UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
TRINITY INDUSTRIES, INC.
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(Name of Registrant as Specified In Its Charter)
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TRINITY INDUSTRIES, INC.
2525 STEMMONS FREEWAY
DALLAS, TEXAS 75207-2401
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 2002
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 13, 2002, at 9:30 a.m., Central Daylight Saving Time, for the
following purposes:
(1) to elect nine (9) 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, 2002; 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 29, 2002
will be entitled to notice of and to vote at the 2002 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 2002 Annual
Meeting, for a period of ten (10) days prior to the meeting at the Company's
offices, 2525 Stemmons Freeway, Dallas, Texas 75207.
You are requested to forward your proxy in order that you will be
represented at the 2002 Annual Meeting, whether or not you expect to attend in
person. Stockholders who attend the 2002 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 12, 2002
TRINITY INDUSTRIES, INC.
2525 STEMMONS FREEWAY
DALLAS, TEXAS 75207-2401
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 13, 2002
This Proxy Statement is being mailed on or about April 12, 2002 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 13, 2002, at 9:30 a.m., Central Daylight Saving Time (the "2002
Annual Meeting"), or at any adjournment thereof, for the purposes set forth in
the accompanying Notice of Annual Meeting of Stockholders. Last year the Company
changed its March 31 fiscal year end to a December 31 fiscal year end. As a
result, this year's Annual Meeting will be held earlier in the year than in the
past. The Company's mailing address is P.O. Box 568887, Dallas, Texas,
75356-8887.
The enclosed 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 2002 Annual Meeting and voting in person. Unless
the persons named in the proxy are prevented from acting by circumstances beyond
their control, the proxy will be voted at the 2002 Annual Meeting and at any
adjournment thereof in the manner specified therein, or if not specified, the
proxy will be voted FOR the election of the nine (9) nominees for Directors as
listed below and FOR the approval of Ernst & Young as independent auditors for
the fiscal year ending December 31, 2002.
The enclosed proxy is solicited by and on behalf of the Board of
Directors of the Company. The expense of the solicitation of proxies for the
2002 Annual Meeting, including the cost of mailing, will be borne by the
Company. To the extent necessary to assure sufficient representation at the 2002
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.
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 2002 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 outstanding voting securities of the Company consist entirely of
shares of Common Stock, $1.00 par value per share, each share of which entitles
the holder thereof to one vote. The record date for the determination of the
stockholders entitled to notice of and to vote at the 2002 Annual Meeting, or
any adjournment thereof, has been established by the Board of Directors as of
the close of business on March 29, 2002. At that date, there were outstanding
and entitled to vote 45,897,525 shares of Common Stock.
The following table provides certain information as of March 15, 2002,
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.
NUMBER OF SHARES PERCENT OF
NAME BENEFICIALLY OWNED(1) CLASS
---- --------------------- ----------
Directors:
David W. Biegler 35,010 *
Craig J. Duchossois 7,750,150(2) 16.4%
Ronald J. Gafford 17,702 *
Barry J. Galt 29,000 *
Clifford J. Grum 36,410(3) *
Dean P. Guerin 39,000 *
Jess T. Hay 27,384(4) *
Diana S. Natalicio 36,910 *
Timothy R. Wallace 690,227(5) 1.5%
W. Ray Wallace 973,013(6) 2.1%
Named Executive Officers:
John L. Adams 226,066 *
Michael G. Fortado 49,398 *
Jim S. Ivy 141,703 *
Mark W. Stiles 155,301 *
All Directors and Executive
Officers as a Group: 10,454,308 22.1%
Other 5% Owners:
Berger Small Cap Value Fund 2,900,000(7) 6.1%
EQSF Advisers, Inc. 2,511,435(8) 5.3%
M.J. Whitman Advisers, Inc.
and M.J. Whitman
Perkins, Wolf, McDonnell 4,158,090(9) 8.8%
& Company
Pioneer Global Asset Management S.P.A. 3,547,600(10) 7.5%
Thrall Investment Company, L.L.C. 7,750,150(11) 16.4%
Thrall Car Management Company, Inc.
Craig J. Duchossois
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* Less than one percent (1%)
(1) Unless otherwise noted, all shares are owned directly and the owner has
the right to vote the shares, except for shares that officers and
directors have the right to acquire under the Company's stock option
plans as of
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March 15, 2002 or within sixty (60) days thereafter as follows: Adams
(118,834); Biegler (33,410); Fortado (32,986); Gafford (17,500); Galt
(24,000); Grum (33,410); Guerin (14,000); Hay (24,000); Ivy (94,171);
Natalicio (33,410); Stiles (113,742); T. R. Wallace (457,258); W. R.
