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DEFERRED COMPENSATION PLAN AND AGREEMENT
THIS PLAN AND AGREEMENT made and entered into as of the ____ day of __________,
1999, between TRINITY INDUSTRIES, INC., a Delaware Corporation with its
principle office at 0000 Xxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000 (hereinafter
called the "Company") and _____________ , an individual (hereinafter called
"Officer");
WITNESSETH:
WHEREAS, Officer is in the employ of the Company and serves in a capacity
which will develop and expand the business of the Company; and
WHEREAS, in recognition of Officer's valued services as an employee and
officer of the Company, and as an inducement to Officer to continue to serve the
Company in the future, the Company desires to provide certain benefits for
Officer and his designated beneficiary through a plan of deferred compensation,
as hereinafter set forth; and
WHEREAS, Officer is willing to remain in the employ of the Company and to
have the Company defer a portion of his annual compensation in order to provide
such benefits, as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the terms, conditions
and covenants hereinafter set forth, the Company and Officer hereby agree as
follows:
1. Deferred Compensation Account. The Company shall establish an account
on the books of the Company in the name of Officer to which will be accrued
deferred compensation in an amount equal to ten percent (10%) of Officer's
combined annual base salary and incentive compensation, payable in the manner
and subject to the conditions hereinafter set forth. Base salary is defined as
that amount specifically approved by the Board of Directors as base salary and
excludes other payments such as car allowance, insurance reimbursements, etc.
Incentive compensation shall mean all amounts earned under a specific plan for a
given year whether payable currently or over a period of future years. Credits
to such account will accrue annually, at the rate of ten per cent (10%) of
Officers combined annual base salary and incentive compensation, commencing with
the Company's fiscal year ended March 31, 1999 and, subject to the annual review
of this Plan by the Board of Directors of the Company, continuing in like matter
for each of the Company's fiscal years thereafter for so long as Officer shall
continue his active, full-time employment with the Company.
2. Administration of Account. The Company shall have the right to
segregate from the other general assets of the Company the sums which accrue
monthly hereunder as deferred compensation. Officer's deferred compensation
account shall be credited with interest at the prime rate as published by Chase
Bank of Texas, N.A. or its successor. Neither Officer or his designated
beneficiary shall at any time have any interest in accrued sums which are so
segregated and/or invested and reinvested, and such funds, as they are from time
to time
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constituted, shall at all times remain assets of the Company subject to the
claims of the general creditors of the Company.
3. Payment of Deferred Compensation. Subject to the conditions
hereinafter set forth, the deferred compensation accrued hereunder and shown to
Officer's credit on the books of the Company shall be payable upon the
termination of the active, full-time employment of Officer for any reason
whatsoever, and shall be paid in such form as Officer may elect from the
following two alternatives:
(i) Payment may be made in annual periodic payments for specified
number of years, not fewer than 5 nor in excess of 20, with the
first payment to be made one (1) year and one (1) day from the
date in which Officer's termination occurs and subsequent
payments to be made on the same date of each succeeding year,
where the payment made during each year shall be in an amount
equal to a fraction of the amount shown to Officer's credit on
the books of the Company as of the last day of the month
preceding the month in which the payment is made, and where such
fraction for each payment shall be one (1) divided by the number
of payments remaining (including the current payment).
Notwithstanding the preceding, at any time prior to receipt of
all remaining installments under this paragraph, Officer (of
Officer's beneficiary in the event of Officer's death) may elect
a lump sum payment in an amount equal to the total amount
remaining shown to Officer's credit on the books of the Company
as of the last day of the month preceding the month in which the
election is made, minus a forfeiture amount equal to 10% of such
total amount.
(ii) Complete payment may be made in a lump sum paid on the first day
of the month following the date of Officer's termination of
employment.
Officer's election pursuant to this paragraph must be made as of the effective
date of this amendment and, except as provided below, shall be irrevocable. In
the absence of an election, payment shall be made in the form of annual periodic
payments over a period of 20 years. Officer may change his distribution election
once during any calendar year with the new election to be effective only in the
event that the date of Officer's termination of employment with the Company is
at least 12 months after the date of the new election. All payments shall be
paid to Officer if living, or if not living, to his designated beneficiary or,
upon failure to make such designation or if the designated beneficiary shall
predecease Officer, to Officer's estate.
Notwithstanding the foregoing, in the event that Officer's termination of
employment with the Company occurs on or within two years after a "Change in
Control" of the Company, the amount to the credit of Officer will be distributed
to Officer either in a lump sum or in annual installments not exceeding five (5)
years, whichever is elected by Officer as of the effective date of this
amendment. In the absence of an election, payment shall be made in a lump sum
within five days of termination following a "Change in Control." Officer may
change this election at any time with the new election to be effective only in
the event that the termination of employment with the Company is at least 12
months after the date of the new election. If
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installment payments are elected, the method of distribution shall be similar to
the method described for installment payments under the preceding paragraph.
