-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KisaXmpEbC9BpEQ2aU/e/ws+PExYnt99rdvDttL2ZtYSusuC35HH9PwarWTzljC+ W6++1nAS3wBVWl+LnONvwA== 0000923120-96-000006.txt : 19960725 0000923120-96-000006.hdr.sgml : 19960725 ACCESSION NUMBER: 0000923120-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960531 FILED AS OF DATE: 19960715 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREENBRIER COMPANIES INC CENTRAL INDEX KEY: 0000923120 STANDARD INDUSTRIAL CLASSIFICATION: 3743 IRS NUMBER: 930816972 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13146 FILM NUMBER: 96594417 BUSINESS ADDRESS: STREET 1: ONE CENTERPOINT DR STREET 2: STE 200 CITY: LAKE OSWEGO STATE: OR ZIP: 97035 BUSINESS PHONE: 5036847000 MAIL ADDRESS: STREET 1: ONE CENTERPOINTE DR STREET 2: STE 200 CITY: LAKE OSWEGO STATE: OR ZIP: 97035 10-Q 1 THE GREENBRIER COMPANIES, INC. FORM 10-Q 5/31/96 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------------------------- Form 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended May 31, 1996 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 No. 1-13146 -------------------------------------------------- THE GREENBRIER COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 93-0816972 (State of Incorporation)(I.R.S. Employer Identification No.) One Centerpointe Drive, Suite 200, Lake Oswego, OR 97035 (Address of principal executive offices) (Zip Code) (503)684-7000 (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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares of the registrant's common stock, $0.001 par value per share, outstanding on June 30, 1996 was 14,160,000 shares. 1 THE GREENBRIER COMPANIES, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts, unaudited)
May 31, August 31, 1996 1995 ----------- ----------- ASSETS MANUFACTURING Current assets: Cash and cash equivalents $ 1,584 $ 1,653 Accounts receivable 23,248 28,003 Inventories 65,065 86,280 Prepaid expenses 1,948 1,497 ----------- ----------- 91,845 117,433 Property, plant and equipment 35,170 33,135 Other 3,478 4,200 ----------- ----------- 130,493 154,768 LEASING AND SERVICES Cash and cash equivalents 4,220 8,697 Restricted cash and investments 13,013 3,664 Accounts and notes receivable 26,609 11,610 Railcars held for refurbishment or sale 40,221 13,559 Investment in direct finance leases 184,412 168,402 Equipment on operating leases 165,133 158,661 Prepaid expenses and other 15,352 13,028 ----------- ----------- 448,960 377,621 ----------- ----------- $ 579,453 $ 532,389 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY MANUFACTURING Current liabilities: Revolving notes $ 22,220 $ 27,313 Accounts payable and accrued liabilities 45,722 45,647 Current portion of notes payable 936 966 ----------- ----------- 68,878 73,926 Notes payable 13,366 13,512 ----------- ----------- 82,244 87,438 LEASING AND SERVICES Revolving notes 8,601 - Accounts payable and accrued liabilities 58,480 47,767 Deferred revenue 6,267 4,729 Deferred participation 30,413 27,829 Deferred income taxes 18,396 15,730 Notes payable 185,342 176,276 ----------- ----------- 307,499 272,331 Subordinated debt 43,489 37,762 Minority interest 38,090 38,040 COMMITMENTS AND CONTINGENCIES (NOTE 3) STOCKHOLDERS' EQUITY Preferred stock - $0.001 par value, 25,000 shares authorized, none issued - - Common stock - $0.001 par value, 50,000 shares authorized, 14,160 outstanding 14 14 Additional paid-in capital 49,051 48,894 Retained earnings 58,677 47,383 Foreign currency translation adjustments 389 527 ----------- ----------- 108,131 96,818 ----------- ----------- $ 579,453 $ 532,389 =========== ===========
The accompanying notes are an integral part of these statements. 2 THE GREENBRIER COMPANIES, INC. CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share amounts, unaudited)
Three Months Ended Nine Months Ended May 31, May 31, ------------------- ------------------- 1996 1995 1996 1995 ------------------- ------------------- REVENUES Manufacturing $ 95,842 $ 94,756 $308,345 $215,307 Leasing and services 25,298 22,568 71,651 67,781 --------- --------- --------- --------- Total revenues 121,140 117,324 379,996 283,088 COSTS AND EXPENSES Cost of manufacturing sales 85,529 82,060 276,461 191,074 Leasing and services 10,734 9,488 31,656 28,740 Selling and administrative expense: Manufacturing 3,828 3,073 10,852 8,381 Leasing and services 4,129 2,945 11,147 8,688 Corporate 1,487 1,711 4,955 4,489 --------- --------- --------- --------- 9,444 7,729 26,954 21,558 Interest expense: Manufacturing 565 800 2,397 1,632 Leasing and services 5,553 5,661 16,506 17,022 --------- --------- --------- --------- 6,118 6,461 18,903 18,654 Minority interest: Manufacturing 424 (476) (105) (476) Leasing and services 761 895 2,182 2,512 --------- --------- --------- --------- 1,185 419 2,077 2,036 --------- --------- --------- --------- Total costs and expenses 113,010 106,157 356,051 262,062 EARNINGS BEFORE INCOME TAX EXPENSE Manufacturing 5,496 9,299 18,740 14,696 Leasing and services 4,121 3,579 10,160 10,819 Corporate (1,487) (1,711) (4,955) (4,489) --------- --------- --------- --------- 8,130 11,167 23,945 21,026 Income tax expense (3,229) (4,880) (10,102) (9,021) --------- --------- --------- --------- NET EARNINGS $ 4,901 $ 6,287 $ 13,843 $ 12,005 ========= ========= ========= ========= Net earnings per share $ 0.35 $ 0.44 $ 0.98 $ 0.85 ========= ========= ========= ========= Weighted average shares outstanding 14,160 14,160 14,160 14,160 ========= ========= ========= ========= Dividends declared per share $ 0.06 $ 0.06 $ 0.18 $ 0.18 ========= ========= ========= =========
The accompanying notes are an integral part of these statements. 3 THE GREENBRIER COMPANIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited)
Nine Months Ended May 31, -------------------- 1996 1995 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 13,843 $ 12,005 Adjustments to reconcile net earnings to net cash provided by operating activities: Deferred income taxes 2,666 2,255 Deferred participation 2,584 7,203 Depreciation and amortization 17,886 16,180 Gain on sales of equipment (3,853) (3,029) Other (1,133) 1,033 Decrease (increase) in assets: Accounts and notes receivable (10,244) (21,158) Inventories 21,215 (30,141) Prepaid expenses and other (2,991) (656) Increase (decrease) in liabilities: Accounts payable and accrued liabilities 10,788 22,627 Deferred revenue 1,538 (907) --------- --------- Net cash provided by operating activities 52,299 5,412 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of subsidiary, net of cash acquired - (23,916) Principal payments received under direct finance leases 5,604 5,413 Investment in direct finance leases (21,030) (29,016) Proceeds from sales of equipment 59,625 14,609 Purchase of property and equipment (102,125) (38,409) Use of(investment in) restricted cash and investments (9,349) 4,353 --------- --------- Net cash used in investing activities (67,275) (66,966) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 28,337 30,966 Repayments of borrowings (15,358) (17,728) Proceeds from minority investors - 9,221 Dividends (2,549) (2,548) --------- --------- Net cash provided by financing activities 10,430 19,911 --------- --------- DECREASE IN CASH AND CASH EQUIVALENTS (4,546) (41,643) Cash and cash equivalents Beginning of period 10,350 50,196 --------- --------- End of period $ 5,804 $ 8,553 ========= ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Interest $ 16,471 $ 16,366 Income taxes 9,880 4,602 SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES Equipment obtained through borrowings $ 6,680 $ 3,939 Repayment of borrowings through return of railcars held for refurbishment 1,534 5,315
The accompanying notes are an integral part of these statements. 4 THE GREENBRIER COMPANIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, unaudited) Note 1 - INTERIM FINANCIAL STATEMENTS The consolidated financial statements of The Greenbrier Companies, Inc. and Subsidiaries (the "Company") as of May 31, 1996 and for the three and nine months ended May 31, 1996 and 1995, have been prepared without audit and reflect all adjustments (consisting of normal recurring accruals) which in the opinion of management are necessary for a fair presentation of the financial position and operating results for the periods indicated. The results of operations for the nine months ended May 31, 1996 are not necessarily indicative of the results to be expected for the entire year ending August 31, 1996. Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the consolidated financial statements contained in the Company's 1995 Annual Report to Stockholders incorporated by reference into the Company's 1995 Annual Report on Form 10-K. Note 2 - INVENTORIES May 31, August 31, 1996 1995 ----------- ----------- Manufacturing supplies and raw materials $ 8,551 $ 7,832 Work-in-process 56,514 78,448 ----------- ----------- $ 65,065 $ 86,280 =========== =========== Note 3 - COMMITMENTS AND CONTINGENCIES Purchase commitments of approximately $3,714 for leasing and services operating equipment were outstanding as of May 31, 1996. Note 4 - SUBSEQUENT EVENT Subsequent to May 31, 1996, the Company consummated the acquisition of Superior Transportation Systems, Inc. and the remaining interest in its existing fifty percent owned subsidiary, Tolan O'Neal Transportation & Logistics, Inc. as part of a planned expansion of the Company's third-party transportation logistics services. The acquisitions will be accounted for using the purchase method. 5 THE GREENBRIER COMPANIES, INC. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Greenbrier Companies, Inc. and Subsidiaries ("Greenbrier") currently operates in two primary business segments: the manufacture of railcars and marine vessels and the refurbishment of railcars; and the leasing and management of surface transportation equipment and related services. The two business segments are operationally integrated. The manufacturing operations produce double-stack intermodal railcars, conventional railcars and marine vessels and perform refurbishment and maintenance activity, a portion of which is for railcar leasing operations. The leasing and services operation undertakes most of the sales and marketing activities for the manufacturing operations. New product development is also conducted on an integrated basis. Subsequent to May 31, 1996, Greenbrier acquired Superior Transportation Systems, Inc. and the remaining interest in its existing fifty percent owned subsidiary, Tolan O'Neal Transportation & Logistics, Inc. These transactions, along with the planned acquisition of Interamerican Logistics Inc. discussed in the February 29, 1996 Form 10-Q, are the first steps in a planned expansion of Greenbrier's third-party transportation logistics services. The Interamerican transaction is anticipated to be complete early in fiscal 1997. Synergies with the existing manufacturing and leasing businesses include building stronger relationships with customers in the railroad and shipping community and providing access to Greenbrier's asset base in railcars, trailers and containers. The acquisitions were funded from working capital and are not expected to have a significant impact on 1996 earnings. The following table sets forth information regarding costs and expenses expressed as a percentage of the associated manufacturing or leasing and services revenue.
