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Form 8-K GATX CORP For: Aug 09

August 10, 2018 2:09 PM EDT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 9, 2018

 

 

GATX Corporation

(Exact Name of Registrant as Specified in Charter)

 

 

 

New York   1-2328   36-1124040

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

222 West Adams Street

Chicago, Illinois 60606-5314

(Address of Principal Executive Offices, including Zip Code)

Registrant’s telephone number, including area code: (312) 621-6200

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 10, 2018, GATX Corporation (“GATX”) announced changes in the roles of several of its officers.

Effective August 9, 2018, Robert C. Lyons, Executive Vice President and Chief Financial Offer of GATX, and Thomas A. Ellman, Executive Vice President and President, Rail North America, switched roles, with Mr. Lyons being appointed Executive Vice President and President, Rail North America, and Mr. Ellman being appointed Executive Vice President and Chief Financial Officer.

Mr. Lyons, age 54, had served as Executive Vice President and Chief Financial Officer since June 2012. Previously, Mr. Lyons served as Senior Vice President and Chief Financial Officer from 2007 to June 2012, Vice President and Chief Financial Officer from 2004 to 2007, Vice President, Investor Relations from 2000 to 2004, Project Manager, Corporate Finance from 1998 to 2000, and Director of Investor Relations from 1996 to 1998.

Mr. Ellman, age 50, had served as Executive Vice President and President, Rail North America since June 2013. Previously, Mr. Ellman served as Senior Vice President and Chief Commercial Officer from November 2011 to June 2013, Vice President and Chief Commercial Officer from 2006 to November 2011. Prior to re-joining GATX in 2006, Mr. Ellman served as Senior Vice President and Chief Risk Officer and Senior Vice President, Asset Management of GE Equipment Services, Railcar Services and held various positions at GATX in the GATX Rail Finance Group.

There are no related party transactions involving Mr. Ellman or Mr. Lyons that are reportable under Item 404(a) of Regulation S-K. Additionally, neither Mr. Ellman nor Mr. Lyons has any family relationships with any director or other executive officer of GATX.

To reward and retain these executives in their new roles, Messrs. Lyons and Ellman each received a grant of 4,710 restricted stock units having a grant date value equal to $400,000 pursuant to the form of Restricted Stock Unit Agreement attached hereto as Exhibit 10.1. These restricted stock units will vest 25% on the one year anniversary of the grant and 75% on the third anniversary of the grant, subject to continued employment with GATX. Each also entered into a Confidential Information, Non-Competition, and Non-Solicitation Agreement in the form attached hereto as Exhibit 10.2, pursuant to which he agreed that during employment and for a period equal to the shorter of (a) the 12-months immediately following the termination of his employment for any reason other than a termination by GATX without cause or by the executive for good reason, or (ii) until August 9, 2022 he would not compete with GATX or solicit customers or employees of GATX, in addition to covenanting not to use or disclose confidential information.


Item 7.01.

Regulation FD Disclosure

A copy of the press release announcing these developments about Mr. Lyons and Mr. Ellman, as well as other leadership changes, is furnished as Exhibit 99.1 to this report.

As provided in General Instruction B.2 of Form 8-K, the information in this Item 7.01 and the exhibit furnished pursuant to this item shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01.

Financial Statements and Exhibits

 

10.1    Form of Restricted Stock Unit Agreement for grants under the Amended and Restated 2012 Incentive Award Plan to Robert C. Lyons and Thomas A. Ellman. *
10.2    Form of Confidential Information, Non-Competition, and Non-Solicitation Agreement between the Corporation and Robert  C. Lyons and Thomas A. Ellman. *
99.1    Press Release of GATX Corporation, dated August 10, 2018. **

 

(*)

Compensatory Plans or Arrangements

(**)

Furnished and Not Filed


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  GATX Corporation

Date:  August 10, 2018

    /s/ Deborah A. Golden
   

 

 

Name: Deborah A. Golden

Title:   Executive Vice President, General

Counsel and Corporate Secretary

Exhibit 10.1

GATX CORPORATION

2012 AMENDED AND RESTATED INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT AGREEMENT

In consideration of the provision of services by the Participant, an employee of GATX Corporation (the “Company”) or a subsidiary thereof (such subsidiary and the Company hereinafter collectively “GATX”), and for Participant’s execution and compliance with the terms of the Confidential Information, Non-Competition and Non-Solicitation Agreement entered into contemporaneously herewith (the “Non-Compete Agreement”) and as further incentive for the Participant to advance the interests of the Company, the Company hereby grants to the Participant, on the Grant Date, the number of Restricted Stock Units set forth on the Morgan Stanley Stock Plan Connect website (https://www.stockplanconnect.com) (the “RSUs”) with respect to the same number of Shares of the Company pursuant to the GATX Corporation 2012 Amended and Restated Incentive Award Plan (the “Plan”). Such grant is expressly subject to the terms and conditions of this Restricted Stock Unit Agreement (the “Agreement”) as hereinafter set forth and further subject to the terms and conditions of the Plan, both of which are incorporated herein by reference.

