-----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, OpOCzSAuYY7VOSRhsmcxSCMXwrROXi1VIHMUme0NDAZF7Pw55w0kQEtamIO1rvNs 8TdaYC/3E9zQucxeDqFbWQ== 0000950134-99-005753.txt : 19990630 0000950134-99-005753.hdr.sgml : 19990630 ACCESSION NUMBER: 0000950134-99-005753 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRINITY INDUSTRIES INC CENTRAL INDEX KEY: 0000099780 STANDARD INDUSTRIAL CLASSIFICATION: RAILROAD EQUIPMENT [3743] IRS NUMBER: 750225040 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-06903 FILM NUMBER: 99654194 BUSINESS ADDRESS: STREET 1: 2525 STEMMONS FREEWAY CITY: DALLAS STATE: TX ZIP: 75207-2401 BUSINESS PHONE: 2146314420 FORMER COMPANY: FORMER CONFORMED NAME: TRINITY STEEL CO INC DATE OF NAME CHANGE: 19720407 10-K405 1 FORM 10-K FOR FISCAL YEAR END MARCH 31, 1999 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM 10-K ------------------ (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NUMBER 1-6903 TRINITY INDUSTRIES, INC. (Exact name of registrant as specified in its charter) DELAWARE 75-0225040 (State of Incorporation) (I.R.S. Employer Identification No.) 2525 STEMMONS FREEWAY DALLAS, TEXAS 75207-2401 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (214) 631-4420 Securities Registered Pursuant to Section 12(b) of the Act Name of each exchange Title of each class on which registered ------------------- --------------------- COMMON STOCK, $1.00 PAR VALUE NEW YORK STOCK EXCHANGE, INC. Securities Registered Pursuant to Section 12(g) of the Act: NONE ------------------ INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. Yes [X] No [ ] INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. [X] The aggregate market value of voting stock held by nonaffiliates of the Registrant is $1,234,741,474 as of May 28, 1999. 40,551,785 (Number of Shares of common stock outstanding as of May 28, 1999) ================================================================================ (Continued on reverse side) 2 (Continued from cover page) DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant's 1999 Annual Report to Stockholders for the fiscal year ended March 31, 1999 are incorporated by reference into Parts I and II hereof and portions of the Registrant's definitive Proxy Statement dated June 18, 1999 for the 1999 Annual Meeting of Stockholders to be held July 21, 1999 are incorporated by reference into Part III hereof. 3 PART I ITEM 1. BUSINESS GENERAL DEVELOPMENT OF BUSINESS. Trinity Industries, Inc. (the "Registrant" or "Trinity") was originally incorporated under the laws of the State of Texas in 1933. On March 27, 1987, Trinity became a Delaware corporation by merger into a wholly-owned subsidiary of the same name. NARRATIVE DESCRIPTION OF BUSINESS AND FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS. The Registrant is engaged in the manufacture, marketing, and leasing of a wide variety of products consisting of the following five business segments or groups: RAILCAR GROUP. The Registrant manufactures railroad freight cars, principally pressure and non-pressure tank cars, hopper cars, box cars, intermodal cars and gondola cars used for transporting a wide variety of liquids, gases and dry cargo. The Registrant is also engaged in railcar maintenance, management, and/or leasing to various industries. Tank cars transport products such as liquefied petroleum gas, liquid fertilizer, sulfur, sulfuric acids and corn syrup. Covered hopper cars carry cargo such as grain, dry fertilizer, plastic pellets and cement. Open-top hoppers haul coal, and top-loading gondola cars transport a variety of heavy bulk commodities such as scrap metals, finished flat steel products, machinery and lumber. Intermodal cars transport various products which have been loaded in containers to minimize shipping costs. The Registrant holds patents of varying duration for use in its manufacture of railcar and component products. The Registrant cannot quantify the importance of such patents, but patents are believed to offer a marketing advantage in certain circumstances. No material revenues are received from licensing of these patents. A number of well established companies are presently engaged in the manufacture of railcars on a large scale. The Registrant strives to be competitive through improvements in the efficiency of the manufacturing process and its creative designs to benefit customers. A wholly-owned leasing subsidiary, Trinity Industries Leasing Company ("TILC"), incorporated in 1979, is engaged in leasing specialized types of railcars to industrial companies in the petroleum, chemical, grain, food processing, fertilizer and other industries which supply cars to the railroads. At March 31, 1999, TILC had 10,887 railcars under lease and/or management agreement. Substantially all equipment leased by TILC was purchased from the Registrant at prices comparable to the prices for equipment sold by the Registrant to third parties. As of March 31, 1999, TILC had equipment on lease or available for lease purchased from the Registrant at a cost of $456.4 million. Generally, TILC purchases the equipment to be leased only after a lessee has committed to lease such equipment. The volume of equipment purchased and leased by TILC depends upon a number of factors, including the demand for equipment manufactured by the Registrant, the cost and availability of funds to finance the purchase of equipment, the Registrant's decision to solicit orders for the purchase or lease of equipment and factors which may affect the decision of the Registrant's customers as to whether to purchase or lease equipment. 1 4 A number of well established companies actively compete with TILC in the business of owning and leasing railcars, as well as banks, investment partnerships and other financial and commercial institutions. INDUSTRIAL GROUP. The Registrant is engaged in manufacturing metal containers for the storage and transportation of liquefied petroleum ("LP") gas and anhydrous ammonia fertilizer. Pressure LP gas containers are utilized at industrial plants, utilities, small businesses, and in suburban and rural areas for residential heating and cooking needs. Fertilizer containers are manufactured for highway and rail transport, bulk storage, farm storage, and the application and distribution of anhydrous ammonia. The Registrant also makes heat transfer equipment for the chemical, petroleum, and petrochemical industries and a complete line of custom vessels, standard steam jacketed kettles, mix cookers, and custom-fabricated cooking vessels for the food, meat, dairy, pharmaceutical, cosmetic, and chemical industries. The Registrant also manufactures butt weld type fittings, flanges, and pressure and non-pressure container heads that are made from ferrous and non-ferrous metals and their alloys. The weld fittings include caps, elbows, return bends, concentric and eccentric reducers, full and reducing outlet tees, and a full line of pipe flanges, all of which are pressure rated. The Registrant manufactures and stocks, in standard, extra-heavy, and double-extra-heavy weights and in various diameters, weld caps, tees, reducers, elbows, return bends, flanges, and also manufactures to customer specifications. The basic raw materials for weld fittings and flanges are carbon steel, stainless steel, aluminum, chrome-moly, and other metal tubing or seamless pipe and forgings. The Registrant sells its weld fittings and flanges to distributors and to other manufacturers of weld fittings. Container heads manufactured by the Registrant are pressed metal components used in the further manufacture of a finished product. In addition, the Registrant sells container heads to other manufacturers. Container heads are manufactured in various shapes and may be pressure rated or non-pressure, depending on the intended use in further manufacture. Other pressed shapes are also hot- or cold-formed to customer requirements. The demand for LP gas containers is seasonal and mild winters for the past three years reduced demand for LP gas containers in the United States. Competitors range from large to small local companies. Competition from Asian imports for fittings and flanges has been intense and has resulted in sharply reduced prices for these products. HIGHWAY CONSTRUCTION PRODUCTS GROUP. The highway construction products manufactured by the Registrant include highway guardrail and highway safety devices and related barrier products, and beams and girders. These products are used in the highway construction industries. Generally, customers for highway guardrail and highway safety devices are highway departments or subcontractors on highway projects. Sales of beams and girders are to general contractors and subcontractors on highway construction projects. The Registrant holds patents and is a licensee for certain of its guardrail and end-treatment products that enhance its worldwide competitive position for these products. The Registrant is the largest producer of these products in North America, with products in use in all 50 states, as well as Canada, Mexico, the Caribbean and Europe. 2 5 INLAND BARGE GROUP. The Registrant produces river hopper barges, inland tank barges and fiberglass barge covers. River hopper barges are used to carry coal, grain and other commodities by various barge transport companies. Tank barges are used to transport liquid products. The Registrant is North America's leading producer of inland barges and one of the largest producers of fiberglass barge covers. The inland barge business is made up of a few major manufacturers. The Registrant strives to compete through efficiency in operations and quality of product. CONCRETE, AGGREGATE & ALL OTHER GROUP. The Registrant is engaged in the production and manufacturing of ready-mix concrete and aggregates primarily in Texas and Louisiana. Ready-mix concrete and aggregates are used in the building and foundation industry, and customers include primarily owners, contractors, and sub-contractors. The concrete and aggregate business is extremely competitive depending upon the geographical area. The Registrant strives to compete through service and efficiency of operations. Various financial information concerning the Registrant's segments for each of the last three fiscal years is included in the Registrant's 1999 Annual Report to Stockholders beginning on page 27 under the heading "Segment Information", and such section is incorporated herein by reference. MARKETING, RAW MATERIALS AND EMPLOYEES. As of March 31, 1999, the Registrant operated in the continental United States, Mexico, and Brazil. The Registrant sells substantially all of its products through its own salesmen operating from offices in the following states and foreign countries: Alabama, Illinois, Kentucky, Louisiana, Michigan, North Carolina, Ohio, Pennsylvania, Texas, Utah, Brazil and Mexico. Independent sales representatives are also used to a limited extent. The Registrant primarily markets its transportation and industrial products throughout the United States. Except in the case of weld fittings, guardrail, and standard size LP gas containers, the Registrant's products are ordinarily fabricated to the customer's specifications pursuant to a purchase order. The principal materials used by the Registrant are steel plate, structural steel shapes, steel forgings, aluminum and cement and aggregate material for ready-mix concrete. There are numerous domestic and foreign sources of such steel and most other materials used by the Registrant. The Registrant currently has approximately 17,450 employees, of which approximately 14,000 are production employees and 3,450 are administrative, sales, supervisory, and office employees. RECENT DEVELOPMENTS. Information concerning the Registrant's business acquisitions are included in the Registrant's 1999 Annual Report to Stockholders under the heading "Acquisitions and Divestiture," beginning on page 29, and such section is incorporated herein by reference. ENVIRONMENTAL MATTERS. The Registrant is subject to comprehensive and frequently changing federal, state and local environmental laws and regulations, including those governing emissions of air pollutants, discharges of wastewater and storm waters, and the disposal of nonhazardous and hazardous waste. The Registrant anticipates that it may incur costs in the future to comply with currently existing laws and regulations and any new statutory requirements. Such costs are not expected to be material to the Registrant. OTHER MATTERS. To date, the Registrant has not suffered any material shortages with respect to obtaining sufficient energy supplies to operate its various plant facilities or its 3 6 transportation vehicles. Future limitations on the availability or consumption of petroleum products (particularly natural gas for plant operations and diesel fuel for vehicles) could have an adverse effect upon the Registrant's ability to conduct its business. The likelihood of such an occurrence or its duration, and its ultimate effect on the Registrant's operations, cannot be reasonably predicted at this time. ITEM 2. PROPERTIES. The Registrant principally operates in various locations throughout the United States with other facilities in Mexico and Brazil, all of which are considered to be in good condition, well maintained, and adequate for its purposes.
Approximate Square Feet Productive -------------------------- Capacity Owned Leased Utilized ------------ ------------ ------------ Railcar Group 6,162,000 434,000 90% Industrial Group 1,683,000 317,000 50% Highway Construction Products Group 1,573,000 10,000 75% Inland Barge Group 765,000 45,000 70% Concrete, Aggregate, & All Other 224,000 -- 85% Executive Offices 173,000 -- N/A ---------- ------- 10,580,000 806,000
ITEM 3. LEGAL PROCEEDINGS. The Registrant is involved in various claims and lawsuits incidental to its business. In the opinion of management, these claims and suits in the aggregate will not have a material adverse effect on the Registrant's consolidated financial statements. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS. Market for the Registrant's common stock and related stockholder matters are incorporated herein by reference from the information contained on page 1 under the heading "Company Profile" and on page 36 under the heading "Common Stock Closing Price Range" of the Registrant's 1999 Annual Report to Stockholders. ITEM 6. SELECTED FINANCIAL DATA. Selected financial data is incorporated herein by reference from the information contained on page 18 under the heading "Selected Financial Data" of the Registrant's 1999 Annual Report to Stockholders. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Management's discussion and analysis of financial condition and results of operations is incorporated herein by reference from the Registrant's 1999 Annual Report to Stockholders, pages 18 through 22. 4 7 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Quantitative and qualitative disclosures about market risk is incorporated herein by reference from the information contained on page 21 under the heading "Market Risk" of the Registrant's 1999 Annual Report to Stockholders. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Financial statements of the Registrant at March 31, 1999 and 1998 and for each of the three years in the period ended March 31, 1999 and the auditor's report thereon, and the Registrant's unaudited quarterly financial data for the two year period ended March 31, 1999, are incorporated herein by reference from the Registrant's 1999 Annual Report to Stockholders, pages 23 through 36. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. DIRECTORS OF THE REGISTRANT. Information concerning the directors of the Registrant is incorporated herein by reference from the Registrant's proxy statement dated June 18, 1999 for the 1999 Annual Meeting of Stockholders, beginning on page 4, under the heading "Nominees". EXECUTIVE OFFICERS OF THE REGISTRANT.* The following table sets forth the names and ages of all executive officers of the Registrant, all positions and offices with the Registrant presently held by them, the year each person first became an officer and the term of each person's office:
Officer Term Name(1) Age Office Since Expires - ------- --- ------------------------- ------- ---------- Timothy R. Wallace 45 Chairman & Chief 1993 July 1999 Executive Officer John L. Adams 54 Executive Vice President 1999 July 1999 Mark W. Stiles 50 Senior Vice President 1993 July 1999 Jim S. Ivy 55 Vice President & Chief Financial Officer 1998 July 1999 Michael G. Fortado 55 Vice President, General Counsel, & Secretary 1997 July 1999 Jack L. Cunningham, Jr. 54 Vice President 1982 July 1999 John M. Lee 38 Vice President 1994 July 1999 Michael J. Lintner 56 Vice President 1999 July 1999 R. A. Martin 64 Vice President 1974 July 1999 Joseph F. Piriano 62 Vice President 1992 July 1999 Linda S. Sickels 48 Vice President 1995 July 1999 Neil O. Shoop 55 Treasurer 1985 July 1999 John E. Rutzler III 58 Controller 1999 July 1999
5 8 * This data is furnished as additional information pursuant to instructions to Item 401 to Regulation S-K and in lieu of inclusion in the Registrant's Proxy Statement. (1) Mr. Adams joined the Registrant in 1999. Prior to this year, Mr. Adams served as chief executive officer for a national financial institution. Mr. Ivy joined the Registrant in 1998. Prior to that, Mr. Ivy was a senior audit partner for a national public accounting firm. Mr. Fortado joined the Registrant in 1997. Prior to that, Mr. Fortado served one year as senior vice president, general counsel, and corporate secretary for an oil and gas exploration company and prior to that as vice president, corporate secretary, and assistant general counsel for an integrated energy company. Mr. Lintner joined the Registrant in 1999. Prior to this year, Mr. Lintner held executive officer positions with administrative outsourcing and professional staffing businesses. Mr. Rutzler joined the Registrant in 1999. Prior to this year, Mr. Rutzler was vice president-controller for a plumbing products company. All of the other above-mentioned executive officers have been in the full-time employ of the Registrant or its subsidiaries for more than five years. Although the titles of certain such officers have changed during the past five years, all have performed essentially the same duties during such period of time except for Timothy R. Wallace and Mark W. Stiles. Mr. Wallace became Chairman and Chief Executive Officer on December 31, 1998. He was previously the President and Chief Operating Officer. In addition to Group President, Mr. Stiles became Senior Vice President on June 10, 1999. ITEM 11. EXECUTIVE COMPENSATION. Information on executive compensation is incorporated herein by reference from the Registrant's proxy statement dated June 18, 1999 for the 1999 Annual Meeting of Stockholders beginning on page 7 under the heading "Executive Compensation and Other Matters". ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Information concerning security ownership of certain beneficial owners and management is incorporated herein by reference from the Registrant's proxy statement dated June 18, 1999 for the 1999 Annual Meeting of Stockholders, page 2, under the heading "Voting Securities and Stockholders". ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. None. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) 1&2. Financial statements and financial statement schedules. The financial statements and schedules listed in the accompanying indices to financial statements and financial statement schedules are filed as part of this Annual Report Form 10-K. 3. Exhibits. The exhibits listed in the Index to Exhibits to this report are incorporated herein by reference. Management contracts and compensatory plan arrangements are indicated by a double asterisk ("**") in the Index to Exhibits. 6 9 (b) Reports on Form 8-K Form 8-K was filed on March 31, 1999 that reported the adoption by the Registrant of a Rights Agreement replacing an existing agreement. Trinity Industries, Inc. Index to Financial Statements and Financial Statement Schedules (Item 14(a))
REFERENCE ----------------------------- 1999 Annual Form Report to 10-K Stockholders (Page) (Page) ----------- -------------- Consolidated balance sheet at March 31, 1999 and 1998 .............................. -- 24 For each of the three years in the period ended March 31, 1999: Consolidated income statement ...................... -- 23 Consolidated statement of cash flows ............... -- 25 Consolidated statement of stockholders' equity ............................. -- 26 Notes to consolidated financial statements ....................................... -- 27 Supplemental information: Selected quarterly financial data ................... -- 36 Consolidated financial statement schedule for each of the three years in the period ended March 31, 1999: II - Allowance for doubtful accounts ............ 9 --
All other schedules have been omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedules, or because the information required is included in the consolidated financial statements, including the notes thereto. The consolidated financial statements and supplemental information listed in the above index which are included in the 1999 Annual Report to Stockholders are incorporated by reference. 7 10 SCHEDULE II Trinity Industries, Inc. Allowance for Doubtful Accounts Years Ended March 31, 1999, 1998 and 1997 (in millions)
Additions Balance at charged to Accounts Balance beginning costs and charged at end of year expenses off of year --------------- --------------- --------------- --------------- Year Ended March 31, 1999 $ 1.7 $ 0.7 $ 0.5 $ 1.9 =============== =============== =============== =============== Year Ended March 31, 1998 $ 1.0 $ 0.9 $ 0.2 $ 1.7 =============== =============== =============== =============== Year Ended March 31, 1997 $ 1.1 $ 1.4 $ 1.5 $ 1.0 =============== =============== =============== ===============
8 11 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized. Trinity Industries, Inc. By /s/ Michael G. Fortado - ------------------------ ------------------------------- Registrant Michael G. Fortado Vice President, General Counsel, and Secretary June 25, 1999 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons of the Registrant and in the capacities and on the dates indicated: Directors: Directors (continued) /s/ David W. Biegler /s/ Diana Natalicio - ---------------------------- ------------------------------ David W. Biegler Diana Natalicio Director Director June 25, 1999 June 25, 1999 /s/ Barry J. Galt /s/ W. Ray Wallace - ---------------------------- ------------------------------ Barry J. Galt W. Ray Wallace Director Director June 25, 1999 June 25, 1999 /s/ Clifford J. Grum - ---------------------------- Clifford J. Grum Principal Executive Officer: Director June 25, 1999 /s/ Timothy R. Wallace ---------------------- Timothy R. Wallace /s/ Dean P. Guerin Chairman - ---------------------------- June 25, 1999 Dean P. Guerin Director June 25, 1999 Principal Financial Officer: /s/ Jess T. Hay /s/ Jim S. Ivy - ---------------------------- ------------------------------ Jess T. Hay Jim S. Ivy Director Vice President June 25, 1999 June 25, 1999 Principal Accounting Officer: /s/ John M. Lee - ---------------------------- ------------------------------ Edmund M. Hoffman John M. Lee Director Vice President June 25, 1999 June 25, 1999 9 12 Trinity Industries, Inc. Index to Exhibits (Item 14(a))
NO. DESCRIPTION - ----- ------------------------------------------------------------------------ (3.1) Certificate of Incorporation of Registrant (incorporated by reference to Exhibit 3.A to Registration Statement No. 33-10937 filed April 8, 1987). * (3.2) By-Laws of Registrant (4.1) Specimen Common Stock Certificate of Registrant (4.2) Rights Agreement dated March 31, 1999 (incorporated by reference to Form 8-K filed March 31, 1999). * (10.1) Fixed Charges Coverage Agreement dated as of January 15, 1980, between Registrant and Trinity Industries Leasing Company (incorporated by reference to Exhibit 10.1 to Registration Statement No. 2-70378 filed January 29, 1981). * (10.2) Tax Allocation Agreement dated as of January 22, 1980 between Registrant and its subsidiaries (including Trinity Industries Leasing Company) (incorporated by reference to Exhibit 10.2 to Registration Statement No. 2-70378 filed January 29, 1981). * (10.3) Form of Executive Severance Agreement, as amended, entered into between the Registrant and executive officers of the Registrant. ** (10.4) Trinity Industries, Inc., Stock Option Plan With Stock Appreciation Rights (incorporated by reference to Registration Statement No. 2-64813 filed July 5, 1979, as amended by Post-Effective Amendment No. 1 dated July 1, 1980, Post-Effective Amendment No.2 dated August 31, 1984, and Post-Effective Amendment No. 3 dated July 13, 1990). ** * (10.5) Directors' Retirement Plan adopted December 11, 1986, as amended by Amendment No. 1 dated September 10, 1998. ** (10.6) 1989 Stock Option Plan with Stock Appreciation Rights (incorporated by reference to Registration Statement No. 33-35514 filed June 20, 1990). ** * (10.7) Supplemental Retirement Benefit Plan for W. Ray Wallace, effective July 18, 1990, as amended by Amendment No. 1 dated September 14, 1995, Amendment No. 2 dated May 6, 1997, and Amendment No. 3 dated September 10, 1998. ** (10.8) 1993 Stock Option and Incentive Plan (incorporated by reference to Registration Statement No. 33-73026 filed December 15, 1993) ** *
10 13 Trinity Industries, Inc. Index to Exhibits -- (Continued) (Item 14(a))
NO. DESCRIPTION - ----- ------------------------------------------------------------------------ (10.9) Supplemental Profit Sharing Plan for Employees of Trinity Industries Inc. and Certain Affiliates dated July 1, 1990, as amended by Amendment No. 1 dated August 9, 1991, Amendment No. 2 dated May 18, 1992, Amendment No. 3 dated December 6, 1994, Amendment No. 4 dated January 13, 1997, Amendment No. 5 dated May 6, 1997, Amendment No. 6 dated April 1, 1999, and Amendment No. 7 dated April 1, 1999. ** (10.10) Supplemental Profit Sharing and Deferred Director Fee Trust dated March 31, 1999. ** (10.11) Supplemental Retirement Plan dated April 1, 1995, as amended by Amendment No. 1 dated September 14, 1995 and Amendment No. 2 dated May 6, 1997. ** (10.12) Deferred Plan for Director Fees dated July 17, 1996, as amended by Amendment No. 1 dated September 10, 1998. ** (10.13) Trinity Industries, Inc. 1998 Stock Option and Incentive Plan (incorporated by reference to Registration Statement No. 333-77735 filed May 4, 1999). ** * (10.14) Form of Deferred Compensation Plan and Agreement entered into between Trinity Industries, Inc. and certain officers of the Registrant. ** (13) Annual Report to Stockholders. With the exception of the information incorporated by reference into Items 1, 3, 5, 6, 7 and 8 of Form 10-K, the 1999 Annual Report to Stockholders is not deemed a part of this report. (21) Listing of subsidiaries of the Registrant. (23) Consent of Independent Auditors. (27) Financial Data Schedules for the fiscal year ended March 31, 1999. (99.1) Annual Report on Form 11-K for employee stock purchase, savings and similar plans filed pursuant to Rule 15d-21.
* Incorporated herein by reference from previous filings with the Securities and Exchange Commission. ** Management contracts and compensatory plan arrangements. NOTICE: Exhibits 10.3, 10.5, 10.7, 10.9, 10.10, 10.11, 10.12, 10.14, 13, 27, and 99.1 have been omitted from the reproduction of this Form 10-K. A copy of the Exhibits will be furnished upon written request to Michael E. Conley, Director of Investor Relations, Trinity Industries, Inc., P.O. Box 568887, Dallas, Texas 75356-8887. The Registrant may impose a reasonable fee for its expenses in connection with providing the above-referenced Exhibits. 11 EX-3.2 2 BYLAWS OF TRINITY INDUSTRIES 1 EXHIBIT 3.2 As Amended Effective June 10, 1999 BYLAWS OF TRINITY INDUSTRIES, INC. ARTICLE I. Offices Section 1. The registered office shall be located in the City of Wilmington, County of New Castle, State of Delaware. Section 2. The corporation may also have offices at such other places within or without the State of Delaware as the Board of Directors may from time to time determine, or as the business of the corporation may require. ARTICLE II. Meetings of Stockholders Section 1. Meetings of the stockholders for any purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. The annual meeting of stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. At such meeting, the stockholders entitled to vote thereat shall elect by a plurality vote a Board of Directors. 2 Nominations for election to the Board of Directors shall be made at such meeting only by or at the direction of the Board of Directors, by a nominating committee or person appointed by the Board of Directors, or by a stockholder of the corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 2. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the corporation. To be timely, a stockholder's notice shall be delivered to, or mailed and received at, the principal executive offices of the corporation not less than sixty days nor more than ninety days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within thirty days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs. Such stockholder's notice to the Secretary shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares 2 3 of capital stock of the corporation which are beneficially owned by the person, and (iv) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended; and (b) as to the stockholder giving the notice, (i) the name and record address of the stockholder, (ii) the class and number of shares of capital stock of the corporation which are beneficially owned by the stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as director of the corporation. No person shall be eligible for election as a director of the 3 4 corporation unless nominated in accordance with the procedures set forth herein. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. At each annual meeting of the stockholders, only such business shall be conducted as shall have properly been brought before the meeting. To be properly before the meeting, the business to be conducted must be specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, otherwise properly brought before the meeting by or at the direction of the Board of Directors, or otherwise properly brought before the meeting by a stockholder entitled to vote at the meeting. In addition to any other applicable requirements, for business to be properly brought before the meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a stockholder's notice shall be delivered to, or mailed and received at, the principal executive offices of the corporation not less than sixty days nor more than ninety days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is 4 5 not within thirty days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs. A stockholder's notice to the Secretary of the corporation shall set forth as to each matter that the stockholder proposes to bring before the annual meeting, (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of the stockholder proposing such business, (iii) the class and number of shares of the corporation which are beneficially owned by the stockholder, (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring the foregoing provisions of this Section 2, a stockholder seeking to have a proposal included in the corporation's proxy statement shall comply with the requirements of Regulation 14A under the Securities Exchange Act of 1934, as amended (including, but not limited to, Rule 14a-8 or its successor provision). 5 6 Notwithstanding anything in these By-Laws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Section 2; provided, however, that nothing in this Section 2 shall be deemed to preclude discussion by any stockholder of any business properly brought before the annual meeting in accordance with the procedures set forth in this Section 2. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that the business sought to be so conducted was not properly brought before the meeting in accordance with the provisions of this Section 2, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Section 3. Special meetings of the stockholders may be called by the chief executive officer or a majority of the Board of Directors. Section 4. Written or printed notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting, either personally or by mail, by or at the direction of the President, the Secretary, or the officer or person calling the meeting, to each stockholder of record entitled to vote at such meeting. 6 7 Section 5. Business transacted at any special meeting shall be confined to the purposes stated in the notice thereof. Section 6. The holders of a majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at meetings of stockholders except as otherwise provided by any applicable statute. If, however, a quorum shall not be present or represented at any meeting of the stockholders, the presiding officer at the meeting or the stockholders present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. In addition, the presiding officer at any meeting of stockholders shall have the power to adjourn the meeting at the request of the Board of Directors if the Board of Directors determines that adjournment is necessary or appropriate to enable stockholders to consider fully information which the Board of Directors determines has not been made sufficiently or timely available to stockholders or to otherwise exercise effectively their voting rights. Section 7. Except as provided in Section 2 hereof with respect to the election of the Board of Directors, at a meeting at which a quorum is present, the vote of the holders of a majority of the shares present in person or represented by proxy at the 7 8 meeting and entitled to vote shall be the act of the stockholders' meeting, unless the vote of a greater number is required by law or the Certificate of Incorporation. Section 8. Each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders, except to the extent that the voting rights of the shares of any class are limited or denied by the Certificate of Incorporation. Section 9. At any meeting of the stockholders, every stockholder having the right to vote may vote either in person, or by proxy appointed by an instrument in writing as to a particular meeting and any adjournment or adjournments thereof subscribed by such stockholder or by his duly authorized attorney-in-fact. A proxy shall be revocable unless expressly provided therein to be irrevocable and unless otherwise provided by law. Section 10. The officer or agent having charge of the stock transfer books shall make, at least ten (10) days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting or any adjournment thereof, arranged in alphabetical order, with the address of and number of shares held by each, which list, for a period of ten (10) days prior to such meeting, shall be kept on file at the registered office of the corporation, and shall be subject to inspection by any stockholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of 8 9 the meeting, and shall be subject to the inspection of any stockholder during the whole time of the meeting. The original stock transfer books shall be prima facie evidence as to who are the stockholders entitled to examine such list or transfer book or to vote at any such meeting of stockholders. Section 11. Notwithstanding any inconsistent provision which may be contained in these By-Laws, in order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within ten days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within ten days of the date upon which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a 9 10 signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or any officer or agent of the corporation having custody of the book in which proceedings of stockholders' meeting are recorded, to the attention of the Secretary of the corporation. Delivery shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. ARTICLE III. Directors Section 1. The number of directors of the corporation shall be nine (9). The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified; provided, any director may be removed at any time, with or without cause, by the holders of a majority of the shares entitled to vote, represented in person or by proxy, at any duly constituted meeting of stockholders called for the purpose of removing any such director or directors. 10 11 Directors need not be residents of the State of Delaware or stockholders of the corporation. Section 2. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any newly created directorship(s) resulting from an increase in the authorized number of directors elected by all stockholders entitled to vote as a single class shall be filled by the affirmative vote of a majority of the remaining directors, even though less than a quorum of the proposed Board of Directors. Section 3. The business and affairs of the corporation shall be managed by its Board of Directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute, the Certificate of Incorporation, or these Bylaws directed or required to be exercised and done by the stockholders. Section 4. Meetings of the Board of Directors, regular or special, may be held either within or without the State of Delaware. Section 5. The first meeting of each newly elected Board of Directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting, and no notice of such meeting shall be necessary to the newly elected 11 12 directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time and place of such first meeting of the newly elected Board of Directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors. Section 6. Regular meetings of the Board of Directors may be held at such time and at such place as shall from time to time be determined by the Board. Special meetings of the Board of Directors may be called by the Secretary on the written request of two directors. Section 7. Written notice of regular meetings of the Board of Directors shall not be required. Special meetings of the Board of Directors may be called upon twenty-four (24) hours' notice to each director, or such shorter period of time as the person calling the meeting deems appropriate in the circumstances, either personally or by mail, telephone or telegram. Neither the business to be transacted at, nor the purposes of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such special meeting. Section 8. A majority of the directors shall constitute a quorum for the transaction of business, and the act of the 12 13 majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless a greater number is required by the Certificate of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 9. The Board of Directors, by resolution adopted by a majority of the whole Board, may designate three or more directors to constitute an executive committee, which committee, unless its authority shall be otherwise expressly limited by such resolution, shall have and may exercise all of the authority of the Board of Directors in the business and affairs of the corporation except where action of the Board of Directors is specified by statute. Vacancies in the membership of the committee shall be filled by the Board of Directors at a regular or special meeting of the Board of Directors. The executive committee shall keep regular minutes of its proceedings and report the same to the Board when required. The designation of such committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed upon it or him by law. 13 14 ARTICLE IV. Notices Section 1. Except as otherwise provided in these Bylaws, notices to directors and stockholders shall be in writing, and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. If mailed, such notice shall be deemed to be given when deposited in the United States mail with postage thereon prepaid. Notice to directors may also be given by telegram. Section 2. Whenever any notice is required to be given to any stockholder or director under the provisions of the statutes, the Certificate of Incorporation or these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice. Section 3. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. ARTICLE V. Officers Section 1. The executive officers of the corporation shall consist of a President, one or more Vice Presidents, a Secretary and a Treasurer and may include a Chairman of the Board, one or more Senior Vice Presidents and one or more Executive Vice 14 15 Presidents, each of whom shall be elected by the Board of Directors. Section 2. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall choose a President, one or more Vice Presidents, a Secretary and a Treasurer, none of whom need be a member of the Board, and may appoint one of their number Chairman of the Board. Section 3. Such other officers and assistant officers and agents as may be deemed necessary may be appointed by the chief executive officer of the corporation, including a Chairman, a President, and one or more Vice Presidents of the respective Divisions. The President or the Vice Presidents of the Division who, in the order of their seniority, unless otherwise determined by the chief executive officer of the corporation, shall perform the duties of the Chairman or President, as the case may be, of the Division in the absence or disability of the Chairman or President, as the case may be, of that Division. Each President or Vice President, as the case may be, of a Division shall perform such other duties and have such other powers as the chief executive officer of the corporation or the Chairman or President, as the case may be, of that Division shall prescribe. Division officers shall hold office until their respective successors shall have been chosen and shall have qualified. Any Division officer appointed by the chief executive officer may be removed by the chief executive officer whenever, in his judgment, the best 15 16 interests of the corporation will be served thereby. Any vacancy occurring in any office of a Division by death, resignation, removal or otherwise shall be filled by the chief executive officer of the corporation. Section 4. The salaries of all executive officers of the corporation shall be fixed by the Board of Directors or by a committee of one or more directors, the members of which shall be selected by the Board of Directors and which, unless its authority shall be otherwise limited by resolution of the Board of Directors, shall have the power to fix the salaries of all executive officers of the corporation. Section 5. The executive officers of the corporation shall hold office until their respective successors shall have been chosen and shall have qualified. Any officer or agent or member of the executive committee elected or appointed by the Board of Directors may be removed by the Board of Directors whenever, in its judgment, the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any vacancy occurring in any executive office of the corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 6. The Board of Directors may designate whether the Chairman of the Board, if such an officer shall have been appointed, or the President, shall be the chief executive officer 16 17 of the corporation. The officer so designated as the chief executive officer shall preside at all meetings of the stockholders and the Board of Directors, and shall have such other powers and duties as usually pertain to such office or as may be delegated by the Board of Directors. The President shall have such powers and duties as usually pertain to such office, except as the same may be modified by the Board of Directors. Unless the Board of Directors shall otherwise delegate such duties, the chief executive officer shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. Section 7. The chief executive officer or his designee shall have the authority to execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed, and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation. Section 8. The Vice Presidents, in the order of their seniority, unless otherwise determined by the Board of Directors, shall, in the absence or disability of the President, perform the duties and exercise the powers of the President. The Vice Presidents shall also have the authority to execute bonds, mortgages and other contracts requiring a seal, under the seal of 17 18 the corporation, except where required or permitted by law to be otherwise signed and executed, and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation. The Vice Presidents shall perform such other duties and have such other powers as the Board of Directors or the chief executive officer of the corporation shall prescribe. Section 9. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and shall record all the proceedings of the meetings of the stockholders and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees, when requested. