<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
XTRA CORPORATION
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
XTRA CORPORATION
------------------------------------------------
(Name of Person(s) Filing Proxy Statement if
other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE>
XTRA CORPORATION
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 23, 1997
To the Stockholders:
The 1997 Annual Meeting of Stockholders of XTRA Corporation will be held at
the offices of Ropes & Gray, One International Place, 36th Floor, Boston,
Massachusetts, on Thursday, January 23, 1997, at 10:00 A.M. for the following
purposes:
1. To elect a Board of Directors for the ensuing year.
2. To approve amendments to the 1991 XTRA Corporation Stock Option Plan for
Non-Employee Directors to: (i) increase the number of shares reserved
for issuance under the Plan from 50,000 to 100,000, (ii) increase the
number of shares covered by options awarded annually to directors from
500 to 1,000, and (iii) provide for initial grants to newly elected
directors for options covering 4,000 shares of the Company's Common
Stock.
3. To transact such other business as may properly come before the meeting
and any adjournments thereof.
The Board of Directors has fixed the close of business on December 2, 1996,
as the record date for the determination of the stockholders entitled to
notice of, and to vote at, the meeting and any adjournments thereof.
Whether or not you expect to attend the meeting in person, we urge you to
sign and date the enclosed proxy and return it promptly in the envelope
provided.
By order of the Board of Directors
JAMES R. LAJOIE, Secretary
December 19, 1996
<PAGE>
XTRA CORPORATION
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors for use at the 1997 Annual Meeting
of Stockholders of XTRA Corporation, a Delaware corporation (the "Company"),
on Thursday, January 23, 1997, and at any adjournments thereof. You can ensure
that your shares are voted by signing and returning the enclosed proxy in the
envelope provided. Sending in a signed proxy will not affect your right to
attend the meeting and vote in person. You may revoke your proxy at any time
before it is voted by a written revocation received by the Secretary, by a
subsequently dated proxy or by oral revocation delivered in person to the
Secretary at the meeting. This proxy statement and the enclosed proxy will be
mailed to stockholders commencing on or about December 19, 1996.
ELECTION OF DIRECTORS
The Company's By-Laws provide for no fewer than five directors and no more
than twelve, as determined by the directors. The Board of Directors has fixed
the number of directors for the ensuing year at seven. The Board of Directors
recommends that each of the nominees for director, all of whom are now serving
as directors of the Company and are described below, be reelected as a
director of the Company. Each director to be elected will serve until the next
Annual Meeting of Stockholders or until his successor is duly elected and
qualified. The accompanying proxy will be voted for the election of the
following nominees unless authority to vote is withheld by marking the box
entitled "WITHHELD" on the enclosed proxy. Authority to vote for any
individual nominee may be withheld by writing the name of the nominee in the
space provided on the enclosed proxy. If any nominee is unable to serve, which
is not anticipated, or should any vacancy arise for whatever reason, the
persons named as proxies intend to act with respect to the filling of that
office by voting the shares to which the proxy relates for the election of
such other person or persons as may be designated by the Board of Directors
or, in the absence of such designation, in such other manner as they may in
their discretion determine. Alternatively, in any such situation, the Board of
Directors may take action to fix the number of directors for the ensuing year
at the number of nominees named herein who are then able to serve. Proxies
will then be voted for the election of such nominees, except to the extent the
authority to so vote is withheld. Gilbert Butler, a director since 1993 has
decided not to stand for reelection. In addition, J. Russell Duncan, a
director since 1990, has reached the mandatory retirement age for directors of
the Company and, therefore, will not stand for reelection. The Company thanks
Mr. Butler and Mr. Duncan for their years of dedicated service.
<PAGE>
INFORMATION WITH RESPECT TO DIRECTOR NOMINEES
H. WILLIAM BROWN Director since August 1996
4137 Jackson Drive
Lafayette Hill, PA 19444
Retired. Previously, from 1992 through 1996, Mr. Brown, age 58, was Vice
President-Finance & Administration and Chief Financial Officer of Consolidated
Rail Corporation, one of the largest railroad companies in North America. From
1986 to 1992, Mr. Brown served as Senior Vice President--Finance of
Consolidated Rail Corporation. Previously, Mr. Brown served in various other
executive capacities with Consolidated Rail Corporation from 1978 until 1986.
Mr. Brown is currently a member of the Board of Governors of The Philadelphia
Stock Exchange.
ROBERT M. GINTEL Director since 1990
Gintel & Co.
6 Greenwich Office Park
Greenwich, CT 06831
Since 1990, Mr. Gintel, age 68, has been Vice Chairman of the Board of
Directors of the Company. He is Senior Partner of Gintel & Co. Limited
Partnership, a securities broker/dealer firm and member organization of the
New York Stock Exchange, Inc., Chairman of the Board and Chief Executive
Officer of Gintel Equity Management, Inc., a registered investment advisor,
and Chairman of the Board and Chief Executive Officer of the Gintel Fund. Mr.
Gintel has held such positions for more than the past five years. Mr. Gintel
has also been Director and Chairman of the Board of Oneita Industries, Inc., a
textile and apparel company since October 1993.
Chairman of Nominating Committee and member of Executive Committee.
ROBERT B. GOERGEN Director since 1990
Blyth Industries, Inc.
100 Field Point Road
Greenwich, CT 06830
Since 1990, Mr. Goergen, age 58, has been Chairman of the Board of Directors
of the Company. Since 1976, he has been Chairman of the Board and Chief
Executive Officer of Blyth Industries, Inc., a manufacturer and importer of
candles and home decorating accessories. Since 1979, Mr. Goergen has been the
general partner or president of various Ropart entities whose business is
investing in securities for their own account. Mr. Goergen is a Director of
Bank of America Illinois, a subsidiary of Bank of America. Since November
1996, Mr. Goergen has been a Director of Leading Edge Packaging, Inc., a
packaging company. He is also Chairman of the Board of Trustees of the
University of Rochester.
Chairman of Executive Committee and member of Compensation Committee.
2
<PAGE>
HERBERT C. KNORTZ Director since 1990
14 Manor Road
Ridgefield, CT 06877
From 1973 through 1991, Mr. Knortz, age 75, was a Trustee of Corporate
Property Investors, a real estate investment trust. Mr. Knortz also served in
various executive capacities with ITT Corporation, a diversified international
manufacturing and services corporation, from 1961 until his retirement as
Executive Vice President and Director in 1986. He is a former Director of
Sheraton Corporation and Hartford Insurance Group. From 1985 to 1986, Mr.
Knortz was President and Chief Executive Officer of the National Association
of Accountants, and from 1986 to 1987, its Chairman.
Member of Audit and Nominating Committees.
