SCHEDULE 14A INFORMATION
(Rule 14a-101)
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
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TRINITY INDUSTRIES, INC.
(Name of Registrant as Specified In Its Charter)
J. J. FRENCH, JR., SECRETARY
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: (Note 1)
4) Proposed maximum aggregate value of transaction:
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
_____________________
Note 1: Set forth the amount on which the filing is calculated
and state how it was determined.
Trinity Industries, Inc.
2525 Stemmons Freeway
Dallas, Texas 75207-2401
P. O. Box 568887
Dallas, Texas 75356-8887
(mailing address)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on July 17, 1996
Notice is hereby given that the Annual Meeting of Stockholders
of Trinity Industries, Inc. (the "Company"), a Delaware
corporation, will be held at the offices of the Company, 2525
Stemmons Freeway, Dallas, Texas 75207, on Wednesday, July 17, 1996,
at 9:30 a.m., Central Daylight Saving Time, for the following
purposes:
(1) to elect eight (8) directors to hold office until the
next Annual Meeting of Stockholders or until their successors are
elected and qualified; and
(2) to transact such other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on
May 31, 1996 will be entitled to notice of and to vote at the 1996
Annual Meeting or any adjournment thereof, notwithstanding the
transfer of any stock on the books of the Company after such record
date. A list of the stockholders will be open to the examination
of any stockholder, for any purpose germane to the 1996 Annual
Meeting, for a period of ten (10) days prior to the meeting at the
Company's offices, 2525 Stemmons Freeway, Dallas, Texas 75207.
You are requested to forward your proxy in order that you will
be represented at the 1996 Annual Meeting, whether or not you
expect to attend in person. Stockholders who attend the 1996
Annual Meeting may revoke their proxies and vote in person, if they
so desire.
A Proxy Statement, proxy card and a copy of the Annual Report
on the Company's operations during the fiscal year ended March 31,
1996, accompany this Notice of Annual Meeting of Stockholders.
By Order of the Board of Directors
J. J. FRENCH, JR.
Secretary
June 11, 1996
Trinity Industries, Inc.
2525 Stemmons Freeway
Dallas, Texas 75207-2401
P. O. Box 568887
Dallas, Texas 75356-8887
(mailing address)
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on July 17, 1996
This Proxy Statement is furnished to the stockholders of
Trinity Industries, Inc. (the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company to
be voted at the Annual Meeting of Stockholders of the Company to be
held at the offices of the Company, 2525 Stemmons Freeway, Dallas,
Texas 75207, on Wednesday, July 17, 1996, at 9:30 a.m., Central
Daylight Saving Time (the "1996 Annual Meeting"), or at any
adjournment thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting of Stockholders.
This Proxy Statement and the enclosed form of proxy are being
mailed to stockholders on or about June 11, 1996.
RIGHT TO REVOKE PROXY
Any stockholder giving the proxy enclosed with this Proxy
Statement has the power to revoke such proxy at any time prior to
the exercise thereof by filing with the Company a written
revocation at or prior to the 1996 Annual Meeting, by executing a
proxy bearing a later date or by attending the 1996 Annual Meeting
and voting in person the shares of stock that such stockholder is
entitled to vote. Unless the persons named in the proxy are
prevented from acting by circumstances beyond their control, the
proxy will be voted at the 1996 Annual Meeting and at any
adjournment thereof in the manner specified therein, or if not
specified, the proxy will be voted:
(1) FOR the election of the eight (8) nominees listed under
"Election of Directors" as nominees of the Company for election as
directors to hold office until the next Annual Meeting of
Stockholders or until their successors are elected and qualified;
and
(2) At the discretion of the persons named in the enclosed
form of proxy, on any other matter that may properly come before
the 1996 Annual Meeting or any adjournment thereof.
BY WHOM AND THE MANNER IN WHICH PROXY IS BEING SOLICITED
The enclosed proxy is solicited by and on behalf of the Board
of Directors of the Company. The expense of the solicitation of
proxies for the 1996 Annual Meeting, including the cost of mailing,
will be borne by the Company. To the extent necessary to assure
sufficient representation at the 1996 Annual Meeting, officers and
regular employees of the Company, at no additional compensation,
may request the return of proxies personally, by telephone or
telegram. The extent to which this will be necessary depends
entirely upon how promptly proxies are received. Stockholders are
urged to send in their proxies without delay. The Company will
supply brokers, nominees, fiduciaries and other custodians with
proxy materials to forward to beneficial owners of shares in
connection with the request from the beneficial owners of authority
to execute such proxies, and the Company will reimburse such
brokers, nominees, fiduciaries and other custodians for their
expenses in making such distribution. Management has no knowledge
or information that any other person will specially engage any
persons to solicit proxies.
VOTING SECURITIES AND STOCKHOLDERS
The outstanding voting securities of the Company consist
entirely of shares of Common Stock, $1.00 par value per share, each
share of which entitles the holder thereof to one vote. The record
date for the determination of the stockholders entitled to notice
of and to vote at the 1996 Annual Meeting, or any adjournment
thereof, has been established by the Board of Directors as of the
close of business on May 31, 1996. At that date, there were
outstanding and entitled to vote 41,612,062 shares of Common
Stock.
The presence, in person or by proxy, of the holders of record
of a majority of the outstanding shares of Common Stock entitled to
vote is necessary to constitute a quorum for the transaction of
business at the 1996 Annual Meeting, but if a quorum should not be
present, the meeting may be adjourned from time to time until a
quorum is obtained. All matters to be voted on will be decided by
a majority of the shares represented and voting at the meeting. A
holder of Common Stock will be entitled to one vote per share on
each matter properly brought before the meeting. Cumulative voting
is not permitted in the election of directors.
As of May 31, 1996, no person was known by the Company to own
beneficially more than five percent (5%) of the outstanding shares
of Common Stock of the Company, although Cede and Company, a
central clearinghouse and nominee in New York, New York, was the
record holder of 37,129,130 shares of the Company's Common Stock
as of May 31, 1996.