 

1.

Defined Terms. Capitalized terms used in this Agreement are defined in paragraph 10 or elsewhere herein. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Plan.

 

2.

Award. By acceptance of this RSU award on the Morgan Stanley Stock Plan Connect website (https://www.stockplanconnect.com), Participant hereby agrees and consents to the application this Agreement and the Plan to the RSUs. Each RSU entitles the Participant to receive one Share subject to the terms and conditions of this Agreement.

 

3.

Voting Rights and Dividends. Notwithstanding anything to the contrary the Participant shall not have any rights as a shareholder of the Company, including the right to vote, until Shares are actually issued to the Participant in accordance with paragraph 4 of this Agreement.

An account shall be established for the Participant, to which shall be credited dividend equivalents equal to the product of (a) the number of the Participant’s RSUs and (b) the dividend declared on a single share of Common Stock. To the extent the Participant becomes vested in the RSUs, the Participant shall be entitled to a distribution of the dividend equivalents credited to his or her account at the same time as the Shares are issued with respect to the RSUs so vesting. All dividend equivalents paid will be considered ordinary income and will be subject to supplemental withholding rates for income tax purposes including payroll taxes, applicable to such supplemental income.


4.

Vesting, Transfer and Forfeiture of RSUs.

 

  (a)

Except as otherwise provided in subparagraph 4(b) below, the Participant shall vest in the RSUs which have been granted to the Participant (as set forth in paragraph 2 above) on the Vesting Dates shown in the table below.

 

INSTALLMENT

 

VESTING DATE

   
25% of RSUs   First-year anniversary of the Grant Date    
75% of RSUs   Third-year anniversary of the Grant Date    

The RSUs shall be converted and exchanged for an equal number of shares of Stock to be issued to the Participant no later than the tenth (10th) business day following each Vesting Date. Notwithstanding the foregoing, if the Participant’s Date of Termination occurs prior to one of the Vesting Dates, the Participant shall forfeit all unvested RSUs and the Participant shall have no further rights under this Agreement.

 

  (b)

Notwithstanding the provisions of subparagraph 4(a) above, the Participant shall become vested in the RSUs as provided in subparagraphs (i), (ii), (iii) and (iv) below, and shall become owner of an equal number of Shares thereof free of all restrictions otherwise imposed by this Agreement as provided in subparagraph (v) below, as follows:

 

  (i)

If the Participant’s Date of Termination occurs as a result of death, Retirement or Disability, the Participant will be vested on such Date of Termination in a pro rata portion of the RSUs based on his or her length of employment during the Vesting Period. The pro rata portion of the Restricted Stock Units shall equal the product of:

 

  (A)

the number of RSUs granted to the Participant hereunder; and

 

  (B)

a fraction (not greater than one), the numerator of which shall be the number of days the Participant is employed by the Company or its Subsidiaries during the period beginning on the Grant Date and ending on the Date of Termination and the denominator of which shall be the number of days in the Vesting Period.

 

  (ii)

Subject to the provisions of Section 14.2 of the Plan (relating to the adjustment of Shares), if a Change in Control occurs prior to a Participant’s Date of Termination and before one of the Vesting Dates, and within two (2) years after the occurrence of the Change in Control the Participant’s Date of Termination occurs by reason of discharge by the Participant’s employer without Cause or the Participant resigns from employment with the employer for Good Reason, the Participant shall, except as provided in subparagraph (iii), become fully vested in all unvested RSUs granted under this Agreement prior to the Change in Control that are held by the Participant as of the Date of Termination, in accordance with subparagraphs 4(b)(iv) and 4(b)(v).

 

2


  (iii)

With respect to any RSUs that become vested pursuant to subparagraph (ii) in connection with a Change in Control described in Subsection 2.7(e) of the Plan, with respect to a Participant as described therein relating to certain transactions involving a Subsidiary or Business Segment, then such Participant shall be vested in the RSUs as follows:

 

  (A)

If such Date of Termination occurs during the first year of the Vesting Period, the Participant shall be vested in one-third (1/3) of the Participant’s RSUs.