FRANCIS J. PALAMARA Director since 1990
3110 E. Maryland Avenue
Phoenix, AZ 85016
Since 1988, Mr. Palamara, age 71, has been a business consultant. From 1981
to 1988, he was Executive Vice President, Finance of ARA Services, Inc., now
known as Aramark, Inc., a food services corporation, and until 1992, a member
of its Board of Directors. From 1972 to 1978, Mr. Palamara served as Executive
Vice President and Chief Operating Officer of the New York Stock Exchange,
Inc. and from 1978 to 1981, Executive Vice President and Director of Pittston
Company. Mr. Palamara serves as a Director of the Gintel Fund, the Glenmede
Fund and Central Tractor Farm & Country, Inc.
Chairman of Audit Committee and member of Compensation Committee.
LEWIS RUBIN Director since 1990
XTRA Corporation
60 State Street
Boston, MA 02109
Since 1990, Mr. Rubin, age 58, has been Chief Executive Officer and
President of the Company. From 1988 to 1990, he was a consultant with Lewis
Rubin Associates, a consulting firm advising the transportation equipment
industry. From 1984 to 1988, Mr. Rubin served as President and Chief Executive
Officer of Gelco CTI Container Services, a subsidiary of Gelco Corporation, a
diversified international management services corporation, and as an Executive
Vice President of Gelco Corporation. From 1981 to 1983, Mr. Rubin was
President and Chief Executive Officer of Flexi-Van Corporation, a company
engaged in the leasing of intermodal transportation equipment. Mr. Rubin is a
Director of Oneita Industries, Inc.
Member of Executive Committee.
3
<PAGE>
MARTIN L. SOLOMON Director since 1990
P.O. Box 68
Coconut Grove, FL 33233
Since 1990, Mr. Solomon, age 60, has been a self-employed investor. From
1988 to 1990, he was a Managing Director and general partner of Value Equity
Management I, L.P., the general partner of Value Equity Associates I, L.P., an
investment partnership. From 1985 to 1987, Mr. Solomon was an investment
analyst and portfolio manager with Steinhardt Partners, an investment
partnership. Since 1985, Mr. Solomon has been a Director, Vice Chairman of the
Board and Secretary of Great Dane Holdings, Inc., which is engaged in the
manufacture of transportation equipment, automobile stamping, the leasing of
taxis and insurance. Since August 1995, Mr. Solomon has been a Director of DLB
Oil & Gas, Inc., a company engaged in oil exploration and production and,
since April 1996, Mr. Solomon has been a Director of Hexcel Corp., a company
engaged in the manufacturing of composites.
Chairman of Compensation Committee and member of Audit Committee.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has established the following
committees to assist it in the discharge of its responsibilities.
The Audit Committee, none of whose members is an employee of the Company,
annually recommends to the Board of Directors the appointment of a firm of
independent auditors to audit the financial statements of the Company. In
addition, the Committee meets with such independent auditors, the Company's
internal auditor, the Chief Executive Officer and the principal financial,
accounting and legal personnel of the Company to review the scope and results
of the annual audit, the amount of audit fees, the Company's internal
accounting controls, the Company's financial statements contained in the
Company's Annual Report to Stockholders and other related matters. Messrs.
Palamara (Chairman), Duncan, Knortz and Solomon currently serve as members.
The Audit Committee held 4 meetings in fiscal year 1996.
The Compensation Committee is charged with the duty of review and subsequent
recommendation to the Board on matters concerning the individual compensation
of the most highly paid employees of the Company and administers certain
employee benefit plans. Messrs. Solomon (Chairman), Goergen and Palamara
currently serve as members. The Compensation Committee held 6 meetings during
fiscal year 1996.
The Board of Directors has an Executive Committee, which has authority to
act for the full Board of Directors on most matters during intervals between
meetings of the Board of Directors. Messrs. Goergen (Chairman), Butler, Gintel
and Rubin currently serve as members. The Executive Committee held 1 meeting
in fiscal year 1996.
The Board of Directors also has a Nominating Committee, which held 2
meetings during fiscal 1996. The Nominating Committee has authority to
recommend potential Board members and the reelection or nonreelection of
directors at the expiration of their respective terms, to present annually a
slate of officers for the Board and to make additional nominations as
vacancies occur, and to recommend appointments to standing Committees. The
Nominating Committee will consider
4
<PAGE>
recommendations for director nominees submitted by stockholders by timely
written notice received by the Secretary of the Company in advance of the
applicable stockholder meeting. See "Stockholder Proposals and Director
Nominations" below. Messrs. Gintel (Chairman), Duncan and Knortz currently
serve as members.
The full Board held 6 meetings during fiscal year 1996.
STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of the Company's Common
Stock, $.50 par value, beneficially owned by each current director, director
nominee, by each of the executive officers named in the Compensation Tables,
and by all directors and executive officers as a group on November 29, 1996.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS(1)
- ------------------------ ----------------------- -----------
<S> <C> <C>
H. William Brown -- --
Gilbert Butler 3,500 *
J. Russell Duncan 9,800 *
William H. Franz 60,000 *
Robert M. Gintel 26,400 *
Robert M. Goergen 44,852(2) *
Frederick M. Gutterson 13,334 *
Herbert C. Knortz 7,800 *
Francis J. Palamara 7,800 *
Lewis Rubin 202,722 1.3%
Michael J. Soja 84,284 *
Martin L. Solomon 33,781 *
Charles D. Willmott 61,000 *
All Directors and Executive Officers as a
group, including those named above (18
persons) 701,340 4.4%
</TABLE>
- --------
* Less than 1%.
(1) For purposes of determining beneficial ownership of the Company's Common
Stock, $.50 par value, options exercisable within 60 days have been
included as follows: Mr. Butler - 1,000, Mr. Duncan - 1,800, Mr. Franz -
60,000, Mr. Gintel - 2,400, Mr. Goergen - 1,800, Mr. Gutterson - 13,334,
Mr. Knortz - 1,800, Mr. Palamara - 1,800, Mr. Rubin - 170,000, Mr. Soja -
60,000, Mr. Solomon - 3,781, Mr. Willmott - 60,000, all directors and
executive officers - 520,782. Nature of beneficial ownership is direct and
arises from sole voting and investment power, unless otherwise noted by
footnote.
(2) Includes 2,824 shares of Common Stock owned by Mr. Goergen's wife, 1,600
shares held in accounts for the benefit of Mr. Goergen's adult sons and
700 shares held in trust for the benefit of Mr. Goergen's mother. Mr.
Goergen disclaims beneficial ownership of such shares.
5
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is responsible for the
administration of the Company's executive compensation program. The Committee
is made up of three Directors who are not employees of the Company. It is
responsible for setting the compensation levels of the Company's Chief
Executive Officer and other senior executives, including the executives named
in the Summary Compensation Table. The Committee is also responsible for the
administration of certain compensation and benefit plans. The Committee met 6
times during the year ended September 30, 1996.
COMPENSATION PHILOSOPHY
The Committee believes that the Company's executive compensation program
should attract and retain talented executives. The Committee provides its
executives with the opportunity to earn significant compensation if the
Company and the individual meets or exceeds challenging performance goals.
