DEF 14A of FreightCar America, Inc., Apr 3, 2025

DEF 14A of FreightCar America, Inc.

Filed Apr 3, 2025 · FY20240001104659-25-031747

Open on EDGAR

  1. Who will bear the costs of soliciting votes for the Annual Meeting?

    Each of our directors has signed a contingent resignation letter providing that if a majority of the votes of the shares in an uncontested election in which such director is a nominee are designated to be “WITHHELD” from the director’s election, and the Board accepts the contingent resignation letter following such election, the director’s resignation will be effective upon the acceptance of the resignation by the Board. The Company is party to an investor rights agreement (the “Investor Rights Agreement”) with Fasemex, Inc. (the “US Seller”), Fabricaciones y Servicios de México, S.A. de C.V. (“Fasemex Mexico”) and Agben de Mexico, S.A. de C.V. (“Agben” and, together with Fasemex Mexico, the “MX Sellers”, and the MX Sellers, together with the US Seller, the “Sellers”). Pursuant to the Investor Rights Agreement, the Sellers have the right to designate one nominee for election to the Company’s Board for so long as the Sellers beneficially own in the aggregate, common stock of the Company equal to at least five percent (5%) of shares of the Company’s common stock outstanding. The director nominee designated by the Sellers is Mr. Jesús Salvador Gil Benavides, who was initially appointed by the Board to serve as a Class II director effective on October 23, 2020. Mr. Gil Benavides is nominated for election as a Class II director at the Annual Meeting. In addition, the Investor Rights Agreement provides the Sellers with the right to designate a non-voting observer to attend meetings of the Board and of committees of the Board, subject to customary limitations, for so long as the Sellers beneficially own, in the aggregate, common stock of the Company equal to at least five percent (5%) of shares of the Company’s common stock outstanding. The non-voting Board observer is currently Mr. Alejandro Gil. In connection with the Credit Agreement by and among the Company, as guarantor, FreightCar North America, CO Finance LVS VI LLC, as lender (the “Lender”), an affiliate of a corporate credit fund for which Pacific Investment Management Company LLC serves as an investment manager, and U.S. Bank National Association, as disbursing and collateral agent, the Company also entered into a warrant acquisition agreement (the “Warrant Acquisition Agreement”) with the Lender, which provides for the issuance of a warrant (the “Warrant”) to the Lender, allowing Lender to purchase a number of shares of the Company’s common stock, par value $0.01 per share, equal to 23% of the outstanding common stock on a fully-diluted basis at the time the Warrant is exercised. Pursuant to the Warrant Acquisition Agreement, for so long as the Lender or its affiliates hold (a) at least 50% of the Warrant or (b) at least 50% of the shares issuable pursuant to the exercise of the Warrant, the Lender shall be entitled to designate for recommendation to the Nominating and Corporate Governance Committee of the Board and, upon such recommendation, nomination by the Board one director to the Board and a non-voting observer. Each director designated by the Lender, including the initial director designee, must comply with the requirements of the charter for, and related guidelines of, the Nominating and Corporate Governance Committee of the Board. The director nominee initially designated by the Lender was Travis D. Kelly, who was appointed by the Board to serve as a Class I director, effective June 20, 2022. Our Charter provides that the authorized number of directors may be changed only by resolution of the Board. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors. Our Charter also provides that our Board may fill any vacancy created by the resignation of a director or an increase in the size of the Board. On March 20, 2025, the Board passed a resolution decreasing the size of the Board from nine (9) directors to eight (8) directors, effective May 14, 2025. The Board met eight (8) times during 2024. Nominees for election at this meeting for terms expiring in 2028 Jesús Salvador Gil Benavides, 61, has served as a director since October 2020. Mr. Gil Benavides has over 30 years of experience in metal fabrications, and over 20 years of experience in the railcar manufacturing industry. From October 2020 to January 2024, Mr. Gil Benavides served as the Vice President of Operations for the Company. From 2005 to 2017, Mr. Gil Benavides held various roles with Grupo Industrial Monclova, S.A. de C.V. (“Grupo Industrial”), a corporation operating in railcar manufacturing, offshore platform fabrication, mining, industrial gases and energy. During this time, he also served as a member of Grupo Industrial’s board of directors. From 1997 to 2005, Mr. Gil Benavides worked for Trinity Industries de Mexico as Plant Manager at the Monclova plant and the General Manager of Monclova-Sabinas. In 2018, he finished a one-year Advanced Executive Management Program (AD-2) at the Instituto Panamericano de Alta Dirección de Empresa (IPADE) in Monterrey, Mexico. In 1988, he obtained a master’s degree in electrical engineering from Washington University, Saint Louis, Missouri, and in 1986 he received his bachelor’s degree in electronic engineering from the Instituto Tecnológico de Monterrey. Mr. Gil Benavides brings to our Board extensive and specific experience in the railcar industry. Rodger L. Boehm, 65, has served as a director since May 2022 and is the chairman of our Compensation Committee and a member of our Audit Committee. Until his retirement in September 2017, Mr. Boehm was a senior partner at McKinsey & Company, Inc. He spent 31 years at the premier management consulting firm in a variety of roles with increasing responsibility, beginning in 1986. Mr. Boehm led client service for leading global institutions, primarily focused on Fortune 500 companies. His client service focused on long-term global growth and performance improvement, helping companies to significantly improve their cost, revenue and service performance. Mr. Boehm’s background in strategic leadership in the industrial sector ranges from developing a global growth strategy for an agricultural and construction equipment manufacturer to improving the enterprise marketing capabilities for a leading global industrial conglomerate. Before McKinsey, he was a quality control engineer with Jones & Laughlin Steel from 1982 to 1984. He currently serves on the board of Ruggable and Hyliion and was formerly a board member for Meritor and Home Chef. Mr. Boehm earned a bachelor’s degree in materials engineering from Purdue University in 1982 and a master of business administration from Harvard University in 1986. Mr. Boehm brings to our Board deep and broad experience in strategic leadership in the industrial sector. Directors whose terms continue until 2026

