<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
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
THE GREENBRIER COMPANIES, INC.
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(Name of Registrant as Specified In Its Charter)
MERRILL CORP.
- --------------------------------------------------------------------------------
(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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
ONE CENTERPOINTE DRIVE
SUITE 200
LAKE OSWEGO, OREGON 97035
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 12, 1999
------------------------
To Our Stockholders:
The Annual Meeting of Stockholders of The Greenbrier Companies, Inc. (the
"Company") will be held at 2:00 p.m. on January 12, 1999 at the Benson Hotel,
309 SW Broadway, Portland, Oregon, for the following purposes:
1. Electing two directors of the Company;
2. Ratifying the appointment of Deloitte & Touche LLP as the Company's
independent auditors for fiscal 1999; and
3. Transacting such other business as may properly come before the meeting.
Only holders of the Company's Common Stock at the close of business on
November 20, 1998 are entitled to notice of, and to vote at, the meeting and any
adjournments or postponements thereof. Stockholders may vote in person or by
proxy. A list of stockholders entitled to vote at the meeting will be available
for examination by stockholders at the time and place of the meeting and, for a
period of ten days prior to the meeting, at the offices of the Secretary, 1600
Pioneer Tower, 888 S.W. Fifth Avenue, Portland, Oregon.
By Order of the Board of Directors,
Kenneth D. Stephens
SECRETARY
Lake Oswego, Oregon
November 30, 1998
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING
IN PERSON, PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY IN THE
ENCLOSED ENVELOPE.
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<PAGE>
THE GREENBRIER COMPANIES, INC.
ONE CENTERPOINTE DRIVE
SUITE 200
LAKE OSWEGO, OREGON 97035
------------------------
PROXY STATEMENT
1999 ANNUAL MEETING OF STOCKHOLDERS
------------------------
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of The Greenbrier Companies, Inc. (the "Company") of proxies
to be voted at the 1999 Annual Meeting of Stockholders of the Company to be held
at 2:00 p.m. on January 12, 1999 at the Benson Hotel, 309 SW Broadway, Portland,
Oregon, and at any adjournments or postponements thereof. If proxies in the
accompanying form are properly executed, dated and returned prior to the voting
at the meeting, the shares of Common Stock represented thereby will be voted as
instructed on the proxy. If no instructions are given on a properly executed and
returned proxy, the shares of Common Stock represented thereby will be voted for
election of the directors, for ratification of the appointment of the
independent auditors and in support of the recommendations of management on such
other business as may properly come before the meeting or any adjournments or
postponements thereof.
Any proxy may be revoked by a stockholder prior to its exercise upon written
notice to the Secretary of the Company, by delivering a duly executed proxy
bearing a later date, or by the vote of a stockholder cast in person at the
meeting. The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited personally by the
Company's officers and regular employees or by telephone, facsimile transmission
or express mail. The Company will reimburse brokerage houses, banks and other
custodians, nominees and fiduciaries for their reasonable expenses incurred in
forwarding proxies and proxy material to their principals. This proxy statement
is first being mailed to stockholders on or about November 30, 1998.
VOTING
Holders of record of the Company's Common Stock on November 20, 1998, will
be entitled to vote at the Annual Meeting or any adjournments or postponements
thereof. As of October 31, 1998, there were 14,254,132 shares of Common Stock
outstanding and entitled to vote, and a majority, or 7,127,067 of these shares,
will constitute a quorum for the transaction of business. Each share of Common
Stock entitles the holder to one vote on each matter that may properly come
before the meeting. Stockholders are not entitled to cumulative voting in the
election of directors. Abstentions will be counted in determining whether a
quorum is present for the meeting and will be counted as a vote against any
proposal. Broker non-votes will also be counted in determining whether a quorum
is present, but will not be counted either for or against the proposal at issue.
ELECTION OF DIRECTORS
The Board of Directors is comprised of seven directors. The directors are
divided into three classes, two of which are comprised of two directors and one
of which is comprised of three directors. One class is elected each year for a
three-year term. The two nominees for election as directors to serve until the
Annual Meeting of Stockholders in 2002, or until their respective successors are
elected and qualified, are Victor G. Atiyeh and Benjamin R. Whiteley. Directors
are elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
directors. The two nominees for director receiving the highest number of votes
will be elected to the Board of Directors.
<PAGE>
Unless marked otherwise, proxies received will be voted FOR the election of
each of the nominees named below.
If any nominee is unable or unwilling to serve as a director at the date of
the Annual Meeting or any postponement or adjournment thereof, the proxies may
be voted for a substitute nominee, designated by the proxy holders or by the
present Board of Directors to fill such vacancy, or for the other nominee named
without nomination of a substitute, or the number of directors may be reduced
accordingly. The Board of Directors has no reason to believe that any of the
nominees will be unwilling or unable to serve if elected a director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MESSRS. ATIYEH
AND WHITELEY.