Wallace (293,327) and all directors and executive officers as a group
(1,463,517) and vested common stock equivalent units credited under the
Supplemental Profit Sharing Plan to the following: Adams (8,732);
Fortado (2,461); Ivy (3,901); Stiles (11,624); T. R. Wallace (30,668);
W. R. Wallace (5,188) and all directors and executive officers as a
group (73,840). Includes shares indirectly held through the Company's
401(k) Plan as follows: Fortado (1,451); Ivy (1,631); T. R. Wallace
(1,138) and all executive officers as a group (4,761) shares.
(2) Mr. Duchossois is an operating board member and executive officer of
Thrall Investment Company, L.L.C. and a director and executive officer
of Thrall Car Management Company, Inc. that report ownership in the
aggregate of 7,750,000 shares and Mr. 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 7,750,000
shares except with respect to the pecuniary interest attributed to him
by virtue of his direct or indirect equity ownership of such entities.
(3) Includes 3,000 shares owned by Deerfield Corporation of which Mr. Grum
is an owner.
(4) Includes 384 shares owned of record by Mr. Hay's wife as custodian for
their daughter in which Mr. Hay disclaims beneficial ownership.
(5) Includes 91,063 shares held by a limited partnership which Mr. Wallace
controls.
(6) Includes 455,678 shares held indirectly by limited partnerships which
Mr. Wallace controls.
(7) Berger Small Cap Value Fund, principal address of 210 University
Boulevard, Suite 900, Denver, Colorado 80206, has reported to the SEC
on Schedule 13G dated February 12, 2002 shared voting and dispositive
power of 2,900,000 shares. Perkins, Wolf, McDonnell & Company is the
sub investment advisor delegated with investment and voting authority.
See note 9 below.
(8) EQSF Advisers, Inc. ("EQSF"), M. J. Whitman Advisers, Inc. (MJWA) and
Martin J. Whitman, principal address of 767 Third Avenue, New York, New
York 10017-2023, have jointly reported to the SEC on Schedule 13G/A,
dated January 17, 2002 sole voting of 1,712,700 shares and sole
dispositive power as to 1,727,000 shares by EQSF, sole voting power as
to 749,835 shares and sole dispositive power as to 784,435 by MJWA, and
a disclaimer of beneficial ownership of all such shares by Martin J.
Whitman.
(9) Perkins, Wolf, McDonnell & Company, principal address of 310 S.
Michigan Avenue, Suite 2600, Chicago, Illinois 60604, has reported to
the SEC on Schedule 13G dated February 26, 2002 beneficial ownership of
4,158,090 shares with sole voting and dispositive power of 10,700 and
shared voting and dispositive power of 4,147,390.
(10) Pioneer Global Asset Management S.P.A., Galleria San Carlo 6, 20122,
Milan, Italy, reported to the SEC on Schedule 13G dated December 26,
2001, sole voting and dispositive power as to 3,547,600 shares.
(11) Thrall Investment Company, L.L.C., ("TIC"), Thrall Car Management
Company, Inc. ("TCMC") 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 TIC, sole voting and
dispositive power of 600,000 shares by TCMC and sole voting and
dispositive power of 150 shares and shared voting and dispositive power
of 7,750,000 shares by Craig Duchossois. Mr. Duchossois may be deemed
to have shared voting and dispositive power over the shares owned by
TIC and TCMC. These are the same shares reported by Mr. Duchossois.
Please see note 2 above.
ELECTION OF DIRECTORS
At the 2002 Annual Meeting, nine (9) 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
nine (9) 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.
3
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.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE ELECTION OF EACH OF
THE NINE (9) NOMINEES TO THE BOARD OF DIRECTORS SET FORTH BELOW.
NOMINEES
TIMOTHY R. WALLACE (48)
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 (55)
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 recently
retired as Vice Chairman of TXU Corporation. From 1997 until 2001, he
served as President and Chief Operating Officer of TXU Corp., which
provides electric and natural gas utility services, energy marketing,
merchant energy trading and other energy-related services.
CRAIG J. DUCHOSSOIS (57)
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, Inc., 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 (52)
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, and prior to being named as President served in various
executive capacities for subsidiaries of Austin Industries, Inc.
