UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[ ] Soliciting Material Pursuant to Section 240.14a-12
Trinity Industries, Inc.
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(Name of Registrant as Specified In Its Charter)
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SEC 1913 (02-02)
TRINITY INDUSTRIES, INC.
2525 STEMMONS FREEWAY
DALLAS, TEXAS 75207-2401
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 2003
Notice is hereby given that the Annual Meeting of Stockholders of
Trinity Industries, Inc. (the "Company"), a Delaware corporation, will be held
at the offices of the Company, 2525 Stemmons Freeway, Dallas, Texas 75207, on
Monday, May 12, 2003, at 9:00 a.m., Central Daylight Saving Time, for the
following purposes:
(1) to elect eight directors to hold office until the next Annual
Meeting of Stockholders or until their successors are elected and qualified;
(2) to approve ratification of Ernst & Young LLP as independent
auditors for the fiscal year ending December 31, 2003; and
(3) to transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 28, 2003
will be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof, notwithstanding the transfer of any stock on the books of
the Company after such record date. A list of the stockholders will be open to
the examination of any stockholder, for any purpose germane to the Annual
Meeting, for a period of ten days prior to the meeting at the Company's offices,
2525 Stemmons Freeway, Dallas, Texas 75207.
You are requested to forward your proxy in order that you will be
represented at the Annual Meeting, whether or not you expect to attend in
person. Stockholders who attend the Annual Meeting may revoke their proxies and
vote in person, if they so desire.
A Proxy Statement, proxy card and a copy of the Annual Report of the
Company for the last fiscal year accompany this Notice of Annual Meeting of
Stockholders.
By Order of the Board of Directors
MICHAEL G. FORTADO
Vice President and Corporate Secretary
April 11, 2003
TRINITY INDUSTRIES, INC.
2525 STEMMONS FREEWAY
DALLAS, TEXAS 75207-2401
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 2003
This Proxy Statement is being mailed on or about April 11, 2003 to the
stockholders of Trinity Industries, Inc. ("Trinity" or the "Company") in
connection with the solicitation of proxies by the Board of Directors of the
Company to be voted at the Annual Meeting of Stockholders of the Company to be
held at the offices of the Company, 2525 Stemmons Freeway, Dallas, Texas, on
Monday, May 12, 2003, at 9:00 a.m., Central Daylight Saving Time (the "Annual
Meeting"), or at any adjournment thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. The Company's mailing
address is P.O. Box 568887, Dallas, Texas, 75356-8887.
Shares represented by the enclosed proxy, if properly executed and
returned to the Company prior to the meeting, will be voted at the Annual
Meeting and at any adjournment thereof in the manner specified, or if not
specified, the proxy will be voted FOR the election of the eight nominees for
Directors as listed below and FOR the approval of Ernst & Young as independent
auditors for the fiscal year ending December 31, 2003. The proxy may be revoked
at any time before it is exercised by filing with the Company a written
revocation, by executing a proxy bearing a later date or by attending the Annual
Meeting and voting in person.
The outstanding voting securities of the Company consist entirely of
shares of Common Stock, $1.00 par value per share. The record date for the
determination of the stockholders entitled to notice of and to vote at the
Annual Meeting, or any adjournment thereof, has been established by the Board of
Directors as of the close of business on March 28, 2003. At that date, there
were outstanding and entitled to vote 45,948,964 shares of Common Stock.
The presence, in person or by proxy, of the holders of record of a
majority of the outstanding shares of Common Stock entitled to vote is necessary
to constitute a quorum for the transaction of business at the Annual Meeting,
but if a quorum should not be present, the meeting may be adjourned from time to
time until a quorum is obtained. A holder of Common Stock will be entitled to
one vote per share on each matter properly brought before the meeting.
Cumulative voting is not permitted in the election of directors.
The proxy card provides space for a stockholder to withhold voting for
any or all nominees for the Board of Directors. The election of directors
requires a plurality of the votes cast at the meeting. Ratification of the
independent auditors requires the affirmative vote of a majority of the shares
present in person or represented by proxy and entitled to vote at the meeting.
Shares of a stockholder who abstains from voting on any or all proposals will be
included for the purpose of determining the presence of a quorum. However, an
abstention with respect to the election of the Company's directors will not be
counted either in favor of or against the election of the nominees. In the case
of the other proposal which is being submitted for stockholder approval, an
abstention will effectively count as a vote cast against such proposal. Broker
non-votes on any matter, as to which the broker has indicated on the proxy that
it does not have discretionary authority to vote, will be treated as shares not
entitled to vote with respect to that matter. However, such shares will be
considered present and entitled to vote for quorum purposes so long as they are
entitled to vote on other matters.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides certain information as of March 14, 2003,
as to the beneficial ownership of the Common Stock of the Company for (a) each
director and nominee, (b) each executive officer named in the Summary
Compensation Table below, (c) the directors and executive officers of the
Company as a group and (d) any person owning more than 5% of the Common Stock.
RESTRICTED NUMBER OF SHARES PERCENT OF
NAME STOCK UNITS(1) BENEFICIALLY OWNED(2) CLASS
---- -------------- --------------------- ----------
Directors:
David W. Biegler 41,010 *
Craig J. Duchossois 8,255,150(3) 16.9%
Ronald J. Gafford 22,702 *
Barry J. Galt 35,000 *
Clifford J. Grum 42,410(4) *
Jess T. Hay 33,384(5) *
Diana S. Natalicio 42,910 *
Timothy R. Wallace 44,120 924,764(6) 1.9%
W. Ray Wallace 978,079(7) 2.0%
Named Executive Officers:
John L. Adams 15,500 313,489 *
Michael E. Flannery 5,400 18,001 *
Jim S. Ivy 10,000 194,595 *
Mark W. Stiles 10,000 196,450 *
All Directors and Executive
Officers as a Group: 97,820 11,455,788 23.5%
Other 5% Owners:
Berger Small Cap Value Fund 3,000,000(8) 6.2%
FMR Corp. 4,567,994(9) 9.4%
First Pacific Advisors, Inc. 2,430,300(10) 5.0%
Flippin, Bruce & Porter, Inc. 2,462,471(11) 5.1%
Perkins, Wolf, McDonnell 4,598,990(12) 9.4%
& Company
Thrall Investment Company, L.L.C 8,255,150(13) 16.9%
Thrall Investment Company II, L.L.C
Thrall Car Management Company, Inc.
Craig J. Duchossois
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* Less than one percent (1%)
(1) Holders of restricted stock units have no power to invest or vote
shares of common stock and are not included in the number of shares
beneficially owned. The restricted stock units are convertible into
common stock and are subject to the same market risk as common stock.