Three Months Ended Nine Months Ended May 31, May 31, ------------------- ------------------- 1996 1995 1996 1995 ------------------- ------------------- Manufacturing: Sales 100.0% 100.0% 100.0% 100.0% Cost of sales 89.2 86.6 89.7 88.7 Selling and administrative expense 4.0 3.2 3.5 3.9 Interest expense 0.6 0.8 0.8 0.8 Minority interest 0.5 (0.5) (0.1) (0.2) Earnings before income tax expense 5.7 9.9 6.1 6.8 Leasing and services: Revenues 100.0% 100.0% 100.0% 100.0% Operating expense 42.4 42.0 44.2 42.4 Selling and administrative expense 16.3 13.0 15.6 12.8 Interest expense 22.0 25.1 23.0 25.1 Minority interest 3.0 4.0 3.0 3.7 Earnings before income tax expense 16.3 15.9 14.2 16.0 Corporate expense as a percentage of total revenues 1.2 1.5 1.3 1.6 Income tax expense as a percentage of pre-tax earnings 39.7 43.7 42.2 42.9 Net earnings as a percentage of total revenues 4.0 5.4 3.6 4.2
Three Months Ended May 31, 1996 Compared to Three Months Ended May 31, 1995 Revenues. Manufacturing revenue for the three-month period ended May 31, 1996 increased slightly over the corresponding period in the prior year. Revenue from Canadian operations was substantially greater than the prior comparable period due to increased volume and a product mix with higher unit sales value. During the 1995 period the Canadian facility experienced production difficulties. The increase in revenue from Canadian operations in 1996 was largely offset by decreased revenue from U.S. operations resulting from fewer railcar deliveries, partially offset by a product mix including railcars with a higher unit sales value. Total deliveries decreased by 237 to 1,362 in the current quarter, compared to 1,599 in the prior comparable period. The manufacturing backlog of railcars for sale and lease was approximately 2,700 railcar platforms with an estimated value of $165 million as of May 31, 1996. 6 THE GREENBRIER COMPANIES, INC. Leasing and services revenue increased $3 million, or 12%, for the quarter ended May 31, 1996 compared to the quarter ended May 31, 1995. This increase is primarily due to revenue from additional railcars placed in lease service partially offset by a decrease in revenue from automobile transportation services as a result of the lower volume of automobiles transported. Pre-tax earnings realized on the disposition of leased equipment during the quarter were 50% more than the $1 million realized in the corresponding prior period. Cost of Manufacturing Sales. Cost of sales as a percentage of manufacturing revenue increased in the quarter ended May 31, 1996 to 89% from 87% in the quarter ended May 31, 1995. The lower margins achieved in the current quarter result from line changeovers and a less favorable product mix at U.S. operations partially offset by continuing improvement in manufacturing efficiencies at the Canadian operation. The prior period margin benefited from efficiencies of longer production runs on a product mix that included a greater proportion of higher margin products. Leasing and Services Expense. Leasing and services expense as a percentage of revenue remained consistent at 42% for the three- month period ended May 31, 1996 compared to the corresponding prior period. Reduced contribution from automobile transportation services due to lower volumes, start-up utilization of the highway trailer rental operation and softening of the intermodal trailer and container market were offset by a restructuring of certain lease participation costs. Selling and Administrative Expense. As a percentage of revenue, total selling and administrative expense for the three months ended May 31, 1996 increased compared to the corresponding prior period. Lower manufacturing volume and increased leasing and services costs associated with the start up of the highway trailer rental operation were the primary contributors to the increase in expense as a percentage of revenue. Interest Expense. Interest expense decreased slightly as the effect of lower interest rates on working capital borrowings and normal paydowns of term debt exceeded current year borrowings. Minority Interest. Manufacturing minority interest increased as a result of improved earnings of the Canadian operation. Leasing minority interest decreased due to reduced earnings from automobile transportation services. Income Tax Expense. The income tax provision for the quarter ended May 31, 1996 represents an effective tax rate of 42% on U.S. operations which is consistent with the corresponding prior period. Consolidated income taxes as a percentage of pre-tax earnings are less than 42% as the Canadian operation had generated operating loss carryforwards which offset current period earnings. Nine Months Ended May 31, 1996 Compared to Nine Months Ended May 31, 1995 Revenues. Manufacturing revenues for the nine-month period ended May 31, 1996 increased $93 million, or 43%, over the corresponding prior period. Canadian operations, acquired in March 1995, contributed the majority of the increase. Revenue from U.S. operations decreased slightly due to a product mix characterized by higher unit sales value on fewer railcars delivered than the product mix in the prior comparable period. The number of railcars sold increased by 856 to 4,689 for the nine months ended May 31, 1996 from 3,833 in the prior year comparable period. Leasing and services revenue increased $4 million, or 6%, for the nine-month period ended May 31, 1996 compared to the nine-month period ended May 31, 1995. This increase is primarily due to revenue from additional railcars placed in lease service partially offset by a decrease in revenue from automobile transportation services as a result of the lower volume of automobiles transported. Pre-tax income realized on disposition of leased equipment during the nine-month period ended May 31, 1996 amounted to $3.4 million compared to $2.8 million in the corresponding prior period. 7 THE GREENBRIER COMPANIES, INC. Cost of Manufacturing Sales. Cost of sales as a percentage of manufacturing revenue for the nine-month period ended May 31, 1996 increased slightly compared to the corresponding prior period. Improved margins achieved by U.S. operations due to a favorable product mix and the efficiencies of long production runs early in the year were offset by lower margins achieved at the Canadian operation. Leasing and Services Expense. Leasing and services expense as a percentage of revenue increased to 44% for the nine-month period ended May 31, 1996 as compared to 42% for the corresponding prior period. Reduced contribution from automobile transportation services due to lower volume, as well as start-up utilization of the highway trailer rental operation and the softening of the intermodal trailer and container market were the primary reasons for the increased percentage. Selling and Administrative Expense. As a percentage of revenue, total selling and administrative expense declined due to increased manufacturing volume reduced by higher leasing and services costs associated with the start up of the highway trailer rental operation. Interest Expense. The increase in manufacturing interest expense for the nine-month period ended May 31, 1996 compared to the corresponding prior period relates mainly to working capital borrowings associated with the Canadian operation and to increased production and inventory levels. The slight decrease in leasing and services interest expense results from normal paydowns of term debt offset somewhat by current year borrowings. Minority Interest. Minority interest for the nine-month period ended May 31, 1996 is consistent with the corresponding prior period. The minority investors' share of operating losses at the Canadian facility was reduced due to improved operations during the current year. Decreased operating earnings relating to automobile transportation services has reduced the leasing and services minority interest. Income Tax Expense. The income tax provision for the nine-month period ended May 31, 1996 represents an effective tax rate of 42% on U.S. operations which is consistent with the prior period. As the Canadian operation is not included in the U.S. consolidated tax return, no tax benefit has been recognized on the losses incurred by Canadian operations. Liquidity and Capital Resources Cash provided by operations totaled $52 million for the nine- month period ended May 31, 1996 compared to $5 million for the corresponding prior period. The fluctuation in cash from operations is due to the decrease in inventory resulting primarily from increased railcar deliveries offset somewhat by purchases of materials required for the construction of two marine barges. Inventory levels at August 31, 1995 were higher than anticipated due to the temporary suspension of production at the Canadian operation. Existing credit facilities for operations aggregate approximately $101 million at May 31, 1996. A $43 million revolving credit line is available through March 1997 which provides working capital and interim financing of equipment for leasing and services operations. Borrowings under the revolving credit line were $9 million at May 31, 1996. A $30 million operating line for working capital and a $10 million five-year term facility for certain manufacturing capital expenditures are available through February 1999 and December 1997 for U.S. manufacturing operations. Borrowings outstanding under the operating line were $11 million at May 31, 1996 and there were no borrowings outstanding under the term facility. An $18 million (at the May 31, 1996 exchange rate) operating line is available through March 1997 for working capital and certain capital expenditures for Canadian operations. Borrowings outstanding under this line at May 31, 1996 were $11 million. The weighted average interest rate on amounts outstanding with respect to these credit facilities was 9% for the nine-months ended May 31, 1996. 8 THE GREENBRIER COMPANIES, INC. Capital expenditures totaled $130 million for the nine-months ended May 31, 1996 compared to $71 million for the nine-months ended May 31, 1995. Of these capital expenditures, approximately $125 million and $65 million were attributable to leasing and services operations. Leasing and services capital expenditure programs included additions to the leased railcar fleet under refurbishment programs and various additions to the lease fleet related to other equipment purchases. Certain of these additions are not anticipated to be held long-term but rather sold to other parties and accordingly are included in Railcars held for refurbishment or sale. Leasing and services capital expenditures for the remainder of 1996 are expected to be approximately $23 million. Approximately $5 million and $6 million of the total capital expenditures for the nine-months ended May 31, 1996 and May 31, 1995 were attributable to manufacturing operations. Capital expenditure programs included new and upgraded manufacturing plant and equipment to improve efficiencies and increase capacity. Manufacturing capital expenditures for the remainder of 1996 are expected to be approximately $2 million and will include plant improvements and equipment acquisitions to further increase production capacity and efficiency. Operations in Canada give rise to market risks from changes in foreign currency exchange rates. Forward exchange contracts have been entered into to hedge these risks. At May 31, 1996 the net amount of foreign exchange contracts outstanding for the purchase of Canadian dollars was $15 million maturing at various dates through November 1996. Realized and unrealized gains and losses from such off-balance sheet contracts are deferred and recognized in earnings concurrent with the hedged transaction. Dividends of $.06 per share have been paid quarterly beginning in 1995. Additionally, the next quarterly dividend of $.06 per share was declared in July 1996 to be paid in August 1996. Management expects existing funds and cash generated from operations, together with borrowings under existing credit facilities, will be sufficient to fund dividends, working capital needs, planned capital expenditures and expected debt repayments. Management anticipates long-term financing will be required and will continue to be available for the purchase of equipment to expand Greenbrier's lease fleet. 9 THE GREENBRIER COMPANIES, INC. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.32 Stock Purchase Agreement between and among Greenbrier Logistics, Inc. and A. Daniel O'Neal dated as of June 28, 1996. 10.33 Employment Agreement dated June 1, 1996 between Greenbrier Logistics, Inc. and A. Daniel O'Neal, Jr. 27. Financial Data Schedule (b) Form 8-K No reports on Form 8-K were filed during the quarter for which this report is filed. 10 THE GREENBRIER COMPANIES, INC. SIGNATURES Pursuant to the requirements 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. THE GREENBRIER COMPANIES, INC. Date: July 12, 1996 By: /s/ Larry G. Brady ------------------ -------------------------- Larry G. Brady Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) EX-10.32 2 STOCK PURCHASE AGREEMENT between and among GREENBRIER LOGISTICS, INC. PURCHASER and A. DANIEL O'NEAL (Stockholder of Tolan O'Neal Transportation & Logistics, Inc.) SELLER Dated: June 28, 1996 TABLE OF CONTENTS Section Page ARTICLE 1 PURCHASE AND SALE OF SELLER'S SHARES . . . . . . . . . . . . . 