Filed pursuant to Rule 424(b)(5)
Registration File No. 333-96921
Prospectus Supplement
(to Prospectus dated July 29, 2002)
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[TRINITY INDUSTRIES, INC. LOGO]
TRINITY INDUSTRIES, INC.
600 SHARES OF SERIES B REDEEMABLE CONVERTIBLE
PREFERRED STOCK
3,500,000 SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
OR REDEMPTION OF THE SERIES B PREFERRED STOCK
OR IN CONNECTION WITH THE PAYMENT OF DIVIDENDS ON
THE SERIES B PREFERRED STOCK
--------------------------------------------------------------------------------
Trinity Industries, Inc. is offering, in a privately-negotiated
transaction, 600 shares of our Series B Redeemable Convertible Preferred Stock,
no par value, as well as up to 3,500,000 shares of our common stock issuable
from time to time upon conversion or redemption of the Series B preferred stock
and in connection with the payment of dividends on the Series B preferred stock.
The Series B preferred stock votes with our common stock on an as converted
basis.
We are issuing the Series B preferred stock directly to TI Investments,
LLC pursuant to a Purchase Agreement dated as of June 25, 2003, as described
under the caption "Plan of Distribution" in this prospectus. We are selling the
Series B preferred stock for $100,000 per share for aggregate gross proceeds of
$60,000,000 and net proceeds of approximately $57,600,000, or $96,000 per share,
after deducting offering expenses and placement agent fees of $2,400,000, or
$4,000 per share.
Each share of Series B preferred stock has an initial liquidation
preference of $100,000 and, at the option of the holder, is convertible
initially into 4,452 shares of our common stock, based on an initial conversion
price of $22.46 per share, subject in each case to specified adjustments. We may
require conversion of the Series B preferred stock if the market price of our
common stock exceeds certain levels for ten consecutive trading days. We will be
obligated to redeem all outstanding shares of Series B preferred stock on June
25, 2008 for, at our option, cash or common stock valued at 90% of the market
price of our common stock.
Dividends on the Series B preferred stock are cumulative and payable in
arrears at an annual rate of 4.5%, at our option, in cash or shares of our
common stock on each July 1 and January 1, commencing on January 1, 2004.
Our common stock is listed on the New York Stock Exchange under the
symbol of "TRN." On June 24, 2003, the closing sale price of our common stock
was $18.56 per share.
INVESTING IN OUR SERIES B PREFERRED STOCK AND OUR COMMON STOCK INVOLVES
RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE S-9 OF THIS PROSPECTUS SUPPLEMENT
AND PAGE 6 OF THE ACCOMPANYING PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus supplement is June 25, 2003.
S-1
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Where to Find More Information ................................................. S-3
Incorporation of Documents by Reference ........................................ S-4
Special Note Regarding Forward-Looking Statements .............................. S-5
Summary of the Terms of the Series B Preferred Stock ........................... S-6
Risk Factors ................................................................... S-9
Ratio of Earnings to Fixed Charges ............................................. S-10
Description of Capital Stock ................................................... S-11
Description of Series B Preferred Stock ........................................ S-11
Plan of Distribution ........................................................... S-20
PROSPECTUS
About this Prospectus .......................................................... 3
About Trinity .................................................................. 4
Risk Factors ................................................................... 6
Special Note Regarding Forward-Looking Statements .............................. 9
Where to Find More Information ................................................. 10
Incorporation of Documents by Reference ........................................ 10
Use of Proceeds ................................................................ 12
Ratio of Earnings to Fixed Charges ............................................. 12
Description of Capital Stock ................................................... 13
Description of Depositary Shares ............................................... 18
Description of Senior Debt Securities and Subordinated Debt Securities ......... 22
Description of Warrants ........................................................ 28
Plan of Distribution ........................................................... 31
Legal Matters .................................................................. 34
Experts ........................................................................ 34
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This prospectus supplement and the accompanying prospectus are part of a
registration statement we filed with the Securities and Exchange Commission. You
should rely only on the information incorporated by reference in or provided in
this prospectus supplement, the accompanying prospectus and the registration
statement. We have not authorized any other person to provide you with different
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of this
document.
S-2
WHERE TO FIND MORE INFORMATION
We are subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended, and file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy these reports, proxy statements and other information at
the Securities and Exchange Commission's public reference facilities at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You can request
copies of these documents by writing to the Securities and Exchange Commission
and paying a fee for the copying cost. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for more information about the operation of the
public reference facilities. Securities and Exchange Commission filings are also
available at the Securities and Exchange Commission's website at
http://www.sec.gov.
Our common stock is listed on the New York Stock Exchange, and you can
read and inspect our filings at the offices of the New York Stock Exchange at 20
Broad Street, New York, New York 10005.
The accompanying prospectus is only part of a Registration Statement on
Form S-3 that we have filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, and therefore omits information
contained in the Registration Statement. We have also filed exhibits and
schedules with the Registration Statement that are not contained in this
prospectus supplement or in the accompanying prospectus, and you should refer to
the applicable exhibit or schedule for a complete description of any statement
referring to any contract or other document. You may inspect a copy of the
Registration Statement, including the exhibits and schedules, without charge, at
the public reference room or obtain a copy from the Securities and Exchange
Commission upon payment of the fees prescribed by the Securities and Exchange
Commission.
S-3
INCORPORATION OF DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by reference"
information that we file with them. Incorporation by reference allows us to
disclose important information to you by referring you to those other documents.
The information incorporated by reference is an important part of this
prospectus supplement and the accompanying prospectus, and information that we
file later with the Securities and Exchange Commission will automatically update
and supersede this information. In addition to those documents listed in the
accompanying prospectus, the documents we are incorporating by reference are:
o Our Annual Report on Form 10-K for the year ended December 31,
2002;
o Our Quarterly Report on Form 10-Q for the quarter ended March
31, 2003;
o Our Current Report on Form 8-K, filed May 12, 2003;
o Our Current Report on Form 8-K, filed April 2, 2003;
o Our Current Report on Form 8-K, filed March 17, 2003;
o Our Current Report on Form 8-K, filed March 7, 2003; and
o All documents filed by us pursuant to Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended,
subsequent to the date of this prospectus supplement and prior
to the termination of the effectiveness of the Registration
Statement of which this prospectus is a part.
You can obtain any of the filings incorporated by reference in this prospectus
supplement or the accompanying prospectus through us or from the Securities and
Exchange Commission through the Securities and Exchange Commission's website or
at the address listed above. Documents incorporated by reference are available
from us without charge, excluding any exhibits to those documents that are not
specifically incorporated by reference in those documents. You can request a
copy of the documents incorporated by reference in this prospectus supplement,
the accompanying prospectus, and other documents and agreements referred to in
this prospectus supplement and the accompanying prospectus by requesting them in
writing or by telephone from us at the following address:
Trinity Industries, Inc.
2525 Stemmons Freeway
Dallas, Texas 75207-2401
Attention: Michael G. Fortado
Telephone: (214) 631-4420
S-4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Risk Factors" and elsewhere in this prospectus
supplement and the accompanying prospectus constitute forward-looking
statements. All projections contained in this prospectus supplement and the
accompanying prospectus are forward-looking statements. These statements involve
known and unknown risks, uncertainties and other factors that may cause our or
our industry's actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by these forward-looking
statements.
Forward-looking statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology like "may," "will," "should," "expect," "plan," "project,"
"anticipate," "intend," "believe," "estimate," "predict," "potential," or
"continue" or the negative of these terms or other comparable terminology. These
statements are only predictions. Actual events or results may differ materially.
In evaluating these statements, you should specifically consider various
factors, including the risks outlined under "Risk Factors." These factors may
cause our actual results to differ materially from any forward-looking
statement.
Potential factors that could cause our actual results of operations to differ
materially from those in the forward-looking statements include:
o market conditions and demand for our products;
o the cyclical nature of both the railcar and barge industries;
o abnormal periods of inclement weather in areas where
construction products are sold or used;
o the timing of introduction of new products;
o the timing of customer orders;
o price erosion;
o changes in mix of products sold;
o the extent of utilization of manufacturing capacity;
o availability and costs of component parts, supplies and raw
materials;
o price competition and other competitive factors;
o changing technologies;
o steel prices;
o interest rates and capital costs;
o taxes;
o the stability of the governments and political and business
conditions in certain foreign countries, particularly Mexico
and Romania;
o changes in import and export quotas and regulations;
o business conditions in emerging economies; and
o legal, regulatory and environmental issues.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of these statements. We
are under no duty to update any of the forward-looking statements after the date
on the front of this prospectus supplement or to conform these statements to
actual results and do not intend to do so.
S-5
SUMMARY OF THE TERMS OF THE SERIES B PREFERRED STOCK
The following is a brief summary of select terms of the Series B
preferred stock. For a more complete description of the terms of the Series B
preferred stock, see the section of this prospectus supplement entitled
"Description of the Series B Preferred Stock."
Issuer ........................ Trinity Industries, Inc.
Purchaser ..................... TI Investments, LLC
Maximum number of
securities offered ............ 600 shares of our Series B Redeemable Convertible Preferred Stock.
Purchase Price ................ $100,000 per share for an aggregate of $60,000,000 in gross
proceeds and approximately $57,600,000 in net proceeds after
deducting offering expenses and placement agent fees of
approximately $2,400,000.
Ranking ....................... The Series B preferred stock ranks, with respect to dividend
rights and rights upon liquidation, winding up or dissolution:
o junior to all of our existing and future debt obligations;
o on parity with each class or series of our capital stock that
has terms providing that such class or series will rank on
parity with the Series B preferred stock; and
o senior to our Series A Junior Participating Preferred Stock,
our common stock and each class or series of our capital
stock that has terms providing that such class or series will
rank junior to the Series B preferred stock.
Liquidation preference ......... $100,000 per share.
Voting rights .................. In addition to any voting rights provided by law, the holders of
Series B preferred stock will have the right to:
o vote on an as converted basis, on all matters voted on by the
holders of common stock; and
o approve, by a two-thirds (2/3) majority and as a separate class, all
matters that:
o amend, modify, alter, repeal or waive any provision of our certificate of
incorporation or by-laws in any manner that adversely effects the powers, rights,
preferences or privileges of the holders of the shares of Series B preferred stock;
and
o increases or decreases the authorized shares of Series B preferred stock.
S-6
Dividends ...................... Dividends shall be payable semi-annually, on July 1 and January
1 of each year, beginning on January 1, 2004 at an annual rate of
4.5% of the liquidation preference, accruing from the date of
initial issuance of the Series B preferred stock.
We may, at our option, pay dividends:
o in cash; or
o in shares of our common stock valued at the then current market
price.
Conversion ..................... Each share of Series B preferred stock may be converted at any
time at the option of the holder into shares of our common stock,
based on the conversion price.
The initial conversion price is $22.46, subject to adjustment as
described under "Description of Series B Preferred Stock --
Adjustments to the Conversion Price." The initial conversion
price is equivalent to an initial conversion rate of 4,452 shares of
common stock for each share of Series B preferred stock.
Mandatory conversion ........... We may, at our option, cause all, but not less than all, of the
outstanding shares of the Series B preferred stock to be
converted into shares of common stock at the conversion price.
We may exercise this conversion right if, for at least 10
consecutive trading days prior to such conversion, the daily
volume weighted average price of our common stock equals or
exceeds 200% of the then current conversion price of the Series
B preferred stock.
Mandatory redemption ........... We will be obligated to redeem all outstanding shares of Series
B preferred stock on June 25, 2008, at a price per share equal to
the liquidation preference per share plus an amount equal to
accrued and unpaid dividends for that share.
We may, at our option, pay the redemption price:
o in cash; or
o in shares of our common stock valued at 90% of the market price
of our common stock.
Change of Control .............. If the holders of a majority of the outstanding shares of Series B
preferred stock elect, a change of control will be deemed a
liquidation, winding up or dissolution.
S-7
Restrictions contained in the
Purchase Agreement ............. Each holder of Series B preferred stock, or common stock issued upon
conversion or redemption of, or the payment of dividends on, Series B
preferred stock, and its affiliates will be required to vote in accordance
with the recommendation or direction of our board of directors.
No holder of Series B preferred stock (or common stock issued upon
conversion of, or the payment of dividends on, Series B preferred stock)
nor its affiliates may collectively beneficially own more than 10% of our
common stock.
Each of these restrictions will expire upon the earlier of:
o December 25, 2008; or,
o only with respect to the common stock, the date common stock
issued upon conversion of, or the payment of dividends on, Series
B preferred stock is sold in a bona fide open market sale or a block
sale, so long as no purchaser in the block sale purchases more than
500,000 shares of our common stock in any given week.