The following table shows the number of shares of Common Stock
beneficially owned by each director or nominee, by the Company's
Chief Executive Officer and the next four most highly compensated
executive officers of the Company serving at the close of the
Company's most recent fiscal year and by all such directors,
nominees and executive officers as a group, based upon information
supplied by them:
Number of Shares
Beneficially Owned Percent of
Name at April 30, 1996(1) Class
David W. Biegler 1,600 *
John Dane III 210,954 *
Barry J. Galt 8,250 *
Clifford J. Grum 3,000(2) *
Dean P. Guerin 55,500 *
Jess T. Hay 9,474(3) *
Edmund M. Hoffman 39,771(4) *
Ray J. Pulley 39,800(5) *
John T. Sanford 85,085 *
Mark W. Stiles 12,750 *
Timothy R. Wallace 146,298 *
W. Ray Wallace 1,337,429 3.1%
Directors and Executive
Officers as a Group 2,043,008 4.8%
_________
* Less than one percent (1%).
(1) Unless otherwise noted, all shares are owned directly and the
owner has the right to vote the shares, except for shares that
officers and directors have the right to acquire under the
Company's stock option plans as of the record date or within
sixty (60) days thereafter, which for Messrs. Galt, Guerin,
Hay, Hoffman and Pulley are 7,500 shares each and for Messrs.
Dane, Sanford, Stiles, Timothy R. Wallace and W. Ray Wallace
are 70,030, 46,699, 12,317, 142,323 and 450,000 shares,
respectively.
(2) Shares are owned by Deerfield Corporation of which Mr. Grum is
an owner.
(3) Includes 384 shares owned of record by Mr. Hay's wife as
custodian for their daughter in which Mr. Hay disclaims
beneficial ownership.
(4) Includes 1,500 shares held by Mr. Hoffman as trustee of a
trust in which Mr. Hoffman disclaims beneficial ownership.
(5) Included 22,300 shares held by NationsBank Texas, N.A., Profit
Sharing Trust over which Mr. Pulley has sole investment power
and also includes 1,500 shares owned by Mr. Pulley's wife.
_____________
ITEM 1 - ELECTION OF DIRECTORS
At the 1996 Annual Meeting, eight (8) directors are to be
elected who shall hold office until the next Annual Meeting of
Stockholders or until their respective successors are duly elected
and qualified. It is the intention of the persons named in the
Company's proxy to vote for the election of each of the eight (8)
nominees listed below, unless authority is withheld. All nominees
have indicated a willingness to serve as directors, but if any of
them should decline or be unable to serve as a director, the
persons named in the proxy will vote for the election of another
person recommended by the Board of Directors.
The Board of Directors recommends you vote FOR the election of
each of the eight (8) nominees to the Board of Directors set forth
below.
Nominees
- ------------------------------------------------------------------
W. Ray Wallace, 73. Director since 1956. Chairman, President and
Chief Executive Officer of the Company. He is the father of
Timothy R. Wallace, a director, Group Vice President of the
Company, and Chairman of the Railcars segment and LPG Containers
division.
- ------------------------------------------------------------------
David W. Biegler, 49. Director since 1992. Member of the
Compensation Committee. Mr. Biegler is the Chairman, President and
Chief Executive Officer and a director of ENSERCH Corporation, an
integrated natural gas company engaged principally in natural gas
transmission and distribution, electric power development and other
energy related activities. He is also Chairman and Chief Executive
Officer and a director of Enserch Exploration, Inc. a company
engaged in oil and gas exploration and production, and a director of
Texas Commerce Bank, National Association, a national bank.
- ------------------------------------------------------------------
Barry J. Galt, 62. Director since 1988. Member of the Audit
Committee. Mr. Galt is the Chairman, President, and Chief
Executive Officer and a director of Seagull Energy Corporation, a
diversified energy company engaged in oil and gas exploration and
development, as well as natural gas transportation, processing,
marketing and distribution. He is also a director of Standard
Insurance Company, a mutual life insurance company, and a director
of Texas Commerce Bank, National Association, a national bank.
- ------------------------------------------------------------------
Clifford J. Grum, 61. Director since 1995. Member of the Audit
Committee. Mr. Grum is Chairman and Chief Executive Officer and a
director of Temple-Inland, Inc., a holding company with interests
in corrugated containers, bleached paperboard, building products,
timber and timberlands, and financial services. He is also a
director of Cooper Industries, Inc., a company engaged in the
businesses of electrical products, tools and hardware, and
automotive products and a director of Tupperware Corporation,
a multinational consumer products company.
- ------------------------------------------------------------------
Dean P. Guerin, 74. Director since 1965. Chairman of the
Compensation Committee and Member of the Audit Committee. Mr.
Guerin's principal occupation is investments. Mr. Guerin is a
director of Lone Star Technologies, Inc., engaged in oil country
tubular goods and banking, and a director of Seagull Energy
Corporation, a diversified energy company.
- ------------------------------------------------------------------
Jess T. Hay, 65. Director since 1965. Member of the Compensation
Committee. Mr. Hay is Chairman of Texas Foundation for Higher
Education and of HCB Enterprises, Inc., a private investment firm.
Prior to retirement on December 31, 1994, Mr. Hay was Chairman and
Chief Executive Officer of Lomas Financial Corporation, a
diversified financial services company engaged principally in
mortgage banking and real estate lending, and of Lomas Mortgage
USA, a mortgage banking institution. Mr. Hay is a director of The
Dial Corp., which is primarily involved in consumer products,
services, transportation, manufacturing and financial services, a
director of Exxon Corporation, a diversified energy company engaged
principally in the exploration, production and marketing of
petroleum products, and a director of SBC Communications, Inc., a
telephone and wireless communications company.
