EXHIBIT 10.2
TRINITY INDUSTRIES, INC.
DIRECTORS' RETIREMENT PLAN
(AS AMENDED SEPTEMBER 10, 1998)
1. Each member of the Board of Directors of the Company who is not an
employee of the Company shall, upon retirement, disability or death while
serving as a Director, on or after December 11, 1986, be entitled to receive a
monthly amount determined in accordance with paragraph 3 of this Plan. Payment
of such monthly amount shall commence on the first day of the month following
such Director's retirement, disability or death, and shall continue on the first
day of each month thereafter until a total of one-hundred twenty (120) monthly
payments have been made. In accordance with Company policy, no Director may have
his name placed in nomination for reelection as a Director after he attains age
seventy-two (72), unless such Director served on the Board of Directors prior to
December 11, 1986. For purposes of this Plan, a Director is disabled if such
Director has a physical or mental condition which, in the judgment of the
Company, based upon medical reports and other evidence satisfactory to the
Company, presumably permanently prevents such Director from satisfactorily
performing his usual duties as a member of the Board of Directors of the
Company.
The preceding provisions of this Section 1 to the contrary
notwithstanding, any former Director who has commenced receiving monthly
payments under this Plan following his retirement or disability and who has more
than one such monthly payment remaining to be paid may elect in writing on a
form acceptable to the Company to waive his right to continue receiving monthly
payments hereunder and in lieu thereof to receive one lump sum payment in an
amount equal to 90% of the present value of the monthly payments remaining to be
paid at the time of such lump sum payment. The present value shall be determined
using the actuarial assumptions that would be used for calculating lump sum
distributions under the Trinity
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Industries, Inc. Standard Pension Plan, and the payment will be made in cash to
the former Director no later than 15 days following receipt of his election by
the Company. In the event that a former Director receives a lump sum payment in
accordance with this provision, no further benefits will be owed to or on
account of such former Director under this Plan and the remaining 10% of the
present value of the monthly payments shall be forfeited.
2. Each director shall have the right to designate a beneficiary who is
to succeed to his contingent right to receive future payments hereunder in the
event of his death. Such designation shall be made on a Beneficiary Designation
Form, a specimen of which is attached hereto as Exhibit A. If the Director
should die on or after December 11, 1986 while serving as a Director or before
receiving one-hundred twenty (120) monthly payments under paragraph 1, above,
the full number of such monthly payments, in the case of death while serving as
a Director, or the remaining payments, in the case of death after retirement or
disability, shall be paid to his designated beneficiary, it being understood
that no more than one-hundred twenty (120) monthly payments shall be made in the
aggregate to the Director and his beneficiary and that the monthly payments to a
beneficiary shall be equal in amount to the monthly payments that would be
payable to such Director as if such Director retired on the date of his death,
in the case of death while serving as a Director, or the monthly payments that
would be payable to such Director but for his death before receiving one hundred
twenty (120) monthly payments, in the case of death after retirement or
disability. Payment to a beneficiary shall commence on the first day of the
month following the Director's death and shall continue on the first day of each
month thereafter until the requisite number of monthly payments has been made to
such beneficiary. In the sole discretion of the Board of Directors of the
Company, the value of the entire death benefit described in this paragraph 2 may
be paid in a single lump sum within a reasonable period (as
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determined by such Board) after the Director's death. If no beneficiary has been
designated by the Director, payment under this paragraph 2 shall be made to the
Director's estate.
The preceding provisions of this Section 2 to the contrary
notwithstanding, any beneficiary of a former Director who is receiving monthly
payments under the provisions of this Section 2 and who has more than one such
monthly payment remaining to be paid may elect in writing on a form acceptable
to the Company to waive his right to continue receiving monthly payments
hereunder and in lieu thereof to receive one lump sum payment in an amount equal
to 90% of the present value of the monthly payments remaining to be paid at the
time of such lump sum payment. The present value shall be determined using the
actuarial assumptions that would be used for calculating lump sum distributions
under the Trinity Industries, Inc. Standard Pension Plan, and the payment will
be made in cash to the beneficiary no later than 15 days following receipt of
his election by the Company. In the event that a beneficiary of a former
Director receives a lump sum payment in accordance with this provision, no
further benefits will be owed to such beneficiary on account of such former
Director under this Plan and the remaining 10% of the present value of the
monthly payments shall be forfeited.
3. Each monthly payment referred to in paragraphs 1 and 2 of this Plan
shall be equal to one-twelfth (1/12) of a percentage of the annual retainer paid
to a Director in the year of such Director's retirement, disability or death
while serving as a Director. Such percentage is dependent on the number of his
years of service as a Director and shall be determined as follows:
<Table>
<Caption>
Years of Service Vested Percentage
---------------- -----------------
Less than 5 years 0%
5 years 50%
6 years 60%
7 years 70%
8 years 80%
9 years 90%
10 years and over 100%
</Table>
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4. Until and except to the extent that the monthly amount to be paid
after retirement, disability or death is vested pursuant to paragraph 3 of this
Plan, the interest of each Director or his beneficiary in such monthly amount is
contingent and subject to forfeiture.
