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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
XTRA CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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)(4) 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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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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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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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XTRA CORPORATION
60 State Street
Boston, Massachusetts 02109
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 26, 2000
To the Stockholders:
The 2000 Annual Meeting of Stockholders of XTRA Corporation will be held at
the offices of Ropes & Gray, One International Place, 36th Floor, Boston,
Massachusetts, on Wednesday, January 26, 2000, at 10:00 A.M. for the following
purposes:
1. To elect a Board of Directors for the ensuing year.
2. To approve amendments to the XTRA Corporation 1997 Stock Incentive Plan
to: (i) increase the number of shares reserved for issuance under the
plan from 500,000 to 1,150,000 and (ii) increase the number of shares
for which options or stock appreciation rights may be granted to any
individual in any calendar year from 100,000 to 200,000.
3. To approve amendments to the 1991 XTRA Corporation Stock Option Plan for
Non-Employee Directors to: (i) increase the number of shares covered by
options awarded annually to directors from 1,000 to 3,000 and (ii)
increase from 4,000 to 6,000 the number of shares for which options will
be awarded to newly elected directors.
4. 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 6, 1999,
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
THOMAS A. GIACCHETTO, Secretary
December 22, 1999
<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 2000 Annual Meeting
of Stockholders of XTRA Corporation, a Delaware corporation (the "Company"),
on Wednesday, January 26, 2000, 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, 1999.
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 six. 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 1997
815 Broomley Road
Charlottesville, VA 22901
Mr. Bills, age 42, teaches at the University of Virginia's McIntire School
of Commerce. From 1995 to 1999, Mr. Bills was 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 served as Managing Director
of Tiger Management L.L.C. Previously, Mr. Bills was employed by Goldman,
Sachs & Co. from 1981 to 1986. Mr. Bills currently serves as Director of the
India Magnum Fund, an investment fund managed by Morgan Stanley & Co.
Member of Executive and Nominating Committees.
H. William Brown Director since 1996
4137 Jackson Drive
Lafayette Hill, PA 19444
Since 1997, Mr. Brown, age 61, has been Chief Financial Officer of Maritrans
Inc., a shipping company engaged in petroleum transportation. From 1992
through 1996, Mr. Brown was Vice President-Finance & Administration and Chief
Financial Officer of Consolidated Rail Corporation, then 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.
Chairman of Nominating Committee and member of Audit Committee.
Michael N. Christodolou Director since 1998
Barbnet Investment Co.
201 Main Street, Suite 3200
Fort Worth, Texas 76102
Since 1993, Mr. Christodolou, age 38, has been Director of Equity
Investments for Barbnet Investment Co., formerly Thomas M. Taylor & Co., an
investment consulting firm providing services to entities associated with the
Bass family. From 1988 to 1993, Mr. Christodolou was an investment analyst for
Thomas M. Taylor & Co. Mr. Christodolou currently serves as Director of
Lindsay Manufacturing Co., a manufacturer of agricultural irrigation systems.
Chairman of Audit Committee and member of Compensation Committee.
Robert B. Goergen Director since 1990
Blyth Industries, Inc.
100 Field Point Road
Greenwich, CT 06830
Since 1990, Mr. Goergen, age 61, 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.,
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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. Mr. Goergen serves as a Director of Bionutrics, Inc. a
biopharmaceutical company. He is also Chairman of the Board of Trustees of the
University of Rochester.
Chairman of Executive Committee and member of Compensation Committee.
Lewis Rubin Director since 1990
XTRA Corporation
60 State Street
Boston, MA 02109
Since 1990, Mr. Rubin, age 61, 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
serves as a Director of Hexcel Corp., a company engaged in the manufacture of
composite materials.
Member of Executive Committee.
