RETIREMENT TRANSITION AGREEMENT
Exhibit 10.28
This RETIREMENT TRANSITION AGREEMENT (hereinafter this “Agreement”) is entered into by and
between Trinity North American Freight Car, Inc., a Delaware corporation (hereinafter “Trinity”),
and Xxxxxx Xxxxxx (hereinafter “Xxxxxx”). Trinity and Xxxxxx are collectively hereinafter referred
to as the “Parties.”
RECITALS
WHEREAS, on September 2007, Xxxxxx notified Trinity of his intent to begin a gradual
transition towards a 2011 retirement;
WHEREAS, as part of Trinity’s longstanding succession plan, the Parties agreed to begin
Xxxxxx’x phased retirement transition on January 16, 2008;
WHEREAS, on January 15, 2008, Xxxxxx will relinquish his position as President of Trinity
North American Freight Car, Inc. and assume an advisory role, reporting to the Group President for
TrinityRail;
WHEREAS, Xxxxxx’x competencies in railcar production planning and scheduling, rail industry
knowledge, industry contacts, and manufacturing experience are unique in the railcar industry and
Trinity desires to capitalize on Xxxxxx’x unique competencies during Xxxxxx’x phased retirement
transition;
WHEREAS, Trinity desires to assure itself of the services of Xxxxxx for the period provided in
this Agreement, and Xxxxxx desires to serve in the employ of Trinity on the terms and conditions
hereinafter provided;
WHEREAS, in order to induce Xxxxxx to faithfully and diligently perform his duties and
transfer his business knowledge solely and exclusively to others at Trinity and/or its parent and
their affiliated entities during his retirement transition, Trinity has agreed to provide Xxxxxx
certain compensation and management arrangements as set forth in this Agreement; and
WHEREAS, the Parties also desire to settle fully and finally, in the manner set forth herein,
all differences between them which have arisen, or which may arise, prior to, or at the time of,
the execution of this Agreement, including any and all claims and controversies arising out of the
employment relationship between Xxxxxx and Trinity prior to the effective date of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the Recitals and the mutual promises, covenants, and
agreements set forth in this Agreement, the Parties promise and agree as follows:
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ARTICLE 1
1.1 Employment. Trinity hereby employs Xxxxxx, and Xxxxxx hereby accepts employment
by Trinity, for the period and upon the terms and conditions contained in this Agreement.
1.2 Term. Subject to the provisions hereof, the term of this Agreement shall commence
on the effective date (as herein below defined) and shall end on December 31, 2011, at which time
this Agreement will terminate and Xxxxxx’x retirement will commence; provided, however, if the CEO
and CFO of Trinity Industries, Inc. and the Group President of TrinityRail determine together, in
the exercise of their sole discretion, that Xxxxxx contributed value to Trinity during the term of
this Agreement and that contributions by Xxxxxx made after December 31, 2011 would have value to
Trinity, the Parties may extend the term of this Agreement by mutual written agreement.
1.3 Early Termination. If Xxxxxx breaches this Agreement, Xxxxxx’x employment shall
terminate for cause, and the payments hereunder shall cease. The Parties acknowledge and agree all
rights to non-vested Restricted Stock Awards in and to the common stock of Trinity Industries, Inc.
shall terminate, lapse and be forfeited at the time of such termination for cause. In the event of
Xxxxxx’x death during the term of this Agreement, as and if extended, any outstanding Trinity
Industries, Inc. stock options or stock awards held by Xxxxxx will be resolved by the express
language, terms and conditions of the plan(s) identified, and as further expressed in, Articles
1.10 and 1.11 of this Agreement.
1.4 Position and Duties.
(a) Position. Beginning on the effective date of this Agreement through January 15,
2008, Xxxxxx will begin a succession process as he continues in his current position as President
of Trinity North American Freight Car, Inc. Effective January 16, 2008, Xxxxxx will begin his
gradual retirement transition serving Trinity in a reduced capacity as an advisor to the Group
President of TrinityRail, with duties and responsibilities that are appropriate to such position.