2 1.01 Agreement to Purchase and Sell; Effect . . . . . . . 2 1.02 Purchase Price . . . . . . . . . . . . . . . . . . . 2 ARTICLE 2 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.01 Closing Date. . . . . . . . . . . . . . . . . . . . 4 2.02 Deliveries. . . . . . . . . . . . . . . . . . . . . 4 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . 4 3.01 Organization . . . . . . . . . . . . . . . . . . . . 5 3.02 Affiliates . . . . . . . . . . . . . . . . . . . . . 5 3.03 Capacity, Authorization and Effect of Agreement. . . 5 3.04 Absence of Breach. . . . . . . . . . . . . . . . . . 6 3.05 Title to Seller's Shares . . . . . . . . . . . . . . 6 3.06 Financial Statements . . . . . . . . . . . . . . . . 7 3.07 Absence of Changes . . . . . . . . . . . . . . . . . 10 3.08 Employee and Related Contracts and Transactions with Affiliates. . . . . . . . . . . . . . . . . . . 12 3.09 Legal Proceedings. . . . . . . . . . . . . . . . . . 13 3.10 Property . . . . . . . . . . . . . . . . . . . . . . 14 3.11 Leases . . . . . . . . . . . . . . . . . . . . . . . 15 3.12 Franchises, Licenses, and Obligations. . . . . . . . 15 3.13 Insurance. . . . . . . . . . . . . . . . . . . . . . 16 3.14 Accounts and Notes Receivable. . . . . . . . . . . . 16 3.15 Compliance with Certain Instruments. . . . . . . . . 17 3.16 Minute Books and Stock Records . . . . . . . . . . . 17 3.17 Persons Authorized to Act. . . . . . . . . . . . . . 18 3.18 Accuracy of Representations. . . . . . . . . . . . . 18 3.19 Governmental and Third Party Consents. . . . . . . . 18 3.20 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 19 3.21 Survival of Warranties, Representations, and Covenants. . . . . . . . . . . . . . . . . . . . . . 19 3.22 Brokers. . . . . . . . . . . . . . . . . . . . . . . 19 ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER. . . . . . . . . . 19 4.01 Organization . . . . . . . . . . . . . . . . . . . . 19 4.02 Capacity, Authorization and Effect of Agreement. . . 20 4.03 Absence of Breach. . . . . . . . . . . . . . . . . . 20 4.04 Brokers. . . . . . . . . . . . . . . . . . . . . . . 21 4.05 Accuracy of Representations. . . . . . . . . . . . 21 4.06 Investment Intent. . . . . . . . . . . . . . . . . . 21 4.07 Survival of Representations and Warranties . . . . . 21 ARTICLE 5 COVENANTS OF SELLER. . . . . . . . . . . . . . . . . . . . . . 21 5.01 Execution of Documents . . . . . . . . . . . . . . . 21 5.02 Investigation of Business and Examination of Documents. . . . . . . . . . . . . . . . . . . . . . 22 5.03 Conduct of Business. . . . . . . . . . . . . . . . . 23 5.04 Lost Certificates. . . . . . . . . . . . . . . . . . 26 ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER . . . . . . . 27 6.01 Representations and Warranties Accurate . . . . 27 6.02 Performance by Seller . . . . . . . . . . . . . 27 6.03 Consents and Authorizations. . . . . . . . . . 27 6.04 Absence of Certain Events. . . . . . . . . . . 28 6.05 Examinations. . . . . . . . . . . . . . . . . . 30 6.06 Closing Arrangements. . . . . . . . . . . . . . 30 6.07 Employment Agreement. . . . . . . . . . . . . . 30 6.08 401(k) Plan Termination . . . . . . . . . . . . 30 6.09 Investment Agreement Termination. . . . . . . . 31 ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. . . . . . . . . 31 7.01 Representations and Warranties Accurate . . . . 31 7.02 Performance by Purchaser. . . . . . . . . . . . 31 7.03 Authorizations, Legal Prohibition . . . . . . . 31 ARTICLE 8 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 32 8.01 Indemnification by Seller. . . . . . . . . . . . . . 32 8.02 Indemnification by Purchaser . . . . . . . . . . . . 32 8.03 Notice of Claim. . . . . . . . . . . . . . . . . . . 33 8.04 Procedure for Indemnification. . . . . . . . . . . . 33 8.05 Additional Rules and Procedures. . . . . . . . . . . 35 8.06 Payment of Claims. . . . . . . . . . . . . . . . . . 38 ARTICLE 9 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 38 9.01 Cooperation. . . . . . . . . . . . . . . . . . . . . 38 9.02 Termination. . . . . . . . . . . . . . . . . . . . . 38 9.03 Specific Performance . . . . . . . . . . . . . . . . 39 9.04 Expenses . . . . . . . . . . . . . . . . . . . . . . 39 9.05 Applicable Law, Attorney Fees. . . . . . . . . . . . 39 9.06 Counterparts . . . . . . . . . . . . . . . . . . . . 39 9.07 Notices. . . . . . . . . . . . . . . . . . . . . . . 40 9.08 Assignment . . . . . . . . . . . . . . . . . . . . . 41 9.09 Severability . . . . . . . . . . . . . . . . . . . . 41 9.10 No Third Party Beneficiaries . . . . . . . . . . . . 42 9.11 Entire Agreement. . . . . . . . . . . . . . . . . . 42 9.12 Waiver, Amendment. . . . . . . . . . . . . . . . . . 42 STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT dated as of June 28, 1996 (the "Agreement"), is between GREENBRIER LOGISTICS, INC., an Oregon corporation ("Purchaser"), and A. DANIEL O'NEAL ("Seller"), owner of one-half of the issued and outstanding shares of capital stock of TOLAN O'NEAL TRANSPORTATION & LOGISTICS, INC., a corporation organized and existing under the laws of the state of Washington, whose principal place of business is Suite 500, 200 West Thomas, Seattle, Washington 98119 (the "Company"). W I T N E S S E T H: WHEREAS, Purchaser has offered to acquire all of the issued and outstanding shares (the "Shares") of capital stock of the Company (the "Capital Stock"); and WHEREAS, Seller owns one-half of all of the issued and outstanding shares of Capital Stock of the Company (the "Seller's Shares"); and WHEREAS, Purchaser desires to purchase, and Seller desires to sell, the Seller's Shares upon the terms and subject to the conditions hereinafter set forth. NOW, THEREFORE, in consideration of the promises and of the mutual agreements, provisions and covenants herein contained, the parties hereto agree as follows: ARTICLE 1 PURCHASE AND SALE OF SELLER'S SHARES 1.01 Agreement to Purchase and Sell; Effect. On the terms and subject to the conditions of this Agreement, Seller shall sell to Purchaser and Purchaser shall purchase from Seller on the Closing Date the Seller's Shares in exchange for the Purchase Price, as set forth in Section 1.02. The sale and purchase of the Seller's Shares on the terms and subject to the conditions of this Agreement shall constitute the transfer by Seller to Purchaser of:(a) all of Seller's right, title and interest in and to the Seller's Shares (and any and all other Shares or other securities issued or issuable in respect thereof on or after the date of this Agreement) and all options, warrants or other rights to acquire Seller's Shares; (b) all of Seller's rights as a shareholder of the Company, whether arising by virtue of ownership of the Seller's Shares, by contract or otherwise; and (c) all of Seller's rights, if any, in respect of dividends, adjustment refunds or other distributions of any kind or nature whatsoever arising by reason of Seller's ownership of the Seller's Shares, any note or other evidence of indebtedness of the Company held by Seller, and any other loans or advances made by Seller to the Company. 1.02 Purchase Price. The Purchase Price shall be made up of three components:the "Base Price," the "Deferred Price," and the "Contingent Price." a. The "Base Price" shall be $500,000. b. The Deferred Price shall be $250,000 plus interest at a rate of 7% per annum from the Closing Date (as defined at 2.01, below) until the date such Deferred Price is paid. The Deferred Price and any interest thereon shall be paid in full on or before the fourth anniversary of the Closing Date. c. Subject to the terms and conditions set forth in this Agreement, Purchaser shall also pay to Seller, a Contingent Price, calculated as 5% of the then market value of Purchaser as of the fifth anniversary of the Closing Date. Such calculation shall be made and as of the fifth anniversary of the Closing Date by an independent appraiser selected by Purchaser and agreed to by Seller. Payment of the Contingent Price shall be made within 90 days of the fifth anniversary of the Closing Date. d. Notwithstanding any other provision of this Agreement to the contrary, the Contingent Price shall, as between Seller and Purchaser, be deemed to include simple interest which shall be imputed at the rate of six percent per year, compounded annually from the Closing Date until the date of payment. Each of Purchaser and Seller shall report such payment consistently with this subsection 1.02.d. for purposes of all federal or state income tax returns with respect to periods in which such payment shall have been received. ARTICLE 2 CLOSING 2.01 Closing Date. The closing ("Closing") of the transactions contemplated by this Agreement shall take place at the offices of Tonkon, Torp, Galen, Marmaduke & Booth, 1600 Pioneer Tower, 888 Southwest Fifth Avenue, Portland, Oregon, beginning at the hour of 9:00 A.M., Portland time, on June 28, 1996 or at such other time and place as the parties shall agree in writing (the "Closing Date"). 2.02 Deliveries. At the Closing, Seller shall deliver against payment of the Base Price certificates representing the Seller's Shares, duly endorsed in blank, and in proper form for transfer on the stock transfer books of Company, together with evidence affixed thereto of payment of all applicable documentary or transfer taxes. Purchaser shall deliver Sellers Shares to Garvey Schubert & Barer to hold pursuant to the stock pledge agreement between the parties of even date herewith (the "Stock Pledge Agreement"). At the Closing, Purchaser shall deliver to Seller, against delivery of the Seller's Shares, the Base Price by cashier's or bank check drawn to Seller's order. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER As used herein, the term: "to Seller's knowledge" shall mean such knowledge and belief of Seller as may be acquired by him after reasonable inquiry of the directors, officers, key employees, accountants, and attorneys of the Company. Seller represents and warrants to Purchaser as follows: 3.01 Organization. The Company is a corporation duly organized and validly existing under the laws of Washington, with all requisite corporate power to own or lease its properties as currently owned or leased and carry on its business as currently conducted. The Company is duly qualified to do business in all jurisdictions where the failure to be so qualified would have a material adverse effect on the business or properties of the Company, and the Company has all licenses and permits required by any governmental authority for the conduct of its business as now conducted. 3.02 Affiliates. The Company owns no capital stock nor has any other ownership interest in any other corporation, limited liability company, general or limited partnership, or other entity. 3.03 Capacity, Authorization and Effect of Agreement. Seller will at, and immediately prior to, the Closing Date own one- half of the Company's issued and outstanding Capital Stock and each of the Seller's Shares shall be free and clear of all liens, claims, options, charges, or encumbrances of whatever nature. Seller has all requisite power and authority to enter into and perform his obligations under this Agreement and to consummate the transactions contemplated herein. The execution, delivery and performance of this Agreement by Seller and all of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Seller. This Agreement constitutes the valid and binding obligation of Seller and is enforceable against him in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization and similar laws affecting creditors generally and by the availability of equitable remedies. 3.04 Absence of Breach. The execution and delivery of this Agreement do not, and the performance of this Agreement will not:(a) to Seller's knowledge, violate any existing applicable law, rule, regulation, judgment, order or decree of any governmental instrumentality or court having jurisdiction over the Company or Seller, (b) require the Company, or Seller to obtain any authorization, consent, approval or waiver from, or to make any filing with, any public body or authority or accelerate any action required of the Company under any of the above. 