(2) Unless otherwise noted, all shares are owned directly and the owner has
the right to vote the shares, except for shares that officers and
directors have the right to acquire under the Company's stock option
plans as of March 14, 2003 or within sixty days thereafter as follows:
Adams (192,750); Biegler (39,410); Duchossois (5,000); Flannery
(12,500); Gafford (22,500); Galt (30,000); Grum (39,410); Hay (30,000);
Ivy (144,172); Natalicio (39,410); Stiles (152,571); T. R. Wallace
(651,427); W. R. Wallace (298,327) and all directors and executive
officers as a group (1,932,456) and vested common stock equivalent
units credited under the Supplemental Profit Sharing Plan to the
following: Adams (9,739); Flannery (701); Ivy (6,191); Stiles (11,856);
T. R. Wallace (33,011); W. R. Wallace (5,254) and all directors and
executive officers as a group (80,211). Includes shares indirectly held
through the Company's 401(k) Plan as follows: Ivy (2,232); T. R.
Wallace (1,163) and all executive officers as a group (6,378) shares.
(3) Includes 150 shares owned directly and 5,000 shares that may be
acquired under stock options from the Company. Mr. Duchossois is an
operating board member and executive officer of Thrall Investment
Company, L.L.C., Thrall Investment Company II, L.L.C., and a director
and executive officer of Thrall Car Management Company, Inc. that
report ownership in the aggregate of 8,250,000 shares and Mr.
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Duchossois may be deemed to have the ability to direct the voting and
investment decisions with respect to such shares. He disclaims
beneficial ownership of the 8,250,000 shares except with respect to the
pecuniary interest attributed to him by virtue of his direct or
indirect equity ownership of such entities.
(4) Includes 3,000 shares owned by Deerfield Corporation of which Mr. Grum
is an owner.
(5) Includes 384 shares owned of record by Mr. Hay's wife as custodian for
their daughter, in which Mr. Hay disclaims beneficial ownership.
(6) Includes 91,063 shares held indirectly by a limited partnership which
Mr. Wallace controls.
(7) Includes 455,678 shares held indirectly by limited partnerships which
Mr. Wallace controls.
(8) Berger Small Cap Value Fund, principal address of 210 University
Boulevard, Denver, Colorado 80206, has reported to the SEC on Schedule
13G dated March 14, 2003 shared voting and dispositive power of
3,000,000 shares. Perkins, Wolf, McDonnell & Company is the sub
investment advisor delegated with investment and voting authority. See
note 12 below.
(9) FMR Corp., 82 Devonshire Street, Boston, Massachusetts 02109 reported
to the SEC on Schedule 13G dated February 14, 2003, that FMR Corp. and
certain affiliates had sole voting power over 146,694 shares and sole
dispositive power over all 4,567,994 shares at December 31, 2002.
(10) First Pacific Advisors, Inc., 11400 West Olympic Boulevard, Suite 1200,
Los Angeles, California 90064 reported to the SEC on Schedule 13G dated
February 11, 2003, shared voting power over 947,600 shares and shared
dispositive power over all 2,430,300 shares at December 31, 2002.
(11) Flippin, Bruce & Porter, Inc., 800 Main Street, Suite 200, Lynchburg,
Virginia 24505 reported to the SEC on Schedule 13G filed February 6,
2003, sole voting power over 2,226,771 shares, sole dispositive power
over 2,456,571 shares and shared dispositive power over 5,900 shares at
December 31, 2002.
(12) Perkins, Wolf, McDonnell & Company, principal address of 310 S.
Michigan Avenue, Suite 2600, Chicago, Illinois 60604, reported to the
SEC on Schedule 13G filed January 31, 2003, sole voting and dispositive
power over 18,400 shares and shared voting and dispositive power over
4,580,590 shares at December 31, 2002.
(13) Thrall Investment Company, L.L.C., ("Investment"), Thrall Investment
Company II, L.L.C. ("Investment II"), Thrall Car Management Company,
Inc. ("Management") and Craig J. Duchossois, each with a principal
business address of 845 Larch Avenue, Elmhurst, Illinois 60126, have
filed with the SEC a Schedule 13D/A reporting sole voting and
dispositive power of 7,150,000 shares by Investment, sole voting and
dispositive power of 500,000 shares by Investment II, sole voting and
dispositive power of 600,000 shares by Management and sole voting and
dispositive power of 150 shares by Mr. Duchossois. Mr. Duchossois may
be deemed to have shared voting and dispositive power over the shares
owned by Investment, Investment II and Management. Mr. Duchossois
disclaims beneficial ownership of all shares of Investment, Investment
II and Management. These shares are also reported by Mr. Duchossois.
Please see note 3 above.
The Company has adopted a stock ownership policy for directors and
officers that is designed to align the financial interest of directors and
officers with those of the Company's stockholders.
ELECTION OF DIRECTORS
At the Annual Meeting, eight directors are to be elected who shall hold
office until the next Annual Meeting of Stockholders or until their respective
successors are duly elected and qualified. It is the intention of the persons
named in the Company's proxy to vote for the election of each of the eight
nominees listed below, unless authority is withheld. All nominees have indicated
a willingness to serve as directors, but if any of them should decline or be
unable to serve as a director, the persons named in the proxy will vote for the
election of another person recommended by the Board of Directors.
In connection with the merger of a subsidiary of the Company with
Thrall Car Manufacturing Company, the Company entered into a Stockholder's
Agreement with Thrall Car Management Company, Inc. pursuant to which Thrall Car
Management Company, Inc. is entitled to designate Craig Duchossois, or a
substitute designee reasonably acceptable to the Company, for election as a
director of the Company at the annual meeting of stockholders. In accordance
with such agreement, the Board of Directors of the Company elected Mr. Craig
Duchossois to serve as a member of the Board of Directors in 2001.
The following biographical information sets forth the name, age,
principal occupation or employment during the past five years, Board committee
membership, certain other directorships held by each nominee for director, the
period during which he or she has served as a director of the Company, and
certain family relationships.
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THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE ELECTION OF EACH OF
THE EIGHT NOMINEES TO THE BOARD OF DIRECTORS SET FORTH BELOW.
NOMINEES
TIMOTHY R. WALLACE (49)
Director since 1992. Mr. Wallace is Chairman, President and Chief Executive
Officer of the Company. He is the son of Mr. W. Ray Wallace, a director of
the Company. Mr. Wallace is a director of Viad Corp. which is primarily
involved in trade exhibits and financial services.
DAVID W. BIEGLER (56)
Director since 1992. Chairman of the Corporate Governance and Directors
Nominating Committee and a member of the Audit Committee and the Corporate
Development and Finance Committee. Mr. Biegler is the retired Vice Chairman
of TXU Corporation. From 1997 until 2001, he served as President and Chief
Operating Officer of TXU Corporation, which provides electric and natural
gas utility services, energy marketing, merchant energy trading and other
energy-related services.