Trading ........................ Our common stock currently trades on The New York Stock
Exchange under the symbol "TRN." The 3,500,000 shares of our
common stock covered by this prospectus supplement have been
approved for listing on the New York Stock Exchange, subject to
official notice of issuance. We have not applied and do not
intend to apply for the listing of the Series B preferred stock on
any securities exchange.
S-8
RISK FACTORS
Investing in our Series B preferred stock and common stock will provide
you with an interest in Trinity. As an investor, you will be subject to risks
inherent in our business. The performance of your investment in Trinity will
reflect the performance of our business relative to, among other things, general
economic and industry conditions, market conditions and competition. The value
of your investment may increase or it may decline and could result in a loss.
You should carefully consider the following factors as well as other information
contained in this prospectus supplement and the accompanying prospectus and
information incorporated by reference before deciding to make any investment in
Trinity.
RISKS RELATED TO THE SERIES B PREFERRED STOCK AND OUR COMMON STOCK
THERE CAN BE NO ASSURANCE REGARDING OUR ABILITY TO PAY THE REDEMPTION
PRICE OF, OR DIVIDENDS ON, THE SERIES B PREFERRED STOCK.
On June 25, 2008, we are required to redeem all of the holder's shares
of Series B preferred stock at a redemption price equal to the liquidation
preference plus all accrued and unpaid dividends on those shares to the date of
redemption. While we expect adequate funds will be available to us on the
redemption date, there can be no assurance that we will have available cash or
funds, or will be able to obtain financing on terms acceptable to us, to cover
the redemption of the Series B preferred stock in cash. In addition, the terms
of our current or future credit facilities and other existing and future
indebtedness may restrict our ability to pay the redemption price of, and
dividends on, the Series B preferred stock. Moreover, while our current surplus
is more than adequate to redeem or pay dividends on the Series B preferred
stock, there can be no assurance that we will have surplus at the time of
redemption of, or payment of dividends on, the Series B preferred stock.
THE SERIES B PREFERRED STOCK RANKS JUNIOR TO ALL OF OUR AND OUR
SUBSIDIARIES' LIABILITIES.
In the event of our bankruptcy, liquidation, winding-up or dissolution,
our assets will be available to pay obligations on the Series B preferred stock
only after all our indebtedness and other liabilities have been paid. In
addition, the Series B preferred stock will effectively rank junior to all
existing and future liabilities of our subsidiaries and the capital stock of our
subsidiaries held by third parties. In the event of our bankruptcy, liquidation,
winding-up or dissolution, there can be no assurance that we will have
sufficient assets remaining to pay amounts due on any or all of our Series B
preferred stock. As of March 31, 2003, we had total consolidated liabilities of
$951.3 million and total shareholder's equity of $986.0 million.
THE NUMBER OF SHARES OF OUR COMMON STOCK REGISTERED UNDER THIS
PROSPECTUS SUPPLEMENT MAY BE INSUFFICIENT TO COVER ISSUANCES UPON THE CONVERSION
OR REDEMPTION OF THE SERIES B PREFERRED STOCK OR FOR THE PAYMENT OF DIVIDENDS ON
THE SERIES B PREFERRED STOCK.
We are registering 3,500,000 shares of our common stock under this
prospectus supplement to cover shares of our common stock that may be issued
upon the conversion or redemption of the Series B preferred stock, or for the
payment of dividends on the Series B preferred stock. While we feel 3,500,000
shares of our common stock is adequate for these purposes, there is no assurance
that it will be sufficient. In the event that this amount is not sufficient, we
will attempt to register or to register for resale a sufficient number of
additional shares of our common stock, but may be unable to do so.
S-9
WE CANNOT ASSURE YOU THAT A LIQUID TRADING MARKET WILL EVER DEVELOP FOR
THE SERIES B PREFERRED STOCK OR THAT YOU WILL BE ABLE TO RESELL THESE SECURITIES
AT OR ABOVE THE PURCHASE PRICE.
There is currently no public market for Series B preferred stock and we
do not expect a public market to develop in the future. We cannot predict the
extent to which a liquid trading market will ever exist or whether the market
price of Series B preferred stock will be volatile. We have not applied, and do
not intend to apply, for the listing of Series B preferred stock on any
securities exchange or any automated quotation system.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to
combined fixed charges for the periods shown.
Three Months Nine
Ended March 31, 2003 Year Ended Months Ended Fiscal Years Ended March 31,
(unaudited) December 31, 2002 December 31, 2001 2001 2000 1999
----------- ----------------- ----------------- ---- ---- ----
(a) 0.47x (a) (a) 12.14x 13.30x
The ratio of earnings to fixed charges represents, on a pre-tax basis, the
number of times earnings cover fixed charges. Earnings consist of net income
plus fixed charges and taxes based on our income. Fixed charges consist of
interest on indebtedness, other interest and the interest portion of all rentals
charges to income.
(a) Earnings were inadequate to cover combined fixed charges for the three
months ended March 31, 2003, the nine months ended December 31, 2001, and the
fiscal year ended March 31, 2001. The deficiency for these period was $20.0
million, $40.5 million, and $116.3 million, respectively.
S-10
DESCRIPTION OF CAPITAL STOCK
GENERAL
The general terms of our capital stock, as supplemented by this
description of capital stock and the description of Series B preferred stock
contained in this prospectus supplement, are set forth beginning on page 13 of
the accompanying prospectus.
TRANSFER AGENT AND REGISTRAR
The transfer agent, registrar and dividend disbursing agent for our
common stock and Series B preferred stock is Wachovia Bank, N.A.
DESCRIPTION OF SERIES B PREFERRED STOCK
Under our certificate of incorporation, our board of directors is
authorized to issue shares of our preferred stock from time to time, in one or
more classes or series, without stockholder approval pursuant to a certificate
of designations.
The following section is a summary of the material provisions of the
certificate of designations for our Series B Redeemable Convertible Preferred
Stock and does not restate the certificate of designations in its entirety. We
urge you to read the certificate of designations because it, and not this
description, defines your rights as holders of the Series B preferred stock.
Copies of the certificate of designations are available as set forth under
"Where to Find More Information" and "Incorporation of Documents by Reference"
in this prospectus supplement.
GENERAL
We are issuing 600 shares of Series B Redeemable Convertible Preferred
Stock, no par value, having an initial liquidation preference of $100,000 per
share. When issued, these shares of Series B preferred stock will be validly
issued, fully paid and nonassessable.
The holders of the shares of Series B preferred stock have no
preemptive or preferential rights to purchase or subscribe to stock,
obligations, warrants or any other of our securities.
RANKING
The Series B preferred stock ranks, with respect to dividend rights and
rights upon liquidation, winding up or dissolution:
o junior to all of our existing and future debt obligations;
o on parity with each class or series of our capital stock that
has terms providing that such class or series will rank on a
parity with our Series B preferred stock; and
o senior to our Series A Junior Participating Preferred Stock,
our common stock and each class or series of our capital stock
that has terms providing that such class or series will rank
junior to our Series B preferred stock.
S-11
LIQUIDATION PREFERENCE
The liquidation preference per share of Series B preferred stock is
$100,000. Upon any voluntary or involuntary liquidation, winding up or
dissolution of Trinity, the holder of each share of Series B preferred stock
will be entitled to payment, out of our assets available for distribution, of an
amount equal to the liquidation preference per share of Series B preferred
stock, plus an amount equal to all accrued and unpaid dividends on that share.
If we do not have enough assets available for distribution to pay the Series B
preferred stock and all other parity stock in full, the holders of shares of
Series B preferred stock and the holders of the parity stock will share those
assets available for distribution pro rata based on liquidation amounts due.
Holders of a majority of the outstanding shares of Series B preferred
stock may deem a change of control to be a liquidation, winding up or
dissolution of Trinity. See "-- Change of Control" for more information
regarding this election.
VOTING RIGHTS
In addition to any voting rights provided by law, the holders of Series
B preferred stock will have the right to:
o vote on an as converted basis, on all matters voted on by the
holders of common stock; and
o approve, by a two-thirds (2/3) majority and as a separate
class, all matters that:
o amend, modify, alter, repeal or waive any provision
of our certificate of incorporation or by-laws in any
manner that adversely effects the powers, rights,
preferences or privileges of the holders of the
shares of Series B preferred stock; and
o increases or decreases the authorized shares of
Series B preferred stock.
DIVIDENDS
The holders of the shares of Series B preferred stock are entitled to
receive cumulative dividends at the annual rate of 4.5% of the liquidation
preference per share of Series B preferred stock.
Dividends are payable on July 1 and January 1 of each year, beginning
on January 1, 2004. If any of those dates is not a business day, then dividends
will be payable on the next succeeding business day. Dividends will accrue and
will be cumulative from the date we initially issue the Series B preferred stock
to the date on which Series B preferred stock is converted or redeemed, as
applicable. Dividends will be payable to holders of record as they appear in our
stock records at the close of business on the record date of December 16 or June
16, or such other date fixed by the board of directors. Dividends payable on the
shares of Series B preferred stock for any period other than a full semi-annual
period will be computed based on a 360-day year consisting of twelve 30-day
months. Dividends will accrue whether funds for the dividends are available or
not.
For any semi-annual dividend period in which accrued dividends are not
paid in full on the dividend payment date immediately after the end of such
dividend period, then on that dividend payment date such accrued and unpaid
dividends will be added to the liquidation preference of the Series B preferred
stock. The addition of the accrued and unpaid dividends to the liquidation
preference is solely for the purposes of calculating future dividend payments
and will be effective until the accrued and unpaid dividends have been paid in
full.
S-12
We may pay dividends, at our option, in cash or shares of common stock
valued at the then current market price. The number of shares of common stock to
be paid as dividends on any given dividend payment date will be determined by
dividing the total dollar amount of dividends accrued and unpaid on that date by
the average of the daily volume weighted average price of our common stock for
the prior 10 consecutive trading days. Fractional shares will not be issued. In
lieu of fractional shares, we will pay an amount equal to the value of the
fractional share by check.
We may not declare or pay a dividend or distribution on our junior
stock, nor purchase or redeem junior stock, unless all dividends owed to holders
of the Series B preferred stock have been paid. Our ability to pay dividends may
be affected by the terms of our current or future credit facilities and other
future indebtedness and the requirements under Delaware law regarding surplus.
CONVERSION RIGHTS
Each share of Series B preferred stock will be convertible at any time
before the redemption date, at the option of the holder, into that number of
fully paid and nonassessable shares of our common stock equal to the liquidation
preference per share of Series B preferred stock plus all accrued and unpaid
dividends on that share dividend by the conversion price. The initial conversion
price is $22.46, subject to the adjustments more fully described in "--
Adjustments to the Conversion Price." The number of shares of common stock
deliverable upon conversion of a share of Series B preferred stock, commonly
referred to as the "conversion rate," will initially be 4,452.
To convert Series B preferred stock, a holder must:
o surrender the certificate or certificates for the shares of
Series B preferred stock to be converted, duly endorsed to us
or the transfer agent for the Series B preferred stock, if
any;
o notify us that the holder elects to convert Series B preferred
stock, and the number of shares they wish to convert;
o state in writing the name or names in which the holder wishes
the certificate or certificates for shares of common stock to
be issued; and
o pay any transfer or similar tax if required.
No fractional shares of common stock will be issued upon conversion.
Instead, we will deliver an amount equal to the value of the fractional share by
check.
In case any shares of Series B preferred stock are to be redeemed, the
right to convert those shares of Series B preferred stock will terminate at the
close of business on the business day immediately preceding the date fixed for
redemption.
ADJUSTMENTS TO THE CONVERSION PRICE
The conversion price is subject to adjustment from time to time as
follows:
o Upon a stock dividend, stock split or similar event involving
common stock, the conversion price will be appropriately
adjusted.
S-13
o Upon an issuance or sale of common stock or securities
convertible into common stock at a price below 88% of the then
current market price, there will be a weighted average
adjustment to the conversion price.
o Upon an extraordinary distribution by us, at our option, we
will either:
o ensure that the holder of Series B preferred stock
shall receive an appropriate portion of the
extraordinary distribution upon conversion of the
Series B preferred stock; or
o reduce the conversion price to account for the per
share value of the extraordinary distribution.
A summary of the details of these adjustments is set forth below.
Stock dividends; stock splits and combinations. In case we, at any time
or from time to time after the issuance date of the shares of Series B preferred
stock:
o pay a dividend or make a distribution on our common stock in
shares of our common stock;
o subdivide our outstanding common stock into a greater number
of shares;
o combine our outstanding shares of common stock into a smaller
number of shares; or
o issue by reclassification of our common stock any share of our
capital stock,
then, and in each case, the conversion price, as in effect immediately
prior to such action, will be proportionately adjusted so that the holder of
Series B preferred stock thereafter converted may receive for the same aggregate
conversion price the aggregate number and kind of shares of our capital stock
that such holder would have owned immediately following such action if such
holder had converted such Series B preferred stock immediately prior to such
action.