3.05 Title to Seller's Shares. To Seller's knowledge, no one other than The Greenbrier Companies, Inc. or its affiliates, and Seller owns or holds any rights to acquire any additional shares of the Company's capital stock or other securities (by exercise of warrants, options, or otherwise) or any interest therein or any voting rights with respect to any additional shares of the Company's capital stock or other securities. Seller shall have no rights in respect of dividends, adjustment refunds or other distributions of any kind or nature whatsoever after the Closing Date arising by reason of ownership of the Seller's Shares in respect of any period prior to the Closing Date. The Seller's Shares have been duly and validly issued, are fully paid and nonassessable and are owned by Seller free and clear of any lien, restriction, charge, encumbrance or other security interest. Upon delivery to Purchaser at the Closing against payment of the Base Price therefor, Purchaser will receive good and unencumbered title to the Seller's Shares, free and clear of all liens, restrictions, charges, encumbrances or other security interests of any kind or nature whatsoever except as may be created by Purchaser, and subject to the Stock Pledge Agreement, and will be the owner of all of the Seller's Shares. There are not now, and at the time of the Closing there will not be, any outstanding warrants, options, agreements, contracts, calls, commitments or demands of any character relating to the Seller's Shares which restrict the transfer of Seller's Shares or which otherwise relate to the Seller's Shares other than this Agreement. Seller hereby authorizes the transfer of the Seller's Shares to Purchaser. 3.06 Financial Statements. Seller has delivered to Purchaser true, correct and complete copies of the following financial statements (the "Financial Statements"): a. Reviewed balance sheets and statements of earnings, retained earnings, and changes in financial position for the Company as of August 31, 1995, 1994 and 1993 and for the three years then ended, together with the notes thereto; b. Unreviewed balance sheets, statements of income, retained earnings and changes in financial conditions, as of February 29, 1996 and February 28, 1995, and for the six months then ended, together with any notes thereto (the "Unreviewed Financial Statements"). In all material respects, the Financial Statements: have been prepared and maintained in accordance with, and accurately reflect, the books and records of the Company; accurately and fully reflect all income, costs, and expenses necessary for, or relating to, the conduct of the business of the Company; have been prepared in accordance with generally accepted accounting principles consistently applied; reflect all charges and accruals necessary to fairly present the Company's financial condition and results of operations as of the dates, and for the periods indicated; except that the Unreviewed Financial Statements have been prepared in accordance with generally accepted accounting principals for interim financial information and accordingly do not include all of the information and notes required by generally accepted accounting principles which are included in the reviewed annual financial statements, but the accounting policies used in the preparation of the unreviewed financial statements have been consistently applied in the preparation of the interim statements and, in the opinion of management, all adjustments (consisting of normally recurring accruals) considered necessary for a fair presentation, have been included, subject to usual year-end adjustments which are not material either separately or in the aggregate. The Financial Statements described in Section 3.06.a. above have been reviewed in accordance with generally accepted auditing standards by the public accounting firm of Benson McLaughlin. The balance sheets included in the Financial Statements (the "Balance Sheets") present fairly the financial position of the Company at the dates indicated and, together with any applicable notes, reflect all liabilities, contingent or otherwise, of the Company as of such dates and contain reserves for, and reflect all actual and anticipated liabilities of the Company as of such dates; and in all material respects, the statements of earnings, retained earnings, and changes in financial position present fairly, completely, and accurately the results of operations and changes in financial position of the Company for the periods indicated. The Company maintains accounts, books and records of all its business and activities, and such accounts and books and records are maintained in accordance with adequate systems of internal controls, and are up-to-date in all material respects and are in the possession of the Company. To Seller's knowledge, the Company has no outstanding material liabilities, contingent or otherwise nor is a party to or bound by any agreement of guarantee, support, indemnification, assumption, or endorsement of, or any other similar commitment with respect to the material obligations, liabilities (contingent or otherwise) or indebtedness of any person other than: those set out, referred to or otherwise provided for in the Financial Statements; and liabilities in respect of trade or business obligations incurred after the date of the Financial Statements in the ordinary course of the business of the Company, consistent with past practice, none of which has been materially adverse to the nature, results of operations, assets or financial condition of, or manner of conducting, the business. 3.07 Absence of Changes. Since August 31, 1995, except as set forth in Schedule 3.07, there has not been: a. any sale, transfer, assignment, or other disposition of any of the assets of the Company, except in the ordinary course of business and not exceeding $10,000, or any cancellation or forgiveness of any debt owed to, or claim of,the Company; b. any capital expenditure which, singly or in the aggregate with all other capital expenditures, exceeds $10,000 made or incurred by the Company or any material lease obligation incurred by the Company; c. any loan made or agreed to be made by or to the Company or any material obligation or liability(except trade payables incurred in the ordinary course of business in amounts consistent with prior periods) incurred by the Company; d. any termination or amendment of, or default under, any material contract, lease, agreement, insurance policy, or license to which the Company is or was a party; e. any incurrence of indebtedness for borrowed money or otherwise by the Company to any nontrade creditor; f. any damage, destruction, or loss, whether or not covered by insurance, likely to materially and adversely affect the properties or business of the Company; g. any labor or employment dispute or disagreement, strike, slow down or lockout, affecting or likely to materially adversely affect, the business or prospects of the Company; h. any material dispute with any supplier or customer regarding the quality or quantity of any goods, materials, or services provided to or by the Company regarding the terms of any arrangement with any such supplier or customer, or any notice from any such supplier or customer that it will or may cease doing business with the Company; i. any other changes in the condition (financial or otherwise), assets, liabilities, business prospects or operations of the Company, that have been, or are likely to be, either individually or in the aggregate, materially adverse to the Company; j. any increase in the compensation or other benefits payable or to become payable to any of the employees of the Company, other than general salary increases in the ordinary course of the business, consistent with past practice, or any increase in the compensation or other benefits payable or to become payable to any officer or director or any increase in the benefits provided under any employee benefit plans; k. any declaration or payment of any dividend or any distribution; or l. any authorization or agreement or other commitment to do any of the foregoing. 3.08 Employee and Related Contracts and Transactions with Affiliates. Except only as to this Agreement and the laws, regulations, contracts, agreements, plans, and commitments ("Arrangements") that are listed and described in Schedule 3.08, the Company is not a party to or subject to any of the following, whether written or oral: a. any Arrangement for personal services with any person or firm that is not by its terms terminable at will, without penalty; b. any Arrangement providing for bonuses, pensions, deferred compensation, retirement payments, profit sharing, incentive pay, severance pay, hospitalization, medical expense, death benefits, disability benefits, or other employee benefits; c. any Arrangement providing for insurance for any officer, consultant, director, employee, or members of their families; d. any Arrangement with any labor union; or e. any Arrangement with any officer, director, employee, or stockholder, of the Company or the spouse or children of any such officer, director, employee, or stockholder, or any corporation or other entity which is controlled or majority-owned by any of such persons, individually or collectively, including payments or loans to or from the Company to such persons. 3.09 Legal Proceedings. Except as set forth in Schedule 3.09: a. there is no action, suit, arbitration proceeding or formal investigation of any kind pending or to Seller's knowledge threatened, and no claims or grievances have, to Seller's knowledge, been made that, if valid, would involve (either individually or in the aggregate) uninsured expenditures (including reasonably estimated attorney fees and expenses) by the Company, in excess of $10,000, or otherwise would materially and adversely affect the Company's financial condition, results of operations or business prospects. b. the Company has not committed any act, or failed or omitted to take any action, which act or omission could give rise to any material legal action, investigation, inquiry, or other proceeding before any court or administrative agency including but not limited to acts or omissions related to any labor, health and safety, or environmental regulation; and c. to Seller's knowledge the Company is in compliance with the provisions of all applicable orders, decrees, statutes, regulations, ordinances, and other laws that materially affect the conduct of its business and the ownership of its properties. Seller has furnished or made available to Purchaser copies of all pleadings, complaints, citations, or allegations, and copies of all opinions of legal counsel evaluating or discussing the likelihood and/or the amount of any such potential liability. 3.10 Property. The Company owned all of the property, including all intangible property, reflected on the Balance Sheets provided pursuant to Section 3.06 of this Agreement as of the date of such Balance Sheets. The Company owns all property reasonably required to operate the business of the Company as presently conducted. Property reflected on the Balance Sheets includes all property in which the Company has any interest on such dates, except as changed in the ordinary course of business, none of such changes being, either individually or in the aggregate, materially adverse to the Company. The Company has good, clear and marketable title to and possession of all such property free and clear of all restrictions, interests, or encumbrances of any kind, except as set forth on Schedule 3.10. Except as disclosed on Schedule 3.10, to Seller's knowledge all buildings, fixtures, furniture, vehicles, machinery, and equipment owned or used by the Company are in good condition and repair, ordinary wear and tear accepted. No hazardous substance has been disposed of or released at any property owned or used by the Company nor disposed of or released from any such property, nor otherwise disposed of or released pursuant to the operations of the Company including but not limited to the transport of or arranging for the transport of hazardous substances, except in the regular course of the Company's business and in compliance with all applicable laws, ordinances, codes, and regulations. There is no friable asbestos on any such property. To Seller's knowledge the Company has not received any notice of violation of any applicable zoning, environmental, or safety regulation or ordinance, or any other law, order, ordinance, regulation, or requirement relating to its operations or its properties and (a) there is no such violation; and (b) to Seller' knowledge all buildings and structures owned or used by the Company conforms with all applicable laws, ordinances, codes, and regulations. 3.11 Leases. Seller has provided Purchaser copies of all of the real and personal property leased by or to the Company. All leases are valid, subsisting and enforceable in accordance with their terms, and no party is in default under any such lease. No hazardous substance has been disposed of or released at or from any of the real or personal property leased by or to the Company except in the regular course of the Company's business and in compliance with all applicable laws, ordinances, codes, and regulations. 3.12 Franchises, Licenses, and Obligations. To Seller's knowledge, the Company owns, or has legally enforceable rights in, all patents, applications for patents, inventions, processes, copyrights, trade names, trademarks, service marks, licenses, franchises, registrations and applications therefor, software, and technical information used in connection with, or necessary to, the conduct of business as presently conducted, each of which is listed and described on Schedule 3.12. None of the business activities engaged in by the Company infringe upon the intellectual property rights of any person. 