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors and shall perform such other duties as may be prescribed by the Board of Directors or the President, under whose supervision he shall be. He shall keep in safe custody the seal of the corporation, and, when authorized by the Board of Directors or directed by the President or any Vice President, affix the same to any instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or any Assistant Secretary. Section 10. The Assistant Secretaries, in the order of their seniority, unless otherwise determined by the Board of Directors, shall, in the absence or disability of the Secretary, perform the 18 19 duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 11. The Treasurer shall be the financial officer of the corporation. He shall have the custody of the corporate funds and securities and shall deposit all monies and other valuable effects in the name and to the credit of the corporation in such depositaries as may be designated from time to time by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer. He shall also perform such other duties as may be assigned to him by the Board of Directors. Section 12. If required by the Board of Directors, the Treasurer shall give the corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation. Section 13. The Assistant Treasurers, in the order of their seniority, unless otherwise determined by the Board of Directors, 19 20 shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. ARTICLE VI. Indemnification of Directors and Officers Section 1. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was or has agreed to become a director, officer or Division officer of the corporation, or is or was serving or has agreed to serve at the request of the corporation as a director, officer or Division officer of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such action, suit or proceeding and any appeal therefrom, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The 20 21 termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 2. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was or has agreed to become a director, officer or Division officer of the corporation, or is or was serving or has agreed to serve at the request of the corporation as a director, officer or Division officer of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection with the defense or settlement of such action or suit and any appeal therefrom, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which 21 22 such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Section 3. Notwithstanding the other provisions of this Article, to the extent that a director, officer or Division officer of the corporation has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article, or in defense of any claim, issue or matter therein, he shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by him or on his behalf in connection therewith. Section 4. Any indemnification under Sections 1 and 2 of this Article (unless ordered by a court) shall be paid by the corporation unless a determination is made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal 22 23 counsel in a written opinion, or (3) by the stockholders, that indemnification of the director, officer, employee or agent is not proper in the circumstances because he has not met the applicable standard of conduct set forth in Sections 1 and 2 of this Article. Section 5. Costs, charges and expenses (including attorneys' fees) incurred by a person referred to in Sections 1 and 2 of this Article in defending a civil or criminal action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding; provided, however, that the payment of such costs, charges and expenses incurred by a director, officer or Division officer in his capacity as a director, officer or Division officer (and not in any other capacity in which service was or is rendered by such person while a director, officer or Division officer) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director, officer or Division officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director, officer or Division officer is not entitled to be indemnified by the corporation as authorized in this Article. The Board of Directors may, in the manner set forth above, and upon approval of such director, officer or Division officer of the corporation, authorize the corporation's counsel to represent such 23 24 person, in any action, suit or proceeding, whether or not the corporation is a party to such action, suit or proceeding. Section 6. Any indemnification under Sections 1, 2 and 3, or advance of costs, charges and expenses under Section 5 of this Article, shall be made promptly, and in any event within 60 days, upon the written request of the director, officer or Division officer. The right to indemnification or advances as granted by this Article shall be enforceable by the director, officer or Division officer in any court of competent jurisdiction, if the corporation denies such request, in whole or in part, or if no disposition thereof is made within 60 days. Such persons' costs and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 5 of this Article where the required undertaking, if any, has been received by the corporation) that the claimant has not met the standard of conduct set forth in Sections 1 or 2 of this Article, but the burden of proving such defense shall be on the corporation. Neither the failure of the corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable 24 25 standard of conduct set forth in Sections 1 or 2 of this Article, nor the fact that there has been an actual determination by the corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Section 7. The indemnification and advancement of costs, charges and expenses provided by this Article shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of costs, charges and expenses may be entitled under any law (common or statutory), agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the corporation, and shall continue as to a person who has ceased to be a director, officer or Division officer as to actions taken while he was such a director, officer or Division officer, and shall inure to the benefit of the estate, heirs, executors and administrators of such person. All rights to indemnification under this Article shall be deemed to be a contract between the corporation and each director, officer or Division officer of the corporation who serves or served in such capacity at any time while this Article is in effect. Any repeal or modification of this Article or any repeal or modification of 25 26 relevant provisions of the Delaware General Corporation Law or any other applicable laws shall not in any way diminish any rights to indemnification of such director, officer or Division officer or the obligations of the corporation arising hereunder. Section 8. In addition to the specific indemnification provided for herein, the corporation shall indemnify each person who is or was or has agreed to become a director, officer or Division officer of the corporation, or is or was serving or has agreed to serve at the request of the corporation as a director, officer or Division officer of another corporation, partnership, joint venture, trust or other enterprise, to the fullest extent authorized or permitted (i) by the General Corporation Law of Delaware, or any other applicable law, or by any amendment thereof or other statutory provisions in effect on the date hereof, or (ii) by the corporation's Certificate of Incorporation as in effect on the date hereof. The corporation shall also advance expenses to any of the foregoing individuals to the fullest extent authorized or permitted (i) by the General Corporation Law of Delaware, or any other applicable law, or by any amendment thereof or other statutory provision in effect on the date hereof, or (ii) by the corporation's Certificate of Incorporation as in effect on the date hereof. Section 9. Notwithstanding the foregoing, the corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director, 26 27 officer or Division officer of the corporation, or is or was serving at the request of the corporation as a director, officer or Division officer of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him or on his behalf in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article. Section 10. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director, officer or Division officer of the corporation as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the corporation, to the full extent permitted by any applicable portion of this Article that shall not have been invalidated and to the full extent permitted by applicable law. ARTICLE VII. Certificates for Shares Section 1. The corporation shall deliver certificates representing all shares to which stockholders are entitled; and such certificates shall be signed by the President or a Vice 27 28 President, and the Secretary or an Assistant Secretary of the corporation, and may be sealed with the seal of the corporation or a facsimile thereof. No certificate shall be issued for any share until the consideration therefor has been fully paid. Each certificate representing shares shall state upon the face thereof that the corporation is organized under the laws of the State of Delaware, the name of the person to whom issued, the number and class and the designation of the series, if any, which such certificate represents, and the par value of each share represented by such certificate or a statement that the shares are without par value. Section 2. The signatures of the President or Vice President, and the Secretary or Assistant Secretary, upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent, or registered by a registrar, other than the corporation itself or an employee of the corporation. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of the issuance. Section 3. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed, upon the making of an 28 29 affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed. Section 4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction upon its books. Section 5. For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of stockholders for any other proper purpose, the Board of Directors may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any case, sixty (60) days. If the stock transfer books shall be closed for the purpose of determining stockholders entitled to notice of or to vote at a meeting of 29 30 stockholders, such books shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of stockholders, such date in any case to be not more than sixty (60) days, and, in case of a meeting of stockholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of stockholders is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders or any adjournment thereof, or stockholders entitled to receive payment of a dividend, or in order to make a determination of stockholders for any other proper purpose, the close of business on the day next preceding the day on which notice of the meeting of stockholders is given shall be the record date with respect to such meeting, and the close of business on the day on which the Board of Directors adopts a resolution declaring a dividend or with respect to any other proper purpose, as the case may be, shall be the record date for the determination of stockholders with respect thereto. When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment thereof, except where the determination has been made through the 30 31 closing of stock transfer books and the stated period of closing has expired. Section 6. The corporation shall be entitled to recognize the exclusive rights of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware. ARTICLE VIII. General Provisions Section 1. The Board of Directors may declare and the corporation may pay dividends on its outstanding shares in cash, property, or its own shares pursuant to law and subject to the provisions of its Certificate of Incorporation. Section 2. The Board of Directors may by resolution create a reserve or reserves out of earned surplus for any purpose or purposes, and may abolish any such reserve in the same manner. Section 3. The Board of Directors must, when requested by the holders of at least one-third of the outstanding shares of the corporation, present written reports of the business and financial affairs of the corporation. Section 4. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such 31 32 other person or persons as the Board of Directors may from time to time designate as provided in these bylaws. Section 5. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors. Section 6. The corporate seal shall have inscribed thereon the name of the corporation and may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. ARTICLE IX. Amendments These Bylaws may be altered, amended or repealed at any regular or special meeting of, or by the unanimous written consent of, the Board of Directors. 32 EX-4.1 3 STOCK CERTIFICATE 1 [NUMBER] [GRAPHIC] [SHARES] DX THIS CERTIFICATE IS TRANSFERABLE IN CUSIP 896522 10 9 NEW YORK, NEW YORK SEE REVERSE FOR CERTAIN DEFINITIONS INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE COMMON STOCK COMMON STOCK $1.00 PAR VALUE TRINITY INDUSTRIES, INC. $1.00 PAR VALUE This Certifies that is the owner of SHARES OF FULLY PAID AND NON-ASSESSABLE COMMON STOCK OF Trinity Industries, Inc. transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney, upon surrender of this certificate properly endorsed. This certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar. Witness the seal of the Corporation and the facsimile signatures of its duly authorized officers. DATE COUNTERSIGNED AND REGISTERED: /s/ TIMOTHY R. WALLACE THE BANK OF NEW YORK PRESIDENT TRANSFER AGENT AND REGISTRAR. [TRINITY INDUSTRIES INC. LOGO] [SEAL] BY /s/ [ILLEGIBLE] SECRETARY AUTHORIZED SIGNATURE
2 TRINITY INDUSTRIES, INC. Trinity Industries, Inc. will furnish without charge to each stockholder who so requests a statement of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof which Trinity Industries, Inc. is authorized to issue and the qualifications, limitations or restrictions of such preferences and/or rights. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT - Custodian ------------- ----------- TEN ENT -- as tenants by the entireties (Cust) (Minor) JT TEN -- as joint tenants with right of under Uniform Gifts to Minors survivorship and not as tenants Act ----------------- in common (State)
Additional abbreviations may also be used though not in the above list. For value received, hereby sell, assign and transfer ------------------ unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE [ ] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Shares - ------------------------------------------------------------------------ of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint ------------------------------------------- Attorney to transfer the said stock on the books of the within-named Company with full power of substitution in the premises. Dated, ------------------- X -------------------------------------- (SIGNATURE) NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. X ------------------------------------ (SIGNATURE) ---------------------------------------- THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. --------------------------------------- SIGNATURE(S) GUARANTEED BY: ---------------------------------------- This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement, dated as of March 11, 1999, by and between Trinity Industries, Inc. (the "Company") and The Bank of New York, as Rights Agent (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Company will mail to the holder of this certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and void. NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER. EX-10.3 4 EXECUTIVE SEVERANCE AGREEMENT AS AMENDED 1 EXECUTIVE SEVERANCE AGREEMENT THIS AGREEMENT, dated as of ___________, 1999, between Trinity Industries, Inc., a Delaware corporation (the "Company"), and _________________ (the "Executive") WITNESSETH: WHEREAS, the Company's Board of Directors has determined that it is appropriate to reinforce and encourage the continued attention and dedication of members of the Company's management, including the Executive, to their assigned duties without distraction in potentially disturbing circumstances arising from the possibility of a Change in Control of the Company (as hereinafter defined). NOW, THEREFORE, this Agreement sets forth the severance compensation which the Company agrees it will pay to the Executive if the Executive's employment with the Company terminates under one of the circumstances described herein following a Change in Control of the Company. 1. TERM. This Agreement shall terminate, except to the extent that any obligation of the Company hereunder remains unpaid as of such time, upon the earliest of: (i) June 8, 2000; provided, however, that, commencing on June 8, 1999 and on each anniversary date thereafter (each such date, an "Anniversary Date"), the expiration date under this clause (i) shall automatically be extended for one additional year unless, not later than the December 31 immediately prior to such Anniversary Date, either party shall have given written notice that it does not wish to extend this Agreement; (ii) the termination of the Executive's employment with the Company based on death, Disability (as defined in Section 3(b) hereof) or Cause (as defined in Section 3(d) hereof) or by the Executive for Good Reason (as defined in Section 3(e) hereof); and (iii) two years from the date of a Change in Control of the Company if the Executive has not terminated his employment for Good Reason as of such time. 2. CHANGE IN CONTROL. No compensation shall be payable under this Agreement unless and until (a) there shall have been a Change in Control of the Company, while the Executive is still an employee of the Company and (b) the Executive's employment by the Company 2 thereafter shall have been terminated in accordance with Section 3. For purposes of this Agreement, a "Change in Control" of the Company shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing 30% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph (iii) below; or (ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on May 6, 1997, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on May 6, 1997 or whose appointment, election or nomination for election was previously so approved or recommended; or (iii) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation 2 3 effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company or its Affiliates of a business) representing 30% or more of the combined voting power of the Company's then outstanding securities; or (iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. For purposes hereof: "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act. "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a Corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. 3 4 3. TERMINATION FOLLOWING CHANGE IN CONTROL. (a) If a Change in Control of the Company shall have occurred while the Executive is still an employee of the Company, the Executive shall be entitled to the compensation provided in Section 4 hereof upon the subsequent termination of the Executive's employment with the Company by the Executive or by the Company unless such termination is as a result of: (i) the Executive's death; (ii) the Executive's Disability (as defined in Section (3)(b) below); (iii) the Executive's termination by the Company for Cause (as defined in Section 3(d) below); or (iv) the Executive's decision to terminate employment other than for Good Reason (as defined in Section 3(e) below). (b) DISABILITY. If, as a result of the Executive's incapacity due to physical or mental illness, the Executive shall have been absent from his duties with the Company on a full-time basis for one year and within thirty days after written Notice of Termination (as hereinafter defined) is thereafter given by the Company, the Executive shall not have returned to the full-time performance of the Executive's duties, the Company may terminate this Agreement for "DISABILITY." (c) [subsection intentionally left blank]. (d) CAUSE. The Company may terminate the Executive's employment for CAUSE. For purposes of this Agreement only, the Company shall have "Cause" to terminate the Executive's employment hereunder only on the basis of: (i) the willful and continued failure by the Executive to substantially perform the Executive's duties with the Company (other than any such failure resulting from the Executive's incapacity due to physical or mental illness and other than in respect of any duties inconsistent with, or more burdensome than, the Executive's duties with the Company immediately prior to a Change in Control of the Company); (ii) the willfully engaging by the Executive in continued misconduct which is materially injurious to the Company after having been advised in writing of the particular misconduct deemed by the Company to be materially injurious to the Company and instructed in 4 5 such writing to cease any further misconduct of a similar nature; (iii) misappropriation or embezzlement from the Company of any other act or acts of dishonesty by the Executive constituting a felony that results, or is intended to result, directly or indirectly, in gain to or personal enrichment of the Executive at the Company's expense; or (iv) the conviction of the Executive of a felony involving the moral turpitude of the Executive. For purposes of this Section 3(d), no act or failure to act on the part of the Executive shall be considered "willful" unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the action or omission of the Executive was in the best interest of the Company. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Company's Board of Directors at a meeting of the Board called and held for the purpose (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive's counsel, to be heard before the Board), finding that the Executive was guilty of conduct set forth in this Section 3(d) and specifying the particulars thereof in detail. (e) GOOD REASON. The Executive may terminate the Executive's employment for Good Reason at any time after a Change in Control of the Company. For purposes of this Agreement "GOOD REASON" shall mean any of the following (without the Executive's express written consent): (i) the assignment to the Executive by the Company of duties inconsistent with the Executive's position, duties, responsibilities and status with the Company immediately prior to a Change in Control of the Company, or a change in the Executive's titles or offices as in effect immediately prior to a Change in Control of the Company, or any removal of the Executive from or any failure to reelect the Executive to any of such positions, except in connection with the termination of his employment for Disability or Cause or as a result of the Executive's death or by the Executive other than for Good Reason; 5 6 (ii) a reduction by the Company in the Executive's base salary as in effect on the date hereof or as the same may be increased from time to time during the term of this Agreement or the Company's failure to increase (within 12 months of the Executive's last increase in base salary) the Executive's base salary after a Change in Control of the Company in an amount which at least equals, on a percentage basis, the average percentage increase in base salary for all officers of the Company effected in the preceding 12 months; (iii) any failure by the Company to continue in effect any benefit plan or arrangement (including, without limitation, the Company's pension plan, group life insurance plan, and medical, dental, accident and disability plans) in which the Executive is participating at the time of a Change in Control of the Company (or any other plans providing the Executive with substantially similar benefits) (hereinafter referred to as "Benefit Plans"), or the taking of any action by the Company which would adversely affect the Executive's participation in or materially reduce the Executive's benefits under any such Benefit Plan or deprive the Executive of any material fringe benefit enjoyed by the Executive at the time of a Change in Control of the Company; (iv) any failure by the Company to continue in effect any incentive plan or arrangement (including, without limitation, the Company's Incentive Compensation Plan) in which the Executive is participating at the time of a Change in Control of the Company (or any other plans or arrangements providing him with substantially similar benefits) (hereinafter referred to as "Incentive Plan") or the taking of any action by the Company which would adversely affect the Executive's participation in any such Incentive Plan or reduce the Executive's benefits under any such Incentive Plan, expressed as a percentage of his base salary, in any fiscal year as compared to the immediately preceding fiscal year; (v) any failure by the Company to continue in effect any plan or arrangement to receive securities of the Company (including, without limitation, the Company's Stock Option Plan, and any other plan or arrangement to receive and exercise stock options, stock appreciation rights, restricted stock or grants thereof) in which the Executive is participating at the time of a Change in Control of the Company (or plans or 6 7 arrangements providing him with substantially similar benefits) (hereinafter referred to as "Securities Plans") or the taking of any action by the Company which would adversely affect the Executive's participation in or materially reduce the Executive's benefits under any such Securities Plan; (vi) a relocation of the Company's principal executive offices to a location outside of Dallas County, Texas, or the Executive's relocation to any place other than the location at which the Executive performed the Executive's duties prior to a Change in Control of the Company, except for required travel by the Executive on the Company's business to an extent substantially consistent with the Executive's business travel obligations at the time of a Change in Control of the Company; (vii) any failure by the Company to provide the Executive with the number of paid vacation days to which the Executive is entitled at the time of a Change in Control of the Company; (viii) any material breach by the Company of any provision of this Agreement; (ix) any failure by the Company to obtain the assumption of this Agreement by any successor or assign of the Company; or (x) any purported termination of the Executive's employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 3(f) below, and for purposes of this Agreement, no such purported termination shall be effective. (f) NOTICE OF TERMINATION. Any termination by the Company pursuant to Section 3(b), 3(c) or 3(d) shall be communicated by a Notice of Termination. For purposes of this Agreement, a "NOTICE OF TERMINATION" shall mean a written notice which shall indicate those specific termination provisions in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. For purposes of this Agreement, no such purported termination by the Company shall be effective without such Notice of Termination. (g) DATE OF TERMINATION. "DATE OF TERMINATION" shall mean (a) if this Agreement is terminated by the Company for Disability, 7 8 thirty days after Notice of Termination is given to the Executive (provided that the Executive shall not have returned to the performance of the Executive's duties on a full-time basis during such 30-day period) or (b) if the Executive's employment is terminated by the Company for any other reason, the date on which a Notice of Termination is given. 4. SEVERANCE COMPENSATION UPON TERMINATION OF EMPLOYMENT. The Company may terminate the Executive's employment at any time; however, if the Company shall terminate the Executive's employment other than pursuant to Section 3(b) or 3(d) or if the Executive shall terminate his employment for Good Reason, then as severance pay and as the Executive's sole remedy for such termination: (i) the Company shall pay to the Executive in a lump sum, in cash, on or before the fifth day following the Date of Termination, an amount equal to three times the sum of (A) the Executive's base salary as in effect immediately prior to the Change in Control or, if higher, in effect immediately prior to the Date of Termination and (B) the bonus earned with respect to the fiscal year immediately prior to the Change in Control or, if higher, the fiscal year immediately prior to the Date of Termination; (ii) the Company shall provide, at the Company's sole expense, all benefits to which the Executive and anyone entitled to claim under or through the Executive would be entitled under the Company's group hospitalization plan, health care plan, dental care plan, life or other insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company for which key executives are eligible, as such plans are in effect immediately prior to the Change in Control (or, if more favorable to the Executive, immediately prior to the Notice of Termination), to the same extent as if the Executive had continued in the employment of the Company during the thirty-six month period following the Date of Termination; (iii) the Company shall pay to the Executive and, if applicable, to his beneficiaries, in cash, on or before the fifth day following the Date of Termination, a lump sum representing the present value of the excess of (A) the benefit (expressed as a life annuity commencing at age 65 or such earlier date as of which the actuarial equivalent of such annuity is greatest) that the Executive would have accrued under the provi- 8 9 sions of the Company's Pension Plan for Salaried Employees in effect immediately prior to the Change in Control had the Executive continued to be employed for an additional thirty-six months following the Date of Termination at the annual rate of compensation taken into account under clause (i) hereof over (B) the benefit actually accrued by the Executive under such plan. For purposes hereof, "present value" shall be determined using a per annum discount rate as established from time to time for the Company's Pension Plan for Salaried Employees and "actuarial equivalent" shall be determined using the same assumptions utilized under such plan. The foregoing payments shall be subject to withholding of federal, state and local income, FICA and similar taxes, if required by law. 4.A. Whether or not the Executive becomes entitled to the payments under Section 4 hereof, if any of the payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) (such payments or benefits, excluding the Gross-Up Payment, being hereinafter referred to as the "Total Payments") would be subject to the excise tax imposed under section 4999 of the Internal Revenue Code of 1986, as amended (the "Excise Tax"), the Company shall pay to the Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the residence of the Executive on the Date of Termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. All determinations made under this Section 4.A. shall be made by the accounting firm which served as the 9 10 Company's auditor immediately prior to the Change in Control. 5. NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER CONTRACTS. (a) The Executive shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by the Executive as the result of employment by another employer after the Date of Termination, or otherwise. (b) The provisions of this Agreement, and any payment provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish the Executive's existing rights, or rights which would accrue solely as a result of the passage of time, under any other agreement, contract, plan or arrangement with the Company. 6. SUCCESSOR TO THE COMPANY. (a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company by written agreement in form and substance satisfactory to the Executive, expressly, absolutely and unconditionally to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Any failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a material breach of this Agreement and shall entitle the Executive to terminate the Executive's employment for Good Reason. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 6 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. (b) This Agreement shall inure to the benefit of and be enforceable by the Executive's personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts are still payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive's devisee, legatee, or other designee or, if there be no such devisee, legatee or other designee, to executor or administrator of the Executive's estate. 7. NOTICE. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered 10 11 or mailed by United States registered mail, return receipt requested, postage prepaid, as follows: If to the Company: Trinity Industries, Inc. P. O. Box 568887 Dallas, Texas 75356-8887 Attention: President If to the Executive: Name of Executive Address or 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 be effective only upon receipt. 8. MISCELLANEOUS. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 9. VALIDITY. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 10. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 11. LEGAL FEES AND EXPENSES. The Company shall pay all legal fees and expenses which the Executive may incur as a result of the Company's contesting the validity, enforceability or the Executive's interpretation of, or determinations under, this Agreement. 12. CONFIDENTIALITY. The Executive shall retain in confidence any and all confidential information known to the Executive concerning the Company and its business so long as such information is not otherwise publicly disclosed. 11 12 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. TRINITY INDUSTRIES, INC. By -------------------------------------- Name: Timothy R. Wallace Title: Chairman and President EXECUTIVE By -------------------------------------- Name: Title: 12 EX-10.5 5 AMENDMENT NO. 1 TO DIRECTORS' RETIREMENT PLAN 1 AMENDMENT NO. 1 TO THE TRINITY INDUSTRIES, INC. DIRECTORS' RETIREMENT PLAN Pursuant to the provisions of Section 12 thereof, the Trinity Industries, Inc. Directors' Retirement Plan (the "Plan") is hereby amended effective as of September 10, 1998 in the following respects only: FIRST: Section 1 of the Plan is hereby amended by adding the following paragraph to the end thereof: The preceding provisions of this Section 1 to the contrary notwithstanding, any former Director who has commenced receiving monthly payments under this Plan following his retirement or disability and who has more than one such monthly payment remaining to be paid may elect in writing on a form acceptable to the Company to waive his right to continue receiving monthly payments hereunder and in lieu thereof to receive one lump sum payment in an amount equal to 90% of the present value of the monthly payments remaining to be paid at the time of such lump sum payment. The present value shall be determined using the actuarial assumptions that would be used for calculating lump sum distributions under the Trinity Industries, Inc. Standard Pension Plan, and the payment will be made in cash to the former Director no later than 15 days following receipt of his election by the Company. In the event that a former Director receives a lump sum payment in accordance with this provision, no further benefits will be owed to or on account of such former Director under this Plan and the remaining 10% of the present value of the monthly payments shall be forfeited. SECOND: Section 2 of the Plan is hereby amended by adding the following paragraph to the end thereof: The preceding provisions of this Section 2 to the contrary notwithstanding, any beneficiary of a former Director who is receiving monthly payments under the provisions of this Section 2 and who has more than one such monthly payment remaining to be paid may elect in writing on a form acceptable to the Company to waive his right to continue receiving monthly payments hereunder and in lieu thereof to receive one lump sum payment in an amount equal to 90% of the present value of the monthly payments remaining to be paid at the time of such lump sum payment. The present value shall be determined using the actuarial assumptions that would be used for calculating lump sum distributions under the Trinity Industries, Inc. Standard Pension Plan, and the payment will be made in cash to the beneficiary no later than 15 days following receipt of his election by the Company. In the event that a beneficiary of a former Director receives a lump sum payment in accordance with this provision, no further benefits will be owed to such beneficiary on account of such former Director under this Plan and the remaining 10% of the present value of the monthly payments shall be forfeited. 2 THIRD: Section 5 of the Plan is hereby amended by restatement in its entirety to read as follows: 5. Notwithstanding anything herein to the contrary, in the event of a Change of Control: (I) The vested percentage referred to in Section 3 of this Plan shall be 100% for each member of the Board of Directors at the time of such Change of Control, irrespective of the number of such Director's years of service. (II) Any former Director (or beneficiary of a former Director) who is receiving monthly payments pursuant to Section 1 (or Section 2 with respect to a beneficiary) and any Director who ceases to be a member of the Board of Directors on or after the date of such Change of Control, who elected (or with respect to a beneficiary, if the former Director elected) an accelerated Change of Control payment, as described below, shall receive, in lieu of the monthly payments that otherwise would be owed to the Director under this Plan pursuant to Section 1 hereof (or beneficiary pursuant to Section 2 hereof), either (i) a cash lump sum payment in an amount equal to the present value of such monthly payments, or (ii) equal annual cash installments over five (5), six (6) or seven (7) years in an aggregate amount which is the actuarial equivalent of such monthly payments, whichever method was elected by the Director on the election form. The accelerated Change of Control payment shall be elected by the Director on a separate election form for such purpose at the time the Director initially becomes covered by this Plan or, if later, on or before July 20, 1999 and shall be irrevocable; provided, however, that a Director or former Director may make, revoke or change an accelerated Change of Control distribution election subsequent to the initial election with the new election to be effective only in the event that the new election is made at least 12 months prior to the date payments under this provision commence. (III) Each member of the Board of Directors at the time of such Change of Control and each former Director (or beneficiary of a former Director) who has not yet received the entire benefit to which he is entitled under this Plan, regardless of whether an election was made in accordance with the preceding paragraph (II) and regardless of whether payment has yet commenced, may elect in writing on a form acceptable to the Company to waive his right to any future payment or payments hereunder and in lieu thereof to receive one lump sum payment in an amount equal to 90% of the present value of the payments owed with respect to the Director or former Director under this Plan at the time of such lump sum payment. In the event that a Director or former Director (or beneficiary of a former Director) receives a lump sum payment in accordance with this provision, no further benefits will be owed to or on account of such Director or former Director under this Plan and the -2- 3 remaining 10% of the present value of the payments otherwise owed shall be forfeited. The amount to be distributed as the lump sum present value or actuarial equivalent annual installments shall be determined using the actuarial assumptions that would be used for calculating lump sum distributions or installment payments, as appropriate, under the Trinity Industries, Inc. Standard Pension Plan. A "Change of Control" shall be deemed to have occurred for purposes of this Plan if the event set forth in any one of the following paragraphs shall have occurred: (I) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing 30% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (III) below; or (II) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on May 6, 1997, constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on May 6, 1997, or whose appointment, election or nomination for election was previously so approved or recommended; or (III) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company -3- 4 or its affiliates of a business) representing 30% or more of the combined voting power of the Company's then outstanding securities; or (IV) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. For purposes hereof: "Affiliate" shall have the meaning set forth in Rule l2b-2 promulgated under Section 12 of the Exchange Act. "Beneficial Owner" shall have the meaning set forth in Rule l3d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. FOURTH: Section 12 of the Plan is hereby amended by adding the following to the end thereof: Any provision of this Plan to the contrary notwithstanding, no action taken on or after a Change of Control to amend, modify, freeze or terminate this Plan shall be effective unless written consent thereto is obtained from a majority of the participants who were Directors immediately prior to such Change of Control. -4- 5 IN WITNESS WHEREOF, this Amendment has been executed this _____ day of ________________, 1999. TRINITY INDUSTRIES, INC. By ------------------------------- Title: -5- EX-10.7 6 SUPPLEMENTAL RETIREMENT BENEFIT PLAN-RAY WALLACE 1 SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR W. RAY WALLACE AMENDMENT NO. 1 WHEREAS, the Board of Directors wishes to amend the definition of "Annual Compensation" to reflect annual earnings based on "earned" incentive compensation rather than "paid," the definition of "Annual Compensation" shall become as follows: "Annual Compensation" shall mean the base, incentive, deferred and other compensation earned by the Employee for a particular fiscal year, but shall not include pension, profit sharing or other retirement plan contributions or benefits, the grant or exercise of stock options, life and health insurance premiums or benefits, medical reimbursements, reimburse expenses, deferred incentive not ultimately paid, or any other perquisites. IN WITNESS WHEREOF, the Company and Employee have executed this Amendment on this 14th day of September 1995, effective as of the date the original plan was approved by the Board of Directors of the Company. TRINITY INDUSTRIES, INC. By: /s/ JACK CUNNINGHAM ------------------------------- Jack Cunningham Vice President /s/ W. RAY WALLACE ------------------------------- W. Ray Wallace 2 SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR W. RAY WALLACE AMENDMENT NO 2 The Supplemental Retirement Benefit Plan (the "Plan"), effective as of July 18, 1990 between Trinity Industries, Inc. (the "Company") and W. Ray Wallace, is hereby amended, effective as of May 6, 1997, as set forth below. Any term which is not defined below shall have the meaning set forth for such term in the Plan. 1. Section 4 of the Plan is hereby amended and restated by adding the following sentence at the end thereof: Notwithstanding the foregoing or the provisions of Section 5 hereof, in the event of a Change in Control of the Company (as hereinafter defined), the actuarial value of his Supplemental Retirement Benefits shall be paid into a trust immediately following a Change in Control and, upon termination of employment following a Change in Control, paid in a lump sum to Mr. W. Ray Wallace within five days following such termination. 2. Section 6 of the Plan is hereby amended and restated to read as follows: 6. MATERIAL CHANGES AFFECTING THE COMPANY In the event of a Change in Control (as hereinafter defined), the Company shall deposit in trust for Employee with a national bank designated by Employee that has offices in Dallas, Texas and a capital and surplus of not less than Twenty-Five Million Dollars, as trustee, 3 the actuarial equivalent of the Supplemental Retirement Benefits payable hereunder, calculated as if such Supplemental Retirement benefits commence twenty (20) days after the date of such Change in Control. The terms of the trust shall provide (a) for payments comparable to the payments that the Company would otherwise pay under this Agreement, (b) shall create a spendthrift trust and (c) shall otherwise be in form and substance determined by Employee. For purposes hereof, a "Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (I) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing 30% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (III) below; or (II) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on May 6, 1997, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who 2 4 either were directors on May 6, 1997 or whose appointment, election or nomination for election was previously so approved or recommended; or (III) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company or its affiliates of a business) representing 30% or more of the combined voting power of the Company's then outstanding securities; or (IV) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of 3 5 the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. For purposes hereof, "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act. "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. 