<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 Section240.14a-11(c) or
Section240.14a-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):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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/ / 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 29, 1998
To the Stockholders:
The 1998 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 29, 1998, at 10:00 A.M. for the following
purposes:
1. To elect a Board of Directors for the ensuing year.
2. To approve the XTRA Corporation 1997 Stock Incentive Plan.
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 8, 1997,
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 22, 1997
<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 1998 Annual Meeting
of Stockholders of XTRA Corporation, a Delaware corporation (the "Company"), on
Thursday, January 29, 1998, 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 22, 1997.
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 eight. 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.
<PAGE>
INFORMATION WITH RESPECT TO DIRECTOR NOMINEES
MICHAEL D. BILLS Director since August 1997
Tiger Management L.L.C.
101 Park Avenue
New York, NY 10178
Since 1995, Mr. Bills, age 40, has been Chief Operating Officer and Senior
Managing Director of Tiger Management L.L.C., an investment management company.
From 1991 to 1995, Mr. Bills taught at both the University of Virginia's Darden
Graduate School of Business Administration and the McIntire School of Commerce.
From 1986 to 1991, Mr. Bills was also with Tiger Management serving as Managing
Director. Previously, Mr. Bills was with Goldman, Sachs & Co. from 1981 to 1986.
Mr. Bills currently serves as Co-Chairman of the Board of Trustees of the Tiger
Foundation, a New York based charitable foundation, and as a Director of the
India Magnum Fund, an investment fund managed by Morgan Stanley & Co.
Member of Audit Committee.
H. WILLIAM BROWN Director since 1996
4137 Jackson Drive
Lafayette Hill, PA 19444
Since May 1997, Mr. Brown, age 59, has been Chief Financial Officer of
Maritrans Inc., a shipping company engaged in petroleum transportation.
Previously, from 1992 through 1996, Mr. Brown 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 was a member of
the Board of Governors of The Philadelphia Stock Exchange until he retired in
September 1997.
Member of Audit and Nominating Committees.
ROBERT M. GINTEL Director since 1990
Gintel & Co.
6 Greenwich Office Park
Greenwich, CT 06831
Since 1990, Mr. Gintel, age 69, 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 Asset 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
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more than the past five years. Mr. Gintel was a Director and Chairman of the
Board of Oneita Industries, Inc., a textile and apparel company until he retired
in August 1997.
Member of Executive and Nominating Committees.
ROBERT B. GOERGEN Director since 1990
Blyth Industries, Inc.
100 Field Point Road
Greenwich, CT 06830
Since 1990, Mr. Goergen, age 59, 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.
HERBERT C. KNORTZ Director since 1990
14 Manor Road
Ridgefield, CT 06877
Retired. From 1973 through 1991, Mr. Knortz, age 76, 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.
Chairman of Nominating Committee and member of Audit Committee.
FRANCIS J. PALAMARA Director since 1990
3110 E. Maryland Avenue
Phoenix, AZ 85016
Since 1988, Mr. Palamara, age 72, 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
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<PAGE>
1978 to 1981, Executive Vice President and Director of Pittston Company. Mr.
Palamara serves as a Director of the Gintel Fund and the Glenmede Funds.
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 59, 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.
MARTIN L. SOLOMON Director since 1990
P.O. Box 70
Coconut Grove, FL 33233
Since June 1997, Mr. Solomon, age 61, has been the Chairman and Chief
Executive Officer of American Country Holdings Inc., an insurance company
holding company. Since 1990, Mr. Solomon has been a private investor. From 1988
to 1990, he was a Managing Director and 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. From 1985 to 1996, Mr. Solomon was a Director and Vice
Chairman of the Board of Great Dane Holdings, Inc., a company engaged in the
manufacture of transportation equipment, automobile stamping, the leasing of
taxis and insurance. Since 1995, Mr. Solomon has been a Director of DLB Oil &
Gas, Inc., a company engaged in oil exploration and production. Since April
1996, Mr. Solomon has been a Director of Hexcel Corp., a company engaged in the
manufacture of composite materials, and since June 1997, Mr. Solomon has been a
Director of Telephone and Data Systems, Inc., a diversified telecommunications
service company with established wireless and wireline operations.
Chairman of Compensation Committee and member of Executive 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.