Martin L. Solomon Director since 1990
P.O. Box 70
Coconut Grove, FL 33233
Since 1997, Mr. Solomon, age 63, 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 and the leasing
of taxis and insurance. Mr. Solomon serves as a Director of Hexcel Corp., a
company engaged in the manufacture of composite materials, Telephone and Data
Systems, Inc., a diversified telecommunications service company with
established wireless and wireline operations, and MFN Financial Corporation,
an installment loan finance company.
Chairman of Compensation Committee and member of Audit and Nominating
Committees.
Committees of the Board of Directors
The Board of Directors of the Company has established the following
committees to assist it in the discharge of its responsibilities.
The Audit Committee, none of whose members is an employee of the Company,
annually recommends to the Board of Directors the appointment of a firm of
independent auditors to audit the financial statements of the Company. In
addition, the Committee meets with such independent
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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. Christodolou (Chairman), Brown and Solomon currently serve as
members. The Audit Committee held 4 meetings in fiscal year 1999.
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), Christodolou and Goergen
currently serve as members. The Compensation Committee held 5 meetings during
fiscal year 1999.
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), Bills and
Rubin currently serve as members. The Executive Committee did not meet during
fiscal 1999.
The Board of Directors also has a Nominating Committee, which held 2
meetings during fiscal 1999. 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. Brown
(Chairman), Bills and Solomon currently serve as members.
The full Board held 10 meetings during fiscal year 1999.
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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 9, 1999.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership(1)(2) of Class(1)(2)
- ------------------------ -------------------------- --------------
<S> <C> <C>
Jordan L. Ayers 18,500 *
Michael D. Bills 5,145 *
Jeffrey R. Blum 37,000 *
H. William Brown 6,000 *
Michael N. Christodolou 6,230 *
William H. Franz 145,000 1%
Robert B. Goergen 55,352(3) *
Lewis Rubin 387,722 3%
Michael J. Soja 115,534 *
Martin L. Solomon 45,873 *
All Directors and Executive Officers
as a group, including
those named above (13 persons) 879,523 7%
</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. Ayers -- 14,750, Mr. Bills -- 5,145, Mr. Blum --
30,750, Mr. Brown -- 6,000, Mr. Christodolou -- 6,230, Mr. Franz --
132,500, Mr. Goergen -- 3,500, Mr. Rubin -- 315,000, Mr. Soja -- 95,000,
Mr. Solomon -- 9,793, all directors and executive officers -- 665,835.
Nature of beneficial ownership is direct and arises from sole voting and
investment power, unless otherwise noted by footnote.
(2) Includes ownership of restricted shares of the Company's Common Stock, in
the following amounts: Mr. Ayers -- 3,750; Mr. Blum -- 6,250; Mr. Franz --
12,500; Mr. Rubin -- 25,000; and Mr. Soja -- 6,250.
(3) Includes 2,824 shares of Common Stock owned by Mr. Goergen's wife, 700
shares held in trust for the benefit of Mr. Goergen's mother and 10,000
shares held by The Goergen Foundation. 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 5
times during the year ended September 30, 1999.
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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 $2.49 in
fiscal 1999, an increase of 149%. The Company's earnings per share in fiscal
1999 before one-time charges would have been $4.16, an increase of 316%. 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.
The income tax deductions of publicly traded companies may be limited to the
extent total compensation for particular executive officers exceeds $1 million
during any year. This deduction limit, however, does not apply to payments
which qualify as "performance based." The Committee has reviewed the
regulations issued by the Internal Revenue Service and will continue to review
the application of these rules to future compensation. However, the Committee
intends to continue basing its executive compensation decisions primarily upon
performance achieved, both corporate and individual, while retaining the right
to make subjective decisions and to award compensation that may or may not
meet all of the Internal Revenue Service's requirements for deductibility.
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 1999, the Committee increased the base salary levels of senior
executives, other than the CEO, on average 12% after the Committee considered,
but did not formally weigh, inflation, corporate performance, employee
performance and competitive conditions.