  2. Who will bear the costs of soliciting votes for the Annual Meeting?

    Elizabeth K. Arnold, 60, has served as a director since August 2019 and is chairperson of our Audit Committee. She is a member of our Nominating and Corporate Governance Committee and our Compensation Committee. Ms. Arnold served as the Senior Vice President, Chief Financial Officer and Treasurer of Houghton International, a specialty chemical company with international operations, from October 2014 to August 2019. From October 2012 to April 2014, Ms. Arnold served as the Chief Financial Officer of Physiotherapy Associates. Prior to joining Physiotherapy Associates, Ms. Arnold served as the Chief Financial Officer of Tyco Flow Control from April 2010 to September 2012. Between 2003 and 2010, Ms. Arnold worked as the Vice President, Corporate Financial Planning & Analysis at Tyco. Earlier in her career, Ms. Arnold served in numerous roles, including executive leadership positions, for General Electric, a global industrial company with products and services ranging from aircraft engines, power generation and oil and gas production to medical imaging. Ms. Arnold also serves as a member of the board of directors and audit committee and nominating, governance, sustainability and compliance committee of Innospec Inc. (Nasdaq: IOSP). Ms. Arnold possesses a bachelor’s degree in economics from the University of Alabama. She brings to our Board, among other things, extensive corporate finance and public accounting experiences, as well as a wealth of operational knowledge. James R. Meyer, 63, has served as a director since July 2017, and beginning May 1, 2024, Mr. Meyer became Executive Chairman of the Board. Effective May 14, 2025, Mr. Meyer will transition to the role of Chairman of the Board. Mr. Meyer previously served as our President and Chief Executive Officer (“CEO”) from July 2017 to May 1, 2024. Mr. Meyer has over 30 years of experience in the heavy equipment, automotive and consumer goods industries.. In his prior positions, he served as Chief Operating Officer of Allied Specialty Vehicles, Inc., a manufacturer of specialty vehicles for fire and emergency, commercial and recreation segments, Brunswick Corporation and Ford Motor Company where he spent 16 years and held various executive positions. Mr. Meyer also has extensive M&A experience and has worked with and held ownership positions in a number of privately held heavy equipment manufacturers. Mr. Meyer has a bachelor’s degree in engineering and a master of business administration from the University of Michigan, and a master’s degree in engineering from the Massachusetts Institute of Technology. Mr. Meyer brings to the Board his broad leadership experience from serving in management and directorship roles in the automotive and manufacturing industries. Nicholas J. Randall, 51, was appointed as our President and CEO effective May 1, 2024 and previously served as our Chief Operating Officer from June 2023. He has served as a director since May 2024. Prior to joining the Company, Mr. Randall led a division of Precision Castparts Corporation from 2017-2023. From 2007 to 2017, Mr. Randall served in various capacities at Alcoa Corporation and Arconic Corporation, a company formed from the split of Alcoa in 2016. Prior to that, Mr. Randall worked in various engineering roles at Jaguar Land Rover Automotive. Mr. Randall holds a bachelor’s degree in manufacturing engineering from Liverpool John Moores University. Mr. Randall brings to the Board extensive experience in operations of industrial products