Blog: CSX CORP : Change in Directors or Principal Officers, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 5.02 Departure of Directors or Certain Officers; Election of Directors;

           Appointment of Certain Officers; Compensatory Arrangements of Certain
           Officers.



Chief Executive Officer Transition

On September 15, 2022, CSX Corporation (the “Company”) announced that, as part
of a planned succession process, its Board of Directors appointed Joseph R.
Hinrichs as the Company’s new President and Chief Executive Officer, and as a
member of the Board of Directors, effective September 26, 2022.

Mr. Hinrichs succeeds James M. Foote, who announced that he plans to retire as
President and Chief Executive Officer, as well as from the Board of Directors,
effective September 26, 2022. Mr. Foote will continue to work with the Company
through March 31, 2023 as an advisor to facilitate a seamless leadership
transition. The terms of Mr. Foote’s transition agreement with the Company are
described below.

Mr. Hinrichs, 55, has more than 30 years’ experience in the global automotive,
manufacturing and materials planning and logistics sectors, previously serving
as President of Ford Motor Company’s global automotive business, from 2019 to
2020. In that role, Mr. Hinrichs led the company’s $160 billion automotive
operations, and he previously held other positions at Ford, including President
of Global Operations (from 2017 to 2019), President of the Americas (from 2012
to 2017) and President of Asia Pacific and Africa (from 2009 to 2012).

Mr. Hinrichs currently serves as a venture partner at First Move Capital and a
strategic advisor at microDrive. He is the chairman of Exide Technologies and on
the Automotive Advisory Board of Luminar Technologies. He previously served as a
senior advisor at Boyden California and an operating advisor at Assembly
Ventures, as well as a director at Ascend Wellness Holdings, Inc., Rivian
Automotive, Inc. and Ford Motor Credit Company.



Hinrichs Employment Letter


In connection with his appointment as CEO and President, the Company and Mr.
Hinrichs have entered into an employment letter, dated August 29, 2022 (the
“Employment Letter”), under which Mr. Hinrichs will receive an initial annual
base salary of $1,400,000 and will have an initial annual target bonus
opportunity under the Company’s Management Incentive Compensation Plan (“MICP”)
of 150% of base salary. In addition, Mr. Hinrichs will receive a sign-on equity
award (the “Sign-On Equity Award”) under the Company’s 2019 Stock and Incentive
Award Plan having a grant date target value of $7,000,000, comprised (i) 50% of
performance share units (“PSUs”) that will be eligible to be earned and vest
based on the achievement of performance criteria applicable to the Company’s
2022-2024 long term incentive program and will vest and become payable on the
same schedule as applies to other participants in the 2022-2024 long term
incentive program and (ii) 50% of restricted stock units (“RSUs”) that will
cliff vest on the third anniversary of September 26, 2022. Beginning in 2023,
Mr. Hinrichs will be eligible to receive an annual long term incentive award (an
“LTIP Award”) under the Company’s long term incentive plans on a substantially
similar basis as other similarly situated executives of the Company, with the
initial grant to be made in 2023 having a grant date target value of
$10,000,000. The Company will also provide Mr. Hinrichs with temporary corporate
housing in Jacksonville, Florida for an initial 120-day period following his
start date, and will cover up to $175,000 of the aggregate incremental cost to
the Company for his personal flights taken on the corporate aircraft.

In the event of a termination of Mr. Hinrichs’ employment by the Company without
“cause” or if he resigns for “good reason” (each as defined in the Employment
Letter), in each case prior to his achievement of “retirement age” (as defined
below), he will receive the following severance benefits, subject to his
execution and non-revocation of a general waiver and release of claims and
compliance with post-employment restrictive covenants:

· Pro rata service vesting of the Sign-On Equity Award and any outstanding LTIP

   Awards based on the number of months employed in the vesting or performance
   period during which the termination occurs, with any awards subject to
   performance criteria to be earned based on actual performance at the end of the
   applicable performance period (the "Pro-Rata Vesting");








· A lump sum cash payment, paid within 60 days of the termination date, equal to

two times his then-current base salary and target annual bonus opportunity; and

· A pro-rata bonus for the year of termination based on the number of days

employed during the year in which the termination occurs and actual

performance, paid at the same time bonuses are paid to other senior executives.

If Mr. Hinrich’s employment terminates due to his death or a disability
rendering him physically or mentally unable to perform his duties, he will
receive, subject to his execution and non-revocation of a general waiver and
release of claims and compliance with post-employment restrictive covenants, the
Pro-Rata Vesting.

