SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-6903
TRINITY INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
Incorporated Under the Laws 75-0225040
of the State of Delaware (I.R.S. Employer
Identification No.)
2525 Stemmons Freeway
Dallas, Texas 75207-2401
(Address of Principal (Zip Code)
Executive Offices)
(214) 631-4420
(Registrant's Telephone Number,
Including Area Code)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
and (2) has been subject to such filing requirements for the
past 90 days.
Yes X No
43,095,879
(Number of shares of common stock outstanding as of June 30, 1997)
Part I
Item 1 - Financial Statements
Trinity Industries, Inc.
Consolidated Balance Sheet
(unaudited)
(in millions except per share data)
June 30 March 31
Assets 1997 1997
Cash and cash equivalents . . . . . . . . . $ 7.6 $ 12.2
Receivables . . . . . . . . . . . . . . . . 291.0 236.9
Inventories:
Raw material and supplies . . . . . . . . 225.2 216.7
Work in process . . . . . . . . . . . . . 39.7 41.9
Finished goods . . . . . . . . . . . . . 53.1 55.9
318.0 314.5
Property, plant and equipment, at cost. . . 1,161.6 1,136.5
Less accumulated depreciation . . . . . . . (439.6) (424.9)
722.0 711.6
Other assets. . . . . . . . . . . . . . . . 79.0 81.2
$1,417.6 $1,356.4
Liabilities and Stockholders' Equity
Short-term debt . . . . . . . . . . . . . . $ 102.0 $ 64.0
Accounts payable and accrued liabilities. . 267.4 261.2
Long-term debt. . . . . . . . . . . . . . . 167.7 178.6
Deferred income taxes . . . . . . . . . . . 24.1 22.8
Other liabilities . . . . . . . . . . . . . 20.6 20.3
581.8 546.9
Stockholders' equity:
Common stock - par value $1 per share;
authorized 100.0 shares; shares issued
and outstanding at June 30, 1997 - 43.1
and March 31, 1997 - 43.0. . . . . . . . 43.1 43.0
Capital in excess of par value. . . . . . 273.7 273.3
Retained earnings . . . . . . . . . . . . 519.0 493.2
835.8 809.5
$1,417.6 $1,356.4
Trinity Industries, Inc.
Consolidated Income Statement
(unaudited)
(in millions except per share data)
Three Months
Ended June 30
1997 1996
Revenues. . . . . . . . . . . . . . . . . . . . . . $560.1 $576.5
Operating costs:
Cost of revenues. . . . . . . . . . . . . . . . . 459.2 487.0
Selling, engineering and administrative expenses. 37.4 30.6
Retirement plans expense. . . . . . . . . . . . . 5.2 5.0
501.8 522.6
Operating profit. . . . . . . . . . . . . . . . . . 58.3 53.9
Other (income) expenses:
Interest income . . . . . . . . . . . . . . . . . (0.5) (0.2)
Interest expense. . . . . . . . . . . . . . . . . 5.0 6.4
Other, net. . . . . . . . . . . . . . . . . . . . 1.2 (1.4)
5.7 4.8
Income from continuing operations
before income taxes . . . . . . . . . . . . . . . 52.6 49.1
Provision (benefit) for income taxes:
Current . . . . . . . . . . . . . . . . . . . . . 18.4 21.0
Deferred. . . . . . . . . . . . . . . . . . . . . 1.0 (2.4)
19.4 18.6
Income from continuing operations . . . . . . . . . 33.2 30.5
Income from discontinued operations (net of income
taxes of $2.3). . . . . . . . . . . . . . . . . . - 3.3
Net income. . . . . . . . . . . . . . . . . . . . . $ 33.2 $ 33.8
Net income per common and common equivalent share
from continuing operations. . . . . . . . . . . . $ 0.76 $ 0.72
Net income per common and common equivalent share
from discontinued operations. . . . . . . . . . . - 0.08
Net income per common and common equivalent share . $ 0.76 $ 0.80
Weighted average number of common and common
equivalent shares outstanding. . . . . . . . . . . 43.6 42.1
Trinity Industries, Inc.