5. Notwithstanding anything herein to the contrary, in the event of a
Change of Control:
(I) The vested percentage referred to in Section 3 of
this Plan shall be 100% for each member of the Board
of Directors at the time of such Change of Control,
irrespective of the number of such Director's years
of service.
(II) Any former Director (or beneficiary of a former
Director) who is receiving monthly payments pursuant
to Section 1 (or Section 2 with respect to a
beneficiary) and any Director who ceases to be a
member of the Board of Directors on or after the date
of such Change of Control, who elected (or with
respect to a beneficiary, if the former Director
elected) an accelerated Change of Control payment, as
described below, shall receive, in lieu of the
monthly payments that otherwise would be owed to the
Director under this Plan pursuant to Section 1 hereof
(or beneficiary pursuant to Section 2 hereof), either
(i) a cash lump sum payment in an amount equal to the
present value of such monthly payments, or (ii) equal
annual cash installments over five (5), six (6) or
seven (7) years in an aggregate amount which is the
actuarial equivalent of such monthly payments,
whichever method was elected by the Director on the
election form. The accelerated Change of Control
payment shall be elected by the Director on a
separate election form for such purpose at the time
the Director initially becomes covered by this Plan
or, if later, on or before July 20, 1999 and shall be
irrevocable; provided, however, that a Director or
former Director may make, revoke or change an
accelerated Change of Control distribution election
subsequent to the initial election with the new
election to be effective only in the event that the
new election is made at least 12 months prior to the
date payments under this provision commence.
(III) Each member of the Board of Directors at the time of
such Change of Control and each former Director (or
beneficiary of a former Director) who has not yet
received the entire benefit to which he is entitled
under this Plan, regardless of whether an election
was made in accordance with the preceding paragraph
(II) and regardless of whether payment has yet
commenced, may elect in writing on a form acceptable
to the Company to waive his right to any future
payment or payments hereunder and in lieu thereof to
receive one lump sum payment in an amount equal to
90% of the present value of the payments owed with
respect to the Director or former Director under this
Plan at the time of such lump sum payment. In
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the event that a Director or former Director (or
beneficiary of a former Director) receives a lump sum
payment in accordance with this provision, no further
benefits will be owed to or on account of such
Director or former Director under this Plan and the
remaining 10% of the present value of the payments
otherwise owed shall be forfeited.
The amount to be distributed as the lump sum present value or actuarial
equivalent annual installments shall be determined using the actuarial
assumptions that would be used for calculating lump sum distributions or
installment payments, as appropriate, under the Trinity Industries, Inc.
Standard Pension Plan.
A "Change of Control" shall be deemed to have occurred for purposes of
this Plan 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 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 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
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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
(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 sale.
For purposes hereof:
"Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.
"Beneficial Owner" shall have the meaning set forth in Rule
13d-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.
6. Notwithstanding anything herein to the contrary, a Director or his
beneficiary shall not be entitled to receive payments hereunder if such
Director's service as a member of the Board of Directors of the Company is
terminated for cause.
7. Nothing contained herein shall be deemed to create a trust or
fiduciary relationship of any kind. Funds set aside to provide benefits
hereunder, if any, shall continue for
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all purposes to be a part of the general funds of the Company and shall be
subject to the claims of the Company's general creditors, and no person other
than the Company shall, by virtue of the provisions of this Plan, have any
interest in such funds. To the extent that any person acquires a right to
receive payments from the Company under this Plan, such right shall be no
greater than that of any unsecured general creditor of the Company.
8. The right of any Director or any beneficiary to any benefit or to
any payment hereunder shall not be subject in any manner to attachment or other
legal process for the debts of such Director or beneficiary, and any such
benefit or payment shall not be subject to anticipation, alienation, sale,
transfer, assignment or encumbrance by such Director or beneficiary.
9. Nothing contained herein shall be construed as conferring upon a
Director the right to continue serving as a member of the Board of Directors of
the Company.
10. If any of the provisions of this Plan are held to be invalid, the
remainder of the Plan shall not be affected thereby.
11. This instrument shall be construed in accordance with, and governed
by, the laws of the State of Texas.
12. The Company reserves the right to amend the Plan in whole or in
part, at any time and from time to time. Any provision of this Plan to the
contrary notwithstanding, no action taken on or after a Change of Control to
amend, modify, freeze or terminate this Plan shall be effective unless written
consent thereto is obtained from a majority of the participants who were
Directors immediately prior to such Change of Control.
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