EXHIBIT 10.20
TRINITY INDUSTRIES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, by and between Trinity Industries, Inc. (hereinafter
called the "Company") and Xxxxxxx X. Xxxxxxxx (hereinafter called the
"Optionee");
WITNESSETH:
WHEREAS, the Optionee, was employed by Thrall Car Manufacturing Company
("Thrall") or its parent company, Duchossois Industries, Inc., prior to Thrall's
merger with TCMC Acquisition Corp., a wholly owned subsidiary of the Company,
pursuant to which the Company became the owner of all of the outstanding stock
of Thrall, and the Company desires that the Optionee be employed by Thrall or
one of the Company's Affiliates; and
WHEREAS, the Company has determined to grant to the Optionee a
non-qualified stock option to induce the Optionee to enter into an employment
arrangement with Thrall or one of the Company's Affiliates and also afford the
Optionee an opportunity to obtain an increased proprietary interest in the
Company so as to assure a closer identification between the Optionee's interest
and the interest of the Company;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee the
option to purchase from the Company the $1.00 par value Common Stock of the
Company over a period of time. The price per share (the "Exercise Price"), the
total number of shares subject to the option (the "Optioned Shares"), and the
periods of time during which such Optioned Shares may be purchased are as set
forth in Exhibit A attached hereto and made a part hereof.
The options granted hereunder are not intended to constitute incentive
stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended from time to time.
2. Manner of Exercising Option. The option granted herein shall be
exercised by the Optionee only in the State of Texas at the principal office of
the Company by:
(a) Delivering to the Controller of the Company a written
notice specifying the number of Optioned Shares the Optionee
then desires to purchase, which written notice shall be in
substantially the following form and shall be signed by the
Optionee:
"To the Board of Directors of Trinity Industries, Inc.:
I hereby exercise my option to purchase from Trinity
Industries, Inc. (the "Company") at Dallas, Texas
______________ shares of its Common Stock in accordance
with my Non-Qualified Stock Option Agreement dated October
26, 2001 and hereby tender in payment therefore cash
and/or stock in the amount of, and/or with an aggregate
value equal to $_________, being $___________ per share.
------------------------
"(Name of Optionee)"
"(Date)"
; and
(b) Tendering the full exercise price of such Optioned Shares
either: (1) in cash (including check, bank draft, or money
order); or (2) by the delivery of shares of Common Stock of
the Company already owned by the Optionee; or (3) tendering
shares of Common Stock of the Company owned by the Optionee by
delivery of a completed and signed Trinity Industries, Inc.
"Stock Option Exercise Attestation Form"; or (4) by a
combination of items b(1), b(2) or b(3) above.
Shares of Common Stock of the Company delivered or tendered to exercise
the option must be held for at least six months prior to the date of exercise of
the option if the shares were acquired by previous exercise of a stock option.
Shares acquired by methods other than exercise of a stock option (e.g. open
market purchase, gift, etc.) do not have the six month holding requirement.
The amount of any federal, state, or local tax required to be withheld
by the Company due to the exercise of an option granted hereunder shall be
satisfied, at the election of the Optionee but subject to the consent of the
Company, either (a) by payment by the Optionee to the Company of the amount of
such withholding obligation in cash (the "Cash Method"), or (b) through the
retention by the Company of a number of shares of common stock out of the shares
being purchased through the exercise of the option having a fair market value
equal to the amount of the withholding obligation (the "Share Retention
Method"). The cash payment or cash equal to the fair market value of the shares
so withheld, as the case may be, shall be remitted by the Company to the
appropriate taxing authorities.
As soon as practicable after such exercise of the option in whole or in
part by the Optionee, the Company will deliver to the Optionee at the Company's
principal office in the State of Texas a certificate or certificates for the
number of shares with respect to which the option shall be so exercised minus
the number of shares to be withheld, if any, issued in the Optionee's name. Each
purchase of stock hereunder shall be a separate and divisible transaction and a
complete contract in and of itself.
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3. Compliance with Securities and Other Laws. The Company shall not be
required to sell or issue shares of Common Stock under option if the issuance
thereof would constitute a violation by either the Optionee or the Company of
any provision of any law or regulation of any governmental authority or any
national securities exchange. As a condition of any sale or issuance of the
shares of Common Stock under option, the Company may place legends on shares,
issue stop transfer orders and require such agreements or undertakings from the
Optionee as the Company may deem necessary or advisable to assure compliance
with any such law or regulation, including, if the Company or its counsel deems
it appropriate, representations from the Optionee that the Optionee is acquiring
the shares of Common Stock solely for investment and not with a view to
distribution and that no distribution of such shares acquired by Optionee will
be made unless registered pursuant to applicable federal and state securities
laws, or in the opinion of counsel of the Company, such registration is
unnecessary.