This strategy has helped the Company attract, retain and motivate high quality
executives who have developed and implemented a successful business strategy
which has increased earnings per share from $1.00 in fiscal 1991 to $2.56 in
fiscal 1996, an increase of 156%. The Committee believes that increasing
stockholder value is one of the key measures of management performance. During
the five-year period ending September 30, 1996, the total return to the
Company's stockholders, assuming reinvestment of dividends, has been 245%.
This compares to returns of 103% for the S&P 500 Index and 87% for the Dow
Jones Transportation Index for the same period.
The Committee periodically reviews a number of independent compensation
surveys as guidelines to determine competitive pay practices. The survey data
is reviewed directly and is also summarized by independent compensation
consultants. Generally, the survey data used is for transportation related
companies of similar size to the Company and based in the United States.
However, since the Company's competition for executive talent is not limited
to the transportation industry, compensation data for other companies of
similar size is also considered. The survey data used to assess the Company's
executive compensation includes some companies that are part of the Dow Jones
Transportation Index as well as other transportation and non-transportation
companies.
Section 162(m) of the Internal Revenue Code of 1986 limits to $1 million the
deduction a public company may claim in any year for compensation to the chief
executive officer and the four other most highly compensated executive
officers unless the compensation is performance based. The Committee believes
that it will not be denied any tax deductions during fiscal 1997 as a result
of Section 162(m). While the Committee expects that action will be taken to
qualify most compensation approaches to ensure deductibility, tax
considerations do not automatically cause the Committee to modify its
executive compensation program.
The Committee believes that the total compensation provided to the Company's
executives is both prudent and competitive. Also, the Committee believes that
the program has helped to successfully focus XTRA's executive team on
increasing Company performance and stockholder value.
BASE SALARIES
Base salaries are determined at the discretion of the Committee based on a
review of competitive market pay practices, performance evaluations and
expected future individual contributions. The
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<PAGE>
Committee uses the median of the range of base salaries from independent
compensation surveys to target the Company's base salary levels. However, it
also considers an individual's unique position, responsibilities and
performance in setting salary levels. In reviewing individual performances,
the Committee considers the views of the Chief Executive Officer, Mr. Lewis
Rubin, with respect to other executive officers.
During fiscal 1996, the Committee increased the base salary levels of senior
executives, other than the CEO, on average 5% after the Committee considered,
but did not formally weigh, inflation, corporate performance, employee
performance and competitive conditions.
ANNUAL INCENTIVES
Annual incentives are paid primarily through the Company's Annual Incentive
Plan and are determined by establishing target incentive awards based on a
percentage of base salary. Awards are based on weighted corporate performance,
divisional performance, regional performance and individual performance.
Corporate and divisional performance are based on return on average capital
employed performance against budgeted operating plans and return on average
capital employed performance against a fixed standard. Return on average
capital employed is defined as earnings before interest and taxes, divided by
average capital employed (total assets minus short-term non-interest bearing
liabilities). Return on average capital employed is adjusted for the purposes
of this Plan such that changes in accounting methodology, changes in
depreciation policy, gains or losses from significant dispositions of
equipment and unusual or extraordinary items will neither increase or decrease
the size of the incentives, subject to Committee determination. Individual
performance is determined by the CEO and the Committee.
Awards for corporate executives, other than the CEO, are determined based on
Company performance (weighted 75%) and performance against individual
objectives (weighted 25%). The annual awards for divisional presidents are
determined based on Company performance (weighted 25%), division performance
(weighted 50%) and performance against individual objectives (weighted 25%).
Annual awards for certain regional vice presidents are determined based on
regional performance (weighted 50%), division performance (weighted 25%) and
individual performance (weighted 25%). Annual awards for other divisional
staff are determined based on division performance (weighted 75%) and
individual performance (weighted 25%). The Committee sets the annual award for
the CEO directly based on Company performance (weighted 100%) and its
discretionary evaluation of the CEO's individual performance. It also reviews,
modifies where it deems necessary, and approves the annual incentive awards
for other executives.
Annual incentive target awards for the CEO and the other executives named in
the Summary Compensation Table range from 35% to 60% of salary. Actual awards
may be up to 1.5 times the target awards (no specific maximum in the case of
the CEO). The Committee approved awards for the named corporate executives,
other than the CEO, that were approximately 65% of the targeted award levels.
The annual incentive for the CEO is discussed under the CEO Compensation
section.
During fiscal 1996, the Committee submitted to the Board of Directors the
XTRA Corporation Economic Profit Incentive Plan (the "Economic Profit Plan")
to replace the Company's existing Annual Incentive Plan. The Committee
believes that the Economic Profit Plan measures more directly the economic
profits produced by the Company than does the Company's existing Annual
Incentive Plan.
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<PAGE>
The Economic Profit Plan's objectives are to enhance commitment to the long-
term success of the Company by linking personal financial rewards to the
growth of economic value of the Company, provide an incentive to the executive
officers of the Company for long-term growth in the economic value of the
Company, and to increase the Company's ability to attract and retain key
executives. On September 19, 1996, the Board of Directors adopted the Economic
Profit Plan to take effect for fiscal year 1997.
LONG-TERM INCENTIVES
From time to time, the Committee has granted stock options to the Company's
executives in order to align their interests with the interests of
stockholders. Since stock options are granted at market price, the value of
the stock options is wholly dependent on an increase in the price of the
Company's Common Stock. Stock options are considered effective long-term
incentives by the Committee because an executive is rewarded only if the value
of the Company's Common Stock increases, thus increasing stockholder value. In
determining grants of options for executives, the Committee has reviewed
competitive data of long-term incentive practices at other transportation
related companies and companies of similar size to the Company but in other
industries. The Committee has also taken into account the level of past stock
compensation grants and the value of those grants in determining awards for
the Company's executives.
No options were granted to the Company's executives during fiscal 1996. The
Committee delayed the consideration of such awards to the first quarter of
fiscal 1997 in order to consider such awards at the same time that the
Committee considers base salaries.
CEO COMPENSATION
The Committee awarded an annual incentive award that was 58% of Mr. Rubin's
target annual incentive, based on the Committee's discretionary evaluation of
Mr. Rubin's individual performance. In evaluating the CEO's individual
performance, the Committee considered, but did not formally weigh, the
financial progress that the Company has made since Mr. Rubin became CEO as
measured by return on average capital employed and earnings per share as well
as the factors described above under "Compensation Philosophy".
Martin L. Solomon, Chairman
Robert B. Goergen
Francis J. Palamara
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996, Mr. Solomon was a director of, and owned an equity
interest in the parent corporation of Great Dane Trailers, Inc. ("Great
Dane"). Mr. Solomon is also Chairman of the Compensation Committee. During
fiscal 1996, the Company purchased certain transportation equipment from Great
Dane. See "Certain Transactions" below for additional information.