Issuance of additional shares of common stock. In case we issue or sell
additional shares of our common stock at a price per share less than the target
market price for the date of such issue or sale, then the conversion price will
be reduced, as of the close of business on the date of such issue or sale, to
the price obtained by multiplying:
o the conversion price by
o a fraction, the numerator of which is the sum of the number of
shares of our common stock outstanding immediately prior to
such issue or sale plus the number of shares of our common
stock that the aggregate offering price of the additional
shares of our common stock so issued or sold would purchase at
the target market price and the denominator of which is the
sum of the number of shares of our common stock outstanding
immediately prior to such issue or sale plus the number of
additional shares of our common stock so issued or sold.
For purposes of this subsection, the issuances of warrants, options or
other rights to purchase or acquire securities convertible into shares of our
common stock will be deemed to be issuances of our common stock at an aggregate
offering price equal to the sum of the aggregate offering price of those
securities and the minimum aggregate amount, if any, payable upon conversion of
those securities into shares of our common stock.
S-14
A trading day means each day on which the securities exchange or
quotation system that is used to determine the sale price is open for trading or
quotation.
The target market price of our common stock for any date means the
lesser of 88% of the current market price for that date and 88% of the quoted
price for the first business day prior to that date (if the first business day
is a trading day, or if not, then on the last trading day prior to the first
business day).
The current market price of our common stock for any date means the
average of quoted prices for the ten consecutive trading days ending on the
first business day prior to that date, appropriately adjusted to take into
account the occurrence, during the period commencing on the first of the trading
days during the ten trading day period and ending on that date, of any event
that would result in an adjustment to the conversion price.
The quoted price of our common stock on any trading day means the daily
volume weighted average price per share of our common stock as reported by
Bloomberg Financial, L.P., if our common stock is then listed on the New York
Stock Exchange, or if not then listed on the New York Stock Exchange, the daily
volume weighted average price per share of our common stock on any trading
market where our common stock is listed or a national exchange or
over-the-counter market or, if none of the foregoing apply, the most recent bid
price per share of our common stock as reported in the "pink sheets" by the
National Quotation Bureau, Inc. If the quoted price cannot be determined by any
of the foregoing bases, the quoted price will be the fair market value as
determined by our board of directors.
The adjustment to the conversion price described above will not apply
to any of the following additional shares of common stock:
o shares of our common stock issued or issuable upon conversion
of the Series B preferred stock;
o shares of our common stock issuable upon conversion of any
stock or other securities convertible into or exchangeable for
our common stock that are outstanding on the date of initial
issuance of the Series B preferred stock; and
o shares of our common stock issuable upon exercise of any
warrants, options or other rights to purchase or acquire
shares of our common stock or convertible securities that are
outstanding on the date of initial issuance of the Series B
preferred stock or are issued or granted to our officers,
directors, consultants or employees pursuant to any equity
incentive plan or agreement approved by our board of
directors.
Extraordinary distribution. If we, at any time after date of initial
issuance of the Series B preferred stock and while any shares of the Series B
preferred stock are outstanding, fix a record date for any dividend or other
distribution to the holders of our common stock of (i) cash other than an
ordinary or regular quarterly cash dividend and/or (ii) any of our securities or
capital stock (other than our common stock), evidences indebtedness of Trinity
or any other person, or any other property, in any case whether by way of
dividend, spin-off or otherwise, then, at our option, either:
o we will make adequate provision so that each share of Series B
preferred stock outstanding on the first day that our common
stock trades ex-distribution will have the right to receive,
only upon conversion of that share of Series B preferred stock
and in addition to shares of our common stock, the
extraordinary distribution to which that share of Series B
preferred stock would have been entitled as if that share of
Series B preferred stock was converted into our common stock
immediately prior to the record date for the extraordinary
distribution; or
S-15
o the conversion price in effect immediately before the close of
business on the day that our common stock trades
ex-distribution will be adjusted by multiplying:
o the conversion price, by
o a fraction, the numerator of which is the quoted
price of our common stock on the trading day
immediately before the day that our common stock
trades ex-distribution and the denominator of which
is the quoted price of our common stock on the
trading day immediately before the day that our
common stock trades ex-distribution plus the fair
value (as determined in good faith by our board of
directors) of the extraordinary distribution
distributed per share of our common stock.
General. We will not adjust the purchase price unless any of the
foregoing adjustments will increase or decrease the conversion price by at least
1%. The conversion price will never be adjusted under the par value of the
common stock.
We may, by a vote of two-thirds of our board of directors, reduce the
conversion price currently in effect for any amount for any period of time if
the period of time is at least twenty business days and if the reduction is
irrevocable during that period. However, our board of directors may never reduce
the conversion price to less then the par value of our common stock.
No adjustment of the conversion price will be made for the issuance of
any our securities in a reorganization, acquisition or other similar transaction
except as specifically provided above or as described under the caption "--
Merger or Consolidation." If any action or transaction would require adjustment
of the conversion price pursuant to one or more sections of the certificate of
designations, only one adjustment will be made and that adjustment will be the
amount of adjustment that has the highest absolute value.
MANDATORY CONVERSION
We may, at our option, cause all, but not less than all, of the
outstanding shares of Series B preferred stock and all accrued and unpaid
dividends thereon to be automatically converted into shares of common stock at
the conversion price in effect on the mandatory conversion date, plus cash in
lieu of any fractional shares. We may exercise this right to cause a mandatory
conversion only if the quoted price of our common stock equals or exceeds 200%
of the conversion price of the Series B preferred stock on each day for the ten
consecutive trading days immediately prior to the date of our redemption notice.
To exercise the mandatory conversion right described above, we must
give notice by mail to the holders of the Series B preferred stock not later
than the tenth day prior to the date on which the mandatory conversion would
occur, announcing our intention to mandatorily convert the Series B preferred
stock. The mandatory conversion date will be a date at least ten days but no
more than twenty-five days after the mailing of the conversion notice.
In addition to any information required by applicable law or
regulation, the notice of a mandatory conversion will state, as appropriate:
o the mandatory conversion date;
o the number of shares of common stock to be issued upon the
mandatory conversion of each share of Series B preferred
stock;
o the number of shares of Series B preferred stock to be
converted; and
S-16
o that dividends on the shares of Series B preferred stock to be
converted will cease to be payable on the mandatory conversion
date.
On the mandatory conversion date, dividends will cease to be payable on
the Series B preferred stock and all rights of holders of the Series B preferred
stock will terminate except for the right to receive the shares of common stock
issuable upon conversion thereof and cash in lieu of any fractional share of our
common stock.
MANDATORY REDEMPTION
We will be obligated to redeem each outstanding share of Series B
preferred stock on June 25, 2008, only out of funds legally available for such
payment, at a redemption price equal to the liquidation preference plus the
accrued and unpaid dividends for that share.
We may, at our option, elect to pay the redemption price in cash or in
shares of our common stock valued at 90% of the redemption market price of our
common stock, or in any combination of cash and stock.
The redemption market price of our common stock means the average of the
quoted prices of our common stock for the thirty consecutive trading days ending
on the first business day prior to the redemption date (if the first business
day prior to the applicable redemption date is a trading day, or if not, then on
the last trading day prior to the first business day), appropriately adjusted to
take into account the occurrence, during the period commencing on the first of
the trading days during the thirty trading day period and ending on the
redemption date, of any event that would result in an adjustment to the
conversion price of the Series B preferred stock, as described below under "--
Adjustments to the Conversion Price."
Our right to redeem Series B preferred stock, in whole or in part, with
shares of our common stock is subject to our satisfying various conditions,
including:
o the shares being duly authorized, validly issued, fully paid
and nonassessable; and
o the listing of the shares of common stock on the principal
United States securities exchange on which our common stock is
then listed.
If the transfer agent holds money or securities sufficient to pay the
redemption price of Series B preferred stock on the business day following the
redemption date in accordance with the terms of the certificate of designations,
then, immediately after the redemption date, the Series B preferred stock will
cease to be outstanding, whether or not book-entry transfer is made or
certificates representing the Series B preferred stock are delivered to the
transfer agent. At such time, all rights as a holder of shares of Series B
preferred stock shall terminate, other than the right to receive the redemption
price upon delivery of certificates representing the Series B preferred stock.
Our ability to redeem the Series B preferred stock may be affected by
the terms of our current or future credit facilities and other future
indebtedness and the requirements under Delaware law regarding surplus.
S-17
MERGER OR CONSOLIDATION
In connection with a merger or consolidation in which we are not the
surviving corporation:
o the shares of Series B preferred stock will become shares of
the surviving corporation or other entity resulting from the
merger or consolidation with powers, preferences and relative
participating, optional or other special rights and
qualifications, limitations and restrictions substantially
equivalent to or higher than, in the good faith opinion of the
board of directors, those of the Series B preferred stock
immediately prior to the merger or consolidation; and
o the new replacement shares of the surviving corporation or
other entity shall be convertible into, in lieu of the shares
of our common stock otherwise issuable upon conversion of our
Series B preferred stock, shares of stock, securities and/or
other property as would have been issued or payable in the
merger or consolidation in exchange for the number of shares
of our common stock that would have been issuable immediately
prior to the merger or consolidation upon conversion of the
Series B preferred stock.
For purposes of the foregoing, a merger or consolidation will not
include a liquidation, winding up or dissolution of Trinity, or any change of
control that holders of a majority of the shares of Series B preferred stock
have elected to treat as a liquidation, winding up or dissolution of Trinity.
In addition, the foregoing will not apply in the event that the Series
B preferred stock
o is converted prior to or simultaneously with the
closing of the merger or consolidation referred to
above;
o is subject to mandatory conversion by us; or
o is subject to mandatory redemption by us.
CHANGE OF CONTROL
A change of control of our company means the occurrence of any of the
following:
o the direct or indirect sale, transfer, conveyance or other
disposition, in one or a series of related transactions, of
all or substantially all of our properties or assets to a
third party; or
o the consummation of an acquisition of us by a third party by
way of any transaction or series of related transactions that
results in the third party becoming a beneficial owner,
directly or indirectly, of more than 50% of our voting stock.
If the holders of a majority of the outstanding Series B preferred
stock elect by written notice to us, a change of control will be deemed a
liquidation, winding up or dissolution. See "-- Liquidation Preference."
RESTRICTIONS CONTAINED IN THE PURCHASE AGREEMENT
The purchase agreement contains some restrictions applicable to the
purchaser and transferees who receive from the purchaser the Series B preferred
stock and/or common stock issuable upon conversion or redemption of the Series B
preferred stock, or payable as dividends on the Series B preferred stock. The
S-18
following is a summary of these restrictions and does not restate these
provisions in their entirety. We urge you to refer to the purchase agreement for
the full text of these restrictions.
Each of the purchaser and transferees and their respective affiliates
will be required to vote each share of the Series B preferred stock and the
common stock issued upon conversion or redemption of, or payment of dividends
on, the Series B preferred stock in accordance with the recommendations or
direction of our board of directors including, but not limited to, elections of
our directors and all matters submitted for stockholder approval that are
supported by our board of directors.
Without prior written consent of our board of directors, each of the
purchaser and transferees and its respective affiliates will be restricted from
collectively beneficially owning more than 10% in the aggregate of our common
stock.
Each of the above restrictions will expire upon the earlier of:
o December 25, 2008; or,
o only with respect to the common stock, the date common stock issued
upon conversion of, or the payment of dividends on, Series B preferred
stock is sold in a bona fide open market sale or a block sale, so long
as no purchaser in the block sale purchases more than 500,000 shares of
our common stock in any given week.
S-19
PLAN OF DISTRIBUTION
We are selling 600 shares of our Series B preferred stock to TI
Investments, LLC in a privately-negotiated transaction. The Series B preferred
stock is being purchased pursuant to a Purchase Agreement dated June 25, 2003,
at a negotiated purchase price of $100,000 per share. We determined the amount
of the investment, the formula for the conversion price, the redemption price
and the other terms of the Series B preferred stock through negotiations with
the purchaser. Also included in this prospectus supplement is an aggregate of up
to 3,500,000 shares of our common stock that are issuable upon conversion or
redemption of the Series B preferred stock, or payable as dividends on the
Series B preferred stock.
S-20
================================================================================
PROSPECTUS
July 29, 2002
[TRINITY INDUSTRIES, INC. LOGO]
TRINITY INDUSTRIES, INC.
