the offices of
President and Secretary. Any officer may be required by the board of directors
to secure the faithful performance of his duties to the corporation by giving
bond in such amount and with such sureties or otherwise as the board of
directors may determine.
4.2 TERM OF OFFICE AND REMUNERATION. The term of office of all officers
shall be one year and until their respective successors have been elected and
qualified unless a shorter period shall have been specified by the terms of any
officer's election or appointment. The remuneration of all officers of the
corporation may be fixed by the board of directors or in such manner as the
board of directors shall provide.
4.3 CHAIRMAN OF THE BOARD. The Chairman of the Board, if there be one,
shall preside at all meetings of the board of directors and the stockholders of
the corporation, and shall have such other powers and duties as may from time
to time be assigned by the board of directors.
4.4 VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board, if there
be one, shall, in the absence of the Chairman of the Board, preside at all
meetings of the board of directors and shall have such other powers and duties
as may from time to time be assigned by the board of directors.
4.5 PRESIDENT. The President shall have general management and
supervision of the property, business and affairs of the corporation and over
its other officers; may appoint and remove assistant officers and other agents
and employees, other than the Chairman of the Board and Vice Chairman of the
Board, if there be one; and may execute and deliver in the name of the
corporation powers of attorney, contracts, bonds and other obligations and
instruments, in each case subject to the control of the board of directors.
4.6 VICE-PRESIDENT. A Vice-President shall have such duties and powers as
shall be
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set forth in these by-laws or as shall be designated from time to time by the
board of directors.
4.7 TREASURER. Unless the board of directors otherwise specifies, the
treasurer shall be the chief financial officer of the corporation and shall be
in charge of its funds and valuable papers, and shall have such other duties
and powers as may be designated from time to time by the board of directors.
If no controller is elected, the treasurer shall, unless the board of directors
otherwise specifies, also have the duties and powers of the controller.
4.8 CONTROLLER. If a controller is elected, he shall, unless the board
of directors otherwise specifies, be the chief accounting officer of the
corporation and be in charge of its books of account and accounting records,
and of its accounting procedures. He shall have such other duties and powers
as may be designated from time to time by the board of directors or the
treasurer.
4.9 SECRETARY. The secretary shall record all proceedings of the
stockholders, of the board of directors and of committees of the board of
directors in a book or series of books to be kept therefor and shall file
therein all actions by written consent of directors. In the absence of the
secretary from any meeting, an assistant secretary, or if there be none or he
is absent, a temporary secretary chosen at the meeting, shall record the
proceedings thereof. Unless a transfer agent has been appointed, the secretary
shall keep or cause to be kept the stock and transfer records of the
corporation, which shall contain the names and record addresses of all
stockholders and the number of shares registered in the name of each
stockholder. He shall have such other duties and powers as may from time to
time be designated by the board of directors.
4.10 ASSISTANT OFFICERS. Any assistant officer shall have such powers and
duties of the officer such assistant officer assists as such officer or the
board of directors shall from time to time prescribe.
Section 5. RESIGNATIONS AND REMOVALS
5.1 Any director or officer may resign at any time by delivering his
resignation in writing to the chairman of the board, the president, or the
secretary or to a meeting of the board of directors. Such resignation shall be
effective upon receipt unless specified to be effective at some other time, and
without in either case the necessity of its being accepted unless the
resignation shall so state. A director (including persons elected by directors
to fill vacancies in the board) may be removed from office with or without
cause by the vote of the holders of a majority of the shares issued and
outstanding and entitled to vote in the election of directors. The board of
directors may at any time remove any officer either with or without cause. The
board of directors may at any time terminate or modify the authority of any
agent.
Section 6. VACANCIES
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6.1 If the office of any officer becomes vacant, the directors may elect
a successor by vote of a majority of the directors then in office. Each such
successor shall hold office for the unexpired term, and until his successor is
chosen and qualified or in each case until he sooner dies, resigns, is removed,
is replaced or becomes disqualified. Any vacancy of a directorship shall be
filled as specified in Section 3.4 of these by-laws.
Section 7. CAPITAL STOCK
7.1 STOCK CERTIFICATES. Each stockholder shall be entitled to a
certificate stating the number and the class and the designation of the series,
if any, of the shares held by him, in such form as shall, in conformity to law,
the certificate of incorporation and the by-laws, be prescribed from time to
time by the board of directors. Such certificate shall be signed by the
chairman or vice chairman of the board, if any, or the president or a vice
president and by the treasurer or an assistant treasurer or by the secretary or
an assistant secretary. Any of or all the signatures on the certificate may be
a facsimile. In case an officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed on such certificate shall have
ceased to be such officer, transfer agent, or registrar before such certificate
is issued, it may be issued by the corporation with the same effect as if he
were such officer, transfer agent, or registrar at the time of its issue.
7.2 LOSS OF CERTIFICATES. In the case of the alleged theft, loss,
destruction or mutilation of a certificate of stock, a duplicate certificate
may be issued in place thereof, upon such terms, including receipt of a bond
sufficient to indemnify the corporation against any claim on account thereof,
as the board of directors may prescribe.