3. The definition of "Annual Compensation" in Section 8 of the Plan is hereby amended and restated as follows: "Annual Compensation" shall mean the base, incentive, deferred and other compensation earned by the Employee in respect of a particular fiscal year, but shall not include pension, profit sharing or other retirement plan contributions or benefits, the grant or exercise of 4 6 stock options, life and health insurance premiums or benefits, medical reimbursements, reimbursed expenses, or any other perquisites. IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by a duly authorized officer of the Company and Executive has executed this Amendment as of the day and year first above written. TRINITY INDUSTRIES, INC. By: /s/ JESS HAY ------------------------------------ /s/ W. RAY WALLACE - -------------------------- W. RAY WALLACE 5 7 SUPPLEMENTAL RETIREMENT BENEFIT PLAN FOR W. RAY WALLACE AMENDMENT NO. 3 The Supplemental Retirement Benefit Plan (the "Plan"), effective as of July 18, 1990 between Trinity Industries, Inc. (the "Company") and W. Ray Wallace, is hereby amended, effective as of September 10, 1998 as set forth below: 1. The last sentence of Section 4 of the Plan is hereby deleted in its entirety and replaced by the following: Notwithstanding the foregoing or the provisions of Section 5 hereof, in the event of and immediately following a Change in Control of the Company (as hereinafter defined), the Company shall contribute to the Trinity Industries, Inc. Supplemental Retirement and Deferred Compensation Trust an amount equal to the actuarial present value of Employee's Supplemental Retirement Benefits which shall be credited to a separate account for Employee pursuant to said Trust. For purposes of this Section 4 and Section 5 hereof, "actuarial present value" shall be determined using the 1983 Group Annuity Mortality Table and the interest rate which would be used by the PBGC as of the first day of the calendar year in which the determination is being made for valuing lump sum payments upon a plan termination or a reasonably determined equivalent thereof if such rate is no longer published. 2. Section 5 of the Plan is hereby amended by adding the following to the end thereof: At any time after Employee begins to receive monthly payments under this Plan, if Employee so requests, 90% of the actuarial present value of any remaining Supplemental Retirement Benefits to be paid hereunder shall be paid to Employee in the form of a single lump sum payment in cash no later than 15 days following receipt of Employee's written request therefor by the Company. The remaining 10% shall be forfeited at the time of the distribution. 3. Section 6 of the Plan is hereby amended by deleting the first paragraph thereof in its entirety. 8 4. The Plan is hereby amended by adding the following new Section to the end thereof: 9. AMENDMENT AND TERMINATION This Agreement may be amended or terminated only in a writing signed by Employee and a duly authorized representative of the Company. IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by a duly authorized officer of the Company and Executive has executed this Amendment on this 21st day of December 1998. TRINITY INDUSTRIES, INC. By: /s/ JACK CUNNINGHAM ------------------------------ Title: Vice President /s/ W. RAY WALLACE - -------------------------- W. Ray Wallace EX-10.9 7 AMENDMENT NOS. 1-7 TO SUPPL. PROFIT SHARING PLAN 1 AMENDMENT NO. 1 TO SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES WHEREAS, effective July 1, 1990, TRINITY INDUSTRIES, INC. (the "Company") adopted, for the benefit of certain executive and managerial employees, the SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES (the "Plan"); and WHEREAS, pursuant to Article X of the Plan, the Company desires to amend the Plan in certain particulars. NOW, THEREFORE, the Plan is hereby amended, effective as of July 1, 1990, in the following respects: 1. Section 2.01 of the Plan is hereby revised by amending paragraph (s) thereof to be and read as follows: "2.01 Definitions * * * * * (s) INCOME: The net gain or loss of the Trust Fund from investments, as reflected by interest payments, dividends, realized and unrealized gains and losses on securities, other investment transactions and expenses paid from the Trust Fund. In determining the Income of the Trust Fund for any period, assets shall be valued on the basis of their fair market value, as determined by the Trustee. Notwithstanding the preceding provisions of this paragraph (s), Income need not be determined by reference to the Trust Fund and may be determined pursuant to any other method which may, from time to time, be selected by the Company." 2. Section 5.02 of the Plan is hereby revised by amending paragraph (a) thereof to be and read as follows: 2 "5.02 Account Adjustments * * * * * (a) Income--For each calendar quarter, Income shall, as a bookkeeping entry, be allocated and credited to the accounts of Participants, Former Participants and Beneficiaries who had unpaid balances in their accounts on the last day of such calendar quarter in proportion to the balances in such accounts at the beginning of the calendar quarter (i) increased by one-half of all Salary Reduction Contributions for such calendar quarter, and (ii) decreased by all withdrawals and distributions from such accounts during such calendar quarter. Notwithstanding the preceding provisions of this paragraph (a), if, pursuant to the agreement creating the Trust (including any appendix thereto), Participants are permitted to direct the investment of their accounts in one or more investment funds, Income, to the extent determined by reference to the Trust Fund, shall be allocated in the following manner: (1) The Income (hereinafter, the 'Fund Income') attributable to each investment fund (hereinafter, 'Fund') which may be established pursuant to the Trust (including, as a separate investment fund, assets, if any, invested at the discretion of the Trustee), shall first be determined. (2) Fund Income for such calendar quarter shall then, as a bookkeeping entry, be allocated and credited to the accounts of Participants, Former Participants and Beneficiaries who had unpaid balances in their accounts invested in such Fund on the last day of such calendar quarter in proportion to the balances in such accounts invested in such Fund at the beginning of the calendar quarter (i) increased by one-half of all Salary Reduction Contributions invested in such Fund during such calendar quarter, and (ii) decreased by all amounts withdrawn and distributed during such calendar quarter from such accounts but only to the extent theretofore invested in such Fund for such calendar quarter. * * * * *" 2 3 3. Section 6.01 of the Plan is hereby revised to be and read as follows: "6.01 Termination of Employment As of the last day of the calendar quarter within which a Participant terminates employment, the Committee (i) shall certify to the Trustee or the Treasurer of the Employer, as applicable, the total amount of the allocations to the credit of the Participant on the books of each Employer by which the Participant was employed at a time when amounts were credited by such Employer to his accounts and the Participant's vested interest in such accounts and (ii) shall determine whether the payment of the amounts credited to the Participant's accounts under the Plan is to be paid directly by the applicable Employer, from the Trust Fund, or by a combination of such sources (except to the extent the provisions of the Trust specify payment from the Trust Fund). Payment of the amounts credited to the Participant's accounts shall be made in accordance with the following provisions: (a) In the case of an Employee who becomes a Participant prior to January 1, 1992, that portion of such Participant's account balances determined as of December 31, 1991 shall be paid in the form of a lump sum. (b) In the case of an Employee who becomes a Participant on or after January 1, 1992 (or in the case of an Employee who becomes a Participant prior to such date, but only with respect to the post-12/31/91 portion of his account balances), such Participant may irrevocably select the method of payment of such amounts from the following alternatives: (1) In a lump sum; (2) In periodic payments of substantially equal amounts for a specified number of years not in excess of 20, in which event the unpaid balance at the end of each quarter shall receive an Income allocation. Such periodic payments shall be made not less frequently than annually; or 3 4 (3) In any combination of the methods specified in subparagraphs (1) or (2) of this paragraph (b). Any election pursuant to this paragraph (b) must be made prior to the later of (i) January 1, 1992 or (ii) the date on which such Employee's Participation hereunder first commences, with all payments to be made in the form of a lump sum in the absence of a timely election. In addition, any such election may be made separately with respect to payments occasioned by (i) normal retirement (as defined below), death or Disability and (ii) other terminations of employment. The Committee shall, as of the last day of the calendar quarter within which the Participant terminates employment, certify to the Trustee or the Treasurer of the Employer, as applicable, the method of payment selected by the Participant. (c) Payment of amounts credited to the Participant's accounts must be made or commence on the sixtieth (60th) day following the end of the calendar quarter in which the Participant's termination of employment occurs. The Trustee (to the extent provided in the Trust) or the Treasurer of the Employer, as applicable, shall thereafter make payments of benefits in the manner and at the times specified above, subject, however, to all of the other terms and conditions of this Plan and the Trust. This Plan shall be deemed to authorize the payment of all or any portion of a Participant's benefits from the Trust Fund to the extent such payment is required by the provisions of the Trust. If a Participant's termination of employment is attributable to his death, Disability or his retirement on or after age 65 ('normal retirement'), he shall be entitled to the entire amount credited to his accounts. If a Participant's termination of employment is not attributable to his death, Disability or normal retirement and if such termination of employment occurs on or after a 'Change in Control' (as defined in Section 9.05 hereof), he shall be entitled to the entire amount credited to his accounts; or if such termination of employment occurs prior to a Change in Control, he shall be entitled to the entire amount credited to his Salary Reduction Contribution Account and shall be entitled to 4 5 a 'vested percentage' of the entire amount credited to his Employer Contribution Account based on his years of Service, as follows:
Vested Forfeited Years of Service Percentage Percentage ---------------- ---------- ---------- Less than 1 0% 100% 1 but less than 2 20% 80% 2 but less than 3 40% 60% 3 but less than 4 60% 40% 4 but less than 5 80% 20% 5 or more 100% 0%
For purposes of this Section 6.01, the 'entire amount' credited to a Participant's accounts at termination of employment shall include any amounts to be credited pursuant to Section 4.01 hereof for the Year of termination of employment but not yet allocated." 4. Section 6.02 of the Plan is hereby revised to be and read as follows: "6.02 Death If a Participant shall die while in the service of an Employer, or after termination of employment with the Employers and prior to the complete distribution of all amounts payable to him under the Plan, any remaining amounts payable to the Participant hereunder shall be payable to his Beneficiary designated in accordance with Section 6.04 hereof. The Committee shall cause the Trustee (to the extent provided in the Trust) or the Treasurer of the Employer, as applicable, to pay to such Beneficiary all of the amounts then standing to the credit of the Participant in his accounts, with such payment to be made at the time and in the manner specified in Section 6.01 hereof." 5. Section 6.03 of the Plan is hereby revised to be and read as follows: "6.03 Plan Termination If the Plan is terminated pursuant to the provisions of Article X, the Committee shall cause the Trustee or the Treasurer of the Employer, as applicable, to pay to all Participants all of the amounts then standing to their credit. If the Plan is terminated on or after a 'Change in Control' (as defined in Section 9.05 hereof), then 5 6 such payments shall be in the form of lump sum payments. If the Plan is terminated prior to a Change in Control, then such payments shall be made at the time and in the manner specified in Section 6.01 hereof." 6. Section 6.05 of the Plan is hereby revised to be and read as follows: "6.05 In-Service Distributions No amounts credited to a Participant's Salary Reduction Contribution Account or Employer Contribution Account shall be distributed to or on behalf of the Participant prior to the occurrence of one of the events specified in the preceding provisions of this Article VI except to the extent that the Committee, in its sole discretion, consents to such distribution upon a showing, by the Participant, of an unforeseeable emergency. For purposes of this Section 6.05, an unforeseeable emergency is defined as severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute an unforeseeable emergency will depend on the facts of each case, but payment may not be made to the extent that such hardship is or may be relieved--(a) through reimbursement or compensation by insurance or otherwise, (b) by liquidation of the Participant's assets, to the extent that the liquidation of such assets would not itself cause severe financial hardship, or (c) by cessation of deferrals under the Plan." 7. Section 7.02 of the Plan is hereby revised to be and read as follows: "7.02 Funding of Obligation Section 7.01 above to the contrary notwithstanding, the Employers may elect to transfer assets to the Trust, the provisions of which require the use of the Trust's assets to satisfy claims of an Employer's general unsecured creditors in the event of such Employer's insolvency and direct that no Participant shall at any time have a prior 6 7 claim to such assets. The assets of the Trust shall not be deemed to be assets of this Plan." IN WITNESS WHEREOF, the Company has executed this Amendment No. 1 on the 9th day of August, 1991, effective as of July 1, 1990. TRINITY INDUSTRIES, INC. By: /s/ JACK CUNNINGHAM ------------------------------ Title: V.P. --------------------------- ATTEST: /s/ NEIL O. SHOOP - ----------------------------------- 7 8 AMENDMENT NO. 2 TO SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES WHEREAS, effective July 1, 1990, TRINITY INDUSTRIES, INC. (the "Company") adopted, for the benefit of certain executive and managerial employees, the SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES (the "Plan"); and WHEREAS, pursuant to Article X of the Plan, the Company desires to amend the Plan in certain particulars. NOW, THEREFORE, the Plan is hereby amended in the following respects: 1. Effective January 1, 1992, Section 2.01 of the Plan is hereby revised by amending paragraph (g) thereof to be and read as follows: "2.01 Definitions * * * * * (g) COMPENSATION: The total of all amounts paid to a Participant by the Employer for personal services as reported on the Participant's Federal Income Tax Withholding Statement (Form W-2) plus any salary reduction amounts described in Section 4.02 hereof and any amounts not included in the Participant's gross income pursuant to Section 125 of the Code, but excluding (i) any other contributions made under this Plan or any other plan of deferred compensation, (ii) tuition reimbursement payments, (iii) moving expense payments, (iv) excess life insurance imputed income, (v) income from nonqualified stock options, (vi) automobile allowance payments, (vii) medical allowance payments, (viii) safe driving bonuses, (ix) employee awards, (x) lodging allowance payments, (xi) tool allowance payments, (xii) road expense reimbursement payments, (xiii) commuting allowance payments, (xiv) meal allowance payments, (xv) 9 third-party sick pay, (xvi) attendance/safety bonuses, (xvii) travel allowances and (xviii) company automobile." 2. Effective January 1, 1993, Section 4.02 of the Plan is hereby revised by amending the first paragraph thereof to be and read as follows: "4.02 Participant Salary Reduction Prior to commencement of Participation hereunder, a Participant shall have entered into a written salary reduction agreement with his Employer. The terms of such salary reduction agreement shall provide that the Participant agrees to accept a reduction in salary from the Employer equal to any whole percentage of his Compensation per payroll period. In consideration of such agreement, the Employer will credit the Participant's Salary Reduction Contribution Account for each Year with an amount equal to the total amount by which the Participant's Compensation from the Employer was reduced during the Year pursuant to the salary reduction agreement. * * * * *" IN WITNESS WHEREOF, the Company has executed this Amendment No. 2 on the 18th day of May, 1992, effective as of the dates noted above. TRINITY INDUSTRIES, INC. By: /s/ JACK CUNNINGHAM ------------------------------------ Title: Vice President -------------------------------- ATTEST: /s/ NEIL O. SHOOP - -------------------------- 2 10 AMENDMENT NO. 3 TO SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES WHEREAS, effective July 1, 1990, TRINITY INDUSTRIES, INC. (the "Company") adopted, for the benefit of certain executive and managerial employees, the SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES (the "Plan"); and WHEREAS, pursuant to Article X of the Plan, the Company desires to amend the Plan in certain particulars. NOW, THEREFORE, effective as of April 1, 1995, the Company does hereby amend the Plan in the following respects: 1. Section 2.01 of the Plan is hereby revised by amending paragraph (k) thereof to be and read as follows: "2.01 Definitions * * * * * (k) EMPLOYEE: Any individual on the payroll of an Employer (i) whose wages from the Employer are subject to withholding for purposes of Federal income taxes and for purposes of the Federal Insurance Contributions Act, (ii) who is included within a 'select group of management or highly compensated employees,' as such term is used in Section 401(a)(1) of ERISA, and (iii) who is designated by the Plan Committee as eligible to participate in this Plan; provided that, under no circumstances shall an individual be an eligible Employee hereunder until he has completed one year of Service (or, effective for the calendar quarter beginning April 1, 1995, until the first day of the calendar quarter on or immediately following his Employment Commencement Date). * * * * *" 11 2. Section 3.01 of the Plan is hereby revised to be and read as follows: "3.01 Participation An Employee shall become a Participant in this Plan on one of the following dates, provided that, prior to such date, he shall first have undertaken the actions specified in Section 3.03 hereof: (a) In the case of an individual classified as an Employee under Section 2.01(k) hereof prior to July 1, 1990, on July 1, 1990 or on the first day of any of his taxable years thereafter; (b) In the case of an individual classified as an Employee under Section 2.01(k) hereof on or after July 1, 1990, but prior to April 1, 1995, on the thirtieth (30th) day immediately following such classification or on the first day of any of his taxable years thereafter; or (c) In the case of an individual classified as an Employee under Section 2.01(k) hereof on or after April 1, 1995, on the first day of the calendar quarter on or immediately following such classification or on the first day of any of his taxable years thereafter. An active Participant who incurs a Severance from Service and who is subsequently re-employed by an Employer shall reenter the Plan as an active Participant on his Reemployment Commencement Date or the first day of his next following taxable year, but only if (i) he continues to qualify as an Employee within the meaning of Section 2.01(k) hereof and (ii) prior to such date he shall have again undertaken the actions specified in Section 3.03 hereof. In the event that a Participant shall cease to qualify as an Employee within the meaning of Section 2.01(k) hereof, his Participation shall thereupon cease but he shall continue to accrue Service hereunder during the period of his continued employment with the Employers." 3. Section 3.03 of the Plan is hereby revised to be and read as follows: 2 12 "3.03 Election to Participate In order to participate hereunder, an Employee, otherwise eligible to participate pursuant to Section 3.01, must, after having received a written explanation of the terms of, and the benefits provided under, the Plan, elect to participate in such Plan on such form or forms as the Committee may provide and must execute a salary reduction agreement described in Section 4.02 hereof. Such election to participate and execution of a salary reduction agreement shall be effected on any date on or prior to the applicable date specified in such Section 3.01 for the commencement of Participation and, in all events, prior to the rendition of services for which salary subject to the salary reduction agreement would otherwise have been paid to such Employee." 4. Section 4.01 of the Plan is hereby revised by amending paragraph (b) thereof to be and read as follows: "4.01 Employee Contributions * * * * * (b) Additional Matching Contributions -- For each Year, each Employer shall credit an additional amount to each of its Employees for whom an amount was credited pursuant to paragraph (a) of this Section 4.01; provided, however, that no such additional amount shall be credited prior to the first day of the calendar quarter following the date on which such Employee completes one (1) year of Service. Such additional amount, when added to the Forfeitures which have become available for application as of the end of the Year pursuant to Section 4.03 hereof, shall be equal to the lesser of (1) or (2), where--(1) is (i) fifty percent (50%) of that portion of the Participant's salary reduction for such Year pursuant to Section 4.02 hereof which does not exceed six percent (6%) of his Compensation for such Year, for Participants with at least five (5) years of Service, or (ii) twenty-five percent (25%) of that portion of the Participant's salary reduction for such Year pursuant to Section 4.02 hereof which does not exceed six percent (6%) of his Compensation for such Year, for Participants with less than five (5) years of Service; and (2) is the amount that would have been credited to the Participant pursuant to (1) above if the Participant's salary reduction and Compensation for the Year had been limited to the 3 13 extent provided in, respectively, Sections 402(g) and 401(a)(17) of the Code (and rulings and regulations issued thereunder); provided, however, that no portion of a Participant's salary reduction shall be taken into account for purposes of this computation if, prior to the end of such Year, such portion is withdrawn by, or otherwise distributed to, the Participant or his Beneficiary, or if such portion represents amounts credited pursuant to paragraph (a) of this Section 4.01 prior to the first day of the calendar quarter following the date on which such Participant completes one (1) year of Service; provided, further, that no Matching Employer Contributions shall be credited to Participants for a Year unless (i) the Company's earnings per share for such Year are sufficient to cover dividends to stockholders, or (ii) the Company's net profits for such Year are at least Thirty-three and one-third Cents ($.33-1/3) per share. Notwithstanding the preceding provisions of this paragraph (b), the amount of Matching Employer Contribution credited to a Participant for a Year shall be reduced to the extent of any matching employer contributions made to or on behalf of the Participant for such Year under the Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates." 5. Section 4.02 of the Plan is hereby revised by amending paragraph (b) thereof to be and read as follows: "4.02 Participant Salary Reduction * * * * * (b) A salary reduction agreement shall have been entered into by a Participant on or prior to commencement of Participation hereunder and shall remain in effect until terminated or amended by the Participant in accordance with the procedures set forth herein. Any amendment or termination of a salary reduction agreement shall not be effective until the first day of the Participant's taxable year immediately following the taxable year of the Participant in which an election so to amend or terminate is executed by the Participant and his Employer and must be received by the Corporate Benefits department of the Company at least fifteen (15) days prior to the end of the taxable year of execution. If a Participant terminates his salary reduction agreement as hereinabove provided, then he may elect to enter into another salary reduction agreement to be effective as of the first day of any of his taxable years following his taxable year in which such termination was first effective, provided that written notice of such election must be received by the Corporate Benefits department of 4 14 the Company at least fifteen (15) days prior to such effective date." IN WITNESS WHEREOF, the Company has executed this Amendment No. 3 on the 6th day of December 1994, effective as of April 1, 1995. TRINITY INDUSTRIES, INC. By: /s/ JACK CUNNINGHAM ------------------------------------- Title: Vice President ---------------------------------- ATTEST: /s/ NEIL O. SHOOP - ---------------------------- 15 AMENDMENT NO. 4 TO SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES WHEREAS, TRINITY INDUSTRIES, INC. (the "Company") has heretofore adopted the SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES (the "Plan"); and WHEREAS, effective as of October 1, 1996, HALTER MARINE GROUP, INC. ("HMGI") and its subsidiaries (the "Participating Affiliates") have adopted the Plan; and WHEREAS, effective as of January 1, 1997, HMGI and the Participating Affiliates will withdraw from the Plan; and WHEREAS, effective as of January 1, 1997, the Company desires to transfer all benefit obligations relating to Participants who are employees of HMGI and the Participating Affiliates to a separate supplemental profit sharing plan maintained by HMGI; and WHEREAS, pursuant to those provisions of the Plan permitting the Company to amend the Plan from time to time, the Company desires to amend the Plan in order to reflect the transactions described above. NOW THEREFORE, the Plan is hereby amended as follows: 1. Effective January 1, 1997, new Article XI of the Plan is hereby adopted to be and to read as follows: 16 "ARTICLE XI WITHDRAWING EMPLOYERS In the event that a Participating Employer elects to discontinue or revoke its participation in this Plan: (i) the Company shall cause to be prepared a new plan (the "Successor Plan") for the withdrawing Participating Employer, which plan's terms shall be identical to the terms of this Plan; (ii) the Company shall transfer, deliver and assign any and all benefit obligations under this Plan which relate to Participants who are employees of the withdrawing Participating Employer or its subsidiaries to the Successor Plan; and (iii) the withdrawing Participating Employer shall be deemed to have consented to the adoption of the Successor Plan. For purposes of this provision, the Successor Plan shall treat all benefit obligations described under (ii) above as if they had accrued due to an individual's service with the withdrawing Participating Employer. Subsequent to the withdrawing Participating Employer's adoption of the Successor Plan, and the transfer of benefit obligations from this Plan to the Successor Plan, Participants whose benefits were transferred to the Successor Plan shall not be entitled to receive any amounts from this Plan which relate to benefit obligations which accrued prior to the transfer. IN WITNESS WHEREOF, the Company has caused this AMENDMENT NO. 4 TO THE SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES to be executed in its name and on its behalf this 13th day of January, 1997, effective as noted above. TRINITY INDUSTRIES, INC. By: /s/ JOHN T. SANFORD -------------------------------- Title: Executive Vice President ----------------------------- ATTEST: /s/ NEIL O. SHOOP - ----------------------------------- -2- 17 THE STATE OF TEXAS ) ) COUNTY OF DALLAS ) This instrument was acknowledged before me on the 13th day of January, 1997, by John T. Sanford, Executive Vice President of TRINITY INDUSTRIES, INC., a Delaware corporation, on behalf of said corporation. /s/ JANET L. SNYDER [SEAL] ---------------------------------- Notary Public in and for the State of Texas My Commission Expires: Printed Name of Notary: 3-19-97 Janet L. Snyder - ------------------------------- ---------------------------------- -3- 18 AMENDMENT NO. 5 TO SUPPLEMENTAL PROFIT SHARING PLAN The Supplemental Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates, as amended from time to time (the "Plan"), is hereby further amended, effective as of May 6, 1997, as set forth below. Any term which is not defined below shall have the meaning set forth for such term in the Plan. 1. Section 9.05 of the Plan is hereby amended and restated to read as follows: For purposes hereof, a "Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (I) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing 30% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (III) below; or (II) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on May 6, 1997, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on May 6, 1997, or whose appointment, 19 election or nomination for election was previously so approved or recommended; or (III) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company or its affiliates of a business) representing 30% or more of the combined voting power of the Company's then outstanding securities; or (IV) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. 2 20 For purposes hereof: "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act. "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by a duly authorized officer of the Company as of the day and year first above written. TRINITY INDUSTRIES, INC. By: /s/ W. RAY WALLACE ------------------------------- ATTEST: /s/ NEIL O. SHOOP - ----------------------------------- 3 21 AMENDMENT NO. 6 TO THE SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES Pursuant to the provisions of Article X thereof, the Supplemental Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates (the "Plan") is hereby amended effective as of April 1, 1999 in the following respects only: FIRST: Section 2.01 of the Plan is hereby amended by deleting subsection(s) therefrom in its entirety. SECOND: Section 2.01 of the Plan is hereby amended by restating subsections (cc), (dd) and (ee) thereof in their entirety to read as follows: (cc) TRUST (or TRUST FUND): The fund known as the SUPPLEMENTAL PROFIT SHARING TRUST FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES or, with respect to periods on and after April 1, 1999, known as the TRINITY INDUSTRIES, INC. SUPPLEMENTAL PROFIT SHARING AND DEFERRED DIRECTOR FEE TRUST, maintained in accordance with the terms of the trust agreement, as from time to time amended, which constitutes a part of this Plan. (dd) TRUSTEE: The corporation, individual or individuals appointed to administer the Trust in accordance with the agreement governing the Trust. (ee) VALUATION DATE: The last day of each calendar quarter and such other dates as the Committee in its discretion may prescribe. THIRD: Section 2.01 of the Plan is hereby amended by adding the following to the end thereof: (gg) ACCOUNT: A Participant's Salary Reduction Contribution Account, Employer Contribution Account and/or Discretionary Contribution Account, as the case may be. (hh) DISCRETIONARY CONTRIBUTION ACCOUNT: The account maintained for a Participant on the books of his Employer to which is credited amounts allocated for the benefit of such Participant pursuant to Section 4.01(c) hereof and adjustments related thereto. FOURTH: Section 3.01 of the Plan is hereby amended by adding the following to the end thereof: 22 Any provision of this Plan to the contrary notwithstanding, effective on and after the date of a Change in Control, the term "Participant" shall be limited to those individuals who satisfy the requirements set forth for participation in this Plan and who were Participants in this Plan as of the date immediately prior to the date of such Change in Control. FIFTH: Section 4.01 of the Plan is hereby amended by restating paragraph (b) thereof in its entirety and by adding the following new paragraph (c) to the end thereof: (b) Additional Matching Contributions--As of the last day of each Year, each Employer shall credit an additional amount to the Employer Contribution Account of each of its Employees for whom an amount was credited pursuant to paragraph (a) of this Section 4.01; provided, however, that no such additional amount shall be credited to the Account of an Employee for a Plan Year unless such Employee (i) has completed one year of Service prior to the first day of any calendar quarter during such Year, (ii) is in the employ of the Employer as of the last day of such Year (or, who, while employed by the Employer during the Year, terminated employment with the Employer on account of death, Disability or retirement, as defined by the Trinity Industries, Inc. Standard Pension Plan), and (iii) has made the maximum elective contributions for such Year permitted under the terms of the Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates. Such additional amount shall be equal to the lesser of (1) or (2), where-- "(1)" is an amount equal to a percentage of that portion of the Participant's salary reduction for such Year pursuant to Section 4.02 hereof that does not exceed six percent (6%) of his Compensation for such Year, based on his years of Service as follows:
Years of Service Additional Percentage ---------------- --------------------- Less than 1 0% 1 but less than 2 25% 2 but less than 3 30% 3 but less than 4 35% 4 but less than 5 40% 5 or more 50%
and "(2)" is the amount that would have been credited to the Participant pursuant to (1) above if the Participant's salary reduction and Compensation for the Year had been limited to the extent provided in, respectively, Sections 402(g) and 401(a)(17) of the Code (and rulings and regulations issued thereunder); 2 23 provided, however, that no portions of a Participant's salary reduction shall be taken into account for purposes of this computation if, prior to the end of such Year, such portion is withdrawn by, or otherwise distributed to, the Participant or his Beneficiary, or if such portion represents amounts credited pursuant to paragraph (a) of this Section 4.01 prior to the first day of the calendar quarter following the date on which such Participant completes one year of Service; provided, further, that no Matching Employer Contributions shall be credited to Participants for a Year unless (i) the Company's earnings per share for such Year are sufficient to cover dividends to stockholders, or (ii) the Company's net profits for such Year are at least Thirty-three and one third Cents ($.33-1/3) per share. Notwithstanding the preceding provisions of this paragraph (b), the amount of Matching Employer Contribution credited to a Participant for a Year shall be reduced to the extent of any matching employer contributions made to or on behalf of the Participant for such Year under the Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates. (c) Discretionary Contributions--In addition to the contributions described above, for each Year, an Employer may, but shall not be required to, credit the Discretionary Contribution Account of any one or more Participants in its employ during such Year, with such amount as the Employer may determine in its absolute discretion. SIXTH: Section 4.03 of the Plan is hereby amended by restatement in its entirety to read as follows: 4.03 Forfeitures If, upon a Severance from Service, a Participant is not entitled to a distribution of the entire balance in his Employer Contribution Account and/or Discretionary Contribution Account, then the amount to which the Participant is not entitled shall become a Forfeiture and shall be deducted from the Participant's Accounts at such time. The portion of the Participant's Accounts which is not a Forfeiture shall continue to be adjusted as provided in Section 5.02(a) until it is distributed in full. The Participant shall receive a distribution of the nonforfeitable portion of his Accounts pursuant to Section 6.01. SEVENTH: The third sentence of Section 5.01 of the Plan is hereby amended by restatement in its entirety to read as follows: When appropriate, a Participant shall have two or three separate Accounts, an Employer Contribution Account, a Salary Reduction Contribution Account and a Discretionary Contribution Account. 3 24 EIGHTH: Section 5.02 of the Plan is hereby amended by restating subsection (a) thereof in its entirety to read as follows: (a) Valuation Adjustments--As of each Valuation Date, the amount credited to a Participant's Accounts as of the preceding Valuation Date, less any distributions or Forfeitures with respect to such Accounts since such preceding Valuation Date, shall be adjusted by reference to the fluctuations in value, taking into account gain, loss, expenses and other adjustments, of the investment indices selected by the Participant for the investment adjustment of his or her Accounts, with such adjustments to be made in the manner prescribed by the Committee. Following such adjustment, the amounts credited to a Participant's Accounts shall be increased to take into account additional deferrals and contributions credited to such Accounts since the preceding Valuation Date. The Committee shall have sole and absolute discretion with respect to the number and type of investment indices made available for selection by Participants pursuant to this Section, the timing of Participant elections and the method by which adjustments are made. The designation of investment indices by the Committee shall be for the sole purpose of adjusting Accounts pursuant to this Section and this provision shall not obligate the Company or any of the Employers to invest or set aside any assets for the payment of benefits hereunder; provided, however, that the Company or an Employer may invest a portion of its general assets in investments, including investments which are the same as or similar to the investment indices designated by the Committee and selected by Participants, but any such investments shall remain part of the general assets of the Company or such Employer and shall not be deemed or construed to grant a property interest of any kind to any Participant, designated beneficiary or estate. The Committee shall notify the Participants of the investment indices available and the procedures for making and changing elections. NINTH: Section 5.02 of the Plan is hereby amended by adding the following to the end thereof: (d) Discretion Contributions--Any amount credited to a Participant by an Employer pursuant to Section 4.01 (c) during a Year shall be allocated to the Participant's Discretionary Contribution Account at the time determined by the Employer in its absolute discretion. TENTH: Section 6.01 of the Plan is hereby amended by restating paragraphs (a) and (b) thereof in their entirety to read as follows: (a) All payments with respect to a Participant's termination of employment for reasons other than death, Disability or retirement (as defined by the Trinity Industries, Inc. Standard Pension Plan) shall be made in the form of a lump 4 25 sum. Payments made with respect to a Participant's termination of employment on account of death, Disability or retirement (as defined by the Trinity Industries, Inc. Standard Pension Plan), shall be made in such form as the Participant may elect from the following alternatives: (1) In a lump sum; (2) In annual periodic payments for a specified number of years, not in excess of 20, with the first payment to be made in the calendar quarter following the calendar quarter in which the Participant terminates employment and subsequent payments to be made in the same calendar quarter of each succeeding year, where the payment made during each year shall be in an amount equal to a fraction of the Participant's Account balances as of the last day of the calendar quarter preceding the calendar quarter in which the payment is made, and where such fraction for each payment shall be one (1) divided by the number of payments remaining (including the current payment), and in which event the unpaid balance shall continue to be adjusted as provided in Section 5.02(a) until it is distributed in full; or (3) In a combination of the methods specified in subparagraphs (1) or (2) of this paragraph (a). Any election pursuant to this paragraph (a) must be made prior to the date on which such Employee's Participation hereunder first commences, with all payments to be made in the form of a lump sum in the absence of a timely election and, except as expressly provided otherwise in this Plan, shall be irrevocable; provided, however, that a Participant may change such election once during any Year, with the new election to be effective for a distribution arising from termination of employment of the Participant only if such distribution is to be made or commence more than 12 months after the date of the new election. The Committee shall, as of the last day of the calendar quarter within which the Participant terminates employment, certify to the Trustee or the Treasurer of the Employer, as applicable, the method of payment selected by the Participant. (b) Notwithstanding the preceding, with respect to an Employee who became a Participant prior to April 1, 1999, such Participant's election with respect to the form of payment made pursuant to the provisions of the Plan in effect prior to April 1, 1999 shall remain in effect unless changed by the Participant in accordance with the provisions of paragraph (a) above. ELEVENTH: The last paragraph of Section 6.01 of the Plan is hereby amended by restatement in its entirety to read as follows: 5 26 If a Participant's termination of employment is attributable to his death, Disability or his retirement on or after age 65 ("normal retirement"), he shall be entitled to the entire amount credited to his Accounts. If a Participant's termination of employment is not attributable to his death, Disability or normal retirement and if such termination of employment occurs on or after a "Change in Control" (as defined in Section 9.05 hereof), he shall be entitled to the entire amount credited to his Accounts; or if such termination of employment occurs prior to a Change in Control, he shall be entitled to (i) the entire amount credited to his Salary Reduction Contribution Account, (ii) such portion of the amount credited to his Discretionary Contribution Account determined in accordance with the criteria established by his Employer in its absolute discretion at the time the Discretionary Contribution was credited to such Account, and (iii) a "vested percentage" of the entire amount credited to his Employer Contribution Account based on his years of Service, as follows:
Vested Forfeited Years of Service Percentage Percentage ---------------- ---------- ---------- Less than 1 0% 100% 1 but less than 2 20% 80% 2 but less than 3 40% 60% 3 but less than 4 60% 40% 4 but less than 5 80% 20% 5 or more 100% 0%