$150,000,000 AGGREGATE AMOUNT OF
COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES,
COMMON STOCK WARRANTS, DEBT WARRANTS AND DEPOSITARY SHARES
--------------------------------------------------------------------------------
TRINITY INDUSTRIES, INC.:
o Our principal product lines include:
o tank and freight railcars and related parts;
o inland dry-cargo and tank barges and related covers;
o highway guardrail and safety products;
o concrete and aggregates;
o weld pipe fittings;
o structural bridge products;
o pressure containers and container heads; and
o leasing and managing railcar fleets.
o Trinity Industries, Inc.
2525 Stemmons Freeway
Dallas, Texas 75207
(214) 631-4420
SYMBOL & MARKET:
o TRN/New York Stock Exchange
THE OFFERING:
o This prospectus allows us to issue and sell shares of our common stock,
preferred stock, debt securities, common stock warrants, debt warrants and
depositary shares over time.
o We are offering to sell up to $150,000,000 of our securities.
o We will provide the specific terms of these securities and also may add,
update or change information contained in this document in supplements to
this prospectus.
o You should read this document and any prospectus supplement carefully
before you invest.
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 6.
--------------------------------------------------------------------------------
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
1
TABLE OF CONTENTS
Page
About This Prospectus....................................................3
About Trinity............................................................4
Risk Factors.............................................................6
Special Note Regarding Forward-Looking
Statements.............................................................9
Where to Find More Information..........................................10
Incorporation of Documents by Reference.................................10
Use of Proceeds.........................................................12
Ratio of Earnings to Fixed Charges......................................12
Description of Capital Stock............................................13
Description of Depositary Shares........................................18
Description of Senior Debt Securities and
Subordinated Debt Securities..........................................22
Description of Warrants.................................................28
Plan of Distribution....................................................31
Legal Matters...........................................................33
Experts.................................................................33
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. This prospectus is not an offer to sell or a
solicitation of an offer to buy our securities in any jurisdiction where it is
unlawful. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of securities. This preliminary prospectus is subject
to completion prior to any offering of securities.
THIS PROSPECTUS MAY NOT BE USED TO SELL SECURITIES UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
2
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process we may sell:
o common stock;
o preferred stock;
o debt securities;
o common stock warrants;
o debt warrants; and
o depositary shares,
either separately or in units, in one or more offerings up to a total dollar
amount of $150,000,000. This prospectus provides you with a general description
of these securities. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read this prospectus and the applicable
prospectus supplement together with the additional information contained under
the heading "Where You Can Find More Information."
The registration that contains this prospectus (including the exhibits to
the registration statement) contains additional information about us and the
securities offered under this prospectus. That registration statement can be
read at the Securities and Exchange Commission web site or at the Securities and
Exchange Commission and New York Stock Exchange offices mentioned under the
heading "Where You Can Find More Information."
3
ABOUT TRINITY
Trinity is one of the nation's leading diversified industrial companies
providing a variety of high volume, repetitive products and services for the
transportation, industrial and construction sectors of the market place. We
compete in cyclical markets and are continuously looking for opportunities to
improve our competitive positions. Our principal product lines include:
o tank and freight railcars and related parts;
o inland dry-cargo and tank barges and related covers;
o highway guardrail and safety products;
o concrete and aggregates;
o weld pipe fittings;
o structural bridge products;
o pressure containers and container heads; and
o leasing and managing railcar fleets.
Our five principal business groups are set forth below:
TRINITY RAIL GROUP. Our railcar group primarily serves two markets: North
America and Europe. We develop and manufacture a comprehensive selection of
railcars used for transporting a wide variety of liquids, gases and dry cargo.
From tank cars to specialty cars, we produce the widest range of railcars in the
industry and are the largest producer of railcars in North America. We also
manufacture and sell railcar parts, such as auto carrier doors and accessories,
hatch rings, discharge gates, covers, floors, yokes, couplers, axles, hitches,
bogies, center plates and chutes. The parts are ultimately used in manufacturing
and repairing railcars. In addition, we have the ability to maintain, repair and
modify railcars through our repair network.
INLAND BARGE GROUP. We are the largest producer of inland barges in the
United States. We manufacture a variety of dry-cargo barges, such as deck barges
and open and covered hopper barges that transport various commodities, such as
grain, coal and aggregates. We also produce tank barges used to transport liquid
products at high or low temperatures. Our manufacturing facilities are located
along the United States inland river system allowing for rapid delivery to our
customers.
CONSTRUCTION PRODUCTS GROUP. Our construction products group is composed
of highway safety products, concrete and aggregates, beams and girders used in
highway construction and weld pipe fittings. We are one of the largest
manufacturers of roadside safety products in North America. Our products include
highway safety guardrails and patented products such as guardrail end terminals,
crash cushions, and other protective barriers that absorb and dissipate the
force of impact in collisions between vehicles and fixed roadside objects. We
supply ready mix concrete to the industrial, residential and highway
construction businesses and provide aggregates such as crushed stone, sand and
gravel for a variety of uses. In addition, we also supply weld pipe fittings,
such as caps, elbows, return bends, tees, concentric and eccentric reducers and
full and reducing tees.
INDUSTRIAL PRODUCTS GROUP. We are a leading producer of tank containers
and tank heads for pressure vessels. We manufacture our tanks in the United
States, Mexico and Brazil. Our tanks include gas tanks for rural housing,
transport and storage tanks, motor fuel tanks, air receivers and a variety of
cylinders. We market a portion of our industrial products in Mexico under the
brand name of TATSA.
4
TRINITY RAILCAR LEASING AND MANAGEMENT SERVICES GROUP. We lease
specialized types of railcars, consisting of both tank cars and freight cars.
Our railcars are leased to industrial companies in the petroleum, chemical,
agricultural, energy and other industries that supply their own railcars to the
railroads.
We originally incorporated in Texas in 1933 as Trinity Industries, Inc.
and reincorporated in Delaware in 1987. Our principal offices are located at
2525 Stemmons Freeway, Dallas, Texas 75207-2401, and our telephone number is
(214) 631-4420. Our Internet web site is at www.trin.net. The information on our
web site does not constitute a part of this prospectus.
5
RISK FACTORS
Investing in our securities will provide you with an interest in, or
obligation of, Trinity. As an investor, you will be subject to risks inherent in
our business. The performance of your investment in Trinity will reflect the
performance of our business relative to, among other things, general economic
and industry conditions, market conditions and competition. The value of your
investment may increase or it may decline and could result in a loss. You should
carefully consider the following factors as well as other information contained
in this prospectus or information incorporated by reference before deciding to
make any investment in Trinity.
RISKS RELATED TO OUR INDUSTRIES
THE CYCLICAL NATURE OF OUR BUSINESS RESULTS IN LOWER REVENUES DURING
ECONOMIC DOWNTURNS.
We operate in cyclical industries. Downturns in overall economic
conditions usually have a significant adverse effect on cyclical industries due
to a decreased demand for new and replacement products. This decreased demand
could result in lower sales volumes, lower prices and/or a loss of profits. In
addition, our acquisition of Thrall Car Manufacturing Company has increased our
exposure to the effects of the cyclical nature of the railcar business. The
railcar industry is presently in a deep down cycle and operating with a minimal
backlog. If this down cycle continues we could experience increased losses and
could make additional plant closures and incur related costs.
OUR MANUFACTURER'S WARRANTIES EXPOSE US TO POTENTIALLY SIGNIFICANT CLAIMS.
We warrant the workmanship and materials of many of our products under
limited warranties. Accordingly, we may be subject to significant warranty
claims in the future such as multiple claims based on one defect repeated
throughout our mass production process or claims for which the cost of repairing
the defective part is highly disproportionate to the original cost of the part.
We have never experienced any material losses attributable to warranty claims,
but the possibility exists for these types of warranty claims to result in
costly product recalls, significant repair costs and damage to our reputation.
WE MAY BE LIABLE FOR PRODUCT LIABILITY CLAIMS THAT EXCEED OUR INSURANCE
COVERAGE.
The nature of our business subjects us to product liability claims,
especially in connection with the repair and manufacture of products that carry
hazardous or volatile materials. We maintain reserves and liability insurance
coverage at levels based upon commercial norms in the industries in which we
operate and our historical claims experience. However, an unusually large
product liability claim or a string of claims based on a failure repeated
throughout our mass production process may exceed our insurance coverage or
result in damage to our reputation.
WE HAVE POTENTIAL EXPOSURE TO ENVIRONMENTAL LIABILITIES, WHICH MAY
INCREASE COSTS AND LOWER PROFITABILITY.
Our operations are subject to extensive and frequently changing federal,
state and local environmental laws and regulations, including those dealing with
air quality and the handling and disposal of waste products, fuel products and
hazardous substances. In particular, we may be required to incur remediation
costs and other related expenses because:
6
o some of our manufacturing facilities were constructed and operated
before the adoption of the current environmental laws and the
institution of compliance practices; and
o some of the products that we manufacture are used to transport
hazardous materials.
Furthermore, although we have conducted and intend to conduct appropriate
due diligence with respect to environmental matters in connection with
acquisitions, we may be unable to identify or be indemnified for all potential
environmental liabilities relating to any acquired business. Environmental
liabilities incurred by us, if not covered by adequate insurance or
indemnification, will increase our costs and have a negative impact on our
profitability.
WE COMPETE IN HIGHLY COMPETITIVE INDUSTRIES, WHICH MAY IMPACT OUR
FINANCIAL RESULTS.
We face aggressive competition in all geographic markets and each industry
sector in which we operate. As a result, competition on pricing is often
intense. The effect of this competition could reduce our revenues, limit our
ability to grow, increase pricing pressure on our products, and otherwise affect
our financial results.
RISKS RELATED TO TRINITY
FLUCTUATIONS IN THE SUPPLY OF COMPONENT PARTS USED IN THE PRODUCTION OF
OUR PRODUCTS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR ABILITY TO
COST-EFFECTIVELY MANUFACTURE AND SELL OUR PRODUCTS.
A significant portion of our business depends on the adequate supply of
numerous specialty components such as brakes, wheels, side frames and bolsters
at competitive prices. We depend on outside suppliers for a significant portion
of our component part needs. While we endeavor to be diligent in our contractual
relationships with our suppliers, a significant decrease in the availability of
specialty components could materially increase our cost of goods sold or prevent
us from manufacturing our products on a timely basis.
RISKS RELATED TO OUR OPERATIONS OUTSIDE OF THE UNITED STATES COULD
ADVERSELY IMPACT OUR OPERATING RESULTS.
Our operations outside of the United States are subject to the risks
associated with cross-border business transactions and activities. Political,
legal, trade or economic changes or instability could limit or curtail our
foreign business activities and operations. Some foreign countries where we
operate have regulatory authorities that regulate railroad safety, railcar
design and railcar component part design, performance and manufacture used on
their railroad systems. If we fail to obtain and maintain certifications of our
railcars and railcar parts within the various foreign countries where we
operate, we may be unable to market and sell our railcars in those countries. In
addition, unexpected changes in regulatory requirements, tariffs and other trade
barriers, more stringent rules relating to labor or the environment, adverse tax
consequences and price exchange controls could limit operations and make the
manufacture and distribution of our products difficult. Furthermore, any
material change in the quotas, regulations or duties on imports imposed by the
U.S. government and agencies or on exports by the overnment of Mexico or its
agencies could affect our ability to export the railcars and liquified petroleum
gas containers that we manufacture in Mexico. The uncertainty of the legal
environment in these and other areas could limit our ability to enforce our
rights effectively.
7
WE MAY INCUR INCREASED COSTS DUE TO FLUCTUATIONS IN INTEREST RATES AND
FOREIGN CURRENCY EXCHANGE RATES.
We are exposed to risks associated with fluctuations in interest rates and
changes in foreign currency exchange rates. We seek to minimize these risks,
when considered appropriate, through the use of currency and interest rate
hedges and similar financial instruments and other activities, although these
measures may not be implemented or effective. Any material and untimely changes
in interest rates or exchange rates could result in significant losses to us.
BECAUSE WE DO NOT HAVE EMPLOYMENT CONTRACTS WITH OUR KEY MANAGEMENT
EMPLOYEES, WE MAY NOT BE ABLE TO RETAIN THEIR SERVICES IN THE FUTURE.
Our success depends on the continued services of our key management
employees, none of whom currently have employment agreements with us. Although
we have historically been successful in retaining the services of our key
management, we may be unable to do so in the future. The loss of the services of
one or more key members of our management team could result in increased costs
associated with attracting and retaining a qualified replacement and could
disrupt our operations and result in a loss of revenues.
ALTHOUGH OUR BUSINESS WAS NOT DIRECTLY IMPACTED BY THE RECENT TERRORIST
ATTACKS AGAINST THE UNITED STATES, THE LONG-TERM EFFECT OF THESE EVENTS, OR THE
DOMESTIC OR FOREIGN RESPONSE TO THEM, COULD NEGATIVELY AFFECT OUR ABILITY TO
OPERATE PROFITABLY IN THE FUTURE.
