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 OfficersItem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February6, 2018, the Compensation Committee of CSX Corporation (“CSX” or the “Company”) approved and adopted a new long-term incentive program, including the CSX 2018-2020 Long-Term Incentive Plan (the “2018-2020 Plan”), that seeks to motivate and reward certain employees. The program is comprised of three components—Performance Units, Restricted Stock Units and Stock Options. to the 2018-2020 Plan, the Company’s chief executive officer and executive vice presidents received awards comprised of 60% Performance Units and 40% Stock Options. No Restricted Stock Units were awarded to the Company’s chief executive officer or executive vice presidents to the 2018-2020 Plan.
to the 2018-2020 Plan, Performance Units have potential payouts ranging from zero to 200% of the target awards depending on Company performance against predetermined goals. Performance Units will be paid, if earned, in the form of shares of CSX common stock in early 2021, after the conclusion of the three-year performance cycle. Payouts for certain executives are subject to formulaic upward or downward adjustments of up to 25% based upon the Company’s total shareholder return relative to specified comparator groups.
Payouts of the Performance Units will be based on the achievement of goals related to Operating Ratio (“OR”) and Free Cash Flow (“FCF”), with each measure excluding nonrecurring items as disclosed in the Company’s financial statements. For the 2018-2020 Plan, OR will be determined using the Company’s performance in 2020 and FCF will be measured from the beginning of 2018 through the end of 2020. OR and FCF will each comprise 50% of the total payout opportunity for participants and will be measured independently of the other. OR is defined as operating expense divided by operating revenue. FCF is defined as net cash provided by operating activities minus property additions and adjusted for certain other investing activities.
The following table sets forth the number of Performance Units and Stock Options awarded to the Company’s President and Chief Executive Officer, Executive Vice President and Chief Financial Officer, Executive Vice President of Operations, Executive Vice President and Chief Administrative Officer and Executive Vice President and Chief Legal Officer.
|
Executive |
PerformanceUnits | StockOptions |
|
James M. Foote |
98,666 | 242,229 |
|
Frank A. Lonegro |
21,926 | 53,829 |
|
Edmond L. Harris |
21,926 | 53,829 |
|
Mark K. Wallace |
21,926 | 53,829 |
|
Nathan D. Goldman |
21,926 | 53,829 |
Consistent with past practices, the number of Performance Units was based on the average closing price of CSX common stock for November 2017, December 2017 and January 2018 of $54.73. The number of Stock Options was calculated based on the Black-Scholes value of $14.86 which, consistent with past practices, was determined using the average closing price of CSX common stock for November 2017, December 2017 and January 2018 of $54.73. Stock Options will vest on February6, 2021, and unexercised Stock Options will expire on February6, 2028. The exercise price of each Stock Option is based on the closing price of CSX common stock on the date of grant, which was February6, 2018.
The foregoing descriptions of the 2018-2020 Plan and the awards made to the new long-term incentive program are qualified in their entirety by reference to the 2018-2020 Plan and the form of Stock Option Agreement, which are attached to this Current Report on Form 8-K as Exhibits 10.1 and 10.2, and incorporated herein by reference.
Item 5.02. Exhibits.
(d) The following exhibit is being filed as part of this report:
| 10.1 | CSX 2018-2020 Long-Term Incentive Plan |
| 10.2 | Form of Stock Option Agreement |
CSX CORP ExhibitEX-10.1 2 d532941dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 CSX Long-Term Incentive Plan: 2018-2020 Cycle (President and CEO and Executive Vice Presidents) Purpose and Objective The CSX Long-Term Incentive Plan (LTIP or the Plan) is the vehicle under which CSX Corporation (CSX or Company) issues Performance Grants,…To view the full exhibit click here
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.