§1323 Board of Directors

Summary

Sets who will be on the Corporation’s board and how members change as U.S. government shares are sold. Until June 30, 1987, the board stays the same as it was on October 21, 1986, and any open seats are filled by the remaining directors. Starting July 1, 1987, the board will include 3 directors chosen by the Secretary of Transportation, the Corporation’s Chief Executive Officer and Chief Operating Officer, and 8 business-experienced directors named by special court trustees (working with the Secretary and the Board Chair) to keep the company stable, protect the U.S. investment, preserve essential rail service, and help sell the U.S. shares. If more than 50 percent of the U.S. interest is not sold by June 1, 1987, a special court will pick 3 trustees on that date to make those 8 appointments. Those trustees cannot have been officers, employees, or directors of the U.S. Railway Association, the Corporation, or the Department of Transportation during the prior 30 months, and their pay cannot exceed what directors get for similar work. As U.S. shares are sold to the public, shareholders elect one director for each 12.5 percent sold. Public-elected directors gradually replace government-appointed directors in a set order (alternating between appointing groups before June 30, 1987, or in the trustees’ listed order after July 1, 1987). Once more than 50 percent, and finally at 100 percent, most or all remaining government-appointed directors are replaced by public-elected directors. No director appointed here may be a special court trustee or U.S. employee, and no director may be a Corporation employee, except the CEO and COO or if elected by public shareholders.