Section 8. TRANSFER OF SHARES OF STOCK
8.1 TRANSFER ON BOOKS. Subject to the restrictions, if any, stated or
noted on the stock certificate, shares of stock may be transferred on the books
of the corporation by the surrender to the corporation or its transfer agent of
the certificate therefor properly endorsed or accompanied by a written
assignment and power of attorney properly executed, with necessary transfer
stamps affixed, and with such proof of the authenticity of signature as the
board of directors or the transfer agent of the corporation may reasonably
require. Except as may be otherwise required by law, by the certificate of
incorporation or by these by-laws, the corporation shall be entitled to treat
the record holder of stock as shown on its books as the owner of such stock for
all purposes, including the payment of dividends and the right to receive
notice and to vote or to give any consent with respect thereto and to be held
liable for such calls and assessments, if any, as may lawfully be made thereon,
regardless of any transfer, pledge or other disposition of such stock until the
shares have been properly transferred on the books of the corporation.
It shall be the duty of each stockholder to notify the corporation of
his post office address.
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8.2 RECORD DATE AND CLOSING TRANSFER BOOKS. In order that the
corporation may determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the board of directors, and
which record date shall not be more than sixty nor less than ten days before
the date of such meeting. If no such record date is fixed by the board of
directors, the record date for determining the stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the board of directors may fix a new
record date for the adjourned meeting.
In order that the corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any
rights or to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty days prior to such payment, exercise or other
action. If no such record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the board of directors adopts the resolution relating thereto.
Section 9. CORPORATE SEAL
9.1 Subject to alteration by the directors, the seal of the corporation
shall consist of a flat-faced circular die with the word "Delaware" and the
name of the corporation cut or engraved thereon, together with such other
words, dates or images as may be approved from time to time by the directors.
Section 10. EXECUTION OF PAPERS
10.1 Except as the board of directors may generally or in particular cases
authorize the execution thereof in some other manner, all deeds, leases,
transfers, contracts, bonds, notes, checks, drafts or other obligations made,
accepted or endorsed by the corporation shall be signed by the chairman of the
board, the president, any vice president, the treasurer or the secretary.
Section 11. FISCAL YEAR
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11.1 Except as from time to time otherwise provided by the board of
directors, the fiscal year of the corporation shall end on the last day of
September in each year.
Section 12. AMENDMENTS
12.1 These by-laws may be altered, amended or repealed by (i) the
affirmative vote of the holders of a majority of the voting power of the then
outstanding shares of stock of all classes and series of this corporation
entitled to vote generally in the election of directors, voting together as a
single class or (ii) a vote of the majority of the directors then in office, at
any annual, regular or special stockholders or directors meeting, called for
that purpose, the notice of which shall specify the subject matter of the
proposed new by-law or the alteration, amendment or repeal of an existing
by-law or the articles to be affected thereby. Any by-law, whether made,
altered, amended or repealed by the stockholders or directors, may be repealed,
amended, further amended or reinstated, as the case may be, by either the
stockholders or the directors as aforesaid.
*************
As adopted by the Board of Directors: August 3, 1989
As amended by the Board of Directors: March 20, 1990
As amended by the Board of Directors: January 24, 1996
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<PAGE> 1
Exhibit 10.1
XTRA CORPORATION
1987 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this 1987 Stock Incentive Plan (the "Plan") is to
advance the interests of XTRA Corporation (the "Company") by enhancing the
ability of the Company (a) to attract and retain employees who are in a
position to make significant contributions to the success of the Company; (b)
to reward employees for such contributions; and (c) to encourage employees to
take into account the long-term interests of the Company through ownership of
shares of, and other interests in, the Company's common stock ("Common Stock").
The Plan is intended to accomplish these goals by enabling the Company
to grant awards ("Awards") to eligible employees. Awards may be in the form of
Stock Options (as described in Section 6), Stock Appreciation Rights (as
described in Section 7) and Restricted Stock Awards (as described in Section 8).
2. ADMINISTRATION
The Plan will be administered by the Compensation Committee of the
Board of Directors of the Company, excluding any member who would not be an
"outside director" for purposes of Section 162(m) of the Internal Revenue Code
of 1986, as amended, and the regulations, including proposed regulations,
thereunder (the "Committee"). The Committee will have authority, not
inconsistent with the express provisions of the Plan, (a) to grant Awards to
such eligible employees as the Committee may select ("Participants"); (b) to
determine the type of Awards to be granted and the times of grants; (c) to
determine the number of shares of Common Stock to be covered by any Award; (d)
to determine the terms and conditions of any Award, which terms and conditions
may differ among individual Awards and Participants; (e) to prescribe the form
or forms of instruments evidencing Awards and any other instruments required
under the Plan and to change such forms from time to time; (f) to adopt, amend
and rescind rules and regulations for the administration of the Plan; (g) to
interpret the Plan and to decide any questions and settle all controversies and
disputes that may arise in connection with the Plan; and (h) to waive
compliance by a Participant with any obligation to be performed by him under an
Award, except that the Committee may not, in the case of an incentive stock
option (as
<PAGE> 2
described in Section 6), take any action without consent of the Participant
which would cause such option to lose its status as an "incentive stock
option" ("ISO") within the meaning of section 422 of the Internal Revenue Code
of 1986 (the "Code"). Such determinations and actions of the Committee shall
be conclusive and shall bind all parties.
