CSX CORPORATION (NASDAQ:CSX) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
As previously announced, at CSX Corporations (the Company) annual
meeting of shareholders, held on June5, 2017, the Companys
shareholders overwhelmingly approved, on an advisory basis, the
Company undertaking certain reimbursement arrangements (as
described below) with MR Argent Advisor LLC (Mantle Ridge) and E.
Hunter Harrison, the Companys President and Chief Executive
Officer.
After considering the shareholders advisory vote and following
further discussions, the Board of Directors authorized the
execution of a letter agreement (the Reimbursement Letter) with
Mr.Harrison, which was executed by the Company and Mr.Harrison on
June16, 2017. to the Reimbursement Letter, the Company:
| (1) |
acknowledged its reimbursement payment to Mantle Ridge of $55million concurrently with the execution of the Reimbursement Letter for funds previously paid to Mr.Harrison by Mantle Ridge; |
| (2) |
assumed Mantle Ridges obligation to pay Mr.Harrison a lump sum cash amount of $29million in respect of other forfeited compensation from Canadian Pacific Railway Limited (CP) prior to March15, 2018, subject to applicable deductions and withholdings; and |
| (3) |
assumed Mantle Ridges tax indemnification obligations to Mr.Harrison, which enable him to remain in the same after-tax position as if he had not forfeited such compensation and benefits earned from CP and had not been reimbursed for them. |
The foregoing description of the Reimbursement Letter does not
purport to be complete and is qualified in its entirety by
reference to the full text of the Reimbursement Letter which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and is
incorporated by reference herein.
In making this decision, the Board of Directors considered many
factors, including, without limitation, (i)Mr.Harrisons prior
accomplishments and past experiences generating sustainable value
and ensuring effective successions at CP and Canadian National
Railway; (ii)the views of the Companys shareholders expressed
through the advisory vote and in the period leading up to the
advisory vote; (iii)the risks associated with Mr.Harrisons age
and physical health; and (iv)the operating improvements
undertaken by the Company since Mr.Harrisons appointment as Chief
Executive Officer and the implementation of his business
strategies, including Precision Scheduled Railroading.
The pace of implementing Mr.Harrisons business strategies,
including Precision Scheduled Railroading, depends on numerous
factors, including his continued availability and
service.Continued availability and service can never be
guaranteed for any individual and is a particular risk in the
case of Mr.Harrison, who is 72 years old and has experienced
medical issues at various times, including a respiratory
condition that requires him to use supplemental oxygen.An
extended or permanent loss of the services of Mr.Harrison, due to
death, disability or any other reason, could adversely disrupt
the pace of implementing the companys Precision Scheduled
Railroading, or otherwise adversely affect the Company or the
market price of the Companys securities.
Item9.01. Financial Statements and Exhibits.
(d) Exhibits
| 10.1 |
Reimbursement Letter, dated as of June16, 2017, between CSX Corporation and E. Hunter Harrison. |
About CSX CORPORATION (NASDAQ:CSX)
CSX Corporation, together with its subsidiaries, is a transportation company. The Company provides rail-based transportation services, including rail service and the transport of intermodal containers and trailers. The Company serves three lines of business, such as merchandise business, coal business and intermodal business. The Company’s merchandise business consists of shipments in diverse markets, such as agricultural products, phosphates and fertilizers, food and consumer, chemicals, automotive, metals, forest products, minerals, and waste and equipment. The Company’s coal business transports domestic coal, coke and iron ore to electricity-generating power plants, steel manufacturers and industrial plants, as well as exports coal to deep-water port facilities. The Company’s intermodal business combines the rail transportation with the short-haul flexibility of trucks and offers long-haul trucking.