The terrorist attacks that occurred in the United States on September 11,
2001, the subsequent military response by the United States, other terrorist
attacks and future events occurring in response to or in connection with these
attacks may negatively impact the economy in general. In particular, the
negative impacts of these events may affect the industries in which we operate.
This could result in delays in or cancellations of the purchase of our products
or shortages of raw materials or component parts. Any of these occurrences could
have a significant adverse impact on our operating results, revenues and costs.
8
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Risk Factors" and elsewhere in this
prospectus constitute forward- looking statements. All projections contained in
this prospectus are forward-looking statements. These statements involve known
and unknown risks, uncertainties and other factors that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward- looking statements.
Forward-looking statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology like "may," "will," "should," "expect," "plan," "project,"
"anticipate," "intend," "believe," "estimate," "predict," "potential," or
"continue" or the negative of these terms or other comparable terminology. These
statements are only predictions. Actual events or results may differ materially.
In evaluating these statements, you should specifically consider various
factors, including the risks outlined under "Risk Factors." These factors may
cause our actual results to differ materially from any forward-looking
statement.
Potential factors that could cause our actual results of operations to
differ materially from those in the forward-looking statements include:
o market conditions and demand for our products;
o the cyclical nature of both the railcar and barge industries;
o the timing of introduction of new products;
o the timing of customer orders;
o price erosion;
o changes in mix of products sold;
o the extent of utilization of manufacturing capacity;
o availability of supplies and raw materials;
o price competition and other competitive factors;
o technologies;
o steel prices;
o interest rates and capital costs;
o taxes;
o the stability of the governments and political and business
conditions in certain foreign countries, particularly Mexico and
Romania;
o changes in import and export quotas and regulations;
o business conditions in emerging economies; and
o legal, regulatory and environmental issues.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of these statements. We
are under no duty to update any of the forward-looking statements after the date
of this prospectus to conform these statements to actual results and do not
intend to do so.
9
WHERE TO FIND MORE INFORMATION
We are subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended, and file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy these
reports, proxy statements and other information at the SEC's public reference
facilities at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
You can request copies of these documents by writing to the SEC and paying a fee
for the copying cost. Please call the SEC at 1-800- SEC-0330 for more
information about the operation of the public reference facilities. SEC filings
are also available at the SEC's Web site at http://www.sec.gov. Our common stock
is listed on the New York Stock Exchange, and you can read and inspect our
filings at the offices of the New York Stock Exchange at 20 Broad Street, New
York, New York 10005.
This prospectus is only part of a Registration Statement on Form S-3 that
we have filed with the SEC under the Securities Act of 1933, as amended, and
therefore omits information contained in the Registration Statement. We have
also filed exhibits and schedules with the Registration Statement that are not
contained in this prospectus, and you should refer to the applicable exhibit or
schedule for a complete description of any statement referring to any contract
or other document. You may inspect a copy of the Registration Statement,
including the exhibits and schedules, without charge, at the public reference
room or obtain a copy from the SEC upon payment of the fees prescribed by the
SEC.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information that we file
with them. Incorporation by reference allows us to disclose important
information to you by referring you to those other documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. We filed a Registration Statement on Form S-3 under
the Securities Act of 1933 with the SEC with respect to the securities being
offered pursuant to this prospectus. This prospectus omits information contained
in the Registration Statement, as permitted by the SEC. You should refer to the
Registration Statement, including the exhibits, for further information about us
and the securities being offered pursuant to this prospectus. Statements in this
prospectus regarding the provisions of documents filed with, or incorporated by
reference in, the Registration Statement are not necessarily complete and each
statement is qualified in all respects by that reference. Copies of all or any
part of the Registration Statement, including the documents incorporated by
reference or the exhibits, may be obtained upon payment of the prescribed rates
at the offices of the SEC listed above. The documents we are incorporating by
reference are:
o Our Transition Report on Form 10-K for the nine months ended
December 31, 2001;
o Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2002;
o Our Current Report on Form 8-K/A, filed December 28, 2001;
o Our Current Report on Form 8-K, filed February 19, 2002;
o Our Current Report on Form 8-K, filed March 7, 2002;
o Our Current Report on Form 8-K, filed March 12, 2002;
o Our Current Report on Form 8-K, filed March 20, 2002;
o Our Current Report on Form 8-K, filed April 30, 2002; and
o All documents filed by us pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, subsequent
to the date of this prospectus and prior to the
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termination of the effectiveness of the Registration Statement of
which this prospectus is a part.
You can obtain any of the filings incorporated by reference in this
prospectus through us or from the SEC through the SEC's website or at the
address listed above. Documents incorporated by reference are available from us
without charge, excluding any exhibits to those documents that are not
specifically incorporated by reference in those documents. You can request a
copy of the documents incorporated by reference in this prospectus and other
documents and agreements referred to in this prospectus by requesting them in
writing or by telephone from us at the following address:
Trinity Industries, Inc.
2525 Stemmons Freeway
Dallas, Texas 75207-2401
Attention: Michael G. Fortado
Telephone: (214) 631-4420
This prospectus is part of a Registration Statement we filed with the SEC.
You should rely only on the information incorporated by reference in or provided
in this prospectus and the Registration Statement. We have not authorized any
other person to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate as of any
date other than the date on the front of this document.
11
USE OF PROCEEDS
Except as otherwise provided in the related prospectus supplement, we will
use the net proceeds from the sale of the offered securities for general
corporate purposes. The purposes may include, but are not limited to, the
following:
o repayments or refinancings of debt or other corporate obligations;
o working capital;
o capital expenditures; and
o acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to
fixed charges for the periods shown.
Three Months Nine Fiscal Years Ended March 31,
Ended March 31, 2002 Months Ended --------------------------------------------
(unaudited) December 31, 2001 2001 2000 1999 1998
-------------------- ----------------- -------- -------- ------- ------
(a) (a) (a) 12.16x 13.30x 7.51x
The ratio of earnings to fixed charges represents, on a pre-tax basis, the
number of times earnings cover fixed charges. Earnings means the sum of our
pre-tax income and our fixed charges, net of interest capitalized. Fixed charges
consist of interest on indebtedness, amortization of debt issuance costs and
the interest portion of all rentals charged to income.
(a) Earnings were inadequate to cover fixed charges for the three months
ended March 31, 2002, the nine months ended December 31, 2001, and the fiscal
year ended March 31, 2001. The deficiency for these periods was $11.4 million,
$40.5 million, and $116.3 million, respectively.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
This prospectus describes the general terms of our capital stock. For a
more detailed description of these securities, you should read the applicable
provisions of Delaware law and our certificate of incorporation, as amended.
When we offer to sell a particular series of these securities, we will describe
the specific terms of the series in a supplement to this prospectus.
Accordingly, for a description of the terms of any series of securities, you
must refer to both the prospectus supplement relating to that series and the
description of the securities described in this prospectus. A prospectus
supplement may change any of the terms of the securities described in this
prospectus.
Under our certificate of incorporation, the total number of shares of all
classes of stock that we have authority to issue is 101,500,000, consisting of
100,000,000 shares of common stock, par value $1.00 per share, and 1,500,000
shares of preferred stock, no par value per share, of which 1,000,000 shares of
Series A Junior Participating Preferred Stock are authorized.
COMMON STOCK
As of June 30, 2002, we had 45,900,144 shares of common stock outstanding.
As of that date, there were approximately 1,918 holders of record of the
outstanding shares of common stock. The holders of our common stock are entitled
to one vote for each share on all matters voted on by stockholders. The holders
of our common stock possess all voting power, except as otherwise required by
law or provided in any resolution adopted by our board of directors regarding
any series of preferred stock. Subject to any preferential or other rights of
any outstanding series of our preferred stock that may be designated by our
board, the holders of our common stock will be entitled to such dividends as may
be declared from time to time by our board from available funds and upon
liquidation will be entitled to receive pro rata all of our assets available for
distribution to the holders. The common stock has no subscription, redemption,
conversion or preemptive rights. All shares of common stock are fully paid and
nonassessable.
PREFERRED STOCK
As of the date of this prospectus, no shares of preferred stock were
outstanding. Under our certificate of incorporation, our board of directors is
authorized to issue shares of our preferred stock from time to time, in one or
more classes or series, without stockholder approval. Prior to the issuance of
shares of each series of preferred stock other than the already existing Series
A Junior Participating Preferred Stock, the board of directors is required by
the Delaware General Corporation Law and our certificate of incorporation to
adopt resolutions and file a certificate of designation with the Secretary of
State of the State of Delaware. The certificate of designation fixes for each
class or series the designations, powers, preferences, rights, qualifications,
limitations and restrictions, including the following:
o the number of shares constituting each class or series;
o voting rights;
o rights and terms of redemption, including any sinking fund
provisions;
o dividend rights and rates;
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o dissolution;
o terms concerning the distribution of assets;
o conversion or exchange terms;
o redemption prices; and
o liquidation preferences.
All shares of preferred stock offered by this prospectus will, when
issued, be fully paid and nonassessable and will not have any preemptive or
similar rights.
We will describe in a prospectus supplement relating to the class or
series of preferred stock being offered the following terms:
o the title and stated value of the preferred stock;
o the number of shares of the preferred stock offered, the liquidation
preference per share and the offering price of the preferred stock;
o the dividend rate(s), period(s) or payment date(s) or method(s) of
calculation applicable to the preferred stock;
o whether dividends are cumulative or non-cumulative and, if
cumulative, the date from which dividends on the preferred stock
will accumulate;
o the procedures for any auction and remarketing, if any, for the
preferred stock;
o the provisions for a sinking fund, if any, for the preferred stock;
o the provision for redemption, if applicable, of the preferred stock;
o any listing of the preferred stock on any securities exchange;
o the terms and conditions, if applicable, upon which the preferred
stock will be convertible into common stock, including the
conversion price or manner of calculation and conversion period;
o voting rights, if any, of the preferred stock;
o whether interests in the preferred stock will be represented by
depositary shares;
o a discussion of any material or special United States federal income
tax considerations applicable to the preferred stock;
o the relative ranking and preferences of the preferred stock as to
dividend rights and rights upon the liquidation, dissolution or
winding up of our affairs;
o any limitations on issuance of any class or series of preferred
stock ranking senior to or on a parity with the class or series of
preferred stock as to dividend rights and rights upon liquidation,
dissolution or winding up of our affairs; and
o any other specific terms, preferences, rights, limitations or
restrictions of the preferred stock.
RANK
Unless we specify otherwise in the applicable prospectus supplement, the
preferred stock will rank, relating to dividends and upon our liquidation,
dissolution or winding up:
o senior to all classes or series of our common stock and to all of
our equity securities ranking junior to the preferred stock;
o on a parity with all of our equity securities the terms of which
specifically provide that the equity securities rank on a parity
with the preferred stock; and
o junior to all of our equity securities the terms of which
specifically provide that the equity
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securities rank senior to the preferred stock.
The term equity securities does not include convertible debt securities.
STOCKHOLDER RIGHTS PLAN
On March 11, 1999, our board of directors adopted a rights agreement and
declared a dividend of one right for each share of common stock outstanding as
of April 27, 1999. Each right entitles the holder to purchase one one-hundredth
(1/100th) of a share of a new series of our preferred stock designated as
"Series A Junior Participating Preferred Stock" at an exercise price of $200.00.
Rights are only exercisable (under certain circumstances specified in our rights
agreement, as amended) when there has been a distribution of the rights (and
such rights are no longer redeemable by Trinity). A distribution of the rights
would occur upon the earlier of: (i) ten business days following a public
announcement that any person or group has acquired beneficial ownership of 12%
or more of the outstanding shares of common stock, or (ii) ten business days
following the commencement of a tender offer or exchange offer that would result
in any person or group acquiring beneficial ownership of 12% or more of the
outstanding shares of common stock.
The rights will expire at the close of business on April 27, 2009, unless
such date is extended or the rights are earlier redeemed or exchanged by
Trinity. Until a right is exercised, the holder thereof, as such, will have no
rights as a stockholder of Trinity, including, without limitation, no right to
vote or to receive dividends.
If any person or group acquires 12% or more of the Company's outstanding
common stock, the "flip- in" provision of the rights will be triggered and the
rights will entitle each holder of such rights (other than any acquiring person
or group, whose rights will be null and void) to acquire a number of additional
shares of the our common stock having a market value of twice the exercise price
of each right. In the event that we are involved in a merger or other business
combination transaction, each right will entitle its holder to purchase, at the
right's then-current exercise price, a number of shares of the acquiring
company's common stock having a market value at that time of twice the rights'
exercise price.