- ------------------------------------------------------------------
Edmund M. Hoffman, 74. Director since 1957. Chairman of the Audit
Committee. Mr. Hoffman's principal occupation is investments,
primarily in the soft drink bottling and full line vending business.
Mr. Hoffman is also a director of Coca-Cola Bottling Group (Southwest)
Inc., a distributor for Coca-Cola products.
- ------------------------------------------------------------------
Timothy R. Wallace, 42. Director since 1992. Mr. Wallace is a
Group Vice President of the Company and the Chairman of the
Railcars segment and LPG Containers division of the Company. He is
the son of Mr. W. Ray Wallace, a director and the Chairman,
President and Chief Executive Officer of the Company.
- ------------------------------------------------------------------
Board Meetings and Committees
The directors hold regular quarterly meetings, in addition to
the meeting immediately following the Annual Meeting of
Stockholders, attend special meetings, as required, and spend such
time on the affairs of the Company as their duties require. During
the fiscal year ended March 31, 1996, the Board of Directors held
five (5) meetings. All directors of the Company attended at least
seventy-five percent (75%) of the meetings of the Board of
Directors and the committees on which they served during the fiscal
year ended March 31, 1996.
The Board of Directors has an Audit Committee consisting of
Messrs. Galt, Grum, Guerin and Hoffman. The Audit Committee met
three (3) times during the fiscal year ended March 31, 1996. The
Audit Committee's functions include: (a) making recommendations to
the Board of Directors for the engagement or discharge of the
independent auditors, (b) reviewing the plan and results of the
audit engagement with the independent auditors, (c) reviewing the
degree of independence of the independent auditors, (d) approving
the services performed by the independent auditors, (e) considering
the range of audit and other fees and (f) reviewing the adequacy of
the Company's system of internal controls.
The Board of Directors also has a Compensation Committee
consisting of Messrs. Biegler, Guerin, Hay and Pulley. The
Compensation Committee, which met four (4) times during the fiscal
year ended March 31, 1996, determines the base salary and incentive
compensation arrangements for, and the granting of benefits to,
officers of the Company and senior management of its subsidiaries.
The Compensation Committee also determines, in connection with the
Company's stock option and incentive plans, the persons to whom
awards are granted, the type of awards, the number of shares
covered by the awards, whether stock appreciation rights are
granted, the option vesting schedule and, if other than an
incentive stock option for purposes of the Internal Revenue Code,
the option exercise price. See "Executive Compensation and Other
Matters - Stock Option Plans" below.
The entire Board of Directors acts as a nominating committee.
Compensation of Directors
During the fiscal year ended March 31, 1996, each director
received $1,250 for each director's meeting attended and
reimbursement for reasonable out-of-pocket expenses. In addition,
each director who is not a compensated officer or employee of the
Company or its subsidiaries received a fee of $30,000 per year for
serving as a director (and the Chairman of the Audit Committee and
the Chairman of the Compensation Committee received an additional
$2,000 per year in those capacities) and $1,250 for each Audit
Committee or Compensation Committee meeting attended. Each outside
director (other than Messrs. Biegler and Grum) holds an option to
purchase 7,500 shares of the Company's Common Stock at an option
exercise price of $22.50 per share, the market value of the
Company's Common Stock at the time of the grant. These options were
granted pursuant to the Company's 1989 Stock Option Plan that was
approved by the stockholders at the Annual Meeting on July 19,
1989. Mr. Biegler holds an option to purchase 7,500 shares of the
Company's Common Stock at an option exercise price of $33.50 per
share, the market price of the Company's Common Stock at the time
of the grant to him under the Company's 1993 Stock Option and
Inventive Plan that was approved by the stockholders at the Annual
Meeting on July 21, 1993.
The Company also has a Directors' Retirement Plan that was
adopted on December 11, 1986. The plan is an unfunded arrangement
through which monthly payments will be paid to members of the Board
of Directors who are not employees of the Company upon retirement,
disability or death while serving as a director on or after
December 11, 1986. The payments will be made to the director
and/or his designated beneficiary for a ten-year (10) period. The
amount of each monthly payment will be equal to one-twelfth (1/12)
of a percentage of the annual retainer paid to such director in the
year of his retirement, disability or death while serving as a
director. The applicable percentage is dependent upon the number
of years of service as a member of the Board of Directors. If the
director has less than five (5) years of service, the applicable
percentage is zero. If the director has five (5) years of service,
the applicable percentage is fifty percent (50%). The applicable
percentage increases at the rate of ten percent (10%) for each year
of service thereafter and reaches one hundred percent (100%) after
ten years of service as a director. However, notwithstanding the
number of years of service, a director's applicable percentage will
be one hundred percent (100%) in the event of (i) any merger or
consolidation in which the Company is not the surviving
corporation, (ii) a sale of all or substantially all of the assets
of the Company, (iii) a sale of shares of the Company's Common
Stock in which another corporation, person or entity acquires fifty
percent (50%) or more of the outstanding Common Stock or (iv) the
acquisition of fifty percent (50%) or more of the outstanding
shares of the Company's Common Stock as a result of any tender or
exchange offer.