Annual Incentives
Annual incentives are paid primarily through the Company's Economic Profit
Incentive Plan (the "Economic Profit Plan"). The Economic Profit Plan's
objectives are to enhance commitment to the
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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 earned bonus 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.
Earned bonus awards for corporate executives, other than the CEO, are
determined based on Company performance (weighted 100%). The annual awards for
Mr. William H. Franz and Mr. Jordan L. Ayers, each of whom also serve as
divisional presidents, are determined based on Company performance (weighted
25%), and division performance (weighted 75%). The Committee sets the annual
award for the CEO directly based on Company performance (weighted 100%).
Annual incentive target awards for the CEO and the other executives named in
the Summary Compensation Table range from 30% to 60% of salary. For fiscal
1999 only, each participant's bonus percentage was increased by 50% and hence
the range of annual incentive target awards was 45% to 90%. 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 earned bonus awards for the
named executives, other than the CEO, that averaged 85% of the fiscal 1999
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 and restricted
shares 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 stock awards 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.
On December 7, 1998, the Committee recommended the grant of options covering
191,250 shares of the Company's Common Stock and 63,750 restricted shares of
the Company's Common Stock to certain key members of senior management. The
number of stock awards 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.
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CEO Compensation
For fiscal 1999, the Committee awarded an annual incentive award that was
47% of Mr. Rubin's fiscal 1999 target annual incentive. The Committee also
awarded Mr. Rubin a stock option grant of 75,000 shares and 25,000 restricted
shares of the Company's Common Stock during fiscal 1999. The awards were
determined by the Committee after considering competitive stock award
practices as well as Mr. Rubin's individual performance and previous stock
compensation awards. 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".
Martin L. Solomon, Chairman
Michael N. Christodolou
Robert B. Goergen
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Executive Compensation Table
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 1999, 1998 and 1997 fiscal years.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
------------------------------ ---------------------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary Bonus Compensation Awards(1) Options Compensation(2)
- ------------------ ---- -------- -------- ------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lewis Rubin 1999 $587,500 $344,477 -- 25,000 75,000 $14,250
President and Chief 1998 537,500 593,684 -- -- -- 14,249
Executive Officer 1997 504,166 329,848 -- -- 100,000 11,250
William H. Franz 1999 316,250 371,520 -- 12,500 37,500 14,250
Vice President, 1998 283,750 232,714 -- -- -- 14,249
XTRA Lease 1997 255,000 143,903 -- -- 45,000 11,250
Michael J. Soja 1999 246,250 84,393 -- 6,250 18,750 14,250
Vice President and 1998 232,150 163,866 -- -- -- 14,249
Chief Financial Officer 1997 221,450 84,515 -- -- 26,250 11,250
Jordan L. Ayers 1999 156,750 94,830 -- 3,750 11,250 12,260
Vice President, 1998 130,570 53,946 -- -- 2,500 11,760
XTRA Intermodal 1997 125,750 68,691 -- -- 1,500 10,690
Jeffrey R. Blum 1999 185,000 53,335 -- 6,250 11,250 14,250
Vice President, 1998 165,000 110,564 -- -- 6,000 14,249
Planning and 1997 145,000 47,433 -- -- 3,000 11,250
Development
</TABLE>
- --------
(1) The restricted stock awards vest one-third on each of the first, second
and third anniversaries of the date of grant.
(2) The amounts shown for each named officer for fiscal 1999 include matching
Company 401(k) contributions and the Company's contribution under its
defined contribution 401(k) plan, as follows: Mr. Rubin: $4,800 and
$9,450; Mr. Franz: $4,800 and $9,450; Mr. Soja: $4,800 and $9,450; Mr.
Ayers: $4,540 and $7,720; and Mr. Blum: $4,800 and $9,450.
