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:
[ X ] Preliminary Proxy Statement
[ ] 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 16, 1997
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 16, 1997, at 9:30 a.m., Central Daylight Saving Time, for the
following purposes:
(1) to elect ten (10) directors to hold office until the next Annual
Meeting of Stockholders or until their successors are elected and qualified;
(2) to approve an amendment to the Company's 1993 Stock Option and
Incentive Plan; and
(3) 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 30, 1997 will
be entitled to notice of and to vote at the 1997 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 1997
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 1997 Annual Meeting, whether or not you expect to attend in
person. Stockholders who attend the 1997 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, 1997, accompany
this Notice of Annual Meeting of Stockholders.
By Order of the Board of Directors
J. J. FRENCH, JR.
Secretary
June 11, 1997
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 16, 1997
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 16,
1997, at 9:30 a.m., Central Daylight Saving Time (the "1997 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, 1997.
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 1997 Annual
Meeting, by executing a proxy bearing a later date or by attending the 1997
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
1997 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 ten (10) 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;
(2) FOR the approval of the amendment to the Company's 1993 Stock Option
and Incentive Plan; and
(3) At the discretion of the persons named in the enclosed form of
proxy, on any other matter that may properly come before the 1997 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
1997 Annual Meeting, including the cost of mailing, will be borne by the
Company. To the extent necessary to assure sufficient representation at the
1997 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.
-1-
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
1997 Annual Meeting, or any adjournment thereof, has been established by the
Board of Directors as of the close of business on May 30, 1997. At that date,
there were outstanding and entitled to vote [ ] 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 1997
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 30, 1997, 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 [ ] shares of
the Company's Common Stock as of May 30, 1997.
The following table shows the number of shares of Common Stock
beneficially owned by each director or nominee, by the executive officers
named below in the Summary Compensation Table 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, 1997(1) Class
John L. Adams 1,000 *
Ralph A. Banks, Jr. 6,150 *
David W. Biegler 5,364 *
John Dane III 217,413 *
Barry J. Galt 10,160 *
Clifford J. Grum 3,000(2) *
Dean P. Guerin 57,410 *
Jess T. Hay 11,384(3) *
Edmund M. Hoffman 41,681(4) *
Diana S. Natalicio 1,000 *
John T. Sanford 129,875 *
Mark W. Stiles 21,607 *
Timothy R. Wallace 216,915 *
W. Ray Wallace 1,505,151 3.4%
Directors and Executive
Officers as a Group 2,329,553 5.3%
_________
* Less than one percent (1%).
-2-
(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 and Hoffman are 9,410 shares each, for Mr.
Biegler is 3,764 shares and for Messrs. Dane, Sanford, Stiles, Timothy
R. Wallace and W. Ray Wallace are 39,875, 82,191, 17,987, 203,671 and
621,080 shares, respectively. Such numbers for shares that the officers
and directors have right to acquire under the Company's stock option plans
reflect the adjustment resulting from the Company's distribution of its
stock in Halter Marine Group, Inc. Mr. Dane's association with the Company
ceased on March 31, 1997 upon the Company's distribution of its stock of
Halter Marine Group, Inc.; therefore, his options will expire on June 29,
1997, if not exercised.
(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.
_____________
ITEM 1 - ELECTION OF DIRECTORS
At the 1997 Annual Meeting, ten (10) 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 ten (10) 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 ten (10) nominees to the Board of Directors set forth below.
Nominees
W. Ray Wallace, 74. Director since 1956. Chairman and Chief Executive
Officer of the Company. He is the father of Timothy R. Wallace, a director
and President of the
Company.
John L. Adams, 52. Director since 1996. Member of the Audit Committee and of
the Corporate Development and Finance Committee. Mr. Adams is Chairman and
Chief Executive Officer of Texas Commerce Bank -- Dallas, Texas. He is also
Vice Chairman of the Board of Texas Commerce Bank National Association, a
national bank providing banking services in various Texas cities. He serves
as a director of Phillips Gas Company, a leading purchaser, producer, gatherer
and seller of natural gas, Texas Utilities Company (Advisory Director), a
public utility holding company, and Zale Lipshy University Medical Center, in
addition to service on the Board of Directors of several public and private
charitable organizations.
David W. Biegler, 50. Director since 1992. Chairman of the Corporate
Governance and Nominating 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.
-3-
Barry J. Galt, 63. Director since 1988. Member of the Audit Committee and of
the Corporate Development and Finance 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, 62. Director since 1995. Member of the Audit Committee and
of the Human Resources 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, 75. Director since 1965. Chairman of the Corporate
Development and Finance 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, 66. Director since 1965. Chairman of the Human Resources
Committee and member of the Corporate Governance and Nominating 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, 75. Director since 1957. Chairman of the Audit Committee
and member of the Corporate Development and Finance Committee. Mr. Hoffman's
principal occupation is investments, primarily in the soft drink bottling and
full line vending business. Mr. Hoffman is a director of Coca-Cola Bottling
Group (Southwest) Inc., a distributor for Coca-Cola
products.
Diana S. Natalicio, 57. Director since 1996. Member of the Human Resources
Committee and of the Corporate Governance and Nominating Committee. President
of the University of Texas at El Paso. Dr. Natalicio is 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. She was appointed by President Bush to the Commission on
Educational Excellence for Hispanic Americans and by President Clinton to the
National Science Board, currently serving as its
Vice-Chair.
-4-
Timothy R. Wallace, 43. Director since 1992. Mr. Wallace is President of the
Company. He is the son of Mr. W. Ray Wallace, a director and the Chairman,
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, 1997,
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, 1997.
During most of the fiscal year ended March 31, 1997, there were only two
committees, those being an Audit Committee and a Compensation Committee. The
members of the Audit Committee were Messrs. Barry J. Galt, Chairman, Clifford
J. Grum and Edmund M. Hoffman. The members of the Compensation Committee were
Messrs. Jess T. Hay, Chairman, David W. Biegler and Dean P. Guerin. The Board
of Directors on March 13, 1997 reorganized its committees into four (4)
committees. The committees described below and their functions are those
resulting from the March 13, 1997 meeting, unless the context clearly
indicates otherwise.