(b) Duties. Xxxxxx’x duties shall include those matters determined by the Group
President of TrinityRail which may include: (i) the oversight of a project regarding rail car
production planning; (ii) information and knowledge exchange; (iii) business development; and (iv)
any other special projects or other duties typical of such position or otherwise assigned to Xxxxxx
(hereinafter “Special Projects”).
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1.5 Commitment and Compensation.
Through the term of this Agreement, Xxxxxx shall devote sufficient business time as set forth
hereinafter, and shall use his best efforts in the performance of his Special Projects hereunder,
and Trinity agrees to compensate Xxxxxx on the following schedule and Trinity agrees that the scope
of work for each of the Special Projects will be constructed in such a way as to permit completion
within the time commitments made by Xxxxxx below, plus reasonable excess as needed.
(a) Effective date through January 15, 2008. For the period beginning on the
effective date of this Agreement through January 15, 2008, Trinity agrees to pay Xxxxxx his current
base rate of pay in exchange for Xxxxxx’x commitment to continue to fulfill the duties and
responsibilities of President of Trinity North American Freight Car, Inc., as well as Xxxxxx’x
succession process duties.
(b) January 16, 2008 through December 31, 2008. For the period January 16, 2008
through December 31, 2008, Trinity shall pay Xxxxxx the semi-monthly rate of Nine Thousand Four
Hundred Seventeen and No/100ths Dollars ($9,417.00) in exchange for Xxxxxx’x commitment to make
himself available to Trinity for Special Projects for 30 days per calendar quarter.
(c) January 1, 2009 through December 31, 2009. For the period January 1, 2009 through
December 31, 2009, Trinity shall pay Xxxxxx the semi-monthly rate of Six Thousand Two Hundred Fifty
and No/100ths Dollars ($6,250.00) in exchange for Xxxxxx’x commitment to make himself available to
Trinity for Special Projects for 20 days per calendar quarter.
(d) January 1, 2010 through December 31, 2010. For the period January 1, 2010 through
December 31, 2010, Trinity shall pay Xxxxxx the semi-monthly rate of Three Thousand One Hundred
Twenty Five and No/100ths Dollars ($3,125.00) in exchange for Xxxxxx’x commitment to make himself
available to Trinity for Special Projects for 10 days per calendar quarter.
(e) January 1, 2011 through December 31, 2011. For the period January 1, 2011 through
December 31, 2011, Trinity shall pay Xxxxxx the semi-monthly rate of One Thousand Forty One and
67/100ths Dollars ($1,041.67) in exchange for Xxxxxx’x commitment to make himself available to
Trinity for Special Projects for 5 days per calendar quarter.
1.6 Additional Per Diem Compensation. If, at the direction of the Group President of
TrinityRail, Xxxxxx performs work for Trinity in excess of the stipulated availability commitments
contained in Article 1.5 (b-e), Trinity agrees to pay Xxxxxx the gross sum of One Thousand and
No/100ths Dollars ($1,000.00) per day.
1.7 Additional Special Award Eligibility. Xxxxxx will be eligible to receive a lump
sum payment of One Hundred Thousand and No/100ths Dollars ($100,000.00) as a “Special Award” to be
paid no later than April 1, 2009 if Xxxxxx achieves pre-specified performance goals for the fiscal
year ending December 31, 2008, as determined by Trinity.
1.8 Employee Benefits. During 2007, Xxxxxx will continue to participate in all
executive and standard employee benefit plans that he participated in immediately preceding the
effective date of
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this Agreement. During 2008 Xxxxxx will continue to be eligible to participate in standard
employee benefits to the extent permitted under the terms of the employee benefits plans, excluding
vacation pay, and will be eligible to participate in the Executive Perquisite Program dated July 1,
2001, and company-paid executive physical examination. Beginning in 2009 and continuing through
the remainder of the term of this Agreement, Xxxxxx will only be eligible for standard employee
benefits, including the 401k Enhanced Plan and group medical, dental and cancer plans, and
excluding vacation pay. Xxxxxx acknowledges and agrees employee benefits may be added,
discontinued, amended or modified during the term of this Agreement at the sole discretion of
Trinity Industries, Inc. In the event of Xxxxxx’x death during the term of this Agreement, any
benefits payable under any employee benefit plan in which Xxxxxx participated will be paid to the
designated beneficiary(ies) on file at Trinity Industries, Inc. Trinity also agrees that Xxxxxx
will retain the use of his company laptop and blackberry to facilitate the execution of his tasks
through the term of this Agreement.
