AMENDED AND RESTATED EXECUTIVE
SEVERANCE AGREEMENT
CLASS A-1
THIS
AGREEMENT, amended and restated as of
, 2008, between Trinity Industries, Inc., a Delaware corporation
(the “ Company ”) and
(the “ Executive ”) amends and restates that
certain Executive Severance Agreement entered into between the
Company and the Executive as of
,
.
WHEREAS,
the Company’s Board of Directors has determined that it is
appropriate to reinforce and encourage the continued attention and
dedication of members of the Company’s management, including
the Executive, to their assigned duties without distraction in
potentially disturbing circumstances arising from the possibility
of a Change in Control of the Company (as hereinafter defined);
and
WHEREAS,
in consideration for the benefits provided under this Agreement,
the Executive will continue to give his or her attention and
dedication to his or her duties with the Company; and
WHEREAS ,
the Company and the Executive wish to amend and restate that
certain Executive Severance Agreement by and between the Company
and the Executive which was executed as of the date stated above in
order to revise or clarify certain provisions to carry out the
purposes of such agreement;
NOW,
THEREFORE, this Agreement sets forth the severance compensation
which the Company agrees it will pay to the Executive if the
Executive’s employment with the Company terminates under one
of the circumstances described herein in connection with a Change
in Control of the Company.
1. Term. This Agreement shall terminate, except to the
extent that any obligation of the Company hereunder remains unpaid
as of such time, upon the earliest of:
(a) September 9,
2010; provided, however, that, commencing on September 9, 2009
and on each anniversary date thereafter (each such date, an “
Anniversary Date ”), the expiration date under this
clause (a) shall automatically be extended for one additional
year unless, not later than the December 31 immediately prior
to such Anniversary Date, either party shall have given written
notice that it does not wish to extend this Agreement, but in no
event shall the expiration date under this clause (a) be
earlier than the second anniversary of the Effective Date of a
Change in Control.
(b) the
termination of the Executive’s employment with the Company
based on death, Disability (as defined in Section 3(b)
hereof) or Cause (as defined Section 3(c) hereof);
and
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(c) the
voluntary resignation of the Executive for any reason other than
Good Reason (as defined in Section 3(d) ).
(a)
Acceleration of Vesting and Extension of Exercise Rights of
Equity Compensation Upon a Change in Control. In addition to
any provisions concerning acceleration of vesting in any applicable
plan or agreement relating to equity-type compensation that may be
outstanding between the Executive and the Company or any subsidiary
of the Company (including, without limitation, any stock option
agreement, restricted stock agreement, career share agreement,
bridge share agreement, performance incentive plan agreement, and
performance unit plan agreement), and notwithstanding any provision
to the contrary in any such plan or agreement, upon the Effective
Date of a Change in Control all units, stock options, incentive
stock options, performance shares, performance awards, and stock
appreciation rights then held by the Executive shall immediately
become 100% vested and exercisable, and the Executive shall become
100% vested in all career shares, bridge shares, and shares of
restricted stock, held by or for the benefit of the
Executive.
In addition to any
provisions concerning extension of exercise rights in any
applicable plan or agreement relating to equity-type rights or
compensation that may be outstanding between the Executive and the
Company or any subsidiary of the Company (including, without
limitation, any stock option agreement, restricted stock agreement,
career share agreement, bridge share agreement, performance
incentive plan agreement, and performance unit plan agreement), and
notwithstanding any provision to the contrary in any such plan or
agreement, upon the Effective Date of a Change in Control the
Executive’s right to exercise any previously unexercised
options or other equity-type rights shall not terminate until the
latest date on which the option or other right granted under such
agreement would expire under the terms of such agreement but for
the Executive’s termination of employment; with respect to
any incentive stock option held by the Executive, if not exercised
within three months after termination of employment, such options
shall immediately convert to non-qualified stock
options.
(b)
Acceleration of Vesting of Retirement and Deferred Compensation
Benefits Upon a Change in Control. In addition to any
provisions concerning acceleration of vesting in any applicable
plan or agreement relating to retirement or deferred
compensation-type benefits that may be outstanding between the
Executive and the Company (including, without limitation, the
Company’s Profit Sharing Plan, Supplemental Profit Sharing
Plan, and Deferred Compensation Plan and Agreement), and
notwithstanding any provision to the contrary in any such plan or
agreement, upon the Effective Date of a Change in Control all
accounts, interests, rights, and benefits of the Executive in any
such plan or agreement shall immediately become 100% vested and
exercisable; however, such acceleration shall not apply to the
Company’s Pension Plan for Salaried Employees.
