exv10w22



 






EXHIBIT 10.22




EXECUTIVE TRANSITION, NON-COMPETE 

AND RELEASE AGREEMENT




     This EXECUTIVE TRANSITION, NON-COMPETE AND RELEASE AGREEMENT (hereinafter “this
Agreement”) is entered into by and between Trinity Industries, Inc., a Delaware corporation
(hereinafter “Trinity”), and Michael E. Flannery (hereinafter “Flannery”). Trinity and Flannery are
collectively hereinafter referred to as “the Parties.”



RECITALS




     WHEREAS, on October 14, 2004, Trinity notified Flannery his employment position was being
eliminated, effective immediately;



     WHEREAS, the Parties agreed to establish an employment transition period from October 15, 2004
through December 31, 2005, and Flannery agrees to make himself available to Trinity at reasonable
times and upon reasonable notice for consultations and information exchange during this transition
period;



     WHEREAS, in order to induce Flannery to remain available during this transition period, and in
exchange for Flannery entering into this Agreement, Trinity will provide Flannery certain
additional compensation and other consideration as set forth in this Agreement; and,



     WHEREAS, the Parties now desire to settle fully and finally, in the manner set forth herein,
all bona fide and other disputes, controversies and differences between them, both as to liability



and the amount of damages, if any, which have arisen, or which may arise prior to, or on, the
effective date of this Agreement, including, but in no way limited to, any and all claims and
controversies arising out of the employment relationship between Flannery and Trinity.



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:




1. Transition Period. In consideration for Flannery entering into this Agreement,
Trinity agrees to employ Flannery in a non-executive capacity at his current base rate of
pay, beginning October 15, 2004, and continuing through December 31, 2005 (hereinafter “the
Transition Period”), at which time Flannery’s employment and payments hereunder will
terminate. In the event of Flannery’s death during the Transition Period, any remaining
cash payments required to be made by this Agreement will be made to Flannery’s spouse, or if
she should predecease Flannery, to Flannery’s estate. During the Transition Period,
Flannery agrees to make himself available to Trinity at reasonable times and upon reasonable
notice for consultations and information exchange, and Flannery will be eligible to
participate in the standard employee benefit plans Flannery participated in immediately






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Transition, Non-Compete and Release Agreement — Page 1



 









 






preceding the effective date of this Agreement. For the purposes of this
Agreement, the term “standard employee benefits” for 2005 excludes the Executive Perquisite
Program dated July 1, 2001, the Calendar Year 2005 Incentive Compensation Program, the
Amended and Restated Executive Severance Agreement dated December 13, 2001, the Deferred
Compensation Plan and Agreement dated December 12, 2001, vacation and sick pay.




2. Incentive Compensation Program. The Parties stipulate the amount of incentive
pay under the Calendar Year 2004 Incentive Compensation Program will be One Hundred Thirteen
Thousand Two Hundred and 03/100ths Dollars ($113,200.03) payable to Flannery on
or about the date Flannery would have otherwise received such incentive payment. Flannery
acknowledges and agrees he will not participate in any Trinity incentive compensation or
bonus plans or programs for calendar year 2005.




3. Executive Outplacement. In further consideration for Flannery entering into this
Agreement, Trinity agrees to provide Flannery executive outplacement services through
ShieldsMenely Partners, 311 S. Wacker Drive, Suite 3725, Chicago, Illinois 60606, for a
period not to exceed the earlier to occur of: (a) December 31, 2005; or, (b) until Flannery
becomes employed; provided, however, in no case will Trinity pay more than Forty Thousand
and No/100ths Dollars ($40,000.00) for such outplacement services. Any fees paid
under this paragraph will be paid directly to ShieldsMenely upon presentation of valid
invoices to Trinity from ShieldsMenely for services rendered on behalf of Flannery.




4. 2004 Earned Vacation. Trinity agrees to pay Flannery two (2) weeks of earned
vacation on or before December 31, 2004.




5. Incentive Stock Option Grants (“ISO’s”). The Parties acknowledge and agree the
ISO’s granted: (i) May 9, 2002, under the 1998 Stock Option and Incentive Plan (“the 1998
Plan”); and, (ii) May 29, 2003, under the 1998 Plan will be governed by the express
language, terms and conditions of the 1998 Plan and the Parties agree nothing contained in
this Agreement is intended to modify or in any way whatsoever change the ISO’s. All rights
of Flannery to exercise vested ISO’s shall terminate, lapse and be forfeited on March 31,
2006. Exhibit A sets forth a listing of all ISO’s granted to Flannery and further sets
forth those that currently are vested and those that will vest during the Transition Period.