EXECUTIVE COMPENSATION AND OTHER MATTERS
Cash Compensation
The following table sets forth information for the Company's
fiscal years ended March 31, 1996, 1995 and 1994, with regard to
the compensation for their services to the Company and its
subsidiaries in all capacities of the Chief Executive Officer and
each of the other four (4) most highly compensated executive
officers serving the Company at the close of the Company's most
recently completed fiscal year:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Long Term
Compensation Compen-
sation All
--------- Other
Name and Year Other Stock Compen-
Principal Position Annual Option sation <F4>
Salary Bonus <F1> Compen- Awards
sation <F2> (Shares)
<S> <C> <C> <C> <C> <C> <C>
W. Ray Wallace - Chairman, 1996 $1,000,000 $2,033,372 $441,730 - $25,414
President & Chief Executive Officer 1995 $1,000,000 $2,000,000 $289,227 - $25,414
1994 $900,000 $1,557,203 $211,367 - $28,312
Timothy R. Wallace - Group Vice 1996 $475,000 $373,540 $84,854 - $25,084
President & Chairman of Railcars 1995 $295,000 $348,041 $64,304 - $23,464
segment and LPG Containers division 1994 $275,000 $197,643 - - $24,854
John T. Sanford - Senior Vice 1996 $380,000 $329,498 $70,950 13,202 $18,309
President and Group Vice President & 1995 $270,000 $105,111 $37,511 14,085 $17,559
Chairman of Construction Products 1994 $260,000 $112,580 - - $17,253
and Metal Components segments
Mark W. Stiles - Group Vice 1996 $275,000 $295,130 $57,013 - $5,599
President and President of 1995 $165,000 $90,503 $25,550 1,500 $6,166
Construction Products division 1994 $155,000 $155,000 - - $5,769
John Dane III - Group Vice President 1996 $450,000 $36,810 $48,681 - $19,699
& President of Marine Products 1995 $265,000 $116,017 $38,102 13,030 $18,425
segment 1994 $250,000 $336,325 - - $19,273
<FN>
<F1> Annual incentive bonuses are paid only upon the achievement of
a predetermined financial goal set for each executive by the
Compensation Committee at the beginning of the fiscal year.
All or a portion of the incentive bonus is paid within ninety
(90) days after the close of the Company's fiscal year. If
the incentive bonus earned exceeds a certain percentage of
base salary (ranging from twenty-five percent (25%) in the
case of some executives to fifty percent (50%) in the case of
other executives), the incentive bonus amount in excess of the
applicable percentage is deferred and is payable in two (2),
or in the case of an incentive bonus earned prior to fiscal
1996, three (3), equal annual installments in the succeeding
years, provided the executive's employment with the Company
has not been terminated prior to payment for any reason other
than death, disability, retirement or a change of control of
the Company. The amounts shown for bonus in the foregoing
table include the deferred installments payable to the
executive in the succeeding years if still employed by the
Company at that time and were, in fiscal 1996, 1995 and 1994,
respectively, $1,016,686, $1,500,000 and $1,107,203 for Mr. W.
Ray Wallace, $186,770, $259,541 and $115,143 for Mr. Timothy
R. Wallace, $164,749, $24,111 and $34,580 for Mr. Sanford,
$147,565, $41,003 and $108,500 for Mr. Stiles and $18,405,
$58,008 and $168,162 for Mr. Dane.
<F2> An amount equal to fifteen percent (15%) of the salary and
incentive bonus of Mr. W. Ray Wallace, and amounts equal to
ten percent (10%) of the salaries and incentive bonuses of
Messrs. Timothy R. Wallace, Sanford, Stiles and Dane, are set
aside annually pursuant to the long term deferred compensation
plans for them.
<F3> All Other Compensation consists principally of the matching
amounts under the Company's Supplemental Retirement Plan and
Section 401(k) Plan (described below under "Retirement
Plans"), automobile allowances, reimbursements for medical
insurance premiums and, in the case of Messrs. W. Ray Wallace
and Timothy R. Wallace, directors' fees.
</FN>
</TABLE>
Stock Option Plans
The Company's 1993 Stock Option and Incentive Plan that was
approved by the stockholders at the Annual Meeting held on July 21,
1993 permits the grant of stock options, stock appreciation rights,
restricted stock, performance and other stock related awards. The
1993 stock option plan terminated the Company's earlier 1989 stock
option plan which in turn had terminated the Company's 1983 stock
option plan, except in each case for options granted and
outstanding under the prior plans. Stock options that expire,
terminate or are surrendered unexercised under the prior plans are
available for further award under the 1993 plan. At April 30,
1996, options were granted and outstanding under the 1993 plan on
919,124 shares of the Company's Common Stock, under the 1989 plan
on 647,881 shares, and under the 1983 plan on 109,282 shares.
The Compensation Committee of the Board of Directors
determines the officers and key employees to whom options are
granted, the type of options, the number of shares covered by such
options, the option vesting schedule and, if other than an
incentive stock option for purposes of the Internal Revenue Code,
the option exercise price. In the case of incentive stock options,
the Internal Revenue Code requires that the option exercise price
must not be less than the fair market value of the stock at the
time that the option is granted and, in the case of any employee
owning directly or indirectly more than ten percent (10%) of the
total outstanding Common Stock, the option exercise price for an
incentive stock option must be at least one hundred ten percent
(110%) of the fair market value. Options become exercisable as set
forth in the option agreements pursuant to which they are issued,
but in no event are incentive stock options exercisable after the
expiration of ten (10) years from the date of grant (or, in the
case of an employee owning directly or indirectly more than ten
percent (10%) of the total outstanding Common Stock, five (5) years
from the date of grant). Regardless of any vesting schedule
contained in an option agreement, the plan provides for the
acceleration of vesting in certain events, including the optionee's
death, disability or retirement, the dissolution or liquidation of
the Company, certain reorganizations of the Company or the
acquisition of fifty percent (50%) or more of the Company's
outstanding Common Stock as a result of a tender or exchange offer
other than by the Company. All rights to exercise an option
terminate immediately upon an employee's discharge for cause, ten
(10) days after an employee's resignation, three (3) months after
an employee's disability, twelve (12) months after an employee's
death and three (3) years (or three (3) months in case of incentive
stock options) after the employee's retirement. All stock
appreciation rights and limited stock appreciation rights, if any,
terminate immediately upon cessation of employment, regardless of
the reason for such cessation.