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<PAGE>
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),
Bills, Brown and Knortz currently serve as members. The Audit Committee held 4
meetings in fiscal year 1997.
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 1997.
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), Gintel, Solomon
and Rubin currently serve as members. The Executive Committee held 5 meetings in
fiscal year 1997.
The Board of Directors also has a NOMINATING COMMITTEE, which held 2
meetings during fiscal 1997. 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 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. Knortz (Chairman), Brown and Gintel currently serve
as members.
The full Board held 6 meetings during fiscal year 1997.
5
<PAGE>
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 13, 1997.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS(1)
- -------------------------------------------------------------------------- ------------------------ ---------------
<S> <C> <C>
Michael D. Bills -- --
H. William Brown 4,000 *
Michael K. Fox 51,667 *
William H. Franz 95,000 *
Robert M. Gintel 27,400 *
Robert B. Goergen 45,452(2) *
Frederick M. Gutterson 47,917 *
Herbert C. Knortz 8,800 *
Francis J. Palamara 8,800 *
Lewis Rubin 286,056 1.9%
Michael J. Soja 90,534 *
Martin L. Solomon 36,355 *
All Directors and Executive Officers as a group, including those named
above (16 persons) 797,483 5.2%
</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. Brown -- 4,000, Mr. Fox -- 51,667, Mr. Franz -- 95,000, Mr.
Gintel -- 2,400, Mr. Goergen -- 2,400, Mr. Gutterson -- 47,917, Mr. Knortz
-- 2,400, Mr. Palamara -- 2,400, Mr. Rubin -- 253,334, Mr. Soja -- 76,250,
Mr. Solomon -- 6,355, all directors and executive officers -- 638,625.
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.
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, 1997.
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<PAGE>
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 meet or exceed 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 $2.77 in fiscal 1997,
an increase of 177%. The Committee believes that increasing stockholder value is
one of the key measures of management performance. During the five-year period
ending September 30, 1997, the total return to the Company's stockholders,
assuming reinvestment of dividends, has been 174%. This compares to returns of
157% for the S&P 500 Index and 163% 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 1998 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 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 1997, the Committee increased the base salary levels of senior
executives, other than the CEO, on average 7.9% after the Committee considered,
but did not formally weigh, inflation, corporate performance, employee
performance and competitive conditions.
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<PAGE>
ANNUAL INCENTIVES
Annual incentives are paid primarily through the Company's Economic Profit
Incentive Plan (the "Economic Profit Plan") which was adopted by the Board of
Directors in 1996 to take effect for fiscal 1997. 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 value of the Company, by
increasing the Company's Economic Profit (as defined below), and to increase the
Company's ability to attract and retain key executives. Under the Economic
Profit Plan, annual incentives are determined by establishing target incentive
awards based on a percentage of base salary. Actual awards are based on
corporate performance or divisional performance depending upon the
responsibilities of the participant. Corporate and divisional performance are
measured by the growth of Economic Profit by comparing the actual Economic
Profit against a target Economic Profit as designated by the Committee. The term
"Economic Profit" is defined as after-tax operating profit (before interest
expense), less a capital charge for all capital invested in the Company or
division, as applicable. The term "capital charge" is defined as the Company's
weighted average, after-tax, cost of capital, representing a blend of the
Company's equity and debt capital cost.
Awards for corporate executives, other than the CEO, are determined based on
Company performance (weighted 100%). The annual awards for divisional presidents
are determined based on Company performance (weighted 25%), and division
performance (weighted 75%). Annual awards for other divisional staff are
determined based on division performance (weighted 100%). 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.
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 cash
awards may be up to 1.5 times the target awards plus 33% of any positive amount
in the participant's bonus reserve account, an account maintained for each
participant which carries forward any earned but unpaid bonuses from prior
years. This bonus reserve account may also contain a negative balance from prior
years, in such cases the negative amount must be offset against any positive
bonuses earned. The Committee approved awards for the named executives, other
than the CEO, that averaged 102% of the targeted award levels. The annual
incentive for the CEO is discussed under the CEO Compensation section.
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.