Consolidated Statement of Cash Flows
(unaudited)
(in millions)
Three Months
Ended June 30
1997 1996
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . $ 33.2 $ 33.8
Less: Income from discontinued operations. . . . . - (3.3)
Income from continuing operations. . . . . . . . . 33.2 30.5
Adjustments to reconcile net income to net cash
provided (required) by operating activities:
Depreciation. . . . . . . . . . . . . . . . . . . 19.0 18.5
Deferred provision (benefit) for income taxes . . 1.0 (2.4)
Gain on sale of property, plant and equipment . . (0.8) (1.4)
Other . . . . . . . . . . . . . . . . . . . . . . 0.4 (0.5)
Change in assets and liabilities:
(Increase) decrease in receivables . . . . . . . (52.2) 42.7
(Increase) decrease in inventories . . . . . . . 14.5 (0.4)
(Increase) decrease in other assets. . . . . . . 4.1 (3.4)
Increase in accounts payable and accrued
liabilities . . . . . . . . . . . . . . . . . . 3.2 14.6
Increase in other liabilities. . . . . . . . . . 0.3 0.6
Total adjustments . . . . . . . . . . . . . . . (10.5) 68.3
Net cash provided by operating activities . . . . 22.7 98.8
Cash flows from investing activities:
Proceeds from sale of property, plant
and equipment. . . . . . . . . . . . . . . . . . . 12.3 14.7
Capital expenditures. . . . . . . . . . . . . . . . (23.2) (27.0)
Payment for purchase of acquisitions,
net of cash acquired . . . . . . . . . . . . . . . (36.5) -
Net cash required by investing activities . . . . (47.4) (12.3)
Cash flows from financing activities:
Issuance of common stock. . . . . . . . . . . . . . 0.2 1.0
Net borrowings (repayments) under short-term debt . 38.0 (71.0)
Payments to retire long-term debt . . . . . . . . . (10.8) (8.0)
Dividends paid. . . . . . . . . . . . . . . . . . . (7.3) (7.1)
Net cash provided (required) by
financing activities . . . . . . . . . . . . . . 20.1 (85.1)
Cash flows required by discontinued operations . . . - (12.4)
Net decrease in cash and cash equivalents. . . . . . (4.6) (11.0)
Cash and cash equivalents at beginning of period . . 12.2 14.7
Cash and cash equivalents at end of period . . . . . $ 7.6 $ 3.7
<TABLE>
Trinity Industries, Inc.
Consolidated Statement of Stockholders' Equity
(unaudited)
(in millions except share and per share data)
<CAPTION>
Common Capital
Common Stock in Total
Shares $1.00 Excess Stock-
(100,000,000) Par of Par Retained holders'
Authorized) Value Value Earnings Equity
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1996 . . . . 41,596,037 $41.6 $239.6 $464.8 $746.0
Other. . . . . . . . . . . . . . 61,045 0.1 1.0 - 1.1
Net income . . . . . . . . . . . - - - 33.8 33.8
Cash dividends
($0.17 per share) . . . . . . - - - (7.1) (7.1)
Balance June 30, 1996 . . . . . . 41,657,082 $41.7 $240.6 $491.5 $773.8
Balance at March 31, 1997 . . . . 43,046,365 $43.0 $273.3 $493.2 $809.5
Other. . . . . . . . . . . . . . 49,514 0.1 0.4 - 0.5
Net income . . . . . . . . . . . - - - 33.2 33.2
Cash dividends
($0.17 per share) . . . . . . - - - (7.4) (7.4)
Balance June 30, 1997 . . . . . . 43,095,879 $43.1 $273.7 $519.0 $835.8
</TABLE>
The foregoing consolidated financial statements are unaudited and have
been prepared from the books and records of the Registrant. In the
opinion of the Registrant, all adjustments, consisting only of normal
and recurring adjustments necessary to a fair presentation of the
financial position of the Registrant as of June 30, 1997 and March 31,
1997, the results of operations for the three month periods ended June
30, 1997 and 1996 and cash flows for the three month periods ended June
30, 1997 and 1996, in conformity with generally accepted accounting
principles, have been made.
Trinity Industries, Inc.
Notes to Consolidated Financial Statements
June 30, 1997
Acquisitions
On May 30, 1997, the Registrant acquired, pursuant to an asset
purchase agreement through a wholly-owned subsidiary of the
Registrant, the Industrial Products Division of Ladish Co.,
Inc., ("Ladish") a manufacturer and distributor of pipefitting,
flange, and valve products.
Item 2 - Management's Discussion and Analysis of Consolidated
Financial Condition and Statement of Operations
The increase in 'Receivables' at June 30, 1997 compared to
March 31, 1997 is due primarily to increased business in the
Construction Products segment from improved seasonal revenues.
Short-term debt increased due primarily to the acquisition of
Ladish.
Statement of Operations
Three Months Ended June 30, 1997 vs.
Three Months Ended June 30, 1996
Operating profit from continuing operations in the current
quarter increased $4.4 million, or 8.2%, compared to the same
period last year on a slight decrease in revenues due to
improved operating profit margins across all segments.
Operating profit for the Transportation Products segment
increased in the current three month period on lower revenues
when compared to the prior year quarter as a result of
improving margins attained from cost reduction programs put in
place in prior periods. Revenues decreased due to a reduction
in railcar deliveries. The replacement cycle for railcars and
barges coupled with strong traffic on the nation's rails and
rivers continues to drive this segment. It is anticipated that
these factors will continue throughout the fiscal year.
Construction Products revenues and operating profit for the
current quarter were higher due to increased governmental,
residential, and commercial construction that utilizes the
Company's highway guardrail and safety systems products and its
ready-mix concrete and aggregate businesses. The federal
government continues to emphasize roadside safety and the
upgrade of America's highway system to higher standards to
reflect changes in vehicle mix. In addition the overall
economic outlook across industries has led to strong activity
levels in construction markets served by the Registrant. These
factors should continue to provide a favorable market demand
for the Company's construction products.
The Industrial Products segment's operating results are also
higher in the current quarter as this segment continues to
benefit from a global increase in energy and petrochemical
demand as well as the level of housing starts in markets served
by the Company's LPG business.