companies and insight from his previous roles and as the Company’s Chief Operating Officer. Directors whose terms continue until 2027 Malcolm F. Moore, 74, has served as a director since March 2015 and is the chair of our Nominating and Corporate Governance Committee and a member of our Compensation and Audit Committees. Effective on May 14, 2025, Mr. Moore will assume the role of Lead Independent Director. From July 2015 to June 2019, Mr. Moore served as Executive Vice President and Chief Operating Officer of Twin Disc, Inc., a publicly held global manufacturer and distributor of power transmission equipment for the marine, transportation and industrial business sectors. Between 2006 and 2015, he also served on the board of directors of Twin Disc, Inc. From June 2013 to June 2015, Mr. Moore served as the President and Chief Executive Officer of Digi-Star LLC, a global supplier of electronic components and software used in precision agriculture. From November 2011 to June 2013, Mr. Moore served as Chairman of Digi-Star. Prior to joining Digi-Star, Mr. Moore served as an advisor to Baird Capital Partners from June 2010 to November 2011. Between 1999 and 2010, Mr. Moore worked in a variety of executive roles at Gehl Company, a publicly held manufacturer of compact construction equipment, including serving as President and Chief Executive Officer from August 2009 to April 2010. Earlier in his career, Mr. Moore served in senior executive roles at Pangborn Corporation, an international manufacturer of blast media equipment used by manufacturers of metal products, and LINAC Holdings Inc., a manufacturer of specialized equipment used in steel production, industrial heat-treating, scientific research and product manufacturing. Having served as a senior executive for over 25 years, and as a board member for many years, of companies in the manufacturing sector, Mr. Moore brings to our Board extensive experience in leading complex heavy manufacturing organizations. José De Nigris Felán, 52, has served as a director since June 2022. Mr. De Nigris Felán is the Executive Vice President of Katcon Global USA, Inc., a global supplier of exhaust and after treatment solutions to the automotive industry. Mr. De Nigris Felán has served as a board member of Katcon Global since 2000, and has held various positions since with its subsidiaries. Mr. De Nigris Felán is the Director of Katcon Global, SA (Luxembourg) since 2009, the Director of Katcon Korea since 2016, and the Managing Director of Wendt Automotive GMBH (Germany) since 2018. Mr. De Nigris Felán brings to our Board significant experience in industrial manufacturing. Travis D. Kelly, 48, has served as a director since June 2022. Effective on May 14, 2025, Mr. Kelly will join the Audit Committee. Mr. Kelly has served since December 2018 as the President and Chief Executive Officer of Isola Group LLC, a global material sciences company specialized in making laminate materials used to fabricate multilayer printed circuit boards. From 2007 to 2018, Mr. Kelly served as the Global Chief Operating Officer for Cerberus Capital Management, L.P. Prior to this, Mr. Kelly served numerous operating, financial, and strategic planning roles across several public and private capital raising manufacturing and industrial companies. Mr. Kelly brings to our Board experience in operating an industrial company as well as finance and strategic planning. Committees of the Board Our Board has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Membership in each committee is shown in the following table.(1)