Any of the provisions of our rights agreement may be amended by our board
of directors prior to the distribution of the rights. After such distribution,
the provisions of our rights agreement may be amended by our board of directors
in order to cure any ambiguity, to make changes which do not adversely affect
the interests of holders of rights or to shorten or lengthen any time period
under our rights agreement. The foregoing notwithstanding, no amendment may be
made at such time as the rights are not redeemable.
The rights agreement is intended to protect shareholders in the event of
an unsolicited attempt to acquire us. The right is transferred automatically
with the transfer of the common stock until separate rights certificates are
distributed upon the occurrence of certain events. The rights agreement could
have the effect of delaying, deferring or preventing a person from acquiring us
or accomplishing a change in control of the board of directors. This description
of the rights agreement is intended as a summary only and is qualified in its
entirety by reference to the rights agreement dated as of March 11, 1999, as
amended, between Trinity and The Bank of New York. To obtain a copy of the
rights agreement, as amended, see the section of this prospectus entitled "Where
You Can Find More Information."
15
PROVISIONS OF DELAWARE LAW THAT MAY PREVENT TAKEOVERS
The acquisition of Trinity by means of a tender offer, a proxy contest or
otherwise and the removal of incumbent officers and directors may be more
difficult due to provisions of Delaware law. These provisions are expected to
discourage types of coercive takeover practices and inadequate takeover bids and
to encourage persons seeking to acquire control of Trinity to first negotiate
with us. We believe the increased protection of our potential ability to
negotiate with the proponent of an unfriendly or unsolicited proposal to acquire
or restructure Trinity outweighs the disadvantages of discouraging these
proposals because, among other things, negotiation of these proposals could
result in an improvement of the terms of any of these proposals.
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. In general, the statute prohibits us from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date that the person became an interested stockholder, unless:
o prior to the date that the person became an interested stockholder,
the transaction or business combination that resulted in the person
becoming an interested stockholder is approved by the board of
directors;
o upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of our outstanding voting stock; or
o on or after that date, the business combination is approved by our
board of directors and by the affirmative vote of at least 66 2/3%
of our outstanding voting stock that is not owned by the interested
stockholder.
Generally, a "business combination" includes a merger, asset or stock sale, or
other transaction resulting in a financial benefit to the stockholder. Subject
to specified exceptions, an "interested stockholder" is a person who, together
with that person's affiliates and associates, owns or within the previous three
years, did own 15% or more of our voting stock.
PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS THAT MAY PREVENT
TAKEOVERS
Our certificate of incorporation and bylaws contain provisions that may
delay, defer or prevent a change in control of Trinity and make removal of our
management more difficult.
Our bylaws provide that a stockholder may nominate directors only if the
stockholder delivers written notice to us not less than 60 days or more than 90
days before the first anniversary of the preceding year's annual meeting. If the
date of the annual meeting is advanced more than 30 days before or delayed more
than 30 days after the anniversary of the preceding year's annual meeting, then
we must receive the stockholder's notice not after the later of the sixtieth day
before the annual meeting or the tenth day after the day the public announcement
of the date of the annual meeting is made.
Our bylaws provide that any newly created directorship resulting from an
increase in the number of directors or a vacancy on the board of directors may
be filled only by vote of a majority of the remaining directors then in office,
even if less than a quorum. Directors elected to fill a vacancy or by reason of
an
16
increase in the number of directors will hold office until the annual meeting of
stockholders at which the term to which they have been elected expires.
Directors may be removed from office only with or without cause and only by the
affirmative vote of 50% of the then outstanding shares of stock entitled to vote
on the matter.
The foregoing provisions, together with the ability of the board of
directors to issue preferred stock without further stockholder action, may delay
or frustrate the removal of incumbent directors or the completion of
transactions that would be beneficial, in the short term, to our stockholders.
The provisions may also discourage or make more difficult a merger, tender
offer, other business combination or proxy contest, the assumption of control by
a holder of a large block of our securities or the removal of incumbent
management, even if these events would be favorable to the interests of our
stockholders.
The certificate of incorporation and bylaws requires us to indemnify our
directors and officers to the fullest extent permitted by law. In addition, as
permitted by Delaware law, the certificate of incorporation provides that no
director will be liable to us or our stockholders for monetary damages for
breach of fiduciary duties as a director. The effect of this provision is to
restrict our rights and the rights of our stockholders in derivative suits to
recover monetary damages against a director for breach of fiduciary duties as a
director, except that a director will be personally liable for:
o acts or omissions not in good faith for which involve intentional
misconduct or a knowing violation of law;
o the payment of dividends or the redemption or purchase of stock in
violation of Delaware law;
o any breach of the duty of loyalty to Trinity or our stockholders; or
o any transaction from which the director derived an improper personal
benefit.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is The Bank of New
York.
17
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
We may issue depositary shares, each of which will represent a fractional
interest of a share of a particular series of preferred stock, as specified in
the applicable prospectus supplement. We will deposit with a depositary,
referred to as the preferred stock depositary, shares of preferred stock of each
series represented by depositary shares. We will enter into a deposit agreement
with the preferred stock depositary and holders from time to time of the
depositary receipts issued by the preferred stock depositary which evidence the
depositary shares. Subject to the terms of the deposit agreement, each owner of
a depositary receipt will be entitled, in proportion to the holder's fractional
interest in the preferred stock, to all the rights and preferences of the series
of the preferred stock represented by the depositary shares, including dividend,
voting, conversion, redemption and liquidation rights.
Immediately after we issue and deliver the preferred stock to a preferred
stock depositary, we will cause the preferred stock depositary to issue the
depositary receipts on our behalf. You may obtain copies of the applicable form
of deposit agreement and depositary receipt from us upon request. The statements
made in this section relating to the deposit agreement and the depositary
receipts are summaries of the anticipated provisions. These summaries are not
complete and we may modify them in a prospectus supplement. For more detail, we
refer you to the prospectus supplement and to the deposit agreement itself,
which we will file as an exhibit to the registration statement of which this
prospectus forms a part.
DIVIDENDS AND OTHER DISTRIBUTIONS
The preferred stock depositary will distribute all cash dividends or other
cash distributions received relating to the preferred stock to the record
holders of depositary receipts in proportion to the number of the depositary
receipts owned by the holders, subject to the obligations of holders to file
proofs, certificates and other information and to pay certain charges and
expenses to the preferred stock depositary.
In the event of a distribution other than in cash, the preferred stock
depositary will distribute property received by it to the record holders of
depositary receipts in proportion to the number of the depositary receipts owned
by the holders, unless the preferred stock depositary determines that it is not
feasible to make the distribution, in which case the preferred stock depositary
may, with our approval, sell the property and distribute the net proceeds from
the sale to the holders.
No distribution will be made relating to any depositary share that
represents any preferred stock converted into other securities.
WITHDRAWAL OF STOCK
Assuming we have not previously called for redemption or converted into
other securities the related depositary shares, upon surrender of the depositary
receipts at the corporate trust office of the preferred stock depositary, the
holders will be entitled to delivery at that office of the number of whole or
fractional shares of the preferred stock and any money or other property
represented by the depositary
18
shares. Holders of depositary receipts will be entitled to receive shares of the
related preferred stock as specified in the applicable prospectus supplement,
but holders of the shares of preferred stock will no longer be entitled to
receive depositary shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever we redeem shares of preferred stock held by the preferred stock
depositary, the preferred stock depositary will concurrently redeem the number
of depositary shares representing shares of the preferred stock so redeemed,
provided we have paid the applicable redemption price for the preferred stock to
be redeemed plus an amount equal to any accrued and unpaid dividends to the date
fixed for redemption. The redemption price per depositary share will be equal to
the corresponding proportion of the redemption price and any other amounts per
share payable relating to the preferred stock. If fewer than all the depositary
shares are to be redeemed, the depositary shares to be redeemed will be selected
pro rata or by any other equitable method determined by us.
From and after the date fixed for redemption:
o all dividends relating to the shares of preferred stock called for
redemption will cease to accrue;
o the depositary shares called for redemption will no longer be deemed
to be outstanding; and
o all rights of the holders of the depositary receipts evidencing the
depositary shares called for redemption will cease, except the right
to receive any moneys payable upon the redemption and any money or
other property to which the holders of the depositary receipts were
entitled upon redemption and surrender to the preferred stock
depositary.
VOTING OF THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
preferred stock are entitled to vote, the preferred stock depositary will mail
the information contained in the notice of meeting to the record holders of the
depositary receipts. Each record holder of these depositary receipts on the
record date, which will be the same date as the record date for the preferred
stock, will be entitled to instruct the preferred stock depositary as to the
exercise of the voting rights pertaining to the amount of preferred stock
represented by the holder's depositary shares. The preferred stock depositary
will vote the amount of preferred stock represented by the depositary shares in
accordance with the instructions, and we will agree to take all reasonable
action necessary to enable the preferred stock depositary to do so. The
preferred stock depositary will abstain from voting the amount of preferred
stock represented by the depositary shares for which it does not receive
specific instructions from the holders of depositary receipts evidencing the
depositary shares. The preferred stock depositary will not be responsible for
any failure to carry out any instruction to vote, or for the manner or effect of
any vote made, as long as the action or non-action is in good faith and does not
result from the preferred stock depositary's negligence or willful misconduct.
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LIQUIDATION PREFERENCE
In the event that we voluntarily or involuntarily liquidate, dissolve or
wind up, the holders of each depositary receipt will be entitled to the fraction
of the liquidation preference accorded each share of preferred stock represented
by the depositary shares, as set forth in the applicable prospectus supplement.
CONVERSION OF PREFERRED STOCK
The depositary shares will not be convertible into common stock or any of
our other securities or property. Nevertheless, if we so specify in the
applicable prospectus supplement relating to an offering of depositary shares,
holders may surrender depositary receipts to the preferred stock depositary with
written instructions to the preferred stock depositary to instruct us to convert
the preferred stock represented by the depositary shares into whole shares of
common stock, other shares of our preferred stock or other shares of stock. We
have agreed that upon receipt of the instructions and any amounts payable, we
will convert the depositary shares using the same procedures as those provided
for converting preferred stock. If the depositary shares evidenced by a
depositary receipt are to be converted in part only, the preferred stock
depositary will issue a new depositary receipt for any depositary shares not
converted. No fractional shares of common stock will be issued upon conversion,
and if the conversion would result in a fractional share being issued, we will
pay an amount in cash equal to the value of the fractional interest based upon
the closing price of the common stock on the last business day prior to the
conversion.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
We may amend the form of depositary receipt and any provision of the
deposit agreement at any time by agreement between us and the preferred stock
depositary. However, any amendment that materially and adversely alters the
rights of the holders of depositary receipts or that would be materially and
adversely inconsistent with the rights granted to the holders of the related
preferred stock will not be effective unless the holders of at least two-thirds
of the depositary shares evidenced by the depositary receipts then outstanding
approve the amendment. No amendment will impair the right, subject to the
exceptions in the depositary agreement, of any holder of depositary receipts to
surrender any depositary receipt with instructions to deliver to the holder the
related preferred stock and all money and other property, if any, represented by
the depositary receipt, except in order to comply with law. Every holder of an
outstanding depositary receipt at the time any amendment becomes effective will
be deemed, by continuing to hold the receipt, to consent and agree to the
amendment and to be bound by the deposit agreement, as amended.
We may terminate the deposit agreement upon not less than 30 days' prior
written notice to the preferred stock depositary if a majority of each series of
preferred stock affected by the termination consents to the termination. Upon
termination, the preferred stock depositary will deliver or make available to
each holder of depositary receipts, upon surrender of the depositary receipts
held by the holder, the number of whole or fractional shares of preferred stock
represented by the depositary shares evidenced by the depositary receipts
together with any other property held by the preferred stock depositary relating
to the depositary receipt.
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In addition, the deposit agreement will automatically terminate if:
o all outstanding depositary shares have been redeemed;
o there has been a final distribution of the related preferred stock
in connection with our liquidation, dissolution or winding up and
the distribution has been distributed to the holders of depositary
receipts evidencing the depositary shares representing the preferred
stock; or
o each share of the related preferred stock has been converted into
our securities which are not represented by depositary shares.
CHARGES OF PREFERRED STOCK DEPOSITARY
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the deposit agreement. In addition, we will pay the
fees and expenses of the preferred stock depositary in connection with the
performance of its duties under the deposit agreement. However, holders of
depositary receipts will pay the fees and expenses of the preferred stock
depositary for any duties requested by the holders to be performed that are
outside of those expressly provided for in the deposit agreement.