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<PAGE>
On November 13, 1996, the Committee recommended the grant of options
covering 100,500 shares of the Company's Common Stock to certain key members of
senior management, which included a grant to Mr. Rubin of 25,000 shares. On
September 30, 1997, the Committee also recommended the grant of options covering
150,000 shares of the Company's Common Stock to certain key members of senior
management, which included a grant to Mr. Rubin of 75,000 shares. The number of
options granted was based on the Committee's review of the individual
executive's position and potential within XTRA, and the level of past stock
compensation awards granted to the individual executive.
CEO COMPENSATION
The Committee awarded an annual incentive award that was 109% 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 as measured by the growth of Economic Profit
and earnings per share as well as the factors described above under
"Compensation Philosophy".
In fiscal 1997, the Committee awarded Mr. Rubin two stock option grants of
25,000 and 75,000 shares, respectively. As discussed above, the option grants
were determined by the Committee after considering competitive option grant
practices as well as Mr. Rubin's individual performance and previous stock
compensation awards.
Martin L. Solomon,
Chairman
Robert B. Goergen
Francis J. Palamara
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During a portion of fiscal 1997, Mr. Solomon was a director of, and owned an
equity interest in the parent corporation of Great Dane Trailers, Inc. ("Great
Dane"). In December 1996, Mr. Solomon sold his equity interest in Great Dane and
ceased being a Director. Mr. Solomon is also Chairman of the Compensation
Committee. During fiscal 1997, the Company purchased certain transportation
equipment from Great Dane. See "Certain Transactions" below for additional
information.
9
<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 1997, 1996 and 1995 fiscal years, in
accordance with transitional provisions applicable to the revised rules on
executive compensation disclosure adopted by the Securities and Exchange
Commission.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------
-------------------------------------- SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION(1)
- ----------------------------------- ---- -------- -------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Lewis Rubin 1997 $504,166 $329,848 -- 100,000 $11,250
President and Chief 1996 500,000 174,712 -- -- 11,061
Executive Officer 1995 408,333 222,793 -- 140,000 13,605
William Franz 1997 255,000 143,903 -- 45,000 11,250
Vice President, XTRA 1996 221,250 85,315 -- -- 11,061
Lease 1995 198,750 96,278 -- 50,000 13,568
Frederick M. Gutterson (2) 1997 263,200 7,897 -- 26,250 11,250
Vice President, XTRA 1996 254,452 14,819 -- -- 11,061
International 1995 62,500 90,000 -- 40,000 3,175
Michael J. Soja 1997 221,450 84,515 -- 26,250 11,250
Vice President and 1996 213,000 60,518 -- -- 11,061
Chief Financial Officer 1995 205,250 86,954 -- 50,000 13,762
Michael K. Fox 1997 180,250 107,630 -- 5,000 11,250
Vice President, XTRA 1996 173,750 51,566 -- -- 11,061
Intermodal 1995 162,500 37,783 -- 40,000 10,870
</TABLE>
- ---------
(1) The amounts shown for each named officer for fiscal 1997 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 $6,750; Mr. Franz: $4,500 and $6,750; Mr. Gutterson: $4,500 and
$6,750; Mr. Soja: $4,500 and $6,750; and Mr. Fox $4,500 and $6,750.
(2) 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 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
10
<PAGE>
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.
SEVERANCE AGREEMENTS. In December 1997, the Company entered into severance
agreements with Messrs. Rubin, Franz, Soja and Fox, providing each of them with
severance benefits upon certain terminations of their employment with the
Company. Such agreements provide that if, within twenty-four months following a
Significant Transaction, the executive's employment with the Company is
terminated either by the Company (other than for "cause", as defined in the
agreements) or by such executive for "good reason" (as defined in the
agreements), the executive would receive a severance payment equal to two times
the executive's annual base salary (at the rate in effect immediately prior to
the date of termination) and his annualized average bonus amount for the prior
two fiscal years and the portion of any year in which the termination occurs. In
addition, the agreements provide for the immediate vesting of all bonus awards,
stock options, etc. For a period of two years following any such termination of
employment, the executive would be entitled to participate in all welfare
benefit plans (other than disability) provided by the Company. In the case of
Mr. Fox, cash payments under the agreement are required to be reduced to the
extent necessary to assure that no portion of the payments under the agreement
would constitute a "parachute payment" under Section 280G of the Internal
Revenue Code. The term Significant Transaction as defined in the agreements
generally includes the following events: (i) a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (or, in the case of Mr. Franz and Mr. Fox, XTRA Lease and
XTRA Intermodal), unless (a) the voting power immediately prior to such
transaction continues to represent 50% or more of the voting power thereafter,
(b) no individual or group would acquire 30% or more of the voting power, except
to the extent that such ownership existed prior to such transaction, and (c) at
least a majority of the members of the board of directors of the corporation
resulting from such transaction were members of the Board at the time of the
execution of the initial agreement or of the action of the Board, providing for
such transaction; or (ii) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company (or, in the case of Mr. Franz
and Mr. Fox, the applicable subsidiary, other than a liquidation or dissolution
of such subsidiary into the Company or any subsidiary of the Company).