8
<PAGE>
EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLE
The following information is given regarding compensation earned by the
Chief Executive Officer and the four other most highly compensated executive
officers of the Company with respect to the 1996, 1995 and 1994 fiscal years,
in accordance with transitional provisions applicable to the revised rules on
executive compensation disclosure adopted by the Securities and Exchange
Commission (the "Commission").
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------
SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS COMPENSATION(2)
------------------ ---- -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Lewis Rubin 1996 $500,000 $174,712 -- -- $11,070
President and Chief 1995 408,333 222,793 -- 140,000 13,605
Executive Officer 1994 400,000 290,000 -- 15,000 19,972
William Franz 1996 221,250 85,315 -- -- 11,070
Vice President, XTRA 1995 198,750 96,278 -- 50,000 13,568
Lease 1994 155,000 84,376 -- 5,000 14,524
Frederick M.
Gutterson (3) 1996 254,452 14,819 -- -- 11,070
Vice President, XTRA 1995 62,500 90,000 -- 40,000 3,175
International 1994 -- -- -- -- --
Michael J. Soja 1996 213,000 60,518 -- -- 11,070
Vice President and 1995 205,250 86,954 -- 50,000 13,762
Chief Financial Officer 1994 197,500 79,622 $42,479 5,000 18,479
Charles D. Willmott 1996 206,000 58,529 -- -- 11,070
Vice President, 1995 197,500 74,049 -- 50,000 13,530
Marketing and Planning 1994 187,500 88,189 -- 5,000 17,471
</TABLE>
- --------
(1) Other Annual Compensation represents a cash payment equal to the amount of
income tax with respect to restricted stock that vested during the fiscal
year plus the income tax liability relating to such additional cash
payments.
(2) The amounts shown for each named officer for fiscal 1996 include matching
Company contributions under the Company's 401(k) plan and the Company's
contribution under the defined contribution plan, as follows: Mr. Rubin;
$4,500 and $6,570; Mr. Franz: $4,500 and $6,570; Mr. Gutterson: $4,500 and
$6,570; Mr. Soja: $4,500 and $6,570; and Mr. Willmott $4,500 and $6,570.
(3) Mr. Gutterson became Vice President, XTRA International, of the Company on
June 30, 1995.
Agreement with Mr. Rubin. On July 1, 1994, the Company entered into an
Individual Pension Agreement with Mr. Rubin pursuant to which the Company will
pay Mr. Rubin an annual life benefit of $100,000 if he continues to serve as
Chief Executive Officer of the Company until age 65. In the event of a Change
of Control, the Company has agreed to pay Mr. Rubin a lump sum payment equal
to the present value of such annual benefit in the event his employment with
the Company is terminated within the two year period following the date of the
Change of Control. A Change of Control under the agreement generally includes
the following events: (i) a person or group becomes the beneficial owner of
more than 40% of the voting power of the Company's securities, (ii) a change
of control required to
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<PAGE>
be reported under certain provisions of the Securities Exchange Act of 1934,
(iii) a consolidation, merger or other reorganization (other than (a) in which
the voting power immediately before continues to represent more than 50% of
the voting power thereafter, or (b) in which no person or group would acquire
more than 20% of the voting power), a sale of all or substantially all assets
or a plan of liquidation, and (iv) continuing directors cease to be a majority
of the Board of Directors. In the event Mr. Rubin dies while serving as Chief
Executive Officer or after he becomes entitled to benefits under the
agreement, his surviving spouse, if any, would be entitled to certain survivor
benefits. Mr. Rubin would forfeit all benefits in the event he joins the board
of directors or becomes an executive officer of a competitor of the Company
within two years after the date of termination of his employment with the
Company, other than termination following a Change of Control.
Agreement with Mr. Gutterson. On June 30, 1995, the Company acquired
primarily a marine container fleet of approximately 170,000 twenty-foot
equivalent units from Matson Leasing Company, Inc. In connection with this
acquisition, the Company entered into an Agreement with Mr. Gutterson dated
June 30, 1995, providing for the employment of Mr. Gutterson as a Vice
President of the Company and President of XTRA International Ltd., an indirect
wholly-owned subsidiary of the Company. The agreement provides for an annual
base salary of $250,000, certain bonus compensation tied to the long-term
performance of XTRA International Ltd. (versus a budget agreed upon at the
time of the acquisition), and such fringe benefits as are from time to time
generally provided by the Company to its senior executives. Also pursuant to
the agreement, Mr. Gutterson was granted options covering 40,000 shares of the
Company's Common Stock under the Company's 1987 Stock Incentive Plan.
AGGREGATE OPTION/SAR EXERCISES AND
FISCAL YEAR END OPTION/SAR VALUE TABLE
The table below includes for the individuals named in the Summary
Compensation Table certain information concerning each exercise of stock
options during fiscal 1996 and the fiscal year-end value of unexercised
options.
AGGREGATE OPTION EXERCISES AND
FISCAL YEAR END OPTION VALUE TABLE
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
AT FISCAL YEAR END(#) FISCAL YEAR END($)(1)
------------------------- -------------------------
SHARES
ACQUIRED VALUE
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lewis Rubin -- -- $170,000 -- $89,925 --
William H. Franz -- -- 60,000 -- 29,975 --
Frederick M. Gutterson -- -- 13,334 26,666 -- --
Michael J. Soja -- -- 60,000 -- 29,975 --
Charles D. Willmott -- -- 60,000 -- 29,975 --
</TABLE>
- --------
(1) Based on share price of $42.125, which was the closing price for a share
of the Company's Common Stock on November 29, 1996.
10
<PAGE>
STOCK PERFORMANCE GRAPH
The graph below compares cumulative total shareholder returns for the Company
for the preceding five fiscal years with the S&P 500 Stock Index and the Dow
Jones Transportation Index. The graph assumes the investment of $100 at the
commencement of the measurement period with dividends reinvested.
[GRAPH APPEARS HERE]
XTRA CORPORATION
COMPARISON OF CUMULATIVE TOTAL RETURN
FISCAL YEAR ENDING SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Cumulative Total Return
---------------------------------------------------------------------------------------
9/91 9/92 9/93 9/94 9/95 9/96
Xtra Corp XTR 100 172 375 406 356 345
S & P 500 1500 100 111 125 130 169 203
D J TRANSPORTATION AVERAGE IDJT 100 109 140 131 174 187
</TABLE>
11
<PAGE>
COMPENSATION OF DIRECTORS
The Company pays its directors, other than the Chairman and Vice Chairman of
the Board, a monthly retainer of $1,375. The Chairman and Vice Chairman of the
Board are paid monthly retainers of $5,000 and $1,667, respectively. All
directors are paid a fee of $1,000 for each meeting of the Board of Directors
attended in person or by telephone. In addition, Committee chairmen and
members receive $1,000 for each Committee meeting attended. A monthly retainer
of $250 is also paid to Committee chairmen. Mr. Rubin, as an officer, does not
receive fees for attendance at Committee meetings. Directors may elect to
defer part or all of their director's fees pursuant to the Company's
directors' deferred compensation plan.