 

  (B)

If such Date of Termination occurs during the second year of the Vesting Period, the Participant shall be vested in two-thirds (2/3) of the Participant’s RSUs.

 

  (C)

If such Date of Termination occurs during the third year of the Vesting Period, the Participant shall be vested in all of the Participant’s RSUs.

 

  (iv)

For purposes of subparagraphs (ii) and (iii) above, if, as a result of a Change in Control described in Subsection 2.7(e) of the Plan, the Participant’s Termination of Service occurs by reason of the Participant’s employer ceasing to be a Subsidiary (and the Participant’s employer is or becomes an entity that is separate from the Company), and the Participant is not, immediately following the Change in Control, employed by the Company or an entity that is then a Subsidiary, then the occurrence of the Change in Control shall be treated as the Participant being discharged by the employer without Cause.

 

  (v)

Following the vesting of the RSUs under subparagraph (i) or (ii), RSUs shall be converted to an equal number of Shares and issued no later than the tenth (10th) business day following the Date of Termination; provided, however, that in the event the Participant qualifies for Retirement, then:

 

  (A)

If such Participant’s Date of Termination (under subparagraph (i), (ii), (iii) or (iv) above) is a result of a “separation from service” as determined in accordance with Treas. Reg. §1.409A-1(h) and any interpretation thereof adopted by the Company (a “Separation from Service”) and the Participant is a “specified employee” within the meaning of Section 409A of the Code and the regulations issued

 

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  thereunder, the RSUs shall be converted to an equal number of shares of Stock and issued to the Participant on the earlier of (1) the Vesting Date or (2) the tenth (10th) business day following the six (6)-month anniversary of the Date of Termination.

 

  (B)

If such Participant’s Date of Termination is under subparagraph (ii), (iii) or (iv) above but is not as a result of a Separation from Service, the RSUs shall be converted to an equal number of shares of Stock and issued to the Participant on the earlier of (1) the Vesting Date or (2) the tenth (10th) business day following the date the Participant has a Separation from Service.

 

  (C)

If such Participant’s Date of Termination is under subparagraph (iii) or (iv) above, is not as a result of a Separation from Service, and the Change in Control does not constitute a “change in control event” within the meaning of Treasury Regulation §1.409A-3(i)(5)(i), the RSUs shall be converted to an equal number of shares of Stock and issued to the Participant on the earlier of (1) the Vesting Date or (2) the tenth (10th) business day following the date the Participant has a Separation from Service.

 

  (c)

Except pursuant to a domestic relations order, RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered until share of Common Stock have been distributed to the participant free and clear of all restrictions.

 

5.

Withholding. The granting, vesting and settlement of RSUs under this Agreement are subject to withholding of all applicable taxes. Subject to such rules and limitations as may be established by the Administrator from time to time, the Participant may satisfy his or her withholding obligations through (i) payment of cash to the Company equal to the amount of taxes required to be withheld, (ii) contemporaneously withholding from other sources of income otherwise payable to the Participant by the Company or any Subsidiary, or (iii) the surrender of Shares which the Participant already owns, or to which the Participant is otherwise entitled under the Plan or this Agreement; provided, however, that, except as otherwise provided by the Administrator, Shares otherwise payable under this Agreement may not be used to satisfy more than the Company’s minimum statutory withholding obligation (based on minimum statutory withholding rates for income tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). In the event that the withholding obligation arises during a period in which the Participant is prohibited from trading in Common Stock pursuant to the Company’s insider trading policy, or otherwise by applicable securities or other laws, then unless otherwise elected by the Participant during a period when he/she was not so restricted from trading, the Company shall automatically satisfy the Participant’s withholding obligation by withholding from Shares otherwise deliverable under this Agreement

 

4


6.

Heirs and Successors. This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, including any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business. If any rights of the Participant or benefits distributable to the Participant under this Agreement have not been exercised or distributed, respectively, at the time of the Participant’s death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be distributed to the Designated Beneficiary, in accordance with the provisions of this Agreement and the Plan. If a deceased Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant. If the Designated Beneficiary survives the Participant but dies before the exercise of all rights or the complete distribution of benefits under this Agreement, then any remaining rights and any remaining benefit distribution shall be exercisable by or distributed to the legal representative of the estate of the Designated Beneficiary.

 

7.

Plan Governs. Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the Director, Compensation of the Company. This Agreement is subject to all interpretations, amendments, rules and regulations promulgated by the Administrator from time to time pursuant to the Plan.

 

8.