The Audit Committee consists of Messrs. Adams, Galt, Grum and Hoffman.
The Audit Committee reviews with the management, the director of internal
auditing and the independent accountants the Company's financial statements,
the accounting principles applied in their preparation, the scope of the
audit, any comments made by the independent accountants upon the financial
condition of the Company and its accounting controls and procedures, and such
other matters as the Audit Committee deems appropriate, and the Audit
Committee reviews with management such matters relating to compliance with
corporate policies and internal controls as the Audit Committee deems
appropriate. The Audit Committee met two (2) times during the fiscal year
ended March 31, 1997.
The Human Resources Committee consists of Messrs. Biegler, Grum, Hay and
Dr. Natalicio. The duties of the Human Resources Committee generally are to
(a) determine and/or recommend the compensation structure for the Company and
its subsidiaries, (b) make recommendations to the Board of Directors as to the
salary of the Chief Executive Officer, and set the salaries of other senior
executives of the Company, (c) grant options, shares of stock, stock units and
such other benefits as may be permitted under the Company's stock related
benefit plan or plans to such officers and employees as the Committee may
designate, and report all such grants to the Board of Directors, (d) review
with the Chief Executive Officer, no less frequently than once a year, the
depth and quality of the Company's management and succession plans related to
each critical operating position of the Company, (e) design, recommend to the
Board for approval and administer long, intermediate and short-term incentive
compensation plans of the Company, (f) review and recommend to the Board the
adoption and, where applicable, amendment of employee benefit plans, (g)
administer, interpret, amend (where applicable), and carry out such other
duties with respect to the Company's employee benefit plans, as may be
authorized or called for by such plans or the Board of Directors, (h) be kept
informed as to administration and management matters in respect of the
Company's qualified pension plans, and (i) make such other reports and
recommendations to the Board of Directors from time to time as the Committee
may deem appropriate. The Human Resources Committee succeeded to the
principal duties of the Compensation Committee. The Compensation Committee
met one (1) time during the fiscal year ended March 31, 1997.
The Corporate Governance and Nominating Committee consists of Messrs.
Biegler, Guerin and Hay and Dr. Natalicio. The duties of the Corporate
Governance and Nominating Committee generally are to (a) recommend to the
Board of Directors the director nominees proposed each year in the Company's
proxy statement for election by the Company stockholders, (b) review the
qualifications of, and recommend to the Board, candidates to fill Board
vacancies as they may occur, (c) consider suggestions from stockholders and
other sources regarding possible candidates for director, (d) define and
recommend to the Board appropriate guidelines and criteria regarding the
qualifications of candidates for director of the Company, (e) review and from
time to time propose changes (as and if appropriate) in the compensation and
benefits of non-employee directors of the Company, (f) review and from time to
time propose changes (as and to the extent deemed appropriate by the
Committee) in the Company's system of corporate governance, and (g) make such
other reports and recommendations to the Board of Directors from time to time
as the Committee may deem appropriate. The Corporate Governance and
Nominating Committee is new, being established as a part of the reorganization
of the committee structure of the Board of Directors at its meeting on May 13,
1997. The Corporate Governance and Nominating Committee did not meet during
the fiscal year ended March 31, 1997.
-5-
The Corporate Development and Finance Committee consists of Messrs.
Adams, Galt, Guerin and Hoffman. The duties of the Corporate Development and
Finance Committee generally are to (a) provide direction for the assessment of
future acquisition opportunities, (b) review specific plans regarding
significant acquisitions or dispositions of business or assets, (c) authorize,
subject to limits imposed by the Board of Directors, an investment in (or sale
of) or acquisition of (or disposition of) another company, or the entry into
(or termination of) a partnership, joint venture, or similar investments, or a
financial guarantee or appropriations to subsidiaries of the Company for any
of the foregoing purposes, and (d) make such reports and recommendations to
the Board of Directors from time to time as the Committee may deem
appropriate. In addition, the Corporate Development and Finance Committee
shall (1) periodically review the financial status of the Company, (2) consult
with the officers of the Company and the Board of Directors in regard to
significant matters involving the finances of the Company, (3) review
financial policy and procedures and make such recommendations in regard
thereto as the Committee may deem appropriate, (4) approve guidelines for the
investment of the Company's cash reserves, and (5) recommend for approval by
the Board of Directors (i) the amount and record date of dividends, (ii) the
Company's annual budget (including, but not limited to, revenue, net income,
and capital expenditure objectives) and an acceptable range for the debt to
equity ratio of the Company, and (iii) Registration Statements to be filed
with the SEC in connection with the Company's securities issuances. The
Corporate Development and Finance Committee is new, being established as a
part of the reorganization of the Committee structure of the Board of
Directors at its meeting on March 13,1997. The Corporate Development and
Finance Committee did not meet during the fiscal year ended March 31, 1997.
COMPENSATION OF DIRECTORS
During the fiscal year ended March 31, 1997, 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. Under the Deferred Plan
for Director Fees adopted by the Board of Directors on June 13, 1996, each
director is permitted to elect, on or before each Annual Meeting of Directors,
to defer the receipt of all or a specified portion of the fees to be paid to
him or her. If deferral is elected, the amounts that would otherwise be paid
to him or her in cash during the ensuing fiscal year is credited to an account
on the books of the Company and treated as if invested either at the prime
rate of interest as announced from time to time by Texas Commerce Bank in
Dallas, Texas or, at the director's prior election, in units of the Company's
Common Stock at the closing price on the New York Stock Exchange on the date
that a payment is credited to the director's account. If deemed invested in
units of the Company's Common Stock, the stock units are credited with amounts
equivalent to dividends paid on the Company's Common Stock. Upon ceasing to
serve as a director, the value of the account will be paid to the director in
annual installments not exceeding ten (10) years, according to the director's
prior election.