6. Non-Qualified Stock Option Grants (“NQSO’s”). The Parties acknowledge and agree
the NQSO’s granted: (i) October 26, 2001, under the Non-Qualified Stock Option Agreement
between Trinity and Flannery dated October 26, 2001 (“the TRG Plan”); (ii) May 9, 2002,
under the 1998 Plan; (iii) May 29, 2003, under the 1998 Plan; and, (iv) May 10, 2004, under
the 2004 Stock Option and Incentive Plan (“the 2004 Plan”) will be governed by the express
language, terms and conditions of the TRG Plan, the 1998 Plan, or the 2004 Plan, whichever
is applicable, and the Parties agree nothing contained in this Agreement is intended to
modify or in any way whatsoever change the NQSO’s. All rights of Flannery to exercise
vested NQSO’s shall terminate, lapse and be forfeited on March 31,






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2006. Exhibit A sets forth a listing of all NQSO’s granted to
Flannery and further sets forth those that currently are vested and those that will vest
during the Transition Period.




7. Deferred Compensation Plan and Agreement (“DCP”). The Parties acknowledge and
agree the Deferred Compensation Plan and Agreement dated December 12, 2001, 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;
provided, however, Trinity agrees to include the stipulated incentive compensation for 2004
set forth in paragraph 2 in Flannery’s 2004 DCP. Flannery acknowledges and agrees he will
not participate in the DCP for Fiscal Year 2005 and that he will receive a distribution of
his DCP account balance on or about January 1, 2006.




8. General Release. In exchange for the consideration set forth in paragraphs 1, 2
and 3 of this Agreement, and intending to be legally bound, Flannery hereby IRREVOCABLY AND
UNCONDITIONALLY RELEASES, ACQUITS, AND FOREVER DISCHARGES, for himself, his spouse, heirs,
executors, administrators, legal representatives and assigns, Trinity and its current and
former subsidiaries, parents, affiliates, limited liability companies, partnerships,
successors, assigns, directors, officers, shareholders, Managers, employees, supervisors,
attorneys, insurers, agents and representatives (“the Released Parties”), from any and all
claims, complaints, grievances, liabilities, obligations, promises, agreements, damages,
actions and causes of action, suits, rights, debts, demands, grievances, controversies,
costs, losses, interest, and expenses (including attorneys’ fees and expenses) whatsoever,
in law or in equity, other than any arising under this Agreement, and demands of every kind
or nature whatsoever which Flannery 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 Flannery’s relationship with Trinity occurring or existing at
any time on or prior to the effective date of this Agreement. Unless otherwise specifically
provided in this Agreement, Flannery releases Trinity from any and all rights or claims
under the Amended and Restated Executive Severance Agreement dated December 13, 2001; all
ISO’s, NQSO’s and restricted stock awards which are not presently vested or will not become
vested during the Transition Period (including all restricted shares granted May 29, 2003
under the 1998 Plan, all incentive stock options granted May 10, 2004 under the 2004 Plan;
all restricted shares granted May 11, 2004 under the 2004 Plan, and those ISO’s granted May
29, 2003, under the 1998 Plan, and those NQSO’s granted May 29, 2003 under the 1998 Plan and
May 10, 2004 under the 2004 Plan); bonuses and incentive compensation (excluding the
stipulated incentive payable under the Calendar Year 2004 Incentive Compensation Program as
set forth in paragraph 2); 2005 participation in the Deferred Compensation Plan and
Agreement dated December 12, 2001; 2005 participation in the Executive Perquisite Program
dated July 1, 2001; 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 the
Transition Period, and those “standard employee benefits” Flannery is eligible to
participate in during the Transition Period);
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






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the extent allowed by law,
Flannery waives any and all rights and claims which he has, or may have, against Trinity
under the Age Discrimination in Employment Act, as amended, Title VII of the Civil Rights
Act, as amended, the Americans with Disabilities Act, as amended, the Illinois Human Rights
Act, as amended, the Texas Commission on Human Rights Act, as amended, or any other federal,
state or municipal statutes, regulations, executive orders or ordinances, including any and
all causes of action recognized at common law and/or public policy of the United States of
America, the State of Illinois and/or the State of Texas. Trinity releases Flannery from
any and all claims associated with Flannery’s employment with Trinity.