CRAIG J. DUCHOSSOIS (58)
Director since 2001. Member of the Human Resources Committee, Corporate
Governance and Directors Nominating Committee, and the Corporate
Development and Finance Committee. Mr. Duchossois is Chief Executive
Officer of Duchossois Industries, a privately held company, headquartered
in Elmhurst, Illinois. The company owns or holds major stakes in a
diversified group of businesses including consumer products,
transportation, defense, entertainment and venture capital. He is the
former Chairman of Thrall Car Manufacturing Company which merged with a
subsidiary of the Company in October of 2001. He is a director of Bissell,
Inc., Churchill Downs, Inc., and LaSalle National Bank.
RONALD J. GAFFORD (53)
Director since 1999. Chairman of the Human Resources Committee and a member
of the Corporate Governance and Directors Nominating Committee. Mr. Gafford
is President and Chief Executive Officer of Austin Industries, Inc., a
civil, commercial and industrial construction company.
BARRY J. GALT (69)
Director since 1988. Member of the Audit Committee and the Corporate
Governance and Directors Nominating Committee. Mr. Galt is a director and
retired Chairman and Chief Executive Officer of Ocean Energy, Inc.,
formerly named Seagull Energy Corporation, a diversified energy company
engaged in oil and gas exploration and development. He is also a director
of Friede Goldman Halter, Inc., a director of StanCorp Financial Group,
Inc., an insurance company, and a director of Dynegy Inc., a company
engaged in power generation, natural gas liquids and regulated energy
delivery.
CLIFFORD J. GRUM (68)
Director since 1995. Chairman of the Audit Committee and a member of the
Corporate Development and Finance Committee. Mr. Grum is the retired
Chairman and Chief Executive Officer of Temple-Inland Inc., a holding
company with interests in corrugated containers, bleached paperboard,
building products, timber and timberlands, and financial services. He is
also a director of Cooper Industries, Inc., a company engaged in the
businesses of electrical products, tools and hardware, and automotive
products and a director of Tupperware Corporation, a multinational consumer
products company.
JESS T. HAY (72)
Director since 1965. Chairman of the Corporate Development and Finance
Committee and a member of the Human Resources Committee and the Corporate
Governance and Directors Nominating Committee. Mr.
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Hay is Chairman of HCB Enterprises, Inc., a private investment firm. He is
also Chairman of the Texas Foundation for Higher Education. Mr. Hay is the
retired Chairman and Chief Executive Officer of Lomas Financial
Corporation, a diversified financial services company engaged principally
in mortgage banking and real estate lending, and of Lomas Mortgage USA, a
mortgage banking institution. Mr. Hay is a director of Viad Corp. which is
primarily involved in trade exhibits and financial services, and a director
of SBC Communications, Inc., a telephone and wireless communications
company.
DIANA S. NATALICIO (63)
Director since 1996. Member of the Human Resources Committee. President of
the University of Texas at El Paso. Dr. Natalicio was appointed by
President George H.W. Bush to the Commission on Educational Excellence for
Hispanic Americans and by President Clinton to the National Science Board
and to the President's Committee on the Arts and Humanities.
CORPORATE GOVERNANCE
The business affairs of Trinity are managed under the direction of the
Board of Directors in accordance with the General Corporation Law of the State
of Delaware and the Company's Articles of Incorporation and bylaws. The role of
the Board of Directors is to oversee the management of the Company for the
benefit of the stockholders. This responsibility includes (i) monitoring the
senior management's conduct of the Company's business operations and affairs,
(ii) reviewing and approving the Company's financial objectives, strategies and
plans, (iii) evaluating the performance of the chief executive officer and other
executive officers and (iv) overseeing the Company's policies and procedures
regarding corporate governance, legal compliance, ethical conduct and
maintenance of financial and accounting controls. The Board of Directors first
adopted Corporate Governance Principles in 1998, which are reviewed annually by
the Corporate Governance and Directors Nominating Committee and were last
amended in December 2002. The Corporate Governance Principles are available on
the Company's web site at www.trin.net.
The directors hold regular and special meetings, and spend such time on
the affairs of the Company as their duties require. During 2002, the Board of
Directors held four meetings and acted two times by unanimous written consent.
The Board also meets regularly in non-management executive sessions and has
selected Mr. David W. Biegler as presiding director for the non-management
executive sessions. In 2002, all directors of the Company attended at least
seventy-five percent of the meetings of the Board of Directors and the
committees on which they served.
The standing committees of the Board of Directors are the Audit
Committee, Human Resources Committee, Corporate Governance and Directors
Nominating Committee, and Corporate Development and Finance Committee.
The Audit Committee reviews with management, the director of internal
auditing, and the independent auditors the Company's financial statements, the
accounting principles applied in their preparation, the scope of the audit, any
comments made by the independent auditors upon the financial condition of the
Company and its accounting controls and procedures, and such other matters as
the Audit Committee deems appropriate including reviews with management relating
to compliance with corporate policies, compliance programs, and internal
controls. The Audit Committee also pre-approves all auditing and all allowable
non-audit services provided to the Company by the independent auditors. The
Audit Committee recommends to the Board of Directors the independent auditors
for the Company and approves audit fees. The Audit Committee met six times
during 2002. Messrs. Biegler, Galt and Grum serve on the Audit Committee. The
Board of Directors has determined that all members of the Audit Committee are
"independent" as defined by the rules of the New York Stock Exchange.
The duties of the Human Resources Committee generally are to determine
and/or recommend the compensation structure for the Company and its
subsidiaries; make recommendations to the Board of Directors as to the salary of
the Chief Executive Officer, and set the salaries of other senior executives of
the Company; determine and/or recommend grants of stock options, shares of
stock, stock units and such other benefits as may be permitted under the
Company's stock related benefit plans; design and recommend to the Board for
approval and administer long, intermediate and short-term incentive compensation
plans of the Company. The Human Resources Committee met three times during 2002.
Messrs. Duchossois, Gafford, Hay and Dr. Natalicio serve on The Human Resources
Committee.
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The duties of the Corporate Governance and Directors Nominating
Committee generally are to recommend to the Board of Directors the director
nominees proposed each year in the Company's proxy statement for election by the
Company's stockholders; review the qualifications of, and recommend to the
Board, candidates to fill Board vacancies as they may occur; conduct an annual
self-assessment of the Board's performance, consider suggestions from
stockholders and other sources regarding possible candidates for director;
define and recommend to the Board appropriate guidelines and criteria regarding
the qualifications of candidates for director of the Company; recommend
membership for Board committees; review and propose changes, when appropriate,
in the compensation and benefits of non-employee directors of the Company; and
review the Company's Corporate Governance Principles, the Code of Business
Conduct and Ethics and the charters of Board committees. The Corporate
Governance and Directors Nominating Committee met three times during 2002.
Messrs. Biegler, Duchossois, Gafford, Galt and Hay serve on the Corporate
Governance and Directors Nominating Committee.