Not an Employment Contract. The Award will not confer on the Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate or modify the terms of such Participant’s employment or other service at any time.

 

9.

Notices. Any written notices provided for in this Agreement or the Plan shall be provided in accordance with subparagraph 9(a) or 9(b), as applicable and, if provided to the Company, shall be addressed as follows:

GATX Corporation

222 West Adams Street

Chicago, IL 60606-5314

U.S.A

 

  (a)

Any notice required by the Participant pursuant to the definition of Good Reason as defined below, shall be in writing given by hand delivery or by registered or certified mail, return receipt requested, postage prepaid, addressed to the Executive Vice President, Human Resources and shall be effective when actually received.

 

5


  (b)

All other notices shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier, or by postage paid first class mail. Any such notice sent by mail shall be deemed received three business days after mailing, but in no event later than the date of actual receipt and shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s records, or if to the Company, to the attention of the Director, Compensation and Benefits.

 

10.

Definitions. For purposes of this Agreement, the terms used in this Agreement shall be subject to the following:

Cause” shall mean (i) the willful and continued failure of the Participant to perform the Participant’s duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), or (ii) the willful engaging by the Participant in illegal conduct or gross misconduct in the course of his or her discharge of duties for The Company. For purposes of this provision, no act or failure to act, on the part of the Participant, shall be considered “willful” unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief, that the Participant’s action or omission was in the best interests of the Company.

Change in Control” shall have the meaning ascribed to it in Section 2.7 of the Plan.

Date of Termination” shall mean the date on which the Participant incurs a Termination of Service.

Designated Beneficiary” shall mean the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require.

Disability” shall mean, except as otherwise provided by the Committee, the period in which the Participant is considered to be “disabled” as that term is defined in the Company’s long term disability plan.

Good Reason” shall mean the occurrence of one or more of the following conditions without the consent of the Participant:

 

  (a)

a material diminution in the Participant’s base compensation, compared with the Participant’s base compensation in effect immediately prior to the consummation of a Change in Control;

 

  (b)

a material diminution in the Participant’s authority, duties, or responsibilities, compared with the authority, duties, and responsibilities of the Participant immediately prior to the consummation of a Change in Control;

 

6


  (c)

the Participant is required to report to a supervisor with materially less authority, duties, or responsibilities than the authority, duties, and responsibilities of the supervisor who had the greatest such authority, duties, and responsibilities at the time the Participant was required to report to such supervisor during the 120-day period immediately preceding the consummation of a Change in Control;

 

  (d)

a material diminution in the budget over which the Participant retains authority, compared with the most significant budget, if any, over which the Participant had authority at any time during the 120-day period immediately preceding the consummation of a Change in Control;

 

  (e)

a material change in the geographic location at which the Participant must perform services; or

 

  (f)

any other action or inaction by the Company that constitutes a material breach of any change of control agreement between the Company and the Participant that is in effect when a Change in Control occurs.

If (I) the Participant provides written notice to the Company of the occurrence of Good Reason within a reasonable time (not more than 90 days) after the Participant has knowledge of the circumstances constituting Good Reason, which notice specifically identifies the circumstances which the Participant believes constitute Good Reason; (II) the Company fails to notify the Participant of the Company’s intended method of correction within a reasonable period of time (not less than 30 days) after the Company receives the notice, or the Company fails to correct the circumstances within a reasonable period of time after such notice (except that no such opportunity to correct shall be applicable if the circumstances constituting Good Reason are those described in paragraph (e) above, relating to relocation); and (III) the Participant resigns within a reasonable time after receiving the Company’s response, if such notice does not indicate an intention to correct such circumstances, or within a reasonable time after the Company fails to correct such circumstances (provided that in no event may such termination occur more than two (2) years after the initial existence of the condition constituting Good Reason); then the Participant shall be considered to have terminated for Good Reason.

Grant Date” shall mean the date this RSU award was approved by the Compensation Committee of the Board of Directors of the Company.

Retirement” shall mean retirement of the Participant on a “Retirement Date” as that term is defined in the GATX Corporation Non-Contributory Pension Plan for Salaried Employees.

 

7


Vesting Dates” means the first and third anniversaries of the Grant Date.

Vesting Period” means the period beginning on the Grant Date and ending on the final Vesting Date.