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
and Exchange Act of 1934, (iii) a consolidation, merger or other
reorganization (other than (a) in which the voting power immediately before
continues to represent more than 50% of the voting power thereafter, or (b) in
which no person or group would acquire more than 20% of the voting power), a
sale of all or substantially all assets or a plan of liquidation, and (iv)
continuing directors cease to be a majority of the Board of Directors. In the
event Mr. Rubin dies while serving as Chief Executive Officer or after he
becomes entitled to benefits under the agreement, his surviving spouse, if
any, would be entitled to certain survivor benefits. Mr. Rubin
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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. On June 18, 1999, the Company entered into amended and
restated severance agreements with Messrs. Rubin, Franz, Soja and Blum,
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. 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,
XTRA Lease), 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, 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, XTRA Lease, other than a liquidation or dissolution of such subsidiary
into the Company or any subsidiary of the Company). The severance agreements
further provide for a "gross-up" under which, if amounts paid under such
agreements would be subject to a federal excise tax on "excess parachute
payments," the Company will pay such executives an additional amount of cash
so that, after payment of all such taxes by the employee, the employee will
have received the amount he would have received in the absence of any such
tax.
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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 1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Grant Date
Individual Grants Value
------------------------------------------------ ----------
% of Total
Number of Options Exercise
Securities Granted to or Base Grant Date
Underlying Employees in Price Expiration Present
Name Options Granted Fiscal Year ($/Sh) Date Value(1)
---- --------------- ------------ -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Lewis Rubin 75,000 18% $46.625 12/6/03 $1,119,097
William H. Franz 37,500 9 46.625 12/6/03 559,549
Michael J. Soja 18,750 5 46.625 12/6/03 279,774
Jordan L. Ayers 11,250 3 46.625 12/6/03 167,865
Jeffrey R. Blum 18,750 5 46.625 12/6/03 279,774
</TABLE>
- --------
(1) This is a hypothetical valuation as of the grant date using a modified
Black-Scholes valuation formula pursuant to Securities and Exchange
Commission regulations and does not reflect the actual value of the option
awards at any given time. The Black-Scholes model assumed (a) an option
term of 5 years, (b) a risk-free interest rate of 4.4% (the yield on 5-
year U.S. Treasury securities), (c) a standard deviation of stock-return
of 26%, and (d) a dividend yield of 0%. The standard deviation of stock
return represents a statistical measure intended to reflect the
anticipated fluctuation of price movements over the life of the option.
Aggregate Option/SAR Exercises and
Fiscal Year End Option/SAR Value Table
The table below includes for the individuals named in the Summary
Compensation Table certain information concerning each exercise of stock
options during fiscal 1999 and the fiscal year-end value of unexercised
options.
Aggregate Option Exercises and
Fiscal Year End Option Value Table
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Year End (#) Fiscal Year End ($)(1)
Shares Acquired Value ------------------------- -------------------------
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lewis Rubin -- -- 306,667 8,333 -- --
William H. Franz -- -- 130,000 2,500 -- --
Michael J. Soja -- -- 92,500 2,500 -- --
Jordan L. Ayers -- -- 13,583 2,000 -- --
Jeffrey R. Blum -- -- 27,750 5,000 -- --
</TABLE>
- --------
(1) Based on share price of $39.75, which was the closing price for a share of
the Company's Common Stock on September 30, 1999.
11
<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, 1999
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
---------------------------------------------------
9/93 9/94 9/95 9/96 9/97 9/98
<S> <C> <C> <C> <C> <C> <C>
XTRA CORPORATION 100.00 108.30 95.03 92.18 126.08 104.26
S & P 500 100.00 103.69 134.53 161.89 227.37 247.93
DOW JONES TRANSPORTATION AVERAGE 100.00 93.19 124.26 133.42 203.68 176.11
</TABLE>
12
<PAGE>
Compensation of Directors
The Company pays its directors, other than the Chairman, a monthly retainer
of $1,375. The Chairman of the Board is paid a monthly retainer of $5,000. All
directors are paid a fee of $1,250 for each meeting of the Board of Directors
attended in person or by telephone. In addition, Committee chairmen and
members receive $1,250 for each Committee meeting attended. A monthly retainer
of $417 is also paid to Committee chairmen. Mr. Rubin, as an officer, does not
receive fees for attendance at Committee meetings. Non-employee 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. Messrs.