The following table sets forth certain information about each nominee for
election to the Company's Board of Directors and each continuing director.
<TABLE>
<CAPTION>
EXPIRATION
DIRECTOR OF CURRENT
NAME AGE POSITIONS SINCE TERM
- ----------------------------------------- --- ------------------------------------------ ----------- -------------
<S> <C> <C> <C> <C>
NOMINEES FOR ELECTION
Victor G. Atiyeh+* 75 Director 1994 1999
Benjamin R. Whiteley+* 69 Director 1994 1999
DIRECTORS CONTINUING IN OFFICE
Alan James(1) 68 Chairman of the Board of Directors 1981 2000
William A. Furman(1) 54 President and Chief Executive Officer and 1981 2000
Director
C. Bruce Ward 68 Chairman of Gunderson, Inc. and Director 1994 2000
Peter K. Nevitt+* 71 Director 1994 2001
A. Daniel O'Neal, Jr. 62 Chairman of Autostack Corporation and 1994 2001
Director
</TABLE>
- ------------------------------
+ Member of the Audit Committee
* Member of the Compensation Committee
(1) Messrs. James and Furman have entered into a Stockholders' Agreement
pursuant to which they have agreed to vote their shares together to elect
each other as a director of the Company. See information under the caption
Certain Relationships and Related Party Transactions elsewhere in this Proxy
Statement.
------------------------------
VICTOR G. ATIYEH, Director. Mr. Atiyeh has been a principal in Victor Atiyeh
& Co., international trade consultants, since 1987. He was Governor of the State
of Oregon from January 1979 to January 1987.
BENJAMIN R. WHITELEY, Director. Mr. Whiteley is retired Chairman and Chief
Executive Officer of Standard Insurance Company, a life insurance company. He
served as President and Chief Executive Officer of Standard Insurance Company
from 1983 to 1993 and as Chairman and Chief Executive Officer from 1992 to 1994.
He served as Chairman of the Board from 1993 to 1998. Mr. Whiteley continues as
a director of Standard Insurance Company and is also a director of Northwest
Natural, a utility company, and Willamette Industries, Inc., a forest products
company.
ALAN JAMES is Chairman of the Board of Directors. Mr. James was President of
Greenbrier Leasing Corporation ("Greenbrier Leasing") from 1979 to 1983. Mr.
James has been associated with the Company and its predecessor companies since
1974. Prior to the acquisition of Greenbrier Leasing in 1981, Mr. James served
as President and as a member of the Board of Directors of TransPacific Financial
Corporation. In 1974, he and Mr. Furman acquired TransPacific's National
Division. Prior to joining
2
<PAGE>
TransPacific, Mr. James was Senior Vice President of Marketing for
GATX-ARMCO-Boothe in San Francisco, California.
WILLIAM A. FURMAN is President, Chief Executive Officer and a Director. Mr.
Furman has also been Chief Executive Officer of Gunderson, Inc. ("Gunderson")
since January 1990 and Managing Director of TrentonWorks Limited since March
1995. Mr. Furman has been associated with the Company and its predecessor
companies since 1974. Prior to 1974, Mr. Furman was associated with TransPacific
Financial Corporation and FMC Corporation. Mr. Furman serves as a director of
Schnitzer Steel Industries, Inc., a steel recycling and manufacturing company.
C. BRUCE WARD is a Director and Chairman of the Board of Directors of
Gunderson, a position he has held since 1990. From 1985 to 1989, he was
President and Chief Executive Officer of Gunderson, having rejoined Gunderson
when he and the Company acquired it from FMC Corporation. Mr. Ward serves as a
director of Stimson Lumber Company, a privately-held forest products company.
PETER K. NEVITT, Director. Mr. Nevitt was President and Chief Executive
Officer of Mitsui Nevitt Capital Corporation since it was organized in 1988
through the end of 1996. From 1977 through 1987 he was first President and later
Chairman of BankAmeriLease Companies, subsidiaries of BankAmerica Corporation
engaged in equipment leasing. Mr. Nevitt also serves as a director of Leasing
Solutions, Inc., a company engaged in leasing computer and communications
equipment.
A. DANIEL O'NEAL, JR., Director. Mr. O'Neal has been Chairman of Autostack
Corporation since 1992 and a director of Gunderson since 1985. From 1973 until
1980, Mr. O'Neal served as a commissioner of the Interstate Commerce Commission,
and from 1977 until 1980 served as its Chairman. From 1989 until 1996, he was
Chief Executive Officer and owner of a freight transportation services company.
He is currently Chairman of Powertech Toolworks, Inc., a computer services and
training company.
During the year ended August 31, 1998, the Board of Directors held four
regular meetings. The Company maintains a standing Audit Committee and
Compensation Committee, but does not maintain a standing nominating committee.