 

8

Exhibit 10.2

CONFIDENTIAL INFORMATION, NON-COMPETITION,

AND NON-SOLICITATION AGREEMENT

In consideration, for the grant to the undersigned (“Employee”) of restricted stock units pursuant to the Restricted Stock Unit Agreement of even date herewith (the “RSU Agreement”) and for other good and valid consideration, Employee and GATX Corporation (together with any of its subsidiaries, the “Company”) enter into this Confidential Information, Non-Competition, and Non-Solicitation Agreement (this “Agreement”), effective as of the date executed below (the “Effective Date”), on the following terms and conditions:

 

A.

CONFIDENTIAL INFORMATION.

1.    Other than as necessary in performing Employee’s legitimate duties for the Company, Employee will not use or disclose to any third party any Confidential Information without the written consent of the Company. As used herein, “Confidential Information” means any and all confidential or proprietary information, trade secrets, financial and strategic plans, technical data or know-how of the Company, including, without limitation, that relating to railcar leasing, railcar maintenance, railcar fleet management techniques, pricing and leasing models, product research, products, software, services, development, inventions, manufacturing processes, suppliers, vendors, and customers (including contact lists, pricing, leasing or purchasing history and needs, and confidential agreements of or relating to any such suppliers, vendors, and customers), maintenance, techniques, designs, purchasing, accounting, assembly, distribution, engineering, commercial, marketing, and/or sales information, each of which that Employee obtains or is otherwise exposed to, whether in writing, orally or by inspection during Employee’s employment or engagement with the Company. Confidential Information may also include information of others that is disclosed to Employee by the Company or another party at the Company’s direction. Confidential Information does not include information that (a) is or becomes part of the public knowledge or literature, other than as a result of Employee’s disclosure in violation of this Agreement, or (b) was known by Employee prior to Employee’s employment or engagement with the Company and not as a result of anyone else’s breach of a legal or contractual obligation.

2.    As between the Company and Employee, all Confidential Information will remain the exclusive property of the Company, including, but not limited to, all financial, commercial, operational, specifications, engineering, technical, scientific or business information or data received, obtained, or prepared by Employee in connection with Employee’s employment or engagement and concerning the Company’s business, and all copies and abstracts thereof. Upon the termination of Employee’s employment or engagement with the Company for any reason, Employee will not retain, take, remove, or copy any such property of the Company or any materials containing any Confidential Information whatsoever, and Employee will promptly return all such property and materials to the Company no later than Employee’s termination date or earlier upon the Company’s request. If Employee is asked by the Company, Employee will execute a Termination Certificate substantially in the form attached hereto as Exhibit A following the termination of Employee’s employment or engagement.

3.    Nothing in this Agreement prohibits Employee from filing a charge with, reporting possible violations of federal law or regulation to, participating in any investigation by, or otherwise cooperating with any governmental agency or from making other disclosures that are protected under the whistleblower provisions of applicable law or regulation. Further, nothing herein prevents Employee from disclosing Confidential Information if and to the extent required pursuant to any valid subpoena, court order, or other legal obligation; provided, however, Employee agrees to provide prompt written notice of any such subpoena, court order, or other legal obligation prior to disclosing any Confidential Information (unless such notice to the Company is prohibited by applicable law), enclosing a copy of the subpoena, court order or other documents describing the legal obligation. In the event that the Company objects to the disclosure of Confidential Information, by way of a motion to quash or otherwise, Employee agrees to not disclose any Confidential Information while any such objection is pending.


4.    In compliance with the requirements of the Defend Trade Secrets Act, Employee acknowledges the following: (a) Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, (b) Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal and (c) if Employee files a lawsuit for retaliation by Company for reporting a suspected violation of law, Employee may disclose trade secrets to Employee’s attorney and use the trade secret information in the court proceeding if Employee: (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except pursuant to court order.

 

B.

NON-COMPETITION AND NON-SOLICITATION.