The duties of the Corporate Development and Finance Committee generally
are to provide direction for the assessment of future acquisition opportunities;
review specific plans regarding significant acquisitions or dispositions of
businesses or assets; authorize, subject to limits imposed by the Board of
Directors, investments in or acquisition of another company; authorize
borrowings within limits established by the Board of Directors; and periodically
review the financial status of the Company. The Corporate Development and
Finance Committee met two times during 2002. Messrs. Biegler, Duchossois, Grum,
Hay and W. Ray Wallace serve on the Corporate Development and Finance Committee.
COMPENSATION OF DIRECTORS
Directors are compensated at the rate of $1,250 for each board or
committee meeting attended plus reimbursement for reasonable out-of-pocket
expenses. In addition, each director who is not a compensated officer or
employee of the Company or its subsidiaries receives a fee of $40,000 per year
for serving as a director, and the Chairman of each of the committees receives
an additional $3,500 per year. Directors may elect, pursuant to a Deferred Plan
for Director Fees, to defer the receipt of all or a specified portion of the
fees to be paid to him or her. Deferred amounts are credited to an account on
the books of the Company and treated as if invested either at the annual LIBOR
rate plus 6 points or, at the director's prior election, in units of the
Company's Common Stock at the closing price on the New York Stock Exchange on
the first trading day of the quarter following the date that a payment is
credited to the director's account. Such stock units are credited with amounts
equivalent to dividends paid on the Company's Common Stock. Upon ceasing to
serve as a director, the value of the account will be paid to the director in
annual installments not exceeding ten years according to the director's prior
election.
Annually, each director who is not also an executive officer of the
Company is granted an option to purchase 5,000 shares of the Company's Common
Stock at the fair market value of the Company's Common Stock on the date of
grant.
The Company has a Directors' Retirement Plan that is an unfunded
arrangement whereby members of the Board of Directors who are not employees of
the Company will receive monthly payments for a ten year period upon retirement,
disability or death. The monthly payment will be equal to a percentage of the
monthly payment of the annual retainer in effect at the time of retirement,
disability or death while serving as a director. The applicable percentage is
based upon the number of years of service on the Board of Directors. If the
director has less than five years of service, the applicable percentage is zero.
After five years of service, the applicable percentage is fifty percent with
increases of ten percent for each year of service thereafter up to one hundred
percent after ten years. However, notwithstanding the number of years of
service, a director's applicable percentage will be one hundred percent in the
event of a change in control of the Company (as defined).
Commencing January 1, 1999, Mr. W. Ray Wallace was employed by the
Company as a consultant pursuant to an agreement at a monthly rate of $10,000.
The agreement provides for the performance of services as may be required by the
Chief Executive Officer or the Board of Directors and his continuation as a
director as long as he is eligible. He is provided an office, administrative
assistant, limited use of Company aircraft and reimbursement of expenses. In
addition, the Company will provide medical coverage for the remainder of his
life. In accordance with a retirement policy established by the Board of
Directors, Mr. W. Ray Wallace will retire from the Board of Directors at the end
of his current term on May 11, 2003.
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EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal year ended
December 31, 2002, the nine month period ended December 31, 2001 and the fiscal
years ended March 31, 2001 and 2000 with regard to the compensation for their
services to the Company and its subsidiaries in all capacities of the Chief
Executive Officers and each of the other four most highly compensated executive
officers serving the Company at the close of the Company's most recently
completed fiscal year.
Summary Compensation Table
Annual Compensation Long Term Compensation
------------------------------------- -------------------------
Other Restricted Securities
Annual Stock Underlying All Other
Name and Compensation Awards Options Compensation
Principal Position Year Salary ($) Bonus ($) ($) ($)(4) (#) ($)(5)
------------------------ ----------- ---------- ---------- ------------ ------------ ---------- ------------
Timothy R. Wallace 2002 $ 900,000 $ -0- $ 5,000(3) $ 1,565,845 187,500 $ 197,641
Chairman, President & 12/31/01(2) 555,000 -0- 7,500 1,962,795 155,000 74,231
Chief Executive Officer 2001 740,000 -0- 8,750 -0- 135,000 120,265
2000 700,000 1,029,150 7,500 279,375 151,852 230,515
John L. Adams 2002 $ 550,000 $ 201,527 $ -0- $ 536,505 55,000 $ 115,572
Executive Vice 12/31/01(2) 375,000 -0- -0- 964,225 45,000 46,950
President 2001 500,000 -0- -0- -0- 70,000 89,457
2000 450,000 402,750 -0- 111,750 40,000 98,162
Mark W. Stiles 2002 $ 390,000 $ 369,836 $ -0- $ 217,100 35,000 $ 104,749
Senior Vice President 12/31/01(2) 281,250 225,000 4,813 269,960 47,945 60,047
2001 375,000 -0- 14,859 -0- 50,000 68,059
2000 352,000 391,818 20,025 69,844 30,000 101,668
Jim S. Ivy 2002 $ 375,000 $ 278,009 $ -0- $ 217,100 40,000 $ 87,171
Sr. Vice President and 12/31/01(2) 270,000 -0- -0- 725,900 35,000 34,763
Chief Financial Officer 2001 343,000 -0- 14,064 -0- 30,000 53,960
2000 343,000 245,588 18,858 55,875 20,000 75,026
Michael E. Flannery(1) 2002 $ 550,000 $ 353,184 $ -0- $ 117,234 25,000 $ 109,234
Chief Executive Officer - 12/31/01(2) 98,013 -0- -0- 122,352 78,600 -0-
Trinity Rail Group
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(1) Mr. Flannery joined the Company in October of 2001.
(2) Effective December 31, 2001, the Company changed its March 31 fiscal year
end to a December 31 fiscal year end, therefore the amounts in the table
for 12/31/01 are for a nine-month period.
(3) Other annual compensation for the period ended December 31, 2002 is for
directors' meeting fees for Mr. Wallace.
(4) Amounts shown for each year are the value of each executive officer's
restricted stock or restricted stock units based on the closing price of
the Common Stock on the date of grant. Messrs. Wallace, Adams, Stiles, Ivy
and Flannery had restricted shares or restricted stock units totaling
154,220, 64,000, 30,000, 46,000, and 10,200 shares or units, respectively,
as of December 31, 2002 with a market value of $2,924,000, $1,213,000,
$569,000, $872,000, and $193,000, respectively, based on a $18.96 per share
market price of the Company's Common Stock on that date. Dividends are paid
on the restricted shares and dividend equivalents are paid on the
restricted stock units at the same rate as paid on the Company's Common
Stock. The restrictions on transferability of the restricted stock will be
lifted at times that vary between awards ranging from three years to the
year following the recipient's retirement or earlier with the consent of
the Human Resources Committee, or upon death, disability, or a change in
control of the Company. If the employment of the recipient is terminated
without the consent of the Human Resources
-7-
Committee for any reason before the restrictions have lapsed, then the
restricted shares will be forfeited. The restricted stock units will vest
sixty percent three years from the date of grant and an additional twenty
percent on each of the two succeeding anniversaries thereof. The restricted
stock units will be paid out at vesting, unless payment is deferred, on the
basis of one share of common stock for each unit. Vesting of the restricted
stock units may be accelerated in the event of death, disability, change of
control or with the consent of the Company. If employment with the Company
is terminated without the consent of the Company before the restricted
stock units are vested, the units will be forfeited.