The Audit Committee consists of Messrs. Whiteley (Chairman), Atiyeh and
Nevitt. The function of the Audit Committee is to recommend to the Board of
Directors the engagement and discharge of the Company's independent auditors; to
review the policies and procedures of the Company and management with respect to
maintaining the Company's books and records; to review the results of the audit
and any other recommendations the auditors may have; and to make such other
recommendations to the Board of Directors as it deems appropriate from time to
time.
The Compensation Committee consists of Messrs. Nevitt (Chairman), Atiyeh and
Whiteley. The Compensation Committee considers and makes recommendations to the
Company's Board of Directors regarding the compensation of the senior executives
of the Company; considers, reviews and grants stock options and administers the
Company's 1994 Stock Incentive Plan; and considers matters of director
compensation, benefits and other forms of remuneration.
The Audit Committee of the Board of Directors held four meetings and the
Compensation Committee held three meetings during the Company's year ended
August 31, 1998.
COMPENSATION OF DIRECTORS
Members of the Board of Directors who are officers of the Company are not
separately compensated for serving on the Board of Directors. Directors who are
not officers of the Company are paid a retainer of $12,000 per year and a
meeting fee of $1,000 per meeting, plus reimbursement of expenses. In addition,
each non-employee director will receive, immediately following each annual
meeting of stockholders, a five-year option to purchase 1,000 shares of the
Company's Common Stock at the fair market value of the Common Stock on the date
of grant. Such options vest at a rate of 50 percent per year. During fiscal
1998, the Company awarded Messrs. Atiyeh, Nevitt and Whiteley each an option to
purchase 1,000 shares of the
3
<PAGE>
Company's Common Stock at $17.34 per share, the market price on the date of
grant. Mr. Whiteley also serves as a director of Gunderson and, as such,
receives a meeting fee of $1,000 per meeting, plus reimbursement of expenses.
Mr. Nevitt also provides consulting services for the Company. During the year
ended August 31, 1998, Mr. Nevitt received consulting fees aggregating $30,000.
CERTAIN RELATIONSHIPS AND
RELATED PARTY TRANSACTIONS
JAMES-FURMAN & COMPANY PARTNERSHIP. Mr. James, Chairman of the Board of
Directors, and Mr. Furman, President and Chief Executive Officer of the Company,
are partners in a general partnership, James-Furman & Company (the
"Partnership"), that, among other things, engages in the ownership, leasing and
marketing of railcars and other surface transportation equipment and programs
for refurbishing and marketing of used railcars. In 1989, the Partnership and
the Company entered into presently existing agreements pursuant to which the
Company manages and maintains railcars owned by the Partnership in exchange for
a fixed monthly fee that is no less favorable to the Company than the fee the
Company could obtain for similar services rendered to unrelated parties. The
maintenance and management fees paid to the Company under such agreements in
1998 aggregated $768,000. In addition, the Partnership paid the Company fees of
$120,000 in 1998 for administrative and other services. The management and
maintenance agreements presently in effect between the Company and the
Partnership provide that in remarketing railcars owned by the Partnership and
the Company, as well as by unaffiliated lessors, the Company will, subject to
the business requirements of prospective lessees and regulatory requirements,
grant priority to that equipment which has been off-lease and available for the
longest period of time. Additions to the lease fleet of new or used equipment
are deemed to be off-lease and available from the date of addition to the fleet.
Such agreements also provide that the Partnership will grant to the Company
a right of first refusal with respect to any opportunity originated by the
Partnership in which the Company may be interested involving the manufacture,
purchase, sale, lease, management, refurbishing or repair of railcars or other
surface transportation equipment. The right of first refusal provides that prior
to undertaking any such transaction the Partnership must offer the opportunity
to the Company and must provide the disinterested, independent members of the
Board of Directors a period of not less than 30 days in which to determine
whether the Company desires to pursue the opportunity. The right of first
refusal in favor of the Company continues for a period of 12 months after the
date that both of Messrs. James and Furman cease to be officers or directors of
the Company. The Partnership has advised the Company that it does not currently
expect to pursue acquisitions of additional railcars.
INDEBTEDNESS OF MANAGEMENT. The largest aggregate amount of indebtedness
outstanding at any time to the Company since September 1, 1997 by L. Clark Wood,
President of Manufacturing Operations is $300,000. The amount due from Mr. Wood
neither bears interest nor has a fixed maturity.
OPTION ON PROPERTIES. The Company has granted Messrs. James and Furman a
10-year option to purchase three parcels of residential real estate owned by the
Company and adjacent to property presently owned by Mr. Furman at a purchase
price equal to the greater of the Company's adjusted basis in the properties or
fair market value, as determined by an independent appraiser selected by the
Company. The option also includes a right of first refusal in favor of Messrs.
James and Furman in the event the Company desires to sell the properties to a
third party.