This report contains "forward looking statements" as defined by
the Private Securities Litigation Reform Act of 1995 and
includes statements as to expectations, beliefs, plans,
objectives and future financial performance, or assumptions
underlying or concerning matters herein. These statements that
are not historical facts are forward looking and involve
estimates; projections; goals; forecasts; legal, regulatory and
environmental issues; market conditions, competition and
expectations for new and existing products in Trinity's
Transportation Products, Construction Products and Industrial
Products segments; expectations for market segments and
industry growth; technologies; steel prices; interest rates and
capital costs; taxes; effects of unstable governments and
business conditions in emerging economies; and other
assumptions and uncertainties, any of which could cause actual
results or outcomes to differ materially from those expressed
in the forward looking statements. Any forward looking
statement speaks only as of the date on which such statement is
made. Trinity undertakes no obligation to update any forward
looking statement or statements to reflect events or
circumstances after the date on which such statement is made.
Part II
Item 4 - Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders held July 16, 1997,
stockholders elected ten incumbent directors for a one-year
term (Proposal No. 1) and approved an amendment to Trinity's
1993 Stock Option and Incentive Plan (Proposal No. 2). The vote
tabulation on each proposal follows:
Proposal Proposal
No. 1 No. 2
For 37,928,177 36,522,368
Against/Withheld 105,689 1,356,391
Abstentions 64,935 220,042
38,098,801 38,098,801
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
10.3 Amendment No. 1 to Executive Severance Agreement
entered into between the Registrant and all
executive officers of the Registrant (other than
Mr. French).
10.7 Amendment No. 1 to Supplemental Retirement
Benefit Plan for W. Ray Wallace effective
July 18, 1990.
10.8 Amendment No. 1 to 1993 Stock Option and Incentive
Plan.
10.10 Amendment No. 2 to Supplemental Profit Sharing
Plan for Employees of Trinity Industries, Inc.
and Certain Affiliates dated June 30, 1990.
Amendment No. 2 to Supplemental Profit Sharing
Trust for Employees of Trinity Industries, Inc.
and Certain Affiliates dated June 30, 1990.
27 Financial Data Schedule
(b) Form 8-K was filed on April 14, 1997 that confirmed
the completion on March 31, 1997 of the property
distribution of 15,000,000 shares of common stock
of Halter Marine Group, Inc. to Trinity stockholders.
Form 8-K was filed on May 7, 1997 that reported
the adoption of amendments to the Registrant's By-
Laws. In addition, the Registrant and the Bank of
New York amended the Rights Agreement dated April 11,
1989.
Form 8-K was filed on June 26, 1997 that issued the
restated Consolidated Financial Statements of Trinity
to reflect the distribution of Halter Marine Group,
Inc. in accordance with APB No. 30
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Trinity Industries, Inc.
By: /S/ John M. Lee
John M. Lee
Vice President
August 12, 1997
Index to Exhibits
No. Description
10.3 Amendment No. 1 to Executive Severance Agreement
entered into between the Registrant and all
executive officers of the Registrant (other than
Mr. French).
10.7 Amendment No. 1 to Supplemental Retirement
Benefit Plan for W. Ray Wallace effective
July 18, 1990.
10.8 Amendment No. 1 to 1993 Stock Option and Incentive
Plan.
10.10 Amendment No. 2 to Supplemental Profit Sharing
Plan for Employees of Trinity Industries, Inc.
and Certain Affiliates dated June 30, 1990.
Amendment No. 2 to Supplemental Profit Sharing
Trust for Employees of Trinity Industries, Inc.
and Certain Affiliates dated June 30, 1990.
27 Financial Data Schedule
Exhibit 10.3
AMENDMENT NO. 1 TO
EXECUTIVE SEVERANCE AGREEMENT
The Executive Severance Agreement (the "Agree-
ment"), entered into as of June 8, 1989 between Trinity
Industries, Inc. (the "Company") and __________ (the
"Executive") is hereby amended, effective as of May 6,
1997, as set forth below.
Any term which is not defined below shall have
the meaning set forth for such term in the Agreement.