1.    During any period of employment or engagement with the Company and for the shorter of (a) twelve (12) months immediately following the termination of Employee’s employment or engagement for any reason other than a termination by the Company without Cause or by Employee for Good Reason or (b) the four (4) year period immediately following the Effective Date (the Restricted Period) Employee will not, directly or indirectly, on Employee’s own behalf or with or on behalf of any other individual or entity (a) conduct, engage in, finance, own, or operate, or prepare to conduct, engage in, finance, own, or operate, the Business in competition with the Company in a Restricted Jurisdiction, or (b) render services, whether as an employee, contractor, consultant, advisor, director, or in any other capacity, which are similar to the services, duties or responsibilities that Employee rendered to the Company, or in any role which Employee could reasonably be expected to use or disclose Confidential Information to any person or entity (including without limitation Trinity Industries, Inc., Wells Fargo Rail, CIT Rail, Union Tank Car Company, Greenbrier Companies, and American Railcar Industries, and any of the foregoing’s subsidiaries and successors) that engages in or is preparing to engage in the Business in competition with the Company in the Restricted Jurisdiction. The term “Business” means (a) operating, buying, selling, trading, or leasing of railcars, locomotives, and services relating thereto, (b) cleaning, qualifying, repairing, lining, painting, and performing other maintenance of railcars and locomotives, (c) developing and providing operational and maintenance programs relating to railcars and locomotives, and (d) any other businesses in which the Company engages in or has taken material steps toward engaging in during Employee’s employment or engagement with the Company at the time of Employee’s termination. The term “Cause” shall have the meaning ascribed to it in the RSU Agreement. The term “Good Reason” shall mean the occurrence of one or more of the following conditions without the consent of Employee: (a) a material diminution in Employee’s base compensation, compared with Employee’s base compensation in effect on the Effective Date or (b) a material diminution in Employee’s authority, duties, or responsibilities, compared with the authority, duties, and responsibilities of Employee immediately following the Effective Date; provided, only if (I) Employee provides written notice to the Company of the occurrence of Good Reason within a reasonable time (not more than ninety (90) days) after Employee has knowledge of the circumstances constituting Good Reason, which notice identifies the circumstances that Employee believes constitute Good Reason, (II) the Company fails to notify Employee of the Company’s intended method of correction within thirty (30) days after the Company receives the notice, and (III) Employee resigns within a reasonable time after receiving the Company’s response, if such notice does not indicate an intention to correct such circumstances, or the Company fails to correct the circumstances within a reasonable period of time after notifying an Employee of an intended method of correction. The term “Restricted Jurisdiction” means each country, province, state, county, parish and city in which the Company is engaged in the Business.


2.    During the Restricted Period, Employee will not, directly or indirectly, on Employee’s own behalf or on behalf of any other person or entity other than the Company, in any way (a) solicit business from, or lease or sell products or services to, any Company Customer, that are similar to any products or services provided by the Company or that are otherwise competitive with the Business, (b) cause or encourage any Company Customer to reduce or cease doing business with the Company, or (c) otherwise negatively interfere with the Company’s relationships with any Company Customer. The term “Company Customer” means (i) each customer of the Company that Employee had business contacts with or obtained Confidential Information about at any time during Employee’s employment or engagement with the Company, and (ii) each prospective customer of the Company that Employee had business contact with or knowledge about as part of a solicitation of business on behalf of the Company at any time during the two (2) year period prior to Employee’s termination of employment or engagement with the Company.

3.    During the Restricted Period, Employee will not, directly or indirectly, on Employee’s own behalf or on behalf of any other person or entity, in any way (a) solicit or attempt to solicit for employment or engagement, or employ or engage any Protected Personnel, (b) request, entice or induce any such Protected Personnel to leave employment or engagement with the Company, or (c) otherwise negatively interfere with the Company’s relationship with any Protected Personnel. The term “Protected Personnel” means each individual who is or was employed or engaged (e.g., as a contractor or on any other non-employee basis) by the Company at any time within six (6) months preceding Employee’s solicitation or other activity prohibited by this Section B.3.

 

C.

GENERAL.

1.    Employee has willingly and knowingly entered into this Agreement in consideration for the grant of the restricted stock units by the Company pursuant to the RSU Agreement, as well as employment opportunities, including but not limited to further development as leaders of the Company and in connection with leadership succession planning, which Employee acknowledges and agrees is valid and sufficient consideration for the covenants set forth herein, and which the Company would not have agreed to but for Employee’s agreement to the covenants set forth in this Agreement.

2.    The Employee further acknowledges and agrees that the Company has continuing rights to fully protect its legitimate business interests including, but not limited to, its confidential information, customers and personnel, and the expiration of the Restricted Period shall not be deemed a waiver, limitation or restriction on the Company’s ability to exercise its rights, remedies and privileges to the fullest extent of applicable law.

3.    In the event that a court finds that any time, territory, or any other provision of this Agreement is unenforceable or invalid as an unreasonable restriction, then the Company and Employee agree that such court will have the power, and the parties expressly desire that the court exercise such power, to revise this Agreement to limit the term, territory or provision, to delete specific words or phrases, or to replace any invalid or unenforceable time, territory or other term or provision with a time, territory or other term or provision or make any other modifications that the court deems necessary to render the Agreement reasonable, valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term, and the court shall enforce this Agreement as so judicially modified. Should a court not be able to revise part of this Agreement in such a manner, then any such provision that is unenforceable or invalid will be treated as removed from and not part of this Agreement, but all other portions of the Agreement will remain in effect.

