Item 7.01. Regulation FD Disclosure
On March 20, 2024, Norfolk Southern Corporation (the “Company”) issued a press release announcing the appointment of John Orr as Executive Vice President & Chief Operating Officer of the Company. The press release was furnished as part of the Company’s Current Report on Form 8-K, filed on March 20, 2024. The press release disclosed that, as a reflection of Orr’s unique set of skills and experience and his expected impact on long-term value creation, the Company entered into an agreement with Canadian Pacific Kansas City Limited (“CPKC”) that offers certain financial and commercial considerations in exchange for a waiver of Orr’s non-compete provisions (the “CPKC Agreement”). Under the terms of the CPKC Agreement, Norfolk Southern agreed, among other things, to make certain commercial and operational considerations related to the Meridian Speedway and the Meridian Terminal.
The changes made under the CPKC Agreement in respect of the Meridian Speedway and the Meridian Terminal (the “Meridian Speedway Amendments”) are not consequential to the Company. The Company is filing this Current Report on Form 8-K in order to clarify any potential misunderstandings regarding the terms of the Meridian Speedway Amendments and the impact of the Meridian Speedway Amendments on the Company.
In connection with the CPKC Agreement, the Company and The Kansas City Southern Railway Company (“KCSR”) entered into a Second Amendment to Dallas Terminal Marketing Agreement (the “Dallas Terminal Amendment”), pursuant to which the terms governing domestic intermodal traffic between the Dallas Wylie Terminal and the Southeast region of the United States were amended as follows:
| | • | | The Company’s right of first refusal on intermodal traffic originating in the United States and moving to or from the Wylie Intermodal Terminal will not apply to traffic moving via the connection between CPKC and CSX Transportation, Inc. (“CSX”) in Myrtlewood, Alabama (or any other point of connection in the event of a detour); and |
| | • | | In the event the Company exercises its option to acquire all of KCSR’s right, title and interest in and to the Wylie Intermodal Terminal, which handles Dallas Intermodal Terminal Traffic, the Company’s obligation to provide support to traffic at the Wylie Intermodal Terminal shall apply on a non-discriminatory basis to CPKC-CSX intermodal traffic. |
The intermodal traffic covered by the Dallas Terminal Amendment represents a minority of the Company’s business (~25%) on the Meridian Speedway and accounts for only approximately 1% of the Company’s total revenue. The change merely allows for increased competition along a corridor where competition and pricing are mainly defined and set by abundant truck capacity. The Company did not give up its option to acquire the Dallas Wylie Terminal.
The Company and KCSR also entered into an Amendment to Meridian Lease Agreement (the “Lease Amendment”). Predecessors to the Company and KCSR were parties to the underlying Meridian Lease Agreement dated April 1, 1937 (the “Meridian Lease Agreement”), pursuant to which KCSR leases certain trackage at the Meridian Terminal from the Company. The Lease Amendment confirms KCSR’s right to use the trackage at the Meridian Terminal and amends the termination rights to be by mutual consent.
The information furnished pursuant to this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed to be incorporated by reference in 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.
Important Additional Information and Where to Find It
The Company has filed a definitive proxy statement (the “2024 Proxy Statement”) on Schedule 14A and a WHITE proxy card with the Securities and Exchange Commission (the “SEC”) in connection with the solicitation of proxies for its 2024 Annual Meeting of Shareholders (the “2024 Annual Meeting”). SHAREHOLDERS ARE STRONGLY ADVISED TO READ THE COMPANY’S 2024 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE WHITE PROXY CARD AND ANY OTHER DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain a free copy of the 2024 Proxy Statement, any amendments or supplements to the 2024 Proxy Statement and other documents that the Company files with the SEC from the SEC’s website at www.sec.gov or the Company’s website at https://norfolksouthern.investorroom.com as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC.
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