1. Section 1(i) of the Agreement is hereby
amended and restated to read as follows:
(i) June 8, 1999; provided, however,
that, commencing on June 8, 1998 and on each
anniversary date thereafter (each such date, an
"Anniversary Date"), the expiration date under
this clause (i) shall automatically be extended
for one additional year unless, not later than
the December 31 immediately prior to such Anni-
versary Date, either party shall have given
written notice that it does not wish to extend
this Agreement;
2. Section 1(ii) of the Agreement is hereby
amended and restated to read as follows:
(ii) the termination of the Executive's
employment with the Company based on death,
Disability (as defined in Section 3(b) hereof)
or Cause (as defined in Section 3(d) hereof) or
by the Executive for Good Reason (as defined in
Section 3(e) hereof); and
3. The second sentence of Section 2 of the
Agreement is hereby amended and restated to read as fol-
lows:
For purposes of this Agreement, a "Change in
Control" of the Company shall be deemed to have
occurred if the event set forth in any one of
the following paragraphs shall have occurred:
(i) any Person is or becomes
the Beneficial Owner, directly or indi-
rectly, of securities of the Company
(not including in the securities
beneficially owned by such Person any
securities acquired directly from the
Company or its affiliates) represent-
ing 30% or more of the combined vot-
ing power of the Company's then out-
standing securities, excluding any
Person who becomes such a Beneficial
Owner in connection with a
transaction described in clause (A)
of paragraph (iii) below; or
(ii) the following individuals
cease for any reason to constitute a ma-
jority of the number of directors then
serving: individuals who, on May 6, 1997,
constitute the Board and any new director
(other than a director whose initial as-
sumption of office is in connection with
an actual or threatened election contest,
including but not limited to a consent
solicitation, relating to the election of
directors of the Company) whose appoint-
ment or election by the Board or nomina-
tion for election by the Company's stock-
holders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either
were directors on May 6, 1997 or whose ap-
pointment, election or nomination for
election was previously so approved or
recommended; or
(iii) there is consummated a
merger or consolidation of the Company or
any direct or indirect subsidiary of the
Company with any other corporation, other
than (A) a merger or consolidation which
would result in the voting securities of
the Company outstanding immediately prior
to such merger or consolidation continuing
to represent (either by remaining out-
standing or by being converted into voting
securities of the surviving entity or any
parent thereof) at least 60% of the com-
bined voting power of the securities of
the Company or such surviving entity
or any parent thereof outstanding
immediately after such merger or con-
solidation, or (B) a merger or
consolidation effected to implement a
recapitalization of the Company (or
similar transaction) in which no
Person is or becomes the Beneficial
Owner, directly or indirectly, of
securities of the Company (not in-
cluding in the securities Bene-
ficially Owned by such Person any
securities acquired directly from the
Company or its Affiliates) represent-
ing 30% or more of the combined
voting power of the Company's then
outstanding securities; or
(iv) the stockholders of the
Company approve a plan of complete liqui-
dation or dissolution of the Company or
there is consummated an agreement for the
sale or disposition by the Company of all
or substantially all of the Company's as-
sets, other than a sale or disposition by
the Company of all or substantially all of
the Company's assets to an entity, at
least 60% of the combined voting power of
the voting securities of which are owned
by stockholders of the Company in substan-
tially the same proportions as their own-
ership of the Company immediately prior to
such sale.
For purposes hereof:
"Affiliate" shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
"Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
"Exchange Act" shall mean the Securities Ex-
change Act of 1934, as amended from time to
time.
"Person" shall have the meaning given in Sec-
tion 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities
under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an
offering of such securities or (iv) a corpora-
tion owned, directly or indirectly, by the
stockholders of the Company in substantially
the same proportions as their ownership of
stock of the Company.
4. Section 3 of the Agreement is hereby
amended by deleting subsection 3(a)(iii) thereof and
redesignating all subsequent subsections, and references
thereto, accordingly.
5. Section 3 of the Agreement is hereby
amended by deleting subsection 3(c) thereof and replacing
said subsection with "[subsection intentionally left
blank]."
6. Section 3(e)(i) of the Agreement is hereby
amended and restated to read as follows:
(i) the assignment to the Executive by
the Company of duties inconsistent with the
Executive's position, duties, responsibilities
and status with the Company immediately prior
to a Change in Control of the Company, or a
change in the Executive's titles or offices as
in effect immediately prior to a Change in Con-
trol of the Company, or any removal of the
Executive from or any failure to reelect the
Executive to any of such positions, except in
connection with the termination of his employ-
ment for Disability or Cause or as a result of
the Executive's death or by the Executive other
than for Good Reason;
[7. Section 3(e)(ix) of the Agreement is
hereby amended by deleting the word "or" from the end
thereof.
8. Section 3(e)(x) of the Agreement is hereby
amended by replacing the period at the end thereof with
"; or".
9. Section 3(e) of the Agreement is hereby
amended by adding a subsection (xi) thereto as follows:
(xi) the Executive's decision to terminate
employment for any reason during the period of
time beginning on the six-month anniversary of
a Change in Control and ending on the twelve-
month anniversary of such Change in Control.]