POLICY. It is the Company's policy that all proposed transactions by the
Company with directors, officers, five percent stockholders and their affiliates
be entered into only if such transactions are on terms no less favorable to the
Company than could be obtained from unaffiliated parties, are reasonably
expected to benefit the Company and are approved by a majority of the
disinterested, independent members of its Board of Directors.
4
<PAGE>
EXECUTIVE COMPENSATION
CASH AND NON-CASH COMPENSATION PAID TO CERTAIN EXECUTIVE OFFICERS
The following table sets forth, for the years ended August 31, 1998, 1997
and 1996, compensation information with respect to the Company's (a) Chief
Executive Officer and (b) each of the four other most highly compensated
executive officers (collectively, "Named Executive Officers"), based on the
salary and bonus earned during 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION -------------------
--------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND SALARY BONUS(1) COMPENSATION OPTIONS/SARS(2) COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- -------------------------------------- ---- ------- ---------- ------------ ------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Alan James 1998 240,000 700,000 -- -- --
Chairman of the Board 1997 200,000 75,000 -- -- --
1996 200,000 700,000 -- -- --
William A. Furman 1998 480,000 700,000 -- -- 2,500(3)
President and Chief Executive 1997 400,000 75,000 -- -- 2,375(3)
Officer 1996 400,000 700,000 -- -- 2,375(3)
L. Clark Wood 1998 181,250 245,000 -- -- 136,451(4)
President Manufacturing Operations 1997 165,000 75,000 -- -- 215,684(4)
1996 165,000 195,000 -- 8,000 7,027(4)
Robin D. Bisson 1998 160,000 255,000 -- -- 65,945(5)
Sr. Vice President 1997 155,000 145,000 -- -- 71,916(5)
1996 155,000 190,000 -- 10,000 9,093(5)
Norriss M. Webb 1998 165,000 200,000 -- -- 225,751(6)
Executive Vice President and General 1997 155,000 100,000 -- -- 279,618(6)
Counsel 1996 155,000 150,000 -- 10,000 6,552(6)
</TABLE>
- ------------------------
(1) Includes bonuses paid during the fiscal year or paid during the subsequent
year but attributable to the fiscal year indicated.
(2) Grants of incentive stock options pursuant to the Company's 1994 Stock
Incentive Plan.
(3) Consists of the Company's contributions to the Greenbrier 401(k) Profit
Sharing Plan for the benefit of Mr. Furman.
(4) Consists of the Company's contributions to the Greenbrier 401(k) Profit
Sharing Plan for the benefit of Mr. Wood; $130,000 in 1998 and $210,000 in
1997 representing the contribution to the Deferred Benefit Plan for the
benefit of Mr. Wood, including a cash payment made on behalf of Mr. Wood to
cover the estimated tax liability resulting from the contribution; and
$3,951 in 1998 and $3,100 in each of 1997 and 1996 representing the benefit
to Mr. Wood of payment of the annual premium pursuant to a split dollar life
insurance policy. The benefit is measured based on the term insurance value
of the life insurance purchased and a factor for lost interest on the
premiums advanced. The Company will be reimbursed for its payments from the
proceeds of the life insurance policy in the event of Mr. Wood's death,
termination of employment or cancellation or surrender of the policy.
(5) Consists of the Company's contributions to the Greenbrier 401(k) Profit
Sharing Plan for the benefit of Mr. Bisson; $56,000 in 1998 and $64,000 in
1997 representing the contribution to the Deferred Benefit Plan for the
benefit of Mr. Bisson, including a cash payment made on behalf of Mr. Bisson
to cover the estimated tax liability resulting from the contribution; and
$7,445 in 1998 and $5,200 in each of 1997 and 1996 representing the benefit
to Mr. Bisson of payment of the annual premium pursuant to a split dollar
life insurance policy. The benefit is measured based on the term insurance
value of the life insurance purchased and a factor for lost interest on the
premiums advanced. The Company will be reimbursed for its payments from the
proceeds of the life insurance policy in the event of Mr. Bisson's death,
termination of employment or cancellation or surrender of the policy.
(6) Consists of the Company's contributions to the Greenbrier 401(k) Profit
Sharing Plan for the benefit of Mr. Webb; $220,000 in 1998 and $274,000 in
1997 representing the contribution to the Deferred Benefit Plan for the
benefit of Mr. Webb, including a cash payment made on behalf of Mr. Webb to
cover the estimated tax liability resulting from the contribution; and
$3,243 in 1998 and $3,211 in each of 1997 and 1996 representing the benefit
to Mr. Webb of payment of the annual premium pursuant to a split dollar life
insurance policy. The benefit is measured based on the term insurance value
of the life insurance purchased and a factor for lost interest on the
premiums advanced. The Company will be reimbursed for its payments from the
proceeds of the life insurance policy in the event of Mr. Webb's death,
termination of employment or cancellation or surrender of the policy.