1.9 Travel Expenses. Trinity agrees to reimburse Xxxxxx customary and reasonable
travel expenses directly attributable to the performance of the Special Projects work under this
Agreement, pursuant to Trinity Operating Procedure No. B-11.
1.10 Incentive Stock Option Grants and Non-Qualified Stock Option Grants (“ISO’s and
NQSO’s”). The Parties acknowledge and agree the ISO’s and NQSO’s granted to Xxxxxx will be
governed by the express language, terms and conditions of the plan(s) under which they were
granted, and the Parties agree nothing contained in this Agreement is intended to modify or in any
way whatsoever change the ISO’s and NQSO’s. Exhibit A, attached hereto, sets forth a listing of
all ISO’s and NQSO’s granted to Xxxxxx as of the effective date of this Agreement.
1.11 Restricted Stock Awards (“RSA’s”). The Parties acknowledge and agree the RSA’s
awarded to Xxxxxx will be governed by the express language, terms and conditions of the plan(s)
under which they were awarded; provided, however, the Parties agree Xxxxxx’x RSA’s that would
otherwise vest after December 31, 2011 will not become vested by reason of eligibility for
retirement as defined in the RSA plan document unless the term of this Agreement is extended
pursuant to Article 1.2. If and only if the Parties mutually agree in writing to extend the term
of this Agreement, will vesting occur by reason of Xxxxxx’x continued employment in either or both
of 2012 or 2013 as specified in the Restricted Stock Grant Agreements between the Parties dated May
11, 2004, May 9, 2005 and May 7, 2007. If the Parties do not mutually agree to extend the term of
this Agreement, all RSA’s that would have vested in 2012 and 2013 shall terminate, lapse and be
forfeited; provided, however, in the event the Parties extend this Agreement through 2012, but do
not mutually agree to extend through 2013, those RSA’s vesting in 2012 will vest as a result of
Xxxxxx’x continued employment, and those RSA’s that would have vested in 2013 shall terminate,
lapse and be forfeited. Nothing contained in this Agreement is intended to modify or in any way
whatsoever change the RSA’s, except the agreement between the Parties contained herein to expressly
eliminate the retirement vesting provision of the RSA plan document. The Parties agree that Exhibit
B, attached hereto, sets forth a listing of all RSA’s awarded to Xxxxxx as of the effective date of
this Agreement.
1.12 Deferred Compensation Plan and Agreement (“DCP”). The Parties acknowledge and
agree the Deferred Compensation Plan and Agreement dated January 1, 2005, will be governed by the
express language, terms and conditions of the DCP and the Parties agree nothing contained in this
Agreement is intended to modify or in any way whatsoever change the DCP. Xxxxxx acknowledges and
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agrees he will not participate in the DCP for Fiscal Year 2008 or beyond, that he will receive
a distribution of his DCP account balance in accordance with the plan document and Xxxxxx is bound
by the non-compete provision of paragraph 4 (a) of the DCP.
ARTICLE 2
Confidentiality, Code of Business Conduct and Ethics, Non-Compete, Stock Trading and Injunctive
Relief.
Relief.
2.1 Confidential Information, Code of Business Conduct and Ethics and Training.
During the term of this Agreement, Xxxxxx will continue to be privy to confidential information and
trade secrets of Trinity and its affiliated entities (the “Confidential Information”), including,
but not limited to: (a) information regarding Trinity’s and its affiliated entities’ customers;
(b) information regarding Trinity’s and its affiliated entities’ financial disposition and
investments; and (c) information related to Trinity’s and its affiliated entities’ businesses.