10. The first paragraph of Section 4 of the
Agreement is hereby amended and restated as follows:
The Company may terminate the Executive's em-
ployment at any time; however, if the Company
shall terminate the Executive's employment
other than pursuant to Section 3(b) or 3(d) or
if the Executive shall terminate his employment
for Good Reason, then as severance pay and as
the Executive's sole remedy for such termina-
tion:
11. Section 4(i) of the Agreement is hereby
amended and restated to read as follows:
(i) the Company shall pay to the Execu-
tive in a lump sum, in cash, on or before the
fifth day following the Date of Termination, an
amount equal to three times the sum of (A) the
Executive's base salary as in effect immediate-
ly prior to the Change in Control or, if high-
er, in effect immediately prior to the Date of
Termination and (B) the bonus earned with re-
spect to the fiscal year immediately prior to
the Change in Control or, if higher, the fiscal
year immediately prior to the Date of Termina-
tion;
12. Section 4(ii) of the Agreement is hereby
amended and restated to read as follows:
(ii) the Company shall provide, at the
Company's sole expense, all benefits to which
the Executive and anyone entitled to claim
under or through the Executive would be enti-
tled under the Company's group hospitalization
plan, health care plan, dental care plan, life
or other insurance or death benefit plan, or
other present or future similar group employee
benefit plan or program of the Company for
which key executives are eligible, as such
plans are in effect immediately prior to the
Change in Control (or, if more favorable to the
Executive, immediately prior to the Notice of
Termination), to the same extent as if the
Executive had continued in the employment of
the Company during the thirty-six month period
following the Date of Termination;
13. Section 4(iii) of the Agreement is hereby
amended and restated to read as follows:
(iii) the Company shall pay to the
Executive and, if applicable, to his beneficia-
ries, in cash, on or before the fifth day fol-
lowing the Date of Termination, a lump sum
representing the present value of the excess of
(A) the benefit (expressed as a life annuity
commencing at age 65 or such earlier date as of
which the actuarial equivalent of such annuity
is greatest) that the Executive would have
accrued under the provisions of the Company's
Pension Plan for Salaried Employees in effect
immediately prior to the Change in Control had
the Executive continued to be employed for an
additional thirty-six months following the Date
of Termination at the annual rate of compensa-
tion taken into account under clause (i) hereof
over (B) the benefit actually accrued by the
Executive under such plan. For purposes here-
of, "present value" shall be determined using a
discount rate of [ ]% per annum and "actuarial
equivalence" shall be determined using the same
assumptions utilized under such plan.
14. The final paragraph of Section 4 of the
Agreement is hereby amended to read as follows:
The foregoing payments shall be subject to
withholding of federal state and local income,
FICA and similar taxes, if required by law.
15. The Agreement is hereby amended by insert-
ing a Section 4.A. following Section 4 thereof as fol-
lows:
4.A. Whether or not the Executive becomes
entitled to the payments under Section 4 here-
of, if any of the payments or benefits received
or to be received by the Executive in connec-
tion with a Change in Control or the
Executive's termination of employment (whether
pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the
Company, any Person whose actions result in a
Change in Control or any Person affiliated with
the Company or such Person) (such payments or
benefits, excluding the Gross-Up Payment, being
hereinafter referred to as the "Total Pay-
ments") would be subject to the excise tax im-
posed under section 4999 of the Internal Reve-
nue Code of 1986, as amended (the "Excise
Tax"), the Company shall pay to the Executive
an additional amount (the "Gross-Up Payment")
such that the net amount retained by the Execu-
tive, after deduction of any Excise Tax on the
Total Payments and any federal, state and local
income and employment taxes and Excise Tax upon
the Gross-Up Payment, shall be equal to the
Total Payments. For purposes of determining
the amount of the Gross-Up Payment, the Execu-
tive shall be deemed to pay federal income
taxes at the highest marginal rate of federal
income taxation in the calendar year in which
the Gross-Up Payment is to be made and state
and local income taxes at the highest marginal
rates of taxation in the state and locality of
the residence of the Executive on the Date of
Termination, net of the maximum reduction in
federal income taxes which could be obtained
from deduction of such state and local taxes.
All determinations made under this Section 4.A.
shall be made by the accounting firm which
served as the Company's auditor immediately
prior to the Change in Control.
IN WITNESS WHEREOF, the Company has caused this
Amendment to be executed by a duly authorized officer of
the Company and Executive has executed this Amendment as
of the day and year first above written.
TRINITY INDUSTRIES, INC.
By:_____________________
________________________
[Executive]
Exhibit 10.7
AMENDMENT NO. 1 TO
SUPPLEMENTAL RETIREMENT BENEFIT PLAN
FOR W. RAY WALLACE
The Supplemental Retirement Benefit Plan (the
"Plan"), effective as of July 18, 1990 between Trinity
Industries, Inc. (the "Company") and W. Ray Wallace, is
hereby amended, effective as of May 6, 1997, as set forth
below.
Any term which is not defined below shall have
the meaning set forth for such term in the Plan.
1. Section 4 of the Plan is hereby amended
and restated by adding the following sentence at the end
thereof:
Notwithstanding the foregoing or the provisions
of Section 5 hereof, the present value (deter-
mined utilizing a discount rate of [ ]% per
annum) of the Supplemental Retirement Benefits
shall be paid to Employee in a lump sum cash
payment within five days following any termina-
tion of Employee's employment subsequent to a
Change in Control (as hereinafter defined).
2. Section 6 of the Plan is hereby amended and
restated to read as follows:
6.
MATERIAL CHANGES AFFECTING THE COMPANY
In the event of a Change in Control (as
hereinafter defined), the Company shall deposit
in trust for Employee with a national bank
designated by Employee that has offices in
Dallas, Texas and a capital and surplus of not
less than Twenty-Five Million Dollars, as
trustee, the actuarial equivalent of the Sup-
plemental Retirement Benefits payable hereun-
der, calculated as if such Supplemental Retire-
ment benefits commence twenty (20) days after
the date of such Change in Control. The terms
of the trust shall provide (a) for payments
comparable to the payments that the Company
would otherwise pay under this Agreement, (b)
shall create a spendthrift trust and (c) shall
otherwise be in form and substance determined
by Employee.