AGREEMENTS WITH MR. GUTTERSON. On June 30, 1995, the Company acquired a
marine container fleet of approximately 170,000 twenty-foot equivalent units
from Matson Leasing Company, Inc. ("Matson"). 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.
11
<PAGE>
At the time the Company acquired Matson, Mr. Gutterson was party to an
agreement, assumed by the Company, that provides Mr. Gutterson with certain
severance benefits upon certain terminations of his employment with the Company.
Such agreement provides that if, prior to December 31, 1998 Mr. Gutterson's
employment with the Company is terminated either by the Company (other than for
"cause", as defined in the agreement) or by Mr. Gutterson for "good reason" (as
defined in the agreement), he would receive, in addition to salary and bonus
earned in respect of the year in which such termination occurs, a severance
payment equal to two times his annual base salary (at the highest rate in effect
during the year immediately prior to the date of termination) and his highest
annual bonus compensation in respect of the three calendar years prior to such
termination. For a period of two years following any such termination of
employment, Mr. Gutterson would be entitled to participate in all health and
welfare benefit plans provided by the Company. Payments under the agreement are
required to be reduced to the extent necessary to assure that no portion of the
payments under the agreement would constitute a "parachute payment" under
Section 280G of the Internal Revenue Code.
OPTION/SAR GRANTS TABLE
The table below includes for the individuals named in the Summary
Compensation Table certain information concerning individual grants of stock
options made during fiscal 1997.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
------------------------------------------------------------------------
INDIVIDUAL GRANTS
------------------------------------------------------------------------
% OF
NUMBER OF TOTAL GRANT DATE
SECURITIES OPTIONS VALUE
UNDERLYING GRANTED TO EXERCISE -----------------
OPTIONS EMPLOYEES IN OR BASE EXPIRATION GRANT DATE
NAME GRANTED FISCAL YEAR PRICE ($/SH) DATE PRESENT VALUE(3)
- ------------------------- ----------- ------------------- ------------ ------------------------ -----------------
<S> <C> <C> <C> <C> <C>
Lewis Rubin 25,000(1) 10% $ 40.75 November 12, 2001 $ 328,750
75,000(2) 30 56.94 September 29, 2002 1,377,750
William H. Franz 7,500(1) 3 40.75 November 12, 2001 98,625
37,500(2) 15 56.94 September 29, 2002 688,875
Frederick M. Gutterson 7,500(1) 3 40.75 November 12, 2001 98,625
18,750(2) 7 56.94 September 29, 2002 344,438
Michael J. Soja 7,500(1) 3 40.75 November 12, 2001 98,625
18,750(2) 7 56.94 September 29, 2002 344,438
Michael K. Fox 5,000(1) 2 40.75 November 12, 2001 65,750
</TABLE>
- ---------
(1) All options were granted on November 13, 1996 and have a term of 5 years.
One-third of the shares subject to the option vest and become exercisable on
each of the first, second and third anniversaries of the date of grant. The
exercise price of each option is equal to the fair market value of the
underlying Common Stock on the date of grant, as determined by the closing
price of the Common Stock on November 13, 1996 of $40.75.
(2) All options were granted on September 30, 1997 and have a term of 5 years.
All of the shares subject to the option vested immediately on the date of
grant. The exercise price of each option is equal to the fair market value
of the underlying Common Stock on the date of grant, as determined by the
closing price of the Common Stock on September 30, 1997 of $56.94.