9. Legal Proceedings. For a period of eighteen (18) months from the effective date
of this Agreement, Flannery 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. Flannery will also cooperate reasonably with
Trinity by providing any requested information and reasonably assist in the preparation for
any discovery or legal proceedings. Further, Flannery 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 Flannery will refrain from
providing any information until after notification to and consultation with Trinity.
Flannery shall be reimbursed reasonable expenses incurred while serving as a witness for
Trinity in any such proceedings. Flannery agrees to provide Trinity with proper
documentation for expenses prior to reimbursement.




10. Non-Compete. For the consideration set forth in paragraphs 1, 2 and 3 of this
Agreement, Flannery agrees that for a period of eighteen (18) months, October 15, 2004,
through April 14, 2006 (“the Non-Competition Term”), without the written consent of Trinity,
Flannery will not, directly or indirectly, alone or as a member of a partnership, or limited
liability company, or as an officer, stockholder owning more than ten percent (10%) of the
outstanding stock, corporate director, employee, consultant, representative, or similar
capacity of any company or entity, compete with Trinity anywhere in North America or Europe
in any railcar, axle or end of car castings manufacturing, railcar repair or railcar leasing
businesses engaged in by Trinity during the three (3) years preceding the effective date of
this Agreement (“the Restricted Business”). Flannery further agrees that during the
Non-Competition Term, Flannery will not, directly or indirectly, do anything which will
divert Restricted Business from Trinity with any customer or supplier of Trinity during the
three (3) preceding years, or with any party whose identity or potential as a customer was
confidential and was learned by Flannery while an employee of Trinity. Flannery shall not
during the Non-Competition Term either directly or indirectly, induce or attempt to induce
any person to leave employment of Trinity or any affiliate of Trinity without the written
consent of Trinity.




11. Covenant Not to Sue. Except for any actions necessary to enforce this
Agreement, Flannery hereby warrants and promises neither Flannery nor any agent or






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legal representative of Flannery 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 Flannery or anyone acting on his behalf, including any
federal, state, county or municipal agency or entity, files any administrative claim or
charge pertaining to Flannery’s employment with Trinity or relating to any claim released
under this Agreement, Flannery 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.




12. Confidentiality. For the consideration set forth in paragraph 1, 2 and
3 of this Agreement, Flannery agrees that as a key member of the staff of Trinity,
Flannery has occupied a position of trust and confidence with respect to
confidential information which is the property of Trinity. Flannery therefore
agrees that Flannery will not, for a period of two (2) years from the effective date
of this Agreement, use, divulge, furnish or make accessible such information to
anyone outside of Trinity or its affiliates. For purposes of this paragraph, the
term “confidential information” shall mean information of any nature and in any form
which at the time or times concerned is not generally know to those persons engaged
in a business similar to that conducted or contemplated by Trinity and which relates
to any one or more of the aspects of the present or past business of Trinity or its
predecessors, including, but not limited to, Trinity’s growth plans, its
acquisitions and development projects, its joint venture projects or any other kind
of business combination proposals, and all policies, processes, formulas,
techniques, know-how and other knowledge, information, trade secrets, trade
practices or facts relating to sales, marketing strategy, advertising promotions,
financial matters, customers, lists of customers, suppliers’ or manufacturers’
representatives or other distributors, customers’ purchases, and information
relating to the business of Trinity, the location of manufacturing facilities and
any plans therefor and the type of products produced at such facilities, and the
methods used by Trinity in procuring materials, services and supplies (including any
and all of its sources for the procurement of materials, services and supplies).
For purposes of this paragraph, any such confidential information which is disclosed
to any third party by an employee or representative of Trinity not authorized to
make such disclosure shall be deemed to remain confidential. In the event Flannery
is requested by subpoena, civil investigative demand or similar process in any
proceeding to disclose any confidential information, Flannery will give Trinity
prompt written notice of such request so Trinity may seek an appropriate protective
order or waive compliance with the provisions of this Agreement. If, in the absence
of a protective order or a waiver hereunder, Flannery is, in the reasonable written
opinion of outside counsel, compelled to disclose such confidential information,
Flannery may disclose only such information as counsel advises that is required to
be disclosed in such proceeding
without liability hereunder; provided, however, that Flannery, upon Trinity’s
request and its expense, will use his best efforts to obtain assurances that
confidential treatment will be accorded to such information. Flannery and Trinity






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agree and covenant that neither party will make any statements, comments or
communications of any form, oral or written, which in any way slanders or otherwise
disparages the other party, or which is derogatory or detrimental to the good name
and/or business reputation of any of the aforementioned parties or entities.




13. Proper Disclosure and Indemnification. Flannery 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. Trinity agrees to continue to indemnify, hold harmless
and defend Flannery from and against any claims or action asserted against him for his acts
as an executive or officer of Trinity to the same extent as such obligation existed while
Flannery was an executive or officer.