4
BARRY J. GALT (68)
Director since 1988. Member of the Audit Committee and the Corporate
Governance and Directors Nominating Committee. Mr. Galt is a director,
and prior to his retirement on March 30, 1999, served as 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. and a director of StanCorp Financial Group, Inc., an
insurance company.
CLIFFORD J. GRUM (67)
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 (71)
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. Hay is
Chairman of HCB Enterprises, Inc., a private investment firm. He is
also Chairman of the Texas Foundation for Higher Education. Prior to
retirement on December 31, 1994, Mr. Hay was Chairman and Chief
Executive Officer of Lomas Financial Corporation, a diversified
financial services company engaged principally in mortgage banking and
real estate lending, and of Lomas Mortgage USA, a mortgage banking
institution. Mr. Hay is a director of 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 (62)
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.
W. RAY WALLACE (79)
Director since 1958. Retired as Chairman and Chief Executive Officer of
the Company in December 1998. Member of the Corporate Development and
Finance Committee. He is the father of Timothy R. Wallace, Chairman,
President and Chief Executive Officer of the Company.
BOARD MEETINGS AND COMMITTEES
The directors hold regular quarterly meetings in addition to a meeting
immediately following the Annual Meeting of Stockholders, attend special
meetings and committee meetings as required, and spend such time on the affairs
of the Company as their duties require. During the nine month period ended
December 31, 2001, the Board of Directors held six (6) meetings and all
directors of the Company attended at least seventy-five percent (75%) of the
meetings of the Board of Directors and the committees on which they served.
5
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 consists of Messrs. Biegler, Galt, and Grum. 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 recommends to the Board of Directors the independent
auditors for the Company and reviews audit fees. The Audit Committee met three
(3) times during the nine month period ended December 31, 2001. 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 Human Resources Committee consists of Messrs. Duchossois, Gafford,
Hay and Dr. Natalicio. 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; grant 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 two (2) times during the nine month period ended December 31,
2001.
The Corporate Governance and Directors Nominating Committee consists of
Messrs. Biegler, Duchossois, Gafford, Galt and Hay. 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; 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; 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 Corporate
Governance and Directors Nominating Committee met one (1) time during the nine
month period ended December 31, 2001.
The Corporate Development and Finance Committee consists of Messrs.
Biegler, Duchossois, Grum, Hay and W. Ray Wallace. 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 (2) times
during the nine month period ended December 31, 2001.
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 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
6
to serve as a director, the value of the account will be paid to the director in
annual installments not exceeding ten (10) years according to the director's
prior election.
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 (10) year period upon
retirement, disability or death. The amount of each monthly payment will be
equal to one-twelfth (1/12) of a percentage of the annual retainer paid to such
director in the year of his retirement, disability or death while serving as a
director. The applicable percentage is dependent upon the number of years of
service as a member of the Board of Directors. If the director has less than
five (5) years of service, the applicable percentage is zero. If the director
has five (5) years of service, the applicable percentage is fifty percent (50%).
The applicable percentage increases at the rate of ten percent (10%) for each
year of service thereafter and reaches one hundred percent (100%) after ten (10)
years of service as a director. However, notwithstanding the number of years of
service, a director's applicable percentage will be one hundred percent (100%)
in the event of a change in control of the Company (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.
SUBMISSION OF FUTURE STOCKHOLDER PROPOSALS
Stockholders' proposals to be presented at the 2003 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
13, 2002. Upon timely receipt of any such proposal, the Company will determine
whether or not to include such proposal in the proxy statement and proxy in
accordance with applicable regulations and provisions governing the solicitation
of proxies.
Under the Bylaws of the Company, 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 14, 2003, but
no earlier than February 11, 2003, for the 2003 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) (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
Securities and Exchange Commission 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.
7
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.