-6-
Each outside director has been granted an option to purchase 7,500 shares
of the Company's Common Stock. The option exercise price at March 31, 1997 of
the options granted to Messrs. Galt, Guerin, Hay and Hoffman was $22.50 per
share. The option exercise prices at March 31, 1997 of the options granted to
Mr. Biegler, Mr. Grum, Mr. Adams, and Dr. Natalicio was $33.50, $35.00,
$32.125, and $32.125, respectively. The option exercise price of each option
granted to the outside directors is the market value of the Company's Common
Stock at the time of the grant, as adjusted for stock splits and other
extraordinary property distributions.
The Company 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 (10) year 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 (10) 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 a Change in Control of the Company. For purposes of this Proxy
Statement, a "Change in Control" is deemed to have occurred if (i) any person
becomes the beneficial owner, directly or indirectly, of securities of the
Company (other than directly from the Company of its affiliates) representing
thirty percent (30%) or more of the combined voting power of the Company's
then outstanding securities, (ii) a majority of the number of directors
serving on the Board of Directors no longer consists of the existing directors
and any new director (other than a director whose initial assumption of office
is in connection with an actual or threatened election contest) whose
appointment or election by the Board of Directors or nomination for election
by the stockholders of the Company was approved or recommended by a vote of at
least two-thirds of the directors then still in office who are the existing
directors or whose appointment, election or nomination for election was
previously so approved or recommended, (iii) a merger or consolidation of the
Company with any other company unless the Company's stockholders immediately
after the merger or consolidation represent at least sixty percent (60%) of
the combined voting power of the Company or such surviving entity or any
parent thereof or (iv) the stockholders approve a plan of complete liquidation
or dissolution of the Company or there is consummated an agreement for the
sale by the Company of all or substantially all of its assets other than a
sale or disposition to an entity, at least sixty percent (60%) of the combined
voting power of which is owned by stockholders of the Company in substantially
the same proportions as their ownership of the Company immediately prior to
the sale.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information for the Company's fiscal years
ended March 31, 1997, 1996 and 1995, 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 and of Mr. John Dane III, Chairman, President
and Chief Executive Officer of Halter Marine Group, Inc., of which all stock
owned by the Company was distributed to the Company's stockholders on March
31, 1997.
-7-
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual
Compensation Long Term
Compensation
--------------------
Name and Other Restricted Stock All
Principal Position Annual Stock Option Other
Year Salary Bonus <F1> Compen- Awards Awards Compen-
sation <F2> (Shares) (Shares) sation<F3>
<S> <C> <C> <C> <C> <C> <C> <C>
W. Ray Wallace - Chairman & 1997 $1,000,000 $2,495,430 $524,315 - 75,000 $28,164
Chief Executive Officer 1996 $1,000,000 $2,033,372 $441,730 - - $25,414
1995 $1,000,000 $2,000,000 $289,227 - - $25,414
Timothy R. Wallace 1997 $475,000 $593,750 $106,875 3,000 50,000 $25,022
President 1996 $475,000 $373,540 $84,854 - - $25,084
1995 $295,000 $348,041 $64,304 - - $23,464
John T. Sanford 1997 $380,000 $452,314 $83,231 2,500 35,000 $17,484
Executive Vice President 1996 $380,000 $329,498 $70,950 - 13,202 $18,309
1995 $270,000 $105,111 $37,511 - 14,085 $17,559
Ralph A. Banks, Jr. 1997 $280,000 $40,000 - - - $4,500
Senior Vice President 1996 $280,000 $35,000 - - - $4,500
1995 $280,000 $25,000 - - - $4,500
Mark W. Stiles 1997 $275,000 $69,222 $34,422 2,000 15,000 $8,641
Group Vice President 1996 $275,000 $295,130 $57,013 - - $5,599
1995 $165,000 $90,503 $25,550 - 1,500 $6,166
John Dane III <F4> 1997 $491,667 $415,800 $134,947 - 27,682 $18,312
Chairman, President and Chief 1996 $450,000 $36,810 $48,681 - - $19,699
Executive Officer of Halter 1995 $265,000 $116,017 $38,102 - 13,030 $18,425
Marine Group, Inc.
<FN>
<F1> An incentive bonus is paid only upon the achievement of a predetermined financial goal set for each
executive by the Human Resources Committee (formerly, the Compensation Committee) at the beginning
of the fiscal year. The Committee also predetermines at the beginning of each fiscal year whether the
amount of any incentive bonus earned in excess of 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), will be paid within ninety (90) days after the close of the fiscal year or, in the discretion of
the Committee, deferred and paid in equal annual installments up to three (3) years after the close of the
fiscal year. The Committee elected not to defer any of the incentive bonus earned for fiscal 1997;
however, the Committee elected to defer and pay the incentive bonus earned for fiscal 1996 in excess of
the applicable percentage in two (2) subsequent annual installments, and for fiscal 1995, in three (3)
subsequent annual installments. If the Committee elects to defer the payment of a portion of the incentive
bonus, the executive will forfeit the deferred portion if the executive's employment with the Company is
terminated prior to payment for any reason other than death, disability, retirement or a change of control
of the Company. The amounts shown for incentive bonuses in the foregoing table include the amounts
deferred and payable to the executive in succeeding years. The amounts deferred for fiscal 1997, 1996
and 1995, respectively, were $-0-, $1,016,686 and $1,500,000 for Mr. W. Ray Wallace, $-0-, $186,770
and $259,541 for Mr. Timothy R. Wallace, $-0-, $164,749 and $24,111 for Mr. Sanford, $-0-, $-0- and
$-0- for Mr. Banks, $-0-, $147,565 and $41,003 for Mr. Stiles and $207,900, $18,405 and $58,008 for
Mr. Dane.
-8-
<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.
<F4> Does not include a special bonus of $442,000 awarded to Mr. Dane by the Board of Directors of Halter
Marine Group, Inc. on April 2, 1997, after Trinity had distributed to its stockholders all of its stock of
Halter Marine Group, Inc. and after the officers of Trinity had ceased to serve as directors.