(5) All other compensation for the year ended December 31, 2002 is composed of
(i) the Company's matching amounts under the Company's Supplemental Profit
Sharing Plan and Section 401(k) Plan (described below under "Retirement
Plans") for Messrs. Wallace $24,401, Adams $15,520, Stiles $18,706, Ivy
$17,840 and Flannery $18,916; (ii) an amount equal to ten percent of the
salaries and incentive bonuses set aside pursuant to long-term deferred
compensation plans for Messrs. Wallace $150,800, Adams $95,153, Stiles
$75,984, Ivy $65,301 and Flannery $90,318; and (iii) above market interest
accrued on the long-term deferred compensation plans for Messrs. Wallace
$22,440, Adams $4,899, Stiles $10,059 and Ivy $4,030.
Option Grants In Last Fiscal Year
Potential Realizable Value
at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation for Option Term ($)
------------------------------------------------------------------------- ----------------------------------
Number of
Securities
Underlying Percent Exercise
Options of Total Or Base
Granted Options Price Expiration
Name (#)(1) Granted ($/Sh) Date 5% ($) 10% ($)
----------------------- ---------- ---------- -------- ---------- --------- ---------
Timothy R. Wallace 187,500 20.9% 21.71 05/09/12 2,559,975 6,487,518
John L. Adams 55,000 6.1% 21.71 05/09/12 750,926 1,903,005
Mark W. Stiles 35,000 3.9% 21.71 05/09/12 477,862 1,211,003
Jim S. Ivy 40,000 4.5% 21.71 05/09/12 546,128 1,384,004
Michael E. Flannery 25,000 2.8% 21.71 05/09/12 341,330 865,002
----------
(1) Annual grants of stock options in Trinity common stock at the market price
on the date of grant which vest 33-1/3% on each anniversary of the grant
date, except for Mr. Flannery's grant of options, which vest 50% on each
anniversary of the grant date.
-8-
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Values
Trinity Stock Options
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Option
Shares Value at Fiscal Year End (#) at Fiscal Year End (($)
Acquired on Realized -------------------------- --------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ -------- ----------- ------------- ----------- -------------
Timothy R. Wallace -- -- 492,258 355,817 -- --
John L. Adams -- -- 129,834 124,576 -- --
Mark W. Stiles 11,670 74,455 112,572 82,494 -- --
Jim S. Ivy -- -- 104,171 83,329 -- --
Michael E. Flannery -- -- -- 103,600 -- --
RETIREMENT PLANS
The Trinity Industries, Inc. Standard Pension Plan is a noncontributory
defined benefit retirement and death benefit plan which is available to all
eligible employees who have completed specified periods of employment. Funds are
contributed periodically to a trust that invests the Company's contributions and
earnings thereon in order to pay the benefits to the employees. The plan
provides for the payment of monthly retirement benefits determined under a
calculation based on credited years of service and a participant's highest
compensation over five consecutive years in the last ten years of employment.
Retirement benefits are paid to participants upon normal retirement at the age
of 65 or later, or upon early retirement. The plan also provides for the payment
of certain disability and death benefits. Covered compensation includes salary
and bonus as shown in the Summary Compensation Table. Other elements of
compensation in the Summary Compensation Table are not included in covered
compensation.
The Company has also adopted a Supplemental Retirement Plan that
permits the payment of supplemental benefits to certain employees who have been
determined by the Plan Committee to be participants and whose annual benefits
under the foregoing retirement plan would exceed those permitted by the Internal
Revenue Code of 1986, as amended (the "Code"). The compensation that may be
covered by a qualified plan is limited under the Code to $200,000 adjusted for
cost of living increases in accordance with the Code. The Supplemental
Retirement Plan provides that if at any time the amount of the annual retirement
benefit which would otherwise be payable under the Company's pension plan is or
becomes limited by reason of compliance with the Code, such person shall be
entitled to receive a supplemental pension benefit equal to the difference
between the benefit that such person receives under the Company's pension plan
and the benefit that such person would have received if such limitation had not
been in effect. The benefits are payable from the general assets of the Company.
Timothy R. Wallace is the only named executive officer who is a participant in
the Supplemental Retirement Plan.
The following table reflects the estimated aggregate annual benefits,
computed on the basis of a monthly benefit payable for ten years certain and
life thereafter, payable under such plans to a fully vested participant of the
Company upon retirement at age 65 after 10, 20, 30 and 40 credited years of
service at the annual remuneration levels set forth in the table and without
regard to any limitations on the amount of benefits by the Code.
-9-
Pension Plan Table
Years of Service
----------------------------------------------------------------------------
Compensation 10 20 30 40
------------ ------------ ------------ ------------ ------------
$ 300,000 $ 29,760 $ 59,520 $ 89,280 $ 119,040
400,000 39,760 79,520 119,280 159,040
600,000 59,760 119,520 179,280 239,040
800,000 79,760 159,520 239,280 319,040
1,000,000 99,760 199,520 299,280 399,040
1,200,000 119,760 239,520 359,280 479,040
1,400,000 139,760 279,520 419,280 559,040
1,600,000 159,760 319,520 479,280 639,040
1,800,000 179,760 359,520 539,280 719,040
2,000,000 199,760 399,520 599,280 799,040
The annual benefits shown are not subject to any deduction for Social
Security benefits or other offset amounts. At December 31, 2002, Mr. Timothy R.
Wallace has 27 credited years of service under the plans under which he is
covered; Messrs. Adams, Stiles, Ivy and Flannery have 4 years, 11 years, 5 years
and 1 year, respectively.
The Company maintains a Section 401(k) plan that permits employees to
elect to set aside up to fourteen percent of their compensation (subject to the
maximum limit on the amount of compensation permitted by the Code to be deferred
for this purpose) in a trust to pay future retirement benefits. Depending upon
years of service, the Company may match from twenty-five to fifty percent of up
to six percent of the employee's compensation set aside for this purpose. The
Company also maintains a Supplemental Profit Sharing Plan ("Supplemental Plan")
for certain of its "highly compensated employees", as defined in the Code. The
highly compensated employees are not limited as to the percentage of their
compensation which may be contributed to the Supplemental Plan. The first six
percent of a Participant's base salary and bonus contributed to the Supplemental
Plan, less any compensation matched under the 401(k) plan, may be matched from
twenty-five percent to fifty percent by the Company based on years of service.
The Company's match vests 20% for each year of service up to 100% after five
years. An additional seventeen and one-half percent match may be made on up to
twenty-five percent of a Participant's base salary and bonus if the deferrals
are directed into stock units. The additional match for stock units vests two
plan years after the end of the plan year for which the match is made. The
additional match does not apply to stock units acquired by transfer from
existing account balances. All matches in the Supplemental Plan are made in
stock units. Stock units may not be transferred into other investment accounts
and may only be paid out in Common Stock.