5
<PAGE>
No options for the purchase of the Company's Common Stock were awarded to
the Company's Named Executive Officers during the fiscal year ended August 31,
1998.
The following table sets forth the aggregate value of unexercised options to
acquire shares of the Common Stock held by the Named Executive Officers on
August 31, 1998. No options were exercised by the Named Executive Officers
during the fiscal year ended August 31, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END AT FY-END($)(1)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Alan James -- -- -- --
William A. Furman -- -- -- --
L. Clark Wood 12,000 12,000 31,750 31,750
Robin D. Bisson 16,312 16,313 101,820 101,821
Norriss M. Webb 16,000 16,000 101,313 101,313
</TABLE>
- ------------------------------
(1) Calculated based upon the difference between the exercise price and the
price of a share of the Company's Common Stock on August 31, 1998. The
closing price on the New York Stock Exchange of the Common Stock of the
Company on August 31, 1998 was $15.6250.
EMPLOYMENT AGREEMENTS; OTHER ARRANGEMENTS. Messrs. James and Furman have
entered into employment agreements with the Company dated July 1, 1994 under
which they have agreed to serve, respectively, as the Company's Chairman of the
Board and President and Chief Executive Officer. The principal terms of such
employment agreements are described in the accompanying report of the
Compensation Committee of the Board of Directors.
Mr. O'Neal was a party to an employment agreement with Greenbrier Logistics
under which he served as Chairman of the Board of Greenbrier Logistics. Mr.
O'Neal received $200,000 in salary and $25,000 in bonus during fiscal year 1998
pursuant to that employment agreement.
Mr. Wood, Mr. Bisson and Mr. Webb participate in a deferred benefit plan
which provides for a payment as a result of a change of control (as defined).
The principal terms of such plan are described in the accompanying report of the
Compensation Committee of the Board of Directors.
6
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
Board of Directors
The Greenbrier Companies, Inc.
Securities and Exchange Commission rules governing disclosure of executive
compensation in proxy statements require inclusion in this Proxy Statement of a
report from the Compensation Committee of the Board of Directors addressing,
with respect to the Company's most recently completed fiscal year: (a) the
Company's policies regarding executive compensation generally; (b) the factors
and criteria considered in setting the compensation of the Company's Chief
Executive Officer; and (c) any relationship between such compensation and the
Company's performance.
COMPOSITION OF THE COMMITTEE
The Compensation Committee of the Board of Directors is established pursuant
to the Company's Amended and Restated By-Laws. The Committee is charged, among
other matters, with considering and making recommendations to the Board of
Directors regarding salaries and bonuses for elected officers of the Company;
considering, reviewing and granting awards under the Company's 1994 Stock
Incentive Plan and administering the Plan; consulting with the Board of
Directors of Greenbrier Leasing Corporation ("Greenbrier Leasing") regarding
awards under Greenbrier Leasing's Deferred Benefit Plan and considering matters
of director compensation, benefits and other forms of remuneration. The
Committee is comprised of at least two members of the Board of Directors, none
of whom may be an active or retired officer or employee of the Company or any of
its subsidiaries. Members of the Compensation Committee are appointed at the
annual meeting of the Board of Directors. Messrs. Peter K. Nevitt, Victor G.
Atiyeh and Benjamin R. Whiteley are the present members of the Compensation
Committee.
The Compensation Committee held three meetings during the Company's 1998
fiscal year.
EXECUTIVE COMPENSATION POLICY GENERALLY
The Company's general compensation policy extends to all employees,
including executive officers. Under the policy, the Company endeavors to pay
compensation, including salary and bonuses, as applicable, at levels consistent
with prevailing levels of compensation for similar positions in the geographic
areas in which the Company maintains operations.
The Company believes that a significant portion of each employee's
compensation should take the form of discretionary bonuses which generally
reflect the results of operations achieved by the Company. This policy extends
to all levels of the Company's employees. Under this policy, employees, other
than employees covered by collective bargaining agreements, typically receive
annual bonuses. The aggregate amount of such bonuses is determined at the
discretion of senior management of the Company and is subject to approval by the
Board of Directors of the applicable subsidiary based primarily upon a
subjective evaluation of the subsidiary's results of operations. Within the
approved bonus pool, specific bonus allocations to employees are made by
management. Bonus amounts paid to executive officers must be approved by the
Compensation Committee upon recommendation of the President.
There is no fixed or predetermined relationship between the Company's
results of operations and the amount to be allocated to employee or officer
bonuses.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The compensation of the Company's Chairman of the Board and of its President
and Chief Executive Officer is determined pursuant to the terms and conditions
of employment agreements between such officers and the Company, effective July
1, 1994. During fiscal 1998, an independent consulting firm was engaged to
review and analyze the compensation of the Corporation's President and Chief
Executive
7
<PAGE>
Officer and of its Chairman of the Board. Based upon an analysis prepared by the
consultants and in view of the fact that the President and Chief Executive
Officer and the Chairman of the Board had not received an increase in base
salary since 1994, the Committee recommended and the Board of Directors approved
base salary increases as of September 1, 1997 for Messrs. Furman and James, to
$480,000 per year and $240,000 per year, respectively.