3.13 Insurance. Seller has provided Purchaser copies of all insurance policies maintained by the Company. All such insurance policies are in full force and effect, and the Company is not in default of any obligations under any such policies. Seller has no reason to believe that any of the policies will not be renewed by the insurer upon expiration, or will be renewed only on the basis that there will be a material increase in the premiums. 3.14 Accounts and Notes Receivable. The accounts, contracts, and notes receivable of the Company shown or reflected on the Financial Statements provided pursuant to Section 3.06 are the result of bona fide transactions and, to Seller's knowledge, are good and collectible in the amounts there shown, and all such receivables acquired subsequent to the date of such statements are the result of bona fide transactions and, to Seller's knowledge, are good and collectible in the aggregate amounts shown on the books of the Company in all cases after application of reserves for returns and bad debts in accordance with generally accepted accounting principles consistently applied. 3.15 Compliance with Certain Instruments. The Company is in compliance with all material obligations under all contracts and agreements to which it is bound or by which any of its properties may be affected. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will result in the imposition of any lien or encumbrance on any property of the Company or accelerate the maturity of any indebtedness of the Company or be an event that, by itself or by the lapse of time, giving of notice, or otherwise, would constitute a material breach of, default under, or cause the acceleration of the expiration of, any contract or agreement to which any of the Company is a party. 3.16 Minute Books and Stock Records. The minute books of all proceedings of the boards of directors and shareholders of the Company, have been made available to Purchaser, reflect all necessary signatures, set forth the Company's respective articles of incorporation and bylaws, as amended, and reflect that the Company has taken all action required by statute. The stock transfer books and stock ledgers of the Company are in good order, complete, accurate, up-to-date, and reflect all necessary signatures, and set forth all stock and securities issued, transferred, and surrendered. No transfer has been made without surrender of the proper certificate to the Company, duly endorsed, and the Company has cancelled and retained such certificates in its stock transfer records. 3.17 Persons Authorized to Act. Schedule 3.17 sets forth with respect to the Company: a. All bank or other financial institution accounts of the Company and the names of each person authorized to draw on each such account; b. All safe deposit boxes of the Company and the names of each person entitled to have access to each safe deposit box; c. The name of each person authorized to borrow money (or furnish security for the same) or to transfer any securities owned by the Company; and d. Each power of attorney granted by the Company to any person(s) for any purpose. 3.18 Accuracy of Representations. Seller has not made any misstatements of material fact, or omitted to state any material fact, necessary to make complete, accurate, and not misleading any representation, warranty, schedule, exhibit, or agreement set forth or described in this Agreement or delivered in connection with the transactions contemplated by this Agreement. 3.19 Governmental and Third Party Consents. Except as set forth in Schedule 3.19, no consent, approval, or authorization of, or designation, declaration, or filing with, any governmental authority or other person on the part of the Company or Seller is required in connection with the execution, delivery, or performance of this Agreement. 3.20 ERISA. Except as set forth in Schedule 3.08, Company has never sponsored or maintained any "pension plans," within the meaning of the Employee Retirement Income Security Act of 1974, as originally executed and as subsequently amended. 3.21 Survival of Warranties, Representations, and Covenants. The representations and warranties of Seller contained in this Agreement or contained in any document or certificate given in order to carry out the transactions contemplated hereby shall survive the execution and delivery of this Agreement and the Closing, and, with the exception of the warranties set out in Sections 3.01 through 3.03, Section 3.05, and the first four sentences of Section 3.10, shall terminate and expire except as to matters for which Purchaser has provided notice to Seller of the inaccuracy or breach of such representations or warranties with respect to any theretofore unasserted claim on August 31, 2001. 3.22 Brokers. Seller has not taken any action that has obligated or could obligate Purchaser or the Company to pay any fee or commission to any broker, finder, investment banker or other intermediary in connection with the transactions contemplated by this Agreement. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser represents and warrants to Seller as follows: 4.01 Organization. Purchaser is a corporation duly organized and validly existing under the laws of the State of Oregon, with all requisite power to own or lease its properties and carry on its business as presently owned or conducted and to take any action contemplated by Purchaser pursuant to this Agreement. 4.02 Capacity, Authorization and Effect of Agreement. Purchaser has all requisite corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and all of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement constitutes the valid and binding obligation of Purchaser and is enforceable against it in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization and similar laws affecting creditors generally and by the availability of equitable remedies. 4.03 Absence of Breach. The execution and delivery of this Agreement does not, and the performance of this Agreement will not:(a) violate the organization documents of Purchaser; (b) violate any existing applicable law, rule, regulation, judgment, order or decree of any governmental instrumentality or court having jurisdiction over Purchaser; or (c) require Purchaser to obtain any authorization, consent, approval or waiver from, or to make any filing with any governmental body, authority, or other person. 4.04 Brokers. Purchaser has not taken any action that has obligated or could obligate Seller or the Company to pay any fee or commission to any broker, finder, investment banker or other intermediary in connection with the transactions contemplated by this Agreement. 4.05 Accuracy of Representations. Purchaser has not made any misstatement of material fact, or omitted to state any material fact, necessary to make complete, accurate and not misleading any representation, warranty, schedule, exhibit or agreement set forth or described in this Agreement or delivered in connection with the transactions contemplated by this Agreement. 4.06 Investment Intent. Purchaser intends to acquire the Seller's Shares for investment and without a view to resale or further distribution. Purchaser has no present intent to resell the Seller's Shares. 4.07 Survival of Representations and Warranties. The representations and warranties of Purchaser contained in this Agreement shall survive the Closing and expire on August 31, 2001. ARTICLE 5 COVENANTS OF SELLER Seller covenants to Purchaser that he will do or cause to be done the following: 5.01 Execution of Documents. Seller will at any time or from time to time after the date of this Agreement (including after Closing) execute whatever minutes of meetings or other instruments and take whatever action Purchaser may deem necessary or desirable (and which Seller may lawfully do) to carry out the intent and purposes of the transactions contemplated by this Agreement. Seller shall also use his best efforts to obtain the cooperation of all other present and previous directors and officers of the Company to execute such documents and take such actions in accordance with the foregoing. 5.02 Investigation of Business and Examination of Documents. During the period between the execution of this Agreement and the Closing Date, Seller will provide access to and will permit Purchaser to make such investigation of the operations, properties, assets and records of the Company and of the financial and legal condition thereof, as Purchaser deems necessary or advisable to familiarize itself with such operations, properties, assets, records and other matters. Without limiting the generality of the foregoing, Seller will permit Purchaser to have access to the premises used by the Company upon reasonable advance request and during regular business hours, and will produce for inspection and provide copies to Purchaser of: a. all agreements and other documents referred to in Article 3 hereof or in any of the Schedules attached hereto and all other contracts, leases, licenses, title documents, title opinions, insurance policies, pension plans, information relating to employees, customer lists, information relating to customers and suppliers, documents relating to all liabilities, documents relating to legal or administrative proceedings, and all other documents of or in the possession of the Company; b. all books, records, accounts, tax returns and financial statements of the Company; and c. all other information which in the reasonable opinion of Purchaser is required in order to make an examination of the Company. 5.03 Conduct of Business. Except as contemplated by this Agreement or with the prior written consent of Purchaser, through the Closing Date Seller will: a. operate the Company, only in the usual and ordinary course thereof, consistent with past practice, and maintain accounting records in accordance with generally accepted accounting principles consistently applied; b. take all reasonable and appropriate actions within his control to ensure that the representations and warranties in Article 3 hereof remain true and correct at the Closing Date, with the same force and effect as if such representations and warranties were made at and as of the Closing Date; c. forthwith advise Purchaser of any facts that come to Seller's attention which would cause any of the representations and warranties herein contained to be untrue in any material respect; d. use his best efforts to: (i) preserve the tangible and intangible assets and goodwill of the Company and relationships with customers, suppliers and others having dealings with the Company; (ii) keep available the services of all employees; and (iii) maintain in full force and effect all agreements to which the Company is a party; e. take all other reasonable and appropriate action reasonably requested by Purchaser in order that the condition of the Company will not be impaired; f. forthwith advise Purchaser in writing of any material adverse change in the condition of the Company or its assets; g. use best efforts to maintain all of the tangible properties and assets of the Company in the same condition as they now exist, ordinary wear and tear excepted; h. use best efforts to maintain the books, records and accounts of the Company in the ordinary course and record all transactions on a basis consistent with past practice; i. not create, incur, assume, or permit to exist any encumbrance upon any of the properties or assets of the Company except as incurred in the ordinary course of business and consistent with past practices; j. not dispose of any of the properties or assets of the Company except in the ordinary course of the business; k. not terminate or waive any right of substantial value of the Company; l. not make any capital expenditure or expenditures relating to the Company in excess of $25,000 in the aggregate; m. keep in full force all of the current insurance policies of the Company; n. take all reasonable and appropriate actions within Seller's control to ensure that the Company performs all obligations falling due under all agreements relating to the Company or assets to which the Company is a party or by which the Company is bound; o. not enter into any agreement other than agreements made in the ordinary course of business consistent with past practice; p. not increase, in any manner, the compensation or employee benefits of any of the employees of the Company or pay or agree to pay to any of them any pension, severance or termination amount or other employee benefit not required by any of the employee benefit plans and programs and collective bargaining agreements referred to in the Schedules attached hereto; and q. from time to time, forthwith amend the Schedules to this Agreement to reflect any change or inaccuracy therein; provided that no such amendment to any Schedule shall be effective to modify any representation or warranty of Seller unless Purchaser shall have failed to object thereto within 10 days following written notice to Purchaser of the amendment or modification; provided, further, however, that if Purchaser timely registers its written objections to such modification of a Schedule, then Seller shall use his best efforts to address such objections, prior to Closing; if Seller fails to address such objections to Purchaser's satisfaction, Purchaser's sole remedy shall be to elect to terminate this Agreement without liability to the other parties; if, however, such objections are timely registered but Purchaser elects not to terminate this Agreement and to proceed to the Closing, then the Closing shall operate as a waiver of Purchaser's objections and shall relieve Seller from any liability arising out of the modification in question. 