12
<PAGE>
(3) This is a hypothetical valuation as of the grant date using a modified
Black-Scholes valuation formula pursuant to Securities and Exchange
Commission regulations and does not reflect the actual value of the option
awards at any given time. The Black-Scholes model assumed (a) an option term
of five years, (b) a risk-free interest rate of 6% (the yield on five-year
U.S. Treasury securities), (c) a standard deviation of stock-return of
31.2%, and (d) a dividend yield of 1.8%. The standard deviation of stock
return represents a statistical measure intended to reflect the anticipated
fluctuation of price movements over the life of the option.
AGGREGATE OPTION/SAR EXERCISES AND
FISCAL YEAR END OPTION/SAR VALUE TABLE
The table below includes for the individuals named in the Summary
Compensation Table certain information concerning each exercise of stock options
during fiscal 1997 and the fiscal year-end value of unexercised options.
AGGREGATE OPTION EXERCISES AND
FISCAL YEAR END OPTION VALUE TABLE
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT FISCAL YEAR END(#) FISCAL YEAR END($)(1)
ACQUIRED VALUE ---------------------------- -----------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ ----------------- ----------- ------------ -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Lewis Rubin -- -- 245,000 25,000 $ 1,411,800 $ 404,688
William H. Franz 5,000 $ 72,013 92,500 7,500 347,562 121,406
Frederick M. Gutterson -- -- 45,417 20,833 271,667 257,240
Michael J. Soja 5,000 40,388 73,750 7,500 347,562 121,406
Michael K. Fox -- -- 50,000 5,000 388,550 80,938
</TABLE>
- ---------
(1) Based on share price of $56.94, which was the closing price for a share of
the Company's Common Stock on September 30, 1997.
13
<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.
XTRA CORPORATION
COMPARISON OF CUMULATIVE TOTAL RETURN
FISCAL YEAR ENDING SEPTEMBER 30, 1997
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
XTRA CORPORATION S & P 500 DOW JONES TRANSPORTATION AVERAGE
<S> <C> <C> <C>
9/92 $100 $100 $100
9/93 $217 $113 $129
9/94 $235 $117 $120
9/95 $207 $152 $160
9/96 $200 $183 $172
9/97 $274 $257 $263
</TABLE>
14
<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 Deferred Director Fee
Option 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
13, 1997, there were outstanding options to purchase 4,854 shares of the
Company's Common Stock at an average option exercise price of $22.45.
During fiscal 1997, Mr. Solomon was awarded an option to purchase 779 shares
of the Company's Common Stock at an option price of $21.81 on December 31, 1996
and an option to purchase 899 shares of the Company's Common Stock at an option
price of $21.69 on January 24, 1997. 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 "1991 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 1991 Plan. The Plan also provides initial grants to
newly elected directors for options covering 4,000 shares of the Company's
Common Stock. 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 1,000 shares (subject
to the maximum number of shares available under the 1991 Plan) of Common Stock
on such date. The exercise price of each option is 100% of fair market value (as
defined in the 1991 Plan) on the date of award. At November 13, 1997 there were
outstanding options to purchase 26,000 shares of the Company's Common Stock
under the 1991 Plan at an average option exercise price of $44.16. The exercise
price of the options for 1,000 shares awarded to each such director following
the 1997 Annual Meeting of Stockholders was $43.38 per share. In addition, Mr.
Bills was awarded an option to purchase 4,000 shares upon his election to the
Board of Directors on August 5, 1997 at an exercise price of $47.00 per share.
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. 100,000 shares have been authorized for
delivery upon exercise of options under the 1991 Plan. The 1991 Plan is
administered by the Compensation Committee of the Board of Directors.
15
<PAGE>
CERTAIN TRANSACTIONS
During fiscal 1997, the Company purchased certain transportation equipment
from Great Dane Trailers, Inc. ("Great Dane") for an aggregate purchase price of
$54 million. The transaction was consummated on an arms-length basis and on
usual and customary commercial terms. Until December 1996, Mr. Solomon was a
director of, and owned an equity interest in, the parent corporation of Great
Dane.