</FN>
</TABLE>
Stock Option Plans
The Company's 1993 Stock Option and Incentive Plan (the "1993 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 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, 1997, options were granted and
outstanding under the 1993 Plan on 1,634,781 shares of the Company's Common
Stock, under the 1989 plan on 681,536 shares, and under the 1983 plan on
107,369 shares.
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. 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.
The Human Resources 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, or a Change in Control of the Company. For the definition of
Change in Control, see Compensation of Directors" above. 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 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.
-9-
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. In certain instances, when the optionee surrenders stock already owned
by him in payment of the exercise price, the optionee will be granted 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.
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.
The following table contains information concerning the grant of stock
options with respect to fiscal 1997 to 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 $821,368,000 $2,081,519,000
W. Ray Wallace 75,000<F2> 15.6% $31.50 $31.50 03/21/07 $1,486,000 $3,765,000
Timothy R. Wallace 50,000<F2> 10.4% $31.50 $31.50 03/21/07 $991,000 $2,510,000
John T. Sanford 14,925<F3> 3.1% $33.50 $33.50 04/13/03 $314,000 $797,000
35,000<F2> 7.3% $31.50 $31.50 03/21/07 $693,000 $1,757,000
Ralph A. Banks, Jr. - - - - - - -
Mark W. Stiles 500<F3> 0.1% $36.00 $36.00 04/13/03 $11,000 $29,000
1,108<F3> 0.2% $37.50 $37.50 04/13/03 $26,000 $66,000
15,000<F2> 3.1% $31.50 $31.50 03/21/07 $297,000 $753,000
John Dane III 27,682<F3> 5.8% $36.125 $36.125 06/29/97<F4> $629,000 $1,594,000
<FN>
<F1> The Company has not granted any stock appreciation rights.
<F2> These stock options were original grants pursuant to the 1993 Plan.
-10-
<F3> These stock options were granted pursuant to the reload provisions of the 1993 Plan.
<F4> These options would have expired on April 13, 2003, but Mr. Dane's association with the Company
terminated upon the Company's distribution to its stockholders of all stock of Halter Marine Group, Inc.
Therefore, these options, as well as all other employee stock options granted to Mr. Dane, will expire on
June 29, 1997.
</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 $4,156,252
150,000 $178,125
Timothy R. Wallace 6,249 $101,546 143,574 $1,187,311
143,750 $347,653
John T. Sanford 22,368 $196,565 65,506 $263,180
128,750 $347,653
Ralph A. Banks, Jr. 4,500 $62,750 - $-
- $-
Mark W. Stiles 3,733 $45,928 10,584 $41,832
34,858 $69,531
John Dane III 84,500 $1,009,387 13,030 $-
121,432 $347,653
</TABLE>
Career Stock Awards
In fiscal 1997, the Company granted under the 1993 Plan career stock
awards to certain executive officers and key employees. The recipients of the
awards were given shares of Common Stock of the Company that were issued in
their respective names. Each recipient receives dividends and other
distributions on his shares when and if paid by the Company and is entitled to
vote his shares on any matter submitted to a vote of the holders of the Common
Stock of the Company. However, the shares so awarded to a recipient may not
be sold, transferred, pledged or in any manner alienated except upon the
recipient's retirement at age 65 (or earlier retirement, with the approval of
the Human Resources Committee), death or disability or except upon a Change in
Control of the Company. For the definition of Change in Control, see
"Compensation of Directors" above. If the employment of the recipient is
terminated for any reason other than death or disability prior to the
recipient's retirement, then absent a merger, consolidation or change of
control of the Company, the shares of stock so awarded to the recipient are
forfeited to the Company as of the date of the recipient's termination of
employment.
-11-
The following table sets forth each long-term incentive plan award (the
career stock awards) made during fiscal 1997 to each of the executives named
in the Summary Compensation Table .
Long-Term Incentive Plans -- Awards in Last Fiscal year
Performance
Number of Or Other
Shares, Period Until
Units Or Maturation
Name Year Other Rights Or Payout (1)
W. Ray Wallace 1997 - -
1996 - -
1995 - -
Timothy R. Wallace 1997 3,000 12/30/2018
1996 - -
1995 - -
John T. Sanford 1997 2,500 05/18/2017
1996 - -
1995 - -
Ralph A. Banks, Jr. 1997 - -
1996 - -
1995 - -
Mark W. Stiles 1997 2,000 11/03/2013
1996 - -
1995 - -
John Dane III 1997 - -
1996 - -
1995 - -
(1) The date of maturation shown in the above table is the date when the
person will attain age 65. The shares may not be sold, transferred,
pledged or in any manner alienated except upon the recipient's retirement
at age 65 (or earlier with the approval of the Human Resources Committee),
death or disability or except upon a merger, consolidation or change of
control of the Company. If the employment of the recipient is terminated
for any reason other than death or disability prior to the recipient's
retirement, then absent a merger, consolidation or change of control of
the Company, the shares of stock are forfeited to the Company as of the
date of termination of employment.
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.
-12-
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 participant 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
Remuneration Years of Service
10 20 30 40
$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
$900,000 $89,760 $179,520 $269,280 $359,040
$950,000 $94,760 $189,520 $284,280 $379,040
$1,000,000 $99,760 $199,520 $299,280 $399,040
$1,050,000 $104,760 $209,520 $314,280 $419,040
$1,100,000 $109,760 $219,250 $329,280 $439,040
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. Mr. Timothy R. Wallace has 22 credited years of service under
the plans under which he is covered; Mr. Sanford has 13 years and Mr. Stiles
has 5 years. Messrs. W. Ray Wallace and Ralph A. Banks, Jr. began receiving
pension payments at age 65 of $126,933 and $76,848, respectively, per year
from the Company's regular retirement plan.
-13-
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, 1997, the estimated annual
benefit payable to him upon his retirement under this unfunded supplemental
retirement program was $2,293,000.
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.