RESIGNATION AND REMOVAL OF DEPOSITARY
The preferred stock depositary may resign at any time by delivering to us
notice of its election to do so, and we may at any time remove the preferred
stock depositary. Any resignation or removal of the acting preferred stock
depository will take effect upon our appointment of a successor preferred stock
depositary. We must appoint a successor preferred stock depositary within 60
days after delivery of the notice of resignation or removal.
MISCELLANEOUS
The preferred stock depositary will forward to holders of depositary
receipts any reports and communications the preferred stock depositary receives
from us relating to the preferred stock.
We will not be liable, nor will the preferred stock depositary be liable,
if we are prevented from or delayed in, by law or any circumstances beyond our
control, performing our obligations under the deposit agreement. Our obligations
and the obligations of the preferred stock depositary under the deposit
agreement will be limited to performing our duties in good faith and without
negligence or willful misconduct. We will not be obligated, nor will the
preferred stock depositary be obligated, to prosecute or defend any legal
proceeding relating to any depositary receipts, depositary shares or shares of
preferred stock represented by depositary shares unless satisfactory indemnity
is furnished to us. We may rely, and the preferred stock depositary may rely, on
written advice of counsel or accountants, or information provided by persons
presenting shares of preferred stock represented by depositary shares for
deposit, holders of depositary receipts or other persons we believe in good
faith to be competent to give this information, and on documents we believe in
good faith to be genuine and signed by a proper party. In the event the
preferred stock depositary receives conflicting claims, requests or instructions
from holders of depositary receipts, on the one hand, and us, on the other hand,
the preferred stock depositary will be entitled to act on these claims, requests
or instructions received from us.
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DESCRIPTION OF SENIOR DEBT SECURITIES AND
SUBORDINATED DEBT SECURITIES
GENERAL
The debt securities will be our general unsecured obligation and will be
issued as either senior notes or debentures, which are referred to throughout as
the senior debt securities, or subordinated notes or debentures, which are
referred to throughout as the subordinated debt securities, or both. We would
issue our debt securities under one or more separate indentures, in each case
between us and the trustee, and in substantially the form that has been filed as
an exhibit to the registration statement of which this prospectus is a part, but
subject to any future amendments or supplements. We will issue senior debt
securities under a senior indenture and subordinated debt securities under a
subordinated indenture. We refer to the senior indenture and the subordinated
indenture below singularly as the indenture or together as the indentures. We
refer to the senior trustee and the subordinated trustee below individually as a
trustee and together as the trustees.
Set forth below is a summary of all of the material terms of the
indentures. The particular terms of the debt securities we might offer and the
extent to which these general provisions apply will be described in a prospectus
supplement relating to the offered debt securities. We have included the forms
of the indentures under which the offered debt securities will be issued as
exhibits to the registration statement, and you should read the indentures for
provisions that may be important to you.
Unless we provide otherwise in any prospectus supplement, the indentures
do not limit the aggregate principal amount of debt securities that we can
issue. We may issue debt securities in one or more series and in differing
aggregate principal amounts. We may issue debt securities in any currency or
currency unit that we may designate. We may issue debt securities in registered
or global form. The rights of holders of debt securities will be limited to our
assets.
The senior debt securities will rank equally with all of our other
unsubordinated debt, but will be effectively subordinate to the rights of
holders of secured unsubordinated debt to the extent of the value of the
collateral security securing such secured debt. The subordinated debt securities
will have a junior position to all of our senior debt, if any. As of June 30,
2002, we had $230 million in indebtedness outstanding under our $450 million
senior secured bank loan facility. In addition, as of such date, we have
existing guarantees for certain obligations of our subsidiaries in the amount of
approximately $181.2 million. Our obligations under such guarantees rank pari
passu with our senior secured bank loan facility. Any amounts borrowed under our
senior secured bank loan facility would be senior to the subordinated debt
securities and effectively senior to the senior debt. Other than as may be
described in a prospectus supplement, neither indenture will contain any
covenant or provision that affords debt holders protection in the event that we
enter into a highly leveraged transaction in which we borrow a substantial
amount of the monetary requirements for such transaction. These same holders
would not have any right to require us to repurchase the debt securities, in the
event that the credit rating of any debt securities declined as a result of our
involvement in a takeover, recapitalization, similar restructuring or otherwise.
A prospectus supplement will include the terms of any series of debt
securities that we offer. These terms will include some or all of the following:
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o the title and type of debt securities being offered;
o the total principal amount of debt securities being offered;
o whether the debt securities will be issued in one or more forms of
global securities and whether such global securities are to be
issuable in temporary global form or permanent global form;
o the dates on which the principal of, and premium, if any, on the
offered debt securities is payable;
o the interest rate or the method of determining the interest rate;
o the date from which interest will accrue;
o whether and under what circumstances additional amounts with respect
to the debt securities is payable;
o the interest payment dates;
o the place where the principal, premium and interest is payable;
o any optional redemption periods;
o any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem the debt securities;
o whether the debt securities will be convertible into shares of
common stock or exchangeable for other of our securities (which
would be required to be registered under the securities act of 1933)
and if so, the terms of conversion or exchange;
o the currency or currencies, if other than U.S. dollars, in which
principal payments or other payments will be payable;
o events causing acceleration of maturity;
o any provisions granting special rights to holders when a specified
event occurs;
o any changes to or additional events of default or covenants;
o any material United States federal income tax consequences and any
special tax implications of ownership and disposition of the debt
securities;
o whether the debt securities will be guaranteed and , if so, the
terms of such guarantee and the circumstances under which the
guarantors may be released; and
o any other terms of the debt securities.
The debt securities will be issued in registered form. There will be no
service charge for any registration, transfer or exchange of debt securities. We
may, however, require payment of an amount that would be sufficient to cover any
tax or other governmental charge we may incur. We may sell debt securities at a
discount or premium (which may be substantial) below or above their stated
principal amount, either bearing no interest or bearing interest at a rate that
may be below the market rate at the time we issue the debt securities.
We will describe any material United States federal income tax
consequences and other special considerations applicable to discounted debt
securities in the prospectus supplement. If we sell any of the offered debt
securities for any foreign currency or currency unit, or if any of the
principal, premium or interest, if any, is payable on any of the offered debt
securities, the restrictions, elections, tax consequences, specific terms and
other information pertaining to the offered debt securities and such foreign
currency or foreign currency unit will be set forth in the prospectus supplement
describing such offered debt securities.
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DENOMINATIONS
We will issue the debt securities in registered form of $1,000 each or
integral multiples thereof.
SUBORDINATION
Under the subordinated indenture, payment of the principal, interest and
any premium on the subordinated debt securities generally will be subordinated
and junior in right of payment to the prior payment in full of all senior
indebtedness. The subordinated indenture defines senior indebtedness to include
all notes or other unsecured evidences of indebtedness, including our guarantees
for money borrowed by us, not expressed to be subordinate or junior in right of
payment to any other of our indebtedness and all extensions of such
indebtedness. The subordinated indenture provides that no payment of principal,
interest and any premium on the subordinated debt securities may be made in the
event:
o of any insolvency, bankruptcy or similar proceeding involving us or
our property;
o we fail to pay the principal, interest, any premium or any other
amounts on any senior indebtedness when due, unless and until the
payment default has been cured or waived or shall no longer exist;
or
o of a default (other than a payment default with respect to the
senior indebtedness) that imposes a payment blockage on the
subordinated debt securities for a maximum of 179 days at any one
time, unless the event of default has been cured or waived or shall
no longer exist.
In the event of any voluntary or involuntary bankruptcy, insolvency,
reorganization or other similar proceeding relating to us, all of our
obligations to holders of senior indebtedness will be entitled to be paid in
full before any payment shall be made on account of the principal of, or
premium, if any, or interest, if any, on the subordinated debt securities of any
series. In the event of any such bankruptcy, insolvency, reorganization or other
similar proceeding, holders of the subordinated debt securities of any series,
together with holders of indebtedness ranking equally with the subordinated debt
securities, shall be entitled, ratably, to be paid amounts that are due to them,
but only from assets remaining after we pay in full the amounts that we owe on
our senior indebtedness. We will make these payments before we make any payment
or other distribution on account of any indebtedness that ranks junior to the
subordinated debt securities. If we are in default on any of our senior
indebtedness or if any such default would occur as a result of certain payments,
then we may not make any payments on the subordinated debt securities or effect
any exchange or retirement of any of the subordinated debt securities unless and
until such default has been cured or waived or otherwise ceases to exist.
No provision contained in the subordinated indenture or the subordinated
debt securities affects our absolute and unconditional obligation to pay when
due, principal of, premium, if any, and interest on the subordinated debt
securities and neither the subordinated indenture nor the subordinated debt
securities prevents the occurrence of any default or event of default under the
subordinated indenture or limits the rights of the subordinated trustee or any
holder of subordinated debt securities, subject to the three preceding
paragraphs, to pursue any other rights or remedies with respect to the
subordinated debt securities. As a result of these subordination provisions, in
the event of the liquidation, bankruptcy, reorganization, insolvency,
receivership or similar proceeding or an assignment for the benefit of our
24
creditors or a marshaling of our assets or liabilities, holders of subordinated
debt securities may receive ratably less than other creditors.
If this prospectus is being delivered in connection with a series of
subordinated debt securities, the accompanying prospectus supplement or the
information incorporated herein by reference will set forth the approximate
amount of senior indebtedness outstanding as of the end of the most recent
fiscal quarter.
EVENTS OF DEFAULT; REMEDIES
The following are defined as events of default under each indenture:
o our failure to pay principal or any premium on any debt security
when due;
o our failure to pay any interest on any debt security when due,
continued for 30 consecutive days;
o our failure to deposit any mandatory sinking fund payment when due,
continued for 30 days;
o our failure to perform any other covenant or warranty in the
indenture that continues for 90 days after written notice;
o certain events of our bankruptcy, insolvency or reorganization; and
o any other event of default as may be specified with respect to debt
securities of such series.
An event of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities. The trustee may withhold notice to the holders of debt securities of
any default (except in the payment of principal or interest) if the trustee
considers withholding of notice to be in the best interest of the holders. If an
event of default occurs, either the trustee or the holders of at least 25% of
the principal amount of the outstanding debt securities may declare the
principal amount of the debt securities of the applicable series to be due and
payable immediately. If this happens, subject to certain conditions, the holders
of a majority of the principal amount of the outstanding debt securities of such
series can void the declaration. These conditions include the requirement that
we have paid or deposited with the trustee a sum sufficient to pay all overdue
principal and interest payments on the series of debt securities subject to the
default. If an event of default occurs due to certain events of bankruptcy,
insolvency or reorganization, the principal amount of the outstanding debt
securities of all series will become immediately due and payable without any
declaration or other act on the part of either trustee or any holder.
Depending on the terms of our indebtedness, an event of default under an
indenture may cause a cross default on our other indebtedness. Other than its
duties in the case of default, a trustee is not obligated to exercise any of its
rights or powers under any indenture at the request, order or direction of any
holder or group of holders unless the holders offer the trustee reasonable
indemnity. If the holders provide reasonable indemnification, the holders of a
majority of the principal amount of any series of debt securities may direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee, or exercising any power conferred upon the trustee for any series
of debt securities. The holders of a majority of the principal amount
outstanding of any series of debt securities may, on behalf of all holders of
such series, waive any past default under the indenture, except in the case of a
payment of principal or interest default. We are required to provide to each
trustee an annual
25
statement reflecting the performance of our obligations under the indenture and
any statement of default, if applicable.
COVENANTS
Under the indentures, we will:
o pay the principal, interest and any premium on the debt securities
when due;
o maintain a place of payment;
o deliver a report to the trustee after the end of each fiscal year
reviewing our obligations under the indentures; and
o deposit sufficient funds with any payment agent on or before the due
date for any principal, interest or any premium.
MODIFICATION OR AMENDMENT OF INDENTURES
Under each indenture, all rights and obligations and the rights of the
holders may be modified or amended with the consent of the holders of a majority
in aggregate principal amount of the outstanding debt securities of all series
affected by the modification or amendment acting as one class. No modification
or amendment may, however, be made without the consent of the holders of any
debt securities if the following provisions are affected:
o change in the stated maturity date of the principal payment or
installment of any principal payment;
o reduction in the principal amount or premium on, or rate of interest
on any of the debt securities;
o reduction in the percentage required for modifications or amendment
to be effective against any holder of any debt securities;
o change in place of payment where any debt security is payable; or
o modification of the subordination provisions in any way adverse to
the security holders.