PROPOSAL 2
APPROVAL OF THE XTRA CORPORATION
1997 STOCK INCENTIVE PLAN
The Company's 1987 Stock Incentive Plan (the "1987 Plan") prohibits the
granting of awards more than ten years after the 1987 Plan was adopted by the
Board. Accordingly, on November 6, 1997, the Company was no longer able to grant
awards under the 1987 Plan. The Board believes that it is important to continue
to have options available for grant in order to attract and retain key employees
who contribute to and are responsible for the continued long-term growth of the
Company. As a result, on November 13, 1997, the Board adopted the XTRA
Corporation 1997 Stock Incentive Plan (the "Plan"), a copy of which is attached
hereto as Exhibit A, and directed its submission to the stockholders for
approval at the 1998 Annual Meeting.
GENERAL
The Compensation Committee (excluding any member who would not be considered
an "outside director" for purposes of Section 162 (m) and the regulations
thereunder or a "non-employee" director within the meaning of Rule 16b-3 under
the Securities Exchange Act of 1934) will administer the Plan, which will permit
the granting of a variety of stock and stock based awards, including stock
options; the award of restricted shares; the granting of stock appreciation
rights; and cash payments to offset the federal, state and local income taxes of
participants resulting from awards under the Plan, all as more fully described
below.
The Compensation Committee will have full authority, consistent with the
Plan, to select who will receive awards, to determine the types of awards to be
granted and the times of grant, to determine the number of shares to be covered
by any award, to determine the terms and conditions of any award, to adopt,
amend and rescind rules and regulations for the administration of the Plan, to
interpret the Plan and to decide any questions and settle all controversies and
disputes which may arise in connection with the Plan, and, in general, to waive
compliance by a participant with any obligation to be performed by the
participant under the award.
Persons eligible to participate in the Plan will 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. Approximately 40 employees are currently eligible to participate
in the Plan. The Plan will limit the terms of awards to ten years and prohibit
the granting of awards more than ten years after November 14, 1997.
16
<PAGE>
The maximum number of shares of Common Stock that may be delivered under the
Plan will be 500,000. Awards and shares of Common Stock that are forfeited or
reacquired, and awards that are satisfied without the issuance of shares of
Common Stock, will not be counted towards this maximum limit. The maximum number
of shares of Common Stock for which stock options or stock appreciation rights
may be granted to any participant in any calendar year will be 100,000.
STOCK OPTIONS. The Plan will permit the granting of non-transferable
incentive stock options under Section 422 of the Internal Revenue Code of 1986
("ISOs") and stock options that do not so qualify ("non-statutory options"). The
option exercise price of each option will be determined by the Committee but
shall not be less than 100% (110% in the case of an ISO granted to a 10%
stockholder) of the fair market value of the shares on the date immediately
preceding the date of grant. At November 13, 1997, the closing price of the
Company's Common Stock as reported on the New York Stock Exchange Composite Tape
was $50.875.
The term of each option may not exceed ten years (five years in the case of
an ISO granted to a 10% 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. Options may be made exercisable in installments, and the exercisability
of options may be accelerated by the Committee. The exercise price of an option
is payable in cash or, if the option so provides, through the delivery of
previously acquired shares of Common Stock, delivery of the participant's
promissory note, or a combination of these payment methods. In the event of
termination of employment by reason of death or total and permanent disability,
each option held by the employee will become fully exercisable and will remain
exercisable for two years in the case of death and one year in the case of
disability (subject to the limitation relating to maximum exercise period).
In the event of termination of employment other than by reason of death or
total and permanent disability, all options held by the employee 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 the stated term of the option, 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 or her employment with the Company, in
which case the entire option shall terminate immediately.
STOCK APPRECIATION RIGHTS. The Committee may also grant non-transferable
stock appreciation rights, alone or in conjunction with options, entitling the
holder upon exercise to receive an amount in any combination of cash or shares
of Common Stock, not greater in value than the increase since the date of grant
in the value of the shares covered by such right. Stock appreciation rights
shall be subject to such terms and conditions as may be determined by the
Committee. The provisions described above relating to the exercisability of
options upon termination of employment as a result of death, disability or
otherwise will also apply to stock appreciation rights.