-14-
Report of the Human Resources Committee on Executive Compensation
The following report is submitted by the Human Resources Committee for
inclusion in this Proxy Statement pursuant to the rules of the Securities and
Exchange Commission with respect to Executive Compensation:
The Company's executive compensation program is administered by the Human
Resources Committee ("the Committee") of the Board of Directors. The
Committee, which is composed entirely of independent outside directors, is
responsible for setting and overseeing the administration of policies that
govern the compensation of the Company's executives. It establishes the base
salary, the incentive compensation, the deferred compensation, the stock
options and other stock based awards for each Corporate officer and certain
key operating officers of the Company.
It is the 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 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, stock options and restricted stock
awards. The 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 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 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. In
fixing base salaries, the Committee also considers salaries of senior
executives of other comparable companies as reflected in a survey provided by
an independent outside consultant.
Incentive Compensation
Incentive bonuses awarded annually to the Company's executive officers
and key operating 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 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 Human
Resource 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 by
any executive in any year is limited to a predetermined maximum percentage of
his or her base salary.
Stock Options, Restricted Stock Grants and Deferred Compensation
Long-term incentive awards provided by the stockholder-approved 1993
Stock Option and Incentive Plan are designed to develop and retain strong
management through stock ownership, deferred compensation, stock options and
other stock based incentive awards.
Stock options historically have been and in fiscal 1997 were the primary
long-term incentive granted to 12 executive officers, 12 key operating
officers and approximately 60 key employees in fiscal 1997. Options to
purchase a total of 480,456 shares were granted in fiscal 1997. The Committee
believes that a significant portion of senior executives' compensation should
be dependent on value created for the shareholders. Options are an excellent
vehicle to accomplish this by tying the executives' interest directly to the
shareholders' interests. Options are granted at the fair market value of the
Company's Common Stock on the date of grant and vest in annual increments over
five to eight years after such date if the optionee is still employed or vest
fully at the date of normal retirement.
-15-
The number of options that the Committee grants to executive officers is
based on individual performance and level of responsibility. The award level
must be sufficient in size to provide a strong incentive for executives to
work for long-term business interests and become meaningful owners of the
business. The number of options currently held by an executive is not a
factor in determining individual grants since such a factor would create an
incentive to exercise options and sell the shares.
A limited number of senior executives also received grants of Career
Shares in 1997. Career Shares are shares of the Company's Common Stock
granted with a restriction designed to promote long-term retention, as well as
superior long-term performance, of key strategic and operating management.
These restrictions generally expire after the executive reaches normal
retirement age. The number of Career Shares granted to senior executives also
recognizes the increased responsibility and complexity of senior positions.
Individual grants are based on personal contribution and level of
responsibility within the organization. The number of shares currently held
by an executive is not a factor in determining individual grants since Career
Shares are primarily designed to promote long-term retention and steadily
increasing stock ownership by the Company's key executives. A total of 20,000
Career Shares were granted to 14 key executives in 1997.
To encourage the retention of certain key and strategically important
executives focused on continuous improvement and growth of the Company, the
Company has established a deferred compensation plan for certain key officers
of the Company including Messrs. Timothy R. Wallace, John T. Sanford and Mark
W. Stiles. Under the deferred compensation plan, an amount equal to ten
percent (10%) of each participant's annual base salary and incentive
compensation is accrued to his deferred account on the books of the Company.
All such deferrals bear interest at the prime rate from time to time at Texas
Commerce Bank.
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 1997 was fixed by the Committee after reviewing
the performance of the Company in fiscal 1996, 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. There was no change in his base salary for fiscal 1997. The
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 1997 was derived from a
formula directly related to the Company's pretax income from continuing and
discontinued operations, which in fiscal 1997 totaled $223 million, up from
$186 million in fiscal 1996. His incentive compensation for the year is
payable currently.
Mr. Wallace also has a long term deferred compensation plan under which
the Company awards annually an amount equal to fifteen percent (15%) of Mr.
Wallace's combined salary and incentive compensation in each fiscal year.
These deferrals bear interest at the prime rate from time to time at Texas
Commerce Bank.
-16-
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 (5) consecutive years in which he was
most highly compensated by the Company.
Conclusion
The Committee believes that the Company's compensation policies and
practices are appropriately designed to attract, retain and motivate key
executives to guide the Company in the future and to produce results which
will enhance the Company's long-term prospects, thereby ultimately enriching
shareholder values.
Jess T. Hay, Chairman David W. Biegler, Member
Human Resource Committee Clifford J. Grum, Member
Diana Natalicio, Member
Compensation Committee Interlocks and Insider Participation
No member who served during the Company's fiscal year ended March 31,
1997 on either the current Human Resources Committee or the former
Compensation Committee is a current or former officer or employee of the
Company or any of its subsidiaries. During the Company's fiscal year ended
March 31, 1997, no executive officer of the Company served as a member of a
compensation committee (or other board committee performing equivalent
functions) or as a director of any other entity which has an executive officer
serving on either the current Human Resources Committee or former Compensation
Committee of the Company.
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 Equipment Index are
Research Data Group 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:
1992 1993 1994 1995 1996 1997
Trinity 100 159 201 201 192 170
DJ Transport. 100 120 138 124 131 156
NYSE Index 100 115 119 133 173 202]
-17-
ITEM 2 - AMENDMENT OF 1993 STOCK OPTION AND INCENTIVE PLAN
The following proposal will be offered by the Board of Directors: The
Board of Directors recommends that you vote FOR this proposal.