In addition to base salary, Messrs. Furman and James are entitled to receive
annual cash bonuses which increase with the Company's return on stockholders'
equity. As long as the Company's return on equity is positive, the bonus is
required to be at least $100,000. In the event the return on equity is 10%, an
additional bonus of $200,000 is earned which increases ratably to $600,000 as
the return on equity increases to 18%. If the return on equity exceeds 18%, the
Compensation Committee has the authority to approve or recommend an additional
bonus in excess of the $600,000. The Corporation achieved a return on defined
stockholders' equity for the fiscal year ending August 31, 1998 of 18.8%.
Accordingly, pursuant to the terms of the agreements, each of Messrs. James and
Furman is entitled to an aggregate bonus of $700,000 for the fiscal year ended
August 31, 1998. The Compensation Committee currently believes that the Company
should be able to continue to manage its executive compensation program for the
Chief Executive Officer so as to preserve the related federal income tax
deductions under Section 162(m) of the Internal Revenue Code.
RETIREMENT SAVINGS PLANS
The Company maintains 401(k) retirement savings plan applicable to all
United States employees, including executive officers. Pursuant to these plans,
the Company typically matches a portion of employee contributions to the plans.
Contributions to the plans may be invested in a number of alternative
investments which do not presently include the Company's Common Stock. The
Company does not maintain other retirement or profit sharing plans for executive
officers or other employees.
1994 STOCK INCENTIVE PLAN
Pursuant to the 1994 Stock Incentive Plan (the "Plan"), the Company reserved
an aggregate of 1,380,000 shares of its Common Stock for grants of incentive
stock options, nonqualified stock options and restricted stock awards to
officers, directors, employees and consultants. Under the Plan, each of the
Company's non-employee directors receives an option to purchase 1,000 shares of
the Company's Common Stock following each annual meeting of stockholders.
Pursuant to this provision, each of the Company's three non-employee directors
received options in January of 1998 to purchase 1,000 shares of the Common Stock
at $17.34 per share. In 1998 the Committee recommended and the Board approved an
amendment to the Plan to provide for the automatic acceleration of vesting of
options upon the death of holders. In fiscal year 1998, the Company did not
award any stock options to employees and consultants under the Plan. The
President and Chief Executive Officer is not eligible to receive awards under
the Plan. The Plan is administered, and any future grants will be awarded, by
the Compensation Committee.
1995 EMPLOYEE STOCK PURCHASE PLAN
All permanent employees of the Company and designated subsidiaries,
including employees who are officers or directors, are eligible to participate
in the Company's 1995 Employee Stock Purchase Plan (the "Stock Purchase Plan").
Under the Stock Purchase Plan, participating employees authorize payroll
deductions of up to five percent of their base pay. Amounts so contributed are
used by the custodian of the Stock Purchase Plan to purchase shares of the
Company's Common Stock in open market transactions. Beginning June 1, 1996, the
Company has made matching contributions to amounts contributed by employees
pursuant to the Stock Purchase Plan in amounts equal to 15 percent of the
aggregate amounts contributed by employees. During the fiscal year ended August
31, 1998 the Company's matching contributions under the Stock Purchase Plan
aggregated $29,937.
8
<PAGE>
DEFERRED BENEFIT PLAN
During fiscal 1997, Greenbrier Leasing adopted a supplemental non-qualified
deferred compensation plan for certain executives including certain Named
Executive Officers (the "Deferred Benefit Plan") as a result of an independent
review of the Company's executive compensation plans. Prior to its adoption by
Greenbrier Leasing, the Compensation Committee reviewed and approved the
Deferred Benefit Plan which provides retirement benefits for certain executives.
The Deferred Benefit Plan is administered by the Board of Directors of
Greenbrier Leasing upon consultation with the Compensation Committee.
Contributions to the Deferred Benefit Plan are made by January 31 of each year
for the prior fiscal year and are based upon the consolidated earnings of the
Company. For fiscal 1997, $369,000 was contributed to the Deferred Benefit Plan.
In addition, the Company made a cash payment on behalf of each participant to
cover the participant's estimated tax liability resulting from the contribution,
assuming a 50% combined federal, state and local tax bracket. The contribution
for fiscal 1998 has not yet been determined. Upon a change of control (as
defined), the Employer will contribute a payment equal to the average allocation
for the participant for the prior three Plan Years multiplied by the number of
Plan Years from the effective date of the change of control to the participant's
normal retirement date.