For purposes of this Section 6.01, the "entire amount" credited to a Participant's Accounts at termination of employment shall include any amounts to be credited pursuant to Section 4.01 hereof for the Year of termination of employment but not yet allocated. TWELFTH: Section 6.03 of the Plan is hereby amended by restatement in its entirety to read as follows: 6.03 Plan Termination If the Plan is terminated pursuant to the provisions of Article X, the Committee shall cause the Trustee or the Treasurer of the Employer, as applicable, to pay to all Participants all of the amounts then standing to their credit, with payment to be made at the time and in the manner specified in Section 6.01 hereof; provided, however, that if the Plan is terminated on or after a Change in Control, payment shall be made in the form of lump sums which shall be paid no later than 60 days following the end of the quarter in which the Plan termination occurs or, if elected by the Participant at least one full year prior to the date payment otherwise would have been made upon termination of the Plan, payment may be made in the form of five annual installments, with the first installment to be made no later than 60 days following the 6 27 end of the quarter in which the termination occurs and the remaining installments to be paid no later than the last day of February of the next four successive calendar years. Each installment shall be in an amount equal to a fraction of the total balance in the Participant's Accounts as of the end of the immediately preceding calendar quarter, where the fraction shall be one (1) divided by the number of installments remaining to be paid (including the current installment), and where the unpaid balance shall continue to be adjusted as provided in Section 5.02(a) until it is distributed in full. THIRTEENTH: Section 6.05 of the Plan is hereby amended by restatement in its entirety to read as follows: 6.05 In-Service Distributions No amounts credited to a Participant's Accounts shall be distributed to or on behalf of the Participant prior to the occurrence of one of the events specified in the provisions of this Article VI except as follows: (a) A distribution may be made to or on behalf of the Participant to the extent that the Committee, in its sole discretion, consents to such distribution upon a showing by the Participant of an unforeseeable emergency. For this purpose, an "unforeseeable emergency" is defined as severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent of the Participant, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute an unforeseeable emergency will depend on the facts of each case, but payment may not be made to the extent that such hardship is or may be relieved--(i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant's assets, to the extent that the liquidation of such assets would not itself cause severe financial hardship, or (iii) by cessation of deferrals under the Plan. (b) A lump sum distribution may be made to or on behalf of a Participant at any time, but no more often than once during any Year, of such amount equal to at least 25% of the Participant's vested Account balances as the Participant may request; provided, however, that (i) an amount equal to 10% of the amount distributed from the Accounts of a Participant pursuant to this paragraph shall be forfeited from the Accounts at the time of the distribution so that the amount distributed to the Participant pursuant to this paragraph shall never exceed the amount of the Participant's vested Account balances minus the amount so forfeited, and (ii) the salary reduction agreement of any Participant who receives a distribution pursuant to this paragraph shall be suspended for one full year from the date of such distribution. 7 28 FOURTEENTH: Article VI of the Plan is hereby amended by adding the following new Section 6.06 to end thereof: 6.06 Designated Distributions Prior to the beginning of a calendar year, a Participant may elect that all or any portion of the amount of any salary reduction to be credited to the Participant's Account during such calendar year, be distributed to or on behalf of the Participant in the form of a lump sum in a subsequent calendar year designated by the Participant in the election which subsequent calendar year shall not be earlier than the third calendar year following the calendar year for which the election is made. The distribution shall be made no later than March 31 of the designated year. In the event of the Participant's termination of employment for any reason prior to the designated year, the election shall be void and of no effect. FIFTEENTH: Article IX of the Plan is hereby amended by adding the following three Sections to the end thereof: 9.07 Claims Procedure/Arbitration If any person (hereinafter called the "Claimant") feels that he or she is being denied a benefit to which he or she is entitled under this Plan, such Claimant may file a written claim for said benefit with the Committee. Within sixty days following the receipt of such claim the Committee shall determine and notify the Claimant as to whether he or she is entitled to such benefit. Such notification shall be in writing and, if denying the claim for benefit, shall set forth the specific reason or reasons for the denial, make specific reference to the pertinent provisions of this Plan, and advise the Claimant that he or she may, within sixty days following the receipt of such notice, in writing request to appear before the Committee or its designated representative for a hearing to review such denial. Any such hearing shall be scheduled at the mutual convenience of the Committee or its designated representative and the Claimant, and at any such hearing the Claimant and/or his or her duly authorized representative may examine any relevant documents and present evidence and arguments to support the granting of the benefit being claimed. The final decision of the Committee with respect to the claim being reviewed shall be made within sixty days following the hearing thereon, and the Committee shall in writing notify the Claimant of said final decision, again specifying the reasons therefor and the pertinent provisions of this Plan upon which said final decision is based. The final decision of the Committee shall be conclusive and binding upon all parties having or claiming to have an interest in the matter being reviewed. Any dispute or controversy arising out of, or relating to, the payment of benefits pursuant to this Plan shall be settled by arbitration in Dallas, Texas (or, if applicable law requires some other forum, then such other forum) in accordance with the rules then obtaining of the American Arbitration Association. The District Court of Dallas 8 29 County, Texas or, as the case may be, the United States District Court for the Northern District of Texas shall have jurisdiction for all purposes in connection with any such arbitration. Any process or notice of motion or other application to either of said courts, and any paper in connection with arbitration, may be served by certified mail, return receipt requested, or by personal service or in such other manner as may be permissible under the rules of the applicable court or arbitration tribunal, provided a reasonable time for appearance is allowed. Arbitration proceedings must be instituted within one year after the claimed breach occurred, and the failure to institute arbitration proceedings within such period shall constitute an absolute bar to the institution of any proceedings, and a waiver of all claims, with respect to such breach. 9.08 Reimbursement of Costs In the event that a dispute arises between a Participant or Beneficiary and the Company or other Employer liable for payments with respect to the payment of benefits hereunder and the Participant or Beneficiary is successful in pursuing a benefit to which he or she is entitled under the terms of the Plan against the Company or such other Employer or any other party in the course of litigation or otherwise and incurs attorneys' fees, expenses and costs in connection therewith, the Company or such other Employer against whom the Participant or beneficiary has been successful in pursuing a benefit under this Plan shall reimburse the Participant or beneficiary for the full amount of any such attorneys' fees, expenses and costs. 9.09 Acceleration of Payment In the event that the Internal Revenue Service formally assesses a deficiency against a Participant on the grounds that an amount credited to such Participant's Accounts under this Plan is subject to federal income tax (the "Reclassified Amount") earlier than the time payment otherwise would be made to the Participant pursuant to this Plan, then the Committee shall direct the Employer maintaining such Participant's Accounts to pay to such Participant and deduct from such Account the Reclassified Amount. SIXTEENTH: Article X of the Plan is hereby amended by adding the following to the end thereof: Any provision of this Plan to the contrary notwithstanding, no action to modify, amend, supplement, suspend or terminate the Plan on or after the date of a Change in Control shall be effective without the consent of a majority of the Participants in the Plan at the time of such action. SEVENTEENTH: Article XI of the Plan is hereby amended by restatement in its entirety to read as follows: 9 30 ARTICLE XI WITHDRAWING EMPLOYERS; TRANSFER TO SUCCESSOR PLAN 11.01 Withdrawing Employers In the event that a Participating Employer elects to discontinue or revoke its participation in this Plan: (a) the Company shall cause to be prepared a new plan (the "Successor Plan") for the withdrawing Participating Employer, the terms of which shall be identical to the terms of this Plan; (b) the Company shall transfer, deliver and assign any and all benefit obligations under this Plan which relate to Participants who are employees of the withdrawing Participating Employer or its subsidiaries to the Successor Plan; and (c) the withdrawing Participating Employer shall be deemed to have consented to the adoption of the Successor Plan. For purposes of this provision, the Successor Plan shall treat all benefit obligations described under (b) above as if they had accrued due to an individual's service with the withdrawing Participating Employer. Subsequent to the withdrawing Participating Employer's adoption of the Successor Plan and the transfer of benefit obligations from this Plan to the Successor Plan, Participants whose benefits were transferred to the Successor Plan shall not be entitled to receive any amounts from this Plan which relate to benefit obligations which accrued prior to the transfer. 11.02 Transfer to Successor Plan Any provision of this Plan to the contrary notwithstanding, in the event that: (a) the employment of a Participant with the Company or other Participating Employer is terminated in connection with the sale, spin-off or other disposition of a direct or indirect subsidiary of the Company or a sale or other disposition of assets of the Company or the assets of a direct or indirect subsidiary of the Company (the "Transaction"), and (b) in connection with the Transaction, such terminated Participant becomes employed by the subsidiary that is sold, spun-off or otherwise disposed of, the purchaser of the subsidiary or assets or other surviving entity in the Transaction, as the case may be, or an affiliate thereof, (the "Successor Employer"), and 10 31 (c) in connection with and effective as of or prior to the closing of the Transaction, the Successor Employer establishes a new plan, the terms of which are substantially identical to the terms of this Plan and which treat all benefit obligations which relate to the Participant (including those transferred to the Successor Plan pursuant to the provisions of this Section) as if they had accrued due to the Participant's service with the Successor Employer (the "Successor Plan"), and a new rabbi trust, the terms of which are substantially identical to the terms of the Trust (the "Successor Trust"), then the Participant shall not be entitled to a distribution of benefits from this Plan on account of such termination of employment, and the Company or other Participating Employer which formerly employed the Participant and which maintains an Account or Accounts for such Participant under this Plan shall transfer, deliver and assign to the Successor Plan and Successor Employer as of the date the Participant becomes employed by the Successor Employer any and all benefit obligations under this Plan which relate to the Participant, and effective with and subsequent to the adoption of the Successor Plan by the Successor Employer and the transfer of the Participant's benefit obligations from this Plan to the Successor Plan, the Participant whose benefits were transferred to the Successor Plan shall not be entitled to receive any amounts from this Plan which relate to benefit obligations which accrued prior to the transfer. The preceding provisions to the contrary notwithstanding, the provisions of this Section 11.02 shall not be effective for Transactions that occur on or after the date of a Change in Control without the written consent of a majority of the Participants in the Plan at such time. IN WITNESS WHEREOF, this Amendment has been executed this 31st day of March, 1999. TRINITY INDUSTRIES, INC. By: /s/ JACK CUNNINGHAM ------------------------------ Title: Vice President 11 32 AMENDMENT NO. 7 TO THE SUPPLEMENTAL PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES Pursuant to the provisions of Article X thereof, the Supplemental Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates (the "Plan") is hereby amended effective as of April 1, 1999 (except as otherwise noted herein) in the following respects only: FIRST: Section 2.01 of the Plan is hereby amended by deleting subsection(s) therefrom in its entirety. SECOND: Section 2.01 of the Plan is hereby amended by restating subsections (cc), (dd) and (ee) thereof in their entirety to read as follows: (cc) TRUST (or TRUST FUND): The fund known as the SUPPLEMENTAL PROFIT SHARING TRUST FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES or, with respect to periods on and after April 1, 1999, known as the TRINITY INDUSTRIES, INC. SUPPLEMENTAL PROFIT SHARING AND DEFERRED DIRECTOR FEE TRUST, maintained in accordance with the terms of the trust agreement, as from time to time amended, which constitutes a part of this Plan. (dd) TRUSTEE: The corporation, individual or individuals appointed to administer the Trust in accordance with the agreement governing the Trust. (ee) VALUATION DATE: The last day of each calendar quarter and such other dates as the Committee in its discretion may prescribe. THIRD: Section 2.01 of the Plan is hereby amended by adding the following to the end thereof: (gg) ACCOUNT: A Participant's Salary Reduction Contribution Account, Employer Contribution Account and/or Discretionary Contribution Account, as the case may be. (hh) DISCRETIONARY CONTRIBUTION ACCOUNT: The account maintained for a Participant on the books of his Employer to which is credited amounts allocated for the benefit of such Participant pursuant to Section 4.01(c) hereof and adjustments related thereto. 1 33 FOURTH: Section 3.01 of the Plan is hereby amended by adding the following to the end thereof: Any provision of this Plan to the contrary notwithstanding, effective on and after the date of a Change in Control, the term "Participant" shall be limited to those individuals who satisfy the requirements set forth for participation in this Plan and who were Participants in this Plan as of the date immediately prior to the date of such Change in Control. FIFTH: Section 4.01 of the Plan is hereby amended by restating paragraph (b) thereof in its entirety and by adding the following new paragraph (c) to the end thereof, with such amended and added provisions to be effective April 1, 1999, except for restated paragraph (b)(1), which shall be effective April 1, 1998: (b) Additional Matching Contribution--For each Year, each Employer shall credit an additional amount to each of its Employees for whom an amount was credited pursuant to paragraph (a) of this Section 4.01; provided, however, that no such additional amount shall be credited prior to the date on which such Employee completes one (1) year of Service. Such additional amount, when added to the Forfeitures which have become available for application as of the end of the Year pursuant to Section 4.03 hereof, shall be equal to the lesser of (1) or (2), where--(1) is a percentage of that portion of the Participant's salary reduction for such Year pursuant to Section 4.02 hereof which does not exceed six percent (6%) of his Compensation for such Year, based on his years of Service as follows:
Years of Service Applicable Percentage ---------------- --------------------- Less than 1 0% 1 but less than 2 25% 2 but less than 3 30% 3 but less than 4 35% 4 but less than 5 40% 5 or more 50%
and (2) is the amount that would have been credited to the Participant pursuant to (1) above if the Participant's salary reduction and Compensation for the Year had been limited to the extent provided in, respectively, Sections 402(g) and 401(a)(17) of the Code (and rulings and regulations issued thereunder); provided, however, that, except in the case of a Participant who "retires" (as defined in the Trinity Industries, Inc. Standard Pension Plan), dies or incurs a Disability, no portion of a Participant's salary reduction shall be taken into account for purposes of this computation if, prior to the end of such Year, such portion is withdrawn by, or otherwise distributed to, the Participant or his 2 34 Beneficiary; provided, further, that no Matching Employer Contributions shall be credited to Participants for a Year unless (i) the Company's earnings per share for such Year are sufficient to cover dividends to stockholders, or (ii) the Company's net profits for such Year are at least Thirty-Three and one-third Cents ($.33-1/3) per share. Notwithstanding the preceding provisions of subparagraph (1) of this paragraph (b), (i) the amount of Matching Employer Contributions, determined without regard to any allocations of income or loss under Section 5.02, credited to a Participant's Account shall not be less than the amount credited immediately prior to April 1, 1998; and (ii) in no event will the amount of Matching Employer Contribution credited to a Participant for a Year under this Plan when combined with any matching contribution credited to the Participant under the Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates exceed the amount of matching contribution that would have been credited under such Profit Sharing Plan determined as if all Salary Reduction Contributions hereunder had been made under such Profit Sharing Plan. (c) Discretionary Contributions--In addition to the contributions described above, for each Year an Employer may, but shall not be required to, credit the Discretionary Contribution Account of any one or more Participants in its employ during such Year with such amount as the Employer may determine in its absolute discretion. SIXTH: Section 4.03 of the Plan is hereby amended by restatement in its entirety to read as follows: 4.03 Forfeitures If, upon a Severance from Service, a Participant is not entitled to a distribution of the entire balance in his Employer Contribution Account and/or Discretionary Contribution Account, then the amount to which the Participant is not entitled shall become a Forfeiture and shall be deducted from the Participant's Accounts at such time. The portion of the Participant's Accounts which is not a Forfeiture shall continue to be adjusted as provided in Section 5.02(a) until it is distributed in full. The Participant shall receive a distribution of the nonforfeitable portion of his Accounts pursuant to Section 6.01. SEVENTH: The third sentence of Section 5.01 of the Plan is hereby amended by restatement in its entirety to read as follows: When appropriate, a Participant shall have two or three separate Accounts, an Employer Contribution Account, a Salary Reduction Contribution Account and a Discretionary Contribution Account. 3 35 EIGHTH: Section 5.02 of the Plan is hereby amended by restating subsection (a) thereof in its entirety to read as follows: (a) Valuation Adjustments--As of each Valuation Date, the amount credited to a Participant's Accounts as of the preceding Valuation Date, less any distributions or Forfeitures with respect to such Accounts since such preceding Valuation Date, shall be adjusted by reference to the fluctuations in value, taking into account gain, loss, expenses and other adjustments, of the investment indices selected by the Participant for the investment adjustment of his or her Accounts, with such adjustments to be made in the manner prescribed by the Committee. Following such adjustment, the amounts credited to a Participant's Accounts shall be increased to take into account additional deferrals and contributions credited to such Accounts since the preceding Valuation Date. The Committee shall have sole and absolute discretion with respect to the number and type of investment indices made available for selection by Participants pursuant to this Section, the timing of Participant elections and the method by which adjustments are made. The designation of investment indices by the Committee shall be for the sole purpose of adjusting Accounts pursuant to this Section and this provision shall not obligate the Company or any of the Employers to invest or set aside any assets for the payment of benefits hereunder; provided, however, that the Company or an Employer may invest a portion of its general assets in investments, including investments which are the same as or similar to the investment indices designated by the Committee and selected by Participants, but any such investments shall remain part of the general assets of the Company or such Employer and shall not be deemed or construed to grant a property interest of any kind to any Participant, designated beneficiary or estate. The Committee shall notify the Participants of the investment indices available and the procedures for making and changing elections. NINTH: Section 5.02 of the Plan is hereby amended by adding the following to the end thereof: (d) Discretionary Contributions--Any amount credited to a Participant by an Employer pursuant to Section 4.01(c) during a Year shall be allocated to the Participant's Discretionary Contribution Account at the time determined by the Employer in its absolute discretion. TENTH: Section 6.01 of the Plan is hereby amended by restating paragraphs (a) and (b) thereof in their entirety to read as follows: (a) All payments with respect to a Participant's termination of employment for reasons other than death, Disability or retirement (as defined by the Trinity Industries, Inc. Standard Pension Plan) shall be made in the form of a lump 4 36 sum. Payments made with respect to a Participant's termination of employment on account of death, Disability or retirement (as defined by the Trinity Industries, Inc. Standard Pension Plan), shall be made in such form as the Participant may elect from the following alternatives: (1) In a lump sum; (2) In annual periodic payments for a specified number of years, not in excess of 20, with the first payment to be made in the calendar quarter following the calendar quarter in which the Participant terminates employment and subsequent payments to be made in the same calendar quarter of each succeeding year, where the payment made during each year shall be in an amount equal to a fraction of the Participant's Account balances as of the last day of the calendar quarter preceding the calendar quarter in which the payment is made, and where such fraction for each payment shall be one (1) divided by the number of payments remaining (including the current payment), and in which event the unpaid balance shall continue to be adjusted as provided in Section 5.02(a) until it is distributed in full; or (3) In a combination of the methods specified in subparagraphs (1) or (2) of this paragraph (a). Any election pursuant to this paragraph (a) must be made prior to the date on which such Employee's Participation hereunder first commences, with all payments to be made in the form of a lump sum in the absence of a timely election and, except as expressly provided otherwise in this Plan, shall be irrevocable; provided, however, that a Participant may change such election once during any Year, with the new election to be effective for a distribution arising from termination of employment of the Participant only if such distribution is to be made or commence more than 12 months after the date of the new election. The Committee shall, as of the last day of the calendar quarter within which the Participant terminates employment, certify to the Trustee or the Treasurer of the Employer, as applicable, the method of payment selected by the Participant. (b) Notwithstanding the preceding, with respect to an Employee who became a Participant prior to April 1, 1999, such Participant's election with respect to the form of payment made pursuant to the provisions of the Plan in effect prior to April 1, 1999 shall remain in effect unless changed by the Participant in accordance with the provisions of paragraph (a) above. ELEVENTH: The last paragraph of Section 6.01 of the Plan is hereby amended by restatement in its entirety to read as follows: 5 37 If a Participant's termination of employment is attributable to his death, Disability or his retirement on or after age 65 ("normal retirement"), he shall be entitled to the entire amount credited to his Accounts. If a Participant's termination of employment is not attributable to his death, Disability or normal retirement and if such termination of employment occurs on or after a "Change in Control" (as defined in Section 9.05 hereof), he shall be entitled to the entire amount credited to his Accounts; or if such termination of employment occurs prior to a Change in Control, he shall be entitled to (i) the entire amount credited to his Salary Reduction Contribution Account, (ii) such portion of the amount credited to his Discretionary Contribution Account determined in accordance with the criteria established by his Employer in its absolute discretion at the time the Discretionary Contribution was credited to such Account, and (iii) a "vested percentage" of the entire amount credited to his Employer Contribution Account based on his years of Service, as follows:
Vested Forfeited Years of Service Percentage Percentage ---------------- ---------- ---------- Less than 1 0% 100% 1 but less than 2 20% 80% 2 but less than 3 40% 60% 3 but less than 4 60% 40% 4 but less than 5 80% 20% 5 or more 100% 0%
For purposes of this Section 6.01, the "entire amount" credited to a Participant's Accounts at termination of employment shall include any amounts to be credited pursuant to Section 4.01 hereof for the Year of termination of employment but not yet allocated. TWELFTH: Section 6.03 of the Plan is hereby amended by restatement in its entirety to read as follows: 6.03 Plan Termination If the Plan is terminated pursuant to the provisions of Article X, the Committee shall cause the Trustee or the Treasurer of the Employer, as applicable, to pay to all Participants all of the amounts then standing to their credit, with payment to be made at the time and in the manner specified in Section 6.01 hereof; provided, however, that if the Plan is terminated on or after a Change in Control, payment shall be made in the form of lump sums which shall be paid no later than 60 days following the end of the quarter in which the Plan termination occurs or, if elected by the Participant at least one full year prior to the date payment otherwise would have been made upon termination of the Plan, payment may be made in the form of five annual installments, with the first installment to be made no later than 60 days following the 6 38 end of the quarter in which the termination occurs and the remaining installments to be paid no later than the last day of February of the next four successive calendar years. Each installment shall be in an amount equal to a fraction of the total balance in the Participant's Accounts as of the end of the immediately preceding calendar quarter, where the fraction shall be one (1) divided by the number of installments remaining to be paid (including the current installment), and where the unpaid balance shall continue to be adjusted as provided in Section 5.02(a) until it is distributed in full. THIRTEENTH: Section 6.05 of the Plan is hereby amended by restatement in its entirety to read as follows: 6.05 In-Service Distributions No amounts credited to a Participant's Accounts shall be distributed to or on behalf of the Participant prior to the occurrence of one of the events specified in the provisions of this Article VI except as follows: (a) A distribution may be made to or on behalf of the Participant to the extent that the Committee, in its sole discretion, consents to such distribution upon a showing by the Participant of an unforeseeable emergency. For this purpose, an "unforeseeable emergency" is defined as severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent of the Participant, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute an unforeseeable emergency will depend on the facts of each case, but payment may not be made to the extent that such hardship is or may be relieved--(i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant's assets, to the extent that the liquidation of such assets would not itself cause severe financial hardship, or (iii) by cessation of deferrals under the Plan. (b) A lump sum distribution may be made to or on behalf of a Participant at any time, but no more often than once during any Year, of such amount equal to at least 25% of the Participant's vested Account balances as the Participant may request; provided, however, that (i) an amount equal to 10% of the amount distributed from the Accounts of a Participant pursuant to this paragraph shall be forfeited from the Accounts at the time of the distribution so that the amount distributed to the Participant pursuant to this paragraph shall never exceed the amount of the Participant's vested Account balances minus the amount so forfeited, and (ii) the salary reduction agreement of any Participant who receives a distribution pursuant to this paragraph shall be suspended for one full year from the date of such distribution. 7 39 FOURTEENTH: Article VI of the Plan is hereby amended by adding the following new Section 6.06 to end thereof. 6.06 Designated Distributions Prior to the beginning of a calendar year, a Participant may elect that all or any portion of the amount of any salary reduction to be credited to the Participant's Account during such calendar year, be distributed to or on behalf of the Participant in the form of a lump sum in a subsequent calendar year designated by the Participant in the election which subsequent calendar year shall not be earlier than the third calendar year following the calendar year for which the election is made. The distribution shall be made no later than March 31 of the designated year. In the event of the Participant's termination of employment for any reason prior to the designated year, the election shall be void and of no effect. FIFTEENTH: Article IX of the Plan is hereby amended by adding the following three Sections to the end thereof: 9.07 Claims Procedure/Arbitration If any person (hereinafter called the "Claimant") feels that he or she is being denied a benefit to which he or she is entitled under this Plan, such Claimant may file a written claim for said benefit with the Committee. Within sixty days following the receipt of such claim the Committee shall determine and notify the Claimant as to whether he or she is entitled to such benefit. Such notification shall be in writing and, if denying the claim for benefit, shall set forth the specific reason or reasons for the denial, make specific reference to the pertinent provisions of this Plan, and advise the Claimant that he or she may, within sixty days following the receipt of such notice, in writing request to appear before the Committee or its designated representative for a hearing to review such denial. Any such hearing shall be scheduled at the mutual convenience of the Committee or its designated representative and the Claimant, and at any such hearing the Claimant and/or his or her duly authorized representative may examine any relevant documents and present evidence and arguments to support the granting of the benefit being claimed. The final decision of the Committee with respect to the claim being reviewed shall be made within sixty days following the hearing thereon, and the Committee shall in writing notify the Claimant of said final decision, again specifying the reasons therefor and the pertinent provisions of this Plan upon which said final decision is based. The final decision of the Committee shall be conclusive and binding upon all parties having or claiming to have an interest in the matter being reviewed. Any dispute or controversy arising out of, or relating to, the payment of benefits pursuant to this Plan shall be settled by arbitration in Dallas, Texas (or, if applicable law requires some other forum, then such other forum) in accordance with the rules then obtaining of the American Arbitration Association. The District Court of Dallas 8 40 County, Texas or, as the case may be, the United States District Court for the Northern District of Texas shall have jurisdiction for all purposes in connection with any such arbitration. Any process or notice of motion or other application to either of said courts, and any paper in connection with arbitration, may be served by certified mail, return receipt requested, or by personal service or in such other manner as may be permissible under the rules of the applicable court or arbitration tribunal, provided a reasonable time for appearance is allowed. Arbitration proceedings must be instituted within one year after the claimed breach occurred, and the failure to institute arbitration proceedings within such period shall constitute an absolute bar to the institution of any proceedings, and a waiver of all claims, with respect to such breach. 9.08 Reimbursement of Costs In the event that a dispute arises between a Participant or Beneficiary and the Company or other Employer liable for payments with respect to the payment of benefits hereunder and the Participant or Beneficiary is successful in pursuing a benefit to which he or she is entitled under the terms of the Plan against the Company or such other Employer or any other party in the course of litigation or otherwise and incurs attorneys' fees, expenses and costs in connection therewith, the Company or such other Employer against whom the Participant or beneficiary has been successful in pursuing a benefit under this Plan shall reimburse the Participant or beneficiary for the full amount of any such attorneys' fees, expenses and costs. 9.09 Acceleration of Payment In the event that the Internal Revenue Service formally assesses a deficiency against a Participant on the grounds that an amount credited to such Participant's Accounts under this Plan is subject to federal income tax (the "Reclassified Amount") earlier than the time payment otherwise would be made to the Participant pursuant to this Plan, then the Committee shall direct the Employer maintaining such Participant's Accounts to pay to such Participant and deduct from such Account the Reclassified Amount. SIXTEENTH: Article X of the Plan is hereby amended by adding the following to the end thereof: Any provision of this Plan to the contrary notwithstanding, no action to modify, amend, supplement, suspend or terminate the Plan on or after the date of a Change in Control shall be effective without the consent of a majority of the Participants in the Plan at the time of such action. SEVENTEENTH: Article XI of the Plan is hereby amended by restatement in its entirety to read as follows: 9 41 ARTICLE XI WITHDRAWING EMPLOYERS; TRANSFER TO SUCCESSOR PLAN 11.01 Withdrawing Employers In the event that a Participating Employer elects to discontinue or revoke its participation in this Plan: (a) the Company shall cause to be prepared a new plan (the "Successor Plan") for the withdrawing Participating Employer, the terms of which shall be identical to the terms of this Plan; (b) the Company shall transfer, deliver and assign any and all benefit obligations under this Plan which relate to Participants who are employees of the withdrawing Participating Employer or its subsidiaries to the Successor Plan; and (c) the withdrawing Participating Employer shall be deemed to have consented to the adoption of the Successor Plan. For purposes of this provision, the Successor Plan shall treat all benefit obligations described under (b) above as if they had accrued due to an individual's service with the withdrawing Participating Employer. Subsequent to the withdrawing Participating Employer's adoption of the Successor Plan and the transfer of benefit obligations from this Plan to the Successor Plan, Participants whose benefits were transferred to the Successor Plan shall not be entitled to receive any amounts from this Plan which relate to benefit obligations which accrued prior to the transfer. 11.02 Transfer to Successor Plan Any provision of this Plan to the contrary notwithstanding, in the event that: (a) the employment of a Participant with the Company or other Participating Employer is terminated in connection with the sale, spin-off or other disposition of a direct or indirect subsidiary of the Company or a sale or other disposition of assets of the Company or the assets of a direct or indirect subsidiary of the Company (the "Transaction"), and (b) in connection with the Transaction, such terminated Participant becomes employed by the subsidiary that is sold, spun-off or otherwise disposed of, the purchaser of the subsidiary or assets or other surviving entity in the Transaction, as the case may be, or an affiliate thereof, (the "Successor Employer"), and 10 42 (c) in connection with and effective as of or prior to the closing of the Transaction, the Successor Employer establishes a new plan, the terms of which are substantially identical to the terms of this Plan and which treat all benefit obligations which relate to the Participant (including those transferred to the Successor Plan pursuant to the provisions of this Section) as if they had accrued due to the Participant's service with the Successor Employer (the "Successor Plan"), and a new rabbi trust, the terms of which are substantially identical to the terms of the Trust (the "Successor Trust"), then the Participant shall not be entitled to a distribution of benefits from this Plan on account of such termination of employment, and the Company or other Participating Employer which formerly employed the Participant and which maintains an Account or Accounts for such Participant under this Plan shall transfer, deliver and assign to the Successor Plan and Successor Employer as of the date the Participant becomes employed by the Successor Employer any and all benefit obligations under this Plan which relate to the Participant, and effective with and subsequent to the adoption of the Successor Plan by the Successor Employer and the transfer of the Participant's benefit obligations from this Plan to the Successor Plan, the Participant whose benefits were transferred to the Successor Plan shall not be entitled to receive any amounts from this Plan which relate to benefit obligations which accrued prior to the transfer. The preceding provisions to the contrary notwithstanding, the provisions of this Section 11.02 shall not be effective for Transactions that occur on or after the date of a Change in Control without the written consent of a majority of the Participants in the Plan at such time. IN WITNESS WHEREOF, this Amendment has been executed this 31 day of March, 1999. TRINITY INDUSTRIES, INC. By: /s/ JACK CUNNINGHAM -------------------- Title: Vice President 11 EX-10.10 8 SUPPL PROFIT SHARING & DEFERRED DIRECTOR FEE TRUST 1 TRINITY INDUSTRIES, INC. SUPPLEMENTAL PROFIT SHARING AND DEFERRED DIRECTOR FEE TRUST This Trust Agreement made by and between TRINITY INDUSTRIES, INC., a Delaware corporation (the "Company") and CHASE BANK OF TEXAS, N.A., a national banking association (the "Trustee"); WHEREAS, the Company and certain affiliates (the Company and its affiliates collectively referred to as the "Employers") have adopted nonqualified deferred compensation plans known as the Trinity Industries, Inc. Supplemental Profit Sharing Plan (the "Supplemental Profit Sharing Plan") and the Trinity Industries, Inc. Deferred Plan for Director Fees (the "Director Plan") (each sometimes referred to herein as a "Plan" and collectively referred to herein as the "Plans"); and WHEREAS, the Employers have incurred or expect to incur liability under the terms of such Plans with respect to the individuals participating in such Plans; and WHEREAS, the Employers have previously established a trust known as the Supplemental Profit Sharing Trust for Employees of Trinity Industries, Inc. and Certain Affiliates (hereinafter called the "Trust") pursuant to separate agreement with the Trustee, to which the Employers have contributed assets to be used for the satisfaction of the benefit liabilities under the Supplemental Profit Sharing Plan; and WHEREAS, pursuant to Section 11.3 of the agreement governing the Trust, the Company may amend the trust on behalf of all Employers; and WHEREAS, the Company desires to amend and restate the trust agreement pursuant to which the Trust is maintained and administered in order to add to the Trust the funding of the Director Plan, to change the name of the Trust, and to provide that assets contributed by and held for the satisfaction of Plan benefit liabilities of each Employer shall be allocated to a Separate Account, as herein defined, for such Employer's Plan Participants and beneficiaries, subject to the claims of such Employer's creditors in the event of the Employer's Insolvency, as herein defined, until paid to Plan Participants and their beneficiaries in such manner and at such times as specified in the Plans; and WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Director Plan as an unfunded plan or the Supplemental Profit Sharing Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974; and WHEREAS, it is the intention of the Employers to make contributions to the Trust to provide a source of funds to assist them in the meeting of their liabilities under the Plans; NOW, THEREFORE, the parties do hereby amend, rename and restate the Trust and agree that the Trust shall be comprised, held and disposed of as follows: 2 Section 1. Establishment Of Trust. (a) The Employers have previously deposited with the Trustee in trust amounts in excess of $1,000.00, which constitute the principal of the Trust to be held, administered and disposed of by the Trustee as provided in this Trust Agreement. (b) The Trust hereby established shall be irrevocable. (c) The Trust is intended to be a grantor trust, of which each Employer is the grantor with respect to its Separate Account, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly. (d) The principal of the Trust, and any earnings thereon shall be held separate and apart from other funds of the Employers and shall be used exclusively for the uses and purposes of Plan Participants and general creditors as herein set forth. Plan Participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plans and this Trust Agreement shall be mere unsecured contractual rights of Plan Participants and their beneficiaries against the Employers. Any amounts allocated to an Employer's Separate Account under the Trust will be subject to the claims of such Employer's general creditors under federal and state law in the event of Insolvency, as defined in Section 4(a) herein. (e) The Employers, in their sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with the Trustee to augment the principal to be held, administered and disposed of by the Trustee as provided in this Trust Agreement; provided, however, that each 12-month period ending March 31 each Employer shall contribute to the Trust an amount of cash or property at least equal in value to the total amount of deferrals and contributions credited to the Accounts of Participants employed by such Employer pursuant to the Supplemental Profit Sharing Plan during such 12-month period and the Company shall contribute to the Trust each 12-month period ending March 31 an amount of cash or property at least equal in value to the total amount of deferrals credited to the Accounts of Participants pursuant to the Director Plan during such 12-month period. In lieu of all or a portion of the contribution to the Trust required by this paragraph and paragraph 1(f) below, the Employers may make contributions in the form of premium payments on insurance policies that are assets of the Trust in such amount and in such manner as the Trustee may direct. (f) Any provision of this Trust Agreement to the contrary notwithstanding, upon a Change in Control, as defined in the Plans, each Employer shall (i) as soon as possible, but in no event more than two business days following the date of such Change in Control, make an irrevocable contribution to the Trust in an amount, as determined by an Independent Committee, as defined below, which when added to the total value of the assets allocated to the Employer's Separate Account under the Trust at such time equals 125% of the total amount credited to all Accounts under the Supplemental Profit Sharing Plan and the Director Plan with respect to such Employer's respective Plan Participants as of the date on which the Change in Control occurred, -2- 3 and (ii) on and after the date of the Change in Control, make monthly contributions to the Trust in amounts sufficient, as determined by the Independent Committee, to maintain the total value of the assets allocated to the Employer's Separate Account at an amount equal to 125% of the total amount credited to all Accounts under the Supplemental Profit Sharing Plan and the Director Plan with respect to such Employer's respective Plan Participants. Any provision of this Trust Agreement to the contrary notwithstanding, on and after the date of a Change in Control, the assets allocated to each Employer's Separate Account under this Trust, including any additional contributions made by such Employer in accordance with this Section 1(f) for the period following such Change in Control and any earnings on such Separate Account's proportionate share of the Trust's assets, shall be held exclusively for the benefit of those Participants in the Plans (or their beneficiaries) employed by such Employer as of the date immediately prior to the date of such Change in Control, subject to the claims of general creditors of such Employer under federal and state law as set forth below. (g) In the event that: (i) an Employer, other than the Company, for whom a Separate Account is being maintained under this Trust ceases to be a "Participating Employer" in the Supplemental Profit Sharing Plan as provided in Section 11.01 of that Plan and is deemed to have established a Successor Plan as provided in said Section 11.01 to which all benefit obligations which are allocable to its employees under the Supplemental Profit Sharing Plan have been transferred, the Company shall cause to be prepared a new trust (the "Successor Trust") for the withdrawing Employer, the terms of which shall be identical to the terms of this Trust, and the Trustee shall transfer the assets of the Separate Account being maintained for such Employer under this Trust to the Successor Trust; or (ii) the benefit obligations which relate to a Participant under the Supplemental Profit Sharing Plan are transferred, delivered and assigned to a Successor Plan as provided in Section 11.02 of the Supplemental Profit Sharing Plan, then the Trustee shall transfer to the Successor Trust from the Separate Account of each Employer who, immediately prior to such transfer, delivery and assignment, maintained an Account under the Supplemental