CHANGE IN CONTROL AGREEMENTS
Each named executive officer has executed a change in control agreement
with the Company that provides certain benefits in the event his or her
employment is terminated subsequent to a change in control of the Company (as
defined in the agreements). The agreements are for continuous two-year terms
until terminated by the Company upon specified notice and continue for two years
following a change in control. The agreements provide that if there is a change
in control of the Company and if the Company terminates the executive's
employment other than as a result of the executive's death, disability or
retirement, or for cause (as defined in the agreements), or if the executive
terminates his or her employment for good reason (as defined in the agreements),
then the Company will pay to such executive a lump sum equal to three times the
amount of the executive's base salary and the higher of the average bonus earned
over the previous three years or the target bonus for the fiscal year in which
the change in control occurs.
-10-
The severance benefits provided by the agreements also include certain
fringe benefits to which each executive would have been entitled if the
executive had continued in the employment of the Company for thirty-six months
after the executive's termination, a supplemental benefit based on the Company's
retirement plan, and the right to surrender unexercised stock options and
receive cash for the net realizable value of the options based on the highest
price of the Common Stock within 180 days prior to the date of termination.
The agreements further provide that if any payment to which the
executive is entitled would be subject to the excise tax imposed by Section 4999
of the Code, then the Company will pay to the executive an additional amount so
that the net amount retained by the executive is equal to the amount that
otherwise would be payable to the executive if no such excise tax had been
imposed.
PERFORMANCE GRAPH
The following graph shows a comparison of the five-year cumulative
return (assuming reinvestment of any dividends) for the Company, the New York
Stock Exchange Index and the Dow Jones Transportation Equipment Index. The
source for the information contained in this table in respect to the return for
the Company and for the Dow Jones Transportation Equipment Index is Dow Jones &
Company, Inc. and, in respect to the New York Stock Exchange Index, is Media
General Financial Services.
FIVE YEAR CUMULATIVE TOTAL RETURN
(PERFORMANCE GRAPH)
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
Trinity Industries, Inc. 100 88 66 60 68 48
Dow Jones Transportation Equipment Index 100 101 93 98 111 113
New York Stock Exchange Index 100 119 130 133 122 99
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
The Company's executive compensation program is overseen by the Human
Resources Committee (the "Committee") of the Board of Directors. The Committee,
which is composed entirely of outside directors, is responsible for setting the
administration of policies that govern the compensation of the Company's
executives, including base salary, incentive compensation, deferred
compensation, stock options, and other stock based awards for each executive
officer and certain key operating officers of the Company, except the salary of
the Chief Executive Officer is decided by the Board, after recommendation by the
Committee. The Committee retains an independent consultant to advise on matters
related to executive compensation. Two members of the Committee, Ronald J.
Gafford and Diana S. Natalicio, serve on a subcommittee designated as the Plan
Committee, which has been authorized by the Board of Directors to make the
awards under the Company's stock option and incentive plan based on
recommendations of the Committee.
-11-
It is the Committee's policy to provide a competitive and comprehensive
compensation program to attract, motivate, reward and retain the key executives
needed to enhance the profitability of the Company and to create value for its
stockholders. The Committee believes that the Company's executive compensation
should consist of competitive base salaries and incentive compensation plans
that reward both short and long-term performance. The key components of the
Company's short-term executive compensation program in the last fiscal year were
base salary and incentive compensation. The long-term program consisted of stock
options, restricted stock unit awards, and in some cases deferred compensation.
The Committee periodically reviews each component of the Company's executive
compensation program to ensure that pay levels and incentive opportunities are
competitive, directly linked to performance and aligned with the interest of
stockholders. The Committee determines each executive's compensation based upon
past and expected future performance, the executive's responsibilities within
the Company, and the executive's value to the Company as determined by the
Committee and performance towards specific financial, strategic and operating
objectives.
Base Salary
The Committee each year reviews each executive's performance and
establishes each executive's base salary based upon past and expected future
performance, and the executive's responsibilities within the Company. In fixing
base salaries, the Committee also considers salaries of senior executives of
other comparable companies as reflected in a survey provided by an independent
outside consultant.
Incentive Compensation
Annual incentive bonuses for the Company's named executive officers are
tied to certain operational objectives and/or financial goals set each year by
the Committee at the beginning of the year. Specific targets are tied to
short-term goals applicable to the executive's job assignment. For fiscal 2002,
Mr. Adams received one half of his annual incentive by an award of 12,500 shares
of long-term restricted stock.
Stock Options, LTP Units, Restricted Stock Grants and Deferred Compensation
Long-term incentive awards provided by the stockholder-approved stock
option and incentive plans are designed to develop and retain strong management
through stock ownership, stock options and other stock based incentive awards.
Stock options historically have been a significant portion of long-term
incentive grants to executive officers. During 2002, executive officers,
business group presidents and key employees were granted options to purchase a
total of 853,750 shares. The Committee believes that a significant portion of
senior executives' compensation should be dependent on value created for
stockholders. Options are an excellent vehicle to accomplish this by tying the
executives' interests directly to the stockholders' interests. Options are
granted at the fair market value of the Company's Common Stock on the date of
grant and vest in annual increments over three years after such date if the
optionee is still employed or vest fully at the date of death, disability or
normal retirement.
The number of options executive officers are granted is based on
individual performance and level of responsibility. The number of options
currently held by an executive is not a factor in determining individual grants.
During 2002, certain key executives were awarded restricted stock units
that vest over a five-year period as a retention incentive, including awards to
Messrs. Wallace, Adams, Stiles, Ivy and Flannery of 44,120, 15,500, 10,000,
10,000 and 5,400 restricted stock units, respectively. The restricted stock
units convert to shares of common stock on their vesting dates.
To encourage the retention of certain key and strategically important
executives focused on continuous improvement and growth of the Company, the
Company has established a deferred compensation plan for Messrs. Wallace, Adams,
Stiles, Ivy and Flannery. Under the deferred compensation plan, an amount equal
to ten percent of each participant's annual base salary and annual incentive
compensation is accrued to his deferred account on the books of the Company. All
such deferrals bear interest at the annual LIBOR rate plus 6 points.
-12-
Chief Executive Officer Compensation
Compensation of the Chief Executive Officer is determined by the Board
of Directors after recommendation by the Committee. The Chief Executive
Officer's base salary, incentive compensation, stock option grants and
stock-based awards are set within the philosophy and policies enunciated above
for all other executives of the Company. In determining the compensation of the
Chief Executive Officer, the Committee reviews the performance of the Company,
considers the positioning of the Company for future years, assesses his past and
ongoing personal performance in the position of Chief Executive Officer, and
considers the report of a nationally recognized consulting firm employed to
survey the compensation of chief executive officers of other companies, with
particular emphasis on companies comparable to the Company. As reported in the
Committee's report in the 2002 proxy statement, the Committee recommended to the
Board, and the Board approved, a change in the Chief Executive Officer's
compensation to $900,000 beginning January 1, 2002. The Chief Executive
Officer's base salary has not been changed for 2003. In determining the Chief
Executive Officer's annual incentive, the Committee measured Mr. Wallace's
performance against previously established operational objectives and financial
goals. The Committee determined Mr. Wallace met the operational objectives and
he was awarded 38,000 shares of long-term restricted stock designed to vest upon
retirement. No cash compensation was awarded as an annual incentive for 2002.