EXECUTIVE COMPENSATION
The following table sets forth information for the nine month period
ended December 31, 2001 and the fiscal years ended March 31, 2001, 2000 and 1999
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 (4) 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($) ($)(2) ($)(3) (#) ($)(4)
------------------------ --------- --------- ---------- ------------ ---------- ----------- ------------
Timothy R. Wallace 12/31/01* $555,000 $ -0- $ 7,500 $1,962,795 155,000 $ 74,231
Chairman, President & 2001 740,000 -0- 8,750 -0- 135,000 120,265
Chief Executive Officer 2000 700,000 1,029,150 7,500 279,375 151,852 230,515
1999 600,000 945,000 21,373 393,125 63,574 159,300
John L. Adams(1) 12/31/01* $375,000 $ -0- $ -0- $ 964,225 45,000 $ 46,950
Executive Vice President 2001 500,000 -0- -0- -0- 70,000 89,457
2000 450,000 402,750 -0- 111,750 40,000 98,162
1999 87,500 87,281 4,162 150,750 25,000 -0-
Mark W. Stiles 12/31/01* $281,250 $ 225,000 $ 4,813 $ 269,960 47,945 $ 60,047
Senior Vice President 2001 375,000 -0- 14,859 -0- 50,000 68,059
2000 352,000 391,818 20,025 69,844 30,000 101,668
1999 325,000 406,250 11,707 58,969 19,901 77,925
Jim S. Ivy 12/31/01* $270,000 $ -0- $ -0- $ 725,900 35,000 $ 34,763
Vice President and 2001 343,000 -0- 14,064 -0- 30,000 53,960
Chief Financial Officer 2000 343,000 245,588 18,858 55,875 20,000 75,026
1999 330,000 219,450 14,136 78,625 20,000 57,345
Michael G. Fortado 12/31/01* $180,000 $ -0- $ 2,037 $ 169,670 18,000 $ 4,950
Vice President, General 2001 230,000 -0- 10,457 -0- 13,000 13,991
Counsel and Corporate 2000 220,000 118,140 13,202 27,938 10,000 11,700
Secretary 1999 205,000 102,295 8,438 58,969 5,000 2,400
*NINE MONTH PERIOD
----------
(1) Mr. Adams joined the Company in January of 1999.
(2) Other annual compensation for the nine month period ended December 31,
2001 is composed of amounts reimbursed for the payment of taxes for
certain perquisites for Mr. Stiles and, in the case of Mr. Wallace,
directors' meeting fees.
(3) Amounts shown for each year are based on the closing price of the
Common Stock on the date of grant. Messrs. Wallace, Adams, Stiles, Ivy
and Fortado had restricted shares totaling 110,100, 48,500, 20,000,
36,000, and 11,500 shares, respectively, as of December 31, 2001 with a
market value of $2,991,000,
8
$1,318,000, $543,000, $978,000, and $312,000, respectively, based on a
$27.17 per share market price of the Company's Common Stock on that
date. Dividends are paid on these restricted shares at the same rate as
paid on the Company's Common Stock. The restrictions on transferability
will be lifted at times that vary between awards ranging from three
years to the recipient's retirement at age 65 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 Committee for
any reason before the restrictions have lapsed, then the restricted
shares will be forfeited.
(4) All other compensation for the nine month period ended December 31,
2001 is composed of the Company's matching amounts under the Company's
Supplemental Profit Sharing Plan and Section 401(k) Plan (described
below under "Retirement Plans") for Mr. Wallace $18,731; Mr. Adams
$9,450; Mr. Stiles $9,422; Mr. Ivy $7,763 and Mr. Fortado $4,950; and
an amount equal to ten percent (10%) of the salaries and incentive
bonuses set aside pursuant to long-term deferred compensation plans for
Mr. Wallace $55,500, Mr. Adams $37,500, Mr. Stiles $50,625 and Mr. Ivy
$27,000.
Option Grants In Last Fiscal Year
Potential Realizable Value
at Assumed Annual
Rates of Stock Price
Individual Grants Appreciation for Option Term ($)
----------------------------------------------------------------------- --------------------------------
Number of
Securities
Underlying Percent Exercise
Options of Total or Base
Granted Options Price Expiration
Name (#)(1) Granted ($/Sh) Date 5%($) 10%($)
------------------ ---------- --------- -------- ---------- --------- ---------
Timothy R. Wallace 155,000(2) 15.4% 18.95 4/02/11 1,827,221 4,681,220
John L. Adams 45,000(2) 4.5% 18.95 4/02/11 536,290 1,359,064
Mark W. Stiles 35,000(2) 3.5% 18.95 4/02/11 417,114 1,057,050
12,945(3) 1.3% 26.50 4/13/03 28,895 58,709
Jim S. Ivy 35,000(2) 3.5% 18.95 4/02/11 417,114 1,057,050
Michael G. Fortado 18,000(2) 1.8% 18.95 4/02/11 214,516 543,626
----------
(1) The Company has not granted any stock appreciation rights.