A majority of the members of the Committee will constitute a quorum,
and all determinations of the Committee shall be made by a majority of its
members. Any determination of the Committee under the Plan may be made without
notice or meeting of the Committee by a writing signed by a majority of the
Committee members. All members of the Committee shall be disinterested persons
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan will become effective on the date on which it is approved by
the stockholders of the Company. Grants of Awards under the Plan may be made
prior to that date (but after adoption of the Plan by the Board of Directors),
subject to approval of the Plan by stockholders.
No Award may be granted under the Plan after the completion of ten
years from the date on which the Plan was adopted by the Board of Directors,
but Awards previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
(a) NUMBER OF SHARES. Subject to adjustment as provided in Section
11, the aggregate number of shares of Common Stock that may be delivered under
the Plan is 1,150,000. Shares of Common Stock may be issued up to this maximum
pursuant to any type or types of Award, including ISOs. For purposes of this
limitation, Awards and shares of Common Stock which are forfeited or reacquired
by the Company, and Awards which are satisfied without the issuance of shares
of Common Stock, will not be counted. Such limitation will apply only to
shares of Common Stock which have become free of any restrictions under the
Plan.
(b) SPECIAL LIMITATIONS APPLICABLE TO CERTAIN AWARDS. The Committee
shall have the discretion under the Plan to award Options and SARs that are
intended to satisfy certain performance- based compensation arrangements
intended to be exempt from the deduction limitations of Section 162(m) of the
Code (the "Section 162(m) requirements") ("exempt Options and SARs") as well as
Options and SARs that not intended to satisfy those requirements ("non-exempt
Options and SARs"); provided, that the Committee shall award non-exempt Options
and SARs only if it shall have determined that such award will not jeopardize
the continued exemption under Section 162(m)(4)(C) of exempt Options and SARs.
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<PAGE> 3
Subject to adjustment as provided in Section 11, to the extent such adjustment
is consistent with the continued satisfaction by exempt Options and SARs of the
requirements of Section 162(m)(4)(C) of the Code, the maximum number of shares
of Common Stock for which exempt Options may be awarded under the Plan to any
Participant in any calendar year, is in each case 200,000 shares. For purposes
of the preceding sentence, the regrant of a canceled Option or SAR, or the
repricing of an Option or SAR, shall be treated as a separate Award to the
extent required under Section 162(m)(4)(C) of the Code. The per-individual
Award limitations described in this paragraph are intended to enable exempt
Options and SARs awarded under the Plan to qualify for the performance-based
compensation exemption rules set forth under Section 162(m)(4)(c) of the Code
and shall be subject to amendment or revision to the extent (but only to the
extent) consistent with such rules.
(c) SHARES TO BE DELIVERED. Shares delivered under the Plan will be
authorized but unissued shares of Common Stock or, if the Committee so decides
in its sole discretion, previously issued Common Stock acquired by the Company
and held in treasury. No fractional shares of Common Stock will be delivered
under the Plan.
5. ELIGIBILITY
Employees eligible to become Participants shall be those key employees
of the Company and its subsidiaries who, in the opinion of the Committee, are
in a position to make a significant contribution to the success of the Company
or its subsidiaries. A subsidiary for purposes of the Plan is a corporation in
which the Company owns, directly or indirectly, stock possessing 50% or more of
the total combined voting power of all classes of stock. Members of the
Committee will not be eligible to become Participants.
6. STOCK OPTIONS
Stock Options granted under the Plan ("Options") may be either ISOs or
non-qualified stock options ("NSOs"). Except to the extent expressly
designated as an ISO (or to the extent it does not qualify as an ISO even if so
designated), each Option will be an NSO.
No term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted to the Committee under
the Plan be exercised, so as to disqualify the Plan or, without the consent of
the optionee, any ISO, under section 422 of the Code. The documents evidencing
ISOs will contain such provisions as are required of ISOs under the applicable
provisions of the Code.
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<PAGE> 4
Options granted under the Plan will be subject to the following terms
and conditions and will contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee deems desirable:
(a) EXERCISE PRICE. The exercise price of each Option will be
determined by the Committee but may not be less than 100% (110%, in the case of
an ISO granted to a ten-percent stockholder) of the fair market value per share
of Common Stock at the time the Option is granted. For this purpose,
"ten-percent stockholder" means any employee who at the time of grant owns
directly, or is deemed to own by reason of the attribution rules in section
424(d) of the Code, Common Stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any of its parent or
subsidiary corporations.
(b) DURATION OF OPTIONS. An Option will be exercisable during such
period or periods as the Committee may specify. The latest date on which an
Option may be exercised will be the date which is ten years (five years, in the
case of an ISO granted to a ten-percent stockholder) from the date the Option
was granted or such earlier date as may be specified by the Committee at the
time the Option is granted.
(c) Exercise of Options.