Xxxxxx understands, acknowledges and agrees the Confidential Information gives Trinity and its
affiliated entities a competitive advantage over others who do not have such information and
Trinity and/or its affiliated entities would be harmed if the Confidential Information were
disclosed. Xxxxxx agrees that he will hold the Confidential Information in trust and confidence
for Trinity and/or its affiliated entities and will not: (i) use the Confidential Information for
any purpose (other than for the benefit of Trinity and/or its affiliated entities); or (ii)
disclose to any person or entity the Confidential Information (except as necessary to carry out his
duties under this Agreement). Xxxxxx further agrees to take reasonable steps to safeguard the
Confidential Information and prevent its disclosure to unauthorized persons. During the term of
this Agreement Xxxxxx agrees to comply with the Trinity Industries, Inc. Code of Business Conduct
and Ethics and to participate in the web-hosted, and other, Trinity Industries, Inc. training and
education programs as directed by the Group President of TrinityRail. Xxxxxx affirms he has
properly and truly disclosed to the Trinity Board, and/or appropriate corporate officers of
Trinity, all acts, conduct, undertakings, as well as oral, written and digital communications,
which have been, or could be, subject to audit. Xxxxxx acknowledges and agrees he is also bound by
the terms of the Confidentiality Agreement dated January 9, 2007, and further agrees he will remain
bound by the Confidentiality Agreement during the term of this Agreement and any extensions
thereof.
2.2 Non-compete. During the term of this Agreement, and for a twelve (12) month
period after the expiration of this Agreement, Xxxxxx agrees he will not recruit current employees
of Trinity of its affiliated entities, including those hired or acquired by such entities during
the term of this Agreement, away from their current employment, and Xxxxxx cannot be employed,
either directly or indirectly, including consulting, by Caterpillar Corporation or any Railcar
original equipment manufacturer or any railcar leasing or repair company.
2.3 Stock Trading. Xxxxxx acknowledges that he is aware that United States securities
laws restrict persons with material non-public information about a company obtained directly or
indirectly from that company from purchasing or selling securities of such company, or from
communicating such information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities. In this regard, Xxxxxx
agrees that during the term of this Agreement Xxxxxx will comply with any recurring or discreet
blackout
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period announced by Trinity Industries, Inc. if Xxxxxx performs work on Special Projects involving
material non-public information.
2.4 Injunctive Relief. Xxxxxx consents and agrees that if he were to violate Article
2.1 or 2.2, Trinity would sustain irreparable harm and, therefore, in addition to any other
remedies that Trinity may have under this Agreement or otherwise, and notwithstanding the
provisions of Article 4.5 below, Trinity shall be entitled to apply to any court of competent
jurisdiction for constructive trust or an injunction restraining Xxxxxx or any other party from
committing or continuing any such violation of this Agreement.
ARTICLE 3
General Release, Covenant Not to Xxx and No Admission of Liability
3.1 General Release and Personal Representation and Warranty . In exchange for
Trinity’s agreement to provide Xxxxxx the employment, compensation and other consideration
described in Article 1 of this Agreement, Xxxxxx hereby IRREVOCABLY AND UNCONDITIONALLY RELEASES,
ACQUITS, AND FOREVER DISCHARGES, for himself, his heirs, executors, administrators, legal
representatives and assigns, Trinity and its current and former subsidiaries, parents, affiliates,
successors, assigns, directors, officers, managers, shareholders, employees, supervisors,
attorneys, agents and representatives (the “Released Parties”), from any and all claims,
complaints, grievances, liabilities, obligations, promises, agreements, damages, causes of action,
rights, debts, demands, controversies, costs, losses, interest, and expenses (including attorneys’
fees and expenses) whatsoever, other than any arising under this Agreement, and demands of every
kind or nature whatsoever which he now has or may have or assert, growing out of or pertaining to,
any transactions, dealings, employment, conduct, acts or omissions, or other matters or things
arising from Xxxxxx’x relationship with Trinity occurring or existing at any time on or prior to
the date of this Agreement. Unless otherwise specifically provided in this Agreement, Xxxxxx
releases Trinity from any and all rights or claims under any bonuses and incentive compensation
(excluding any incentive which may be payable under the Calendar Year 2007 Incentive Compensation
Program); the Amended and Restated Executive Severance Agreement dated December 13, 2001;
participation in the Deferred Compensation Plan and Agreement dated January 1, 2005, after calendar