For purposes hereof, a "Change in Control"
shall be deemed to have occurred if the event
set forth in any one of the following para-
graphs shall have occurred:
(I) any Person is or becomes the
Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the
securities beneficially owned by such Person
any securities acquired directly from the Com-
pany or its affiliates) representing 30% or
more of the combined voting power of the Com
pany's then outstanding securities, excluding
any Person who becomes such a Beneficial Owner
in connection with a transaction described in
clause (i) of paragraph (III) below; or
(II) the following individuals cease
for any reason to constitute a majority of the
number of directors then serving: individuals
who, on May 6, 1997, constitute the Board and
any new director (other than a director whose
initial assumption of office is in connection
with an actual or threatened election contest,
including but not limited to a consent solici-
tation, relating to the election of directors
of the Company) whose appointment or election
by the Board or nomination for election by the
Company's stockholders was approved or recom-
mended by a vote of at least two-thirds (2/3)
of the directors then still in office who ei-
ther were directors on May 6, 1997 or whose ap-
pointment, election or nomination for election
was previously so approved or recommended; or
(III) there is consummated a merger
or consolidation of the Company or any direct
or indirect subsidiary of the Company with any
other corporation, other than (i) a merger or
consolidation which would result in the voting
securities of the Company outstanding immedi-
ately prior to such merger or consolidation
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity or any par-
ent thereof) at least 60% of the combined vot-
ing power of the securities of the Company or
such surviving entity or any parent thereof
outstanding immediately after such merger or
consolidation, or (ii) a merger or consolida-
tion effected to implement a recapitalization
of the Company (or similar transaction) in
which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of
the Company (not including in the securities
Beneficially Owned by such Person any securi-
ties acquired directly from the Company or its
Affiliates) representing 30% or more of the
combined voting power of the Company's then
outstanding securities; or
(IV) the stockholders of the Company
approve a plan of complete liquidation or dis-
solution of the Company or there is consummated
an agreement for the sale or disposition by the
Company of all or substantially all of the
Company's assets, other than a sale or disposi-
tion by the Company of all or substantially all
of the Company's assets to an entity, at least
60% of the combined voting power of the voting
securities of which are owned by stockholders
of the Company in substantially the same pro-
portions as their ownership of the Company
immediately prior to such sale.
For purposes hereof,
"Affiliate" shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
"Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
"Exchange Act" shall mean the Securities Ex-
change Act of 1934, as amended from time to
time.
"Person" shall have the meaning given in Sec-
tion 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities
under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an
offering of such securities or (iv) a corpora-
tion owned, directly or indirectly, by the
stockholders of the Company in substantially
the same proportions as their ownership of
stock of the Company.
3. The definition of "Annual Compensation" in
Section 8 of the Plan is hereby amended and restated as
follows:
"Annual Compensation" shall mean the base,
incentive, deferred and other compensation
earned by the Employee in respect of a particu-
lar fiscal year, but shall not include pension,
profit sharing or other retirement plan contri-
butions or benefits, the grant or exercise of
stock options, life and health insurance premi-
ums or benefits, medical reimbursements, reim-
bursed expenses, or any other perquisites.
IN WITNESS WHEREOF, the Company has caused this
Amendment to be executed by a duly authorized officer of
the Company and Executive has executed this Amendment as
of the day and year first above written.
TRINITY INDUSTRIES, INC.
By:_____________________
________________________
W. RAY WALLACE
Exhibit 10.8
AMENDMENT NO. 1 TO
1993 STOCK OPTION AND INCENTIVE PLAN
The Trinity Industries, Inc. 1993 Stock Option
and Incentive Plan, as amended from time to time (the
"Plan"), is hereby further amended, effective as of May
6, 1997, as set forth below.
Any term which is not defined below shall have
the meaning set forth for such term in the Plan.
1. Section 2 of the Plan is hereby amended to
delete the definition of "Reorganization" contained
therein.
2. Section 10(c) of the plan is hereby amend-
ed and restated as follows:
(c) In the event of a Change in
Control (as hereinafter defined), each stock
option granted under the Plan shall become
fully vested and exercisable.