(1) Options will be exercisable at such future time or
times, whether or not in installments, as determined by
the Committee at or after the grant date. The Committee
may at any time accelerate the exercisability of all or
any portion of any Option.
If Options intended to be ISOs when granted to an
individual Participant first become exercisable in any
one calendar year as to shares of Common Stock having a
value (determined when the Options were granted) in
excess of $100,000, such Options will be treated as NSOs
rather than ISOs for federal income tax purposes to the
extent required by applicable provisions of the Code.
(2) Any exercise of an Option must be by written notice to
the Company, accompanied by (i) the document evidencing
the Option (the "Option Certificate") and any other
documents required by the Committee and (ii) payment in
accordance with Section 6(d) below for the number of
shares of Common Stock for which the Option is exercised.
(3) Notwithstanding any other provision of the Plan, during
the 60-day period from and after the date of a Change of
Control, the Participant shall have the right (by giving
written notice to the Company in form satisfactory to
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<PAGE> 5
the Committee) to surrender all or part of an Option to
the Company and to receive an amount in cash equal to
the excess of the aggregate Value (as defined below) of
the shares of Common Stock covered by the Option, or
portion thereof surrendered, determined on the date the
Option is exercised, over the aggregate Option exercise
price of such shares (such excess is referred to herein
as the "Aggregate Spread"); provided however, and
notwithstanding any other provision of the Plan, if the
end of such 60 day period from and after the date of a
Change of Control is within six months of the date of
grant of an Option held by a Participant who is an
officer or director of the Company (within the meaning
of Section 16(b) of the Securities Exchange Act of 1934,
as amended), then, unless (i) a merger with the
Corporation will occur in connection with the Change of
Control, (ii) such merger is not effective until more
than six months from the date of grant of such
Participant's Option and (iii) upon effectiveness of
such merger the Participant's Option will be cancelled
in exchange for the Aggregate Spread, the Option shall
either remain outstanding notwithstanding the
cancellation of Options generally upon the effectiveness
of such merger or shall be exchanged for a fully
exercisable option of the surviving corporation of such
merger (or its parent corporation) on an economically
equivalent basis as set forth in Section 1.425-1 of the
Treasury Income Tax Regulations. The foregoing right
shall not apply to ISOs granted prior to January 31,
1989, other than any such Option that has been modified,
extended or renewed within the meaning of Section 424(b)
of the Code. As used in this Section 6(c)(3) with
respect to an election by a Participant to receive cash
in respect of a NSO the term "Value" means the higher of
(i) the highest fair market value (as defined in Section
12(d) during the 60-day period prior to the date of a
Change of Control and (ii) if the Change of Control is
the result of a transaction or series of transactions
described in paragraphs (i), (ii) or (iii) of the
definition of Change of Control set forth in Exhibit A,
the highest price per share of the Common Stock paid in
such transaction or series of transactions (which in the
case of paragraph (i) shall be the highest price per
share of the common Stock as reflected in a Schedule 13D
by the person having made the acquisition), and as used
in this paragraph 6(c)(3) with respect to an election by
a Participant to receive cash in respect of an ISO,
unless the Participant otherwise elects in writing the
term "Value" shall mean "fair market value" (as defined
in Section 12(d)). Notwithstanding the foregoing, the
right to receive cash under this paragraph and the right
to a special determination of "Value" with respect to
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<PAGE> 6
NSOs shall not apply in the case of any Change of
Control intended to qualify for "pooling of interests"
accounting treatment, to the extent the Committee
determines that such features would be incompatible with
such treatment.
(d) PAYMENT FOR AND DELIVERY OF COMMON STOCK. Common Stock purchased
on exercise of an Option shall be paid for as follows: (1) in cash or by
certified check, bank draft or money order payable to the order of the Company
or (2) if so permitted by the Option Certificate, (i) through the delivery of
shares of Common Stock (held for at least six months, or such other period as
the Committee may specify) having a fair market value on the last business day
preceding the date of exercise equal to the purchase price or (ii) by a
combination of cash and Common Stock as provided in clauses (1) and (2)(i)
above or (iii) by delivery of a promissory note of the Participant to the
Company, payable on such terms as are specified in the Option Certificate
(except that the Option Certificate may provide that the rate of interest on
the note will be the lowest rate which is sufficient, at the time the note is
given, to avoid imputation of interest under the applicable provisions of the
Code), or by a combination of cash (or cash and Common Stock) and the
Participant's promissory note; PROVIDED, that if the Common Stock delivered
upon exercise of the Option is an original issue of authorized Common Stock, at
least so much of the exercise price as represents the par value of such Common
Stock must be paid in cash if the Committee determines that cash payment is
required by law.
(e) NONTRANSFERABILITY OF OPTIONS. No Option may be transferred other
than by will or by the laws of descent and distribution, and during a
Participant's lifetime an Option may be exercised only by him.
(f) DEATH OR DISABILITY. If a Participant's employment with the
Company and its subsidiaries terminates by reason of death or total and
permanent disability, each Option held by the Participant will become fully
exercisable and will remain exercisable after the date of such termination for
a period of two years in the case of death and one year in the case of
disability (but in no event later than the date the option would have expired
in all events under Section 6(b)). In the case of a deceased Participant, such
Option may be exercised within such time limits by his executor or
administrator, or by the person or persons to whom the Option is transferred by
will or the applicable laws of descent and distribution.