Profit Sharing Plan to the Successor Trust assets in an amount equal to the amount that had been credited to the Participant's Account or Accounts by such Employer under the Supplemental Profit Sharing Plan immediately prior to the transfer, delivery and assignment; provided, however, that if the total amount in such Separate Account is less than the total amount of benefit obligations of such Employer under the Plans at the time of transfer, then the amount transferred shall not exceed a pro rata portion of such Separate Account determined based upon the amount of the benefit obligations of such Participant transferred, delivered and assigned by such Employer to the Successor Plan compared to all benefit obligations of such Employer under the Plans; and provided, further, however that the provisions of this subsection (g)(ii) shall not be effective with respect to "Transactions" (as defined in Section 11.02 of the Supplemental Profit Sharing Plan) that occur on or after a Change in Control without the written consent of a majority of the Participants in the Plan at such time. -3- 4 Section 2. Payments to Plan Participants and their Beneficiaries. (a) The Committee of each Plan shall deliver to the Trustee a schedule (the "Payment Schedule") that indicates the amounts payable with respect to each Plan Participant (and his or her beneficiaries) and identifies the Separate Account of the Employer from which such amounts are payable, that provides a formula or other instructions acceptable to the Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plans), and the time of commencement for payment of such amounts. An updated Payment Schedule shall be provided by each Committee to the Trustee periodically, but no less frequently than once each calendar quarter. Except as otherwise provided herein, the Trustee shall make payments to the Plan Participants and their beneficiaries in accordance with such Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plans and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by an Employer under the Supplemental Profit Sharing Plan or by the Company under the Director Plan. (b) The entitlement of a Plan Participant or his or her beneficiaries to benefits under a Plan shall be determined by each Committee or such other party as may be designated under the Plan, and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan. (c) The Employers participating in the Supplemental Profit Sharing Plan or the Company with respect to the Director Plan may make payments of benefits directly to Plan Participants or their beneficiaries as they become due under the terms of each Plan in lieu of payment from the Trust. The applicable Committee shall notify the Trustee of an Employer's or the Company's decision to make payments of benefits directly prior to the time amounts are payable to Participants or their beneficiaries. In addition, if the assets allocated to an Employer's Separate Account under the Trust are not sufficient to make payments of benefits to its respective Plan Participants and beneficiaries in accordance with the terms of the Plans, such Employer shall make the balance of each such payment as it falls due, and the Separate Accounts of other Employers hereunder shall not be liable for the payment of such benefits. The Trustee shall notify the Company immediately when the assets allocated to an Employer's Separate Account under the Trust are not sufficient to satisfy all payments due. (d) Any provision of this Trust Agreement to the contrary notwithstanding, upon and after a Change in Control, (i) the Trustee shall make payments to Plan Participants or their beneficiaries in accordance with the direction of the Independent Committee rather than a Plan Committee, regardless of whether the Trustee has received a Payment Schedule or any other form of direction from a Plan Committee to make such payments, and (ii) to the extent that an Employer's Separate Account is not sufficient to satisfy all vested benefit liabilities of such Employer, whether or not then due or payable, at the time a benefit payment is owed to one or more Plan Participants or beneficiaries upon or after a Change in Control, then each such Participant or beneficiary entitled to payment shall receive from such Employer's Separate -4- 5 Account under the Trust Fund only a pro-rata share of such Separate Account determined on the basis of his or her Plan Account balances for which such Employer is liable compared to the total Plan Account balances for which such Employer is liable, and the remaining amount owed shall be paid directly by the Employer. Section 3. Appointment of Independent Committee. (a) Any provision of this Trust Agreement to the contrary notwithstanding, upon a Change in Control, an Independent Committee consisting of at least three members shall be appointed by the Human Resource Committee subject to the written approval of a majority of the Participants in the Plans on the date of such Change in Control. The Independent Committee shall: (i) determine the amount of the irrevocable contributions to be made by each Employer pursuant to Section 1(f) hereof; (ii) determine in accordance with the Plans the amounts payable with respect to each Plan Participant (and his or her beneficiaries), the form in which such amounts are to be paid, and the time of commencement for payment of such amounts pursuant to Section 2(a) hereof; (iii) determine the entitlement of Plan Participants and beneficiaries to benefits under the terms of the Plans pursuant to Section 2(b) hereof; (iv) direct the Trustee to make payments to Plan Participants and their beneficiaries pursuant to Section 2 hereof; and (v) select a successor Trustee for the Trust if a Trustee resigns or is removed on or after the date of a Change in Control pursuant to Section 12. (b) Each member of the Independent Committee so appointed shall serve in such office until his or her death, resignation or removal. The Human Resource Committee may remove any member of the Independent Committee effective upon the written approval of a majority of the Plan Participants. Vacancies on the Independent Committee shall be filled from time to time by the Human Resource Committee effective upon the written approval of a majority of the Participants in the Plans on the date such vacancy is filled. (c) The Independent Committee shall act by a majority of its members at the time in office and such action may be taken either by a vote at a meeting or in writing without a meeting. The Independent Committee may by such majority action authorize any one or more of its members to execute any document or documents on behalf of the Independent Committee, in which event the Independent Committee shall notify the Trustee in writing of such action and the name or names of its member or members so authorized to act. Every interpretation, choice, determination or other exercise by the Independent Committee of any power or discretion given either expressly or by implication to it shall be conclusive and binding upon all parties having or -5- 6 claiming to have an interest under the Trust or otherwise directly or indirectly affected by such action, without restriction, however, on the right of the Independent Committee to reconsider and redetermine such action. (d) Any provision of this Trust Agreement to the contrary notwithstanding, in the event that (i) the Human Resource Committee shall not appoint an Independent Committee within 30 days following a Change in Control or a majority of the Participants in the Plans do not approve in writing at least three members selected by the Human Resource Committee to serve on an Independent Committee within such 30-day period or (ii) the Human Resource Committee does not fill a vacancy on the Independent Committee within 30 days of the date such office becomes vacant or a majority of the Participants in the Plans do not approve in writing the Human Resource Committee's selection to fill a vacancy on the Independent Committee within such 30-day period, then the Participants in the Plans shall elect, by majority vote, up to three individuals to the extent necessary to ensure that the Independent Committee consists of three members. Section 4. Trustee Responsibility Regarding Payments to Trust Beneficiary when an Employer Is Insolvent. (a) The Trustee shall cease payment of benefits to Plan Participants and their beneficiaries if the Employer liable for such payment of benefits is Insolvent. An Employer shall be considered "Insolvent" for purposes of this Trust Agreement if (i) the Employer is unable to pay its debts as they become due, or (ii) the Employer is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of each Employer's Separate Account under the Trust shall be subject to claims of general creditors of the Employer under federal and state law as set forth below. (i) The Human Resource Committee and the Chief Executive Officer of an Employer shall have the duty to inform the Trustee in writing of the Employer's Insolvency. If a person claiming to be a creditor of an Employer alleges in writing to the Trustee that the Employer has become Insolvent, the Trustee shall determine whether the Employer is Insolvent and, pending such determination, the Trustee shall discontinue payment of benefits to the Employer's respective Plan Participants or their beneficiaries. (ii) Unless the Trustee has actual knowledge of an Employer's Insolvency, or has received notice from the Employer or a person claiming to be a creditor alleging that the Employer is Insolvent, the Trustee shall have no duty to inquire whether the Employer is Insolvent. The Trustee may in all events rely on such evidence concerning the Employer's solvency as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination concerning the Employer's solvency. -6- 7 (iii) If at any time the Trustee has determined that an Employer is Insolvent, the Trustee shall discontinue payments to the Employer's respective Plan Participants and their beneficiaries and shall hold the assets allocated to the Employer's Separate Account under the Trust for the benefit of the Employer's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Plan Participants or their beneficiaries to pursue their rights as general creditors of an Employer with respect to benefits due under the Plans or otherwise. (iv) The Trustee shall resume the payment of benefits to an Employer's respective Plan Participants and their beneficiaries in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that the Employer is not Insolvent (or is no longer Insolvent). (c) Provided that there are sufficient assets allocated to an Employer's Separate Account under the Trust, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 4(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan Participants and their beneficiaries under the terms of the Plans for the period of such discontinuance, less the aggregate amount of any such Plan benefit payments made to Plan Participants or their beneficiaries by the Employers in lieu of the payments provided for hereunder during any such period of discontinuance. Section 5. Payments to the Employers. (a) Except as provided in Sections 4 and 5(b) hereof, the Employers shall have no right or power to direct the Trustee to return to the Employers or to divert to others any of the Trust assets before payment of all benefits have been made to Plan Participants and their beneficiaries pursuant to the terms of the Plans. (b) To the extent that a Plan Committee at any time determines based upon information provided to the Committee by the Trustee that the value of the assets allocated to an Employer's Separate Account under the Trust exceeds 125% of the amounts credited to Plan Accounts for which such Employer is liable as of the most recent Valuation Date plus any deferrals or contributions made since that date, the Trustee shall pay such excess to such Employer upon receipt of written request therefor from the Employer; provided, however, that no such payment of excess assets to an Employer shall be made on or after the date of a Change in Control without the written approval of two-thirds of the Participants for whom such Employer maintains an Account pursuant to a Plan. Section 6. Investment Authority. (a) The Trustee shall establish and maintain a separate account within the Trust for each Employer (the "Separate Account"). An amount equal to the value of all current Trust Fund assets as of the effective date of this agreement shall be allocated to the Separate Account maintained for the Company. All future amounts deposited with the Trustee by an Employer -7- 8 shall be allocated to such Employer's Separate Account. The Separate Accounts shall be maintained for record keeping purposes only, and the assets of the Trust may remain invested as a single fund; provided, however, that the Company may direct the Trustee to segregate all or any portion of the Trust Funds for investment solely for one or more of the Separate Accounts. At the end of each calendar quarter and at such other times as the Company may determine, the Trustee shall determine the fair market value of the assets of the Trust. On the basis of such valuation, the Trustee shall adjust the Separate Account of each Employer to reflect its proportionate share of the earnings, losses and expenses of the Trust for the valuation period then ended. (b) The Trustee shall have full power and authority to invest and reinvest the Trust assets, or any part thereof, in such stocks (common or preferred), bonds, mortgages, notes, interest-bearing deposits (including such deposits with any corporate trustee acting hereunder), options and contracts for the future or immediate receipt or delivery of property of any kind, or other securities, producing or nonproducing oil and gas royalties and payments and other producing and nonproducing interests in minerals, or in commodities, life insurance policies, annuity contracts or other property of any kind or nature whatsoever, whether real, personal or mixed, as the Trustee, in the Trustee's absolute discretion and judgment, deems appropriate for the Trust, and to hold cash uninvested at any time and from time to time in such amounts and to such extent as the Trustee, in the Trustee's absolute discretion and judgment, deems appropriate for the Trust. The Trustee shall have full power and authority to manage, handle, invest, reinvest, sell for cash or credit, or for part cash or part credit, exchange, hold, dispose of, lease for any period of time (whether or not longer than the life of the Trust), improve, repair, maintain, work, develop, use, operate, mortgage, or pledge, all or any part of the assets and property from time to time constituting any part of the trust funds held in trust under the Trust; borrow or loan money or securities; write options and sell securities or other property short or for future delivery; engage in hedging procedures; buy and sell futures contracts; execute obligations, negotiable and nonnegotiable; vote shares of stock in person and by proxy, with or without power of substitution; register investments in the name of a nominee; sell, convey, lease and/or otherwise deal with any producing or nonproducing oil, gas and mineral leases or mineral rights, payments and royalties; pay all reasonable expenses; execute and deliver any deeds, conveyances, leases, contracts, or written instruments of any character appropriate to any of the powers or duties of the Trustee, and shall, in general, have as broad power respecting the management, operation and handling of the Trust assets and property as if the Trustee were the owner of such assets and property in the Trustee's own right. The preceding provisions of this paragraph to the contrary notwithstanding, the Company shall have the right and power at any time and from time to time to give the Trustee broad guidelines within which it shall invest the assets of the Trust; provided, however, that on and after the date of a Change in Control, the Independent Committee, rather than the Company, shall have the sole authority to exercise such right. (c) All rights associated with assets of the Trust shall be exercised by the Trustee or the person designated by the Trustee, and shall in no event be exercisable by or rest with Plan Participants. -8- 9 (d) Each Employer shall have the right, at any time, and from time to time in its sole discretion, to substitute assets of equal fair market value for any asset held by the Trust; provided, however, that on and after the date of a Change in Control, any assets transferred to the Trust in substitution for assets held by the Trust must consist of cash or marketable securities acceptable to the Independent Committee and the fair market value of the respective assets shall be determined by the Trustee. This right is exercisable by the Employer in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity. Section 7. Disposition of Income. During the term of this Trust, all income received by the Trust, net of any applicable expenses and taxes paid from the Trust, shall be accumulated and reinvested; provided, however that the Employers shall pay all taxes, fees and expenses associated with the Plans and the Trust. In the event the Employers do not pay all taxes, fees and expenses owed with respect to the Trust, any portion not paid by the Employers may be paid from the Trust, provided, that the Trustee shall immediately notify the Employers in writing that such payment has been made and the Employers shall reimburse the Trust for such payment within 15 days from the date of such notice. Section 8. Accounting by Trustee. The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and the Trustee. Within 30 days following the close of each twelve-month period ending March 31 and within 30 days after the removal or resignation of the Trustee, the Trustee shall deliver to the Company a written account of its administration of the Trust and to each Employer a written account of its administration of the Employer's Separate Account during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be. Section 9. Responsibility of the Trustee. (a) The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; provided, however, that the Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by an Employer which is contemplated by, and in conformity with, the terms of the Plans or this Trust and is given in writing by the Employer. (b) If the Trustee undertakes or defends any litigation arising in connection with this Trust, the Employers agree to indemnify the Trustee against the Trustee's costs, expenses and liabilities (including, without limitation, attorneys' fees and expenses) relating thereto and to be primarily liable for such payments. If the Employers do not pay such costs, expenses and liabilities in a reasonably timely manner, the Trustee may obtain payment from the Trust; -9- 10 provided, however, that in the event any such costs, expenses and liabilities are paid from the Trust, the Trustee shall notify the Employers in writing that such payment has been made and the Employers shall reimburse the Trust for such payment within 15 days from the date of such notice. (c) The Trustee may consult with legal counsel (who may also be counsel for the Employers generally) with respect to any of its duties or obligations hereunder. (d) The Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder. (e) The Trustee shall have, without exclusion, all powers conferred on trustees by applicable law, unless expressly provided otherwise herein; provided, however, that except as provided in Sections 5(b) and 6(d) hereof, if an insurance policy is held as an asset of the Trust, the Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy. (f) Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code. Section 10. Compensation and Expenses of the Trustee. The Trustee shall be paid such reasonable compensation commensurate with the services and responsibilities involved hereunder as shall from time to time be agreed upon by the Trustee and the Company. The Employers shall pay all administrative and the Trustee's fees and expenses, but, if not so paid, such fees and expenses shall be paid from the Trust; provided, however, that in the event any such fees and expenses are paid from the Trust, the Trustee shall notify the Employers in writing that such payment has been made and the Employers shall reimburse the Trust for such payment within 15 days from the date of such notice. Section 11. Resignation and Removal of the Trustee. (a) The Trustee may resign at any time by written notice to the Company, which shall be effective 30 days after receipt of such notice unless the Company and the Trustee agree otherwise. (b) The Trustee may be removed by the Company on 30 days notice or upon shorter notice accepted by the Trustee; provided, however, that the Trustee may not be removed by the Company on or after the date of a Change in Control except with the written consent of a majority of the Plan Participants. -10- 11 (c) Upon resignation or removal of the Trustee and appointment of a successor Trustee, all assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within 30 days after receipt of notice of resignation, removal or transfer, unless the Company extends the time limit. (d) If the Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 12 hereof, by the effective date of resignation or removal under paragraph(s) (a) or (b) of this Section. If no such appointment has been made, the Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of the Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust. Section 12. Appointment of Successor. (a) If the Trustee resigns or is removed in accordance with Section 11(a) or (b) hereof, the Company may appoint any third party, such as a bank trust department or other party that may be granted corporate trustee powers under state law, as a successor to replace the Trustee upon resignation or removal; provided, however, that if the Trustee resigns or is removed on or after the date of a Change in Control, the Independent Committee shall select a successor Trustee in accordance with this Section 12. The appointment shall be effective when accepted in writing by the new Trustee, who shall have all of the rights and powers of the former Trustee, including ownership rights in the Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by the Company or the successor Trustee to evidence the transfer. (b) The successor Trustee need not examine the records and acts of any prior Trustee and may retain or dispose of existing Trust assets, subject to Sections 8 and 9 hereof. The successor Trustee shall not be responsible for and the Employers shall indemnify and defend the successor Trustee from any claim or liability resulting from any action or inaction of any prior Trustee or from any other past event, or any condition existing at the time it becomes successor Trustee. Section 13. Amendment or Termination. (a) This Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, (i) no such amendment shall conflict with the terms of the Plans or shall make the Trust revocable, and (ii) this Trust Agreement may not be amended on or after the date of a Change in Control without the written consent of a majority of the Participants in the Plans. (b) The Trust shall not terminate until the date on which Plan Participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plans. Upon termination of the Trust any assets that remain allocated to an Employer's Separate Account under the Trust shall be returned to such Employer. -11- 12 (c) Upon written approval of all of the Participants (including any beneficiaries of deceased Participants entitled to payment of benefits pursuant to the terms of the Plans), the Company may terminate this Trust prior to the time all benefit payments under the Plans have been made. All assets allocated to an Employer's Separate Account under the Trust at termination shall be returned to such Employer. (d) The Company may terminate this Trust with respect to the Separate Account of any Employer with the written approval of all of such Employer's respective Plan Participants (including any beneficiaries of deceased Participants of such Employer who are entitled to payment of benefits pursuant to the terms of the Plans). All assets allocated to an Employer's Separate Account under the Trust on the date of such termination shall be returned to such Employer. Section 14. Miscellaneous. (a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. (b) Benefits payable to Plan Participants and their beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. (c) This Trust Agreement shall be governed and construed in accordance with the internal laws (and not the principles relating to conflicts of laws) of the State of Texas, except where superseded by federal law. (d) Unless the context clearly indicates otherwise, when used in this Trust Agreement: (i) "Committee" or "Plan Committee" shall mean the "Committee" appointed to administer the Supplemental Profit Sharing Plan and the "Administrative Committee" appointed to administer the Director Plan. (ii) "Human Resource Committee" shall mean the Human Resource Committee of the Board of Directors of the Company. (iii) "Participant" shall mean each "Participant" as that term is defined in the Supplemental Profit Sharing Plan and each Director who has an amount credited to his or her Account under the Director Plan or who has elected to have all or any portion of his or her Annual Fee deferred under the terms of that Plan. (e) Except where otherwise defined, capitalized terms used herein shall have the meaning given to them in the Plans. -12- 13 (f) In the event that a dispute arises between a Plan Participant or beneficiary and the Participant's Employer, the Company or the Trustee with respect to the payment of amounts from the Trust and the Participant or beneficiary is successful in pursuing a benefit to which he or she is entitled under the terms of the Plans and this Trust against the Participant's Employer, the Company, the Trustee or any other party in the course of litigation or otherwise and incurs attorneys' fees, expenses and costs in connection therewith, the Company or with respect to the Supplemental Profit Sharing Plan, the Participant's Employer, if other than the Company, shall reimburse the Plan Participant or beneficiary for the full amount of any such attorneys' fees, expenses and costs. (g) Upon the written consent of the Company delivered to the Trustee, any other Affiliate of the Company which adopts the Supplemental Profit Sharing Plan may become a party to this Trust by delivering to the Trustee a certified copy of a resolution of its board of directors or other governing authority adopting this Trust. For purposes of this Trust, any such Affiliate which adopts this Trust with the written consent of the Company shall be an Employer hereunder. (h) Any controversy arising out of, or relating to, the payment of Plan benefits that are payable from this Trust shall be resolved pursuant to the provisions of the applicable Plan, including provisions relating to the procedures for making benefit claims under the Plan and in accordance with the provisions, if any, requiring arbitration of Plan benefit disputes. IN WITNESS WHEREOF, this Agreement has been executed this 31 day of March, 1999 to be effective as of April 1, 1999. TRINITY INDUSTRIES, INC. By /s/ JACK CUNNINGHAM -------------------------------------- Title: Vice President CHASE BANK OF TEXAS, N. A. By -------------------------------------- Title: The undersigned, as members of the Trust Committee appointed pursuant to the provisions of the Supplemental Profit Sharing Trust for Employees of Trinity Industries, Inc. and -13- 14 Certain Affiliates, hereby approve and agree to the amendment and restatement of the Trust as set forth herein. /s/ JACK CUNNINGHAM ------------------------------------ /s/ [ILLEGIBLE] ------------------------------------ /s/ NEIL O. SHOOP ------------------------------------ -14- 15 THE STATE OF TEXAS ) ) COUNTY OF DALLAS ) BEFORE ME, the undersigned authority, a notary public in and for said County and State, on this day personally appeared Jack Cunningham, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said TRINITY INDUSTRIES, INC., a Delaware corporation, and that he/she executed the same as the act of such corporation for the purposes and consideration therein expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 31st day of March, 1999. /s/ ANA HORNER [SEAL] ------------------------------------ Notary Public, State of Texas My Commission expires: 3/28/2000 - ---------------------- THE STATE OF TEXAS ) ) COUNTY OF DALLAS ) BEFORE ME, the undersigned authority, a notary public in and for said County and State, on this day personally appeared ______________________, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said CHASE BANK OF TEXAS, N. A., a national banking association, and that he/she executed the same as the act of such banking association for the purposes and consideration therein expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ___ day of _____________________, 1999. ------------------------------------ Notary Public, State of Texas My Commission expires: - ---------------------- -15- EX-10.11 9 SUPPLEMENTAL RETIREMENT PLAN 1 TRINITY INDUSTRIES, INC. SUPPLEMENTAL RETIREMENT PLAN ARTICLE I INTRODUCTION 1.1 This Plan shall be known as the Trinity Industries, Inc. Supplemental Retirement Plan and shall be effective April 1, 1995. 1.2 This Plan is an unfunded deferred compensation arrangement for a select group of management or highly compensated personnel of Trinity Industries, Inc. and its Affiliates (as hereinafter defined) in order to supplement their retirement benefits to the extent that those benefits are limited by Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986. Participants will be determined by the Plan Committee. 1.3 The payments made under this Plan shall be made in coordination with any benefits to which a Participant is or may become entitled under any Base Plan (as hereinafter defined). 1.4 Trinity Industries, Inc. hopes and expects to continue the Plan indefinitely, but reserves the right to amend it or terminate it in any respect and at any time or from time to time, to the extent provided in Article VI hereof. 1.5 This Plan shall apply only to an employee who begins receiving benefits from a Base Plan after April 1, 1995, as determined by the Plan Committee. ARTICLE II DEFINITIONS AND CONSTRUCTION 2.1 Unless the context otherwise requires, the terms used herein shall have the meanings set forth in the remaining sections of this Article II. -1- 2 2.2 Affiliate shall mean any entity affiliated with Trinity which shall have adopted a Base Plan for the benefit of its employees. 2.3 Base Plan shall mean the defined benefit plan or plans sponsored by Trinity and/or its Affiliates and qualified under Section 401(a) of the Code, from which the Participant is entitled to receive benefits. 2.4 Beneficiary shall mean the individual or individuals entitled to receive benefits payable on behalf of any Participant under his Base Plan in the event of his death on or after Retirement. 2.5 Board shall mean the Board of Directors of Trinity Industries, Inc. 2.6 Code shall mean the Internal Revenue Code of 1986, as amended from time to time. 2.7 Committee shall mean the Supplemental Retirement Plan Committee appointed by the Board. 2.8 Company shall mean Trinity Industries, Inc., a Delaware corporation, as well as its Affiliates, which are hereinafter collectively referred to as the Company. 2.9 Effective Date shall mean April 1, 1995. 2.10 Eligibility Requirements shall mean: (i) having been employed by the Company for at least five (5) years; (ii) receiving compensation from the Company in excess of the Code Section 401(a)(17) limit (currently $150,000); (iii) being a participant under a Base Plan; and, (iv) being included within a group of managerial or highly compensated employees of the Company selected by the Plan committee. 2.11 Employee shall mean any person employed by the Company who is included on the Federal Insurance Contribution Act rolls of the Company. 2.12 Participant shall mean an Employee who meets the Eligibility Requirements as determined by the Plan Committee. -2- 3 2.13 Plan shall mean the Trinity Industries, Inc. Supplemental Retirement Plan as set forth in this document, as this document may be amended from time to time. 2.14 Retirement shall mean the date on which a Participant is eligible to begin receiving benefits from any Base Plan. 2.15 Trinity shall mean Trinity Industries, Inc., a Delaware corporation. 2.16 Masculine pronouns used herein shall refer to men or women or both and nouns and pronouns when stated in the singular shall include the plural and when stated in the plural shall include the singular, wherever appropriate. ARTICLE III DESIGNATION OF PARTICIPANTS AND FUNDING ARRANGEMENTS 3.1 The Committee shall meet as necessary to verify the eligibility of Participants and to approve the amounts of benefits. 3.2 Contributions by Trinity to pay benefits under the Plan will be made solely out of the general assets of Trinity. Nothing contained in this Plan and no action taken pursuant to the provisions of this Plan shall create or be construed to create a trust of any kind, or a fiduciary relationship between Trinity or the Plan and any Employee or any other person. Any funds which may be set aside or invested relative to the Plan shall continue for all purposes to be a part of the general funds of Trinity and no person other than Trinity shall, by virtue of the provisions of this Plan, have any interest in such funds. To the extent that any person acquires a right to receive payment from Trinity under the Plan, such right shall be no greater than the right of any unsecured general creditor of Trinity. ARTICLE IV PLAN BENEFITS 4.1 This Plan does not provide for the payment of compensation regularly payable to an Employee for his customary services to the Company. -3- 4 4.2 Benefits payable under this Plan will be paid in coordination with any benefits payable to a Participant from his Base Plan. 4.3 If a Participant's services with the Company are terminated prior to his eligibility to receive early, normal or late Retirement benefits under his Base Plan, he shall forfeit all right, for himself and his Beneficiary, to any benefits under this Plan; provided, however, that in the event that such services are terminated for any reason other than death or disability after the occurrence of a "Change in Control" (as hereinafter defined), then such Participant shall not forfeit his right to benefits hereunder and shall be entitled to the difference between (i) his "accrued benefit" as determined under his Base Plan as of the date of such termination by not taking into account Sections 401(a)(17) and 415 of the Code and (ii) his "accrued benefit" determined under such Base Plan as of the date of such termination by taking into account Sections 401(a)(17) and 415 of the Code, with such amount payable to such Employee at the same time and in the same manner as Retirement benefits are payable under the Base Plan. For purposes of this Plan, a "Change in Control" shall occur in the case of acquisition of 50% or more of the outstanding common stock of the Company by a corporation, person or other entity pursuant to a tender offer or exchange offer for the common stock other than by the Company. 4.4 Benefits from the Plan shall be actuarially computed amounts payable to a Participant or Beneficiary so that the annual payments such Participant or Beneficiary shall receive from this Plan (as limited by the final sentence of this Section) and from the Base Plan shall equal the amount of the payments which the Participant would have received at Retirement under the Base Plan but for the operation of Section 401(a)(17) or Section 415 of the Code. The Plan shall not compensate any Participant or Beneficiary for any adverse effects to the Participant which result in a reduction of benefits available from the Base Plan due to changes in the Base Plan benefit formula, social security laws or other laws and rules. 4.5 In the event of a Participant's death on or after Retirement, Trinity shall make any payments called for hereunder to his Beneficiary. Any payment made by Trinity in good faith shall fully discharge Trinity from its obligations with respect to such payment, and -4- 5 Trinity shall have no further obligation to see to the application of any money so paid. 4.6 The benefits payable under this Plan to a Participant who is eligible to receive benefits from his Base Plan shall be made according to the form of payment elected or mandated under the Base Plan and shall commence at the same time as such Base Plan benefits. ARTICLE V ADMINISTRATION 5.1 The Committee shall have full power and authority to interpret, construe and administer the Plan. The Committee's interpretation and construction hereof, and actions hereunder, including any determination of the amount or recipient of any payment to be made under the Plan, shall be binding and conclusive on all persons and for all purposes. No member of the Committee or the Board shall be liable to any person for any action taken or omitted in connection with the interpretation and administration Of the Plan. ARTICLE VI AMENDMENT AND TERMINATION 6.1 The Plan may be amended or terminated in whole or in part from time to time by the Board; provided, however, that no such action shall adversely affect Participants who shall have begun receiving benefits from the Plan; provided further that, in the event of a Change in Control (as defined in Section 4.3 hereof), the Plan may be so amended or terminated only upon approval (determined as of the date of such approval) by a majority in interest of all Participants entitled to benefits under the Plan. 6.2 If Trinity should reorganize, consolidate or merge with another corporation, the Plan shall become an obligation of the new entity or of any business taking over the assets, duties or responsibilities of Trinity. 6.3 If Trinity liquidates due to insolvency or any other event, the Plan shall terminate and be considered as fully and completely discharged. -5- 6 ARTICLE VII GENERAL PROVISIONS 7.1 The Plan shall not be deemed to constitute a contract between the Company and any Employee or to be a consideration for, or an inducement for, the employment of any Employees by the Company. Nothing contained in the Plan shall be deemed to give any Employee the right to be retained in the service of the Company or to interfere with the right of the Company to discharge any Employee at any time, without regard to the effect such discharge may have on any rights under the Plan. 7.2 The Plan shall inure to the benefit of and be binding upon the Company, and the Participants and their successors and assigns. 7.3 No benefit payable under the Plan will be subject in any manner to anticipation, assignment, garnishment or pledge; and any attempt to anticipate, assign, garnish or pledge the same will be void; and no such benefits will be in any manner liable for or subject to the debts, liabilities, engagements or torts of the Participant; and if the Participant is adjudicated bankrupt or attempts to anticipate, assign or pledge any benefits, then such benefits will, in the discretion of the Committee, cease, and in that even the Committee will have the authority to cause the same or any part thereof to be held or applied to or for the benefit of the Participant, his Beneficiary, his children or other dependents, or any of them, in such manner and in such proportion as the Committee may deem proper. The foregoing will not, however, preclude or affect any pledges, liabilities or other obligations of the Participant to the Company. 7.4 If the Committee shall find that any person to whom any payment is payable under the Plan is unable to care for his affairs because of mental or physical illness, accident, or death, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, a child, a parent, a brother or sister or any person deemed by the Committee, in its sole discretion, to have incurred expenses for such person otherwise entitled to payment, in such manner and proportions as the Committee may determine. Any such payment shall be a complete discharge of the liabilities of Trinity under the Plan, -6- 7 and Trinity shall have no further obligation to see to the application of any money so paid. 7.5 The payment of Plan benefits to a Participant, as hereinabove provided, shall be subject to the following condition, the breach of which shall cause the Participant to forfeit all rights in and to any such benefits remaining unpaid on the date of such breach: Until all payments hereunder have been made in full, such Participant shall not, directly or indirectly, become or serve as an officer, employee, owner or partner of any business which, in the opinion of the Plan Committee, competes in a material manner with the Company, without the prior written consent of the Company. 7.6 The provisions of the Plan shall be construed according to the laws of the State of Texas. EXECUTED this 1st day of April, 1995. TRINITY INDUSTRIES, INC. By: /s/ JACK CUNNINGHAM ---------------------------------- Title: Vice President ------------------------------- Attest: /s/ NEIL O. SHOOP - --------------------------------- -7- 8 TRINITY INDUSTRIES, INC. SUPPLEMENTAL RETIREMENT PLAN AMENDMENT NO. 1 WHEREAS, the Board of Directors wishes to amend the Trinity Industries, Inc. Supplement Retirement Plan to include "earned and ultimately paid" incentive compensation rather than "paid" incentive compensation. NOW, THEREFORE, the annual "Compensation" used when computing any benefit payable under this plan will include incentive compensation earned under the Company's Incentive Compensation Agreement, "when earned" rather than "when paid". To be included as "Compensation" the incentive compensation, must ultimately be paid. IN WITNESS HEREOF, the Company has executed this Amendment on this 14th day of September, 1995, effective as of September 14, 1995. TRINITY INDUSTRIES, INC. By: /s/ JACK CUNNINGHAM -------------------------------------- Jack Cunningham Vice President 9 SUPPLEMENTAL RETIREMENT PLAN AMENDMENT NO. 2 The Trinity Industries, Inc. Supplemental Retirement Plan, as amended from time to time (the "Plan"), is hereby further amended, effective as of May 6, 1997, as set forth below. Any term which is not defined below shall have the meaning set forth for such term in the Plan. 1. Section 4.2 of the Plan is hereby amended and restated as follows: 4.2 Except as provided in Section 4.3 hereof, benefits payable under this Plan will be paid in coordination with any benefits payable to a Participant from his Base Plan. 2. Section 4.3 of the Plan is hereby amended and restated as follows: 4.3 If a Participant's services with the Company are terminated prior to his eligibility to receive early, normal or late Retirement benefits under his Base Plan, he shall forfeit all right, for himself and his Beneficiary, to any benefits under this Plan; provided, however, that in the event that such services are terminated for any reason (other than death or disability) after the occurrence of a "Change in Control" (as hereinafter defined), then such Participant shall not forfeit his right to benefits hereunder and shall be entitled to the difference between (i) his "accrued benefit" as determined under his Base Plan as of the date of such termination by not taking into account Sections 401(a)(17) and 415 of the Code and (ii) his "accrued benefit" determined under 10 such Base Plan as of the date of such termination by taking into account Sections 401(a)(17) and 415 of the Code, with the actuarial value of such difference being payable to the Employee in a lump sum cash payment within five days following such termination. For purposes of this Plan, a "Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (I) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of Trinity Industries, Inc. ("Trinity") (not including in the securities beneficially owned by such Person any securities acquired directly from Trinity or its affiliates) representing 30% or more of the combined voting power of Trinity's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (III) below; or (II) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on May 6, 1997, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Trinity) whose appointment or election by the Board or nomination for election by Trinity's stockholders was approved or recommended by a vote of at 2 11 least two-thirds (2/3) of the directors then still in office who either were directors on May 6, 1997, or whose appointment, election or nomination for election was previously so approved or recommended; or (III) there is consummated a merger or consolidation of Trinity or any direct or indirect subsidiary of Trinity with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of Trinity outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 60% of the combined voting power of the securities of Trinity or such surviving entity or any parent thereof outstanding immediately after such merger. or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of Trinity (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of Trinity (not including in the securities Beneficially Owned by such Person any securities acquired directly from Trinity or its Affiliates other than in connection with the acquisition by the Company or its affiliates of a business) representing 30% or more of the combined voting power of Trinity's then outstanding securities; or (IV) the stockholders of Trinity approve a plan of complete liquidation or dissolution of Trinity or there is consummated an agreement for the sale or disposition by Trinity of all or 3 12 substantially all of Trinity's assets, other than a sale or disposition by Trinity of all or substantially all of Trinity's assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of Trinity in substantially the same proportions as their ownership of Trinity immediately prior to such sale. For purposes hereof: "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act. "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) Trinity or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of Trinity or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the stockholders of Trinity in substantially the same proportions as their ownership of stock of Trinity. 