4.    The termination of Employee’s employment or engagement from the Company will not release Employee from any of Employee’s covenants under this Agreement, which shall continue in full force and effect pursuant to their terms.


5.    Employee acknowledges that the rights of the Company under this Agreement are of a specialized and unique nature and irreparable harm will result to the Company if Employee violates any of Employee’s obligations under this Agreement and that such harm may be difficult to measure in monetary damages. Accordingly, in the event that Employee violates any of Employee’s obligations hereunder, the Company may obtain an immediate injunction or other equitable relief restraining Employee from violating any of the covenants contained in this Agreement, without the need to post a bond or other security and without the necessity of showing any actual damages or that money damages would not afford an adequate remedy.

6.    If Employee violates any of the restrictions set forth in Section B, the Restricted Period shall be extended by one day for each day that Employee is in violation of this Agreement, up to a maximum extension equal to the length of the Restricted Period, so as to give the Company the full benefit of the bargained-for length of forbearance.

7.    No waiver by the Company of any of the provisions of this Agreement shall be effective unless explicitly set forth in writing and signed by the Company, and any such waiver shall not serve to prevent enforcement in the event of subsequent breach. Further, no failure of the Company to (a) object to any conduct or violation of any of the covenants made by Employee under this Agreement or (b) exercise any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof.

8.    This Agreement and all rights and benefits hereunder are personal to Employee, and neither this Agreement nor any right or interest of Employee herein or arising hereunder shall be subject to voluntary or involuntary alienation, assignment, pledge or other transfer by Employee. Nothing herein shall be deemed to create a contract of employment for any term. Employee acknowledges and agrees that Employee’s employment with the Company is and shall remain at all times at will.

9.    Employee agrees that the restrictive covenants set forth in this Agreement are in addition to any other agreements containing restrictive covenants protecting the Company to which Employee is or will be a party or by which Employee is or will be bound, and all such covenants shall be considered together to provide the maximum benefit to the Company; provided, however, any inconsistent or conflicting covenants entered into by Employee prior to the effective date of this Agreement shall be superseded by this Agreement, and the terms of this Agreement shall control. This Agreement may not be modified or amended except by a subsequent writing clearly expressing the intent to so modify or amend this Agreement executed by both the Company and Employee.

10.    The terms and conditions of this Agreement are governed by and are to be interpreted under the laws of the State of Illinois without regard to its conflicts of law principles, rules or statutes of any jurisdiction.

 

EMPLOYEE                 GATX CORPORATION
                  By:    
Dated:                     Title:    
                  Dated:    


Exhibit A

TERMINATION CERTIFICATE

The undersigned (“Employee”) hereby certifies that Employee does not have in Employee’s possession, and Employee has returned, all documents, materials, and other property belonging to GATX Corporation (the “Company”), or copies thereof, including, without limitation, all Confidential Information as defined in Section 2 of the Confidential Information, Non-Competition, and Non-Solicitation Agreement (the “Agreement”) to which Employee is a party with the Company, but not including copies of Employee’s own employment records.

Employee further certifies that Employee has complied with all of the terms of the Agreement signed by Employee.

Employee understands that nothing herein is intended to or shall prevent Employee from communicating directly with, cooperating with, or providing information to, any federal, state or local government agency, including, but not limited to, the U.S. Securities and Exchange Commission, or the U.S. Department of Justice, or from exercising Employee’s rights with respect to trade secrets under Section A.4 of the Agreement.

 

Date:            
        (Employee’s Signature)
         
        (Printed or Typed Name of Employee)

Exhibit 99.1

 

LOGO    NEWS RELEASE

FOR RELEASE: IMMEDIATE

GATX CORPORATION ANNOUNCES SENIOR LEADERSHIP CHANGES

CHICAGO, IL, August 10, 2018 – GATX Corporation (NYSE: GATX), the leading global railcar lessor, today announced a series of senior leadership changes effective immediately:

 

   

Robert C. Lyons will become Executive Vice President and President, Rail North America. Mr. Lyons has been with GATX for 21 years, most recently as Executive Vice President and Chief Financial Officer.

 

   

Thomas A. Ellman will become Executive Vice President and Chief Financial Officer. Mr. Ellman has been with GATX for 21 years, most recently as Executive Vice President and President, Rail North America.

 

   

Paul F. Titterton will become Senior Vice President and Chief Operating Officer, Rail North America, responsible for Rail North America’s Operations and Fleet Organizations.