The Chief Executive Officer did not receive an annual incentive payment for the
two previous fiscal years.
Limitation on Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code denies a publicly held
corporation a federal income tax deduction for the compensation of certain
executive officers exceeding $1 million per year. "Performance based"
compensation is not subject to the limitation on deductibility and the Committee
strives to structure compensation so as to qualify for deductibility. The
Committee will continue to monitor future deductibility options. However, the
Committee will authorize compensation that may not be deductible when it deems
it to be in the best interest of the Company and its stockholders.
Conclusion
The Committee believes that the Company's compensation policies and
practices are appropriately designed to attract, retain and motivate key
executives to guide the Company in the future and to produce results which will
enhance the Company's long-term prospects, thereby enriching shareholder values.
Ronald J. Gafford, Chairman Jess T. Hay
Craig J. Duchossois Diana S. Natalicio
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Craig J. Duchossois, Ronald J. Gafford, Jess T. Hay and Diana S.
Natalicio served on the Human Resources Committee during the last completed
fiscal year. None of the members of the Human Resources Committee has ever
served as an executive officer or employee of the Company or any of its
subsidiaries. No member of the Human Resources Committee serves as a member of
the board of directors or compensation committee of any other entity that has
one or more executive officers serving as a member of the Company's Board of
Directors or Human Resources Committee. HCB Enterprises, Inc., of which Jess T.
Hay is a stockholder, director and Chairman of the Board, leased space from the
Company during 2002. The terms of the lease were at market rates and during
2002, the Company was paid $89,241 in rent. The Company no longer owns the
property that was the subject of the lease and this relationship of lessor and
lessee has terminated. Mr. Hay's son-in-law is employed by the Company, where
his compensation exceeds $60,000 annually. In 2001, a subsidiary of Trinity
merged with Thrall Car Manufacturing Company ("Thrall") pursuant to a Merger
Agreement with the sole stockholder of Thrall, Thrall Car Management Company
("TCMC"). Mr. Duchossois is a director, executive officer and has a pecuniary
interest in TCMC by virtue of his direct or indirect equity ownership of TCMC.
In 2002, TCMC was paid $1,600,000 as part of a working capital adjustment
related to the Merger Agreement. The 2002 payment was included in the working
capital adjustment reported in Trinity's 2002 proxy statement. On February 27,
2003, Trinity submitted a claim to TCMC pursuant to the Merger Agreement
regarding warranty and workers compensation matters. Payment is not expected
until TCMC has had a reasonable time to review the matter.
-13-
Certain Other Relationships
Mr. Patrick S. Wallace, son of Mr. W. Ray Wallace and brother of Mr.
Timothy R. Wallace, is an officer of a subsidiary of the Company, where his
compensation exceeds $60,000 a year.
PROPOSAL TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2003
Upon recommendation of the Audit Committee, the Board of Directors has
appointed Ernst & Young LLP as independent auditors for the fiscal year ending
December 31, 2003, subject to ratification by stockholders.
Ernst & Young LLP, independent auditors, or a predecessor of that firm,
have been the auditors of the accounts of the Company each year since 1958. It
is anticipated that representatives of Ernst & Young LLP will be present at the
Annual Meeting, will have the opportunity to make a statement if they so desire
and will be available to respond to appropriate questions raised at the Annual
Meeting or submitted to them in writing before the Annual Meeting.
AUDIT FEES
The aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statements for the fiscal year ended
December 31, 2002, for the reviews of the financial statements included in the
Company's Quarterly Reports on Form 10-Q for that period, and statutory audits
were $1,063,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Ernst & Young did not render professional services relating to
financial information systems design and implementation for the fiscal year
ended December 31, 2002.
ALL OTHER FEES
The aggregate fees billed by Ernst & Young for services rendered to
the Company, other than the services described above under "Audit Fees" for the
fiscal year ended December 31, 2002, were $540,500, including audit related
services of $73,500 and non-audit services of $467,000. Non-audit services were
fees for tax services.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF ITS
SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2003.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee (the "Committee") of the Board of Directors is a
standing committee comprised of three independent directors as "independence" is
currently defined by the applicable listing standard of the New York Stock
Exchange. The Committee operates under a written charter adopted by the Board of
Directors. A copy of the Charter was attached as Exhibit A to the Company's
proxy statement for the Annual Meeting of Stockholders held July 31, 2001. The
Committee is evaluating the Charter in light of the Sarbanes-Oxley Act of 2002,
recent rules and regulations adopted by the Securities and Exchange Commission
and proposed changes to New York Stock Exchange listing requirements. The
Committee annually recommends to the Board of Directors the selection of the
Company's independent auditors. That recommendation is subject to ratification
by the Company's stockholders.
Management is responsible for the Company's internal controls and the
financial reporting process. The independent auditors are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with auditing standards generally accepted in the
United States of America and issuing a report thereon. As provided in its
Charter, the Committee's responsibilities include the monitoring and oversight
of these processes.
Consistent with its Charter responsibilities, the Committee has met and
held discussions with management and the independent auditors. In this context,
management represented to the Committee that the Company's
-14-
consolidated financial statements for the fiscal year ended December 31, 2002
were prepared in accordance with accounting principles generally accepted in the
United States of America. The financial statements were audited by the
independent auditors who provided an unqualified opinion thereon. The Committee
has reviewed and discussed the consolidated financial statements with management
and the independent auditors and discussed with the independent auditors matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).
The Company's independent auditors have also provided to the Committee
the written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Committee discussed
with the independent auditors that firm's independence. The Audit Committee has
also considered whether the provision of non-audit services is compatible with
maintaining the independent auditors' independence and concluded that such
services have not impaired the auditor's independence.
Based upon Committee's discussion with management and the independent
auditors and the Committee's review of the representation of management and the
report of the independent auditors to the Committee, the Committee recommended
that the Board of Directors include the audited consolidated financial
statements in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002 filed with the Securities and Exchange Commission.
Clifford J. Grum, Chairman
David W. Biegler
Barry J. Galt
ADDITIONAL INFORMATION
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers, directors and persons who own more
than ten percent of the Company's Common Stock to file initial reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). These reports are also filed with the New York Stock Exchange and a
copy of each report is furnished to the Company.