For purposes hereof, a "Change in
Control" shall be deemed to have occurred if
the event set forth in any one of the following
paragraphs shall have occurred:
(I) any Person is or becomes
the Beneficial Owner, directly or indi-
rectly, of securities of the Company (not
including in the securities beneficially
owned by such Person any securities ac-
quired directly from the Company or its
affiliates) representing 30% or more of
the combined voting power of the Company's
then outstanding securities, excluding any
Person who becomes such a Beneficial Owner
in connection with a transaction described
in clause (i) of paragraph (III) below; or
(II) the following individuals
cease for any reason to constitute a ma-
jority of the number of directors then
serving: individuals who, on May 6, 1997,
constitute the Board and any new director
(other than a director whose initial as-
sumption of office is in connection with
an actual or threatened election
contest, including but not limited to
a consent solicitation, relating to
the election of directors of the
Company) whose appointment or elec-
tion by the Board or nomination for
election by the Company's stockhold-
ers was approved or recommended by a
vote of at least two-thirds (2/3) of
the directors then still in office
who either were directors on May 6,
1997 or whose appointment, election
or nomination for election was previ-
ously so approved or recommended; or
(III) there is consummated a
merger or consolidation of the Company or
any direct or indirect subsidiary of the
Company with any other corporation, other
than (i) a merger or consolidation which
would result in the voting securities of
the Company outstanding immediately prior
to such merger or consolidation continuing
to represent (either by remaining out-
standing or by being converted into voting
securities of the surviving entity or any
parent thereof) at least 60% of the com-
bined voting power of the securities of
the Company or such surviving entity or
any parent thereof outstanding immediately
after such merger or consolidation, or
(ii) a merger or consolidation effected to
implement a recapitalization of the Compa-
ny (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of
the Company (not including in the securi-
ties Beneficially Owned by such Person any
securities acquired directly from the Com-
pany or its Affiliates) representing 30%
or more of the combined voting power of
the Company's then outstanding securities;
or
(IV) the stockholders of the
Company approve a plan of complete liqui-
dation or dissolution of the Company or
there is consummated an agreement for
the sale or disposition by the Com
pany of all or substantially all of
the Company's assets, other than a
sale or disposition by the Company of
all or substantially all of the Com
pany's assets to an entity, at least
60% of the combined voting power of
the voting securities of which are
owned by stockholders of the Company
in substantially the same proportions
as their ownership of the Company
immediately prior to such sale.
For purposes hereof:
"Affiliate" shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
"Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
"Exchange Act" shall mean the Securities Ex-
change Act of 1934, as amended from time to
time.
"Person" shall have the meaning given in Sec-
tion 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities
under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an
offering of such securities or (iv) a corpora-
tion owned, directly or indirectly, by the
stockholders of the Company in substantially
the same proportions as their ownership of
stock of the Company.
3. Section 10 of the Plan is hereby amended
by deleting subsections (d) and (e) thereof.
IN WITNESS WHEREOF, the Company has caused this
Amendment to be executed by a duly authorized officer of
the Company as of the day and year first above written.
TRINITY INDUSTRIES, INC.
By:_____________________
Exhibit 10.10
AMENDMENT NO. 2 TO
SUPPLEMENTAL PROFIT SHARING PLAN
The Supplemental Profit Sharing Plan for Em-
ployees of Trinity Industries, Inc. and Certain Affili-
ates, as amended from time to time (the "Plan"), is
hereby further amended, effective as of May 6, 1997, as
set forth below.
Any term which is not defined below shall have
the meaning set forth for such term in the Plan.
1. Section 9.05 of the Plan is hereby amended
and restated to read as follows:
For purposes hereof, a "Change in Control"
shall be deemed to have occurred if the event
set forth in any one of the following para-
graphs shall have occurred:
(I) any Person is or becomes
the Beneficial Owner, directly or indi-
rectly, of securities of the Company (not
including in the securities beneficially
owned by such Person any securities ac-
quired directly from the Company or its
affiliates) representing 30% or more of
the combined voting power of the Company's
then outstanding securities, excluding any
Person who becomes such a Beneficial Owner
in connection with a transaction described
in clause (i) of paragraph (III) below; or
(II) the following individuals
cease for any reason to constitute a ma-
jority of the number of directors then
serving: individuals who, on May 6, 1997,
constitute the Board and any new director
(other than a director whose initial as-
sumption of office is in connection with
an actual or threatened election contest,
including but not limited to a consent
solicitation, relating to the election of
directors of the Company) whose appoint-
ment or election by the Board or nomina-
tion for election by the Company's stock-
holders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who
either were directors on May 6, 1997,
or whose appointment, election or
nomination for election was previ-
ously so approved or recommended; or
(III) there is consummated a
merger or consolidation of the Company or
any direct or indirect subsidiary of the
Company with any other corporation, other
than (i) a merger or consolidation which
would result in the voting securities of
the Company outstanding immediately prior
to such merger or consolidation continuing
to represent (either by remaining out-
standing or by being converted into voting
securities of the surviving entity or any
parent thereof) at least 60% of the com-
bined voting power of the securities of
the Company or such surviving entity or
any parent thereof outstanding immediately
after such merger or consolidation, or
(ii) a merger or consolidation effected to
implement a recapitalization of the Compa-
ny (or similar transaction) in which no
Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of
the Company (not including in the securi-
ties Beneficially Owned by such Person any
securities acquired directly from the Com-
pany or its Affiliates) representing 30%
or more of the combined voting power of
the Company's then outstanding securities;
or
(IV) the stockholders of the
Company approve a plan of complete liqui-
dation or dissolution of the Company or
there is consummated an agreement for the
sale or disposition by the Company of all
or substantially all of the Company's as-
sets, other than a sale or disposition by
the Company of all or substantially all of
the Company's assets to an entity, at
least 60% of the combined voting power of
the voting securities of which are owned
by stockholders of the Company in substan-
tially the same proportions as their
ownership of the Company immediately
prior to such sale.