(2) Annual grants of stock options in Trinity common stock at the market
price on the date of grant which vest 33-1/3% each year.
(3) These stock options were granted pursuant to the reload provision of
the 1993 Plan.
9
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Values
Trinity Stock Options
Number of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Option
Shares Value at Fiscal Year End (#) at Fiscal Year End ($)
Acquired in Realized --------------------------- ---------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ -------- ----------- ------------- ----------- -------------
Timothy R. Wallace -- -- 338,039 322,536 561,426 1,675,203
John L. Adams -- -- 72,367 127,043 109,143 567,431
Mark W. Stiles 28,511 151,032 66,199 105,537 51,588 443,109
Jim S. Ivy -- -- 63,126 84,374 41,700 371,100
Michael G. Fortado -- -- 22,618 36,382 15,087 187,083
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 (10) years certain
and life thereafter, payable under such plans to a fully vested participant of
the Company upon retirement at age 65 after 10, 20, 30 and 40 credited years of
service at the annual remuneration levels set forth in the table and without
regard to any limitations on the amount of benefits by the Code.
10
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, 2001, Mr. Timothy R.
Wallace has 26 credited years of service under the plans under which he is
covered; Messrs. Adams, Stiles, Ivy and Fortado have 3 years, 10 years, 4 years
and 4 years, respectively.
The Company maintains a Section 401(k) plan that permits employees to
elect to set aside up to fourteen percent (14%) 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 (25%) to
fifty percent (50%) of up to six percent (6%) 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 (6%) 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 (25%) to fifty percent
(50%) by the Company. The Company's match vests 20% per year. An additional
seventeen and one-half percent (17-1/2%) match may be made on up to twenty-five
percent (25%) of a Participant's base salary and bonus deferrals 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
11
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 (3) 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.
The severance benefits provided by the agreements also include certain
fringe benefits to which each executive would have been entitled if the
executive had continued in the employment of the Company for thirty-six (36)
months after the executive's termination, 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.
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Human Resources Committee ("the Committee") of the Board of Directors. The
Committee, which is composed entirely of outside directors, is responsible for
setting and overseeing the administration of policies that govern the
compensation of the Company's executives. It establishes base salary, incentive
compensation, deferred compensation, stock options, performance units 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.
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 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.
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 the Company's success in achieving certain financial and specific 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 and,
in the case of
12
Timothy R. Wallace, to the Company's consolidated performance and enhancement of
stockholder value. Of the named executive officers, only Mark W. Stiles was
awarded short-term incentive compensation for the nine month period ended
December 31, 2001.
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 the nine month period ended
December 31, 2001, 14 executive officers and business group presidents and 159
key employees were granted options to purchase a total of 810,900 shares. An
additional 160,000 options were awarded to certain executives of Thrall Car
Manufacturing Company as an inducement to join the Company following the merger
of a subsidiary of the Company and Thrall. 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 that the Committee grants to executive officers
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 the nine month ended December 31, 2001, the Committee awarded
certain key executives shares of restricted stock that vest over a five year
period as a retention incentive and shares of restricted stock that vest after
three years as special performance awards, including awards to Messrs. Timothy
R. Wallace, John L. Adams, Mark W. Stiles, Jim S. Ivy and Michael G. Fortado
totaling 82,100, 40,500, 13,000, 30,000, and 7,500 shares, respectively.
To encourage the retention of certain key and strategically important
executives focused on continuous improvement and growth of the Company, the
Company has established a deferred compensation plan for certain key officers of
the Company including Timothy R. Wallace, John L. Adams, Jim S. Ivy and Mark W.
Stiles. Under the deferred compensation plan, an amount equal to ten percent
(10%) 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.
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. The Chief Executive Officer's base
salary for the nine month period ended December 31, 2001 was unchanged from the
previous fiscal year.
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. Based on the Committee's consideration of
these matters and after consulting with its outside adviser, in December 2001
the Committee recommended to the
13
Board, and the Board approved, a change in the Chief Executive Officer's base
salary to $900,000 beginning January 1, 2002.