NON-EMPLOYEE DIRECTOR FEES
The Committee received a report of independent consultants regarding the
compensation of non-employee directors. The report was referred to the full
Board of Directors.
The Compensation Committee believes that the Company's executive and
employee compensation policies contribute to the long-term financial success of
the Company. The Compensation Committee intends to annually review the structure
of the Company's executive compensation programs to ensure that policies and
levels of compensation effectively link executive and stockholder interests and
are consistent with the long-term investment objectives appropriate to the
Company's business.
November 10, 1998
Peter K. Nevitt, Chairman
Victor G. Atiyeh
Benjamin R. Whiteley
9
<PAGE>
PERFORMANCE GRAPH
The following graph demonstrates a comparison of cumulative total returns
for the Company's Common Stock, the Standard & Poors (S&P) 500 Index and the Dow
Jones Transportation Equipment Index. The graph assumes an investment of $100 on
July 14, 1994 in each of the Company's Common Stock and the stocks comprising
the indices. Each of the indices assumes that all dividends were reinvested and
that the investment was maintained to and including August 31, 1998, the end of
the Company's 1998 fiscal year.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
THE GREENBRIER COMPANIES, INC. S&P 500 DOW JONES TRANSPORTATION EQUIPMENT
<S> <C> <C> <C>
7/14/94 100.00% 100.00% 100.00%
8/94 124.11% 105.21% 101.30%
8/95 94.26% 127.78% 104.00%
8/96 85.10% 151.71% 103.60%
8/97 98.45% 213.38% 201.30%
8/98 120.03% 230.65% 153.79%
</TABLE>
10
<PAGE>
STOCKHOLDINGS OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information, as of October 1, 1998, with
respect to beneficial ownership of the Company's Common Stock (the only class of
shares of outstanding voting securities of the Company) by each director or
nominee for director, by each Named Executive Officer, by all directors and
officers as a group, and by each person who is known to the Company to be the
beneficial owner of more than five percent of the Company's outstanding Common
Stock. Unless otherwise indicated, each person has sole voting power and sole
investment power.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- -------------------------------------------------------------------------------- ------------------- -----------
<S> <C> <C>
Alan James 8,632,700(1) 60.6%(1)
One Centerpointe Drive
Suite 200
Lake Oswego, Oregon 97035
William A. Furman 8,632,700(1) 60.6%(1)
One Centerpointe Drive
Suite 200
Lake Oswego, Oregon 97035
Victor G. Atiyeh 2,800(2) (3)
Peter K. Nevitt 7,500(2) (3)
A. Daniel O'Neal, Jr. 5,255 (3)
C. Bruce Ward 5,562(2) (3)
Benjamin R. Whiteley 5,000(2) (3)
Robin D. Bisson 19,312(2) (3)
Norriss M. Webb 17,514(2) (3)
L. Clark Wood 12,300(2) (3)
All directors and executive officers as a group (13 persons) 8,728,590(2) 61.2%
</TABLE>
- ------------------------------
(1) The shares shown as beneficially owned include 4,316,350 shares held by Mr.
Furman, and 4,316,350 shares held by Mr. James which, pursuant to the terms
of a Stockholders' Agreement, will be voted in concert to elect each other
as directors and with respect to all other matters put to a vote of the
stockholders. Mr. James disclaims beneficial ownership of the shares held by
Mr. Furman, and Mr. Furman disclaims beneficial ownership of the shares held
by Mr. James. The shares beneficially owned by Mr. Furman include 375,000
shares held of record by the William A. Furman Charitable Remainder
Unitrust. The shares beneficially owned by Mr. James include 375,000 shares
held of record by the Alan James Charitable Remainder Unitrust.
(2) The shares shown as beneficially owned include 2,500 shares for Mr. Atiyeh,
2,500 shares for Mr. Nevitt 3,062 shares for Mr. Ward, 1,000 shares for Mr.
Whiteley, 16,312 shares for Mr. Bisson, 16,000 shares for Mr. Webb, 12,000
shares for Mr. Wood and 72,937 shares for the group, which such persons and
the group have the right to acquire by exercise of stock options within 60
days after October 1, 1998.
(3) Less than one percent.
11
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "Commission") and the New York Stock Exchange. Officers, directors and
greater than ten percent beneficial owners are required by Commission
regulations to furnish the Company with copies of all forms they file pursuant
to Section 16(a). Based solely on review of the copies of such reports furnished
to the Company and written representations from reporting persons that no other
reports were required, to the Company's knowledge all of the Section 16(a)
filing requirements applicable to such persons with respect to fiscal 1998 were
complied with.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP, independent
public accountants, to audit the consolidated financial statements of the
Company for the fiscal year ending August 31, 1999. Deloitte & Touche LLP has
acted as independent public accountants for the Company since 1985. A
representative of Deloitte & Touche LLP is expected to be present at the Annual
Meeting, will have the opportunity to make a statement, and will be available to
respond to appropriate questions.