 

   

Michael T. Brooks will become Senior Vice President, Portfolio Management. Mr. Brooks will assume responsibility for GATX’s Rolls Royce spare engine leasing partnerships and blue water marine interests.

 

   

Amita Shetty will become Senior Vice President, Business Development, responsible for analyzing and developing new business opportunities across GATX’s business segments.

 

   

Robert A. Zmudka will become Senior Vice President and Chief Commercial Officer Rail North America, responsible for Sales, Service Delivery, Market Analysis and Utilization-based leasing.


Page  2

 

Brian A. Kenney, chairman and chief executive officer of GATX, stated, “ I am fortunate to work with an extremely capable senior leadership team at GATX, and I believe the changes we are implementing will continue to drive the excellent performance that our shareholders expect. The changes should also enhance our growth efforts, further develop our leaders, and assist the GATX Board of Directors in their ongoing succession planning efforts.”

COMPANY DESCRIPTION

GATX Corporation (NYSE: GATX) strives to be recognized as the finest railcar leasing company in the world by its customers, its shareholders, its employees and the communities where it operates. As the leading global railcar lessor, GATX has been providing quality railcars and services to its customers for 120 years. GATX has been headquartered in Chicago, Illinois, since its founding in 1898. For more information, please visit the Company’s website at www.gatx.com.


Page  3

 

FORWARD-LOOKING STATEMENTS

Statements in this News Release not based on historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and, accordingly, involve known and unknown risks and uncertainties that are difficult to predict and could cause our actual results, performance, or achievements to differ materially from those discussed. These include statements as to our future expectations, beliefs, plans, strategies, objectives, events, conditions, financial performance, prospects, or future events. In some cases, forward-looking statements can be identified by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would”, and similar words and phrases. Forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of the date they are made, and are not guarantees of future performance. We do not undertake any obligation to publicly update or revise these forward-looking statements.

The following factors, in addition to those discussed in our other filings with the SEC, including our Form 10-K for the year ended December 31, 2017 and subsequent reports on Form 10-Q, could cause actual results to differ materially from our current expectations expressed in forward-looking statements:

 

    exposure to damages, fines, criminal and civil penalties, and reputational harm arising from a negative outcome in litigation, including claims arising from an accident involving our railcars

 

    inability to maintain our assets on lease at satisfactory rates due to oversupply of railcars in the market or other changes in supply and demand

 

    a significant decline in customer demand for our railcars or other assets or services, including as a result of:

 

    weak macroeconomic conditions

 

    weak market conditions in our customers’ businesses

 

    declines in harvest or production volumes

 

    adverse changes in the price of, or demand for, commodities

 

    changes in railroad operations or efficiency

 

    changes in supply chains

 

    availability of pipelines, trucks, and other alternative modes of transportation

 

    other operational or commercial needs or decisions of our customers

 

    higher costs associated with increased railcar assignments following non-renewal of leases, customer defaults, and compliance maintenance programs or other maintenance initiatives

 

    events having an adverse impact on assets, customers, or regions where we have a concentrated investment exposure

 

    financial and operational risks associated with long-term railcar purchase commitments, including increased costs due to tariffs or trade disputes
    reduced opportunities to generate asset remarketing income

 

    operational and financial risks related to our affiliate investments, including the Rolls-Royce & Partners Finance joint ventures

 

    the impact of changes to the Internal Revenue Code as a result of the Tax Cuts and Jobs Act of 2017, and uncertainty as to how this legislation will be interpreted and applied.

 

    fluctuations in foreign exchange rates

 

    failure to successfully negotiate collective bargaining agreements with the unions representing a substantial portion of our employees

 

    asset impairment charges we may be required to recognize

 

    deterioration of conditions in the capital markets, reductions in our credit ratings, or increases in our financing costs

 

    competitive factors in our primary markets, including competitors with a significantly lower cost of capital than GATX

 

    risks related to our international operations and expansion into new geographic markets, including the imposition of new or additional tariffs, quotas, or other trade barriers

 

    changes in, or failure to comply with, laws, rules, and regulations

 

    inability to obtain cost-effective insurance

 

    environmental remediation costs

 

    inadequate allowances to cover credit losses in our portfolio

 

    inability to maintain and secure our information technology infrastructure from cybersecurity threats and related disruption of our business
 


Page  4

 

FOR FURTHER INFORMATION CONTACT:

GATX Corporation

Jennifer McManus

Director, Investor Relations

GATX Corporation

312-621-6409

[email protected]

Investor, corporate, financial, historical financial, and news release information may be found at www.gatx.com.

(08/10/18)



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