5.04 Lost Certificates. If any of Seller's certificates for Seller's Shares to be delivered at the Closing pursuant to Section 2.02 have been lost, stolen or destroyed, Seller shall request the issuance of new certificates from the Company and take such further actions as may reasonably be required to obtain such replacement certificate or certificates prior to the Closing Date. ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER The obligation of Purchaser under this Agreement to consummate the purchase of the Seller's Shares at the Closing shall be subject to the satisfaction, at or prior to the Closing, of all of the following conditions, any one or more of which may be waived in whole or in part by Purchaser in writing: 6.01 Representations and Warranties Accurate. All representations and warranties of Seller contained in Article 3 shall be true and correct in all respects at and as of the Closing Date as if such representations and warranties were made at and as of the Closing Date, and all covenants contained in Article 5 shall have been complied with prior to and as of the Closing Date. 6.02 Performance by Seller. Seller shall have performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed and complied with by them prior to or on the Closing Date, including, without limitation, any and all third party contracts. 6.03 Consents and Authorizations. Seller shall have obtained all governmental authorizations, approvals, consents and waivers required on the part of Seller or the Company and all third party consents, necessary to effect the Closing and the transactions contemplated by this Agreement. 6.04 Absence of Certain Events. There shall not have occurred any of the following events: a. there is threatened, instituted or pending any action, proceeding or application by or before any court or governmental agency or other regulatory or administrative agency or commission, domestic or foreign, by any government or governmental authority or other regulatory agency or commission, domestic or foreign, or by any other person, domestic or foreign:(i) challenging the acquisition by Purchaser of any of the Seller's Shares pursuant to this Agreement or otherwise seeking to restrain or prohibit the consummation of the transactions contemplated hereby; (ii) seeking to obtain any material damages directly or indirectly relating to the transactions contemplated hereby; (iii) seeking to prohibit or limit the ownership or operation by Purchaser of all or any portion of the businesses or assets of the Company or of the Seller's Shares or to compel Purchaser or the Company to dispose of, divest or hold separate the Seller's Shares or all or any portion of Purchaser's or the Company's businesses or assets as a result of the transactions contemplated hereby; (iv) making, or seeking to make, the purchase of, or payment for, some or all of the Seller's Shares illegal, or resulting in a delay in the ability of Purchaser to pay for some or all of the Seller's Shares, or making consummation of the transactions contemplated hereby unduly burdensome to Purchaser; (v) imposing, or seeking to impose, material limitations on the ability of Purchaser effectively to acquire or hold or to exercise full rights of ownership of any Seller's Shares acquired by it, including, but not limited to, the right to vote any Seller's Shares purchased by it on all matters properly presented to the stockholders of the Company; or (vi) which, in any event, in the reasonable judgment of Purchaser, materially adversely affects, or may adversely affect, Purchaser or the Company or the value of the Seller's Shares to Purchaser; or b. there shall be any action taken, proposed or threatened, or any statute, rule, regulation, judgment, order or injunction (preliminary or permanent) proposed, sought, enacted, promulgated, entered, enforced or deemed applicable to the Agreement or other subsequent business combination, by any government, governmental authority or other regulatory or administrative agency or commission or court, domestic or foreign, that, in the reasonable judgment of Purchaser,will, directly or indirectly, result in any of the consequences referred to in clauses (i) through (vi) of paragraph a. above; or c. there shall be any change (or any condition, event or development involving a prospective change) or threatened change in the structure, business, properties, assets, liabilities, capitalization, stockholders' equity, condition (financial or otherwise), operations, licenses or franchises, results of operations or prospects of the Company which, in the reasonable judgment of Purchaser, has or will have a materially adverse effect on the Company or Purchaser shall have become aware of any fact (including, but not limited to, any change or development) which, in the reasonable judgment of Purchaser, has or will have a material adverse effect on the Company or the value of the Seller's Shares to Purchaser. 6.05 Examinations. Purchaser shall be satisfied with the results of the examinations and investigations made pursuant to Section 5.02 hereof. 6.06 Closing Arrangements. Seller shall have delivered to Purchaser a certificate, dated the Closing Date and signed by Seller in form and substance acceptable to Purchaser, confirming that all conditions to Closing have been satisfied. The form and content of any and all arrangements and instruments for the Closing shall be reasonably acceptable to Purchaser. 6.07 Employment Agreement. Purchaser or its designated affiliate shall have entered into an employment agreement with Seller, satisfactory in form and substance to Purchaser, that supersedes all prior employment agreements between Seller and Purchaser or its affiliates both written and oral. 6.08 401(k) Plan Termination. The Board of Directors or Shareholders of the Company shall have resolved to terminate the Company's 401(k) Profit Sharing Plan identified in Schedule 3.08. 6.09 Investment Agreement Termination. That certain Investment Agreement dated June 1, 1992, by and among the Company, Greenbrier Leasing Corporation, and Seller shall have been terminated. ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER The obligations of Seller under this Agreement to consummate, or cause the consummation of, the sale of the Seller's Shares at the Closing shall be subject to the fulfillment, at or prior to the Closing, of all of the following conditions, any one or more of which may be waived in whole or in part by Seller: 7.01 Representations and Warranties Accurate. All representations and warranties of Purchaser contained in Article 4 shall be true and correct in all material respects at and as of the Closing Date as if such representations and warranties were made on and as of the Closing Date. 7.02 Performance by Purchaser. Purchaser shall have performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement to be performed and complied with by it prior to or on the Closing Date. 7.03 Authorizations, Legal Prohibition. Purchaser shall have obtained all governmental authorizations, approvals, consents and waivers on its part, the lack of which prior to Closing, under any applicable law, rule or regulation, would render legally impermissible the purchase hereunder of the Seller's Shares by Purchaser. On the Closing Date, there shall exist no injunction or other order issued by a court of competent jurisdiction which would make unlawful the consummation of the transactions contemplated by this Agreement. ARTICLE 8 INDEMNIFICATION 8.01 Indemnification by Seller. Seller shall indemnify and save Purchaser harmless for, from, and against any loss, damages or deficiencies suffered by Purchaser or by the Company as a result of any breach of representation, warranty or covenant on the part of Seller contained in this Agreement or in any certificate or document delivered pursuant to or contemplated by this Agreement, and all claims, demands, costs and expenses, including legal fees, in respect of the foregoing. 8.02 Indemnification by Purchaser. Purchaser shall indemnify and save Seller harmless from and against any loss, damages, or deficiencies suffered by Seller as a result of any breach of any representation, warranty or covenant on the part of Purchaser contained in this Agreement or in any certificate or document delivered pursuant to or contemplated by this Agreement, and all claims, demands, costs and expenses, including legal fees in respect of the foregoing. 8.03 Notice of Claim. The indemnified party shall promptly give notice to the indemnifying party of any claim for indemnification pursuant to Section 8.01 or 8.02 (a "Claim", which term shall include more than one Claim). Such notice shall specify whether the Claim arises as a result of a claim by a person against Purchaser or Seller (a "Third Party Claim") or whether the Claim does not so arise (a "Purchaser's Claim" or a "Seller's Claim"), and shall also specify with reasonable particularity (to the extent that the information is available); a. the factual basis for the Claim; and b. the amount of the claim, or, if an amount is not then determinable, an approximate and reasonable estimate of the likely amount of the Claim. 8.04 Procedure for Indemnification. a. Purchaser's or Seller's Claims. With respect to Purchaser's or Seller's Claims, following receipt of notice of a Claim, the indemnifying party shall have 30 days to make such investigation of the Claim as it or they consider necessary or desirable. For the purpose of such investigation, the indemnified party shall make available to the indemnifying party the information relied upon by the indemnified party to substantiate the Claim. If Purchaser and Seller agree at or prior to the expiration of such 30 day period (or any mutually agreed upon extension thereof) to the validity and amount of such Claim, the indemnifying party shall immediately pay to the indemnified party the full agreed upon amount of the Claim. If Purchaser and Seller do not agree within 30 days (or any mutually agreed upon extension thereof), Purchaser and Seller agree that the dispute shall be submitted to arbitration by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Such dispute shall not be made the subject matter of an action in a court of law or equity by either Purchaser or Seller unless the dispute has first been submitted to arbitration and finally determined by such arbitration. Any action commenced thereafter shall only be for judgment in accordance with the decision of the arbitrators and the costs incidental to the action. In any such arbitration the decision of the arbitrator shall be conclusively deemed to determine the rights and liabilities as between the parties to the arbitration in respect of the matter in dispute. b. Third Party Claims. With respect to any Third Party Claim, the indemnifying party shall have the right, at its expense, to participate in or assume control of the negotiation, settlement or defense of such Third Party Claim and, in such event, shall reimburse the indemnified party for all out-of-pocket expenses as a result of such participation or assumption. If the indemnifying party elects to assume such control, the indemnified party shall cooperate with the indemnifying party, shall have the right to participate in the negotiation, settlement or defense of such Third Party Claim at its own expense and shall have the right to disagree on reasonable grounds with the selection and retention of counsel, in which case counsel satisfactory to both parties shall be retained by the indemnifying party. If the indemnifying party, having elected to assume such control, thereafter fails to defend any such Third Party Claim within a reasonable time, the indemnified party shall be entitled to assume such control and the indemnifying party shall be bound by the results obtained with respect to such Third Party Claim. 