Exhibit 10.19
[LETTERHEAD OF CSX CORPORATION]
Jeff McCutcheon
Senior Vice President
Corporate Human Resources
January 4, 2002
Mr. Chuck Raymond
President
CSX Lines, Inc.
2101 Rexford Road
Suite 350, West
Charlotte, North Carolina 28211
Dear Chuck:
As you know, CSX Corporation ("CSX") is considering strategic
alternatives for CSX Lines ("CSXL"). You have been identified as one of the
executives who is critical to the completion of this effort. In order to
encourage you to remain employed during the process leading up to the sale or
disposition of CSXL (the "Transaction") and thereafter, you have been designated
to participate in a Transaction Incentive Program. This letter sets forth the
terms and conditions on which you will be eligible to receive an Incentive Bonus
and, potentially, a supplementary CSX Payment.
The amount of the Incentive Bonus that you are eligible to earn is
$1,500,000. This amount is payable by CSXL, subject to the requirements set
forth below. In addition, if the Chairman of CSX, upon the advice of the
executive officers of the Chairman's office, determines in his sole discretion
that you have given a superlative performance in helping CSX to exceed its
objectives for the Transaction, you will receive an additional amount of up to
$1,500,000 (the "CSX Payment"). This amount is payable by CSX, and is also
subject to the requirements set forth below.
The Incentive Bonus will be paid only if there is a Closing of a
Transaction by December 31, 2002. For purposes of this letter, a "Closing" means
that a transaction to sell or dispose of all, or substantially all, of the
assets of CSX Lines must be completed prior to December 31, 2002. If no such
Closing occurs by December 31, 2002, this program will expire without payment.
Your Incentive Bonus (including any CSX Payment that the Chairman of
CSX may authorize for you) will be paid, subject to applicable withholdings, in
two equal installments (each a "Payment Date"). The first Payment Date will
occur within 30 days after the Closing and the second Payment Date will occur on
the first anniversary of the Closing.
In order to receive a payment, you must either (i) be employed by the
Buyer, CSXL, CSX, or any other affiliate of the Buyer on the Payment Date or
(ii) have a "Qualifying Termination" before the Payment Date. A Qualifying
Termination means the termination of your employment under any of the following
circumstances:
. Your employment is involuntarily terminated by CSXL before the
Closing because your job is eliminated;
. You terminate your own employment at the time of the Closing because
the post-Closing position offered to you by the Buyer or CSX
requires that you relocate by more than 50 miles from your current
employment location or provides you with a base salary or target
incentive opportunity that is less than you currently receive;
. You are employed by CSXL, the Buyer or one of its other affiliates
or by CSX immediately after the Closing, but your employment is
involuntarily terminated because your job is eliminated after the
Closing;
. You are employed by CSXL, the Buyer or one of its other affiliates
or by CSX immediately after the Closing, but your employer
subsequently requires that you relocate by more than 50 miles from
your employment location immediately after the Closing or reduces
your base salary or target incentive opportunity below those you
receive immediately after the Closing, and as a result you terminate
your own employment.
In the event that your employment is involuntarily terminated because
your employment is eliminated by CSXL in conjunction with or subsequent to a
closing of a sale or disposition of less than substantially all of CSXL, your
Incentive Bonus and CSX Payment will be paid as follows:
. You will receive the $1,500,000 Incentive Bonus in two equal
installments, the first within thirty (30) days of the effective
date of your termination of employment and the second one (1) year
later.
. The CSX Payment, if any, will be made on the same terms, and at the
same times, as CSX Payments are made to the CSXL management team.
Any payment made pursuant to this letter will be paid in lieu of any
severance benefits for which you might have been eligible under any applicable
severance plan of CSXL or CSX. In addition, at the time of the first payment
contemplated herein, you will be asked to sign a release in a form acceptable to
CSX.
You will also only be entitled to receive your Incentive Bonus if you
comply with the following confidentiality requirements. By signing below, you
agree to keep
confidential (i) the terms of this letter, including its existence, except that
you may disclose such information to your legal and tax advisors and immediate
family members, and (ii) all secret or confidential information, knowledge or
data relating to CSX, CSXL or any of their respective affiliates and businesses
(including, without limitation, any proprietary information concerning any
processes, methods, trade secrets, research, secret data, costs or names of
users or purchasers of their respective products or services, business methods,
operating procedures or programs or methods of promotion and sale), unless such
information previously became publicly available other than as a result of your
violation of this paragraph. For the purposes of this paragraph, information
shall not be deemed to be publicly available merely because it is embraced by
general disclosures or because individual features or combinations thereof are
publicly available.
Nothing in this letter shall be construed as an employment contract
between you and CSX or CSXL. You specifically acknowledge that you are an
at-will employee of CSXL and that either you or CSXL may terminate the
employment relationship at any time for any reason. This letter supersedes and
replaces any prior understandings, contracts and agreements, whether or not
written, that you may have had with CSX and/or CSXL regarding any retention or
incentive bonuses related to or arising in connection with any transaction
related to the disposition of CSX Lines. However, nothing in this letter is
intended to limit or modify the benefits payable to you pursuant to the
Employment Agreement between you and CSX dated February 1, 1995, as amended
December 13, 1999.
Please indicate your agreement with and acceptance of the terms and
conditions of this letter, by signing and dating the enclosed copy of this
letter in the space provided below. Keep a copy for your records and return the
original to me.
Sincerely yours,
Jeff McCutcheon
Agreed to and accepted:
/s/ CHUCK RAYMOND
_____________________________
Chuck Raymond