RESOLVED, that the stockholders of the Company hereby approve an
amendment to the 1993 Stock Option and Incentive Plan to add the
following new Section 24:
24. Maximum Compensation of an Employee. Notwithstanding
the foregoing provisions of this Plan, on and after July 16, 1997 the
maximum number of Shares for which grants of stock options and Stock
Appreciation Rights may be made to an employee in any fiscal year of the
Company shall not exceed one-half of one percent (0.5%) of the total number of
Shares of the Company outstanding on March 31, 1997, and the exercise price of
any stock option or Stock Appreciation Right granted on and after July 16,
1997 shall in no event be less than the Fair Market Value of the Shares at the
time of the grant. The sole purpose of this proposed amendment to the 1993
Plan is to entitle the Company to continue to deduct the compensation expense
resulting from stock option exercises (and if and when granted, exercises of
stock appreciation rights) by certain executives for federal income tax
purposes. In order for the Company to continue to receive this tax deduction,
Treasury Regulations Section 1.162-27 issued on December 20, 1995 with respect
to Internal Revenue Code Section 162(m) requires that the 1993 Plan be
amended, and that the amendment be submitted to stockholders, to limit on the
maximum number of shares for which stock options or rights may be granted to
any employee during a specified period so as to enable stockholders to "...
calculate the maximum amount that would be attributable to the exercise of
options on the basis of their assumptions as to the future stock price." The
proposed amendment is intended to comply with this requirement by providing a
maximum number of shares of Common Stock of the Company for which stock
options and stock appreciation rights may be granted to any employee in any
fiscal year at an exercise price at not less than the fair market value of the
shares at the time of the grant.
-18-
The Human Resources Committee (formerly, the Compensation Committee and
hereinafter referred to as the "Committee") has historically granted
individual awards that have been significantly less than the maximum number of
shares which may be awarded under the proposed amendment to the 1993 Plan.
Further, the exercise price of the stock options awarded by the Committee
always have been at the fair market value of the shares at the time of the
grant. This amendment is not intended to result in compensation above the
level that would otherwise be provided. If this amendment is approved by
stockholders, it is expected that the Committee will continue to use its
discretion to make future awards that are significantly less than the maximum
number of shares that may be awarded under this amendment. If this amendment
is not approved, the 1993 Plan will continue in effect in its present form.
The Board of Directors has made no determination as to what action, if any,
will be taken with respect to this matter if the amendment is not approved by
the stockholders.
Copies of the 1993 Plan as currently in effect will be provided to
stockholders without charge upon written request to Mr. F. Dean Phelps, Jr.,
Vice President, Trinity Industries, Inc., P.O. Box 568887, Dallas, TX 75356-
8887 or upon telephone request to him at (214) 630-4420.
Summary of 1993 Plan
The 1993 Plan permits the grant of any or all of the following types of
awards: (1) stock options, including incentive stock options; (2) stock
appreciation rights, in tandem with stock options or freestanding; (3)
restricted stock; (4) performance awards; (5) dividend equivalent rights, in
tandem with other awards or freestanding; and (6) other awards based on,
payable in, or otherwise related to Common Stock of the Company. The 1993
Plan was originally approved by shareholders on July 21, 1993. It may be
terminated by the Board of Directors at any time.
The 1993 Plan provides that the maximum number of shares of Common Stock
with respect to which awards may be granted pursuant to the 1993 Plan is
[______________] shares (originally 1,000,000 shares, but adjusted as a result
of the stock split on August 31, 1993 and the distribution of shares of Halter
Marine Group, Inc. on March 31, 1997). As awards under the 1993 Plan or stock
options granted under prior plans expire, terminate or are surrendered
unexercised, the shares underlying such awards and options are available for
further awards under the 1993 Plan. Under the proposed amendment, the maximum
number of shares for which stock options and stock appreciation rights can be
awarded on and after July 15, 1997 would be limited to one-half of one percent
(0.5%) of the shares of Common Stock of the Company outstanding on March 31,
1997.
The 1993 Plan is administered by the Committee. The Committee currently
consists of four outside directors, none of whom receive remuneration from the
Company or its affiliates in any capacity other than as a director. The Plan
requires that the committee named by the Board of Directors to administer the
1993 Plan must consist of not less than three (3) members of the Board of
Directors.
The Committee determines the persons to whom awards are granted, the type
of award, and, if applicable, the number of shares to be covered by the
award. The persons eligible to receive awards is limited to employees who are
either directors or officers of the Company or one of its affiliates or who
are in managerial or other key positions in the Company or one of its
affiliates. In making the determination as to person to whom awards are
granted, the Committee considers the position and responsibilities of the
person, his or her importance to the Company and its affiliates, the duties of
such person, his or her past, present and potential contributions to the
growth and success of the Company and its affiliates, and such other factors
as the Committee deems relevant in connection with accomplishing the purposes
of the 1993 Plan.
Stock Options. The Committee may grant either an
incentive stock option (as that term is used in Section 422 of the Internal
Revenue Code of 1986) or any other stock option. In the case of an incentive
stock option, the option exercise price must be not less than one hundred
percent (100%) of the last reported sales price of the Company's Common Stock
on the New York Stock Exchange on the date of grant and, in case of any
employee owning more than ten percent (10%) of the total outstanding Common
Stock, the option price of an incentive stock option must be at least one
hundred ten percent (110%) of the last reported sales price. If the proposed
amendment is approved by stockholders, no stock option granted on or after
July 15, 1997 will have an exercise price that is less than one hundred
percent (100%) of the last reported sale price of the Company's Common Stock
on the New York Stock Exchange on the date of grant. Recipients of stock
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 aggregate option exercise price.
-19-
If an optionee delivers shares of Common Stock of the Company already
owned by the optionee in full or partial payment of the exercise price for any
stock option granted under the 1993 Plan or any prior stock option plan of the
Company, the Committee may authorize the automatic grant of a new option (a
"Reload Option") for the same number of shares as the number of shares of
Common Stock surrendered in full or partial payment of the option exercise
price of the underlying stock option being exercised. The option exercise
price of the Reload Option will be the last reported sale price of the
Company's Common Stock on the New York Stock Exchange on the date of the
exercise of the underlying stock option. A Reload Option cannot be exercised
earlier than six (6) months from the date of its grant nor later than the time
when the underlying option exercised by the surrender of the already owned
shares could have been last exercised. The Committee may impose additional
terms, conditions and restrictions on any Reload Option and the shares
acquired upon the exercise of the Reload Option. Stock options will be
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 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 1993 Plan provides for the
acceleration of the vesting of stock options in certain events, including the
optionee's death, disability or retirement, or a Change in Control of the
Company. See "Compensation of Directors" above for the definition of "Change
in Control". All rights to exercise a stock option terminate immediately if
an optionee is discharged for cause, after ten (10) days in the event of an
optionee's resignation, after three (3) months in the case of an optionee's
disability, after twelve (12) months in the case of an optionee's death, and
after three (3) years in case of the optionee's retirement. Options are not
transferrable other than by will or the laws of descent and distribution,
except that with the approval of the Committee, an option that is not an
incentive stock option may be transferred to a trust for the benefit of one
(1) or more members of the immediate family of the optionee.