An amendment that changes or eliminates any covenant or other provision of
either indenture that has expressly been included solely for the benefit of one
or more particular series of debt securities, or that modifies the rights of the
holder of debt securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under such indenture of the
holders of debt securities of any other series.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each indenture generally permits a consolidation or merger between us and
another corporation. Each indenture also permits us to sell all or substantially
all of our property and assets. If this happens, the surviving or acquiring
company will assume all of our responsibilities and liabilities under the
indentures, including the payment of all amounts due on the debt securities and
the performance of the covenants in the indentures. We will only consolidate or
merge with or into any other company or sell all, or substantially all, of our
assets according to the terms and conditions of the indentures. The surviving
26
or acquiring company will be substituted for us in the indentures with the same
effect as if it had been an original party to the indenture. Thereafter, the
successor company may exercise our rights and powers under any indenture, in our
name or in its own name. Any act or proceeding our board of directors or any of
our officers are required or permitted to do may be done by the board of
directors or officers of the successor company. If we sell all or substantially
all of our assets, we shall be released from all our liabilities and obligations
under any indenture and under the debt securities.
DISCHARGE AND DEFEASANCE
We will be discharged from our obligations under the debt securities of
any series at any time if we irrevocably deposit with the trustee enough cash or
U.S. government securities to pay the principal, interest, any premium and any
other sums due through the stated maturity date or redemption date of the debt
securities of the series. In this event, we will be deemed to have paid and
discharged the entire indebtedness on all outstanding debt securities of the
series. Accordingly, our obligations under the applicable indenture and the debt
securities of such series to pay any principal, premium, or interest, if any,
shall cease, terminate and be completely discharged. The holders of any debt
securities shall then only be entitled to payment out of the money or U.S.
government securities deposited with the trustee and such holders of debt
securities of such series will not be entitled to the benefits of the indenture
except as relate to the registration, transfer and exchange of debt securities
and the replacement of lost, stolen or mutilated debt securities.
PAYMENT AND PAYING AGENTS
We will pay the principal, interest and premium on fully registered
securities at designated places. We will pay by check mailed to the person in
whose name the debt securities are registered on the day specified in the
indentures or any prospectus supplement. We will make debt securities payments
in other forms at a place we designate and specify in a prospectus supplement.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Fully registered debt securities may be transferred or exchanged at the
corporate trust office of the trustee or at any other office or agency we
maintain for such purposes without the payment of any service charge except for
any tax or governmental charge. The registered securities must be duly endorsed
or accompanied by a written instrument of transfer, if required by us or the
security registrar. We will describe any procedures for the exchange of debt
securities for other debt securities of the same series in the prospectus
supplement for that offering.
GLOBAL SECURITIES
We may issue the debt securities of a series in whole or in part in the
form of one or more global certificates that will be deposited with a depositary
we identify in a prospectus supplement. We may issue global securities in
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or part for the individual debt securities it represents,
the depositary or its nominee may not transfer a global security except as a
whole. The depositary for a global security and its nominee may only transfer
the global security between themselves or their successors. We will make
principal,
27
premium and interest payments on global securities to the depositary or the
nominee it designates as the registered owner for such global securities. The
depositary or its nominee will be responsible for making payments to you and
other holders of interests in the global securities. We and the paying agents
will treat the persons in whose names the global securities are registered as
the owners of such global securities for all purposes. Neither we nor the paying
agents have any direct responsibility or liability for the payment of principal,
premium or interest to owners of beneficial interests in the global securities,
and such liability is that of the depositary or its variance. As a result the
beneficial interest holder may have to rely on the depositary to recover in the
event of default.
DESCRIPTION OF WARRANTS
We may issue warrants, including warrants to purchase common stock or debt
securities registered pursuant to this registration statement and described in
this prospectus. We may issue warrants independently or together with other
securities that may be attached to or separate from the warrants. We will issue
each series of warrants under a separate warrant agreement that will be entered
into between us and a bank or trust company, as warrant agent, and will be
described in the prospectus supplement relating to the particular issue of
warrants. The warrant agent will act solely as our agent in connection with the
warrant of such series and will not assume any obligation or relationship of
agency for or with holders or beneficial owners of warrants. The following
describes certain general terms and provisions of the warrants we may offer. We
will set forth further terms of the warrants and the applicable warrant
agreement in the applicable prospectus supplement.
COMMON STOCK WARRANTS
The applicable prospectus supplement will describe the terms of any
warrants exchangeable for common stock, including:
o the title of such warrants;
o the offering price of such warrants;
o the aggregate number of such warrants;
o the designation and terms of the common stock issued by us
purchasable upon exercise of such warrants;
o if applicable, the designation and terms of the securities with
which such warrants are issued and the number of such warrants
issued with each such security;
o if applicable, the date from and after which such warrants and any
securities issued therewith will be separately transferable;
o the number of shares of common stock issued by us purchasable upon
exercise of the warrants and the price at which such shares may be
purchased upon exercise;
o the date on which the right to exercise such warrants shall commence
and the date on which such right shall expire;
o if applicable, the minimum or maximum amount of such warrants that
may be exercised at any one time;
o the currency, currencies or currency units in which the offering
price, if any, and the exercise price are payable;
28
o if applicable, a discussion of certain United States federal income
tax considerations; and
o the antidilution provisions of the warrants, if any.
DEBT WARRANTS
The applicable prospectus supplement will describe the terms of any debt
warrants, including the following:
o the title of such debt warrants;
o the offering price for such debt warrants;
o the aggregate number of such debt warrants;
o the designation and terms of the debt securities purchasable upon
exercise of such debt warrants;
o if applicable, the designation and terms of the securities with
which such debt warrants are issued and the number of such debt
warrants issued with each security;
o if applicable, the date from and after which such debt warrants and
any securities issued therewith will be separately transferable;
o the principal amount of debt securities purchasable upon exercise of
a debt warrant and the price at which such principal amount of debt
securities may be purchased upon exercise;
o the date on which the right to exercise such debt warrants shall
commence and the date on which such right shall expire;
o if applicable, the minimum or maximum amount of such debt warrants
that may be exercised at any one time;
o whether the debt warrants represented by the debt warrant
certificates or debt securities that may be issued upon exercise of
the debt warrants will be issued in registered form;
o information with respect to book-entry procedures, if any;
o the currency, currencies or currency units in which the offering
price, if any, and the exercise price are payable;
o if applicable, a discussion of certain United States federal income
tax considerations;
o the antidilution provisions of such debt warrants, if any;
o the redemption or call provisions, if any, applicable to such debt
warrant; and
o any additional terms of the debt warrants, including terms,
procedures and limitations relating to the exchange and exercise of
such debt warrants.
EXERCISE OF WARRANTS
Each warrant will entitle the holder of the warrant to purchase for cash
at the exercise price provided in the applicable prospectus supplement the
principal amount of debt securities or shares of common stock being offered.
Holders may exercise warrants at any time up to the close of business on the
expiration date provided in the applicable prospectus supplement. After the
close of business on the expiration date, unexercised warrants are void.
Holders may exercise warrants as described in the prospectus supplement
relating to the warrants being offered. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the prospectus
29
supplement, we will, as soon as practicable, forward the debt securities or
shares of common stock purchasable upon the exercise of the warrant. If less
than all of the warrants represented by the warrant certificate are exercised,
we will issue a new warrant certificate for the remaining warrants.
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PLAN OF DISTRIBUTION
We may sell the securities:
o to or through underwriters or dealers;
o through agents;
o directly to purchasers, including in connection with any potential
settlement of on-going litigation;
o in the over-the-counter market;
o in privately negotiated transactions; or
o through a combination of such methods.
We will describe in a prospectus supplement, the particular terms of the
offering of the securities, including the following:
o the names of any underwriters, dealers, agents or investors who
purchase the securities;
o the purchase price and the proceeds we will receive from the sale;
o any underwriting discounts and other items constituting
underwriters', dealers' or agents' compensation;
o any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers;
o any securities exchanges on which the securities of the series may
be listed;
o the material terms of the distribution, including the amount sold
and the consideration paid; and
o any other information we think is important.
If we use underwriters in the sale, such underwriters will acquire the
securities for their own account. The underwriters may resell the securities in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
The securities may be either offered to the public through underwriting
syndicates represented by managing underwriters or by underwriters without a
syndicate. The obligations of the underwriters to purchase the securities will
be subject to certain conditions. The underwriters will be obligated to purchase
all the securities of the series offered if any of the securities are purchased.
The underwriters may change from time to time any initial public offering price
and any discounts or concessions allowed or re-allowed or paid to dealers.
We may sell offered securities through agents designated by us. Any agent
involved in the offer or sale of the securities for which this prospectus is
delivered will be named, and any commissions payable by us to that agent will be
set forth, in the prospectus supplement. Unless indicated in the prospectus
supplement, the agents have agreed to use their reasonable best efforts to
solicit purchases for the period of their appointment.
We also may sell offered securities directly. In this case, no
underwriters or agents would be involved.
31
Underwriters, dealers and agents that participate in the distribution of
the offered securities may be underwriters as defined in the Securities Act, and
any discounts or commissions received by them from us and any profit on the
resale of the offered securities by them may be treated as underwriting
discounts and commissions under the Securities Act. We will identify any
underwriters or agents, and describe their compensation, in a prospectus
supplement.
Certain of any such underwriters and agents, including their associates,
may be customers of, engage in transactions with and perform services for us and
our subsidiaries in the ordinary course of business. One or more of our
affiliates may from time to time act as an agent or underwriter in connection
with the sale of the securities to the extent permitted by applicable law. The
participation of any such affiliate in the offer and sale of the securities will
comply with Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. regarding the offer and sale of securities of an
affiliate.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make. Underwriters, dealers
and agents may engage in transactions with, or perform services for, us or our
subsidiaries in the ordinary course of their businesses.
We may authorize agents or underwriters to solicit offers by certain types
of institutions to purchase securities from us at the public offering price set
forth in the prospectus supplement pursuant to delayed delivery contracts. These
contracts will provide for payment and delivery on a specified date in the
future. The conditions to these contracts and the commissions payable for
solicitation of such contracts will be set forth in the applicable prospectus
supplement.
In order to facilitate the offering of the securities, any underwriters or
agents, as the case may be, involved in the offering of such securities may
engage in transactions that stabilize, maintain or otherwise affect the price of
such securities or any other securities the prices of which may be used to
determine payments on such securities. Specifically, the underwriters or agents,
as the case may be, may overallot in connection with the offering, creating a
short position in such securities for their own account. In addition, to cover
overallotments or to stabilize the price of such securities or any such other
securities, the underwriters or agents, as the case may be, may bid for, and
purchase, such securities or any such other securities in the open market.
Finally, in any offering of such securities through a syndicate of underwriters,
the underwriting syndicate may reclaim selling concessions allotted to an
underwriter or a dealer for distributing such securities in the offering if the
syndicate repurchases previously distributed securities in transactions to cover
syndicate short positions, in stabilization transaction or otherwise. Any of
these activities may stabilize or maintain the market price of the securities
above independent market levels. The underwriters or agents, as the case may be,
are not required to engage in these activities, and may end any of these
activities at any time.
Some or all of the securities may be new issues of securities with no
established trading market. Any underwriter to which securities are sold by us
for public offering and sale may make a market in such securities, but will not
be obligated to do so, and may discontinue any market making at any time
32
without notice. We cannot and will not give any assurances as to the liquidity
of the trading market for any of our securities.
LEGAL MATTERS
The validity of the issuance of the securities offered in this prospectus
will be passed upon for us by our lawyers, Haynes and Boone, LLP, Dallas, Texas.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedules included in our Form 10-K for the nine-month
period ended December 31, 2001, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements and schedules are incorporated by reference
in reliance on Ernst & Young LLP's report, given on their authority as experts
in accounting and auditing.
The financial statements of Thrall Car Manufacturing Company incorporated
by reference in this prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto and are incorporated in this prospectus in reliance upon their authority
as experts in accounting and auditing. Arthur Andersen LLP has not consented to
the inclusion of their reports in this prospectus, and we have dispensed with
the requirement to file their consent in reliance upon Rule 437a of the
Securities Act of 1933. Because Arthur Andersen LLP has not consented to the
inclusion of their reports in this prospectus, you will not be able to recover
against Arthur Andersen LLP under Section 11 of the Securities Act of 1933 for
any untrue statements of a material fact contained in the financial statements
audited by Arthur Andersen LLP or any omissions to state a material fact
required to be stated therein.
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================================================================================
July 29, 2002
[TRINITY INDUSTRIES, INC. LOGO]
TRINITY INDUSTRIES, INC.
$150,000,000 AGGREGATE AMOUNT OF
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
COMMON STOCK WARRANTS
DEBT WARRANTS
DEPOSITARY SHARES
---------------
PROSPECTUS
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We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor any
sale made hereunder after the date of this prospectus shall create an
implication that the information contained herein or the affairs of Trinity
Industries, Inc. have not changed since the date hereof.
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