Bills, Brown, Christodolou and Solomon have elected to participate in the 1993
Plan. At November 9, 1999, there were outstanding options to purchase 11,300
shares of the Company's Common Stock at an average option exercise price of
$22.41.
During fiscal 1999, the following directors were awarded stock options
pursuant to the 1993 Plan:
<TABLE>
<CAPTION>
Securities
Date of Underlying Exercise
Name Grant Options Price
---- -------- ---------- --------
<S> <C> <C> <C>
Michael D. Bills 12/31/98 145 $20.66
2/19/99 835 19.75
H. William Brown 2/19/99 823 19.75
Michael N. Christodolou 12/31/98 678 20.66
2/19/99 987 19.75
Martin L. Solomon 12/31/98 823 20.66
2/19/99 987 19.75
</TABLE>
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. On November 9, 1999, the Board of Directors
adopted amendments (the "Amendments") to the 1991 Plan and directed that they
be submitted to the stockholders for approval at the 2000 Annual Meeting of
Stockholders. The Amendments would (i) increase from 1,000 to 3,000 the number
of shares for which options will be awarded annually to directors, and (ii)
increase from 4,000 to 6,000 the number of shares for which options will be
awarded to newly elected directors. See Proposal 3 "Approval of Amendments to
the XTRA Corporation 1991 Stock Option Plan for Non-Employee Directors" below
for additional information. The exercise price of each option is 100% of fair
market value (as defined in the 1991 Plan) on the date of award. At November
9, 1999 there were
13
<PAGE>
outstanding options to purchase 28,000 shares of the Company's Common Stock
under the 1991 Plan at an average option exercise price of $48.38. The
exercise price of the options for 1,000 shares awarded to each such director
following the 1999 Annual Meeting of Stockholders was $39.50 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.
PROPOSAL 2
APPROVAL OF AMENDMENTS TO THE COMPANY'S 1997 STOCK INCENTIVE PLAN
On November 9, 1999, the Board approved, and is submitting for stockholder
approval, a proposal to approve amendments to the XTRA Corporation 1997 Stock
Incentive Plan (the "Plan") that would (i) increase from 500,000 to 1,150,000
the number of shares reserved for issuance under the Plan and (ii) increase
the number of shares for which options or stock appreciation rights may be
granted to any one individual in any calendar year from 100,000 to 200,000.
The Board believes that it is important to make these amendments in order to
continue to attract and retain key executive officers of the Company.
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) administers the Plan, which permits 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 has 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 are 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 28 employees are currently eligible to
participate in the Plan. The Plan limits the terms of awards to ten years and
prohibit the granting of awards more than ten years after November 14, 1997.
If Proposal No. 2 is adopted, the maximum number of shares of Common Stock
that may be delivered under the Plan is 1,150,000. Awards and shares of Common
Stock that are forfeited or reacquired, and awards that are satisfied without
the issuance of shares of Common Stock, are not counted towards this maximum
limit. The number of shares for which options or stock appreciation
14
<PAGE>
rights (intended to be exempt from the deduction limitations of Section 162(m)
of the Internal Revenue Code of 1986 (the "Code")) may be granted to any one
individual in any calendar year is limited to 100,000. If Proposal No. 2 is
adopted, the number will be increased to 200,000. The stock option awards set
forth in the table below are subject to stockholder approval of Proposal No.
2. Therefore, approval of Proposal No. 2 by the stockholders at the 2000
Annual Meeting will constitute approval of the option grants.
Stock Options. The Plan permits the granting of non-transferable incentive
stock options under Section 422 of the Code ("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 9, 1999, the closing price of the Company's Common Stock as reported
on the New York Stock Exchange Composite Tape was $41.19.