(c) No
Other Compensation Paid Prior to Termination of Employment.
Except as provided in paragraphs (a) and (b) of this
Section 2 , no compensation shall be payable or
benefits provided under this Agreement unless and until
(x) there shall have been a Change in Control of the Company,
and (y) the Executive’s employment by the Company is
terminated.
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(d)
Definition of Change in Control. For purposes of this
Agreement, 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 representing 30% or more of the combined
voting power of the Company’s then-outstanding securities,
unless the transaction resulting in a Person becoming the
Beneficial Owner of 30% or more of the combined voting power of the
Company’s then-outstanding securities is approved in advance
by the Company’s Board of Directors (sometimes hereafter
referred to as the “ Board ”), excluding any
Person who becomes such a Beneficial Owner in connection with a
transaction described in clause (A) 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
September 9, 2008, constitute the Board 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 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 September 9, 2008 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 (A) 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 (B) 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
(iv) the
stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company, or a sale or disposition (whether by
reorganization, merger, consolidation, split-up, spin-off,
split-off, combination, subdivision, or other similar corporate
transaction or event) by the Company of all or substantially all of
the Company’s assets (in one transaction or a series of
transactions within any period of 24 consecutive months) 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
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to such sale.
However, a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity (or
two or more entities in one transaction or a series of transactions
within any period of 24 consecutive months), 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 or disposition shall be considered a Change in Control of
the Company for purposes of this Agreement if the Executive is not
offered employment with such entity (or one of such entities) on
terms comparable to those described in Section 3(g)
hereof. The sale or disposition of a subsidiary or a division of
the Company, or certain assets of the Company (or of a subsidiary
of the Company), shall not be a Change in Control unless any such
transaction or series of related transactions results in a sale or
disposition by the Company of all or substantially all of the
Company’s assets as provided in subparagraph (iv)
above.
“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.
(e)
Definition of Effective Date of a Change in Control. For
purposes of this Agreement, “Effective Date of a Change in
Control” shall mean the first to occur of (A) the date
on which a Person first becomes the Beneficial Owner of 30% or more
of the combined voting power of the Company’s then
outstanding securities as defined in subparagraph (d)(i) above, or
(B) the effective date of the election of one or more
directors to the Board which results in the individuals defined in
subparagraph (d)(ii) above ceasing to constitute a majority of the
number of directors then serving, or (C) the effective date of
the consummation of a merger or consolidation of the Company or any
direct or indirect subsidiary of the Company with any other
corporation as defined in subparagraph (d)(iii) above, or
(D) the effective date of a liquidation or dissolution of the
Company, or a sale or disposition by the Company of all or
substantially all of the Company’s assets, as defined in
subparagraph (d)(iv) above.
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3. Termination Following Change in Control.
(a)
Compensation Payable Upon Termination. If a Change in
Control of the Company shall have occurred, the Executive shall be
entitled to the compensation provided in Section 4
hereof upon the termination of the Executive’s employment
with the Company by the Executive or by the Company unless such
termination is as a result of:
(i) the
Executive’s death;
(ii) the
Executive’s Disability (as defined in
Section 3(b) below;
(iii) the
Executive’s termination by the Company for Cause (as defined
in Section 3(c) below); or
(iv) the
Executive’s decision to terminate employment other than for
Good Reason (as defined in Section 3(d)
below).
Notwithstanding
the foregoing provisions of this Section 3 , if the
Executive’s employment is terminated by the Company other
than for Cause or Disability (for purposes of this paragraph, Cause
shall include all of the events set forth in
Section 3(c) hereof and the following: willfully
engaging by the Executive in continued misconduct which is
materially injurious to the Company after having been advised in
writing of the particular misconduct deemed by the Company to be
materially injurious to the Company and instructed in such writing
to cease any further misconduct of a similar nature) prior to a
Change in Control, and it is reasonably demonstrated that such
termination (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change in Control or
(ii) otherwise arose in connection with a Change in Control,
then for all purposes of this Agreement, such termination shall be
deemed to have occurred immediately following a Change in Control;
in addition, if the Executive’s employment is terminated by
the Company other than for Cause (as defined in this paragraph) or
Disability within 90 days prior to a Change in Control, such
termination shall conclusively be deemed to have occurred following
a Change in Control. For further clarification, in the event of a
termination of employment prior to a Change in Control that is
treated as having occurred after a Change in Control, the Executive
shall not be entitled to benefits under Section 4
hereof if the Executive voluntarily terminated his or her
employment whether or not for Good Reason.