Deferred Director Fee Option Plan--The Company's Deferred Director Fee
Option Plan (the "1993 Plan") permits non-employee directors to choose between
receiving their fees from the Company in the form of cash or non-qualified
stock options. The option exercise price is 50% of the fair market value of
the shares at the time the options are awarded and the amount of shares is
determined by dividing the directors' fees by the exercise price. Mr. Solomon
is the only current director who has elected to participate in the 1993 Plan.
At November 29, 1996, there were outstanding options to purchase 1,484 shares
of the Company's Common Stock at an option price of $24.25, 1,096 shares of
the Company's Common Stock at an option price of $22.81, 1,422 shares of the
Company's Common Stock at an option price of $25.31, 814 shares of the
Company's Common Stock at an option price of $20.88, and 795 shares of the
Company's Common Stock at an option price of $20.75. Options granted in lieu
of annual retainer fees become exercisable as to all shares covered thereby on
the first anniversary of the date of grant and options granted in lieu of
meeting fees become exercisable six months following the date of grant.
Stock Option Plan for Directors--The Company has established the 1991 Stock
Option Plan for Non-Employee Directors (the "Plan"), pursuant to which each of
the then current directors who was not an employee of the Company (each an
"Eligible Director") was awarded options to purchase 4,000 shares of Common
Stock upon adoption of the Plan. Following the initial grant, each person who
is an Eligible Director on the day immediately succeeding the day of each
annual meeting of stockholders of the Company will receive options covering
500 shares (subject to the maximum number of shares available under the Plan)
of Common Stock on such date. On November 14, 1996, the Board of Directors
adopted amendments (the "Amendments") to the Plan and directed that they be
submitted to the stockholders for approval at the 1997 Annual Meeting of
Stockholders. The Amendments would, effective for fiscal 1996 (subject to
stockholder approval), (i) increase the number of shares reserved for issuance
under the Plan from 50,000 to 100,000, (ii) increase from 500 to 1,000 the
number of shares for which options will be awarded annually to directors, and
(iii) provide for initial grants to newly elected directors for options
covering 4,000 shares of the Company's Common Stock. See Proposal 2 "Approval
of Amendments to the XTRA Corporation 1991 Stock Option Plan for Non-Employee
Directors" below for additional information. The exercise price of each option
is 100% of fair market value (as defined in the Plan) on the date of award. At
November 29, 1996, there were outstanding options to purchase 22,000 shares of
the Company's Common Stock under the Plan at an average option exercise price
of $41.92. The exercise price of the options for 1,000 shares awarded to each
such director following the 1996 Annual Meeting of Stockholders was $41.50 per
share, 500 of which (3,500 in the aggregate) are subject to stockholder
approval of the Amendments at the 1997 Annual Meeting. In addition, Mr. H.
William Brown was awarded 4,000 shares upon his election to the Board of
Directors on August 1, 1996, subject to stockholder approval of the Amendments
at the 1997 Annual
12
<PAGE>
Meeting. Options become exercisable on the earlier of (i) the first
anniversary of the date of grant or (ii) the date immediately prior to the
date of the next annual meeting of stockholders following the grant date
provided that such date is at least 355 days after such grant date. The Plan
is administered by the Compensation Committee of the Board of Directors.
CERTAIN TRANSACTIONS
During fiscal 1996, the Company purchased certain transportation equipment
from Great Dane Trailers, Inc. ("Great Dane") for an aggregate purchase price
of $8 million. The transaction was consummated on an arms-length basis and on
usual and customary commercial terms. Mr. Solomon is a director of, and owns
an equity interest in, the parent corporation of Great Dane. The Company
currently has commitments to purchase $11 million of additional equipment from
Great Dane during fiscal 1997.
PROPOSAL 2
APPROVAL OF AMENDMENTS TO THE XTRA CORPORATION
1991 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
On November 14, 1996, the Board of Directors adopted amendments (the
"Amendments") to the XTRA Corporation 1991 Stock Option Plan for Non-Employee
Directors (the "Plan"), to be effective for fiscal 1996 (subject to
stockholder approval), to (i) increase the number of shares reserved for
issuance under the Plan from 50,000 to 100,000, (ii) increase from 500 to
1,000 the number of shares for which options will be awarded annually to
directors, and (iii) provide for initial grants to newly elected directors for
options covering 4,000 shares of the Company's Common Stock. The Company's
management believes that it is important to make these Amendments in order to
continue to attract and retain key directors of the Company.
GENERAL
Under the Plan, each director who is not an employee of the Company (each an
"Eligible Director") was awarded options to purchase 4,000 shares of the
Company's Common Stock upon adoption of the Plan. Following the initial grant,
each person who was an Eligible Director on the day immediately succeeding the
day of each annual meeting of the stockholders of the Company, beginning with
the annual meeting in 1992, received options covering 400 shares of the
Company's Common Stock on such date. The exercise price of each option is 100%
of fair market value (as defined in the Plan) on the date of award. The
exercise price of the initial awards to the then Eligible Directors was $11.19
per share. The option exercise price of options for 400 shares awarded to each
Eligible Director following the 1992 and 1993 Annual Meetings of Stockholders
was $15.69 and $37.75, respectively. Beginning with the annual meeting in
1994, each Eligible Director received options covering 500 shares. The option
exercise price of options for 500 shares awarded to each Eligible Director
following the 1994 and 1995 Annual Meetings of Stockholders was $48.50 and
$50.63, respectively. Each Eligible Director received options covering 1,000
shares at an exercise price of $41.50 following the 1996 Annual Meeting of
Stockholders, 500 of which for each such director are subject to stockholder
approval of the Amendments at the 1997 Annual Meeting. Also subject to
stockholder approval at the 1997 Annual Meeting, Mr. H. William Brown received
an initial grant of
13
<PAGE>
options covering 4,000 shares upon his election to the Board of Directors on
August 1, 1996 at an exercise price of $42.25. Options become exercisable on
the earlier of (i) the first anniversary of the date of grant or (ii) the date
immediately prior to the date of the next annual meeting of stockholders
following the grant date provided that such date is at least 355 days after
such grant date. 50,000 shares, subject to adjustments as described below,
have been authorized for delivery upon exercise of options under the Plan. The
Plan is administered by the Compensation Committee of the Board of Directors.
The exercise price of the options under the Plan may be paid in cash or by
check, bank draft or money order or by delivery of shares of the Company's
Common Stock or by any combination of cash and Common Stock. The maximum term
of each option is five years, and no options may be awarded under the Plan
after August 5, 2001. All options are non-transferable, except by will or by
the laws of descent and distribution. Upon the death of any Eligible Director,
all options issued to him but not then exercisable shall terminate. Options
that are exercisable at the time of death may be exercised by his
administrator or executor, or by the person to whom the option is transferred
by will or the applicable laws of descent and distribution, at any time within
the three-year period ending with the third anniversary of the director's
death, subject in each case to the maximum option term. If an Eligible
Director's service for the Company terminates for any reason other than death,
all options held by the director that are not exercisable shall terminate and
options that are exercisable on the date of termination may be exercised for a
period of three months thereafter, subject in each case to the maximum option
term.