  3. Who will bear the costs of soliciting votes for the Annual Meeting?

    Nicholas J. Randall, 51, has served as our President and CEO since May 2024. Biographical information for Mr. Randall is included above under the section of this Proxy Statement entitled “Governance of the Company – Directors whose terms continue until 2026.” Michael A. Riordan, 40, has served as our Vice President, Chief Financial Officer and Treasurer since March 2022. Mr. Riordan joined the Company in November 2020 and served as our Chief Accounting Officer and Controller until his promotion to Chief Financial Officer and Treasurer. Mr. Riordan was Controller at InnerWorkings from 2017 to 2020. Prior to joining InnerWorkings, Mr. Riordan served in several financial management positions at Zekelman Industries, from 2013 to 2017. Mr. Riordan also held various positions at PricewaterhouseCoopers earlier in his career. He holds a bachelor’s degree in Accounting and Finance from Miami University and is a Certified Public Accountant. W. Matthew Tonn, 59, has served as our Chief Commercial Officer since September 2019. Mr. Tonn has over 30 years of commercial and operations experience in the railroad industry. Prior to joining the Company, Mr. Tonn served as the Vice President, Sales and Marketing of Westinghouse Air Brake Technologies Corporation’s (“WABTEC”) Train Control, Signaling and Analytics Group from May 2017 to September 2019 and as a regional Vice President, Sales and Marketing of WABTEC from October 2008 to May 2017. His earlier work experience includes various sales and marketing positions at Standard Car Truck, Co., National Castings/ABC NACO and VP Sales & Marketing / Equity Partner of ZefTek, Inc. Celia R. Perez, 38, has served as our Vice President, General Counsel and Corporate Secretary since August 2022 and served as our interim Vice President of Human Resources from March 2023 until January 2024. Prior to joining the Company, Ms. Perez held various legal roles of increasing responsibility at Fortune Brands Home & Security, Inc. (n/k/a Fortune Brands Innovations, Inc.) from August 2018 to August 2022. From 2012 to 2018, Ms. Perez worked as an associate attorney in private law firms focusing on mergers & acquisitions and complex commercial transactions. Ms. Perez holds a bachelor’s degree in Communication Studies, with a minor in Environmental Policy & Culture, from Northwestern University and a juris doctor from The George Washington University Law School. Juan Carlos Fuentes Sierra, 47, has served as our Corporate Controller and Chief Accounting Officer since April 2022. Mr. Fuentes Sierra joined the Company in February 2022 as Operations Controller until his promotion to Corporate Controller and Chief Accounting Officer. Prior to joining the Company, Mr. Fuentes Sierra served as Director of Internal Audit and SOX Compliance at GrafTech International Ltd from 2014 to 2019, and served in several roles of increasing responsibility internationally in Internal Audit, SOX Compliance, and Controllership between 2007 and 2014. Mr. Fuentes holds a bachelor’s degree in accounting and a masters of business administration from the Monterrey Institute of Technology and Higher Education and is a Certified Public Accountant. OUR BOARD RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NEOS. Proposal 3 Ratification of the Appointment of Independent Registered Public Accounting Firm for Fiscal Year 2025

  4. Audit Committee Report

    | ● | Annual incentive compensation. Historically, our annual cash incentive program primarily utilized financial metrics that the Compensation Committee, with input from our CEO, had determined were appropriately linked to stockholder value creation. Accordingly, the performance objectives underlying our annual cash incentive program for 2024 were based on adjusted EBITDA, sales goals, operating cash flow goals and safety goals. |