8.05 Additional Rules and Procedures. The obligation to indemnify in respect of Claims shall also be subject to the following: a. in the event of any claims under this Article 8, no amount shall be owing until the amount of damage, loss, or expense incurred by the indemnified party exceeds $50,000 in the aggregate, but once the aggregate sum of $50,000 is exceeded, the entire amount of all aggregate damages, losses, or expenses shall be owed. Notwithstanding anything to the contrary herein, neither Seller's nor Purchaser's maximum liability under this Article 8 shall exceed the Purchase Price. b. with respect to any indemnifiable claim hereunder, the amount recoverable by the parties seeking indemnity shall take into account the present value of any insurance or third party indemnification recoveries or reimbursements realized by or inuring to the benefit of such party, and any tax benefits, arising from the same incident or set of facts or circumstance giving rise to the claim for indemnity. c. Purchaser shall have no right to seek indemnity hereunder, or otherwise to pursue any right, claim or remedy against Seller with respect to any breach of warranty or misrepresentation the specific factual basis of which was actually known by Larry G. Brady, William A. Furman, or Marney Malik prior to the Closing, unless, prior to the Closing, Purchaser notifies Seller of such breach of warranty or misrepresentation and gives Seller 30 days to cure the same. d. in the event that any Third Party Claim is of a nature such that the indemnified party is required by applicable law to make a payment to any person (a "Third Party") with respect to such Third Party Claim before the completion of settlement negotiations or related legal proceedings, the indemnified party may make such payment and the indemnifying party shall, forthwith after demand reimburse the indemnified party for any such payment. If the amount of any liability of the indemnified party under the Third Party Claim in respect of which such a payment was made, as finally determined, is less than the amount which was paid by the indemnifying party to the indemnified party, the indemnified party shall, forthwith after receipt of the difference from the Third Party, pay the amount of such difference to the indemnifying party. e. except in the circumstance contemplated by paragraph 8.04 b. above, and whether or not the indemnifying party assumes control of the negotiation, settlement or defense of any Third Party Claim, the indemnified party shall not negotiate, settle, compromise or pay any Third Party Claim except with the prior written consent of the indemnifying party (which consent shall not be unreasonably withheld); f. the indemnified party shall not permit any right of appeal in respect of any Third Party Claim to terminate without giving the indemnifying party notice thereof and an opportunity to contest such Third Party Claim; g. The parties shall cooperate fully with each other with respect to Third Party Claims, shall keep each other fully advised with respect thereto (including supplying copies of all relevant documentation promptly as it becomes available); h. notwithstanding paragraph 8.04.b., the indemnifying party shall not settle any Third Party Claim or conduct any related legal or administrative proceeding in a manner which would, in the opinion of the indemnified party, acting reasonably, have a material adverse impact on the indemnified party. 8.06 Payment of Claims. Subject to the provisions of this Article, the indemnified party shall be entitled to payment from the indemnifying party immediately upon final determination of any claim for which indemnification is due, whether by settlement, judgment, arbitrator's decision, or other final resolution of the claim. Any payment not made by the indemnifying party to the indemnified party within 30 days after such final determination shall bear interest at a rate equal to the lesser of 15 percent per annum or the maximum rate permitted by law. ARTICLE 9 MISCELLANEOUS 9.01 Cooperation. Each party hereto agrees that it is its intent to consummate this Agreement in accordance with its terms, and they respectively agree to exert their best efforts to that end, including without limitation, the removal or satisfaction of any objections to the validity or legality of this Agreement. Seller agrees to cooperate fully with Purchaser in connection with the purchase of the Seller's Shares and any transaction related thereto and seek in a timely manner to make any filings and to obtain any consents, permits, authorizations, approvals or waivers required to be obtained. 9.02 Termination. This Agreement may be terminated pursuant to: (a) the mutual consent of Purchaser and Seller; or (b) by written notice from one party to the other if the Closing does not occur on or before August 30, 1996, or (c) at Purchaser's election pursuant to Section 5.03.q., hereof. There shall be no further liability hereunder on the part of any party or any of its partners, directors, officers or trustees if this Agreement shall be so terminated, except by reason of the breach of this Agreement by either party hereto. 9.03 Specific Performance. Seller acknowledges that the unique nature of the Seller's Shares to be purchased by Purchaser pursuant to this Agreement renders money damages an inadequate remedy for the breach by Seller of its obligations under this Agreement, and Seller agrees that in the event of such breach, Purchaser shall, upon proper action instituted by it, be entitled to a decree for specific performance of this Agreement according to its terms. 9.04 Expenses. Each party will pay all of its own fees and expenses incurred in connection with this Agreement. 9.05 Applicable Law, Attorney Fees. This Agreement shall be governed by and construed in accordance with the laws of Oregon. If any action is instituted by any party to this Agreement to interpret or enforce this Agreement, the prevailing party shall be entitled to recover as part of the award its reasonable attorney fees and costs incurred in any such action including at arbitration, trial, bankruptcy proceeding, and appeal. 9.06 Counterparts. This Agreement may be executed in two or more counterparts, each of which counterparts shall be deemed an original, but all of which together shall constitute one and the same instrument. 9.07 Notices. Any notices or other communications hereunder shall be in writing and shall be deemed to have been duly given (and shall be deemed to have been duly received if so given) if personally delivered or sent by telegram, cable, telex or facsimile or by registered or certified mail, postage prepaid, addressed to the respective parties as follows: If to Purchaser: Larry G. Brady Vice President and Chief Financial Officer The Greenbrier Companies, Inc. Suite 200 One Centerpointe Drive Lake Oswego, Oregon 97035 Telephone:(503) 684-7000 Telefax:(503) 684-7553 With a copy to: Norriss M. Webb Executive Vice President and General Counsel The Greenbrier Companies, Inc. Suite 200 One Centerpointe Drive Lake Oswego, Oregon 97035 Telephone:(503) 684-7000 Telefax:(503) 684-7553 If to Seller: A. Daniel O'Neal, Jr. Tolan O'Neal Transportation & Logistics, Inc. Suite 500 200 West Thomas Seattle, Washington 98119 Telephone:(206) 282-0099 Telefax:(206) 282-3824 or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall only be effective upon receipt. Inadvertent failure to provide a copy of a notice shall not be deemed a breach of this Agreement. 9.08 Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns; provided, however, that Seller may not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of Purchaser, which may be granted or withheld in Purchaser's sole discretion; and provided further, however, that Purchaser shall have the unrestricted right to assign this entire Agreement at any time or any part of its rights or obligations hereunder from time to time to any affiliate of Purchaser, without relieving Purchaser of its obligations hereunder. 9.09 Severability. If any provision or portion of this Agreement shall become invalid or unenforceable for any reason:(a) the invalidity or unenforceability of any provision of portion thereof shall not affect the validity or enforceability of the other provisions or portions hereof; and (b) the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties to the end that the transactions contemplated hereby are fulfilled to the extent possible. 9.10 No Third Party Beneficiaries. This Agreement is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. 9.11 Entire Agreement. Except only as set forth in the written employment agreement referred to in Section 6.09 hereof: this Agreement constitutes the entire agreement between the parties pertaining to the subject matter hereof; there are no warranties, conditions or representations (including any that may be implied by statute) and there are no agreements in connection with such subject matter except as specifically set forth or referred to in this Agreement; and no reliance is placed on any warranty, representation, opinion, advice or assertion of fact made by any party hereto or its directors, officers, employees or agents, to any other party hereto or its directors, officers, employees or agents, except to the extent that the same has been reduced to writing and included as a term of this Agreement. Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such warranty, representation, opinion advice or assertion of fact, except to the extent aforesaid. 9.12 Waiver, Amendment. Except as expressly provided in this Agreement, no amendment or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement shall constitute a waiver of any other provision nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. IN WITNESS WHEREOF, Purchaser and Seller have caused this Agreement to be duly executed on the day and year first above written. PURCHASER: SELLER: GREENBRIER LOGISTICS, INC. By: /s/ Larry G. Brady /s/ A. Daniel O'Neal ----------------------- -------------------- Its: Vice President A. Daniel O'Neal ----------------------- CONSENT OF SPOUSE I, the undersigned, certify and agree that: 1. I am the spouse of A. Daniel O'Neal who signed the foregoing Agreement as Seller. 2. I have read the foregoing Agreement and I am aware that by its provisions my spouse agrees to sell all his shares of the Company, including my community property interest in them. I hereby consent to the sale, approve of the provisions of this Agreement, and agree that those shares and my interest in them are subject to the provisions of this Agreement and that I will take no action at any time to hinder operation of the Agreement on those shares or in my interest in them. DATE: July 2, 1996 /s/ Diane O'Neal ------------------------- ------------------------- Diane O'Neal EX-10.33 3 EMPLOYMENT AGREEMENT This Employment Agreement ("Agreement"), dated for reference purposes the 1st day of June, 1996, is by and between GREENBRIER LOGISTICS, INC., an Oregon corporation ("Company"), and A. DANIEL O'NEAL, JR. ("Executive") (collectively, "the Parties"). RECITALS A. By agreement to be dated June 28, 1996, (the "Stock Purchase Agreement"), Executive will sell and Company will purchase all of Executive's shares of Tolan-O'Neal Transportation & Logistics, Inc. held by Executive. B. Company is engaged in the business of commercial transportation scheduling and logistics. Company desires to employ Executive on a full-time basis as its Chairman to perform the duties set forth in this Agreement; and Executive desires to accept the employment. AGREEMENT NOW, THEREFORE, in consideration of the mutual promises, agreements and conditions set forth below, it is agreed as follows: 1. Employment. Company agrees to employ Executive and Executive agrees to accept employment by Company upon the terms and conditions hereinafter set forth. 2. Term. Subject to the provisions for termination in Section 8, the term of this Agreement shall be for five (5) years beginning on June 1, 1996. 3. Duties. Executive will perform duties as Chairman of Company, and such other duties as may be assigned to him from time to time by the Board of Directors of Company, provided that such duties are consistent with those duties customarily associated with such position. 4. Extent of Services; Restrictions. Executive shall devote his entire working time, attention and energies to the performance of his duties hereunder and shall not, during the term of this Agreement, be engaged in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage. Notwithstanding the foregoing, Executive may invest his assets in such form or manner as will not require services on his part. Executive shall at all times faithfully and to the best of his ability perform all of the duties that may be required of him pursuant to this Agreement. The duties shall be rendered at such places and times as the needs of Company shall require subject to reasonable travel burdens on Executive, consistent with past service to the Greenbrier Companies. 