RESTRICTED STOCK. The Committee may also grant restricted stock awards
subject to such conditions and restrictions, including vesting, as the Committee
may determine at the time of grant. The purchase price (if any) for restricted
stock awards under the Plan may not exceed par value. The Committee may at any
time waive such restrictions, including through accelerated vesting. Shares of
restricted stock will be non-transferable and if a participant who holds shares
of restricted stock ceases for any reason (other than death or total and
permanent disability) to be employed prior to the lapse or waiver of the
restrictions, the Company may require the forfeiture or repurchase of the shares
in
17
<PAGE>
exchange for the amount, if any, which the participant paid for them. If the
employee's employment terminates because of death or total and permanent
disability, all restrictions on restricted stock held by the employee shall
lapse. Prior to the lapse of restrictions on shares of restricted stock the
participant will have all rights of a stockholder with respect to the shares,
including voting and dividend rights, subject only to the conditions and
restrictions generally applicable to restricted stock under the Plan or
specifically set forth in the award agreement.
CASH AWARDS. In connection with any awards, the Committee may, in its
discretion, provide at any time for a cash award to the recipient equal to the
amount of any federal, state and local income tax for ordinary income for which
the recipient would be liable with respect to the award, plus the additional
amount of a grossed-up basis necessary to make the employee whole after tax and
discharge all the employee's income tax liabilities arising from such payments.
ADJUSTMENTS FOR STOCK DIVIDENDS, MERGER, ETC. The Committee will be
required to make appropriate adjustments in connection with awards to reflect
stock dividends, stock splits and similar events. In the event of a merger,
liquidation or similar event, in which the Company effectively is not the
surviving corporation, options and stock appreciation rights will terminate, but
prior to such event, the Committee must either make all options and stock
appreciation rights immediately exercisable and must eliminate all restrictions
on restricted stock, or arrange for substitute grants from the successor
corporation.
EFFECT, DISCONTINUANCE, AMENDMENT AND TERMINATION. The Committee may at any
time discontinue granting awards under the Plan. 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 any time be permitted by law, or may at any time
terminate the Plan as to any further grants of awards, provided that no such
amendment shall, without the approval of the shareholders of the Company, effect
a change to the Plan for which stockholder approval would at the time be
required to maintain qualification or exemption of the Plan under Section 422 or
Section 162(m)(4) of the Internal Revenue Code of 1986.
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 federal employment tax or other federal tax consequences that may be
associated with the Plan, nor does it cover state, local or non-U.S. taxes.
INCENTIVE OPTIONS. In general, no taxable income will be realized by the
optionee for regular income tax purposes upon the grant or exercise of an ISO.
However, the exercise of an ISO may result in alternative minimum tax liability
for the optionee. With certain exceptions, a disposition of shares purchased
under an ISO within two years from the date of grant or within one year after
the date of exercise will produce ordinary income to the optionee (and a
deduction to the Company) equal to the excess of the value of the shares at the
time of exercise over the option price. Any additional gain recognized in the
disposition will be treated as capital gain and any loss sustained will be
capital loss (and no additional deduction will be allowed to the Company for
federal income tax purposes).
18
<PAGE>
NON-STATUTORY OPTIONS. No income will be realized by an optionee at the
time a non-statutory option is granted. Generally, (a) at exercise, ordinary
income would be realized by the optionee in an amount equal to the difference
between the option price and the fair market value of the shares on the date of
exercise, and a tax deduction for the same amount would be available to the
Company, and (b) upon a later sale or exchange, appreciation or depreciation
after the date of exercise would be treated as either short-term or long-term
capital gain or loss depending on the tax holding period applicable to the
shares. Generally, an ISO that is exercised more than three months following
termination of employment (other than termination by reason of death) would be
treated as a non-statutory option.
SECTION 162(M). Section 162(m) of the Internal Revenue Code of 1986 limits
to $1 million the deduction a public corporation may claim in any year for
compensation to any of certain key officers. There are a number of exceptions to
the deduction limitation, including an exception for qualifying
performance-based compensation. It is intended that stock options granted under
the Plan will be eligible for this performance-based exception.
RECOMMENDATION OF THE BOARD OF DIRECTORS FOR THIS PROPOSAL.
The Board of Directors has adopted the XTRA Corporation 1997 Stock Incentive
Plan, and recommends that the stockholders vote "FOR" Proposal 2. Proxies
solicited by the Board of Directors will be so voted unless stockholders specify
otherwise.