Recipients of options may pay the option exercise price in
cash or by delivering to the Company shares of the Company's Common
Stock already owned by the optionee having a fair market value
equal to the option exercise price. When the optionee surrenders
stock already owned by him in payment of the exercise price, the
optionee will be granted, except in limited instances, a new option
on shares equal in number to those surrendered at an option
exercise price that is the fair market value of the Company's
Common Stock on the date of the new grant and exercisable no
earlier than six (6) months after the date of such new grant. An
optionee also may elect to satisfy the income tax withholding
requirement upon the exercise of a nonincentive stock option either
by payment of the amount of such withholding obligation in cash or
through the retention by the Company of a number of shares of
Common Stock out of the shares being purchased with a fair market
value equal to the amount of the withholding obligation, but no new
option is awarded for the shares retained to satisfy the employee's
income tax withholding requirement.
The provisions of the 1993 plan may be modified or amended at
any time or from time to time by the Board of Directors; provided,
however, no option at any time outstanding may be impaired or
canceled without the consent of the holder thereof, and no
amendment can increase the maximum number of shares subject to the
plan, reduce the option exercise price of shares contrary to the
provisions of the plan or materially modify the requirements as to
eligibility for participation in the plan, without stockholder
approval.
One of the goals of the 1993 plan is to make the key
executives to whom options are granted long term stockholders of
the Company in order that their long range economic interests will
be more directly aligned with the long term economic interests of
the Company's stockholders. Further, the awards are designed to
retain and develop a strong management team who will be dependent
upon value created for the Company's stockholders for an
accumulation of significant personal wealth. All stock options
granted by the Company after the adoption of the 1993 plan have
been granted under the Company's Executive Stock Ownership Program,
other than options granted to Mr. W. Ray Wallace and "reload
options", i.e., options granted to an optionee for the number of
shares previously owned that the optionee surrendered in payment of
the exercise price of a stock option. Options granted under the
Company's Executive Stock Ownership Program become exercisable only
in annual installments over a period of eight (8) years and must be
exercised before ten (10) years from the date of the grant. More
importantly, the shares acquired pursuant to the exercise of the
option are restricted in respect to their transferability and are
not transferable from the date of the exercise until the expiration
of five (5) years thereafter, when fifty percent (50%) of the
shares become transferable, and until the expiration of ten years
thereafter, when the balance of the shares become transferable,
except upon death, disability or normal retirement or a change in
the control of the Company, or with the consent of the Compensation
Committee (which consent will only be granted upon special request
in case of hardship, to purchase a home, to pay for a child's
education or for any other reason deemed appropriate by the
Compensation Committee).
The following table contains information concerning the grant
of stock options with respect to fiscal 1996 each of the executives
named in the Summary Compensation Table.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR <F1>
<CAPTION>
Individual Grants
--------------------------------------------------------
Percent
of
Total Potential Realizable Value
Options at Assumed Annual
Granted Market Rates of Stock Price
to Exercise Price Appreciation For Option Term
Employ- or on ---------------------------------
ees in Base Date At 5% At 10%
Options Fiscal Price of Expiration Annual Annual
Name Granted Year ($/Sh) Grant Date Growth Growth
<S> <C> <C> <C> <C> <C> <C> <C>
All Stockholders'
Stock appreciation N/A N/A N/A N/A N/A $978,000,000 $2,478,000,000
W. Ray Wallace - - - - - - -
Timothy R. Wallace - - - - - - -
John T. Sanford 13,202 - $37,875 $37,875 04/13/03 $314,000 $797,000
Mark W. Stiles - - - - - - -
John Dane III - - - - - - -
<FN>
<F1> The stock options shown in the table were granted pursuant to
the reload provisions of the 1993 plan. The Company has not
granted any stock appreciation rights but most of the
Company's stock option agreements provide that the option may
be surrendered for cash for the difference between the then
market value of the shares and the option exercise price
within thirty (30) days after the acquisition of fifty percent
(50%) of the Company's Common Stock pursuant to a tender or
exchange offer other than one made by the Company.
</FN>
</TABLE>
The table below sets forth information concerning each
exercise of stock options by each of the named executive officers
during the most recently completed fiscal year and the number of
exercisable and unexercisable stock options held by them and the
fiscal year-end value of the exercisable and unexercisable options.
<TABLE>
Aggregated Option Exercises In Last Fiscal Year And FY-End Option Values
<CAPTION>
Value of
Number of Unexercised
Unexercised in-the-Money
Shares Options at Fiscal Options at Fiscal
Acquired Value Year-End Year-End
Name on Realized
Exercise Exercisable/ Exercisable/
Unexercisable Unexercisable
<S> <C> <C> <C> <C>
W. Ray Wallace - - 450,000 $6,181,253
75,000 $515,625
Timothy R. Wallace 26,427 $579,922 142,323 $1,839,782
101,250 $881,091
John T. Sanford 58,088 $1,057,238 46,699 $322,620
101,250 $881,091
Mark W. Stiles - - 12,317 $99,539
20,250 $176,218
John Dane III - - 70,030 $597,874
101,250 $881,091
</TABLE>
Retirement Plans
The Company has noncontributory, defined benefit retirement and
death benefit plans which are available to all eligible employees
who have completed specified periods of employment. The benefits
of the plans are funded by periodic contributions to retirement
trusts that invest the Company's contributions and earnings thereon
in order to pay the benefits to the employees. The plans provide
for the payment of monthly retirement benefits determined under a
calculation based on credited years of service and/or a
participant's compensation. Retirement benefits are paid to
participants upon normal retirement at the age of 65 or later, or
upon early retirement. The plans also provide for the payment of
certain disability and death benefits.
The Company has also adopted a Supplemental Pension Plan that
permits the payment of supplemental benefits to certain employees
whose annual benefits under the foregoing retirement plan would
exceed those permitted by the Internal Revenue Code of 1986, as
amended (the "Code"). The Supplemental Pension Plan provides that
if at any time the amount of the annual retirement benefit which
would otherwise be payable under the Company's pension plan is or
becomes limited by reason of compliance with the Code, such person
shall be entitled to receive a supplemental pension benefit equal
to the difference between the benefit that such person receives
under the Company's pension plan and the benefit that such person
would have received if such limitation had not been in effect. The
benefits are payable from the general assets of the Company.