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 exchange for the amount, if any, which the
participant paid for them. If the employee's employment
15
<PAGE>
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 may 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 Code.
On November 9, 1999, the Compensation Committee granted stock options to
purchase shares of the Company's Common Stock under the Plan subject to the
approval of Proposal No. 2 by the stockholders at the 2000 Annual Meeting, as
described in the following table. Approval by the stockholders of Proposal No.
2 shall also constitute approval of such awards.
<TABLE>
<CAPTION>
Number of Grant Date
Securities Underlying Present
Name Options Granted Value(1)
- ---- --------------------- ----------
<S> <C> <C>
Lewis Rubin 200,000 $2,891,351
William H. Franz 100,000 1,445,675
Michael J. Soja 65,000 939,689
Jordan L. Ayers 40,000 578,270
Jeffrey R. Blum 65,000 939,689
Current Executive Officers as a group,
including those named above 470,000 6,794,674
Current Non-Executive Directors as a group N/A N/A
Current Non-Executive Employees as a group 0 0
</TABLE>
- --------
(1) 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 5 years, (b) a risk-free interest rate of 5.9% (the yield on 5-
year U.S. Treasury securities), (c) a standard deviation of stock-return
of 26%, and (d) a dividend yield of 0%. 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.
16
<PAGE>
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 by the optionee
and no additional deduction will be allowed to the Company for federal income
tax purposes. Any loss sustained will be a capital loss for the optionee.
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 Code 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.
Recommendation of the Board of Directors FOR this Proposal.
The Board of Directors has approved the amendments to (i) increase from
500,000 to 1,150,000 the number of shares of common stock reserved for
issuance under the Plan and (ii) increase the number of shares for which
options or stock appreciation rights may be granted to any one individual in
any calendar year from 100,000 to 200,000 and recommends that the stockholders
vote "FOR" Proposal 2. Proxies solicited by the Board of Directors will be so
voted unless stockholders specify otherwise.
17
<PAGE>
PROPOSAL 3
APPROVAL OF AMENDMENTS TO THE XTRA CORPORATION
1991 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
On November 9, 1999, the Board of Directors adopted amendments (the
"Amendments") to the XTRA Corporation 1991 Stock Option Plan for Non-Employee
Directors (the "1991 Plan"), to (i) increase from 1,000 to 3,000 the number of
shares for which options will be awarded annually to directors, and (ii)
increase from 4,000 to 6,000 the number of shares for which options will be
awarded to newly elected directors. The Board of Directors believes that it is
important to make these Amendments in order to continue to attract and retain
key directors of the Company.
General
Under the 1991 Plan, each director who is not an employee of the Company
(each an "Eligible Director") was awarded options to purchase 4,000 shares of
the Company's Common Stock upon either the adoption of the Plan or election to
the Board. If Proposal No. 3 is adopted, Eligible Directors would receive
options to purchase 6,000 shares of the Company's Common Stock upon initial
election to the Board. If Proposal No. 3 is adopted, each Eligible Director on
the day immediately succeeding the day of each annual meeting of the
stockholders of the Company would receive options covering 3,000 shares at an
exercise price for each option of 100% of fair market value (as defined in the
1991 Plan) on the date of award. 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, subject to adjustments as described below, 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.
The exercise price of the options under the 1991 Plan may be paid in cash or
by check, bank draft or money order or by delivery of shares of the Company's
Common Stock or by any combination of cash and Common Stock. The maximum term
of each option is five years, and no options may be awarded under the Plan
after August 5, 2001. All options are non-transferable, except by will or by
the laws of descent and distribution. Upon the death of any Eligible Director,
all options issued to him but not then exercisable shall terminate. Options
that are exercisable at the time of death may be exercised by his
administrator or executor, or by the person to whom the option is transferred
by will or the applicable laws of descent and distribution, at any time within
the three-year period ending with the third anniversary of the Director's
death, subject in each case to the maximum option term. If an Eligible
Director's service for the Company terminates for any reason other than death,
all options held by the director that are not exercisable shall terminate and
options that are exercisable on the date of termination may be exercised for a
period of three months thereafter, subject in each case to the maximum option
term.