The Company is of the opinion that a person receiving a stock option will
not realize any compensation income under the Internal Revenue Code upon the
grant of the option. However, he or she will realize compensation income at
the time of exercise (except for options which are incentive stock options or
where restricted stock is acquired upon the exercise of the option) in the
amount of the difference between the option exercise price and the fair market
value on the date of exercise. The Company is also of the opinion that for
its federal income tax purposes, the Company will be entitled to a deduction
equal to the amount of compensation income realized by optionee at the time of
exercise. In the case of incentive stock options, although no compensation
income is realized upon exercise, the excess of the fair market value on the
date of exercise over the option price is included in alternative minimum
taxable income for alternative minimum tax purposes.
Stock Appreciation Rights. A stock appreciation right may be granted in
conjunction with or independent of a stock option. A stock appreciation
right is the right to receive an amount equal to the excess of the fair market
value of a share of the Company's Common Stock on the date of exercise over
the exercise price, i.e., the fair market value of a share of Common Stock on
the date of grant (or other value specified in the agreement granting the
stock appreciation right). A stock appreciation right granted in tandem with
a stock option will require the holder, upon exercise, to surrender the
related stock option, or a portion thereof, with respect to the number of
shares as to which such stock appreciation right is exercised. If the
proposed amendment is approved by stockholders, no stock appreciation right
granted on or after July 15, 1997 will have an exercise price that is less
than one hundred percent (100%) of the last reported sale price of the
Company's Common Stock on the New York Stock Exchange on the date of the grant.
A stock appreciation right granted independent of a stock option will be
exercisable as determined by the Committee. An independent stock appreciation
right will entitle the holder, upon exercise, to receive payment as described
above either in cash or in shares of Common Stock of the Company, or a
combination thereof, as specified in the grant of the stock appreciation
right. The Committee may limit the amount payable upon exercise of any Stock
Appreciation Right. Any such limitation will be specified in the grant.
-20-
In the case of a stock appreciation right granted either independent of
or in conjunction with a stock option, the Company is of the opinion that the
person to whom the stock appreciation right is granted will not realize any
compensation income at the time of the grant. However, the cash, or in case
of shares delivered pursuant to the exercise of any such stock appreciation
right, the fair market value of the shares, will be treated as compensation
income of the grantee at the time of exercise, and the Company will be
entitled to a federal income tax deduction in the amount of the compensation
income realized by the grantee of the stock appreciation right at the time of
exercise.
Restricted Stock. An award of restricted stock may be granted under the
1993 Plan, either at no cost to the recipient or for such cost as may be
required by law or otherwise as determined by the Committee. The terms and
conditions of the restricted stock will be specified at the time of the
grant. Restricted stock may not be disposed of by the recipient until the
restrictions specified in the award expire. The Committee will determine at
the time of the award what rights, if any, the person to whom an award of
restricted stock is made will have with respect to restricted stock during the
restriction period, including the right to vote the shares and the right to
receive any dividends or other distributions applicable to the shares.
In the case of restricted stock, the Company is of the opinion that the
recipient will realize compensation income in an amount equal to the fair
market value of such stock less any amount paid for such stock at a time when
the employee's rights with respect to such stock are no longer subject to a
substantial risk of forfeiture. However, the recipient may make a special
election provided in the Internal Revenue Code to be taxed at the time of the
receipt of the award (as if the restrictions did not exist) but he or she will
not be allowed any deduction if the restricted stock is later forfeited.
Dividends, if any, paid to the holder of the restricted stock award during the
restriction period will be taxable as compensation income (or as dividend
income if the election referred to in the preceding sentence has been made).
The Company is also of the opinion that, subject to the limitations of
Internal Revenue Code Section 162(m), it will be entitled to a federal income
deduction at the time and equal to the amount that compensation income is
realized by the recipient of the restricted stock.
Performance Awards. A performance award may be granted under the 1993
Plan, either at no cost to the recipient or for such cost as may be required
by law or as otherwise determined by the Committee. Performance awards may
take the form of performance shares, or of performance units or rights valued
by reference to the value of Common Stock of the Company or by reference to
some other formula or method. Any performance award may require attainment of
performance criteria within a specified period in order for the award to be
earned. Performance awards, when and if payable, may be paid in cash, stock,
other consideration, or a combination thereof. If the Committee determines,
in its sole discretion, that the established performance measures or
objectives are no longer suitable to Company objectives because of a change in
the Company's business, operations, corporate structure, or for other reasons
that the Committee deems satisfactory, the Committee may modify the
performance measures or objectives and/or the performance period.
The Company is of the opinion that the recipient of a performance award
will realize compensation income when the recipient's rights with respect to
such award are no longer subject to a substantial risk of forfeiture in an
amount equal to the excess of the fair market value of such award at that time
over the amount, if any, paid for such award, unless the recipient makes a
special election provided in the Internal Revenue Code. The Company is also
of the opinion that, subject to the limitations of Internal Revenue Code
Section 162(m), it will be entitled to a federal income tax deduction at the
time and equal to the amount that compensation income is realized by the
recipient of the performance award.
Dividend Equivalent Rights and Interest Equivalents. A dividend
equivalent right gives the recipient the right to receive credits for
dividends that would be paid if the recipient held a specified number of
shares of Common Stock of the Company. A dividend equivalent right may be
granted as a component of another award or as a freestanding award. Dividend
equivalents credited to the holder of a dividend equivalent right may be paid
currently or be deemed to be reinvested in additional shares (which may
thereafter accrue additional dividend equivalents) at fair market value at the
time of deemed reinvestment. Dividend equivalent rights may be settled in
cash, shares, or a combination thereof, in a single payment or in
installments, as specified in the award.