In the event of a stock dividend, stock split, combination of shares,
recapitalization or other change in the Company's capital stock, the number
and kind of shares subject to options, the exercise price and other relevant
provisions under the Plan will be appropriately adjusted. In the event of a
merger or consolidation of the Company, a sale of all or substantially all
assets or dissolution or liquidation of the Company, all options outstanding
will become immediately exercisable, unless the Compensation Committee
arranges that the successor or surviving corporation grants replacement
options.
The Committee may at any time or times amend the Plan for any purpose which
may at the time be permitted by law, or may at any time terminate the Plan as
to any further grants of options, provided that no such amendment shall,
without the approval of the shareholders of the Company, increase the maximum
number of shares available under the Plan, increase the number of options
granted to Eligible Directors, amend the definition of Eligible Directors so
as to enlarge the group of directors eligible to receive options under the
Plan, reduce the price at which options may be granted, change or extend the
times at which options may be granted or amend the amendment provisions of the
Plan. However, no such action shall adversely affect any rights under
outstanding awards without the director's consent.
14
<PAGE>
The following table sets forth certain information concerning the Plan for
fiscal 1996:
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF SHARES SHARES UNDERLYING MARKET VALUE OF
UNDERLYING OPTION OUTSTANDING OPTIONS SECURITIES UNDERLYING
PLAN PARTICIPANTS GRANTS IN FISCAL 1996 AT END OF FISCAL YEAR OUTSTANDING OPTIONS (1)
----------------- --------------------- --------------------- -----------------------
<S> <C> <C> <C>
H. William Brown 4,000(2) 4,000 $168,500
Gilbert Butler 1,000 2,000 84,250
J. Russell Duncan 1,000 2,800 117,950
Robert M. Gintel 1,000 2,400 101,100
Robert B. Goergen 1,000 2,800 117,950
Herbert C. Knortz 1,000 2,800 117,950
Francis J. Palamara 1,000 2,800 117,950
Martin L. Solomon 1,000 2,400 101,100
Current Directors as a
Group (8 persons) 11,000 22,000 926,750
</TABLE>
- --------
(1) Based on the share price of $42.125 on November 29, 1996.
(2) Initial Grant.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes certain federal income tax consequences
associated with stock option awards under the Plan. The summary does not
purport to cover other federal tax consequences that may be associated with
the Plan, nor does it cover state, local or non-U.S. taxes.
The grant of a non-qualified stock option under the Plan will not result in
the recognition of taxable income to the director or in a deduction to the
Company. Upon exercise, a director will recognize income in an amount equal to
the excess of the fair market value of the common stock received upon exercise
of the option over the exercise price of the option. The Company is entitled
to a tax deduction equal to the amount of such income. Gain or loss upon a
subsequent sale of any common stock received upon the exercise of a non-
qualified stock option is taxed as capital gain or loss (long-term or short-
term, depending upon the holding period of the stock sold).
If a director exercises an option by surrendering previously acquired stock,
no gain or loss is recognized on the exchange for an equivalent number of new
shares. The director will realize ordinary income, and the Company will be
entitled to a corresponding deduction equal to the fair market value of any
new shares received in excess of the number of previously acquired shares
surrendered in the exchange, less any cash paid.
RECOMMENDATION OF THE BOARD OF DIRECTORS FOR THIS PROPOSAL.
The Board of Directors has approved amendments to the Plan, effective for
fiscal 1996, to: (i) increase the number of shares reserved for issuance under
the Plan from 50,000 to 100,000, (ii) increase the number of shares covered by
options awarded annually to directors from 500 to 1,000, and (iii) provide for
initial grants to newly elected directors for options covering 4,000 shares of
the Company's Common Stock and recommends that the stockholders vote "FOR"
Proposal 2. Proxies solicited by the Board of Directors will be so voted
unless stockholders specify otherwise.
15
<PAGE>
OTHER INFORMATION
AUDITORS
Representatives of Arthur Andersen LLP, the auditors for the Company's 1996
fiscal year, are expected to attend the 1997 Annual Meeting, where they will
have the opportunity to make a statement if they wish to do so and will be
available to answer appropriate questions from the stockholders.
OUTSTANDING VOTING SECURITIES
On November 29, 1996, there were outstanding and entitled to vote 15,246,099
shares of the Common Stock, $.50 par value, of the Company, constituting the
only class of outstanding voting securities.
QUORUM, VOTING OF PROXIES, REQUIRED VOTES AND METHOD OF TABULATION
Consistent with state law and under the Company's By-laws, a majority of the
shares entitled to be cast on a particular matter, present in person or
represented by proxy, constitutes a quorum as to such matter. Votes cast by
proxy or in person at the Annual Meeting will be counted by persons appointed
by the Company to act as election inspectors for the meeting.
Proxies will be voted as specified by the stockholders. If specific choices
are not indicated, proxies will be voted FOR the election of all of the
nominees for director specified above and FOR the approval of Item 2 of the
accompanying Notice of 1997 Annual Meeting of Stockholders.
Directors will be elected by a plurality of the votes properly cast for the
election of directors at the meeting. A majority of the votes present and
entitled to vote on the matter is necessary to approve Item 2 of the
accompanying Notice of 1997 Annual Meeting of Stockholders.
The election inspectors will count the total number of votes cast "for"
approval of Item 2 for purposes of determining whether sufficient affirmative
votes have been cast. The election inspectors will count shares represented by
proxies that withhold authority to vote for a nominee for election as a
director or reflect abstentions and "broker non-votes" (i.e., shares
represented at the meeting held by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or persons
entitled to vote and (ii) the broker or nominee does not have the
discretionary voting power on a particular matter) only as shares that are
present and entitled to vote on the matter for purposes of determining the
presence of a quorum, but neither abstentions nor broker non-votes have any
effect on the outcome of voting on the matter.
16
<PAGE>
BENEFICIAL OWNERSHIP OF MORE THAN FIVE
PERCENT OF THE VOTING SECURITIES
The only persons or entities known to the Company to be the beneficial owner
of five percent or more of the Company's voting securities are as follows:
<TABLE>
<CAPTION>
AMOUNT
AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP(1) CLASS
------------------- -------------- ------------ -------
<S> <C> <C> <C>
Alliance Capital Common Stock 2,472,700 16.2%
1345 Avenue of the Americas
New York, NY 10105
Franklin Mutual Advisers, Common Stock 1,380,700 8.9%
Inc.(2)
51 John F. Kennedy Parkway
Short Hills, NJ 07078
Tiger Management Common Stock 5,341,400(3) 35.0%
101 Park Avenue
New York, NY 10172
</TABLE>
- --------
(1) Nature of beneficial ownership is direct and arises from sole voting and
investment power, unless otherwise noted by footnote.