OTHER INFORMATION
AUDITORS
Representatives of Arthur Andersen LLP, the auditors for the Company's 1997
fiscal year, are expected to attend the 1998 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 13, 1997, there were outstanding and entitled to vote 15,282,700
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 1998 Annual Meeting of Stockholders.
19
<PAGE>
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 1998 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.
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
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP(1) OF CLASS
- ----------------------------------------------------------- ------------------ ------------------- -----------
<S> <C> <C> <C>
American Century Companies, Inc. Common Stock 957,200 6.3%
4500 Main Street
Kansas City, Missouri 64111
Franklin Mutual Advisers, Inc. Common Stock 1,447,800 9.5%
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
Tiger Management Common Stock 5,341,400 35.0%
101 Park Avenue
New York, New York 10172
Trinity I Fund, L.P. Common Stock 1,424,000 9.3%
201 Main Street, Suite 3200
Fort Worth, Texas 76102
Westport Asset Management Inc. Common Stock 1,424,320 9.3%
253 Riverside Avenue
Westport, Connecticut 06880
</TABLE>
- ---------
(1) Nature of beneficial ownership is direct and arises from sole voting and
investment power, unless otherwise noted by footnote.
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 13, 1997. The number of shares reported
as
20
<PAGE>
held for each of American Century Companies, Inc., Tiger Management and Westport
Asset Management Inc. was as of November 13, 1997 and for each of Franklin
Mutual Advisers, Inc. and Trinity I Fund, L.P. was as of September 30, 1997.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended September 30,
1997 has been mailed to all stockholders.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Stockholder proposals intended to be presented at the 1999 Annual Meeting
must be received by the Company on or before August 24, 1998 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 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 1999 Annual Meeting, the
notice must be received by the Secretary of the Company by October 31, 1998. 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.
21
<PAGE>
EXHIBIT A
XTRA CORPORATION
1997 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this 1997 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
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 non-employee directors within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934.
<PAGE>
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 10, the
aggregate number of shares of Common Stock that may be delivered under the Plan
is 500,000. 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"). Subject to adjustment as provided in Section 10, 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 Options or SARs may be awarded under the
Plan to any Participant in any calendar year is in each case 100,000 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.
(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.
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<PAGE>
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, 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.
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. Also 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 as reflected in the New York
Stock Exchange Composite Index.
(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.
(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.
(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
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<PAGE>
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. Except as may otherwise be determined
by the Committee, 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 the Participant.
(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 the
executor or administrator of the deceased Participant's estate, 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 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 (or shorter) 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.
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<PAGE>
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.
(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.
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 other 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 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.
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<PAGE>
(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 or 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, 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. 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 10(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.
A-6
<PAGE>
(b) MERGER, ETC. 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 may arrange that the successor or surviving
corporation, if any, grant replacement or substitute replacement Options and/or
SARs.
(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.
11. 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 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
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<PAGE>
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. Except as set forth herein, 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 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.
12. 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 no such amendment shall, without the approval of
the stockholders of the Company effect a change to the Plan for which
stockholder approval would at the time be required to maintain qualification or
exemption of the Plan under Section 422 or Section 162(m)(4) of the Code.
AS ADOPTED BY THE BOARD OF DIRECTORS: NOVEMBER 13, 1997
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XTRA CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints as proxies, each with power of 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 8, 1997, at the Annual Meeting of Stockholders to be
held January 29, 1998 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: Michael D. Bills, H. William Brown, Robert M. Gintel, Robert B.
Goergen, Herbert C. Knortz, Francis J. Palamara, Lewis Rubin and Martin L.
Solomon
<TABLE>
<S> <C>
FOR ALL NOMINEES
/ /
/ / For all nominees except as noted above
<CAPTION>
WITHHELD FROM ALL NOMINEES
<S> <C>
/ /
/ / For all nominees except as noted above
</TABLE>
2. To approve the XTRA Corporation 1997 Stock Incentive Plan.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
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.
[ ] MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears hereon.
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.
<TABLE>
<S> <C>
Signature ----------------------------------------------------------------- Date --------------------
Signature ----------------------------------------------------------------- Date --------------------
</TABLE>