3. Section 4.6 of the Plan is hereby amended and restated as follows: 4 13 4.6 Except as provided in Section 4.3 hereof, the benefits payable under this Plan to a Participant who is eligible to receive benefits from his Base Plan shall be made according to the form of payment elected or mandated under the Base Plan and shall commence at the same time as such Base Plan benefits. 4. Section 6.1 of the Plan is hereby amended and restated as follows: 6. The Plan may be amended or terminated in whole or in part from time to time by the Board; provided, however, that no such action shall adversely affect Participants who shall have begun receiving benefits from the Plan; and provided further, that during (a) the period commencing on the date of occurrence of a Potential Change in Control (as defined below) and ending on the earlier of (i) six months after the later of (1) the expiration of six months following the occurrence of such Potential Change in Control or (2) the Board's adoption of a resolution certifying that a Potential Change in control ceases to exist or (ii) the date of occurrence of a Change in Control, and (b) a period of two years following the occurrence of a Change in Control, the Plan may not be terminated or amended in any manner adverse to Participants or Beneficiaries (including, but not limited to, any adverse amendment of this Section 6.1 or any adverse amendment to the proviso in Section 4.3 hereof). For purposes of this Plan: A "Potential Change in Control" shall be deemed to have occurred if the event set 5 14 forth in any one of the following paragraphs shall have occurred: (1) Trinity enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (2) Trinity or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; (3) any Person becomes the Beneficial Owner, directly or indirectly, of securities of Trinity representing 15% or more of either the then outstanding shares of common stock of Trinity or the combined voting power of Trinity's then outstanding securities (not including in the securities beneficially owned by such Person any securities acquired directly from Trinity or its affiliates); or (4) the Board adopts a resolution to the effect that, for purposes of this Plan, a Potential Change in Control has occurred. 5. The second paragraph of Section 7.5 of the Plan is hereby amended by adding to the end thereof the following clause: ; provided, however, that the provisions of this Section 7.5 shall be of no force and effect from and after the occurrence of a Change in Control (as defined above). 6 15 IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by a duly authorized officer of the Company as of the day and year first above written. TRINITY INDUSTRIES, INC. By: /s/ W. RAY WALLACE ---------------------------------- 7 EX-10.12 10 DEFERRED PLAN FOR DIRECTOR FEES 1 TRINITY INDUSTRIES, INC. DEFERRED PLAN FOR DIRECTOR FEES THIS PLAN, made and executed at Dallas, Texas by Trinity Industries, Inc., a Delaware corporation (the "Company"), is being established primarily for the purpose of providing to members of the Board of Directors of the Company the ability to defer receipt of all or part of their compensation as a Director. I. DEFINITIONS Whenever used herein, the following terms shall have the meaning set forth below: (a) "Account" means the separate memorandum account maintained by the Company for each Director who elects to participate in the Plan. (b) "Adjustment Date" means the last day of each calendar quarter and such other dates as the Administrative Committee in its discretion may prescribe. (c) "Administrative Committee" means a committee composed of at least three individuals appointed by the Compensation Committee of the Board of Directors of the Company to administer the adjustment of participant accounts as provided herein, each of whom shall serve in such office until a successor is appointed by the Compensation Committee or until such person's death, resignation or removal by the Compensation Committee. (d) "Annual Fee" means the retainer and meeting fees paid to a Director for services rendered as a member of the Board of Directors of the Company, including fees for services on a committee, for the Annual Period. 2 (e) "Annual Period" means the period commencing with the Annual Meeting of Stockholders of the Company at which the Director is elected and ending with the next Annual Meeting of Stockholders of the Company. (f) "Board of Directors" means the Board of Directors of the Company. (g) "Change of Control" means the occurrence of either of the following: (1) any person (as such term is used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), shall become the beneficial owner (within the meaning of Rule l3d-3 under the Exchange Act) of 30% or more of the Company's outstanding Common Stock; or (2) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. (h) "Competitive Business Entity" means any business, proprietorship, partnership, corporation engaged in business activities in the same or similar markets in which the Company, its subsidiaries, and affiliates operate or plan to operate. (i) "Director" means a member of the Board of Directors. (j) "Plan" means the Trinity Industries, Inc. Deferred Plan for Director Fees as set forth in this instrument and as it may hereafter be amended from time to time. 2 3 (k) "Termination Date" means the date upon which a Director ceases to be a member of the Board of Directors. II. PLAN DESCRIPTION A Director may elect to defer receipt of all or a specified part of his or her Annual Fee. The Company will maintain an Account for each participant into which the deferred portion of the Annual Fee will be credited on the date the Director would otherwise be entitled to receive such fee. Sums credited to the Account will accrue an interest equivalent from the date that they are credited at a rate equal to the prime rate of interest as announced by Texas Commerce Bank Dallas as of the first business day following each Adjustment Date. The accrued interest equivalent shall be credited to the Account on each Adjustment Date, and shall thereafter be subject to subsequent accruals of an interest equivalent. In lieu of having the Account credited with an interest equivalent as provided in the preceding paragraph, a Director may elect to have the deferred portion of his or her Annual Fee treated as if invested in units of Common Stock of the Company ("Stock Units"). Stock Units will be deemed to be purchased on the date that the deferred portion of the Annual Fee otherwise would be credited to the Account. A Stock Unit shall be deemed to be equal in value to a share of Common Stock of the Company at the closing price of the Company's Common Stock on the New York Stock Exchange on the date of particular determination, or if the date of determination is not a trading day on the New York Stock Exchange, on the next succeeding trading day. Dividend equivalents in the form of additional Stock Units will be credited to the Account as of the date of payment of cash dividends on the Company's Common Stock. In case of a split or other subdivision of the Company's Common Stock, 3 4 Stock Units will be similarly deemed to be split or subdivided. At each Adjustment Date, a Participant's Account that has been credited with Stock Units shall be valued on the basis of shares of the Company's Common Stock at that date, taking into account any increase or decrease in the market value of the Company's Common Stock. A director must affirmatively elect to have the deferred portion of his or her Annual Fee treated as if invested in Stock Units. Such an election must be made prior to the first day of the Annual Period and shall apply to the deferred portion of the Annual Fee for the entire Annual Period. The failure to timely elect to have the deferred portion of his or her Annual Fee treated as if invested in Stock Units will be deemed an election to have the deferred portion of his or her Annual Fee credited with an interest equivalent. Any amounts previously treated as invested in Stock Units will continue to be so treated as invested in Stock Units, except that at any time following a Director's Termination Date, if he or she has not elected to be paid a lump sum, then he or she may elect, by written notice to the Company, to have the Stock Units in his or her Account converted into a dollar value as of the next Adjustment Date to thereafter accrue an interest equivalent on the value of the Account. The amount payable from a participant's Account shall be determined on the basis of value of the Account as of the Adjustment Date last preceding the date of payment plus any deferrals credited to and less any distributions made from such Account since such Adjustment Date. The amount of each payment made with respect to an Account and any forfeiture amounts applied pursuant to Article X shall be deducted from the balance of such Account at the time of payment or forfeiture. The participant's Account, as determined in accordance with the preceding paragraph, will be distributed to the participant, in accordance with the participant's election, either (i) in 4 5 annual installments not exceeding ten (10) years or (ii) in a lump sum, with such installments to begin or lump sum payment to be made, as soon as practicable following the participant's Termination Date. Any such election by the participant must be made prior to the participant's Termination Date and will be irrevocable on and after the Termination Date. If the participant fails to make an election, the participant's Account will be paid in annual installments over a ten (10) year period. If the participant is paid in installments, the interest equivalent sum will continue to accrue on the undisbursed balance of the Account and the Stock Units will continue to be credited with dividend equivalents on the Stock Units remaining in the Account. All distributions will be deemed to be made pro rata from the interest equivalent balance and from the value of Stock Units, with the portion of the distribution from Stock Units being treated as if an equivalent number of Stock Units had been sold (without commission or other expense) as of the last Adjustment Date in order to make the distribution. The Account of a participant who, subsequent to his or her Termination Date, becomes a proprietor, officer, partner, employee, or otherwise affiliated with a Competitive Business Entity may, if directed by the Board of Directors in its sole discretion, be paid immediately in a lump sum the value of his or her account as of the last Adjustment Date. Upon the death of a participant, the value of the Account shall be payable to such beneficiary or beneficiaries as the participant shall have designated in writing to the Company (or to his or her estate if no such beneficiary has been designated) in full as soon as practicable following the date of his or her death. 5 6 III. ELECTION TO BECOME A PARTICIPANT A Director desiring to become a participant shall execute an "Election and Agreement to Defer Director's Fees" as described and set forth in the attachment to this Plan labeled Exhibit "A". This election shall be made in advance of the performance of services during the Annual Period for which an election to participate in this Plan is being made and shall be irrevocable. IV. TERMINATION OF ELECTION Participation in the Plan will be automatically terminated at the next Annual Meeting of Stockholders of the Company unless the participant executes a new election for the next Annual Period pursuant to Article III. All amounts credited to a participant's Account shall remain in the Account to be distributed or forfeited in accordance with the provisions of this Plan. V. MAINTENANCE OF ACCOUNT The Company shall maintain an Account on behalf of each participant in the form and manner prescribed by acceptable accounting standards, and shall make a report of same in writing within 90 days after the end of Annual Period to each participant. VI. UNFUNDED PLAN This Plan shall be unfunded for tax purposes and for purposes of Title I of the ERISA. Neither the Company nor the Board of Directors shall be deemed to be a trustee of any 6 7 amounts to be paid under this Plan. Said amounts shall continue for all purposes to be a part of the general funds of the Company, and no person other than the Company shall, by virtue of the provisions of this Plan, have any interest in such funds. To the extent that any person acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company. Any liability of the Company to any participant with respect to a payment to be made under this Plan shall be based solely upon any contractual obligations which may be created by or pursuant to this Plan; no such obligation shall be deemed to be secured by any pledge or any encumbrance on any property of the Company. VII. AMENDMENT AND TERMINATION OF PLAN The Board of Directors may terminate this Plan at any time. A termination of the Plan shall be effective at the end of the Annual Period in which the Directors vote to terminate the Plan. The Board of Directors may amend this Plan at any time. Any provision of this Plan to the contrary notwithstanding, no amendment to or termination of this Plan shall reduce the amounts actually credited to a participant's Account as of the date of such amendment or termination, or further defer the dates for the payment of such amounts, without the consent of the affected participant. The preceding provisions of this Article to the contrary notwithstanding, no action taken on or within two years following a Change of Control to amend or terminate this Plan shall be effective unless written consent thereto is obtained from a majority of the participants who were Directors immediately prior to such Change of Control. 7 8 VIII. EFFECTIVE DATE AND DURATION This Plan shall become effective as of July 17, 1996, the date of the next Annual Meeting of Stockholders of the Company. This Plan shall remain in effect until it is terminated by the Board of Directors in accordance with Article VII above. IX. GOVERNING LAW This Plan and the rights of all persons under the Plan shall be construed in accordance with and governed by the laws of the State of Texas, wherein the principal office of the Company is located. X. OPTION TO REQUEST IMMEDIATE PAYOUT In lieu of any other benefits or payments to be made pursuant to this Plan, each participant shall have the right at any time to elect a lump sum payment in an amount equal to: (a) the amount credited to the participant's Account, minus (b) a forfeiture amount equal to 20% of (a) above; provided, however, that if the election is made on or within two years following the date a Change of Control occurs, such forfeiture amount shall be determined substituting 10% for 20%. A participant's election for an immediate payout pursuant to this Article must be in the form of a written notice provided to the Administrative Committee. The Administrative Committee shall notify the Company of the election and the amount so determined shall be paid to the participant no later than 15 days following receipt of notice by the Administrative 8 9 Committee. Any amount remaining credited to the participant's Account shall be forfeited at the time payment is made. XI. RESTRAINTS ON ALIENATION Subject to Article X hereof, no participant or beneficiary of a participant shall have the right or power to anticipate, by assignment or otherwise, any future payment to be made under this Plan, or any portion thereof; nor, in advance of actually receiving the same, shall any participant or beneficiary have the right or power to sell, transfer, encumber or in anywise charge same; nor shall any future payment to be made under this Plan, or any portion of same, be subject to any divorce, execution, garnishment, attachment, insolvency, bankruptcy or other legal proceeding of any character, or legal sequestration, levy or sale or in any event or manner be applicable or subject, voluntarily or involuntarily, to the payment of such participant's or beneficiary's debts or other obligations. IN WITNESS WHEREOF, this Plan has been executed on this 25th day of June, 1996, to be effective as of July 17, 1996. TRINITY INDUSTRIES, INC. By: ------------------------------ W. Ray Wallace, Chairman, President and Chief Executive Officer 9 10 AMENDMENT NO. 1 TO THE TRINITY INDUSTRIES, INC. DEFERRED PLAN FOR DIRECTOR FEES Pursuant to the provisions of Article VII thereof, the Trinity Industries, Inc. Deferred Plan for Director Fees (the "Plan") is hereby amended effective as of September 10, 1998 in the following respects only: FIRST: Section (g) of Article I of the Plan is hereby amended by restatement in its entirety to read as follows: (g) A "Change of Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (I) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing 30% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (III) below; or (II) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on May 6, 1997, constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on May 6, 1997, or whose appointment, election or nomination for election was previously so approved or recommended; or (III) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in 11 which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company or its affiliates of a business) representing 30% or more of the combined voting power of the Company's then outstanding securities; or (IV) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. For purposes hereof: "Affiliate" shall have the meaning set forth in Rule l2b-2 promulgated under Section 12 of the Exchange Act. "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. SECOND: The third sentence of the first paragraph of Article II of the Plan is hereby amended by restatement in its entirety to read as follows: Sums credited to the Account will accrue an interest equivalent from the date that they are credited at a rate equal to the prime rate of interest as announced by Chase Bank of Texas, N.A. or its successor in interest, as of the first business day following each Adjustment Date. -2- 12 THIRD: The fifth paragraph of Article II of the Plan is hereby amended by restatement in its entirety to read as follows: The participant's Account, as determined in accordance with the preceding paragraph, will be distributed to the participant, in accordance with the participant's election, either (i) in annual installments not exceeding ten (10) years or (ii) in a lump sum, with such installments to begin or lump sum payment to be made, as soon as practicable following the participant's Termination Date. Any such election by the participant must be made on the "Election and Agreement to Defer Director's Fees" as described and set forth in the attachment to this Plan labeled Exhibit "A." Such distribution election must be made in advance of the performance of services during the Annual Period for which an election to participate in the Plan is made and shall be irrevocable unless and until a new "Election and Agreement to Defer Director's Fees" is completed for a subsequent Annual Period. Upon a participant's Termination Date, the participant's distribution shall be made in accordance with the distribution election made on the "Election and Agreement to Defer Director's Fees" for the Annual Period ending concurrently with or immediately prior to the participant's Termination Date. If the participant fails to make an election, the participant's Account will be paid in annual installments over a ten (10) year period. If the participant is paid in installments, the interest equivalent sum will continue to accrue on the undisbursed balance of the Account and the Stock Units will continue to be credited with dividend equivalents on the Stock Units remaining in the Account. All distributions will be deemed to be made pro rata from the interest equivalent balance and from the value of Stock Units, with the portion of the distribution from Stock Units being treated as if an equivalent number of Stock Units had been sold (without commission or other expense) as of the last Adjustment Date in order to make the distribution. The preceding provisions of this paragraph to the contrary notwithstanding, in the event that a participant's Termination Date occurs on or after a Change of Control, the participant's Account will be distributed to the participant either in a lump sum or in annual installments not exceeding ten (10) years, whichever is elected by the participant on a separate election form for such purpose, which election shall be made at the time of the participant's initial election to participate in the Plan or, if later, on or before July 20, 1999 and shall be irrevocable; provided, however, that the participant may make, revoke or change this distribution election subsequent to the initial election with the new election to be effective only in the event that the new election is made at least 12 months prior to the date payments under this provision commence. FOURTH: The first paragraph of Article X of the Plan is hereby amended by restatement in its entirety to read as follows: In lieu of any other payments to be made pursuant to this Plan, each participant shall have the right at any time to elect a lump sum payment in an amount equal to: (a) the amount credited to the participant's Account, minus -3- 13 (b) a forfeiture amount equal to 20% of (a) above; provided, however, that if the election (I) is made at any time following a Change of Control, or (II) is made by a participant receiving installment payments under this Plan, such forfeiture amount shall be determined substituting 10% for 20%. IN WITNESS WHEREOF, this Amendment has been executed this _______ day of __________________, 1999. TRINITY INDUSTRIES, INC. By -------------------------------- Title: -4- EX-10.14 11 DEFERRED COMPENSATION PLAN & AGREEMENT 1 DEFERRED COMPENSATION PLAN AND AGREEMENT THIS PLAN AND AGREEMENT made and entered into as of the ____ day of __________, 1999, between TRINITY INDUSTRIES, INC., a Delaware Corporation with its principle office at 2525 Stemmons Freeway, Dallas, Texas 75207 (hereinafter called the "Company") and _____________ , an individual (hereinafter called "Officer"); WITNESSETH: WHEREAS, Officer is in the employ of the Company and serves in a capacity which will develop and expand the business of the Company; and WHEREAS, in recognition of Officer's valued services as an employee and officer of the Company, and as an inducement to Officer to continue to serve the Company in the future, the Company desires to provide certain benefits for Officer and his designated beneficiary through a plan of deferred compensation, as hereinafter set forth; and WHEREAS, Officer is willing to remain in the employ of the Company and to have the Company defer a portion of his annual compensation in order to provide such benefits, as hereinafter set forth. NOW, THEREFORE, in consideration of the premises and the terms, conditions and covenants hereinafter set forth, the Company and Officer hereby agree as follows: 1. Deferred Compensation Account. The Company shall establish an account on the books of the Company in the name of Officer to which will be accrued deferred compensation in an amount equal to ten percent (10%) of Officer's combined annual base salary and incentive compensation, payable in the manner and subject to the conditions hereinafter set forth. Base salary is defined as that amount specifically approved by the Board of Directors as base salary and excludes other payments such as car allowance, insurance reimbursements, etc. Incentive compensation shall mean all amounts earned under a specific plan for a given year whether payable currently or over a period of future years. Credits to such account will accrue annually, at the rate of ten per cent (10%) of Officers combined annual base salary and incentive compensation, commencing with the Company's fiscal year ended March 31, 1999 and, subject to the annual review of this Plan by the Board of Directors of the Company, continuing in like matter for each of the Company's fiscal years thereafter for so long as Officer shall continue his active, full-time employment with the Company. 2. Administration of Account. The Company shall have the right to segregate from the other general assets of the Company the sums which accrue monthly hereunder as deferred compensation. Officer's deferred compensation account shall be credited with interest at the prime rate as published by Chase Bank of Texas, N.A. or its successor. Neither Officer or his designated beneficiary shall at any time have any interest in accrued sums which are so segregated and/or invested and reinvested, and such funds, as they are from time to time 2 constituted, shall at all times remain assets of the Company subject to the claims of the general creditors of the Company. 3. Payment of Deferred Compensation. Subject to the conditions hereinafter set forth, the deferred compensation accrued hereunder and shown to Officer's credit on the books of the Company shall be payable upon the termination of the active, full-time employment of Officer for any reason whatsoever, and shall be paid in such form as Officer may elect from the following two alternatives: (i) Payment may be made in annual periodic payments for specified number of years, not fewer than 5 nor in excess of 20, with the first payment to be made one (1) year and one (1) day from the date in which Officer's termination occurs and subsequent payments to be made on the same date of each succeeding year, where the payment made during each year shall be in an amount equal to a fraction of the amount shown to Officer's credit on the books of the Company as of the last day of the month preceding the month in which the payment is made, and where such fraction for each payment shall be one (1) divided by the number of payments remaining (including the current payment). Notwithstanding the preceding, at any time prior to receipt of all remaining installments under this paragraph, Officer (of Officer's beneficiary in the event of Officer's death) may elect a lump sum payment in an amount equal to the total amount remaining shown to Officer's credit on the books of the Company as of the last day of the month preceding the month in which the election is made, minus a forfeiture amount equal to 10% of such total amount. (ii) Complete payment may be made in a lump sum paid on the first day of the month following the date of Officer's termination of employment. Officer's election pursuant to this paragraph must be made as of the effective date of this amendment and, except as provided below, shall be irrevocable. In the absence of an election, payment shall be made in the form of annual periodic payments over a period of 20 years. Officer may change his distribution election once during any calendar year with the new election to be effective only in the event that the date of Officer's termination of employment with the Company is at least 12 months after the date of the new election. All payments shall be paid to Officer if living, or if not living, to his designated beneficiary or, upon failure to make such designation or if the designated beneficiary shall predecease Officer, to Officer's estate. Notwithstanding the foregoing, in the event that Officer's termination of employment with the Company occurs on or within two years after a "Change in Control" of the Company, the amount to the credit of Officer will be distributed to Officer either in a lump sum or in annual installments not exceeding five (5) years, whichever is elected by Officer as of the effective date of this amendment. In the absence of an election, payment shall be made in a lump sum within five days of termination following a "Change in Control." Officer may change this election at any time with the new election to be effective only in the event that the termination of employment with the Company is at least 12 months after the date of the new election. If 2 3 installment payments are elected, the method of distribution shall be similar to the method described for installment payments under the preceding paragraph. For purposes hereof, a "Change in Control" of the Company shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (I) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing 30% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (III) below; or (II) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on May 6, 1997, constitute the Board of Directors of the Company and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors of the Company or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on May 6, 1997, or whose appointment, election or nomination for election was previously so approved or recommended; or (III) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such person any securities acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company or its affiliates of a business) representing 30% or more of the combined voting power of the Company's then outstanding securities; or 3 4 (IV) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such date. For purposes hereof: "Affiliate" shall have the meaning set forth in Rule l2b-2 promulgated under Section 12 of the Exchange Act. "Beneficial Owner" shall have the meaning set forth in Rule l3d-3 under the Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. 4. Conditions. The payment of deferred compensation to Officer, as hereinabove provided, shall be subject to the following conditions, the breach of either of which shall cause the forfeiture of all rights in and to any and all amounts of deferred compensation remaining unpaid upon the date of any such breach: a. Commencing with the date of termination of the active, full-time employment of Officer and continuing until all payments hereunder have been made in full, Officer shall not, directly or indirectly, become or serve as an officer, employee, owner or partner of any business which competes in a material manner with the Company, without prior written consent of the Company. b. Commencing with the date of termination of the active, full-time employment of Officer and continuing until all payments hereunder have been made in full, Officer shall be available for consultation in respect of matters pertaining to the business and financial affairs of the Company, upon the request of the Company and at such reasonable and convenient times and places and for such compensation therefor as may be mutually agreed upon. 4 5 Notwithstanding the foregoing, the conditions set forth in a. and b. above shall be of no force and effect from and after the occurrence of a Change in Control (as defined above). 5. Death. In the event of Officer's death prior to the receipt of any or all of the installments of deferred compensation, such installments as are then unpaid shall be paid to the beneficiary or beneficiaries designated in writing and filed with the Secretary, of the Company by Officer during his lifetime or, upon failure to make such designation or if such designee or designees shall have predeceased Officer, then to Officer's estate. Officer shall have the right to change the beneficiary designation from time to time by instrument in writing delivered to the Secretary of the Company. 6. Nonassignability. Officer during his lifetime, and his designated beneficiary or beneficiaries, after his death, shall not be entitled to commute, encumber, sell or otherwise dispose of his or their rights to receive the deferred compensation provided for herein, and the right thereto shall be nonassignable and nontransferable and shall not be subject to execution, attachment or similar process. 7. Participation in Other Plans. Nothing herein contained shall in any manner modify, impair or effect the existing or future rights or interests of Officer to receive any employee benefits to which he is or would otherwise be entitled, or as a participant in the present or any future incentive bonus plan, stock option plan or pension or profit sharing plan of the Company. 8. Benefit. This Agreement shall be binding upon and inure to the benefit of any successor of the Company, including any person, firm, corporation or other entity which, by merger, consolidation, purchase or otherwise, acquires all or substantially all of the assets or business of the Company. 9. Amendment or Termination. This Agreement may be amended or terminated in whole or in part by mutual written agreement of the parties hereto. 10. Election. Officer hereby elects, pursuant to paragraph 3 hereof, to receive payment hereunder after termination following a "Change in Control" as follows: [ ] in annual installments (choose from 5 to 20) over a period of ____________ years, or [ ] in a lump sum Officer hereby elects, pursuant to paragraph 3 hereof, to receive payment hereunder after termination within two years following a "Change in Control" as follows: [ ] in annual installments (choose from 1-5) over a period of ____________ years, or [ ] in a lump sum 5 6 IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day and year first hereinabove written. TRINITY INDUSTRIES, INC. By: -------------------------- -------------------------- Officer I designate the following beneficiary(ies) in the event of my death. Primary, if living, otherwise to Secondary -------------------------- -------------------------- Name Relationship Secondary -------------------------- -------------------------- Name Relationship -------------------------- -------------------------- Officer's Signature Date 6 EX-13 12 ANNUAL REPORT TO SECURITY HOLDERS 1 Financial Information
Financial Table of Contents --------------------------- 18 Selected Financial Data 18 Management's Discussion & Analysis of Financial Condition & Results of Operations 23 Consolidated Income Statement 24 Consolidated Balance Sheet 25 Consolidated Statement of Cash Flows 26 Consolidated Statement of Stockholders' Equity 27 Notes to Consolidated Financial Statements 35 Report of Independent Auditors 36 Supplemental Information 36 Stockholder Information
2 Selected Financial Data / Management's Discussion & Analysis
Selected Financial Data Year Ended March 31 ------------------------------------------------------- (in millions except percent and per share data) 1999 1998 1997 1996 1995 ---------- ---------- --------- -------- -------- Revenues $ 2,926.9 2,473.0 2,234.3 2,241.7 2,064.3 Operating profit $ 284.9 255.9 214.2 194.9 148.9 Income from continuing operations $ 185.3 103.7 113.7 101.3 73.4 Income from discontinued operations, net of income taxes $ -- -- 23.8 12.5 15.7 Net income $ 185.3 103.7 137.5 113.8 89.1 Total assets $ 1,684.9 1,573.9 1,356.4 1,426.6 1,400.5 Long-term debt $ 120.6 149.6 178.6 206.4 242.9 Stockholders' equity $ 959.1 887.5 809.5 746.0 641.2 Stock data: Weighted average number of diluted shares outstanding 43.6 43.9 42.8 41.9 40.5 Net income per diluted common share: Continuing operations $ 4.25 2.36 2.66 2.42 1.81 Discontinued operations -- -- 0.55 0.30 0.39 ---------- ------- ------- ------- ------ Net income per share $ 4.25 2.36 3.21 2.72 2.20 Dividends per share $ 0.69 0.68 0.68 0.68 0.68 Book value per share $ 23.22 20.40 18.83 17.93 15.95
Management's Discussion & Analysis of Financial Condition & Results of Operations Basis of Presentation Trinity Industries, Inc. is one of the nation's leading diversified industrial manufacturers. Effective March 31, 1999, the Company changed the way it reports segment results to provide more helpful information in accordance with Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information." Segment information is reported for (i) the Railcar Group, (ii) the Industrial Group, (iii) the Highway Construction Products Group, (iv) the Inland Barge Group, and (v) the Concrete, Aggregate, & All Other group. See Notes to Consolidated Financial Statements for further discussion of business segments. The following discussion compares results from continuing operations of Trinity for fiscal 1999, 1998, and 1997. 1999 Compared With 1998 - Results of Operations Revenues were $2.93 billion in fiscal 1999 compared to $2.47 billion in fiscal 1998, an 18.6% increase. Operating profit was $284.9 million in fiscal 1999 compared to $255.9 million in fiscal 1998, an 11.3% increase. Increased revenues and operating profit were primarily attributable to the Railcar Group. Selling, engineering, and administrative expenses declined as a percentage of revenue to 5.8% from 6.6%. This decline is primarily a result of reduced legal costs and pension expense, partially offset by increases in technology and personnel costs to support the Company's growth. Other income/expense changed from $90 million expense in fiscal 1998 to $11.5 million income in fiscal 1999. In fiscal 1998, other expense included a litigation settlement of $70 million, while in fiscal 1999 other income includes a net gain 18 3 Management's Discussion & Analysis of Financial Condition & Results of Operations on the sale of real estate and other assets in the first quarter of $22.1 million. Net income in fiscal 1999 increased 78.7% to $185.3 million, or $4.25 per diluted share as compared to $103.7 million, or $2.36 per diluted share, in fiscal 1998. Excluding the net gain and litigation settlement mentioned above, earnings per share increased $0.57 per diluted share or 17% from fiscal 1998.
Railcar Group (in millions) 1999 1998 ---------- ----------- Revenues $ 1,959.7 $ 1,303.0 Operating Profit $ 248.1 $ 177.2 Operating Profit Margin 12.7% 13.6%
Revenues increased in the Railcar Group $656.7 million, or 50.4%, in fiscal 1999 due to high demand and the ongoing replacement cycle for railcars, which also contributed to strong current railcar backlogs. Trinity is a manufacturer of a broad product line serving various industries and a full-service provider of railcar maintenance services, management services, and leasing alternatives which provides more opportunity for stability during fluctuations in demand for specific car types or services. Railcar Group operating profit increased by $70.9 million in the current fiscal year to $248.1 million from $177.2 million in fiscal 1998. This 40% increase is primarily a result of the increased volume in fiscal 1999. As a percentage of revenues, operating profit declined primarily due to the product mix of railcar sales.
Industrial Group (in millions) 1999 1998 ---------- ---------- Revenues $ 284.2 $ 371.5 Operating Profit $ 17.5 $ 45.0 Operating Profit Margin 6.2% 12.1%
Revenues in the Industrial Group decreased from $371.5 million in fiscal 1998 to $284.2 million in fiscal 1999, while operating profit decreased from $45.0 million to $17.5 million. The decline in revenues is primarily due to the sale of Beaird Industries, Inc. in the quarter ended June 30, 1998, as well as softness in fittings and flange products and LPG products. The decline in operating profit was attributable to the Beaird sale, continued price competition in the fittings and flange business, primarily due to a weak energy sector and increased imports as a result of the Asian Crisis, and the mild fall and winter which impacted demand and competition for LPG products.
Highway Construction Products Group (in millions) 1999 1998 --------- ---------- Revenues $ 220.6 $ 221.9 Operating Profit $ 36.0 $ 33.5 Operating Profit Margin 16.3% 15.1%
Revenues in the Highway Construction Products Group were relatively unchanged, while operating profit increased from $33.5 million in fiscal 1998 to $36.0 million. The slight decline in revenue was primarily a result of delays by state government agencies in job lettings under the new federal highway spending legislation. Improved operating margins in fiscal 1999 resulted from continued focus on cost reduction and efficiency. Federal funding for highway construction and improvements is forecasted to increase up to 40% for approximately four and one-half years from the beginning of fiscal 2000. Trinity is strategically positioned to serve the states that will receive the most funding under the recently enacted legislation.
Inland Barge Group (in millions) 1999 1998 --------- --------- Revenues $ 202.9 $ 339.9 Operating Profit $ 14.2 $ 32.0 Operating Profit Margin 7.0% 9.4%
Revenues decreased in the Inland Barge Group $137.0 million, from $339.9 million in fiscal 1998, to $202.9 million in the current year. Operating profit decreased by $17.8 million, from $32.0 million in fiscal 1998, to $14.2 million in the current year. The decline in barge demand was primarily driven by reduced grain export shipments and other factors which led to lower rates paid to river freight carriers. The volume of barge orders increased in the third and fourth quarters of fiscal 1999. The Company believes this signals a recovery in the barge business and improved profitability in fiscal 2000. In the barge industry, the fleet replacement 19 4 Management's Discussion & Analysis of Financial Condition & Results of Operations cycle and fleet age are important factors, and since nearly 40% of the nation's barges are more than 20 years old, the long-term outlook for barges continues to remain positive.
Concrete, Aggregate, & All Other (in millions) 1999 1998 --------- --------- Revenues $ 259.5 $ 236.7 Operating Profit $ 28.7 $ 22.5 Operating Profit Margin 11.1% 9.5%
Revenues increased by $22.8 million in the Concrete, Aggregate, & All Other group, from $236.7 million in fiscal 1998, to $259.5 million in the current year. Operating profit in-creased by $6.2 million, or 27.6%. Better weather conditions in fiscal 1999, internal expansion, and acquisitions contributed to growth in concrete and aggregate revenues. The demand in residential, commercial, and municipal construction in the markets served by the Company's ready-mix concrete and aggregate businesses points to continued growth in this business. 1998 Compared With 1997 Record operating profits of $255.9 million were recorded for the fiscal year ended March 31, 1998, an increase of $41.7 million, or 19.5%, compared to fiscal 1997. This increase was due primarily to higher operating profit recorded in the Railcar Group, Inland Barge Group, and Concrete, Aggregate, & All Other group. The Highway Construction Products Group and Industrial Group showed slight increases in operating profit. Revenues recorded for fiscal 1998 were $2.47 billion, an increase of $0.24 billion, or 10.8% from the previous fiscal year. Selling, engineering, and administrative expenses increased to $163.1 million in fiscal 1998 from $142.5 million in fiscal 1997, but as a percentage of revenue increased only slightly as the Company continues to invest in people and systems to fuel additional growth. Other, net expense decreased to $0.9 million in fiscal 1998 from $12.0 million in the previous fiscal year primarily due to the recording in fiscal 1997 of certain nonrecurring charges, principally for valuation of production facilities determined to be in excess of that required for future business operations.
Railcar Group (in millions) 1998 1997 ---------- ---------- Revenues $ 1,303.0 $ 1,247.3 Operating Profit $ 177.2 $ 155.4 Operating Profit Margin 13.6% 12.5%
A surge in demand during fiscal 1998 contributed to revenues of $1.30 billion in fiscal 1998, a $55.7 million increase from fiscal 1997, and contributed to railcar backlogs that were at record levels. Operating profit of $177.2 million was reported in fiscal 1998, which is a $21.8 million, or 14% increase compared to fiscal 1997. Improved production methods, cost reductions, and volume increases resulted in improved margins.
Industrial Group (in millions) 1998 1997 --------- --------- Revenues $ 371.5 $ 327.6 Operating Profit $ 45.0 $ 42.5 Operating Profit Margin 12.1% 13.0%
The Industrial Group benefited primarily from the general improvement in the economy in fiscal 1998. Revenues were $371.5 million, which is a $43.9 million, or 13.4% increase over fiscal 1997. Operating profit was $45.0 million, or a 5.9% increase over fiscal 1997. Emphasis on protecting the environment in the chemical and petroleum industries and continued strength in new housing starts contributed to fiscal 1998 results.
Highway Construction Products Group (in millions) 1998 1997 --------- --------- Revenues $ 221.9 $ 192.7 Operating Profit $ 33.5 $ 29.7 Operating Profit Margin 15.1% 15.4%
The Highway Construction Products Group recorded revenues for fiscal 1998 of $221.9 million, which is a $29.2 million, or 15.2% increase compared to fiscal 1997. Operating profits were $33.5 million, which is a $3.8 million, or 12.8% increase compared to fiscal 1997. Improved results were due to market acceptance of new highway guardrail products. 20 5 Management's Discussion & Analysis of Financial Condition & Results of Operations
Inland Barge Group (in millions) 1998 1997 -------- -------- Revenues $ 339.9 $ 254.2 Operating Profit $ 32.0 $ 19.7 Operating Profit Margin 9.4% 7.7%