In the event of a stock dividend, stock split, combination of shares,
recapitalization or other change in the Company's capital stock, the number
and kind of shares subject to options, the exercise price and other relevant
provisions under the 1991 Plan will be appropriately adjusted. In the event of
a merger or consolidation of the Company, a sale of all or substantially all
assets or dissolution or liquidation of the Company, all options outstanding
will become immediately exercisable, unless the Compensation Committee
arranges that the successor or surviving corporation grants replacement
options.
18
<PAGE>
The Committee may at any time or times amend the 1991 Plan for any purpose
which may at the time be permitted by law, or may at any time terminate the
1991 Plan as to any further grants of options, provided that no such amendment
shall, without the approval of the shareholders of the Company, increase the
maximum number of shares available under the 1991 Plan, increase the number of
options granted to Eligible Directors, amend the definition of Eligible
Directors so as to enlarge the group of directors eligible to receive options
under the 1991 Plan, reduce the price at which options may be granted, change
or extend the times at which options may be granted or amend the amendment
provisions of the 1991 Plan. However, no such action shall adversely affect
any rights under outstanding awards without the Director's consent.
Federal Income Tax Consequences
The following discussion summarizes certain federal income tax consequences
associated with stock option awards under the 1991 Plan. The summary does not
purport to cover other federal tax consequences that may be associated with
the 1991 Plan, nor does it cover state, local or non-U.S. taxes.
The grant of a non-qualified stock option under the 1991 Plan will not
result in the recognition of taxable income to the director or in a deduction
to the Company. Upon exercise, a director will recognize income in an amount
equal to the excess of the fair market value of the common stock received upon
exercise of the option over the exercise price of the option. The Company is
entitled to a tax deduction equal to the amount of such income. Gain or loss
upon a subsequent sale of any common stock received upon the exercise of a
non-qualified stock option is taxed as capital gain or loss (long-term or
short-term, depending upon the holding period of the stock sold).
If a director exercises an option by surrendering previously acquired stock,
no gain or loss is recognized on the exchange for an equivalent number of new
shares. The director will realize ordinary income, and the Company will be
entitled to a corresponding deduction equal to the fair market value of any
new shares received in excess of the number of previously acquired shares
surrendered in the exchange, less any cash paid.
Recommendation of the Board of Directors FOR this Proposal.
The Board of Directors has approved amendments to the 1991 Plan, to: (i)
increase the number of shares covered by options awarded annually to directors
from 1,000 to 3,000, and (ii) increase from 4,000 to 6,000 the number of
shares for which options will be awarded to newly elected directors and
recommends that the stockholders vote "FOR" Proposal 3. Proxies solicited by
the Board of Directors will be so voted unless stockholders specify otherwise.
19
<PAGE>
OTHER INFORMATION
Auditors
Representatives of Arthur Andersen LLP, the auditors for the Company's 1999
fiscal year, are expected to attend the 2000 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 9, 1999, there were outstanding and entitled to vote 12,812,400
shares of the Common Stock, $.50 par value, of the Company, constituting the
only class of outstanding voting securities.
Quorum, Voting of Proxies, Required Vote 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, "FOR" the approval of Proposal 2, and
"FOR" the approval of Proposal 3 of the accompanying Notice of 2000 Annual
Meeting of Stockholders.
Directors will be elected by a plurality of the votes properly cast for the
election of directors at the meeting. A majority of the votes present and
entitled to vote on the matter is necessary to approve each of Proposal 2 and
Proposal 3 of the accompanying Notice of 2000 Annual Meeting of Stockholders.