(b)
Disability. If, as a result of the Executive’s
incapacity due to physical or mental illness, the Executive shall
have been absent from his or her duties with the Company on a
full-time basis for one year and within thirty days after written
Notice of Termination (as hereinafter defined) is thereafter given
by the Company, the Executive shall not have returned to the
full-time performance of the Executive’s duties, the Company
may terminate this Agreement for “ Disability
.”
(c)
Cause. The Company may terminate the Executive’s
employment for Cause. For purposes of this Agreement only, the
Company shall have “ Cause ” to terminate the
Executive’s employment hereunder only on the basis
of:
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(i) the willful
and continued failure by the Executive to substantially perform the
Executive’s duties with the Company (other than any such
failure resulting from the Executive’s incapacity due to
physical or mental illness and other than in respect of any duties
inconsistent with, or more burdensome than, the Executive’s
duties with the Company immediately prior to a Change in Control of
the Company);
(ii)
misappropriation or embezzlement from the Company or any other act
or acts of dishonesty by the Executive constituting a felony that
results, or is intended to result, directly or indirectly, in gain
to or personal enrichment of the Executive at the Company’s
expense;
(iii) the
conviction of the Executive of a felony involving the moral
turpitude of the Executive; or
(iv) the refusal
of the Executive to accept offered employment after a Change in
Control which complies with the terms and conditions of
Section 3(g) hereof.
For purposes of
this Section 3(c) , no act or failure to act on the
part of the Executive shall be considered “willful”
unless done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that the action or omission of
the Executive was in the best interest of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and
held for the purpose (after reasonable notice to the Executive and
an opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board), finding
that the Executive was guilty of conduct set forth in this
Section 3(c) and specifying the particulars thereof in
detail.
(d) Good
Reason. The Executive may terminate the Executive’s
employment for Good Reason at any time after the Effective Date of
a Change in Control of the Company. For purposes of this Agreement
“ Good Reason ” shall mean the occurrence of any
of the following unless the Executive has given his or her express
prior written consent:
(i) a good faith
determination by the Executive that there has been a material
adverse change in the Executive’s working conditions or
responsibilities relative to the most favorable working conditions,
and responsibilities applicable to the Executive during the 12
month period prior to the Change in Control (including, but not
limited to, a significant reduction in the level of support
services, staff, secretarial and other assistance, office space,
and accoutrements);
(ii) the
assignment to the Executive by the Company of duties inconsistent
with the Executive’s position, duties, and reporting
responsibilities with the Company immediately prior to a Change in
Control of the Company (including, but not limited to, a reduction
in the nature or scope of the Executive’s authority, powers,
functions, or duties), or a change in the Executive’s titles
or offices as in effect immediately prior to a Change in Control of
the Company, or any removal of the Executive from or any failure to
reelect the Executive to any of such positions, except in
connection with the
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termination of
his or her employment for Disability or Cause, or as a result of
the Executive’s death, or by the Executive other than for
Good Reason;
(iii) a reduction
by the Company in the Executive’s base salary as in effect on
the date hereof or as the same may be increased from time to time
during the term of this Agreement, or the Company’s failure
to increase (within 12 months of the Executive’s last
increase in base salary) the Executive’s base salary after a
Change in Control of the Company in an amount which at least
equals, on a percentage basis, the average percentage increase in
base salary for all officers of the Company effected in the
preceding 12 months;
(iv) any action by
the Company which would adversely affect the Executive’s
participation in or materially reduce the Executive’s
benefits, in the aggregate, under the Benefit Plans, Incentive
Plans, and Securities Plans; “Benefit Plans” include
health and welfare benefit plans in which the Executive is
participating at the time of a Change in Control of
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