(g) OTHER TERMINATION OF EMPLOYMENT. If a Participant's employment
with the Company and its subsidiaries terminates for any reason other than
death or total and permanent disability, all Options held by the Participant
that are not then exercisable shall terminate. Options that are exercisable on
the date of
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<PAGE> 7
termination will continue to be exercisable for a period of three months (but
in no event later than the date the option would have expired in all events
under Section 6(b)) unless the employee has confessed to, or been convicted of,
any act of fraud, theft or dishonesty arising in the course of, or in
connection with, his employment with the Company, in which case the Option will
terminate immediately and in full. After completion of that three-month period
such Options shall terminate to the extent not previously exercised, expired or
terminated.
7. STOCK APPRECIATION RIGHTS
(a) NATURE OF STOCK APPRECIATION RIGHT. A Stock Appreciation Right
("SAR") is an Award entitling the recipient to receive an amount in cash or
shares of Common Stock or a combination thereof having a value equal to the
excess of the fair market value of a share of Common Stock on the date of
exercise over the fair market value of a share of Common Stock on the date of
grant (or over the Option exercise price, if the SAR was granted in tandem with
an Option) multiplied by the number of shares with respect to which the SAR has
been exercised, with the Committee having the right to determine the form of
payment.
(b) GRANT OF SARS. SARs may be granted in tandem with, or
independently of, Options granted under the Plan. In the case of an SAR
granted in tandem with an NSO, such SAR may be granted either at or after the
time of the grant of such Option. In the case of an SAR granted in tandem with
an ISO, such SAR may be granted only at the time of the grant of the Option.
SARs will be evidenced by such written agreement as is deemed appropriate by
the Committee.
An SAR or applicable portion thereof granted in tandem with an Option
will terminate and no longer be exercisable upon the termination or exercise of
such Option, except that an SAR granted with respect to less than the full
number of shares covered by an Option will not be reduced until the exercise or
termination of the related Option exceeds the number of shares not covered by
the SAR.
(c) TERMS AND CONDITIONS OF SARS. SARs will be subject to such terms
and conditions as are determined from time to time by the Committee, subject,
in the case of SARs granted in tandem with Options, to the following:
(1) SARs will be exercisable only at such time or times and
to the extent that the related Option is exercisable.
(2) Upon the exercise of an SAR, the applicable portion of
any related Option must be surrendered.
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<PAGE> 8
(3) SARs will be transferable only with the related Option.
All SARs will be exercisable during the Participant's
lifetime only by the Participant or his legal
representative.
(4) An SAR granted in tandem with an Option may be exercised
only when the market price of the Common Stock subject
to the Option exceeds the exercise price of such Option.
The provisions of Sections 6(f) and 6(g) relating to the exercisability
and termination of Options shall also apply to SARs, whether or not granted in
tandem with Options.
Any exercise of an SAR must be by written notice to the Company,
accompanied by the document evidencing the SAR and any other documents required
by the Committee.
(d) SPECIAL RULES RELATING TO EXERCISE. In the case of a Participant
subject to the restrictions of Section 16(b) of the Securities Exchange Act of
1934, no SAR may be exercised except in compliance with any applicable
requirements of Rule 16b-3(e) or any successor rule. Notwithstanding Section
7(a) above, in the event of such exercise during the exercise period currently
prescribed by Rule 16b-3(e), the Committee may prescribe, by guidelines of
general application, such other measure of value as it may determine but not in
excess of the highest per share closing sale price of the Common Stock reported
on the New York Stock Exchange Composite Transactions Index during such period
and, where in tandem with an ISO, not in excess of any amount consistent with
the qualification of such option as an ISO under section 422A of the Code;
provided, however, that such guidelines shall be put into operation only if the
Company has received a favorable letter from the Staff of the Securities and
Exchange Commission, or an opinion of counsel, to the effect that such
operation will not adversely affect compliance with Rule 16b-3(e).
8. RESTRICTED STOCK
(a) NATURE OF RESTRICTED STOCK AWARD. A Restricted Stock Award is an
Award entitling the recipient to acquire shares of Common Stock ("Restricted
Stock") for a purchase price (which may be zero) not to exceed par value,
subject to such conditions, including the restrictions specified in Section
8(d) below, as the Committee may impose at the time of grant.
(b) AWARD AGREEMENT. A Participant who is granted a Restricted Stock
Award will have no rights with respect to such Award unless the Participant
accepts the Award within 60 days (or such shorter period as the Committee may
specify) following the Award date by making payment to the Company by certified
or bank check or other instrument acceptable to the Committee in an amount
equal to the specified purchase price, if any, of the shares
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<PAGE> 9
covered by the Award and by executing and delivering to the Company an
agreement (an "Award Agreement") in such form as the Committee determines.