For purposes hereof:
"Affiliate" shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
"Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
"Exchange Act" shall mean the Securities Ex-
change Act of 1934, as amended from time to
time.
"Person" shall have the meaning given in Sec-
tion 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities
under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an
offering of such securities or (iv) a corpora-
tion owned, directly or indirectly, by the
stockholders of the Company in substantially
the same proportions as their ownership of
stock of the Company.
IN WITNESS WHEREOF, the Company has caused this
Amendment to be executed by a duly authorized officer of
the Company as of the day and year first above written.
TRINITY INDUSTRIES, INC.
By:_____________________
Exhibit 10.10
AMENDMENT NO. 2 TO
SUPPLEMENTAL PROFIT SHARING TRUST
The Supplemental Profit Sharing Trust for Em-
ployees of Trinity Industries, Inc. and Certain Affili-
ates, as amended from time to time (the "Trust"), is
hereby further amended, effective as of May 6, 1997, as
set forth below.
Any term which is not defined below shall have
the meaning set forth for such term in the Trust.
1. Section 1.1 of the Trust is hereby amended
to insert the following at the end of the last sentence
thereof:
Upon a Change in Control (as defined in Article
IV hereof), the Company shall, as soon as pos-
sible, but in no event longer than two (2)
business days following the Change in Control,
make an irrevocable cash contribution to the
Trust in an amount that is sufficient to pay
each Plan Participant or Beneficiary the bene-
fits to which Plan Participants or Beneficia-
ries would be entitled pursuant to the terms of
the Plan as of the date on which the Change in
Control occurred, assuming the participant
terminated employment as of such date under
circumstances giving rise to payment of bene-
fits under the Plan. At three (3)-month inter-
vals thereafter, the Company shall redetermine
such benefits and shall contribute such addi-
tional amounts as may be necessary to ensure
that the assets of the Trust are sufficient to
make payment of such benefits.
2. Article IV of the Trust is hereby amended
and restated to read as follows:
For purposes hereof, a "Change in Control"
shall be deemed to have occurred if the event
set forth in any one of the following para-
graphs shall have occurred:
(I) any Person is or becomes
the Beneficial Owner, directly or indi-
rectly, of securities of the Company (not
including in the securities benefi-
cially owned by such Person any
securities acquired directly from the
Company or its affiliates) represent-
ing 30% or more of the combined vot-
ing power of the Company's then out-
standing securities, excluding any
Person who becomes such a Beneficial
Owner in connection with a transac
tion described in clause (i) of para
graph (III) below; or
(II) the following individuals
cease for any reason to constitute a ma-
jority of the number of directors then
serving: individuals who, on May 6, 1997,
constitute the Board and any new director
(other than a director whose initial as-
sumption of office is in connection with
an actual or threatened election contest,
including but not limited to a consent
solicitation, relating to the election of
directors of the Company) whose appoint-
ment or election by the Board or nomina-
tion for election by the Company's stock-
holders was approved or recommended by a
vote of at least two-thirds (2/3) of the
directors then still in office who either
were directors on May 6, 1997, or whose
appointment, election or nomination for
election was previously so approved or
recommended; or
(III) there is consummated a
merger or consolidation of the Company or
any direct or indirect subsidiary of the
Company with any other corporation, other
than (i) a merger or consolidation which
would result in the voting securities of
the Company outstanding immediately prior
to such merger or consolidation continuing
to represent (either by remaining out-
standing or by being converted into voting
securities of the surviving entity or any
parent thereof) at least 60% of the com-
bined voting power of the securities of
the Company or such surviving entity or
any parent thereof outstanding immediately
after such merger or consolidation,
or (ii) a merger or consolidation
effected to implement a recapi-
talization of the Company (or similar
transaction) in which no Person is or
becomes the Beneficial Owner,
directly or indirectly, of securities
of the Company (not including in the
securities Beneficially Owned by such
Person any securities acquired di-
rectly from the Company or its Af-
filiates) representing 30% or more of
the combined voting power of the
Company's then outstanding securi-
ties; or
(IV) the stockholders of the
Company approve a plan of complete liqui-
dation or dissolution of the Company or
there is consummated an agreement for the
sale or disposition by the Company of all
or substantially all of the Company's as-
sets, other than a sale or disposition by
the Company of all or substantially all of
the Company's assets to an entity, at
least 60% of the combined voting power of
the voting securities of which are owned
by stockholders of the Company in substan-
tially the same proportions as their own-
ership of the Company immediately prior to
such sale.
For purposes hereof:
"Affiliate" shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the
Exchange Act.
"Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.
"Exchange Act" shall mean the Securities Ex-
change Act of 1934, as amended from time to
time.
"Person" shall have the meaning given in Sec-
tion 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities
under an employee benefit plan of the Company
or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an
offering of such securities or (iv) a corpora-
tion owned, directly or indirectly, by the
stockholders of the Company in substantially
the same proportions as their ownership of
stock of the Company.
IN WITNESS WHEREOF, the Company has caused this
Amendment to be executed by a duly authorized officer of
the Company as of the day and year first above written.
TRINITY INDUSTRIES, INC.
By:_____________________
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