In the event that Mr. Hinrichs’ employment terminates after he reaches
“retirement age” (defined to mean his attainment of age 60 plus at least 5 years
of continued service with the Company) either (i) by the Company without cause
or by him for good reason or (ii) by him due to his voluntary retirement by
providing the Company with at least 180 days’ notice of his plans to retire, Mr.
Hinrichs will receive, in lieu of any of the severance benefits described above
and subject to his execution and non-revocation of a general waiver and release
of claims and compliance with post-employment restrictive covenants, continued
vesting of any outstanding portion of the Sign-On Equity Award and any other
outstanding LTIP Awards, subject to any relevant performance criteria.

Mr. Hinrichs has also entered into the Company’s Form of Change of Control
Agreement (the “CIC Agreement”), under which, in the event of a termination of
employment by the Company without cause or by Mr. Hinrichs for good reason in
connection with a “change of control” (as defined in the CIC Agreement) of the
Company, he will receive the following severance benefits, subject to his
execution and non-revocation of a general waiver and release of claims and
compliance with post-employment restrictive covenants:

· A lump sum cash payment, paid within 30 days of the termination date, equal to

   (i) three times his then-current base salary and target annual bonus
   opportunity and (ii) 102% of the aggregate employee and employer premiums for
   medical, group life and disability benefits that would have been paid over a
   three-year period following the termination date;


· A pro-rata annual bonus for the year of termination, based on target, based at

the same time bonuses are normally paid; and

· Outplacement services of up to $40,000 for the period commencing on the

   termination date and ending on the last day of the second calendar year
   following the calendar year in which the termination occurs.



Mr. Hinrichs is subject to non-competition and non-solicitation restrictions
under the Company’s form of Non-Compete Agreement (the “Non-Compete Agreement”)
that apply during his employment with the Company and for 18 months following a
termination of employment and confidentiality restrictions that apply during
employment and at all times thereafter.

The foregoing descriptions of the Employment Letter, the CIC Agreement and the
Non-Compete Agreement do not purport to be complete and are subject to, and
qualified in their entirety by, the full text of such agreements to be attached
to the Company’s Quarterly Report on Form 10-Q filed for the quarter ending
September 30, 2022.

There are no arrangements or understandings pursuant to which Mr. Hinrichs was
selected for his position. He has no family relationships with any of the
Company’s directors or executive officers, and he is not a party to, and he does
not have any direct or indirect material interest in, any transaction requiring
disclosure under Item 404(a) of Regulation S-K.









Foote Transition Agreement


The Company has entered into a Transition Agreement with Mr. Foote (the
“Transition Agreement”), under which Mr. Foote will continue in the employment
of the Company from the period September 26, 2022 through December 31, 2022 (the
“Transition Period”), serving as a Special Advisor to the Company to assist Mr.
Hinrichs in the assumption of his duties and to facilitate a smooth transition
of duties. During the Transition Period, Mr. Foote will continue to receive his
current base salary at the annual rate of $1,550,000, be eligible to receive his
annual bonus opportunity in effect for 2022 based on actual performance in
accordance with the terms of the MICP for 2022 and participate in the Company’s
health and welfare plans and programs. After the Transition Period, Mr. Foote
will provide services to the Company as a non-employee consultant for the period
from January 1, 2023 through March 31, 2023 (the “Consulting Period”). During
the Consulting Period, Mr. Foote will receive a consulting fee of $350,000 per
month. Mr. Foote’s outstanding equity incentive awards will be treated in
accordance with the terms of his Employment Letter with the Company, dated
October 25, 2017, as amended on December 22, 2017. Mr. Foote will remain subject
to the restrictive covenants contained in his Non-Compete Agreement with the
Company, dated as of October 25, 2017.

The foregoing description of the Transition Agreement does purport to be
. . .

Item 7.01. Regulation FD Disclosure.

On September 15, 2022, the Company issued a press release announcing the
leadership changes mentioned above. A copy of the press release is attached
hereto as Exhibit 99.1 and is incorporated by reference herein.

In accordance with General Instruction B.2 of Form 8-K, the information
furnished pursuant to this Item 7.01, including Exhibit 99.1 furnished herewith,
shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), nor shall such
information be deemed incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

The following exhibits are filed as a part of this Report.



Exhibit No.                              Description
    99.1       Press Release, dated September 15, 2022 announcing the appointment
             of Joseph R. Hinrichs as President and Chief Executive Officer and
             the retirement of James M. Foote.
    104      Cover Page Interactive Data File (embedded within the Inline XBRL
             document)

© Edgar Online, source Glimpses

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s