  5. Audit Committee Report

    | ● | Long-term incentive compensation. In January 2024, our Board, at the recommendation of the Compensation Committee, approved awards to Messrs. Randall, Tonn, Riordan and Meyer of time-based restricted shares and time-based stock options, with each form of award comprising approximately 50% of the target long-term incentive opportunity for each NEO. In May 2024, Mr. Randall received a promotional grant in recognition of his being named CEO of 67,619 stock options and 48,077 restricted shares. |

  6. Audit Committee Report

    | ● | Other goals. The Company’s compensation program is designed to balance short-term and long-term financial objectives. |

  7. Audit Committee Report

    Mr. Tonn is a participant in the Company’s Executive Severance Plan. Mr. Tonn is also eligible for additional severance in the event his employment is terminated by the Company without “Cause” or he terminates his employment for “Good Reason” within 24 months following a “Change in Control” (each as defined in the Executive Severance Plan). Upon the occurrence of such event, in addition to any benefits provided under the Executive Severance Plan, Mr. Tonn is eligible to receive continued base salary for an additional 12-month period following termination of employment, an additional payment equal to the average of the annual bonuses paid for the last two full years and an additional six months of health insurance continuation. In the event of a Change in Control while Mr. Tonn is employed with the Company, his equity vesting will be accelerated, and he will receive a transaction payment equal to 75% of his annual base salary. Mr. Tonn has agreed to keep confidential certain information, to assign intellectual property rights to the Company and to certain restrictions with respect to non-competition and non-solicitation of current or prospective customers that apply for one year following termination of employment, and non-solicitation of employees that apply for two years following termination of employment. Michael A. Riordan. In connection with Mr. Riordan’s appointment as Vice President, Chief Financial Officer and Treasurer, the Company and Mr. Riordan entered into a letter agreement regarding the terms of employment (the “Riordan Agreement”) dated March 18, 2022 and effective as of March 21, 2022. The Riordan Agreement does not provide for a specified term. It provides for an initial base salary of $300,000 per year; threshold, target and maximum annual bonus opportunities of 20%, 50% and 100%, respectively, of his base salary, and a sign-on award granting (i) 40,000 restricted shares of Company stock under the LTIP and (ii) 100,000 Company stock options. Mr. Riordan is entitled to participate in all management incentive plans and to receive all benefits under any employee benefit plan made available to employees. Mr. Riordan is a participant in the Company’s Executive Severance Plan. Mr. Riordan has agreed to keep confidential certain information, to assign intellectual property rights to the Company and to certain restrictions with respect to non-competition and non-solicitation of current or prospective customers that apply for one year following termination of employment, and non-solicitation of employees that apply for two years following termination of employment. James R. Meyer. Mr. Meyer retired as CEO, effective May 1, 2024. As previously disclosed, Mr. Meyer was eligible for retirement vesting on his then-outstanding equity awards in connection with his “Qualifying Retirement” under the terms of the Executive Severance Plan. Mr. Meyer continues to be bound by certain confidentiality, non-solicitation, non-competition and non-disparagement restrictions that apply for one year following his retirement. Stock Ownership Guidelines The Board requires that the Company’s NEOs and meet minimum stock ownership requirements that are consistent with industry standards and are set forth in the Company’s Corporate Governance Guidelines. Each NEO must maintain Company stock holdings at least equal to the aggregate number of shares (including options or shares granted but not vested) that the Company has awarded to such NEO during the three-year period ending on any given date of determination. As of December 31, 2024, the stock ownership of each of our NEOs either (i) exceeded the Company’s minimum stock ownership requirements or (ii) was in the transition period to comply with such guidelines. Executive Compensation Recovery Policy (“Clawback Policy”) and other Clawbacks In 2023, the Company adopted a new Clawback Policy in accordance with Section 10D of the Exchange Act and Rule 10D-1 promulgated thereunder (collectively, “Section 10D”). In the event the Company is required to prepare an accounting restatement, the Clawback Policy provides that the Company will within a reasonably prompt timeframe recover the erroneously awarded compensation from covered executive officers in accordance with Section 10D and Nasdaq rules. In addition, the Company’s incentive equity awards provide for forfeiture and clawback of incentive equity awards in connection with a breach of certain restrictive covenants. Company Insider Trading Policy The Company’s Insider Trading Policy prohibits directors, NEOs, other officers who are subject to Section 16 of the Exchange Act, and certain other employees who may be designated from time to time by the Company’s General Counsel (collectively, “Insiders”) from the following actions, without prior written consent from the Company’s General Counsel: (i) trading in Company securities during certain restricted periods, (ii) engaging in short sales of Company securities, (iii) buying or selling Company options (other than options granted pursuant to the Company’s long-term incentive plans), including puts or calls, (iv) holding Company securities in margin accounts and/or pledging Company securities as collateral, (v) hedging transactions, and (vi) placing standing orders with a broker to buy or sell Company securities that have a duration in excess of two (2) business days (other than when such orders are made pursuant to a trading plan that complies with SEC Rule 10b5-1). In addition, Insiders must preclear transactions in Company securities in advance with the Company’s General Counsel. While the Company is not subject to the Insider Trading Policy itself, the Company will not engage in transactions in its securities while aware of material nonpublic information. We believe that the Company’s Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. EXECUTIVE COMPENSATION Summary Compensation Table The following table sets forth information regarding 2024 compensation for each of the Company’s NEOs. Pursuant to SEC rules, information regarding 2023 compensation is presented for each executive who was also an NEO.