The Inland Barge Group recorded revenues for fiscal 1998 of $339.9 million, an $85.7 million or 33.7% increase over fiscal 1997. Operating profit was $32.0 million, a $12.3 million, or 62.4% increase over fiscal 1997. The inland river hopper barge market was very strong in the first part of fiscal 1998 due to the replacement cycle for barges, but order levels softened in the last two quarters due to decreasing grain prices and other factors which affected rates paid to river freight carriers.
Concrete, Aggregate, & All Other (in millions) 1998 1997 -------- -------- Revenues $ 236.7 $ 204.0 Operating Profit $ 22.5 $ 12.7 Operating Profit Margin 9.5% 6.2%
The Concrete, Aggregate, & All Other group recorded revenues of $236.7 million, which is a $32.7 million, or 16.0% increase over fiscal 1997. Operating profit was $22.5 million, which is a $9.8 million, or 77.2% increase over 1997. The increase in revenues resulted from better weather conditions than in the prior year and the Company's emphasis on expanding its ready-mix concrete and aggregate business. Operating profit increased due to expansion and increases in both production and efficiency. Market Risk The Company's earnings are affected by changes in interest rates due to the impact those changes have on the Company's variable-rate debt obligations, which represented approximately 70% of its total debt as of March 31, 1999. If interest rates average one percent more in fiscal 2000 than they did during 1999, the Company's interest expense would increase by $2.0 million. Liquidity and Financial Resources The Company's cash and equivalents increased $10.4 million from $3.1 million at March 31, 1998 to $13.5 million at March 31, 1999. Net cash provided by operating activities increased to $176.4 million during fiscal 1999 from $120.9 million in fiscal 1998. Capital expenditures during fiscal 1999 were $208.3 million, of which $116.5 million was for additions to the lease fleet. This compares to $129.4 million of capital expenditures in fiscal 1998, of which $79.5 million was for additions to the lease fleet. Expenditures for acquisitions were $82.8 million compared to $60.2 million in the prior year. Proceeds from the sale of property, plant and equipment and other assets were $178.7 million in fiscal 1999, composed primarily of the sale of cars from the lease fleet and a portion of the Company's investment real estate, compared to $81.4 million in fiscal 1998. The Company repurchased 2.4 million shares of its common stock for $79.5 million in fiscal 1999. Future operating requirements are expected to be financed principally with net cash flows from operations. Internally generated funds and short-term and long-term debt will continue to be used to finance business acquisitions. Additions to Trinity's assets under lease are anticipated to be financed through internally generated funds, the issuance of equipment trust certificates, or similar debt instruments. Year 2000 The advent of the year 2000 has become an issue due to dates being programmed into hardware, software, and embedded chips with only two digits to identify a year, interpreting 00 to be the year 1900, instead of 2000. This misinterpretation could cause systems and equipment to produce errors, or fail to function after December 31, 1999. Some errors may occur even earlier due to forward processing of orders or purchases. Information technology (IT) systems are used throughout the Company to manage key production and financial processes and embedded chip technology is used in some of the Company's machinery and equipment. Efforts to identify and correct Year 2000 issues began in 1996. The Company has a Year 2000 Project Management Office that is taking those actions it believes reasonable so that Year 2000 issues do not materially impact the Company's operations. In addition, an outside consulting firm has been retained to advise the Company on general Year 2000 issues, supplier assessment, and testing of mission critical IT systems. The Company's plan to manage compliance of IT systems, non-IT items, and third-party relationships consists of six phases: 21 6 Management's Discussion & Analysis of Financial Condition & Results of Operations Identification: Inventory of items that may be affected by Year 2000 issues, including hardware, software, Trinity products, machinery and equipment with embedded technology, and third-party relationships. Assessment: Evaluation of inventoried items to establish risk potential and determination of corrective steps to be taken. Certification: Collection of data from third-party suppliers certifying compliance of products and services. Remediation: Process of upgrading or replacement of noncompliant systems. Testing: Application and embedded technology testing involving standardized methodology. Contingency Planning: Continuity assessment and planning to minimize potential impacts from business failures arising from Year 2000 issues. Mission Critical Y2K Compliance [GRAPH] To date, the Company has spent approximately $3.6 million on compliance efforts. An additional $3.3 million is expected to be spent by the year 2000. The Company anticipates that costs to address the Year 2000 issue represent approximately 13 percent of the total IT budget for fiscal years 1998, 1999, and 2000. While the Company has no way to provide assurance that third-party systems will be Year 2000 compliant on a timely basis, the Company is surveying and assessing third parties with whom it has a significant relationship. Approximately 5,000 suppliers have been surveyed and assessed for Year 2000 compliance. Contingency plans are being developed for suppliers and vendors believed to be at risk. The Company is also working with key customers on exchanging Year 2000 status information. As a manufacturing company, potential worst-case scenarios facing Trinity would be: an interruption of utility services that would impact production; an interruption of transport services by one of the key railroads that would impact the Company's ability to deliver finished product to its customers, receive certain materials and affect demand, or the ability of key suppliers to deliver raw materials or services due to their noncompliance. Contingency plans are being developed, as deemed appropriate, to deal with the impact of these matters. However, there is no guarantee that all noncompliant systems of third parties will be identified and remediated in time, making the number of hours or days of possible interruption an uncertainty. It is expected that the occurrence of any one, or all of the above worst-case scenarios, would be of short-term duration and would not have a material effect on the Company's long-term results of operations, liquidity, and financial condition. However, many of these events are outside of the Company's control and there can be no assurance that an occurrence or event will not happen which could materially impact operations. At this time, the Company believes all significant areas have been identified, remediation is on schedule, and contingency plans to deal with Year 2000 issues will be in place. Inflation Changes in price levels did not significantly affect the Company's operations in fiscal 1999, 1998, or 1997. Forward Looking Statements Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performance, estimates, projections, goals, and forecasts. Potential factors which could cause the Company's actual results of operations to differ materially from those in the forward-looking statements include market conditions and demand for the Company's products, competition, technologies, steel prices, interest rates and capital costs, taxes, unstable governments and business conditions in emerging economies, and legal, regulatory, and environmental issues. Any forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made. 22 7 Consolidated Income Statement
Consolidated Income Statement Year Ended March 31 -------------------------------------- (in millions except per share data) 1999 1998 1997 ---------- ---------- ---------- Revenues $ 2,926.9 $ 2,473.0 $ 2,234.3 Operating costs: Cost of revenues 2,472.8 2,054.0 1,877.6 Selling, engineering, and administrative expenses 169.2 163.1 142.5 ---------- ---------- ---------- 2,642.0 2,217.1 2,020.1 ---------- ---------- ---------- Operating profit 284.9 255.9 214.2 Other (income) expense: Litigation settlement -- 70.0 -- Interest income (4.5) (1.8) (0.5) Interest expense 20.4 20.9 21.4 Other, net (27.4) 0.9 12.0 ---------- ---------- ---------- (11.5) 90.0 32.9 ---------- ---------- ---------- Income from continuing operations before income taxes 296.4 165.9 181.3 Provision (benefit) for income taxes: Current 106.9 53.3 71.2 Deferred 4.2 8.9 (3.6) ---------- ---------- ---------- 111.1 62.2 67.6 ---------- ---------- ---------- Income from continuing operations 185.3 103.7 113.7 Discontinued operations: Income (net of income taxes of $10.9) -- -- 14 5 Gain from sale of subsidiary stock in an initial public offering -- -- 9.3 ---------- ---------- ---------- -- -- 23 8 ---------- ---------- ---------- Net income $ 185.3 $ 103.7 $ 137.5 ========== ========== ========== Net income per common share: Basic: Continuing operations $ 4.31 $ 2.41 $ 2.68 Discontinued operations -- -- 0.56 ---------- ---------- ---------- Net income per share $ 4.31 $ 2.41 $ 3.24 ========== ========== ========== Diluted: Continuing operations $ 4.25 $ 2.36 $ 2.66 Discontinued operations -- -- 0.55 ---------- ---------- ---------- Net income per share $ 4.25 $ 2.36 $ 3.21 ========== ========== ========== Weighted average number of shares outstanding: Basic 43.0 43.1 42.4 Diluted 43.6 43.9 42.8
See accompanying notes to consolidated financial statements. 23 8 Consolidated Balance Sheet
Consolidated Balance Sheet March 31 ------------------------ (in millions except per share data) 1999 1998 ---------- ---------- ASSETS Cash and equivalents $ 13.5 $ 3.1 Receivables (net of allowance for doubtful accounts of $1.9 in 1999 and $1.7 in 1998) 357.4 390.5 Inventories: Raw materials and supplies 279.5 248.5 Work in process 42.5 42.5 Finished goods 75.1 51.6 ---------- ---------- 397.1 342.6 Property, plant and equipment, at cost 1,213.6 1,201.9 Less accumulated depreciation (481.3) (475.0) ---------- ---------- 732.3 726.9 Other assets 184.6 110.8 ---------- ---------- $ 1,684.9 $ 1,573.9 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Short-term debt $ 181.0 $ 101.0 Accounts payable and accrued liabilities 366.7 386.6 Long-term debt 120.6 149.6 Deferred income taxes 34.0 27.5 Other liabilities 23.5 21.7 ---------- ---------- 725.8 686.4 Stockholders' equity: Common stock - par value $1 per share; authorized - 100.0 shares; shares issued and outstanding in 1999 - 43.7; in 1998 - 43.5 43.7 43.5 Capital in excess of par value 292.6 287.7 Retained earnings 722.9 567.5 Accumulated other comprehensive income (20.6) (11.2) Treasury stock (2.4 shares), at cost: (79.5) -- ---------- ---------- 959.1 887.5 ---------- ---------- $ 1,684.9 $ 1,573.9 ========== ==========
See accompanying notes to consolidated financial statements. 24 9 Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows Year Ended March 31 -------------------------------------- (in millions) 1999 1998 1997 ---------- ---------- ---------- Operating activities: Net income $ 185.3 $ 103.7 $ 137.5 Less income from discontinued operations -- -- (23.8) ---------- ---------- ---------- Income from continuing operations 185.3 103.7 113.7 Adjustments to reconcile income to net cash provided (required) by operating activities: Depreciation and amortization 72.0 73.0 75.3 Deferred income taxes 4.2 8.9 (3.6) Gain on sale of property, plant and equipment and other assets (24.6) (4.2) (4.3) Other 7.2 (1.1) 8.0 Changes in assets and liabilities, net of effects from acquisitions: (Increase) decrease in receivables 45.3 (150.9) 64.7 (Increase) decrease in inventories (47.9) (3.2) 17.9 Increase in other assets (13.9) (30.6) (32.0) Increase (decrease) in accounts payable and accrued liabilities (53.0) 121.1 51.5 Increase (decrease) in other liabilities 1.8 4.2 (12.4) ---------- ---------- ---------- Total adjustments (8.9) 17.2 165.1 ---------- ---------- ---------- Net cash provided by operating activities 176.4 120.9 278.8 Investing activities: Proceeds from sale of property, plant and equipment and other assets 178.7 81.4 59.2 Capital expenditures (208.3) (129.4) (173.5) Payment for purchase of acquisitions, net of cash acquired (82.8) (60.2) (5.6) ---------- ---------- ---------- Net cash required by investing activities (112.4) (108.2) (119.9) Financing activities: Issuance of common stock 4.8 2.4 4.6 Stock repurchases (79.5) -- -- Net borrowings (repayments) of short-term debt 80.0 34.5 (152.0) Payments to retire long-term debt (29.5) (29.4) (31.6) Dividends paid (29.4) (29.3) (28.7) ---------- ---------- ---------- Net cash required by financing activities (53.6) (21.8) (207.7) Cash flows provided by discontinued operations -- -- 46.3 ---------- ---------- ---------- Net increase (decrease) in cash and equivalents 10.4 (9.1) (2.5) Cash and equivalents at beginning of period 3.1 12.2 14.7 ---------- ---------- ---------- Cash and equivalents at end of period $ 13.5 $ 3.1 $ 12.2 ---------- ---------- ----------
Interest paid in fiscal 1999, 1998, and 1997 was $20.5, $23.1, and $24.5, respectively. See accompanying notes to consolidated financial statements. 25 10 Consolidated Statement of Stockholders' Equity
Consolidated Statement of Stockholders' Equity Common Common Capital Accumulated Shares Stock in Other Treasury Total (in millions except share (100,000,000 $1.00 Excess of Retained Comprehensive Treasury Stock Stockholders' and per share data) Authorized) Par Value Par Value Earnings Income Shares at Cost Equity ------------ --------- --------- -------- ------------- ---------- --------- ------------- Balance at March 31, 1996 41,596,037 $ 41.6 $ 239.6 $464.8 $ 746.0 Distribution of Halter Marine Group, Inc. -- -- -- (80.2) (80.2) Other 1,450,328 1.4 40.9 -- 42.3 Net income -- -- -- 137.5 137.5 Currency translation adjustments -- -- -- -- $ (7.2) (7.2) ------------- Comprehensive income 130.3 Cash dividends ($0.68 per share) -- -- -- (28.9) (28.9) ------------ --------- --------- ------- ------------- ---------- --------- ------------- Balance at March 31, 1997 43,046,365 43.0 280.5 493.2 (7.2) 809.5 Other 442,911 0.5 7.2 -- -- 7.7 Net income -- -- -- 103.7 -- 103.7 Currency translation adjustments -- -- -- -- (4.0) (4.0) ------------- Comprehensive income 99.7 Cash dividends ($0.68 per share) -- -- -- (29.4) -- (29.4) ------------ --------- --------- ------- ------------- ---------- --------- ------------- BALANCE AT MARCH 31, 1998 43,489,276 43.5 287.7 567.5 (11.2) 887.5 STOCK REPURCHASES -- (2,363,932) $ (79.5) (79.5) OTHER 216,360 0.2 4.9 -- -- -- 5.1 NET INCOME -- -- -- 185.3 -- -- 185.3 CURRENCY TRANSLATION ADJUSTMENTS -- -- -- -- (9.4) -- -- (9.4) ------------- COMPREHENSIVE INCOME 175.9 CASH DIVIDENDS ($0.69 PER SHARE) -- -- -- (29.9) -- -- -- (29.9) ------------ --------- --------- ------- ------------- ---------- --------- ------------- BALANCE AT MARCH 31, 1999 43,705,636 $ 43.7 $ 292.6 $ 722.9 $ (20.6) (2,363,932) $ (79.5) $ 959.1 ============ ========= ========= ======= ============= ========== ========= =============
The Company has authorized and unissued 1,500,000 shares of no par value voting preferred stock. See accompanying notes to consolidated financial statements. 26 11 Notes to Consolidated Financial Statements Summary of Significant Accounting Policies The financial statements of Trinity Industries, Inc. and its consolidated subsidiaries ("Trinity" or the "Company") include the accounts of all significant majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. For purposes of the Consolidated Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Financial instruments which potentially subject the Company to concentrations of credit risk are primarily cash investments and receivables. The Company places its cash investments in investment grade, short-term debt instruments, and limits the amount of credit exposure to any one commercial issuer. Concentrations of credit risk with respect to receivables are limited due to control procedures to monitor the credit worthiness of customers, the large number of customers in the Company's customer base, and their dispersion across different industries and geographic areas. The Company maintains an allowance for losses based upon the expected collectibility of all receivables. At March 31, 1999, the Company has an advance payment and a deposit agreement totaling approximately $50 million for steel inventory purchases from a supplier in Mexico which has suspended payments on its debt, received court protection from its creditors, and is currently negotiating with its lenders to restructure its debt due to short-term liquidity problems. To date, deliveries of steel to the Company have been timely and management believes there will be no material adverse effect on the Company. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company enters into lease contracts with third parties with terms generally ranging between one and fifteen years, wherein certain equipment manufactured by Trinity is leased for a specified type of service over the term of the contract. The Company primarily enters into operating leases. Inventories are valued at the lower of cost or market, with cost determined principally on the specific identification method. Market is replacement cost or net realizable value. Depreciation and amortization are generally computed by the straight-line method over the estimated useful lives of the assets, generally 2 to 30 years. The costs of ordinary maintenance and repairs are charged to expense, while renewals and major replacements are capitalized. Diluted net income per common share is based on the weighted average shares outstanding plus the assumed exercise of dilutive stock options less the number of treasury shares assumed to be purchased from the proceeds using the average market price of Trinity's common stock. Basic net income per common share is based on the weighted average number of common shares outstanding for the period. The numerator for both basic net income per common share and diluted net income per common share is net income. The difference between the denominator in the basic calculation and the denominator in the diluted calculation is attributable to the effect of stock options. In fiscal 1999, the Company adopted Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use," which requires certain direct development costs associated with internal-use software to be capitalized including external direct costs of material and services, and payroll costs for employees devoting time to the software projects. These costs are included in property, plant and equipment and are depreciated over a period not exceeding three years beginning when the asset is substantially ready for use. Costs incurred during the preliminary project stage, as well as maintenance and training costs, are expensed as incurred. In fiscal 1999, Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," was issued. Adoption of this Statement is currently proposed to be effective for fiscal years beginning after June 15, 2000. The Company has determined that this Statement will not have a material impact on its financial statements. The Company initiated a stock repurchase program in the second quarter of fiscal year 1999. The program authorizes the Company to repurchase up to 10 percent of the Company's 43.5 million shares of common stock. As of March 31, 1999, approximately 2.4 million shares had been repurchased at a total cost of $79.5 million. Certain reclassifications have been made to prior year statements to conform to the current year presentation. Segment Information As of March 31, 1999, the Company adopted Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information." The segment information for 1998 and 1997 has been restated from prior years' presentation in order to conform to current 27 12 Notes to Consolidated Financial Statements requirements. The Company determined its operating segments based on the types of products and services it provides. Trinity manufactures, sells, and leases a wide variety of products principally in the following segments or groups: (1) the Railcar Group, consisting primarily of tank cars, freight cars, and railcar maintenance, management, or leasing to various industries; (2) the Industrial Group, consisting primarily of container heads (the ends of pressure and non-pressure containers) for use internally and by other manufacturers of containers, weld fittings (tees, elbows, reducers, caps, and flanges) used in pressure piping systems, and pressure and non-pressure containers for the storage and transportation of liquefied gases and other liquid and dry products; (3) the Highway Construction Products Group, consisting primarily of highway guardrail and safety products and girders, beams, and columns used in the construction of highway and railway bridges; (4) the Inland Barge Group, consisting of barges for inland waterway services; and (5) the Concrete, Aggregate, & All Other group, composed of ready-mix concrete and aggregate, passenger loading bridges and conveyor systems, heavy equipment components, transportation services, and the Company's captive insurance subsidiary. The financial information for these segments is shown in the tables below. The Company operates principally in the continental United States, Mexico, and Brazil. Intersegmental sales are shown at market prices. Total revenues from external customers attributed to foreign operations in fiscal 1999, 1998, and 1997 are $42.6 million, $55.3 million, and $39.7 million, respectively. The Railcar Group includes revenues from one customer which
Year Ended March 31, 1999 (in millions) Revenues Operating ------------------------------ Profit Segment Depreciation & Capital Outside Intersegment Total (Loss) Assets Amortization Expenditures -------- ------------ -------- -------- -------- -------------- ------------ Railcar Group $1,959.7 $ 6.9 $1,966.6 $ 248.1 $ 978.3 $ 29.0 $ 165.4 Industrial Group 284.2 1.4 285.6 17.5 140.4 5.5 6.8 Highway Construction Products Group 220.6 1.2 221.8 36.0 93.1 3.3 1.7 Inland Barge Group 202.9 -- 202.9 14.2 73.1 7.1 1.3 Concrete, Aggregate, & All Other 259.5 51.2 310.7 28.7 140.5 22.5 21.1 Eliminations & Corporate Items -- -- (60.7) (59.6) 259.5 4.6 12.0 -------- -------- -------- -------- -------- -------- -------- Consolidated Total $2,926.9 $ 284.9 $1,684.9 $ 72.0 $ 208.3 ======== ======== ======== ======== ========
Year Ended March 31, 1998 (in millions) Revenues Operating ------------------------------ Profit Segment Depreciation & Capital Outside Intersegment Total (Loss) Assets Amortization Expenditures -------- ------------ -------- -------- -------- -------------- ------------ Railcar Group $1,303.0 $ 9.3 $1,312.3 $ 177.2 $ 875.9 $ 28.1 $ 86.2 Industrial Group 371.5 3.0 374.5 45.0 222.3 8.4 7.7 Highway Construction Products Group 221.9 -- 221.9 33.5 91.9 3.6 2.0 Inland Barge Group 339.9 -- 339.9 32.0 100.6 7.3 0.4 Concrete, Aggregate, & All Other 236.7 50.6 287.3 22.5 146.4 20.1 19.4 Eliminations & Corporate Items -- -- (62.9) (54.3) 136.8 5.5 13.7 -------- -------- -------- -------- -------- -------- -------- Consolidated Total $2,473.0 $ 255.9 $1,573.9 $ 73.0 $ 129.4 ======== ======== ======== ======== ========
28 13 Notes to Consolidated Financial Statements
Year Ended March 31, 1997 (in millions) Revenues Operating ------------------------------ Profit Segment Depreciation & Capital Outside Intersegment Total (Loss) Assets Amortization Expenditures -------- ------------ -------- -------- -------- -------------- ------------ Railcar Group $1,247.3 $ 12.1 $1,259.4 $ 155.4 $ 708.7 $ 31.9 $ 134.9 Industrial Group 327.6 3.0 330.6 42.5 164.9 7.8 6.4 Highway Construction Products Group 192.7 -- 192.7 29.7 75.2 4.5 1.1 Inland Barge Group 254.2 -- 254.2 19.7 192.1 5.2 13.8 Concrete, Aggregate, & All Other 204.0 34.4 238.4 12.7 147.6 21.4 16.0 Eliminations & Corporate Items 8.5 -- (41.0) (45.8) 67.9 4.5 1.3 -------- -------- -------- -------- -------- -------- -------- Consolidated Total $2,234.3 $ 214.2 $1,356.4 $ 75.3 $ 173.5 ======== ======== ======== ======== ========
accounted for 9.9 percent, 10.1 percent, and 10.8 percent of consolidated revenues in fiscal 1999, 1998, and 1997, respectively. Long-lived assets located outside the United States in fiscal 1999, 1998, and 1997 are $134.7 million, $120.7 million, and $79.7 million, respectively. Corporate assets are composed of cash and equivalents, notes receivable, land held for investment, certain property, plant and equipment, and other assets. Capital expenditures do not include business acquisitions. Segment operating profit excludes administrative overhead of the corporate office and certain shared services of the businesses which are included in Eliminations & Corporate Items. Acquisitions and Divestiture ACQUISITIONS The Company made certain acquisitions during fiscal 1999, 1998, and 1997 accounted for by the purchase method. The acquired operations have been included in the consolidated financial statements from the effective dates of the acquisitions. In fiscal 1999, the businesses acquired for cash included: (i) 100 percent of the capital stock of Excell Materials, Inc., a ready-mix concrete company; and (ii) 100 percent of the capital stock of MCT Holdings, Inc., the parent of McConway & Torley Corporation which manufactures casting products for the railcar industry. The aggregate purchase price for these acquisitions was approximately $104.4 million. Goodwill of approximately $65 million recorded in the MCT acquisition is included in other assets and is being amortized over 30 years. Contributions from these acquisitions to revenues and operating profit during fiscal 1999 were not material. In fiscal 1998, the businesses acquired included: (i) certain assets of the Industrial Products Division of Ladish Co., Inc. utilized in the manufacture of metal components for cash; (ii) certain assets of Buffalo Specialty Products, Inc. utilized in the manufacture of highway construction products for cash; (iii) 100 percent of the capital stock of Differential Holdings, Inc., a railcar manufacturer, in exchange for 94,067 shares of Trinity common stock; (iv) certain assets of Industrial Companies, Inc. used in the ready-mix concrete business for cash; and (v) certain assets of the Springfield, Missouri facility of Busch Mechanical Services, Inc. utilized in the railcar repair business for cash. The aggregate purchase price for these acquisitions was approximately $70.8 million. Contributions from these acquisitions to revenues and operating profit during fiscal 1998 were not material. In fiscal 1997, the businesses acquired for continuing operations included: (i) 100 percent of the capital stock of Transcisco Industries, Inc., a diversified railcar services company engaged in railcar maintenance and repair, specialty railcar leasing and management services, and Russian rail transportation services through its 20 percent ownership of SFAT, a Russian private rail transportation services company, in exchange for 1,162,612 shares of Trinity common stock; and (ii) certain assets of John Guidry Ready Mix Company, Inc., The Cement and Supply Company, and Pitcock Bros. Ready Mix Concrete, Inc. for cash. The aggregate purchase price of these acquisitions was approximately $68.6 million. Contributions from these acquisitions to revenues and operating profit during fiscal 1997 were not material. 29 14 Notes to Consolidated Financial Statements DIVESTITURE Halter Marine Group, Inc. ("Halter"), previously a wholly-owned subsidiary of the Company, was divested in 1997 through (i) the sale of 19.0 percent of Halter in an initial public offering resulting in a gain of $9.3 million, and (ii) a tax-free distribution of the remaining ownership to the Company's stockholders. Halter's revenues and net income (inclusive of minority interest) for fiscal 1997 were $406.8 million and $16.1 million, respectively. Stock Plans The Company's 1998 Stock Option and Incentive Plan provides for awarding 2,000,000 shares of common stock plus shares covered by forfeited, expired, and canceled options granted under prior plans for a total of 2,211,316 shares available for issuance at March 31, 1999, with a maximum of 600,000 shares being available for issuance as restricted stock or in satisfaction of performance or other awards. The plan provides for the granting of: nonqualified and incentive stock options, having maximum 10 year terms, to purchase common stock at its market value on the award date; stock appreciation rights based on common stock fair market values with settlement in common stock or cash; restricted stock; and performance awards with settlement in common stock or cash on achievement of specific business objectives. Under previous plans, nonqualified and incentive stock options and restricted shares were granted at their fair market values. One grant provided for granting reload options for the remaining term of the original grant at the common stock market value on the date shares already owned by the optionee are surrendered in payment of the option exercise price. Options become exercisable in various percentages over periods ranging from six months to eight years.
Year Ended March 31 ------------------------------------------------------------------------------ 1999 1998 1997 ------------------------ ------------------------ ------------------------ Weighted Weighted Weighted Average Average Average Exercise Exercise Exercise Shares Price Shares Price Shares Price ---------- ---------- ---------- ---------- ---------- ---------- Outstanding beginning of year 1,982,495 $ 26.01 1,962,722 $ 26.72 1,726,461 $ 24.40 Halter property distribution -- -- 499,369 -- -- -- Granted 414,663 39.76 389,218 46.44 480,456 32.26 Exercised (314,453) 18.73 (554,357) 20.78 (237,570) 21.16 Canceled (22,722) 33.26 (314,457) 23.63 (6,625) 24.35 ---------- ---------- ---------- ---------- ---------- ---------- Outstanding end of year 2,059,983 29.81 1,982,495 26.01 1,962,722 26.72 ========== ========== ========== ========== ========== ========== Exercisable 961,903 23.92 967,973 19.34 948,689 23.33 ========== ========== ========== ========== ========== ==========
30 15 Notes to Consolidated Financial Statements
March 31, 1999 --------------------------------------------------------------- Outstanding Options ------------------------------------ Weighted Average Exercisable Options ----------------------- -------------------- Remaining Weighted Contractual Exercise Average Exercise Price Range Shares Life (Years) Price Shares Price --------- ------------ -------- -------- -------- $ 13.22 - $ 15.94 301,429 2.1 $ 14.23 301,429 $ 14.23 21.25 - 31.38 1,030,440 5.8 24.27 547,132 24.18 33.00 - 49.00 475,148 9.3 39.34 44,176 41.18 49.81 - 53.81 252,966 8.6 53.01 69,166 53.04 --------- ------- -------- -------- -------- $ 13.22 - $ 53.81 2,059,983 6.4 29.81 961,903 23.92 ========= ======= ======== ======== ========
In connection with the Halter property distribution, outstanding stock options were adjusted to preserve their economic value. The Company has elected to apply the accounting provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and its Interpretations and, accordingly, no compensation cost has been recorded for stock options. The effect of computing compensation cost in accordance with Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation," and the weighted average fair value of options granted during 1999, 1998, and 1997 using the Black-Scholes option pricing model are shown in the accompanying table.
1999 1998 1997 ---------- ---------- ---------- Estimated fair value per share of options granted $ 15.49 $ 17.72 $ 9.26 Pro forma: Net income (millions) $ 183.1 $ 102.7 $ 136.8 Per diluted share $ 4.20 $ 2.34 $ 3.20 Black-Scholes assumptions: Expected option life (years) 6.7 6.5 6.8 Risk-free interest rate 6.00% 7.05% 6.45% Dividend yield 1.82% 1.56% 2.11% Common stock volatility 0.393 0.283 0.209
RESTRICTED STOCK
1999 1998 1997 ---------- ---------- ---------- Shares awarded 42,000 24,000 20,000 Grant date fair value per share $ 39.04 $ 53.00 $ 25.13 Outstanding at March 31 81,500 40,500 20,000
31 16 Notes to Consolidated Financial Statements Debt
LONG-TERM DEBT March 31 ----------------------- (in millions) 1999 1998 ---------- ---------- 3.0-9.25 percent industrial development revenue bonds payable in varying amounts through 2005 $ 2.0 $ 1.9 5.56-6.0 percent promissory notes generally payable annually through 2008 30.0 31.7 6.96-10.25 percent equipment trust certificates to institutional investors generally payable in semi-annual installments of varying amounts through 2003 81.4 107.5 11.3 percent notes payable monthly through 2003 7.2 8.5 ---------- ---------- $ 120.6 $ 149.6 ========== ==========
The fair value of nontraded, fixed-rate outstanding debt, estimated using discounted cash flow analysis, approximates its carrying value. The Company is required to maintain certain financial ratios, as defined. Principal payments due during the next five years are: 2000 - $26.7; 2001 - $53.0; 2002 - $25.9; 2003 - $11.5; and 2004 - $2.0. The trustees of the equipment trusts have been assigned title to railcars with a cost of $190.6 million at March 31, 1999 for the life of the respective equipment trusts. Leases relating to such railcars financed by equipment trust certificates have been assigned as collateral. Future minimum rental revenues on leases in each fiscal year are: 2000 - $50.8; 2001 - $40.6; 2002 - $35.4; 2003 - $28.8; 2004 - $24.9; and $114.1 thereafter. SHORT-TERM DEBT Short-term debt primarily consists of money market borrowings, generally due within 30 days, with interest rates ranging from 5.21% to 5.76% in 1999 and 5.86% to 6.43% in 1998.
Property, Plant and Equipment March 31 ----------------------- (in millions) 1999 1998 ---------- ---------- Land $ 38.6 $ 37.6 Buildings and improvements 226.8 224.7 Machinery 487.5 497.7 Equipment on lease (predominantly long-term) 428.4 416.8 Construction in progress 32.3 25.1 ---------- ---------- $ 1,213.6 $ 1,201.9 ---------- ----------
32 17 Notes to Consolidated Financial Statements Income Taxes (in millions except percent data) The provision for federal income taxes is determined on a consolidated return basis. The components of the provision (benefit) for income taxes from continuing operations are:
Year Ended March 31 ------------------------------ 1999 1998 1997 -------- -------- -------- Current: Federal $ 96.2 $ 48.0 $ 63.2 State 10.7 5.3 8.0 -------- -------- -------- 106.9 53.3 71.2 Deferred 4.2 8.9 (3.6) -------- -------- -------- Total $ 111.1 $ 62.2 $ 67.6 ======== ======== ========
Deferred income taxes are provided for temporary differences between financial and taxable income. The components of deferred tax liabilities and assets are:
March 31 ------------------------ 1999 1998 ---------- ---------- Deferred tax liability - depreciation $ 66.5 $ 73.4 Deferred tax assets: Pensions and other benefits 33.1 34.2 Accounts receivable, inventory, and other asset valuation accounts 8.6 8.5 Other (9.2) 3.2 ---------- ---------- Total deferred tax assets 32.5 45.9 ---------- ---------- Net deferred tax liability $ 34.0 $ 27.5 ========== ==========
The provision for income taxes from continuing operations results in effective tax rates different than the statutory rates. The reconciliation between the effective and statutory rates follows:
Year Ended March 31 -------------------------------------- 1999 1998 1997 ---------- ---------- ---------- Statutory rate 35.0% 35.0% 35.0% State taxes 2.4 2.1 2.3 Other 0.1 0.4 -- ---------- ---------- ---------- Effective tax rate 37.5% 37.5% 37.3% ========== ========== ==========
In fiscal 1999, 1998, and 1997 income taxes of $111.6, $33.6, and $85.9, respectively, were paid net of refunds received and, for 1997, include amounts associated with Halter. 33 18 Notes to Consolidated Financial Statements Employee Retirement Plans (in millions except percent data) The Company sponsors defined benefit pension and defined contribution profit sharing plans which provide income and death benefits for eligible employees.
Year Ended March 31 ---------------------------------------- 1999 1998 1997 ---------- ---------- ---------- Actuarial Assumptions Obligation discount rate 7.25% 7.25% 7.75% Compensation increase rate 4.75% 4.75% 4.75% Long-term rate of return on plan assets 9% 9% 9% Expense Components Service cost $ 11.4 $ 12.5 $ 10.5 Interest 11.2 10.5 9.7 Expected return on assets (13.1) (10.2) (8.9) Amortization and deferral (0.1) -- (0.2) Profit sharing 5.3 4.5 4.6 ---------- ---------- ---------- Net expense $ 14.7 $ 17.3 $ 15.7 ========== ========== ========== Benefit Obligations Beginning of year $ 156.1 $ 127.5 Service cost 11.4 12.5 Interest 11.2 10.5 Benefits paid (6.1) (6.9) Actuarial (gain) loss (3.5) 12.5 Sale of Beaird Industries, Inc. (5.9) -- ---------- ---------- End of year $ 163.2 $ 156.1 ========== ========== Under funded plans $ 147.9 $ 20.4 Over funded plans 15.3 135.7 ========== ========== Plans' Assets Beginning of year $ 153.4 $ 114.3 Actual return on assets 12.3 33.3 Employer contributions 5.1 12.7 Benefits paid (6.1) (6.9) Sale of Beaird Industries, Inc. (4.7) -- ---------- ---------- End of year $ 160.0 $ 153.4 ========== ========== Under funded plans $ 140.4 $ 13.2 Over funded plans 19.6 140.2 ========== ========== Consolidated Balance Sheet Components Funded status $ 3.2 $ 2.7 Unamortized transition obligation 1.6 1.9 Unrecognized prior service cost (1.1) (1.4) Unrecognized loss (3.4) (5.9) ---------- ---------- Net obligation (asset) $ 0.3 $ (2.7) ========== ========== Accrued $ 5.6 $ 5.7 Prepaid 5.3 8.4 ---------- ---------- Net accrued (prepaid) $ 0.3 $ (2.7) ========== ==========
34 19 Notes to Consolidated Financial Statements / Report of Independent Auditors Contingencies In September 1997, the Company settled a 13 year-old lawsuit brought against a former subsidiary of the Company by Morse/Diesel, Inc. The settlement resulted in an after-tax charge of $43.8 million being recorded in fiscal year 1998. The Company has not participated in the business associated with this matter since 1989. In April 1998, the Company settled a five year-old patent infringement lawsuit brought by Johnstown America Corp. for approximately $10.5 million, net of tax. The Company is involved in various other claims and lawsuits incidental to its business. In the opinion of management, these claims and suits in the aggregate will not have a material adverse effect on the Company's consolidated financial statements. Stockholder's Rights Plan The Company has adopted a Stockholder's Rights Plan to replace its existing plan which expired April 27, 1999. On March 11, 1999, the Board of Directors of the Company declared a dividend distribution of one right for each outstanding share of the Company's common stock, $1.00 par value, to stockholders of record at the close of business on April 27, 1999. Each right entitles the registered holder to purchase from the Company one one-hundredth (1/100) of a share of Series A Preferred Stock at a purchase price of $200.00 per one one-hundredth (1/100) of a share, subject to adjustment. The rights are not exercisable or detachable from the common stock until 10 business days after a person acquires beneficial ownership of 12 percent or more of the Company's common stock, or if a person or group commences a tender or exchange offer upon consummation of which that person or group would beneficially own 12 percent or more of the common stock. The Company will generally be entitled to redeem the rights at $0.01 per right at any time until the first public announcement that a 12 percent position has been acquired. If any person becomes a beneficial owner of 12 percent or more of the Company's common stock, each right not owned by that person or related parties enables its holder to purchase, at the right's purchase price, shares of the Company's common stock having a calculated value of twice the purchase price of the right. Report of Independent Auditors The Board of Directors and Stockholders Trinity Industries, Inc. We have audited the accompanying consolidated balance sheets of Trinity Industries, Inc. as of March 31, 1999 and 1998, and the related consolidated statements of income, cash flows and stockholders' equity for each of the three years in the period ended March 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Trinity Industries, Inc. at March 31, 1999 and 1998, and the consolidated results of its operations and its cash flows for each of the three years in the period ended March 31, 1999, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Dallas, Texas June 2, 1999 35 20 Supplemental Information / Stockholder Information
Selected Quarterly Financial Data (unaudited) (in millions except per share data) First Second Third Fourth Quarter Quarter Quarter Quarter Year ---------- ---------- ---------- ---------- ---------- YEAR ENDED MARCH 31, 1999: REVENUES $ 711.5 717.4 722.9 775.1 2,926.9 OPERATING PROFIT $ 74.1 74.7 69.7 66.4 284.9 NET INCOME $ 57.8 44.8 41.8 40.9 185.3 NET INCOME PER COMMON SHARE: BASIC $ 1.33 1.03 0.97 0.97 4.31 DILUTED $ 1.31 1.02 0.96 0.96 4.25 Year ended March 31, 1998: Revenues $ 560.1 560.3 642.4 710.2 2,473.0 Operating profit $ 58.3 63.2 68.7 65.7 255.9 Net income (loss)(1) $ 33.2 (7.3) 38.8 39.0 103.7 Net income (loss) per common share: Basic $ 0.77 (0.17) 0.90 0.90 2.41 Diluted $ 0.76 (0.17) 0.88 0.89 2.36
(1) Loss in second quarter is due to one-time after-tax charge of $43.8, or $1.00 per diluted share, for litigation settlement.
Common Stock Closing Price Range 1999 1998 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- First Quarter $ 54 9/16- 34 3/4- 36- 40 1/4- 39 3/4- $ 39 15/16 24 1/2 33 1/8 32 33 7/8 Second Quarter $ 44 1/16- 48 1/4- 33 7/8- 36 1/8- 35 1/4- $ 28 3/8 31 1/4 31 1/8 30 7/8 31 Third Quarter $ 40 5/8- 54- 37 1/2- 32 1/2- 35 3/8- $ 29 15/16 39 32 1/2 28 1/4 30 1/2 Fourth Quarter $ 39 7/16- 55- 36 7/8- 35 3/4- 37 3/8- $ 28 5/8 43 9/16 30 3/8 31 1/8 31 3/4
Stockholder Information EXECUTIVE OFFICES 2525 Stemmons Freeway Dallas, Texas 75207-2401 P.O. Box 568887 Dallas, Texas 75356-8887 Tel: (214) 631-4420 AUDITORS Ernst & Young LLP TRANSFER AGENT AND REGISTRAR The Bank of New York New York, New York ANNUAL MEETING The Annual Meeting of Stockholders will be held on July 21, 1999 at 9:30 a.m. at the offices of the Company, 2525 Stemmons Freeway, Dallas, Texas 75207-2401 FORM 10-K A copy of the Company's 10-K, as filed with the Securities and Exchange Commission, shall be furnished without charge upon written request to Michael E. Conley, Director of Investor Relations, Trinity Industries, Inc., P.O. Box 568887, Dallas, Texas 75356-8887 36 21
Board of Directors Executive Officers Operating Executives ------------------ ------------------ -------------------- David W. Biegler Timothy R. Wallace Don A. Graham President and Chief Operating Officer Chairman Group President Texas Utilities Company President and Chief Executive Officer Highway Safety/Fittings and Flange Barry J. Galt John L. Adams John R. Nussrallah Retired Chairman and Executive Vice President Group President Chief Executive Officer Railcar Ocean Energy, Inc. Mark W. Stiles Senior Vice President Douglas H. Schneider Clifford J. Grum Group President Chairman and Chief Executive Officer Jack L. Cunningham, Jr. Inland Barge/International Temple Inland, Inc. Vice President Mark W. Stiles Dean P. Guerin Michael G. Fortado Group President Investments Vice President Concrete and Aggregate/ Secretary/General Counsel Shared Services Jess T. Hay Chairman Jim S. Ivy Manuel Castro, Sr. HCB Enterprises Vice President and Group President Chairman Chief Financial Officer Trinity Industries de Mexico/ Texas Foundation for Higher Education World Wide LPG John M. Lee Edmund M. Hoffman Vice President Rodney A. Boyd Investments President Michael J. Lintner Rollform Division Diana Natalicio Vice President President Antonio Carrillo The University of Texas at El Paso R.A. Martin Executive Vice President Vice President Trinity Industries de Mexico Timothy R. Wallace Chairman Joseph F. Piriano George Creighton President and Chief Executive Officer Vice President President Trinity Rail Services W. Ray Wallace Linda S. Sickels Retired Chairman and Vice President Keith Culhane Chief Executive Officer President Trinity Industries, Inc. Neil O. Shoop U.S. LPG Treasurer Harry W. Hinkle John E. Rutzler III President Controller Specialty Products Division Jeffrey J. Marsh President Railcar-Tank Car Division William A. McWhirter, II President Concrete and Aggregate Patrick A. Turner President Trinity Industries Transportation, Inc. Patrick S. Wallace Executive Vice President Railcar-Freight Car Division
Trinity Industries wishes to recognize two of our key employees who retired during the past year. RALPH A. BANKS, JR., SENIOR VICE PRESIDENT, served Trinity for 55 years, earning the nickname "Mr. Manufacturing" due to his expertise in plant operations. RICHARD G. BROWN, SENIOR VICE PRESIDENT, was instrumental in bringing Trinity Industries to its current position of leadership in the railcar industry. He served the Company for 20 years. We salute both of these exceptional individuals for the valuable contributions and many years of dedicated service. EX-21 13 LISTING OF SUBSIDIARIES 1 EXHIBIT 21 Trinity Industries, Inc. Listing of Subsidiaries of the Registrant The Registrant has no parent. At March 31, 1999, the operating subsidiaries of the Registrant were:
Percentage of Organized voting securities under the owned by the Name of subsidiary laws of Registrant - --------------------------------------------------------------------------- ----------- ----------------- Helmsdale, Limited Isle of Man 100% International Industrial Indemnity Co. Vermont 100% Standard Forged Products, Inc. Delaware 100% Syntechnics, Inc Delaware 100% Syro, Inc Ohio 100% Transit Mix Concrete & Materials Company Delaware 100% Transit Mix Concrete & Materials Company of Louisiana Louisiana 100% Trinity DIFCO, Inc Delaware 100% Trinity Casteel, Inc. Delaware 100% Trinity Equipment Co., Inc Delaware 100% Trinity Financial Services, Inc. Delaware 100% Trinity Fitting & Flange Group, Inc. Delaware 100% Trinity Industries Buffalo, Inc. Delaware 100% Trinity Industries de Mexico SA de CV Mexico 100% Trinity Industries do Brasil, Ltda. Brazil 100% Trinity Industries Leasing Company Delaware 100% Trinity Industries Rail do Brasil, Ltda. Brazil 100% Trinity Industries Real Properties, Inc. Delaware 100% Trinity Industries Transportation, Inc. Texas 100% Trinity Marine Caruthersville, Inc. Delaware 100% Trinity Marine Nashville, Inc. Delaware 100% Trinity Marine Port Allen, Inc. Delaware 100% Trinity Marine Products, Inc. Delaware 100% Trinity Materials, Inc. Delaware 100% Trinity Mobile Railcar Repair, Inc. Delaware 100% Trinity Rail, Inc. Delaware 100% Trinity Rail Management, Inc. Delaware 100% Transcisco Trading Company Delaware 100% Trinity Rail Services, Inc. California 100% MCT Holdings, Inc. Delaware 100% McConway and Torley Corporation Pennsylvania 100% McConway and Torley Anniston, Inc. Delaware 100% Excell Materials, Inc. Delaware 100%
EX-23 14 CONSENT OF INDEPENDENT AUDITORS 1 EXHIBIT (23) Consent of Independent Auditors We consent to the incorporation by reference in this Annual Report (Form 10-K) of Trinity Industries, Inc. of our report dated June 2, 1999, included in the 1999 Annual Report to Stockholders of Trinity Industries, Inc. Our audits also included the financial statement schedule of Trinity Industries, Inc. listed in Item 14(a). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also consent to the incorporation by reference in Post-Effective Amendment No. 3 to the Registration Statement (Form S-8, No. 2-64813), Post-Effective Amendment No. 1 to the Registration Statement (Form S-8, No. 33-10937), Post-Effective Amendment No. 1 to the Registration Statement (Form S-3, No. 33-12526), Amendment No. 1 to the Registration Statement (Form S-3, No. 33-57338), Registration Statement (Form S-8, No. 33-35514), Registration Statement (Form S-8, No. 33-73026), Post-Effective Amendment No. 1 to the Registration Statement (Form S-4, No. 33-51709), Post-Effective Amendment No. 1 to the Registration Statement (Form S-4, No. 333-08321), Registration Statement (Form S-8, No. 333-77735) of Trinity Industries, Inc. and in the related Prospectuses of our reports dated June 2, 1999 and June 24, 1999 with respect to the consolidated financial statements and schedule of Trinity Industries, Inc. included or incorporated by reference in this Annual Report (Form 10-K) for the year ended March 31, 1999. ERNST & YOUNG LLP Dallas, Texas June 24, 1999 EX-27 15 FINANCIAL DATA SCHEDULE
5 1,000 12-MOS MAR-31-1999 MAR-31-1999 13,500 0 357,400 0 397,100 0 1,213,600 (481,300) 1,684,900 0 0 0 0 43,700 915,400 1,684,900 0 2,926,900 0 2,472,800 0 0 20,400 296,400 111,100 185,300 0 0 0 185,300 4.31 4.25
EX-99.1 16 ANNUAL REPORT ON FORM 11-K 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------------ FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 1999 Commission File Number 1-6903 ------------------------------------ PROFIT SHARING PLAN FOR EMPLOYEES OF TRINITY INDUSTRIES, INC. AND CERTAIN AFFILIATES (Full Title of the Plan) TRINITY INDUSTRIES, INC. (Name of issuer of the securities held pursuant to the plan) Delaware 75-0225040 (State of Incorporation) (I.R.S. Employer Identification No.) 2525 Stemmons Freeway Dallas, Texas 75207-2401 (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code (214) 631-4420 ================================================================================ 2 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Financial Statements and Supplemental Schedules CONTENTS Report of Ernst & Young LLP, Independent Auditors....................... 1 Financial Statements Statements of Financial Condition as of March 31, 1999 and 1998......... 2 Statements of Income and Changes in Plan Equity for the years ended March 31, 1999, 1998 and 1997................................ 4 Notes to Financial Statements........................................... 7 Exhibits and Supplemental Schedules Line 27a - Schedule of Assets Held for Investment Purposes.............. 21 Line 27d - Schedule of Reportable Transactions.......................... 22 Consent of Ernst & Young LLP, Independent Auditors...................... 24 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees have duly caused this Annual Report to be signed by the undersigned thereunto duly authorized. Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates /S/ John M. Lee - -------------------------- John M. Lee Vice President June 28, 1999 4 Report of Ernst & Young LLP, Independent Auditors Board of Directors Trinity Industries, Inc. We have audited the accompanying statements of financial condition of the Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates as of March 31, 1999 and 1998, and the related statements of income and changes in plan equity for each of the three years in the period ended March 31, 1999. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial condition of the Plan at March 31, 1999 and 1998, and the income and changes in Plan equity for each of the three years in the period ended March 31, 1999, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of March 31, 1999, and reportable transactions for the year then ended, are presented for purpose of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The Fund Information in the statements of financial condition and the statements of income and changes in plan equity is presented for purposes of additional analysis rather than to present the financial condition and income and changes in plan equity of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. ERNST & YOUNG LLP Dallas, Texas June 18, 1999 5 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Statement of Financial Condition, with Fund Information March 31, 1999
CHASE VISTA CHASE CHASE PRIME CORE VISTA CHASE STOCK PUTNAM MONEY EQUITY U.S. VISTA ACCOUNT VOYAGER MARKET FUND TREASURY BALANCED ------------ ------------ ------------ ------------ ------------ ------------ ASSETS Cash $ $ $ $ $ $ -- -- 24 -- -- -- Notes receivable from -- -- -- -- -- -- participants Investment in Trinity Industries, Inc. common stock, at fair value 14,157,579 -- -- -- -- -- ($13,230,551 cost) Investment in Halter Marine Group, Inc. common stock, at fair value 880,943 -- -- -- -- -- ($2,969,517 cost) Investment in mutual funds, at fair value ($99,245,222 cost) -- 28,896,556 44,132,441 26,643,069 8,611,647 46,266 Interest income receivable -- -- -- -- 9,874 -- Contribution receivable from 980,679 1,319,348 1,852,530 1,195,145 398,008 53,395 Trinity Contribution receivable from employees 123,016 165,767 189,611 151,219 47,995 8,463 ------------ ------------ ------------ ------------ ------------ ------------ Plan equity $ 16,142,217 $ 30,381,671 $ 46,174,606 $ 27,989,433 $ 9,067,524 $ 108,124 ============ ============ ============ ============ ============ ============
CHASE VISTA INTERNATIONAL PARTICIPANT EQUITY LOANS TOTAL ------------ ------------ ------------ ASSETS Cash $ $ $ -- -- 24 Notes receivable from -- 1,442,735 1,442,735 participants Investment in Trinity Industries, Inc. common stock, at fair value -- -- 14,157,579 ($13,230,551 cost) Investment in Halter Marine Group, Inc. common stock, at fair value -- -- 880,943 ($2,969,517 cost) Investment in mutual funds, at fair value ($99,245,222 cost) 12,538 -- 108,342,517 Interest income receivable -- -- 9,874 Contribution receivable from 11,192 -- 5,810,297 Trinity Contribution receivable from employees 2,152 42,181 730,404 ------------ ------------ ------------ Plan equity $ 25,882 $ 1,484,916 $131,374,373 ============ ============ ============
See accompanying notes. 2 6 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Statement of Financial Condition, with Fund Information March 31, 1998
PUTNAM GUARANTEED PUTNAM U.S. GOVT. STOCK INVESTMENT GROWTH & INCOME ACCOUNT ACCOUNT INCOME TRUST ------------ ------------ ------------ ------------ ASSETS Cash and short-term investments $ 311,055 $ 2,187,542 $ 15,001 $ 15,276 Notes receivable from participants -- -- -- -- Investment in Trinity Industries, Inc. common stock, at fair value ($9,856,316 23,455,410 -- -- -- cost) Investment in Halter Marine Group, Inc. common stock, at fair value ($3,472,278 2,771,188 -- -- -- cost) Investment in guaranteed investment contracts, at contract value -- 37,478,543 -- -- Investment in mutual funds, at fair value ($39,991,701 cost) -- -- 21,241,233 6,845,093 Interest receivable 1,243 195,007 259 123 Contribution receivable from Trinity 681,292 1,406,200 902,855 264,223 Contribution receivable from employees -- -- -- -- ------------ ------------ ------------ ------------ Plan equity $ 27,220,188 $ 41,267,292 $ 22,159,348 $ 7,124,715 ============ ============ ============ ============
PUTNAM PARTICIPANT VOYAGER LOANS TOTAL ------------ ------------ ------------ ASSETS Cash and short-term investments $ 14,999 $ 76,521 $ 2,620,394 Notes receivable from participants -- 1,266,866 1,266,866 Investment in Trinity Industries, Inc. common stock, at fair value ($9,856,316 -- -- 23,455,410 cost) Investment in Halter Marine Group, Inc. common stock, at fair value ($3,472,278 -- -- 2,771,188 cost) Investment in guaranteed investment contracts, at contract value -- -- 37,478,543 Investment in mutual funds, at fair value ($39,991,701 cost) 22,909,895 -- 50,996,221 Interest receivable 285 812 197,729 Contribution receivable from Trinity 981,319 -- 4,235,889 Contribution receivable from employees -- 39,993 39,993 ------------ ------------ ------------ Plan equity $ 23,906,498 $ 1,384,192 $123,062,233 ============ ============ ============
See accompanying notes. 3 7 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Statement of Income and Changes in Plan Equity with Fund Information Year ended March 31, 1999
PUTNAM CHASE U.S. VISTA GUARANTEED PUTNAM GOVT. PRIME STOCK INVESTMENT GROWTH & INCOME PUTNAM MONEY ACCOUNT ACCOUNT INCOME TRUST VOYAGER MARKET ------------- ------------- ------------- ------------- ------------- ------------- Net investment income: Interest $ 11,833 $ 2,187,308 $ 3,344 $ 1,837 $ 4,042 $ 509,445 Dividends 386,374 -- 2,017,648 426,349 1,851,484 -- ------------- ------------- ------------- ------------- ------------- ------------- 398,207 2,187,308 2,020,992 428,186 1,855,526 509,445 Net realized gain (loss) on sale of investments (80,991) -- 3,340,788 (71,418) 502,063 -- Unrealized appreciation (depreciation) of investments (14,104,550) -- (4,451,348) (19,258) 1,460,688 -- Contributions: Employee contributions 3,281,801 3,968,916 3,022,426 853,395 4,410,888 1,285,100 Employer contributions 980,679 -- -- -- 1,319,348 1,852,530 ------------- ------------- ------------- ------------- ------------- ------------- 4,262,480 3,968,916 3,022,426 853,395 5,730,236 3,137,630 Withdrawals, distributions, transfers and other (1,553,117) (47,423,516) (26,092,206) (8,315,620) (3,073,340) 42,527,531 ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in plan equity (11,077,971) (41,267,292) (22,159,348) (7,124,715) 6,475,173 46,174,606 Plan equity at beginning of year 27,220,188 41,267,292 22,159,348 7,124,715 23,906,498 -- ------------- ------------- ------------- ------------- ------------- ------------- Plan equity at end of year $ 16,142,217 $ -- $ -- $ -- $ 30,381,671 $ 46,174,606 ============= ============= ============= ============= ============= =============
CHASE CORE CHASE CHASE CHASE VISTA EQUITY VISTA U.S. VISTA INTERNATIONAL PARTICIPANT FUND TREASURY BALANCED EQUITY LOANS TOTAL ------------- ------------- ------------- ------------- ------------- ------------- Net investment income: Interest $ -- $ 9,874 $ -- $ -- $ 3,836 $ 2,731,519 Dividends 2,568 126,563 286 -- -- 4,811,272 ------------- ------------- ------------- ------------- ------------- ------------- 2,568 136,437 286 -- 3,836 7,542,791 Net realized gain (loss) on sale of investments 138 (33) -- -- -- 3,690,547 Unrealized appreciation (depreciation) of investments 1,212,586 (110,113) 147 71 -- (16,011,777) Contributions: Employee contributions 910,036 284,455 53,720 14,590 452,921 18,538,248 Employer contributions 1,195,145 398,008 53,395 11,192 -- 5,810,297 ------------- ------------- ------------- ------------- ------------- ------------- 2,105,181 682,463 107,115 25,782 452,921 24,348,545 Withdrawals, distributions, transfers and other 24,668,960 8,358,770 576 29 (356,033) (11,257,966) ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in plan equity 27,989,433 9,067,524 108,124 25,882 100,724 8,312,140 Plan equity at beginning of year -- -- -- -- 1,384,192 123,062,233 ------------- ------------- ------------- ------------- ------------- ------------- Plan equity at end of year $ 27,989,433 $ 9,067,524 $ 108,124 $ 25,882 $ 1,484,916 $ 131,374,373 ============= ============= ============= ============= ============= =============
See accompanying notes 4 8 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Statement of Income and Changes in Plan Equity, with Fund Information Year ended March 31, 1998
GUARANTEED PUTNAM PUTNAM U.S. STOCK INVESTMENT GROWTH & GOVT. INCOME ACCOUNT ACCOUNT INCOME TRUST ------------- ------------- ------------- ------------- Net investment income: Interest $ 13,478 $ 2,357,177 $ 3,746 $ 1,695 Dividends 280,127 -- 2,294,268 387,367 ------------- ------------- ------------- ------------- 293,605 2,357,177 2,298,014 389,062 Net realized gain (loss) on sale of investments 347,060 -- 238,425 (4,246) Unrealized appreciation (depreciation) of investments 12,455,553 -- 2,388,560 202,427 Contributions: Employee contribution 2,761,318 4,682,007 3,178,363 924,506 Employer contribution 681,292 1,406,200 902,855 264,223 ------------- ------------- ------------- ------------- 3,442,610 6,088,207 4,081,218 1,188,729 Withdrawals, distributions, transfers and other (1,809,717) (4,445,632) (688,901) (407,255) ------------- ------------- ------------- ------------- Net increase in plan equity 14,729,111 3,999,752 8,317,316 1,368,717 Plan equity at beginning of year 12,491,077 37,267,540 13,842,032 5,755,998 ------------- ------------- ------------- ------------- Plan equity at end of year $ 27,220,188 $ 41,267,292 $ 22,159,348 $ 7,124,715 ============= ============= ============= =============
PUTNAM PARTICIPANT VOYAGER LOANS TOTAL ------------- ------------- ------------- Net investment income: Interest $ 4,569 $ 5,414 $ 2,386,079 Dividends 1,091,255 -- 4,053,017 ------------- ------------- ------------- 1,095,824 5,414 6,439,096 Net realized gain (loss) on sale of investments 365,269 -- 946,508 Unrealized appreciation (depreciation) of investments 5,733,735 (1,483) 20,778,792 Contributions: Employee contribution 3,627,687 457,886 15,631,767 Employer contribution 981,319 -- 4,235,889 ------------- ------------- ------------- 4,609,006 457,886 19,867,656 Withdrawals, distributions, transfers and other (1,445,982) (100,856) (8,898,343) ------------- ------------- ------------- Net increase in plan equity 10,357,852 360,961 39,133,709 Plan equity at beginning of year 13,548,646 1,023,231 83,928,524 ------------- ------------- ------------- Plan equity at end of year $ 23,906,498 $ 1,384,192 $ 123,062,233 ============= ============= =============
See accompanying notes. 5 9 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Statement of Income and Changes in Plan Equity, with Fund Information Year ended March 31, 1997
GUARANTEED PUTNAM PUTNAM U.S. STOCK INVESTMENT GROWTH & GOVT. INCOME ACCOUNT ACCOUNT INCOME TRUST ------------ ------------ ------------ ------------ Net investment income: Interest $ 4,733 $ 2,618,472 $ 2,184 $ 335,753 Dividends 277,519 -- 961,995 -- ------------ ------------ ------------ ------------ 282,252 2,618,472 964,179 335,753 Net realized gain (loss) on sale of investments 26,352 -- 36,728 (29,828) Unrealized appreciation (depreciation) of investments (2,325,333) -- 676,370 (32,663) Contributions: Employee contribution 2,758,108 5,065,279 2,387,157 953,693 Employer contribution 676,128 1,779,673 758,561 271,819 ------------ ------------ ------------ ------------ 3,434,236 6,844,952 3,145,718 1,225,512 Withdrawals, distributions, transfers and other (1,494,617) (6,515,500) 1,544,735 (190,070) Halter Maine Group, Inc. divestiture (1,556,223) (7,473,914) (1,220,040) (658,137) ------------ ------------ ------------ ------------ Net increase (decrease) in plan equity (1,633,333) (4,525,990) 5,147,690 650,567 Plan equity at beginning of year 14,124,410 41,793,530 8,694,342 5,105,431 ------------ ------------ ------------ ------------ Plan equity at end of year $ 12,491,077 $ 37,267,540 $ 13,842,032 $ 5,755,998 ============ ============ ============ ============
PUTNAM PARTICIPANT VOYAGER LOANS TOTAL ------------ ------------ ------------ Net investment income: Interest $ 3,032 $ 7,358 $ 2,971,532 Dividends 642,747 -- 1,882,261 ------------ ------------ ------------ 645,779 7,358 4,853,793 Net realized gain (loss) on sale of investments 21,920 -- 55,172 Unrealized appreciation (depreciation) of investments (928,839) 1,483 (2,608,982) Contributions: Employee contribution 2,751,676 332,111 14,248,024 Employer contribution 906,172 -- 4,392,353 ------------ ------------ ------------ 3,657,848 332,111 18,640,377 Withdrawals, distributions, transfers and other 3,469,873 (238,145) (3,423,724) Halter Maine Group, Inc. divestiture (1,383,931) -- (12,292,245) ------------ ------------ ------------ Net increase (decrease) in plan equity 5,482,650 102,807 5,224,391 Plan equity at beginning of year 8,065,996 920,424 78,704,133 ------------ ------------ ------------ Plan equity at end of year $ 13,548,646 $ 1,023,231 $ 83,928,524 ============ ============ ============
See accompanying notes. 6 10 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements March 31, 1999 and 1998 1. DESCRIPTION OF THE PLAN GENERAL The Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates (the Plan) was adopted by the Board of Directors of Trinity Industries, Inc. (the Board) on December 11, 1986 and became effective January 1, 1987, for eligible employees of Trinity Industries, Inc. and Certain Affiliates (the Employer). The Plan was amended and restated effective April 1, 1994. The Plan is a defined contribution plan designed to comply with the provisions of Title I of the Employee Retirement Income Security Act of 1974 (ERISA). The following is a brief description of the Plan. Participants should refer to the Plan document for complete information regarding the Plan. The Plan's fiscal year end is March 31. DIVESTITURE At the close of business on March 31, 1997, Trinity Industries, Inc. completed the divestiture, which commenced on September 26, 1996, of Halter Marine Group, Inc. (Halter) by distributing the remaining shares of Halter stock to its stockholders in the form of a tax-free distribution. The Plan received .348 shares of Halter common stock for each share of Trinity Common Stock held in the Plan in the form of a tax-free distribution. The financial statements for the year ended March 31, 1997 reflect the transfer of participants' assets, who were employed by Halter, out of the Plan. PARTICIPATION Each employee is eligible to contribute to the Plan on the first day of the calendar quarter on or immediately following his employment date with the Company and must meet the following requirements: Must be classified as a full-time, part-time, or temporary employee of Trinity Industries, Inc.; and Must be in a unit of employees who are designated as eligible to participate in the Plan; and Must not be included in a unit of employees covered by a collective bargaining agreement unless benefits under this Plan were included in an agreement as a result of good faith bargaining. 7 11 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) Eligible employees automatically become participants and must indicate on the form or forms provided by the Plan Committee (Committee) whether or not they want to make contributions to the Plan. If they elect to contribute, they will authorize the Employer to make payroll deductions for contributions to the Plan. CONTRIBUTIONS For fiscal years 1999 and 1998, each Plan participant agreed to contribute not less than two percent nor more than fourteen percent of their compensation in one percent increments as designated by the participant. A participant's salary reduction may not exceed specified IRS limits for each calendar year. A salary reduction and contribution agreement must be entered into by each employee as the employee begins participation in the Plan and may be amended by such employee twice each year. Employer matching contributions shall be made if Company earnings are at least sufficient to pay dividends to stockholders ($0.69, $0.68, and $0.68 per share for the years ended March 31, 1999, 1998, and 1997, respectively) but in no event less than $0.33 per share of common stock. Effective April 1, 1998, if the Employer matching contribution is made, then each participant shall receive an amount equal to a percentage of that portion of such participant's employee contribution up to six percent of such participant's total compensation for the year under the following schedule:
PERCENTAGE OF YEARS OF SERVICE EMPLOYER CONTRIBUTION Less than 1 0% 1 but less than 2 25% 2 but less than 3 30% 3 but less than 4 35% 4 but less than 5 40% 5 years 50%
Prior to April 1, 1998, if the Employer matching contribution was made, then each participant with at least five years of service received an amount equal to 50 percent of that portion of such participant's employee contribution up to six percent of such participant's total compensation for the year, and each participant with at least one but less than five years of service received an amount equal to 25 percent of that portion of such participant's employee contribution up to 8 12 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) six percent of such participant's total compensation for the year. Employer contributions are net of forfeitures, as defined. Employer contributions for a given plan year shall be deposited in the Profit Sharing Trust for Employees of Trinity Industries, Inc. and Certain Affiliates (the Trust Fund) as defined below, no later than the date on which the Employer files its federal income tax return for such year. The Employer and Chase Bank of Texas, N.A. (the Trustee) have entered into a Trust Agreement under which the latter acts as Trustee under the Plan. The Plan offers the following investment options (hereafter collectively referred to as the Trust Fund): Trinity Stock Investment Account (Stock Account) is an investment in shares of Employer common stock purchased on behalf of the participants and Halter common stock by virtue of the tax-free distribution. Idle cash is invested in interest-bearing accounts until such time as it can be utilized to purchase Employer common stock. Guaranteed Investment Contract Account (the Guaranteed Investment Account) is an investment in guaranteed investment contracts issued by various insurance companies selected annually by the Committee. Effective January 1, 1999, the Guaranteed Investment Account is no longer an investment option. At March 31, 1998, the guaranteed investment contracts had guaranteed annual rates of return of 7.33% (GAC 8672), 6.08% (GAC 20254), and 5.66% (GAC 16795). The crediting interest rates approximated average yields. Participant's accounts invested in the Guaranteed Investment Account earn interest at a rate blended from all of the contracts included in the Guaranteed Investment Account. The account is credited with earnings on the underlying investments and charged for plan withdrawals and administrative expenses charged by the insurance companies. Transfers of participants accounts to and from the Guaranteed Investment Account are not permitted. However, during fiscal year 1997, participants were offered a one-time option to transfer monies out of the Guaranteed Investment Account and into other fund options. 9 13 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) Mutual Funds Investment Accounts are investments in registered investment companies selected by the Committee. At March 31, 1999 the funds are Putnam Voyager, Chase Vista Prime Money Market, Chase Core Equity, Chase Vista U.S. Treasury, Chase Vista Balanced, and Chase Vista International Equity. At March 31, 1998, the funds were Putnam U.S. Government Income Trust, Putnam Growth and Income, and Putnam Voyager. Participants may elect the extent to which assets are invested in the options described above in increments of 10% or 25%. The number of participants in each fund as of March 31, 1999 and 1998, respectively, was as follows: 10,606 and 3,936 in Stock Account, 0 and 4,543 in Guaranteed Interest Account, 0 and 4,150 in Putnam Growth & Income, 0 and 1,743 in Putnam U.S. Government Income Trust, 6,508 and 4,246 in Putnam Voyager, 9,182 and 0 in Chase Vista Prime Money Market, 6,550 and 0 in Chase Core Equity, 3,786 and 0 in Chase Vista U.S. Treasury, 290 and 0 in Chase Vista Balanced Fund, and 118 and 0 in Chase Vista International Equity. BENEFITS Distribution of a participant's account balance is payable upon retirement at or after age 65, total disability, death, or termination of employment. Distribution is equal to the salary reduction contribution and related earnings plus the vested portion of the Employer contribution and related earnings. Withdrawals of up to 100 percent of the employee contribution can be made only to meet "immediate and heavy financial needs" (medical care, college tuition, the purchase of a principal residence, or to prevent the foreclosure on a principal residence) as long as the funds are not available for such needs from other sources. No withdrawal can be made against the earnings on the employee contributions or against the Employer contribution and related earnings. These restrictions no longer apply when the participant reaches age 59 1/2. Loans for "immediate and heavy financial needs" may be made for a minimum of $1,000 up to a maximum of $50,000, not to exceed 50% of the Employee contribution and related earnings and not to exceed 50% of the vested portion of the Employer contribution and related earnings. Loans are subject to rules and regulations established by the Committee, as defined in the Plan. 10 14 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) VESTING The Employer contribution and related earnings (losses) vest to participants, depending upon the number of years of vesting service, as defined, completed by such participant as follows:
YEARS OF SERVICE PERCENTAGE VESTED ------------------ ----------------- Less than 1 0% 1 but less than 2 20% 2 but less than 3 40% 3 but less than 4 60% 4 but less than 5 80% 5 or more 100%
Participants are 100% vested in their Employer contribution and allocated portion of related earnings (losses) upon their attainment of age 65 and are always 100% vested in their employee contribution and related earnings (losses) on such contribution. ADMINISTRATION OF THE PLAN The Plan is administered by the Committee, consisting of at least three persons who are appointed by the Board. The members of the Committee serve at the discretion of the Board, and any Committee member who is an employee of the Employer shall not receive compensation for his services. A separate account is maintained for each participant. The Plan provides that account balances for participants are adjusted periodically as follows: Employee contributions are generally allocated on a quarterly basis; Participant's share of the Employer contribution shall be allocated to the participant's account as of a date no later than the last day of the Plan year; 11 15 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) Earnings and appreciation or depreciation in the fair value of investment assets of the Trust Fund for each calendar quarter shall be allocated to the accounts of participants, former participants and beneficiaries who had unpaid balances in their accounts on the last day of such calendar quarter in proportion to the balances in such accounts at the beginning of the calendar quarter. Upon request, distributions shall be made no earlier than the later of the last day of the calendar quarter in which entitlement occurs or the date on which the Committee determines the final balances. Distributions from the Stock Account shall be made in cash unless otherwise designated by the participant. INCOME TAX STATUS The Plan has received determination letters from the Internal Revenue Service dated November 4, 1994, September 27, 1996, April 30, 1997 and December 9, 1998, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt. Employee contributions and Employer contributions are not included in the participant's federal taxable income in the year such contribution are made. A participant shall not be subject to federal income taxes with respect to participation in the Plan until the amounts are withdrawn or distributed. AMENDMENT OR TERMINATION OF THE PLAN The Employer may amend the Plan at any time. However, no amendment, unless made to secure approval of the Internal Revenue Service or other governmental agency, may operate retroactively to reduce or divest the then vested interest in the Plan of any participant, former participant or beneficiary, or to reduce or divest any benefit payable under the Plan unless all participants, former participants and beneficiaries then having vested interests or benefit payments affected thereby consent to such amendment. 12 16 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) The Employer may terminate the Plan at any time. Upon complete or partial termination, the accounts of all participants affected thereby shall become 100% vested, and the Committee shall direct the Trustee to distribute the assets in the Trust Fund, after receipt of any required approval by the Internal Revenue Service and payment of any expenses properly chargeable thereto, to participants, former participants, and beneficiaries in proportion to their respective account balances. 2. SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS AND NET INVESTMENT INCOME Cash and cash equivalents are valued at cost which approximates fair value. Investments in the common stock of the Employer and Halter are value at their quoted market price. Investment in mutual funds are valued at the quoted market prices which represent the net asset value of shares held by the Plan at year end. The fair value approximates the recorded contract value for the guaranteed investment contracts. Security transactions are recorded on a trade date basis. The statements of income and changes in Plan equity include net unrealized appreciation or depreciation in fair value on investments. The Plan's financial statements are prepared on an accrual basis of accounting. REALIZED GAINS AND LOSSES Realized gains and losses have been calculated using average cost. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the amounts in the financial statements and accompanying notes. Actual results could differ from those estimates. 13 17 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 3. INVESTMENTS Investments are as follows:
MARCH 31, 1999 MARCH 31, 1998 ---------------------------------------- --------------------------------------- NO. OF NO. OF SHARES COST FAIR VALUE SHARES COST FAIR VALUE ---------- ------------ ------------ --------- ------------ ------------ Trinity Industries, Inc. common stock 481,960 $ 13,230,551 $ 14,157,579* 426,462 $ 9,856,316 $ 23,455,410* Halter Marine Group, Inc. common stock 151,560 2,969,517 880,943 174,563 3,427,278 2,771,188 Guaranteed investment contracts: GAC 20254 -- -- -- -- 16,156,699 16,156,699* GAC 8672 -- -- -- -- 4,167,290 4,167,290 GAC 16795 -- -- -- -- 17,154,554 17,154,554* ------------ ------------ ------------ ------------ -- -- -- -- 37,478,543 37,478,543 Mutual funds: Putnam Growth & Income -- -- -- 1,409,471 16,789,885 21,241,233* Putnam U.S. Gov't Income Trust -- -- -- 594,704 6,825,834 6,845,093* Putnam Voyager 1,245,004 20,901,928 28,896,556* 1,308,932 16,375,982 22,909,895* Chase Core Equity 936,487 25,430,433 26,643,069* -- -- -- Chase Vista International Equity 999 12,517 12,538 -- -- -- Chase Vista Balanced 2,882 46,119 46,266 -- -- -- Chase Vista Prime Money Market 44,132,441 44,132,441 44,132,441* -- -- -- Chase Vista US Treasury 774,428 8,721,784 8,611,647* -- -- -- ------------ ------------ ------------ ------------ 99,245,222 108,342,517 39,991,701 50,996,221 Participant loans 1,442,735 1,442,735 1,266,866 1,266,866 ------------ ------------ ------------ ------------ $116,888,025 $124,823,774 $ 92,020,704 $115,968,228 ============ ============ ============ ============
* Individual investment represents 5% or more of the fair value of net assets. 14 18 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 4. RECONCILIATION OF FINANCIAL STATEMENTS TO THE FORM 5500 The following is a reconciliation of Plan equity per the financial statements to the Form 5500:
MARCH 31 1999 1998 ------------- ------------- Plan equity per the financial statements $ 131,374,373 $ 123,062,233 Amounts allocated to withdrawing participants (4,665,228) (2,792,574) ------------- ------------- Plan equity per the Form 5500 $ 126,709,145 $ 120,269,659 ============= =============
The following is a reconciliation of withdrawals, distributions, and transfers per the financial statements to the Form 5500:
YEAR ENDED MARCH 31, 1999 ----------- Withdrawals, distributions and transfers per the financial statements $11,257,966 Amounts allocated to withdrawing participants at end of year 4,665,228 Amounts allocated to withdrawing participants at beginning of year (2,792,574) ----------- Withdrawals, distributions and transfers per the Form 5500 $13,130,620 ===========
Amounts allocated to withdrawing participants are recorded on the Form 5500 for withdrawals that have been processed and approved for payment prior to March 31 but not yet paid as of that date. 15 19 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 5. UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS AND NET REALIZED GAIN OR LOSS ON SALE OF INVESTMENTS Unrealized appreciation (depreciation) of investments in Trinity and Halter common stock, mutual funds, and participant loans for the years ended March 31, 1999, 1998, and 1997 were determined as follows:
INVESTMENTS AT INVESTMENTS AT NET INCREASE FAIR VALUE COST (DECREASE) ------------- ------------- ------------- March 31, 1999 Trinity common stock March 31, 1999 $ 14,157,579 $ 13,230,551 $ 927,028 March 31, 1998 23,455,410 9,856,316 13,599,094 ------------- ------------- ------------- (9,297,831) 3,374,235 (12,672,066) Halter common stock March 31, 1999 880,941 2,969,517 (2,088,576) March 31, 1998 2,771,188 3,427,278 (656,090) ------------- ------------- ------------- (1,890,245) (457,761) (1,432,486) Mutual funds March 31, 1999 108,342,517 99,245,222 9,097,295 March 31, 1998 50,996,221 39,991,701 11,004,520 ------------- ------------- ------------- 57,346,296 59,253,521 (1,907,225) Participant loans March 31, 1999 1,442,735 1,442,735 -- March 31, 1998 1,266,866 1,266,866 -- ------------- ------------- ------------- 175,869 175,869 -- Unrealized depreciation of investments ($ 16,011,777) =============
16 20 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 5. UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS AND NET REALIZED GAIN OR LOSS ON SALES OF INVESTMENTS (CONTINUED)
INVESTMENTS AT INVESTMENTS AT NET INCREASE FAIR VALUE COST (DECREASE) ------------ ------------ ------------ March 31, 1998 Trinity common stock March 31, 1998 $ 23,455,410 $ 9,856,316 $ 13,599,094 March 31, 1997 11,707,801 11,220,350 487,451 ------------ ------------ ------------ 11,747,609 (1,364,034) 13,111,643 Halter common stock March 31, 1998 2,771,188 3,427,278 (656,090) March 31, 1997 -- -- -- ------------ ------------ ------------ 2,771,188 3,427,278 (656,090) Mutual funds March 31, 1998 50,996,221 39,991,701 11,004,520 March 31, 1997 30,931,691 28,251,893 2,679,798 ------------ ------------ ------------ 20,064,530 11,739,808 8,324,722 Participant loans March 31, 1998 1,266,866 1,266,866 -- March 31, 1997 959,157 957,674 1,483 ------------ ------------ ------------ 307,709 309,192 (1,483) Unrealized appreciation of investments $ 20,778,792 ============
17 21 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 5. UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS AND NET REALIZED GAIN OR LOSS ON SALE OF INVESTMENTS (CONTINUED)
INVESTMENTS AT INVESTMENTS AT NET INCREASE FAIR VALUE COST (DECREASE) ------------ ------------ ------------ March 31, 1997 Trinity common stock March 31, 1997 $ 11,707,801 $ 11,220,350 $ 487,451 March 31, 1996 13,156,629 10,343,846 2,812,783 ------------ ------------ ------------ (1,448,828) 876,504 (2,325,332) Putnam mutual funds March 31, 1997 30,931,691 28,251,893 2,679,798 March 31, 1996 19,569,446 16,604,515 2,964,931 ------------ ------------ ------------ 11,362,245 11,647,378 (285,133) Participant loans March 31, 1997 959,157 957,674 1,483 March 31, 1996 863,724 863,724 -- ------------ ------------ ------------ 95,433 93,950 1,483 Unrealized depreciation of investments ($ 2,608,982) ============
18 22 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 5. UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS AND NET REALIZED GAIN OR LOSS ON SALE OF INVESTMENTS (CONTINUED) Net realized gain or loss on sale of investments in Trinity and Halter common stock, mutual funds, and participant loans for the years ended March 31, 1999, 1998, and 1997 are as follows:
NET REALIZED GAIN OR LOSS ON AGGREGATE AGGREGATE SALE OF PROCEEDS COST INVESTMENTS ----------- ----------- ----------- March 31, 1999 Trinity common stock $ 1,697,458 $ 1,625,336 $ 72,122 Halter common stock 473,362 626,475 (153,113) Mutual funds 82,705,695 78,934,157 3,771,538 ----------- ----------- ----------- $84,876,515 $81,185,968 $ 3,690,547 =========== =========== =========== March 31, 1998 Trinity common stock $ 1,221,055 $ 1,067,942 $ (153,113) Halter common stock 1,097,263 903,316 193,947 Mutual funds 16,697,796 16,098,348 599,448 ----------- ----------- ----------- $19,016,114 $18,069,606 $ 946,508 =========== =========== =========== March 31, 1997 Trinity common stock $ 3,709,239 $ 3,682,887 $ 26,352 Halter common stock -- -- -- Mutual funds 16,262,136 16,233,316 28,820 ----------- ----------- ----------- $19,971,375 $19,916,203 $ 55,172 =========== =========== ===========
19 23 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Notes to Financial Statements (continued) 6. EXPENSES The expenses incurred by the Trustee in the performance of its duties, including the Trustee's compensation and the services of the recordkeeper, shall be paid by the Plan unless paid by the Employer. The Employer paid $337,328, $526,177, and $187,993 for recordkeeping and trustee fees on behalf of the Plan for the fiscal years ended March 31, 1999, 1998, and 1997, respectively. 7. YEAR 2000 (UNAUDITED) The Company has determined that it will be necessary to take certain steps in order to ensure that the Plan's information technology (IT) systems are prepared to handle year 2000 date issues. Both internal and external resources are being utilized to replace or modify existing IT systems and software applications, and to test those systems and applications for year 2000 compliance. Approximately $3.6 million has been spent on compliance efforts company-wide, and an additional $3.3 million is expected to be spent by the year 2000. In addition, Plan management has established formal communications with its third-party service providers to determine if they have developed plans to address their own year 2000 issues as they relate to the Plan's operations. All third-party service providers have indicated that they will be year 2000 compliant before critical dates occur. At this time, the Company believes all significant areas have been identified, remediation is on schedule, and contingency plans to deal with year 2000 issues will be in place. 8. SUBSEQUENT EVENT Effective April 1, 1999, the Plan was amended and restated to change the following: eligibility begins on the first of the month following 60 days of employment; salary deferral increases or decreases are allowed for any pay period; the Plan's assets are valued daily; two loans may be outstanding at one time; investment transfers are permitted on any business day; and salary deferrals can range from 1% to 14%. 20 24 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Line 27a - Schedule of Assets Held for Investment Purposes March 31, 1999
(e) (b) (c) (d) CURRENT (a) IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST VALUE - ------- ------------------------ --------------------------------- ------------ ------------ * Trinity Industries, Inc. Common stock; 481,960 shares $ 13,230,551 $ 14,157,579 * Halter Marine Group, Inc. Common stock; 151,560 shares 2,969,517 880,943 * Putnam Investments, Inc. Voyager mutual fund; 1,245,004 shares 20,901,928 28,896,556 * Chase Bank of Texas, N.A. Chase Core Equity; mutual fund; 936,487 shares 25,430,433 26,643,069 Chase Vista International Equity; mutual fund; 999 shares 12,517 12,538 Chase Vista Balanced; mutual fund; 2,882 shares 46,119 46,266 Chase Vista Prime Money Market; mutual fund; 44,132,441 shares 44,132,441 44,132,441 Chase Vista U.S. Treasury; mutual fund; 774,428 shares 8,721,784 8,611,647 * Participants Loans with interest rates ranging from 9.25% to 10.5% - 1,442,735 ------------ ------------ $115,445,290 $124,823,774 ============ ============ * Party-in-interest
21 25 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Line 27d - Schedule of Reportable Transactions Year ended March 31, 1999
(h) (b) (c) (d) (g) CURRENT VALUE OF (i) (a) DESCRIPTION PURCHASE SELLING COST OF ASSET ON NET GAIN OR IDENTITY OF PARTY INVOLVED OF ASSET PRICE PRICE ASSET TRANSACTION DATE (LOSS) - --------------------------- ------------- ---------- ----------- ----------- ---------------- ----------- Category (i) - Individual transactions in excess of 5% of Plan assets. Chase Bank of Texas, N.A Short-term Money Market $21,396,821 $ -- $21,396,821 $21,396,821 $ -- 20,440,325 -- 20,440,325 20,440,325 -- 8,183,891 -- 8,183,891 8,183,891 -- 24,607,237 -- 24,607,237 24,607,237 -- -- 42,667,333 42,667,333 42,667,333 -- -- 24,607,237 24,607,237 24,607,237 -- -- 8,305,104 8,305,104 8,305,104 -- Putnam Investments, Inc. Growth & Income -- 24,607,238 21,432,817 24,607,238 3,174,421 Putnam Investments, Inc. U.S. Government Income Trust -- 8,142,614 8,215,947 8,142,614 (73,333) Chase Bank of Texas, N.A Core Equity 24,654,560 -- 24,654,560 24,654,560 -- Chase Bank of Texas, N.A Prime Money Market 42,495,141 -- 42,495,141 42,495,141 -- Chase Bank of Texas, N.A U.S. Treasury 8,353,611 -- 8,353,611 8,353,611 -- Metropolitian Life Insurance Co. GAC 20254 -- 16,891,397 16,891,397 16,891,397 -- Travelers GAC 16795 -- 19,896,534 19,896,534 19,896,534 -- Travelers GAC 16956 19,983,759 -- 19,983,759 19,983,759 -- -- 20,440,325 20,440,325 20,440,325 --
22 26 Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates Line 27d - Schedule of Reportable Transactions (continued) Year ended March 31, 1999
(h) (b) (c) (d) (g) CURRENT VALUE OF (i) (a) DESCRIPTION PURCHASE SELLING COST OF ASSET ON NET GAIN OR IDENTITY OF PARTY INVOLVED OF ASSET PRICE PRICE ASSET TRANSACTION DATE (LOSS) - -------------------------- ----------- ----------- ----------- ----------- ---------------- ----------- Category (iii) - Series of securities transactions in excess of 5% of Plan assets. Travelers GAC 16956 $20,437,394 $ -- $ 20,437,394 $20,437,394 $ -- -- 20,440,325 20,440,325 20,440,325 -- Travelers GAC 16795 241,980 -- 241,980 241,980 -- -- 19,896,534 19,896,534 19,896,534 -- Metropolitian Life Insurance Co. GAC 20254 734,697 -- 734,697 734,697 -- -- 16,891,396 16,891,396 16,891,396 -- Putnam Investments, Inc. Growth and Income 5,905,236 -- 5,905,236 5,905,236 -- -- 25,696,918 22,715,420 25,696,918 2,981,498 Putnam Investments, Inc. Voyager 6,507,781 -- 6,507,781 6,507,781 -- -- 2,106,091 1,604,029 2,106,091 502,062 Putnam Investments, Inc. U.S. Government 1,847,212 -- 1,847,212 1,847,212 -- Income Trust -- 8,597,046 8,525,627 8,597,046 (71,419) Chase Bank of Texas, N.A. Chase Core Equity 25,432,228 -- 25,432,228 25,432,228 -- -- 1,883 1,745 1,883 138 Chase Bank of Texas, N.A. Chase Vista Prime 44,222,829 -- 44,222,829 44,222,829 -- Money Market -- 90,388 90,388 90,388 -- Chase Bank of Texas, N.A. Chase Vista U.S. 8,722,835 -- 8,722,835 8,722,835 -- Treasury -- 1,041 1,075 1,041 (34) Chase Bank of Texas, N.A. Short-term Money 95,929,497 -- 95,929,497 95,929,497 -- Market -- 98,557,880 98,557,880 98,557,880 --
There were no category (ii) or (iv) reportable transactions for the Plan year ended March 31, 1999. Columns (e) and (f) are not applicable. 23 27 Exhibits and Supplemental Schedules 28 Consent of Ernst & Young LLP, Independent Auditors We consent to the incorporation by reference in the Post Effective Amendment No. 1 to the Registration Statement (Form S-8, File No. 33-10937), pertaining to the Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates and in the related Prospectus of our report dated June 18, 1999, with respect to the financial statements and supplemental schedules of the Profit Sharing Plan for Employees of Trinity Industries, Inc. and Certain Affiliates included in this Annual Report (Form 11-K) for the year ended March 31, 1999. ERNST & YOUNG LLP Dallas, Texas June 25, 1999 -----END PRIVACY-ENHANCED MESSAGE-----