4. Early Termination of Option. Subject to the provisions of Section 7,
in the event that the Optionee ceases to be an officer, director, or employee of
the Company or a Subsidiary of the Company for any reason, this option shall
terminate completely as to all shares with respect to which the Optionee was not
entitled, under the terms hereof, to purchase at the date of such cessation of
service. However, to the extent that this option could have been exercised at
the date of cessation of service and the Optionee could have purchased shares,
under the terms hereof, at the date of such cessation of service, then this
option shall continue with respect to those shares which the Optionee could have
purchased and had not purchased, under the terms hereof, at the date of such
cessation of service only to the extent set forth below.
For purposes hereof, the term "Disability" shall mean the Optionee's
permanent and total inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment; the term
"Retirement" shall mean the Optionee's termination of employment, other than
discharge for cause, after age 65 or on or before age 65 if pursuant to the
terms of any Retirement plan maintained by the Company or any of its
Subsidiaries in which the Optionee participates; and the term "Change in
Control" shall have the meaning set forth in the Trinity Industries, Inc. 1998
Stock Option and Incentive Plan, as Amended or may be amended from time to time
(the "Plan").
(a) If the Optionee ceases to be an officer, director, or
employee of the Company or a Subsidiary by reason of the fact
that the Optionee is discharged for cause, as determined
solely and exclusively by the Chief Executive Officer of the
Company, all rights of the Optionee to exercise an option
shall terminate, lapse, and be forfeited at the time of the
Optionee's discharge for cause.
(b) If the Optionee ceases to be an officer, director, or
employee of the Company or a Subsidiary by reason of the
Optionee's resignation, all rights of the Optionee to exercise
an option shall terminate, lapse, and be forfeited ten (10)
days after the date of the Optionee's resignation; except that
in case the Optionee shall die within ten (10) days after the
date of resignation, the personal representatives, heirs,
legatees, or distributees of the Optionee, as appropriate,
shall have the right up to twelve (12) months from the date of
resignation to
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exercise any such option to the extent that the option was
exercisable prior to death and had not been so exercised.
(c) If the Optionee ceases to be an officer, director, or
employee of the Company or a Subsidiary by reason of the
Optionee's Retirement, all rights of the Optionee to exercise
an option shall terminate, lapse, and be forfeited thirty-six
(36) months after the date of the Optionee's Retirement;
except that in case the Optionee shall die within thirty-six
(36) months after the date of Retirement, the personal
representatives, heirs, legatees, or distributees of the
Optionee, as appropriate, shall have the right up to twelve
(12) months from the date of death to exercise any such option
to the extent that the option was exercisable prior to death
and had not been so exercised.
(d) If the Optionee ceases to be an officer, director, or
employee of the Company or a Subsidiary by reason of the
Optionee's Disability, all rights of the Optionee to exercise
an option shall terminate, lapse, and be forfeited three (3
months) after the date that the Optionee ceased to be an
officer, director, or employee of the Company or a Subsidiary;
except that in case the Optionee shall die within three (3)
months after the Optionee ceases to be an officer, director,
or employee pursuant to the provisions of this paragraph (d),
the personal representatives, heirs, legatees, or distributees
of the Optionee, as appropriate, shall have the right up to
twelve (12) months from such cessation of service to exercise
any such option to the extent that the option was exercisable
prior to death and had not been so exercised.
(e) If the Optionee ceases to be an officer, director, or
employee of the Company or a Subsidiary by reason of death,
the personal representatives, heirs, legatees, or distributees
of the Optionee, as appropriate, shall have the right up to
twelve (12) months from the termination of service to exercise
any such option to the extent that the option was exercisable
prior to death and had not been so exercised.
(f) If the Optionee ceases to be an officer, director, or
employee of the Company or a Subsidiary for any reason other
than discharge for cause, resignation, Retirement, Disability,
or death, all rights of the Optionee to exercise an option
shall terminate, lapse, and be forfeited three (3) months
after the date that the Optionee ceased to be an officer,
director, or employee of the Company or a Subsidiary; except
that in case the Optionee shall die within three(3) months
after the Optionee ceases to be an officer, director, or
employee pursuant to the provisions of this paragraph (f), the
personal representatives, heirs, legatees, or distributees of
the Optionee, as appropriate, shall have the right up to
twelve (12) months from such cessation of service to exercise
any such option to the extent that the option was exercisable
prior to death and had not been so exercised.
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(g) Despite the provisions of paragraphs (b), (c), (d), (e),
and (f) of this Section 4, no option shall be exercisable
under any condition after the expiration date specified in
Exhibit A.
(h) Notwithstanding the provisions of paragraphs (b), (c),
(d), (e) and (f) of this Section 4, if Optionee is employed by
the Company or a Subsidiary on October 26, 2003, this option
shall be exercisable by Optionee, to the extent not previously
exercised, during the period of October 27, 2003 through
October 26, 2005 even if the Optionee ceases employment with
the Company or a Subsidiary during such period.