For purposes hereof, a "Change in Control" of the Company shall be deemed
to have occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(I) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its affiliates)
representing 30% or more of the combined voting power of the
Company's then outstanding securities, excluding any Person who
becomes such a Beneficial Owner in connection with a transaction
described in clause (i) of paragraph (III) below; or
(II) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who, on May 6, 1997, constitute the Board of Directors of the
Company and any new director (other than a director whose initial
assumption of office is in connection with an actual or
threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board of
Directors of the Company or nomination for election by the
Company's stockholders was approved or recommended by a vote of
at least two-thirds (2/3) of the directors then still in office
who either were directors on May 6, 1997, or whose appointment,
election or nomination for election was previously so approved or
recommended; or
(III) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other
corporation, other than (i) a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent
thereof) at least 60% of the combined voting power of the
securities of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not
including in the securities Beneficially Owned by such person any
securities acquired directly from the Company or its Affiliates
other than in connection with the acquisition by the Company or
its affiliates of a business) representing 30% or more of the
combined voting power of the Company's then outstanding
securities; or
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(IV) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated
an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity, at least 60% of the combined
voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions
as their ownership of the Company immediately prior to such date.
For purposes hereof:
"Affiliate" shall have the meaning set forth in Rule l2b-2 promulgated
under Section 12 of the Exchange Act.
"Beneficial Owner" shall have the meaning set forth in Rule l3d-3 under the
Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Person" shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that
such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities,
or (iv) a corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their ownership of
stock of the Company.
4. Conditions. The payment of deferred compensation to Officer, as
hereinabove provided, shall be subject to the following conditions, the breach
of either of which shall cause the forfeiture of all rights in and to any and
all amounts of deferred compensation remaining unpaid upon the date of any such
breach:
a. Commencing with the date of termination of the active, full-time
employment of Officer and continuing until all payments hereunder have been
made in full, Officer shall not, directly or indirectly, become or serve as
an officer, employee, owner or partner of any business which competes in a
material manner with the Company, without prior written consent of the
Company.
b. Commencing with the date of termination of the active, full-time
employment of Officer and continuing until all payments hereunder have been
made in full, Officer shall be available for consultation in respect of
matters pertaining to the business and financial affairs of the Company,
upon the request of the Company and at such reasonable and convenient times
and places and for such compensation therefor as may be mutually agreed
upon.
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Notwithstanding the foregoing, the conditions set forth in a. and b. above shall
be of no force and effect from and after the occurrence of a Change in Control
(as defined above).
5. Death. In the event of Officer's death prior to the receipt of any
or all of the installments of deferred compensation, such installments as are
then unpaid shall be paid to the beneficiary or beneficiaries designated in
writing and filed with the Secretary, of the Company by Officer during his
lifetime or, upon failure to make such designation or if such designee or
designees shall have predeceased Officer, then to Officer's estate. Officer
shall have the right to change the beneficiary designation from time to time by
instrument in writing delivered to the Secretary of the Company.
6. Nonassignability. Officer during his lifetime, and his designated
beneficiary or beneficiaries, after his death, shall not be entitled to commute,
encumber, sell or otherwise dispose of his or their rights to receive the
deferred compensation provided for herein, and the right thereto shall be
nonassignable and nontransferable and shall not be subject to execution,
attachment or similar process.
7. Participation in Other Plans. Nothing herein contained shall in any
manner modify, impair or effect the existing or future rights or interests of
Officer to receive any employee benefits to which he is or would otherwise be
entitled, or as a participant in the present or any future incentive bonus plan,
stock option plan or pension or profit sharing plan of the Company.
8. Benefit. This Agreement shall be binding upon and inure to the benefit
of any successor of the Company, including any person, firm, corporation or
other entity which, by merger, consolidation, purchase or otherwise, acquires
all or substantially all of the assets or business of the Company.
9. Amendment or Termination. This Agreement may be amended or terminated
in whole or in part by mutual written agreement of the parties hereto.
10. Election. Officer hereby elects, pursuant to paragraph 3 hereof, to
receive payment hereunder after termination following a "Change in Control" as
follows:
[ ] in annual installments (choose from 5 to 20) over a period of
____________ years, or
[ ] in a lump sum
Officer hereby elects, pursuant to paragraph 3 hereof, to receive
payment hereunder after termination within two years following a
"Change in Control" as follows:
[ ] in annual installments (choose from 1-5) over a period of
____________ years, or
[ ] in a lump sum
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the day and year first hereinabove written.
TRINITY INDUSTRIES, INC.
By:
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Officer
I designate the following beneficiary(ies) in the event of my death.
Primary, if living, otherwise to Secondary
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Name Relationship
Secondary
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Name Relationship
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Officer's Signature Date
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