The following table reflects the estimated aggregate annual
benefits, computed on the basis of a monthly benefit payable for
ten (10) years certain and life thereafter, payable under such
plans to a fully vested executive officer of the Company upon
retirement at age 65 after 10, 20, 30 and 40 credited years of
service at the annual remuneration levels set forth in the table.
Pension Plan Table
Years of Service
Remuneration
10 20 30 40
$100,000 $9,760 $19,520 $29,290 $39,040
$150,000 14,760 29,520 44,280 59,040
$200,000 19,760 39,520 59,280 79,040
$250,000 24,760 49,520 74,280 99,040
$300,000 29,760 59,520 89,280 119,040
$350,000 34,760 69,520 104,280 139,040
$400,000 39,760 79,520 119,280 159,040
$450,000 44,760 89,520 134,280 179,040
$500,000 49,760 99,520 149,280 199,040
$550,000 54,760 109,520 164,280 219,040
$600,000 59,760 119,520 179,280 239,040
$650,000 64,760 129,520 194,280 259,040
$700,000 69,760 139,520 209,280 279,040
$750,000 74,760 149,520 224,280 299,040
$800,000 79,760 159,520 239,280 319,040
$850,000 84,760 169,520 254,280 339,040
The compensation covered under those plans is the same as the
salary and bonus reported earlier in the Summary Compensation
Table. The annual benefits shown are not subject to any deduction
for Social Security benefits or other offset amounts. The five (5)
executive officers named in the Summary Compensation Table above
have credited years of service under the plans under which they are
covered as follows: Mr. Timothy R. Wallace has 21 years; Mr.
Sanford has 12 years; Mr. Stiles has 4 years; and Mr. Dane has 9
years. Mr. W. Ray Wallace began receiving pension payments at age
65 of $126,933 per year from the Company's regular retirement plan.
The Company also is obligated to pay supplemental retirement
benefits to Mr. W. Ray Wallace, Chairman, President and Chief
Executive Officer of the Company, under an agreement made by the
Company in 1990 which provides that the Company will supplement,
commencing at his actual retirement, his other retirement benefits
from the Company so that his aggregate retirement benefits from the
Company will equal eighty percent (80%) of the average of his
annual cash compensation earned during his most highly compensated
five (5) consecutive years of employment. At March 31, 1996, the
estimated annual benefit payable to him upon his retirement under
this unfunded supplemental retirement program was $1,838,000.
The Company maintains a Section 401(k) plan that permits
employees to elect to set aside up to ten percent (10%) of their
compensation (subject to the maximum limit on the amount of
compensation permitted by the Code to be deferred for this purpose)
in a trust to pay future retirement benefits. The Company matches
fifty percent (50%) of the lesser of (i) the amount that the
employee elects to set aside for this purpose or (ii) six percent
(6%) of the employee's compensation. The Company also maintains a
similar plan for its "highly compensated employees", as defined in
the Code. The highly compensated employees are not limited as to
the percentage of their compensation which may be contributed to
the plan; however, the Company only matches the lesser of (i) the
amount that the employee elects to set aside for this purpose or
(ii) six percent (6%) of the employee's compensation (but the
Company never contributes more than it would have contributed if
the "highly compensated employees" had participated in the Section
401(k) plan). Participation in the Section 401(k) plan by all such
"highly compensated employees" would have an adverse effect on the
Section 401(k) plan. Contributions under the latter plan are also
made to a trust, but unlike the contributions by the Company to the
trust created pursuant to the Section 401(k) plan (which are
deductible by the Company when paid to the trust), the
contributions of the Company to the trust for the "highly
compensated employees" are not deductible by the Company for
federal income tax purposes until such amounts are paid out by the
trust. Further, the assets of the trust created under the plan for
the "highly compensated employees" are considered part of the
general assets of the Company that can be attached by its
creditors.
Change of Control Agreements
On June 8, 1989, the Board of Directors authorized agreements
with each of the executive officers named in the Summary
Compensation Table above and others to provide certain severance
benefits to them in the event of a termination of employment
following a change of control (as defined in the agreements) of the
Company. Each agreement provides that if there is a change of
control of the Company and if the Company terminates the
executive's employment other than as a result of the executive's
death, disability or retirement, or for cause (as defined in the
agreements), or if the executive terminates his employment for good
reason (as defined in the agreements), then the Company will pay to
such executive a lump sum equal to three (3) times the amount of
the executive's base salary and bonus paid by the Company and its
subsidiaries to the executive during the twelve (12) months prior
to termination or, if higher, the twelve (12) months prior to the
change of control of the Company.
The severance benefits provided by the agreements also include
certain fringe benefits to which each executive would have been
entitled if the executive had continued in the employment of the
Company for thirty-six (36) months after the executive's
termination, and a supplemental benefit based on the Company's
retirement plan, which benefit is payable in a series of cash
payments.
The agreements further provide that if any payment to which
the executive is entitled would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, then the Company will pay to the executive an additional
amount so that the net amount retained by the executive is equal to
the amount that otherwise would be payable to the executive if no
such excise tax had been imposed.
Report of the Compensation Committee on Executive Compensation
The following report is submitted by the Compensation
Committee for inclusion in this Proxy Statement pursuant to the
rules of the Securities and Exchange Commission:
The Company's executive compensation program is administered
by the Compensation Committee appointed by the Board of Directors
and is composed of independent outside directors. The Compensation
Committee is responsible for setting and overseeing the
administration of policy that governs the compensation of the
Company's executives. It establishes the base salary, the
incentive compensation, the deferred compensation and the stock
options of each officer of the Company.