(c) RIGHTS AS A STOCKHOLDER. Upon complying with Section 8(b) above,
a Participant will have all the rights of a stockholder with respect to the
Restricted Stock awarded to him including voting and dividend rights, subject
to the restrictions described in this Section 8 and subject to any other
conditions contained in the Award Agreement. Unless the Committee otherwise
determines, certificates evidencing shares of Restricted Stock will remain in
the possession of the Company until such shares are free of any restrictions
under the Plan.
(d) RESTRICTION. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. If a Participant ceases for any reason to be
employed by the Company or its subsidiaries, shares of Restricted Stock held by
such Participant shall be resold to the Company at their purchase price, or
forfeited to the Company if the purchase price was zero, except as specifically
set forth herein. Shares of Restricted Stock resold to the Company shall have
the status of authorized but unissued shares of Common Stock.
(1) The Committee will specify in the Award Agreement the date or
dates (which may depend upon or be related to the attainment of
performance goals and other conditions) on which the
nontransferability of the Restricted Stock and the obligation of
the Participant to resell such Stock to the Company will lapse.
The Committee may at any time accelerate such date or dates.
(2) If the Participant's employment terminates because of death or
total and permanent disability, all restrictions on Restricted
Stock held by the Participant will lapse.
(e) NOTICE OF ELECTION. Any Participant making an election under
section 83(b) of the Code with respect to a Restricted Stock Award must provide
a copy thereof to the Company within 30 days of the filing of such election
with the Internal Revenue Service.
9. CASH AWARDS
In connection with any Award hereunder the Committee may, in its sole
discretion, at the time such Award is made or at a later date, provide for and
grant a cash award to the Participant not to exceed an amount equal to (a) the
amount of any federal, state and local income tax on ordinary income for which
the Participant will be liable with respect to the Award, plus (b) an
additional amount on a grossed-up basis necessary to make him whole after tax,
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<PAGE> 10
discharging all his income tax liabilities arising from all payments under this
Section 9. Any payments under this Section 9 will be made at the time the
Participant incurs federal income tax liability with respect to the Award.
10. CHANGE OF CONTROL
Notwithstanding any other provision of this Plan, in the event of a
Change of Control of the Company as defined in Exhibit A hereto (a) each Option
and SAR held by each Participant will immediately become fully exercisable; and
(b) restrictions and conditions on Restricted Stock held by the Participant
will immediately lapse.
11. CHANGES IN COMPANY; SUBSTITUTE AWARDS
(a) CHANGES IN STOCK. In the event of a stock dividend, stock split
or combination of shares, recapitalization or other change in the Company's
capital stock, the number and kind of shares of stock or securities of the
Company subject to Awards then outstanding or subsequently granted under the
Plan, the maximum number of shares of stock or securities that may be delivered
under the Plan, the purchase price, and other relevant provisions will be
appropriately adjusted by the Committee, whose determination shall be binding
on all persons.
The Committee may also adjust the number of shares subject to
outstanding Awards, the exercise price of outstanding Options and the terms of
outstanding Awards, to take into consideration material changes in accounting
practices or principles, consolidations or mergers (except those described in
Section 11(b) below), acquisitions or dispositions of stock or property or any
other event if it is determined by the Committee that such adjustment is
appropriate to avoid distortion in the operation of the Plan.
(b) MERGER, ETC. Subject to Section 10, in the event of a dissolution
or liquidation of the Company or a merger or consolidation in which the Company
is not the surviving corporation or its outstanding shares are converted into
securities of another corporation or exchanged for other consideration, all
Options and SARs granted hereunder will terminate, but at least 20 days prior
to the effective date of any such dissolution or liquidation (or 20 days prior
to any earlier related sale of substantially all the assets of the Company) or
of any such merger or consolidation, the Committee shall (1) make all Options
and SARs outstanding hereunder immediately exercisable, provided that, unless
the event will give rise to a Change of Control or it is anticipated that a
Change of Control will coincide with or follow the event, the Committee may
instead arrange that the successor or surviving corporation, if any, grant
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replacement Options and/or SARs and (2) eliminate immediately all restrictions
and conditions on all Restricted Stock.
(c) SUBSTITUTE AWARDS. The Company may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or a subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or a subsidiary or the acquisition by the Company or a subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute Awards be granted on such terms and conditions as the Committee
considers appropriate. The shares which may be delivered under such substitute
Awards will be in addition to the maximum number of shares provided for in
Section 4(a) only to the extent that the substitute Awards are both (1) granted
to persons whose relationship to the Company does not make (and is not expected
to make) them subject to Section 16(b) of the Securities Exchange Act of 1934
and (2) are granted in substitution for awards issued under a plan approved, to
the extent then required under Rule 16b-3 (or any successor rule under such
Act) by the stockholders of the entity which issued such predecessor awards.
12. GENERAL PROVISIONS
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS, ETC. The
Committee may require each person acquiring Common Stock pursuant to an Award
to represent to and agree with the Company in writing that such person is
acquiring the Common Stock without a view to distribution thereof.