The election inspectors will count the total number of votes cast "FOR"
approval of each of Proposal 2 and Proposal 3 for purposes of determining
whether sufficient affirmative votes have been cast. Because the required vote
of the stockholders on each of Proposal 2 and Proposal 3 is based on the total
number of the shares presented and entitled to vote, any abstention will have
the effect of an "AGAINST" vote with respect to each proposal, while a "broker
non-vote" (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) will not be treated as
being a vote cast on each of Proposal 2 and Proposal 3.
20
<PAGE>
Beneficial Ownership of more than Five Percent of the Voting Securities
The only persons or entities known to the Company to be the beneficial owner
of five percent or more of the Company's voting securities are as follows:
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Title of Beneficial of
Name and Address of Beneficial Owner Class Ownership(1) Class
- ------------------------------------ ------------ ------------ -------
<S> <C> <C> <C>
Tiger Management Common Stock 3,916,294 31%
101 Park Avenue
New York, New York 10172
Ontario Teachers' Pension Plan Board Common Stock 1,346,814 11%
5650 Yonge Street, 5th Floor
Toronto, Ontario, Canada M2M 4H5
Westport Asset Management, Inc. Common Stock 1,324,600 10%
253 Riverside Avenue
Westport, Connecticut 06880
American Century Companies, Inc. Common Stock 971,100 8%
4500 Main Street
Kansas City, Missouri 64111
</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 9, 1999. The
number of shares reported as held for each of Westport Asset Management Inc.
and American Century Companies, Inc. was as of November 9, 1999, for Tiger
Management was as of September 30, 1999 and for Ontario Teachers' Pension Plan
Board was as of November 30, 1999.
Annual Report
The Annual Report of the Company for the fiscal year ended September 30,
1999 has been mailed to all stockholders.
Stockholder Proposals and Director Nominations
Stockholder proposals intended to be presented at the 2001 Annual Meeting
must be received by the Company on or before August 24, 2000 for inclusion in
the proxy material for that meeting. Any such proposals should be mailed to:
Secretary, XTRA Corporation, Nyala Farms Corporate Center, 200 Nyala Farms
Road, Westport, Connecticut 06880.
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
21
<PAGE>
Company not less than 90 days prior to the first anniversary of the date of
the last annual meeting. Accordingly, with respect to the 2001 Annual Meeting,
the notice must be received by the Secretary of the Company by October 28,
2000. 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.
If a stockholder wishing to present a proposal at the 2001 Annual Meeting
(without regard to whether it will be included in the proxy materials for that
meeting) fails to notify the Company by September 13, 2000, the proxies the
Company's management receives for the meeting will accord management
discretionary authority to vote on that stockholder's proposal if it is
properly brought before the meeting.
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.
22
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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 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 6, 1999, at the Annual Meeting of Stockholders to be
held January 26, 2000 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 SEE REVERSE
the reverse side where indicated SIDE
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[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 ITEM 1.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1 BELOW.
1. To elect a Board of Directors for the ensuing year.
NOMINEES: Michael D. Bills, H. William Brown, Michael N. Christodolou,
Robert B. Goergen, Lewis Rubin and Martin L. Solomon
FOR ALL NOMINEES WITHHELD FROM ALL NOMINEES
[_] [_]
[_]
For all nominees except as noted above
2. To approve amendments to the XTRA Corporation 1997 Stock Incentive Plan to:
(i) increase the number of shares reserved for issuance under the plan from
500,000 to 1,150,000 and (ii) increase the number of shares for which
options or stock appreciation rights may be granted to any individual in any
calendar year from 100,000 to 200,000.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. To approve amendments to the 1991 XTRA Corporation Stock Option Plan for
Non-Employee Directors to: (i ) increase the number of shares covered by
options awarded annually to directors from 1,000 to 3,000 and (ii) increase
from 4,000 to 6,000 the number of shares for which options will be awarded
to newly elected directors.
FOR AGAINST ABSTAIN
[_] [_] [_]
4. 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 partnership, sign in partnership name.
Signature_______________________________________________ Date________________
Signature_______________________________________________ Date________________