-21-
In the case of a dividend equivalent right, the Company is of the opinion
that the recipient of the dividend equivalent right will realize compensation
income in an amount equal to the cash or fair market value of the shares as
and when the same becomes payable to the recipient. The Company is also of
the opinion that, subject to the limitations of Internal Revenue Code Section
162(m), it will be entitled to a federal income tax deduction at the time and
equal to the amount that compensation income is realized by the recipient.
Other Awards. Other forms of award based upon, payable in, or otherwise
related in whole or in part to Common Stock of the Company may be granted
under the 1993 Plan if the Committee determines that such awards are
consistent with the purposes and restrictions of the 1993 Plan. The terms and
conditions of such awards shall be specified by the grant. Such awards shall
be granted for no cash consideration, for such minimum consideration as may be
required by applicable law, or for such other consideration as may be
specified by the Committee. The federal income tax consequences of such other
awards will depend upon the form that such awards may take.
Adjustments upon Changes in Capitalization. The number of shares subject
to an award will be adjusted for any subdivision or consolidation of shares of
Common Stock of the Company or upon stock dividends payable in stock of the
Company or in case of any change from par value stock to stock of a different
par value or without par value or, in the discretion of the Board of
Directors, any distribution by the Company of shares of stock of another
corporation. Amendments. All provisions of the 1993 Plan (including
any award under the plan) may at any time or from time to time be modified or
amended by the Board of Directors. However, no outstanding award may be
adversely modified, impaired or canceled without the consent of the holder
thereof, and the 1993 Plan cannot be amended, without stockholder approval, to
increase the maximum number of shares subject to the 1993 Plan, or to
materially modify the requirements as to eligibility for participation in the
1993 Plan or materially increase the benefits accruing to persons eligible to
participate in the 1993 Plan, or if stockholder approval is necessary in order
to comply with Rule 16b-3 under the Securities Exchange Act of 1934 or to
comply with any other applicable law, regulation, or listing requirement or to
qualify for an exemption or characterization deemed desirable by the Company's
Board of Directors.
Termination. The 1993 Plan will terminate only by resolution of the
Board of Directors. However, no incentive stock option may be granted under
the 1993 Plan after April 12, 2003.
The awards that the Committee will grant to persons eligible to receive
awards under the 1993 Plan is not currently determinable. Information
regarding stock options and restricted stock awarded to the executive officers
named in the Summary Compensation Table is set forth on pages 10, 11 and 12 of
the proxy statement. At April 30, 1997, options were granted and outstanding
under the 1993 Plan on 1,634,781 shares.
At March 31, 1997, [___________] shares of Common Stock of the Company
were outstanding. The closing price of a share of Common Stock of the Company
on the New York Stock Exchange consolidated tape on May 30, 1997 was
[________].
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.
-22-
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, 1997, 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, 1997. It is anticipated that
representatives of Ernst & Young LLP will be present at the 1997 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 1997
Annual Meeting or submitted to them in writing before the 1997 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 1997
Annual Meeting upon recommendation of the Audit Committee.
OTHER MATTERS
Management of the Company is not aware of other matters to be presented
for action at the 1997 Annual Meeting; however, if 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.
STOCKHOLDER PROPOSALS
Stockholders' proposals to be presented at the 1998 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 [120
days in advance of the date that is one year from this mailing], 1998. Upon
timely receipt of any such proposal, the Company will determine whether or not
to include such proposal in the proxy statement and proxy in accordance with
applicable regulations and provisions governing the solicitation of proxies.
Under the Bylaws of the Company, stockholders entitled to vote in the
election of directors may nominate one or more persons for election as
directors only if notice in writing to the Secretary of the Company of such
stockholder's intent to make such nomination or nominations has been delivered
to, or mailed and received at, the principal executive of the Company not less
than sixty (60) days nor more than ninety (90) days prior to the anniversary
date of the immediately preceding annual meeting. Such notice must set forth
(a) as to each person whom the stockholder proposes to nominate for election
as a director, (i) the name, age, business address and residence address of
the person, (ii) the principal occupation or employment of the person, (iii)
the class and number of shares of capital stock of the corporation which are
beneficially owned by the person, and (iv) any other information relating to
the person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Rule 14a under the Securities Exchange Act
of 1934, as amended; and (b) as to the stockholder giving the notice, (i) the
name and record address of the stockholder, (ii) the class and number of
shares of capital stock of the corporation which are beneficially owned by the
stockholder, (iii) a description of all arrangements or understandings between
such stockholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made by
such stockholder, (iv) a representation that such stockholder intends to
appear in person or by proxy at the meeting to nominate the persons named in
its notice and (v) any other information relating to such stockholder that
would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election
of directors pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. The Company may require any proposed
nominee to furnish such other information as may reasonably be required by the
Company to determine the eligibility of such proposed nominee to serve as
director. No person is eligible for election as a director of the Company
unless nominated in accordance with the procedures set forth in the Bylaws.
-23-
REPORT ON FORM 10-K
Upon written request from any stockholder of record at May 30, 1997 (or any
beneficial owner representing that he is or was entitled to vote at the 1997
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, 1997, 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.
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, 1997
-24-
[FRONT SIDE OF PROXY CARD]
TRINITY INDUSTRIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - July 16, 1997
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 16, 1997 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 ten (10) Directors: John L. Adams, David W.
Biegler, Barry J. Galt, Clifford J. Grum, Dean P. Guerin, Jess
T. Hay, Edmund M. Hoffman, Diana S. Natalicio, 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) Approval of the amendment to the the Company's 1993 Stock Option and
Incentive Plan.
___
/___/ FOR approval of the amendment.
___
/___/ AGAINST approval of the amendment.
___
/___/ ABSTAIN.
(3) 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.