(2) On November 1, 1996 Franklin Mutual Advisers, Inc. replaced Heine
Securities Corporation ("HSC") as the investment adviser to HSC's former
clients and, consequently, now has sole investment discretion and voting
authority with respect to the Company's voting securities owned by its
advisory clients.
(3) Includes 211,600 owned by Panther Management Company, L.P.
Information with respect to beneficial ownership of the Company's Common
Stock is based in part upon information contained in filings with the
Securities and Exchange Commission and in part on information obtained
directly from the holders. The percentages shown in the foregoing table have
been computed on the basis of shares outstanding on November 29, 1996 for
Alliance Capital and Tiger Management and on September 30, 1996 for Franklin
Mutual Advisers, Inc.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended September 30,
1996 has been mailed to all stockholders.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Stockholder proposals intended to be presented at the 1998 Annual Meeting
must be received by the Company on or before August 22, 1997 for inclusion in
the proxy material for that meeting. Any such proposals should be mailed to:
Secretary, XTRA Corporation, 60 State Street, Boston, Massachusetts 02109.
The Company's By-Laws also establish an advance notice procedure with
respect to stockholder nomination of candidates for election as directors and
other stockholder proposals (whether or not such proposals are to be included
in the Company's proxy material). A notice regarding stockholder
17
<PAGE>
nominations for director or other stockholder proposals must be received by
the Secretary of the Company not less than 90 days prior to the first
anniversary of the date of the last annual meeting. Accordingly, with respect
to the 1998 Annual Meeting, the notice must be received by the Secretary of
the Company by October 25, 1997. Any such notice must contain certain
specified information concerning the persons to be nominated or the proposal
being made and the stockholder submitting the nomination or proposal, all as
set forth in the By-Laws. The presiding officer of the meeting may refuse to
acknowledge any director nomination or other stockholder proposal not made in
compliance with such advance notice requirements.
SOLICITATION
Proxies may be solicited by directors, officers and a small number of
regular employees of the Company personally or by mail, telephone, facsimile
or otherwise, but such persons will not be specially compensated for such
service. Banks and brokers will be requested to solicit proxies from their
customers, where appropriate, and the Company will reimburse them for their
reasonable expenses. The cost of such solicitation will be borne by the
Company. In addition, the Company has retained Morrow & Co., Inc. to assist in
the solicitation of proxies for a fee of approximately $4,000 plus out-of-
pocket expenses.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this proxy statement that will be presented for action at the
meeting. If other matters come before the meeting, the persons named as
proxies intend to vote in accordance with their judgment.
18
<PAGE>
EXHIBIT 99.1
XTRA CORPORATION
1991 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE
-------
The purpose of this 1991 Stock Option Plan for Non-Employee Directors (the
"Plan") is to advance the interests of XTRA Corporation (the "Company") by
enhancing the ability of the Company to attract and retain Directors who are in
a position to make significant contributions to the success of the Company and
to reward Directors for such contributions through ownership of shares of the
Company's common stock (the "Stock").
2. ADMINISTRATION
--------------
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors (the "Board") of the Company. The
Committee shall have authority, not inconsistent with the express provisions of
the Plan, to adopt, amend and rescind rules and regulations for the
administration of the Plan, and to interpret the Plan and to decide any
questions and settle all controversies and disputes that may arise in connection
with the Plan. Such determinations of the Committee shall be conclusive and
shall bind all parties.
3. EFFECTIVE DATE AND TERM OF PLAN
-------------------------------
The Plan shall become effective on the date on which the Plan is approved
by the stockholders of the Company. Options granted under Section 6(a) of the
Plan prior to that date shall be subject to approval of the Plan by the
stockholders. No option shall be granted under the Plan after the completion of
ten years from the date on which the Plan was adopted by the Board, but options
previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
--------------------------
(a) Number of Shares. Subject to adjustment as provided in Section 4(c),
----------------
the aggregate number of shares of
<PAGE>
Stock that may be delivered upon the exercise of options granted under the Plan
shall be 100,000. If any option granted under the Plan terminates without having
been exercised in full, the number of shares of Stock as to which such option
was not exercised shall be available for future grants within the limits set
forth in this Section 4(a).
(b) Shares to be Delivered. Shares delivered under the Plan shall be
----------------------
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in
treasury. No fractional shares of Stock shall be delivered under the Plan.
(c) 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 options then outstanding or subsequently granted under the Plan, the
maximum number of shares or securities that may be delivered under the Plan, the
exercise price, and other relevant provisions shall be appropriately adjusted by
the Committee, whose determination shall be binding on all persons.
5. ELIGIBILITY FOR OPTIONS
-----------------------
Directors eligible to receive options under the Plan ("Eligible Directors")
shall be any Director who is not an employee of the Company.
6. TERMS AND CONDITIONS OF OPTIONS
-------------------------------
(a) Number of Options.
-----------------
Eligible Directors who are Directors on the date of adoption of the Plan by
the Board of Directors shall be awarded 4,000 shares of Stock on that date.
Newly elected Eligible Directors who are subsequently elected to the Board shall
also be awarded options covering 4,000 shares of Stock on the date of their
first election to the Board.
Following the initial grants, each Eligible Director shall be awarded
options covering 1,000 shares of Stock on the day immediately succeeding the day
of each Annual Meeting of the Stockholders of the Company, provided such
individual is then an Eligible Director.
-2-
<PAGE>
(b) Exercise Price. The exercise price of each option shall be 100% of
--------------
the fair market value per share of the Stock at the time the option is granted,
but not less, in the case of an original issue of authorized stock, than par
value per share. For this purpose, "fair market value" on any given date means
the highest closing sale price on the date immediately preceding the date in
question of a share of Stock on the Composite Tape for New York Stock Exchange
Listed Stocks, or, if such Stock is not quoted on the Composite Tape, on the New
York Stock Exchange, or, if such Stock is not listed on such Exchange, on the
principal United States securities exchange registered under the Securities
Exchange Act of 1934 on which such Stock is listed, or, if such Stock is not
listed on any such exchange, the highest closing bid quotation with respect to a
share of such Stock on the date immediately preceding the date in question on
the National Association of Securities Dealers, Inc. Automated Quotation System
or any similar system then in use, or if no such quotation system is available,
the fair market value on the date in question as determined in good faith by the
Committee.
(c) Duration of Options. The latest date on which an option may be
-------------------
exercised (the "Final Exercise Date") shall be the date which is five years from
the date the option was granted.
(d) Exercise of Options.
-------------------
(1) Each option shall become exercisable in full on the earlier of (i) the
first anniversary of the grant date or (ii) the date immediately prior
to the date of the next annual meeting of stockholders following the
grant date provided that such date is at least three hundred fifty
five (355) days after such grant date.
(2) Any exercise of an option shall be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (a) the
option certificate and any other documents required by the Committee
and (b) payment in full for the number of shares for which the option
is exercised.