Unless marked to the contrary, proxies received will be voted FOR
ratification of the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the 1999 fiscal year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE 1999
FISCAL YEAR.
OTHER BUSINESS
Management knows of no other matters that will be presented for action at
the Annual Meeting. However, the enclosed proxy gives discretionary authority to
the persons named in the proxy in the event that any other matters should be
properly presented to the meeting.
STOCKHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy materials for the 2000
Annual Meeting of stockholders, a proposal intended to be presented by a
stockholder for action at that meeting must, in addition to complying with the
stockholder eligibility and other requirements of the Commission's rules
governing such proposals, be received not later than July 26, 1999 by the
Secretary of the Company at the Company's principal executive offices, One
Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035.
Stockholders may only bring business before an annual meeting if the
stockholder proceeds in compliance with the Company's Amended and Restated
Bylaws. For business to be properly brought before the 1999 Annual Meeting by a
stockholder, notice of the proposed business must be given to the Secretary of
the Company in writing on or before the close of business on December 3, 1998.
The notice to the Secretary must set forth as to each matter that the
stockholder proposes to bring before the meeting: (a) a brief description of the
business and reasons for conducting such business at the annual meeting; (b) the
stockholder's name and address as they appear on the Company's books; (c) the
class and number of shares beneficially owned by the stockholder; (d) any
material interest of the stockholder in such business and a description of all
arrangements and understandings between such stockholder and any other person
(including their names) in connection with the proposal of such business; and
(e) a representation that the stockholder intends to appear in person at the
annual meeting and bring such business before the meeting. The presiding officer
at any annual meeting shall determine whether any matter was properly brought
before the meeting in accordance with the above provisions. If the presiding
officer should
12
<PAGE>
determine that any matter has not been properly brought before the meeting, he
or she will so declare at the meeting and any such matter will not be considered
or acted upon.
------------------------
A COPY OF THE COMPANY'S 1998 ANNUAL REPORT ON FORM 10-K WILL BE AVAILABLE TO
STOCKHOLDERS WITHOUT CHARGE UPON REQUEST TO: INVESTOR RELATIONS, THE GREENBRIER
COMPANIES, INC., ONE CENTERPOINTE DRIVE, SUITE 200, LAKE OSWEGO, OREGON 97035.
By order of the Board of Directors,
Kenneth D. Stephens
SECRETARY
November 30, 1998
13
<PAGE>
THE GREENBRIER COMPANIES, INC.
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R
The undersigned hereby appoints William A. Furman, C. Bruce Ward and
O A. Daniel O'Neal, Jr., as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as
X designated below, all the shares of Common Stock of The Greenbrier
Companies, Inc. held of record by the undersigned on November 20, 1998, at
Y the Annual Meeting of Stockholders to be held on January 12, 1999 or any
adjournments or postponements thereof.
Election of Directors, Nominees: (notation/comments)
VICTOR G. ATIYEH BENJAMIN R. WHITELEY -------------------------------
-------------------------------
-------------------------------
-------------------------------
(If you have written in the
above space, please mark the
corresponding box on the reverse
side of this card.)
-----------
SEE REVERSE
SIDE
-----------
- --------------------------------------------------------------------------------
-FOLD AND DETACH HERE-
ANNUAL
THE GREENBRIER COMPANIES, INC. MEETING OF
SHAREHOLDERS
JANUARY 12, 1999
<PAGE>
--
/X/ PLEASE MARK | | 2344
YOUR VOTES |
AS IN THIS |
EXAMPLE. ------
FOR ALL
NOMINEES WITHHOLD
AS LISTED AUTHORITY
ON REVERSE TO VOTE
(EXCEPT AS FOR ALL
MARKED TO NOMINEES
THE CONTRARY LISTED
BELOW) ON REVERSE FOR AGAINST ABSTAIN
1. ELECTION / / / / 2. PROPOSAL TO RATIFY
OF THE APPOINTMENT OF
DIRECTORS DELOITTE & TOUCHE
For, except vote withheld from LLP AS THE COMPANY'S
the following nominee(s): INDEPENDENT AUDITORS
FOR FISCAL 1999: / / / / / /
- -------------------------------
3. THE PROXIES ARE
AUTHORIZED IN THEIR
DISCRETION TO VOTE
UPON SUCH OTHER
BUSINESS AS MAY
PROPERLY COME BEFORE
THE MEETING / / / / / /
This proxy when properly executed will
be voted in the manner directed herein
by the undersigned stockholder. If no
direction is made, this proxy will be
voted for Proposals 1 and 2 and in the
proxies' discretion as to such other
matters as may properly come before
the meeting.
Please sign exactly as your name
appears at left. When shares are held
by joint tenants, both should sign.
When signing as attorneys, executor,
administrator, trustee, or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
----------------------------
----------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
-FOLD AND DETACH HERE-
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