14. Return of Property and Records. Flannery agrees to return to Trinity any and
all Trinity property, equipment, business records and proprietary information in his
possession, agrees not to retain copies or summaries of such records and proprietary
information, and further agrees not to disclose to others any confidential or other
proprietary information concerning the business affairs of Trinity. Specifically, without
limitation, Flannery agrees to immediately return to Trinity all business records,
including, but not limited to, files, forms, work papers, documents, memoranda,
correspondence, records, diaries, e-mails, notes, notebooks, computer files, discs, CDs and
printouts; all business property, including, but not limited to, Trinity issued credit
cards, phone cards, security access card, electronic equipment, computer programs,
estimates, logs, invoices and computer equipment.




15. No Admission of Liability. Flannery 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 Flannery’s employment relationship with Trinity, these
facts shall in no manner be deemed an admission, finding or indication – for any purpose
whatsoever – that Trinity has, at any time (including the present) or in any respect,
contrary to law or to the rights of any person, violated Flannery’s rights.




16. Governing Law and Severability. Flannery acknowledges and agrees the terms and
conditions of this Agreement are contractual and not a mere recital. Flannery further
agrees and acknowledges that the validity and/or enforceability of this Agreement will be
governed by the laws of the State of Texas (except that paragraph 10 shall be governed by
the laws of the State of Illinois), 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.






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17. Entire Agreement. This Agreement constitutes a complete and exclusive statement
of the terms of the agreement between the Parties with respect to its subject matter. There
are no other agreements, understandings, conditions, or representations, express or implied,
that are not merged within or superseded hereby. The Parties agree that changes to this
Agreement, whether material or immaterial, will not re-start the running of “the
Consideration Period” as defined in paragraph 19 of this Agreement.




18. Compliance with Law. Flannery acknowledges that the terms of this Agreement
fully comply with the Illinois Human Rights Act, as amended, the Texas Commission on Human
Rights Act, as amended, and the Age Discrimination in Employment Act of 1967, as amended,
including, but not limited to, the Older Workers Benefit Protection Act of 1990, as amended,
and implementing regulations, and that said terms therefore are final and binding.
Specifically, Flannery acknowledges that this Agreement specifically refers to his rights
and claims under the federal and state statutes prohibiting age discrimination, and he
understands that he is irrevocably waiving such rights and claims. The consideration recited
in this Agreement is good and valuable, and said consideration is in addition to payments or
benefits to which Flannery would otherwise be entitled as a terminating employee of Trinity.




19. Voluntary Consent. By signing this Agreement, Flannery 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 (“the Consideration Period”) 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 JERRY L. MYERS, CORPORATE LABOR & EMPLOYMENT COUNSEL, TRINITY
INDUSTRIES, INC., 2525 Stemmons Freeway, Dallas, Texas 75207, so as to be received within
seven (7) days of Flannery’s 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 Flannery; (f) he has been given the opportunity to consult with an attorney of
his own choosing, Jeffrey L. London, regarding the terms of this Agreement and encouraged to
do so; (g) Flannery must sign this Agreement and return it to Timothy R. Wallace, Chairman,
President and Chief Executive Officer, Trinity Industries, Inc., 2525 Stemmons Freeway,
Dallas, Texas 75207, before November 30, 2004, otherwise this offer will expire and this
Agreement will be null and void; (h) he acknowledges that this Agreement was not requested
nor provided in connection with an exit incentive or other employment termination program
offered to a group or class of employees; (i) the consideration provided for herein is good
and valuable, and it is accepted by Flannery in full satisfaction of all claims Flannery
has, or may have, against the Released Parties, as well as adequate consideration for
Flannery’s commitments made herein; and, (j) 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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20. Captions. The paragraph captions are inserted herein only as a matter of
convenience and attempted reference and in no way define, limit or describe the scope of
this Agreement or the intent of any provision.




21. Counterparts. This Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.



     NOW, THEREFORE, intending to be legally bound hereby, Flannery and Trinity execute this
Agreement on the 23rd day of November, 2004 (“the effective date of this Agreement”).



	 	 	 
	MICHAEL E. FLANNERY

	 	TRINITY INDUSTRIES, INC.
	 
	 	 
	/s/ Michael E. Flannery

	 	/s/ Timothy R. Wallace
	


	 	

	Michael E. Flannery

	 	Timothy R. Wallace,
	

	 	Chairman, President and
	

	 	     Chief Executive Officer
	

	 	on behalf of said corporation.









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