It is the Compensation Committee's policy to provide a
competitive and comprehensive compensation program to attract,
motivate, reward and retain the key executives needed to enhance
the profitability of the Company and to create value for its
stockholders. The Compensation Committee believes that the
Company's executive compensation should consist of competitive base
salaries and incentive compensation plans that reward both short
and long term performance. The key components of the Company's
executive compensation program in the last fiscal year were a base
salary, incentive compensation and in some cases, deferred
compensation. The Compensation Committee periodically reviews each
component of the Company's executive compensation program to ensure
that pay levels and incentive opportunities are competitive,
directly linked to performance and aligned with the interest of
stockholders. The Compensation Committee determines each
executive's compensation based upon past and expected future
performance, the executive's responsibilities within the Company,
and the executive's value to the Company as determined by the
Committee.
Base Salary
The Compensation Committee each year reviews each executive's
performance and establishes each executive's base salary based upon
past and expected future performance, and the executive's
responsibilities within the Company. The Compensation Committee
also considers a survey of salaries of senior executives of other
companies provided by an independent outside consultant. Base
salaries are determined each year for each executive of the
Company. Base salaries for the Chief Executive Officer and each of
the other four most highly compensated officers for the fiscal
years ending March 31, 1996, 1995 and 1994, are shown in the
Summary Compensation Table.
Incentive Compensation
The Company's annual incentive bonuses of its executive
officers are tied to the Company's success in achieving significant
performance goals. An incentive bonus is determined for each
executive upon the basis of the achievement of certain financial
goals set each year by the Compensation Committee at the beginning
of the year. The Company's corporate executives' performance
targets are directly related to the Company's consolidated income
before federal income tax; and targets of division executives
responsible for the operation of a division or segment of the
Company are directly related to the operating profits achieved by
that division or segment. The performance goals are predetermined
by the Compensation Committee on the basis of the Company's past
performance and anticipated future performance. In the case of
both corporate and division executives, the total amount of
incentive compensation that may be earned in any year is limited to
a predetermined maximum percentage of base salary.
Stock Options and Deferred Compensation
The long term incentive element of the Company's management
compensation program is generally in the form of stock option
grants. The Committee's objective is to create an opportunity for
officers and other key employees of the Company to acquire a
proprietary interest in the Company that aligns the executive's
interest with the interest of the Company's stockholders.
In April, 1993, the Compensation Committee made awards under
the Executive Stock Ownership Program of nonqualified stock options
on a larger number of shares that typically had been granted in
previous years and provided for a ratable exercise over an eight
year period (instead of the usual five years) and also provided
that the shares acquired upon exercise would be subject to
restrictions on transferability for periods after exercise of five
years (when restrictions would lapse on fifty percent of the
shares) and ten years (when restrictions would lapse on the other
fifty percent of the shares), except in the case of the death,
disability or retirement or a change in control of the Company or
with the consent of the Compensation Committee. Consequently, the
Compensation Committee did not award any stock options to
executives in the fiscal year ended March 31, 1996, other than
reload options.
Commencing April 1, 1994, the Company established a deferred
compensation plan for certain key officers of the Company other
than Mr. W. Ray Wallace, Chairman, President and Chief Executive
Officer. Under the deferred compensation plan, ten percent (10%)
of the participant's annual base salary and incentive compensation
is accrued on the books of the Company, together with interest at
the prime rate of a specified national bank, to be paid, as
determined by the Board of Directors of the Company after
consultation with the participant in annual installments over five
years or other periods as determined by the Board of Directors.
Payment of the deferred compensation commences one year and one day
after the participant's termination of employment with the Company.
If the participant dies, the installments are paid to his or her
designated beneficiary. The installment payments terminate if the
participant, without the prior written consent of the Company,
directly or indirectly, becomes or serves as an officer, employee,
owner or partner of any business which competes in a material
manner with the Company.
Chief Executive Officer Compensation
The base salary, incentive compensation and stock option
grants to Mr. W. Ray Wallace, the Company's Chief Executive
Officer, are set within the philosophy and policies enunciated
above for all other executives of the Company.
His base salary in Fiscal 1996 was fixed by the Committee
after reviewing the performance of the Company in Fiscal 1995,
after considering the positioning of the Company for future years,
and after assessing Mr. Wallace's past and ongoing personal
performance in the position of Chief Executive Officer. The
Compensation Committee did not follow any set formula in making
such determination, but considered, among other things, the report
of a nationally recognized consulting firm employed to survey the
compensation of chief executive officers of other companies, with
particular emphasis on companies with sales volumes comparable to
that of the Company.
Mr. Wallace's incentive compensation in Fiscal 1996 was
derived from a formula directly related to the Company's pretax
income, which in Fiscal 1996 totaled $186 million, up from $147
million in Fiscal 1995. His incentive compensation for the year is
payable fifty (50%) percent currently and fifty (50%) percent in
two (2) equal annual installments commencing in April, 1997.
Mr. Wallace also has a long term deferred compensation plan
with respect to which the Company sets aside annually an amount
equal to fifteen percent (15%) of Mr. Wallace's combined salary and
bonus in each fiscal year.
Pursuant to an agreement between the Company and Mr. Wallace
dated July 18, 1990, the Company is obligated to supplement his
pension plan and other retirement benefits from the Company so that
the aggregate amount of all his retirement benefits from the
Company will equal eighty percent (80%) of his average annual
compensation for the five consecutive years in which he was most
highly compensated by the Company.
Dean P. Guerin, Chairman David W. Biegler, Member
Compensation Committee Jess T. Hay, Member
Ray J. Pulley, Member
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is a current or former
officer or employee of the Company or any of its subsidiaries. Mr.
W. Ray Wallace was, until April 1995, prior to Mr. Biegler's membership
on the Compensation Committee of the Company, a director of ENSERCH
Corporation and a member of its Audit Committee and the Chairman of
its Compensation Committee, of which Mr. Biegler, a director of the
Company, is the Chairman, President and Chief Executive Officer.
The members of the Board of Directors of the Company were fully
informed of this relationship.