Additionally, SEC regulations require that the Company identify any
individuals for whom one of the referenced reports was not filed on a timely
basis during the most recent fiscal year. To the Company's knowledge, based
solely on review of reports furnished to it and written representations that no
other reports were required during and with respect to the fiscal year ended
December 31, 2002, each individual who was required to file such reports
complied with the applicable filing requirements.
STOCKHOLDER PROPOSALS FOR THE 2004 PROXY STATEMENT
Stockholders' proposals to be presented at the 2004 Annual Meeting of
Stockholders, for inclusion in the Company's Proxy Statement and form of proxy
relating to the meeting, must be received by the Company at its offices in
Dallas, Texas, addressed to the Secretary of the Company, no later than December
12, 2003. Upon timely receipt of any such proposal, the Company will determine
whether or not to include such proposal in the proxy statement and proxy in
accordance with applicable regulations and provisions governing the solicitation
of proxies.
DIRECTOR NOMINEES OR OTHER BUSINESS FOR PRESENTATION AT THE 2004 ANNUAL MEETING
Under the Bylaws of the Company, certain procedures are provided which
a stockholder must follow to nominate persons for election as directors or to
introduce an item of business at an annual meeting of stockholders. These
procedures provide, generally, that stockholders desiring to make nominations
for directors, and/or bring a proper subject of business before the meeting,
must do so by a written notice timely received (on or before March 12, 2004, but
no earlier than February 12, 2004, for the 2004 Annual Meeting) to the Secretary
of the Company containing the name and address of the stockholder, the number of
shares of the Company beneficially owned by the stockholder, and a
representation that the stockholder intends to appear in person or by proxy at
the meeting. If the notice relates to a nomination for director, it must also
set forth the name and address of any nominee(s), all arrangements or
understandings between the stockholder and each nominee and any other person or
person(s)
-15-
(including their names) pursuant to which the nomination(s) are to be made, such
other information regarding each nominee as would have been required to be
included in a proxy statement filed pursuant to the proxy rules of the SEC had
each nominee been nominated by the Board, and the consent of each nominee to
serve. The Company may require any proposed nominee to furnish such other
information as may reasonably be required by the Company to determine the
eligibility of such proposed nominee to serve as director. Notice of an item of
business shall include a brief description of the proposed business and any
material interest of the stockholder in such business.
The Chairman of the meeting may refuse to allow the transaction of any
business not presented, or to acknowledge the nomination of any person not made,
in compliance with the foregoing procedures. Copies of the Company's Bylaws are
available from the Secretary of the Company.
PROXY SOLICITATION COSTS
The expense of the solicitation of proxies for the Annual Meeting,
including the cost of mailing, will be borne by the Company. To the extent
necessary to assure sufficient representation at the Annual Meeting, officers
and regular employees of the Company, at no additional compensation, may request
the return of proxies personally, by telephone, facsimile, mail, or other
method. Stockholders are urged to send in their proxies without delay. The
Company has retained Georgeson Shareholder Communications Inc. to assist with
the solicitation of proxies for a fee of $8,500, plus reimbursement for
out-of-pocket expenses. The Company will supply brokers, nominees, fiduciaries
and other custodians with proxy materials to forward to beneficial owners of
shares in connection with this solicitation, and the Company will reimburse such
brokers, nominees, fiduciaries and other custodians for their expenses in making
such distribution. Management has no knowledge or information that any other
person will specially engage any persons to solicit proxies.
REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002, as filed with the Securities and Exchange Commission,
including financial statements, was included with the Annual Report mailed to
each stockholder. Stockholders may obtain without charge another copy of the
Form 10-K, excluding certain exhibits, by writing to Michael G. Fortado, Vice
President and Corporate Secretary, Trinity Industries, Inc., P.O. Box 568887,
Dallas, Texas 75356-8887.
OTHER BUSINESS
Management of the Company is not aware of other business to be
presented for action at the Annual Meeting; however, if other matters are
presented for action, it is the intention of the persons named in the
accompanying form of proxy to vote in accordance with their judgment on such
matters.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY TO AVOID UNNECESSARY
EXPENSE. THEREFORE, STOCKHOLDERS ARE URGED, REGARDLESS OF THE NUMBER OF SHARES
OWNED, TO DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED BUSINESS
REPLY ENVELOPE.
By Order of the Board of Directors
MICHAEL G. FORTADO
Vice President and Corporate Secretary
April 11, 2003
-16-
TRINITY INDUSTRIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - MAY 12, 2003
The undersigned hereby appoints Timothy R. Wallace, Jess T. Hay and
Michael G. Fortado and each of them with full power of substitution, attorneys,
agents and proxies of the undersigned to vote as directed below the shares of
stock which the undersigned would be entitled to vote, if personally present, at
the Annual Meeting of Stockholders of Trinity Industries, Inc. to be held at its
offices, 2525 Stemmons Freeway, Dallas, Texas 75207, on Monday, May 12, 2003 at
9:00 a.m. Central Daylight Saving Time, and at any adjournment or adjournments
thereof. If more than one of the above attorneys shall be present in person or
by substitution at such meeting or at any adjournment thereof, the majority of
said attorneys so present and voting, either in person or by substitution, shall
exercise all of the powers hereby given. The undersigned hereby revokes any
proxy or proxies heretofore given to vote upon or act with respect to such
shares of stock and hereby ratifies and confirms all that said attorneys, their
substitutes, or any of them, may lawfully do by virtue hereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH OF THE NAMED NOMINEES FOR DIRECTOR AND FOR PROPOSAL 2.
(Continued and to be marked, dated and signed on reverse side)
TRINITY INDUSTRIES, INC.
P.O. BOX 217950
CHARLOTTE, NC 28254-3555
THE DIRECTORS RECOMMEND VOTING FOR PROPOSALS 1 and 2.
(1) Election of eight (8) Directors:
FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY to vote [ ] EXCEPTIONS [ ]
listed below for all nominees listed below.
Nominees: David W. Biegler, Craig J. Duchossois, Ronald J. Gafford, Barry J.
Galt, Clifford J. Grum, Jess T. Hay, Diana S. Natalicio and Timothy R. Wallace.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE
"EXCEPTIONS" BOX AND STRIKE A LINE THROUGH THAT NOMINEE'S NAME.)
(2) To approve ratification of Ernst & Young as Independent Auditors for fiscal
year ending December 31, 2003.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) In their discretion on such other matters as may properly come before the
Meeting.
Change of Address
Mark Here [ ]
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS
ON THE PROXY. IF YOUR STOCK IS JOINTLY
OWNED, BOTH PARTIES MUST SIGN.
FIDUCIARIES AND REPRESENTATIVES SHOULD
SO INDICATE WHEN SIGNING, AND WHEN MORE
THAN ONE IS NAMED, A MAJORITY SHOULD
SIGN. IF SIGNED BY A CORPORATION, ITS
SEAL SHOULD BE AFFIXED.
DATED:
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SIGNATURE
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SIGNATURE
VOTES MUST BE INDICATED [ ]
(x) in Black or Blue ink.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.