The Company will not be obligated to deliver any shares of Common Stock
pursuant to an Award (1) until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulations have been complied with, and
(2) if the outstanding Common Stock is at the time listed on any stock
exchange, until the shares to be delivered have been listed or authorized to be
listed on such exchange upon official notice of issuance, and (3) until all
other legal matters in connection with the issuance and delivery of such shares
have been approved by the Company's counsel. If the sale of Common Stock has
not been registered under the Securities Act of 1933, as amended, the Company
may require such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Common Stock bear an appropriate legend
restricting transfer.
Notwithstanding any provision of the Plan, the Company will be under no
obligation to deliver shares of Common Stock to an estate of a deceased
Participant, or to the person or persons to whom the Award has been transferred
by the Participant's will or
11
<PAGE> 12
the applicable laws of descent and distribution, until the Company is satisfied
as to the authority of such person or persons.
(b) TAX WITHHOLDING, ETC. Each Participant will, no later than the
date as of which the value of an Award or of any Common Stock or other amounts
received hereunder first becomes includable in gross income for federal income
tax purposes, pay to the Company, or make arrangements satisfactory to the
Committee regarding payment of, all federal, state and local taxes required by
law to be withheld with respect to such income. The Company and its
subsidiaries will, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Participant.
The Committee may provide, in respect of any transfer of Common Stock
under an Award, that if and to the extent withholding of any federal, state or
local tax is required, the Participant may elect in such manner as the
Committee prescribes, to have the Company hold back from the transfer Common
Stock having a value calculated to satisfy such withholding obligation, or to
deliver to the Company previously owned shares of equal value. Notwithstanding
the foregoing, in the case of a Participant subject to the restrictions of
Section 16(b) of the Securities Exchange Act of 1934 no such election shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3(e) or any successor rule under such Act.
(c) CONTINUANCE OF EMPLOYMENT. For purposes of the Plan, employment
of a Participant will not be considered terminated (1) in the case of sick
leave or other bona fide leave of absence approved for purposes of the Plan by
the Committee, so long as the Participant's right to reemployment is guaranteed
either by statute or by contract, or (2) in the case of a transfer to the
employment of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an option in a transaction to which section
424(a) of the Code would apply.
(d) FAIR MARKET VALUE. For purposes of the Plan, in general, "fair
market value" of a share of Common Stock on any date means the closing price on
such date as reflected in the New York Stock Exchange Composite Index. If,
however, the Committee determines that a different meaning is in any
circumstance necessary in order to comply with applicable law, such different
meaning will apply in that circumstance.
(e) EMPLOYMENT RIGHTS. Neither the adoption of the Plan nor the grant
of Awards will confer upon any employee any right to continued employment with
the Company or any subsidiary or affect in any way the right of the Company or
subsidiary to terminate the employment of an employee at any time. Except as
specifically provided by the Committee in any particular case, the loss of
existing or potential profit in Awards granted under this Plan
12
<PAGE> 13
shall not constitute an element of damages in the event of termination of the
employment of an employee even if the termination is in violation of an
obligation of the Company to the employee by contract or otherwise.
13. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION.
Neither adoption of the Plan nor the grant of Awards to a Participant
shall affect the Company's right to grant to such Participant awards that are
not subject to the Plan, to issue to such Participant Common Stock as a bonus
or otherwise, or to adopt other plans or arrangements under which Common Stock
may be issued to employees.
The Committee may at any time discontinue granting Awards under the
Plan. With the consent of the Participant, the Committee may at any time
cancel an existing Award in whole or in part and grant the Participant another
Award for such number of shares of Common Stock as the Committee specifies,
subject to Section 4(b). The Committee may at any time or times amend the Plan
or any outstanding Award for the purpose of satisfying the requirements of any
changes in applicable laws or regulations or for any other purpose which may at
the time be permitted by law; or may at any time terminate the Plan as to any
further grants of Awards, provided that (except to the extent expressly
required or permitted herein above) no such amendment shall, without the
approval of the stockholders of the Company, (a) increase the maximum number of
shares available for delivery under the Plan, (b) change the group of employees
eligible to receive Awards under the Plan, (c) reduce the price at which ISOs
may be granted, (d) extend the time within which Awards may be granted, or (e)
amend the provisions of this Section 13, and no such amendment shall adversely
affect the rights of any Participant (without his consent) under any Award
previously granted.