5. Compensation and Benefits. a. Base Compensation. Executive shall receive base compensation of $200,000 per year, payable in accordance with Company's standard payroll procedures for its non-union employees. b. Bonus Compensation. Executive shall be entitled to receive such bonus remuneration, if any, as the Board of Directors of Company shall authorize. Executive acknowledges that such bonuses are discretionary. c. Executive Benefits. Executive shall be entitled to such other fringe benefits as are normally accorded full-time employees of Company under its personnel policies adopted from time to time, which are not inconsistent with the terms of this Agreement; provided, however, Executive shall be entitled to maintain existing benefits or equivalents. Company shall have the right to modify or terminate any such fringe benefits and personnel policies at any time, except those benefits specifically provided in this Agreement. d. Stock Options. The Greenbrier Companies, Inc. shall grant a stock option to Executive on or before November 30, 1996 to purchase 50,000 shares of The Greenbrier Companies, Inc. common stock under the terms of The Greenbrier Companies' 1994 Stock Option program with fair market valuation of $12.12 per share. e. Expenses. Executive shall be entitled to reimbursement from Company for reasonable expenses, including club and trade association dues, necessarily incurred by Executive in the performance of Executive's duties under this Agreement, upon presentation of vouchers indicating in detail the amount and business purpose of each such expense and upon compliance with Company's reimbursement policies established from time to time. f. Car Allowance. The Company shall provide a car for Executive, for use in performing his duties hereunder, that is in keeping with his position and responsibilities, and the Company shall pay for full maintenance and operating costs for such car. 6. Vacation. Executive shall be entitled to four weeks of vacation with pay annually, to be taken at such time as may be acceptable to the Executive and Company giving consideration to the operating needs of Company. At the termination of Executive's employment, either at the end of the term of this Agreement or pursuant to Section 8, Executive shall be entitled to payment in lieu of vacation which was not taken in the year of termination. 7. Confidentiality; Noncompetition. a. Confidentiality. Executive acknowledges that during the course of his employment by Company, he has been and will be exposed to, have disclosed to him and may develop information that is proprietary to Company ("Confidential Information"). Confidential Information includes, but is not limited to, financial data, trade secrets, information concerning the operation, design and marketing of products, repairs and processes, business plans and procedures, customer lists, files and profiles needs analyses, calculations, data, manuals, specifications, performance standards, instructions and any other material or information related to Company, its business or operations, and the ideas and information relating thereto. Confidential Information does not include any information which is available to the public, in the public domain, or readily ascertainable or available from another legitimate source. Executive will at no time use or permit any other person or entity to examine, use or derive benefit from Confidential Information except in the course of performing his duties under this Agreement. Executive shall maintain all Confidential Information in the strictest confidence, and shall take all reasonable precautions to preserve its confidentiality during the term of this Agreement and thereafter. All documents and materials evidencing Confidential Information, and copies thereof, shall at all times remain the property of Company. Upon demand, Executive will deliver to Company all documents and other materials which contain or pertain to Confidential Information. b. Noncompetition. Provided that Company is not in breach of this Agreement, Executive agrees that during the term of this Agreement and for a period of two years following termination of his employment for any reason, Executive will not, without the consent of the Company, within the geographic area of North America: (1) Directly or indirectly own (as a proprietor, general or limited partner, shareholder, trust beneficiary or otherwise), manage, operate, participate in (as an employee, agent, manager, director, officer, consultant or otherwise), perform services or consult for or otherwise carry on in any capacity whatsoever for, a business engaged in providing services which directly compete with the Company's business or products; (2) Directly or indirectly induce or attempt to persuade any former, current or future employee, agent, manager, consultant, director of, or other participant in the Company's business to terminate such employment or other relationship; or (3) Directly or indirectly contact or solicit any customers of Company or any of its affiliates for the purpose of selling to the customers any products or services which are the same as or substantially similar to, or competitive with the products or services sold by Company or any of its affiliates during Executive's employment with Company; or (4) Directly or indirectly use Confidential Information in connection with any activity prohibited above. (5) Notwithstanding anything herein to the contrary, Executive may own an interest not in excess of 5% of a corporation whose shares are listed on a recognized stock exchange or traded in the over-the-counter market in any country in North America, which carries on a business which directly competes with the services or products provided by Company. c. Breach. Upon a breach by Executive of any of the terms or conditions of the confidentiality or noncompetition covenants, Company shall have the right to: (1) Recover from Executive its actual damages incurred by reason of such breach, including its attorney fees and costs of suit, if Company prevails, or provided that such is awarded to Company by way of an actual judgment; (2) Obtain injunctive relief to prevent the breach or continued breach of the covenants without proof of actual damages; and (3) Pursue any other remedy available at law or in equity. The provisions of this Section 7 shall remain in full force and effect following termination of this Agreement for any reason. 8. Termination. a. For Cause. Company may terminate Executive's employment at any time for cause with immediate effect upon delivering written notice thereof to Executive. For purposes of this Agreement, "for cause" shall mean: (i) gross negligence or willful misconduct in the performance of Executive's duties; (ii) embezzlement, theft, larceny, material fraud or other acts of dishonesty; (iii) failure to cure any violation of any of the provisions of this Agreement within thirty (30) days of written notice from the Company; (iv) conviction of or entrance of a plea of guilty or nolo contendere to a felony or other crime which has or may have a material adverse effect on Executive's ability to carry out his duties under this Agreement or upon the reputation of Company; (v) conduct involving moral turpitude; or (vi) refusal or repeated failure after warning by the Company to carry out the reasonable directives of the Board of Directors, provided that such directives are consistent with Executive's duties herein. Upon termination for cause, Company's sole and exclusive obligation will be to pay Executive his base compensation earned through the date of termination, and any accrued but unused vacation during the year of termination and outstanding reimbursements, and Executive shall not be entitled to any compensation after the date of such termination. b. Without Cause. Company may terminate Executive's employment at any time without cause upon written notice. Upon termination without cause, Company's sole and exclusive obligation will be to pay to Executive his base compensation for the lesser of one year from the date of termination or the remaining term of this Agreement, and Executive shall not be entitled to any other compensation after the date of such termination, except any accrued, but unused or unpaid, vacation in the year of termination or compensation, and any unreimbursed expenses incurred in conformance with this Agreement prior to termination. Company's obligation under this paragraph shall be reduced by any compensation Executive earns subsequent to his termination and during the period that Company is required to pay Executive his base compensation. c. Upon Death. In the event of Executive's death during the term of this Agreement, Company's sole and exclusive obligation will be to pay to Executive's widow, if living, or to his estate, if his widow is not then living, Executive's base compensation through the last day of the month in which his death occurs and any accrued, but unused, vacation in the year of Executive's death. d. Upon Disability. This Agreement shall terminate, at Company's option, upon Executive's total disability. Executive's total disability means his inability to perform his duties under this Agreement by reason of illness, mental or physical disability or accident for a period of six consecutive months or for a period of twelve months (whether or not consecutive in any consecutive 24-month period). Upon termination by reason of Executive's disability, Company's sole and exclusive obligation will be to pay Executive his base compensation through the date of termination and any accrued, but unused or unpaid, vacation or compensation. If Executive claims disability, Company shall have the authority to consult with Executive's attending physicians. Any and all information obtained through such consultation shall be treated as confidential. e. Executive may terminate his employment under this Agreement upon written notice to Company. Upon such termination, Executive shall be entitled to all base compensation and unused vacation in the year of termination, accrued to the date of termination, and to reimbursement of any reasonable business expenses incurred on behalf of the company prior to termination. 9. Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and personally delivered or sent by registered or certified mail addressed as follows: If to Company: William A. Furman Greenbrier Logistics, Inc. Suite 200 One Centerpointe Drive Lake Oswego, OR 97035 Telephone: (503) 684-7000 Facsimile: (503) 684-7553 With a copy to: Norriss M. Webb Executive Vice President and General Counsel The Greenbrier Companies, Inc. Suite 200 One Centerpointe Drive Lake Oswego, OR 97035 Telephone: (503) 684-7000 Facsimile: (503) 684-7553 And a copy to: Larry G. Brady Vice President and Chief Financial Officer The Greenbrier Companies, Inc. Suite 200 One Centerpointe Drive Lake Oswego, OR 97035 Telephone: (503) 684-7000 Facsimile: (503) 684-7553 If to Executive: A. Daniel O'Neal, Jr. Greenbrier Logistics, Inc. Suite 500 200 West Thomas Seattle, WA 98119 Telephone: (206) 282-0099 Facsimile: (206) 282-3824 Inadvertent failure to provide a courtesy copy shall not be deemed a breach of this Agreement. Either party may, by notice in writing to the other party, change the address to which notices to that party are to be given. 10. Waiver. The waiver by either party of the breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by such party. 11. Modification. No amendment, modification or discharge of this Agreement shall be valid unless it is in writing and duly executed by the party to be charged therewith. 12. Construction, Attorney Fees. This Agreement shall be construed in accordance with and governed by the laws of the state of Oregon. If any action is instituted by any party to this Agreement to interpret or enforce this Agreement, the prevailing party shall be entitled to recover as part of the award its reasonable attorney fees and costs incurred in any such action including at arbitration, trial, bankruptcy proceeding, and appeal. 13. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. 14. Benefit. This Agreement shall inure to and be binding upon the Parties, their heirs, personal representatives, successors and assigns, provided Executive may not assign this Agreement. 15. Entire Agreement. The entire agreement between the Parties is contained herein. This Agreement supersedes any and all prior agreements and understandings between the Parties. There are no promises or representations made on behalf of Company to induce Executive to enter into this Agreement which are not set forth herein. Executive expressly acknowledges and agrees that this Agreement extinguishes all rights and interest in Additional Compensation pursuant to Section 4.5 of the Prior Contract. 16. Arbitration. Except for any dispute arising under Section 7 above, any and all disputes arising from or pertaining to this Agreement, or the interpretation or enforcement thereof, shall be resolved by binding arbitration. The arbitration shall be conducted by an independent and neutral arbiter mutually agreed upon by the Parties. 17. Captions. The paragraph captions are for convenience of the Parties and shall not affect the meaning or interpretation of this Agreement. 18. Counterparts. This Agreement may be executed in two or more counterparts, each of which counterparts shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first written above. /s/ A. Daniel O'Neal --------------------------------- A. DANIEL O'NEAL, JR. GREENBRIER LOGISTICS, INC. By /s/ Larry G. Brady -------------------------------- Its Vice President ------------------------------- THE GREENBRIER COMPANIES, INC. By /s/ Larry G. Brady -------------------------------- Its Vice President -------------------------------- EX-27 4
5 The schedule contains summary financial information extracted from the company's consolidated financial statements and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS AUG-31-1996 MAY-31-1996 18,817 0 49,857 0 65,065 91,845 35,170 0 579,453 68,878 0 0 0 14 108,117 579,453 0 379,996 308,117 356,051 0 0 18,903 23,945 10,102 13,843 0 0 0 13,843 .98 .98 Of this amount, $13,013 is restricted.
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