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 Craig J. Duchossois, Member
Human Resource Committee Jess T. Hay, Member
Diana S. Natalicio, Member
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
David W. Biegler, Craig J. Duchossois, Ronald J. Gafford,
Clifford J. Grum, 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 current officer of the
Company has ever served as a member of the board of directors or compensation
committee of any other entity that has or has had 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, leases space from the Company. The terms of
the lease are at market rates and during the nine month period ended December
31, 2001, the Company was paid $66,930 in rent. On October 26, 2001, a
subsidiary of the Company merged with Thrall Car Manufacturing Company whereby
the sole stockholder of Thrall, Thrall Car Management Company ("TCMC"), received
at closing 7,150,000 shares of common stock of the Company and $165,550,000 in
cash and has the right to receive an additional $45,000,000 depending on the
number of cars sold through 2006. TCMC also received approximately $15,200,000
as part of a working capital adjustment pursuant to the Merger Agreement. TCMC
is an Associate of Mr. Duchossois.
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 (10%) of the Company's Common Stock to file initial reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). These reports are also filed with the New York Stock Exchange and a
copy of each report is furnished to the Company.
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 nine month period
ended December 31, 2001, each individual who was required to file such reports
complied with the applicable filing requirements.
14
PERFORMANCE GRAPH
The following graph shows a comparison of the five (5) year cumulative
return (assuming reinvestment of any dividends) for the Company, the New York
Stock Exchange Index and the Dow Jones Transportation Equipment Index. The
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
[LINE CHART]
1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
Trinity Industries, Inc. 100 121 107 81 73 82
Dow Jones Transportation Equipment Index 100 124 102 117 104 134
New York Stock Exchange Index 100 132 157 171 176 160
PROPOSAL TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2002
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, 2002, 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
2002 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
2002 Annual Meeting or submitted to them in writing before the 2002 Annual
Meeting.
15
AUDIT FEES
The aggregate fees billed for professional services rendered for the
audit of the Company's annual financial statements for the nine months ended
December 31, 2001, and for the reviews of the financial statements included in
the Company's Quarterly Reports on Form 10-Q for that period, were $724,500.
FINANCIAL INFORMATION SYSTEMS DESIGN
AND IMPLEMENTATION FEES
Ernst & Young did not render professional services relating to
financial information systems design and implementation for the nine months
ended December 31, 2001.
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 nine
months ended December 31, 2001, were $1,356,500, including audit related
services of $1,012,000 and non-audit services of $344,500. Audit related
services included fees primarily for employee benefit plan audits, foreign
statutory audit reports, and due diligence on acquisitions. Non-audit services
included 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, 2002.
AUDIT COMMITTEE REPORT
The Audit Committee (the Committee) of the Board of Directors is a
standing committee comprised of four independent directors. It operates under a
written charter adopted by the Board of Directors. 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 control 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 consolidated
financial statements were prepared in accordance with accounting principles
generally accepted in the United States of America. 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
16
Company's Annual Report on Form 10-K for the nine months ended December 31, 2001
filed with the Securities and Exchange Commission.
Clifford J. Grum, Chairman David W. Biegler, Member
Audit Committee Barry J. Galt, Member
Dean P. Guerin, Member
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December of 2001, the Company paid to an entity owned and controlled
by Beatrice G. Wallace, wife of W. Ray Wallace, a director, $560,000 for the
purchase of a warehouse that was needed by the Company for document storage. The
purchase price of the property was equivalent to the seller's cost and was
comparable to similar property located within the same distance from the
Company's headquarters.
OTHER MATTERS
Management of the Company is not aware of other matters to be presented
for action at the 2002 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.
REPORT ON FORM 10-K
The Company's Transition Report on Form 10-K for the nine month period
ended December 31, 2001, 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.
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 12, 2002
17
TRINITY INDUSTRIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - MAY 13, 2002
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 13, 2002 at
9:30 a.m. Central Daylight Saving Time, and at any adjournment or adjournments
thereof. If more than one of the above attorneys shall be present in person or
by substitution at such meeting or at any adjournment thereof, the majority of
said attorneys so present and voting, either in person or by substitution, shall
exercise all of the powers hereby given. The undersigned hereby revokes any
proxy or proxies heretofore given to vote upon or act with respect to such
shares of stock and hereby ratifies and confirms all that said attorneys, their
substitutes, or any of them, may lawfully do by virtue hereof.
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 11369
NEW YORK, N.Y. 10203-0369
THE DIRECTORS RECOMMEND VOTING FOR PROPOSALS 1 and 2.
(1) Election of nine (9) 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, Timothy R. Wallace and
W. Ray 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, 2002.
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.