As adopted by the Board of Directors: November 5, 1987
As amended and ratified by the Board of Directors: December 10, 1987
As approved by the STOCKHOLDERS: January 28, 1988
As amended and ratified by the Board of Directors: January 31, 1989
As amended by the Compensation Committee of the Board of
Directors: November 1, 1989
As amended by the Board of Directors: November 17, 1994
As approved by the Stockholders: January 26, 1995
As amended by the Board of Directors: November 16, 1995
As approved by the Stockholders: January 25, 1996
13
<PAGE> 14
EXHIBIT A
A Change of Control will occur for purposes of this Plan if (i) any
individual, corporation, partnership, company or other entity (a "Person")
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of securities of the Company representing more than 30%
of the combined voting power of the Company's then-outstanding securities
(other than as a result of acquisitions of such securities from the Company),
(ii) there is a change of control of the Company of a kind which would be
required to be reported under Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934 (the "Act") (or a similar
item in a similar schedule or form), whether or not the Company is then subject
to such reporting requirement, (iii) the Company is a party to, or the
stockholders approve, a merger consolidation, or other reorganization (other
than (a) a merger, consolidation or other reorganization which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent, either by remaining outstanding or by being converted
into vested securities of the surviving entity, more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger, consolidation, or other
reorganization, or (b) a merger, consolidation, or other reorganization
effected to implement a recapitalization of the Company, or similar transaction
in which no Person acquires more than 20% of the combined voting power of the
Company's then outstanding securities), a sale of all or substantially all
assets, or a plan of liquidation or (iv) individuals who, at the date hereof,
constitute the Board cease for any reason to constitute a majority thereof,
PROVIDED, HOWEVER, that any director who is not in office at the date hereof
but whose election by the Board or whose nomination for election by the
Company's shareholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the date hereof or
whose election or nomination for election was previously so approved (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the Directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Act) shall be deemed to have
been in office at the date hereof for purpose of this definition.
Notwithstanding the foregoing provisions of this Exhibit A, a "Change
of Control" will not be deemed to have occurred solely because of the
acquisition of securities of the Company (or any reporting requirement under
the Act relating thereto) by an employment benefit plan maintained by the
Company for its employees.
14
<PAGE> 1
<TABLE>
EXHIBIT 11.1
XTRA CORPORATION
EARNINGS PER SHARE AND WEIGHTED AVERAGE SHARES OUTSTANDING CALCULATION
----------------------------------------------------------------------
FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
(MILLIONS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<CAPTION>
Three Months Ended
December 31,
------------------
1995 1994
-------- --------
<S> <C> <C>
Net Income $ 13.9 $ 19.1
======= =======
Weighted average number of fully diluted common
shares outstanding (in thousands) 16,431 17,034
Earnings per common and
dilutive common equivalent share $ 0.85 $ 1.12
======= =======
Computation of Primary Shares Outstanding (in thousands)
- --------------------------------------------------------
Weighted average common shares outstanding 16,396 16,942
Common stock equivalents for primary EPS: 35 92
------- -------
Weighted average number of common
shares outstanding (primary) 16,431 17,034
======= =======
Computation of Fully Diluted Shares Outstanding (in thousands)
- --------------------------------------------------------------
Weighted average common shares outstanding 16,396 16,942
Common stock equivalents for fully diluted EPS: 35 92
------- -------
Weighted average number of common
shares outstanding (fully diluted) 16,431 17,034
======= =======
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 12.1
XTRA CORPORATION
STATEMENT OF THE CALCULATION OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
FOR THE THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
(MILLIONS OF DOLLARS)
(UNAUDITED)
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
EARNINGS
Income from operations before provision for income taxes $23.4 $32.7
Add: Fixed charges (below) 16.8 8.4
----- -----
$40.2 $41.1
===== =====
FIXED CHARGES
Interest expense $16.7 $ 8.3
Interest portion of rent expense 0.1 0.1
----- -----
$16.8 $ 8.4
===== =====
Ratio of Earnings to Fixed Charges 2.4 4.9
===== =====
<FN>
Note: For purposes of computing the ratio of earnings to fixed charges,
"earnings" represents income from operations before taxes plus fixed
charges. "Fixed charges" for operations consist of interest on
indebtedness and the portion of rental expense which represents
interest.
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 12.2
XTRA, INC.
STATEMENT OF THE CALCULATION OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
For the twelve months ended December 31, 1995 and 1994
(Millions of dollars)
(Unaudited)
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
EARNINGS
Income from operations before provision for income taxes $23.4 $32.7
Add: Fixed charges (below) 16.8 8.4
----- -----
$40.2 $41.1
===== =====
FIXED CHARGES
Interest expense $16.7 $ 8.3
Interest portion of rent expense 0.1 0.1
----- -----
$16.8 $ 8.4
===== =====
Ratio of Earnings to Fixed Charges 2.4 4.9
===== =====
<FN>
Note: For purposes of computing the ratio of earnings to fixed charges,
"earnings" represents income from operations before taxes plus fixed
charges. "Fixed charges" for operations consist of interest on
indebtedness and the portion of rental expense which represents
interest.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF XTRA CORPORATION FOR THE PERIOD
ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<CASH> 700,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,542,400,000
<PP&E> 1,918,300,000
<DEPRECIATION> 505,000,000
<TOTAL-ASSETS> 1,542,400,000
<CURRENT-LIABILITIES> 0
<BONDS> 913,500,000
<COMMON> 8,200,000
0
0
<OTHER-SE> 349,300,000
<TOTAL-LIABILITY-AND-EQUITY> 1,542,400,000
<SALES> 0
<TOTAL-REVENUES> 112,200,000
<CGS> 0
<TOTAL-COSTS> 71,700,000
<OTHER-EXPENSES> 400,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,700,000
<INCOME-PRETAX> 23,400,000
<INCOME-TAX> 9,500,000
<INCOME-CONTINUING> 13,900,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,900,000
<EPS-PRIMARY> .85
<EPS-DILUTED> .85
</TABLE>