Performance Graph
The following graph shows a comparison of the five (5) year
cumulative return (assuming reinvestment of any dividends) for the
Company, the New York Stock Exchange Index and the Dow Jones
Transportation Equipment Index. The sources for the information
contained in this table in respect to the return for the Company
and for the Dow Jones Transportation Index are STAR Services, Inc.
and, in respect to the New York Stock Exchange Index, is Media
General Financial Services.
[Appearing at this point is a performance graph comparing the
five (5) year cumulative return (assuming reinvestment of any
dividends) for the Company, the New York Stock Exchange Index and
the Dow Jones Transportation Equipment Index, with the following
plot points expressed dollars:
1991 1992 1993 1994 1995 1996
Trinity 100 116 184 233 233 222
DJ Transport. 100 131 157 181 162 190
NYSE Index 100 110 126 131 146 190]
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's executive officers, directors and persons who own
more than ten percent (10%) of the Company's Common Stock to file
initial reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC"). These reports are also
filed with the New York Stock Exchange and a copy of each report is
furnished to the Company.
Additionally, SEC regulations require that the Company
identify any individuals for whom one of the referenced reports was
not filed on a timely basis during the most recent fiscal year. To
the Company's knowledge, based solely on review of reports
furnished to it and written representations that no other reports
were required during and with respect to the fiscal year ended
March 31, 1996, each individual who was required to file such
reports during the fiscal year complied with the applicable filing
requirements.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, or a predecessor of
that firm, have been the auditors of the accounts of the Company
each year since 1958, including the fiscal year ended March 31,
1996. It is anticipated that representatives of Ernst & Young LLP
will be present at the 1996 Annual Meeting, will have the
opportunity to make a statement if they so desire and will be
available to respond to appropriate questions raised at the 1996
Annual Meeting or submitted to them in writing before the 1996
Annual Meeting.
Ernst & Young LLP has informed the Company that it does not
have any direct financial interest in the Company and that it has
not had any direct connection with the Company in the capacity of
promoter, underwriter, director, officer or employee.
As is customary, auditors for the current fiscal year will be
appointed by the Board of Directors at their meeting immediately
following the 1996 Annual Meeting upon recommendation of the Audit
Committee.
STOCKHOLDER PROPOSALS
Stockholders' proposals to be presented at the 1997 Annual
Meeting of Stockholders, for inclusion in the Company's Proxy
Statement and form of proxy relating to the meeting, must be
received by the Company at its offices in Dallas, Texas, addressed
to the Secretary of the Company, not later than February 11, 1997.
OTHER MATTERS
Management of the Company is not aware of other matters to be
presented for action at the 1996 Annual Meeting; however, if any
such other matters are presented for action, it is the intention of
the persons named in the accompanying form of proxy to vote in
accordance with their judgment on such matters.
It is important that proxies be returned promptly to avoid
unnecessary expense. Therefore, stockholders are urged, regardless
of the number of shares owned, to date, sign and return the
enclosed proxy in the enclosed business reply envelope.
By Order of the Board of Directors
J. J. FRENCH, JR.
Secretary
June 11, 1996
Upon written request from any stockholder of record at May 31,
1996 (or any beneficial owner representing that he is or was
entitled to vote at the 1996 Annual Meeting), the Company will
furnish to such stockholder, without charge, its Annual Report on
Form 10-K for the fiscal year ended March 31, 1996, as filed with
the Securities and Exchange Commission, including financial
statements. The Company may impose a reasonable fee for its
expenses in connection with providing exhibits referred to in such
Form 10-K, if the full text of such exhibits is specifically
requested. Requests should be directed to: Mr. F. Dean Phelps,
Jr., Vice President, Trinity Industries, Inc., P. O. Box 568887,
Dallas, Texas 75356-8887.
[FRONT SIDE OF PROXY CARD]
TRINITY INDUSTRIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - July 17, 1996
The undersigned hereby appoints J. J. French, Jr., W. Ray
Wallace and Dean P. Guerin and each of them with full power of
substitution, attorneys, agents and proxies of the undersigned to
vote as directed below the shares of stock which the undersigned
would be entitled to vote, if personally present, at the Annual
Meeting of Stockholders of Trinity Industries, Inc. to be held at
its offices, 2525 Stemmons Freeway, Dallas, Texas 75207, on
Wednesday, July 17, 1996 at 9:30 a.m. Central Daylight Saving Time,
and at any adjournment or adjournments thereof. If more than one
of the above attorneys shall be present in person or by
substitution at such meeting or at any adjournment thereof, the
majority of said attorneys so present and voting, either in person
or by substitution, shall exercise all of the powers hereby given.
The undersigned hereby revokes any proxy or proxies heretofore
given to vote upon or act with respect to such shares of stock and
hereby ratifies and confirms all that said attorneys, their
substitutes, or any of them, may lawfully do by virtue hereof.
(1) Election of eight (8) Directors: David W. Biegler,
Barry J. Galt, Clifford J. Grum, Dean P. Guerin, Jess T. Hay,
Edmund M. Hoffman, Timothy R. Wallace and W. Ray Wallace.
___
/___/ FOR all nominees listed above (except as marked to the
contrary)
___
/___/ WITHHOLD AUTHORITY to vote for all nominees listed above
INSTRUCTION: To withhold authority to vote for one or more,
but not all, of the above-named nominees, check the box before
"FOR" and indicate your desire to withhold such authority by
drawing a line through the name(s) of such nominee(s).
(2) In their discretion on such other matters as may properly
come before the meeting.
(Please sign on reverse side)
[BACK SIDE OF PROXY CARD]
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR EACH OF THE ABOVE NAMED NOMINEES
FOR DIRECTOR.
Signature(s): _____________________
_____________________
Date Signed: _____________________
Please sign exactly as your name
appears on the proxy. If your stock
is jointly owned, both parties must
sign. Fiduciaries and
representatives should so indicate
when signing, and when more than one
is named, a majority should sign.
If signed by a corporation, its seal
should be affixed.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED.