5. Nontransferability of Option. This option shall not be transferable
otherwise than by will or the laws of descent and distribution, and this option
may be exercised, during the lifetime of the Optionee, only by the Optionee. Any
attempted assignment, transfer, pledge, hypothecation, or other disposition of
this option contrary to the provisions hereof, or the levy of any execution,
attachment, or similar process upon this option shall be null and void and
without effect.
6. Changes in Capitalization. The option price shall be adjusted from
time to time as follows:
(a) Subject to any required action by stockholders, the number
of Optioned Shares covered by each outstanding option, and the
Exercise Price, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common
Stock of the Company resulting from a subdivision or
consolidation of shares of Common Stock or the payment of a
stock dividend (but only on shares of Common Stock) or any
other increase or decrease in the number of shares of Common
Stock effected without receipt of consideration by the
Company.
(b) Subject to any required action by stockholders, if the
Company shall be the surviving corporation in any merger or
consolidation, this option shall pertain to and apply to the
securities to which a holder of the number of shares of Common
Stock subject to the option would have been entitled.
(c) In the event of a change in the shares of Common Stock of
the Company as presently constituted, which is limited to a
change of all of its authorized shares with par value into the
same number of shares with a different par value or without
par value, the shares resulting from any such change shall be
deemed to be the Optioned Shares within the meaning of this
option.
To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Board of
Directors of the Company, whose determination shall be final, binding, and
conclusive.
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Except as hereinbefore expressly provided in this Section 6 and in
Section 7, Optionee shall have no rights by reason of any subdivision or
consolidation, of stock of any class or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class or by
reason of any dissolution, liquidation, reorganization, merger, or
consolidation, or spin-off of assets or stock of another corporation, and any
issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of Optioned Shares or the
Exercise Price.
The granting of this option shall not affect in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations, or
changes of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate, or sell, or transfer all or any part of its business or
assets.
7. Vesting of Option.
(a) The option granted hereunder may only be exercised to the
extent that the Optionee is vested in such option. The
Optionee shall vest in the option granted hereunder in
accordance with the schedule specified in Section 1. This
option vesting schedule will be accelerated in the event the
provisions of paragraphs (b), (c), (d) or (e) of this Section
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(b) If the Optionee ceases to be an officer, director, or
employee of the Company or a Subsidiary by reason of death,
Disability, or Retirement, the Optionee or the personal
representatives, heirs, legatees, or distributees of the
Optionee, as appropriate, shall become fully vested in the
option granted hereunder and shall have the immediate right to
exercise such option to the extent not previously exercised.
(c) In the event of the dissolution or liquidation of the
Company, the option granted hereunder shall terminate as of a
date to be fixed by the Board of Directors, provided that not
less than thirty (30) days' written notice of the date so
fixed shall be given to the Optionee and the Optionee shall
have the right during such period to exercise the option even
though the option would not otherwise be exercisable under the
option vesting schedule. At the end of such period, any
unexercised option shall terminate and be of no further
effect.
(d) In the event of a Change in Control, (as defined in the
Plan) the option granted hereunder shall become fully vested
and exercisable.
(e) If the Human Resources Committee of the Board of Directors
of the Company determines that acceleration would be in the
best interest of the Company.
8. No Rights of a Shareholder or of Continued Employment. Optionee
shall not have any of the rights of a stockholder of the Company with respect to
the Optioned Shares
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except to the extent that one or more certificates for Optioned Shares shall
have been delivered to him, or he has been determined to be a stockholder of
record by the Company's Transfer Agent, upon due exercise of the option.
Further, nothing herein shall confer upon Optionee any right to remain in the
employ or continue as a director of the Company or one of its Subsidiaries, and
nothing herein shall be construed in any manner to interfere in any way with the
right of the Company or its Subsidiaries to terminate the Optionee's employment
or directorship at any time.
9. Interpretation of this Agreement. All questions of interpretation
and application of this option shall be subject to the determination by a
majority of the Human Resources Committee of the Board of Directors of the
Company, which determination shall be final and binding on Optionee.
EXECUTED as of October 26, 2001.
Trinity Industries, Inc.
By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
Optionee:
/s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxx
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EXHIBIT A TRINITY INDUSTRIES, INC.
ID: 00-0000000
NOTICE OF GRANT OF STOCK OPTIONS 0000 Xxxxxxxx Xxxxxxx
AND OPTION AGREEMENT Xxxxxx, Xxxxx 00000-0000
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XXXXXXX X XXXXXXXX OPTION NUMBER:00413793
000 XXXXX XXXXXX XXXX: TRG
XXXXXXXX, XX XXX 00000 ID: 208214
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Effective 10/26/2001, you have been granted a(n) Non-Qualified Stock Option to
buy 78,600 shares of Trinity Industries, Inc. (the Company) stock at $24.6700
per share.
The total option price of the shares granted is $1,939,062.00.
Shares in each period will become fully vested on the date shown.
Shares Vest Type Full Vest Expiration
------ ------------ ---------- ----------
78,600 On Vest Date 10/26/2003 10/26/2011
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