(3) If an option is exercised by the executor or administrator of a
deceased Director, or by the person or persons to whom the option has
been
-3-
<PAGE>
transferred by the Director's will or the applicable laws of descent
and distribution, the Company shall be under no obligation to deliver
Stock pursuant to such exercise until the Company is satisfied as to
the authority of the person or persons exercising the option.
(e) Payment for and Delivery of Stock. Stock purchased under the Plan
---------------------------------
shall be paid for as follows: (i) in cash or by check, bank draft or money
order payable to the order of the Company, (ii) through the delivery of shares
of Stock which have been beneficially owned by the Eligible Director for not
less than six months prior to the date of exercise and having a fair market
value on the last business day preceding the date of exercise equal to the
purchase price or (iii) by a combination of cash and Stock as provided in
clauses (i) and (ii) above.
An option holder shall not have the rights of a stockholder with regard to
awards under the Plan except as to Stock actually received by him under the
Plan.
The Company shall not be obligated to deliver any shares of Stock (a)
until, in the opinion of the Company's counsel, all applicable federal and state
laws and regulations have been complied with, and (b) if the outstanding 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 (c) 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 Stock has not been registered under the Securities Act
of 1933, as amended, the Company may require, as a condition to exercise of the
option, 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 Stock bear an appropriate legend restricting
transfer.
(f) Nontransferability of Options. No option may be transferred other
-----------------------------
than by will or by the laws of descent and distribution, and, during a
Director's lifetime, an option may be exercised only by him.
(g) Death. Upon the death of any Eligible Director granted options under
-----
this Plan, all options not then exercisable shall terminate. All options held
by the
-4-
<PAGE>
Director that are exercisable immediately prior to death may be exercised
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, at
any time within the three-year period ending with the third anniversary of the
Director's death (subject, however, to the limitations of Section 6(c) regarding
the maximum exercise period for such option). After completion of that three
year period (or the period set forth in Section 6(c), whichever ends earlier),
such options shall terminate to the extent not previously exercised.
(h) Other Termination of Status of Director. If a Director's service with
---------------------------------------
the Company terminates for any reason other than death, all options held by the
Director that are not then exercisable shall terminate. Options that are
exercisable on the date of termination shall continue to be exercisable for a
period of three months (subject to Section 6(c)), but shall terminate
immediately if the Director was removed for cause or resigned under
circumstances which in the opinion of the Committee casts such discredit on him
as to justify termination of his options. After completion of that three-month
period (or the period set forth in Section 6(c), whichever ends earlier), such
options shall terminate to the extent not previously exercised, expired or
terminated.
(i) Mergers, etc. Subject to Section 7, in the event of any merger or
-------------
consolidation involving the Company, any sale of substantially all of the
Company's assets or a dissolution or liquidation of the Company, all options
held by each Eligible Director shall terminate, but at least 20 days prior to
the effective date of any such merger, sale, dissolution, or liquidation, the
Committee shall make all options outstanding hereunder immediately exercisable,
provided that the Committee may instead arrange that the successor or surviving
corporation, if any, grant replacement options.
7. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION
---------------------------------------------------------------
Neither adoption of the Plan nor the grant of options to a Director shall
affect the Company's right to grant to such Director options that are not
subject to the Plan, to issue to such Directors Stock as a bonus or otherwise,
or to adopt
-5-
<PAGE>
other plans or arrangements under which Stock may be issued to
Directors.
The Committee may at any time or times amend the Plan for any purpose which
may at the time be permitted by law, or may at any time terminate the Plan as to
any further grants of options; provided, however, 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 under the Plan, (b) increase the number of options granted
to Eligible Directors, (c) amend the definition of Eligible Director so as to
enlarge the group of Directors eligible to receive options under the Plan, (d)
reduce the price at which options may be granted, (e) change or extend the times
at which options may be granted, or (f) amend the provisions of this Section 7,
and no such amendment shall adversely affect the rights of any Director (without
his consent) under any option previously granted, and, provided further, that
Sections 4(a) and (c) and 6(a)-(d) of the Plan may not be amended more than once
every six months other than to comport with changes in the Internal Revenue Code
or the rules thereunder.
*********************
As adopted by the Board of Directors: AUGUST 6, 1991
As approved by the Stockholders: JANUARY 29, 1992
As amended by the Board of Directors: NOVEMBER 18, 1993
As approved by the Stockholders: JANUARY 27, 1994
As amended by the Compensation Committee: JANUARY 25, 1996
As amended by the Compensation Committee: NOVEMBER 13, 1996
As approved by the Board of Directors: NOVEMBER 14, 1996
[As approved by the Stockholders: JANUARY 23, 1997]
-6-
<PAGE>
EXHIBIT 99.2
XTRA CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R
O
X The undersigned hereby appoints as proxies, each with power of
Y substitution, Robert M. Gintel, Robert B. Goergen and Lewis Rubin, or any of
them, and hereby authorizes them to represent and to vote, as designated on
the reverse side, all the shares of common stock of XTRA Corporation (the
"Company") held of record by the undersigned on December 2, 1996, at the
Annual Meeting of Stockholders to be held January 23, 1997 at Ropes & Gray,
One International Place, 36th Floor, Boston, Massachusetts 02110, and at any
adjournments thereof. The proxies appointed shall act by a majority of such of
them as shall be present at the meeting, or if only one is present, by that
one. The undersigned hereby revokes any proxies heretofore given.
PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE WHERE INDICATED SEE REVERSE
SIDE
<PAGE>
[X] Please mark votes as in this example.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED, OR IF NO
DIRECTION IS MADE, FOR ITEMS 1 AND 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2 BELOW.
1. To elect a Board of Directors for the ensuing year.
NOMINEES: H. William Brown, Robert M. Gintel, Robert B. Goergen, Herbert C.
Knortz, Francis J. Palamara, Lewis Rubin and Martin L. Solomon
FOR WITHHELD
[ ] [ ]
[ ]
For all nominees except as noted above
[ ] MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
2. To approve amendments to the 1991 XTRA Corporation Stock Option Plan for Non-
Employee Directors to: (i) increase the number of shares reserved for
issuance under the Plan from 50,000 to 100,000, (ii) increase the number of
shares covered by options awarded annually to directors from 500 to 1,000,
and (iii) provide for initial grants to newly elected directors for options
covering 4,000 shares of the Company's Common Stock.
FOR AGAINST ASTAIN
[ ] [ ] [ ]
3. The proxies have, in their discretion, the authority to vote upon such other
matters as may properly come before the meeting and any adjournments thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears herein.
All joint owners should sign. When signing as attorney, executor, administrator,
trustee, guardian, or custodian for a minor, please give full title as such. If
a corporation, please sign full corporate name and indicate the signer's office.
If a partner, sign in partnership name.
Signature___________________________________ Date_____________
Signature___________________________________ Date_____________