year 2007; participation in the Executive Perquisite Program dated July 1, 2001, after calendar
year 2008; vacation pay after calendar year 2007, any and all claims for benefits (other than those
benefits vested as of the effective date of this Agreement or which become vested prior to the
expiration of this Agreement, and those “standard employee benefits” and “executive benefits”
Xxxxxx is eligible to participate in during the term of this Agreement); compensatory and punitive
damages; any and all claims for personal, emotional and medical injury; any and all claims for
breach of contract or quasi-contract; or tort or negligence; as well as costs, interest, expenses
and attorneys’ fees. To the extent allowed by law, Xxxxxx waives any and all rights and claims
which he has or may have against Trinity under the Age Discrimination in Employment Act of 1967
(including the Older Workers Benefit Protection Act), as amended, Title VII of the Civil Rights Act
of 1964, as amended, the American with Disabilities Act, as amended, the Texas Commission on Human
Rights Act, or any other state, municipal or federal statutes, regulations or executive orders,
including any and all causes of action recognized at common law and/or public policy of the United
States of America and/or the State of Texas. Xxxxxx represents and warrants that no other person
has any right, title, interest or claim, at law or equity, or pursuant to judgment, decree
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or settlement, and whether arising by marriage, divorce or otherwise, to any of the
compensation, benefits or property set out in this Agreement.
3.2 Covenant Not to Xxx. Except for any actions necessary to enforce this Agreement,
Xxxxxx hereby warrants and promises neither Xxxxxx nor any agent or legal representative of Xxxxxx
has filed, or will file or initiate, a lawsuit against Trinity or the Released Parties in any
federal, state or local forum as to any claim or dispute released under this Agreement. If Xxxxxx
or anyone acting on his behalf, including any federal, state, county or municipal agency or entity,
files any administrative claim pertaining to Xxxxxx’x employment with Trinity or relating to any
claim released under this Agreement, Xxxxxx hereby agrees to disclaim and waive any claim for
damages of any nature, including wages, compensatory and punitive damages, and attorneys’ fees,
costs and expenses.
3.3 No Admission of Liability. Xxxxxx does hereby acknowledge and promise that,
although there is included in the foregoing the full, complete and final settlement and
satisfaction of all claims, demands and charges of every nature growing out of those matters
involved in each and every aspect of his employment relationship with Trinity, these facts shall in
no manner be deemed an admission, finding or indication — for any purpose whatsoever — that Trinity
or the Released Parties have, at any time (including the present) or in any respect, contrary to
law or to the rights of any person, violated the rights of Xxxxxx or any other person.
ARTICLE 4
Miscellaneous
4.1 Amendment Waiver. This Agreement may be amended, modified, superseded or
canceled, and any of the terms, provisions, covenants or conditions hereof may be waived, only by a
written instrument executed by the Parties hereto, or, in the case of a wavier, by the party
waiving compliance. The failure of any party to this Agreement at any time or times to require
performance of any provision hereof shall in no manner affect the right to enforce the same. No
waiver by any party to this Agreement of any condition contained in this Agreement, or of the
breach of any term, provision or covenant contained in this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing waiver of any such
condition or breach, or as a waiver of any other condition or of the breach of any other term,
provision or covenant.
4.2 Legal Proceedings. During the term of this Agreement and for a period of twelve
(12) months from the termination of this Agreement, Xxxxxx agrees, without the necessity of a
subpoena, to make himself available, upon reasonable notice and at reasonable times, if deemed
needed by Trinity, for any and all legal proceedings or threatened legal proceedings involving
Trinity and agrees to cooperate fully with Trinity in any such legal proceeding or threatened
proceeding for which Trinity may call him as a witness. Xxxxxx will also cooperate with Trinity by
providing any requested information and reasonably assist in the preparation for any discovery or
legal proceedings. Further, Xxxxxx will immediately notify Trinity upon being contacted by any
person or entity not specifically authorized by Trinity requesting information about internal
company operations or matters, and Xxxxxx will refrain from providing any information until after
notification to and consultation with Trinity. Xxxxxx shall be reimbursed reasonable expenses
incurred while serving as a witness for
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Trinity in any such proceedings. Xxxxxx agrees to provide Trinity with proper documentation
for expenses prior to reimbursement.
4.3 Governing Law and Severability. Xxxxxx acknowledges and agrees the terms and
conditions of this Agreement are contractual and not a mere recital. Xxxxxx further agrees and
acknowledges that the validity and/or enforceability of this Agreement will be governed by the laws
of the State of Texas, unless preempted by federal law, and that if any provision contained herein
should be determined by any court or administrative agency to be illegal, invalid, unenforceable,
or otherwise contrary to public policy, the validity and enforceability of the remaining parts,
terms or provisions shall not be affected thereby and said illegal or invalid part, term or
provision shall be deemed not to be a part of this Agreement.
4.4 Entire Agreement. Except for existing written agreements between Xxxxxx and
Trinity, including, but not limited to, the Confidentiality Agreement, the DCP, the ISO’s, the
NQSO’s, the RSA’s, or any other restrictive covenants, this Agreement contains the entire
understanding between the Parties hereto with respect to Xxxxxx’x employment, and supersedes all
prior and contemporaneous agreements and understandings, inducements or conditions, express or
implied, oral or written, except as herein contained, which shall be deemed terminated effective
immediately.
4.5 Dispute Resolution. Any dispute, controversy or claim arising out of or in
relation to or connection to this Agreement, including, without limitation, any dispute as to the
construction, validity, interpretation, enforceability or breach of this Agreement, shall be
exclusively and finally settled by binding arbitration in accordance with the then current
Arbitration Rules of the American Arbitration Association, and any party may submit such dispute,
controversy or claim to arbitration. Each party may elect one arbitrator and the Parties shall
mutually select a third arbitrator, and all three arbitrators shall determine the dispute,
controversy or claim by a majority vote. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. §§ 1-16 to the exclusion of any provision of state law inconsistent
therewith or which would produce a different result, and judgment upon the award rendered by the
arbitrator may be entered by any court having jurisdiction. The arbitration shall be held in
Dallas, Texas.
4.6 Voluntary Consent. By signing this Agreement, Xxxxxx acknowledges: (a) he has
read this Agreement and fully understands its terms and their import; (b) any and all questions
regarding the terms of this Agreement have been asked and answered to his complete satisfaction;
(c) he has had at least 21 days to consider the terms and effects of this Agreement and has either
considered it for that period of time or has knowingly and voluntarily waived his right to do so;
(d) he may revoke this Agreement by sending written notice to XXXXX X. XXXXX, DEPUTY GENERAL
COUNSEL- LABOR & EMPLOYMENT, TRINITY INDUSTRIES, INC., 0000 Xxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000,
so as to be received within seven (7) days of Xxxxxx’x signing of this Agreement (“Revocation
Period”); (e) the receipt of the consideration described in this Agreement is expressly conditioned
on his signing of this Agreement and the expiration of the mandatory Revocation Period, without
revocation by Xxxxxx; (f) he has been given the opportunity to consult with an attorney of his own
choosing regarding the terms of this Agreement and encouraged to do so; and (g) he is entering into
this Agreement voluntarily, of his own free will, and without any coercion, undue influence,
threat, or intimidation of any kind or type whatsoever.
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NOW, THEREFORE, intending to be legally bound hereby, Xxxxxx signs this Agreement on this
17th day of October, 2007 (the “effective date of this Agreement”).
XXXXXX XXXXXX |
/s/ Xxxxxx Xxxxxx |
Xxxxxx Xxxxxx |
NOW, THEREFORE, intending to be legally bound hereby, Xxxxxxx X. XxXxxxxxx, an
authorized officer, executes, executes this Agreement on behalf of Trinity North American Freight
Car, Inc. this 17 day of October, 2007.
TRINITY NORTH AMERICAN FREIGHT CAR, INC.
by:
|
/s/ Xxxxxxx X. XxXxxxxxx | |
| Xxxxxxx X. XxXxxxxxx
on behalf of said corporation. |
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