  8. Audit Committee Report

    | Summary Compensation Table | | | | | | | | | | Name | Principal Position | Year | Salary (1) | Stock Awards (2) | Option Awards (3) | Non-Equity Incentive Plan Compensation (4) | All Other Compensation | Total | | Nicholas J. Randall | President and CEO | 2024 | $516,666 | $450,481 | $450,487 | $757,889 | $122,512 | $2,298,035 | | W. Matthew Tonn | Chief Commercial Officer | 2024 | $400,000 | $168,752 | $168,727 | $275,596 | $16,200 | $1,029,275 | | | | 2023 | $375,000 | $125,625 | $125,003 | $184,250 | $16,812 | $826,690 | | Michael A. Riordan | Vice President, Chief Financial Officer and Treasurer | 2024 | $400,000 | $162,001 | $161,979 | $275,596 | $16,200 | $1,015,776 | | | | 2023 | $360,000 | $112,500 | $111,943 | $165,000 | $9,724 | $759,167 | | James R. Meyer | Former President and CEO | 2024 | $213,140 | $468,752 | $468,686 | - | $153,679 | $1,304,257 | | | | 2023 | $625,000 | $423,749 | $421,651 | $621,500 | $20,724 | $2,112,624 |

  9. Audit Committee Report

    DIRECTOR COMPENSATION Set forth below are summaries of the compensation paid to each of our non-employee directors in 2024, in both cash and equity awards. No information is presented for Mr. Randall, who joined the Board on May 1, 2024 and does not receive any compensation for his role as an employee director. The compensation paid to Mr. Meyer in connection with his service as a non-employee director since May 1, 2024 is reported above under the “All Other Compensation” column of the Summary Compensation Table. 2024 Director Compensation Table

  10. Audit Committee Report

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | | Elizabeth K. Arnold | 71,291 | 74,999 | 146,290 | | Rodger Boehm | 65,291 | 74,999 | 140,290 | | José De Nigris Felán | 52,291 | 74,999 | 127,290 | | William D. Gehl | 87,574 | 74,999 | 162,573 | | Jesús Salvador Gil Benavides | 47,541 | 74,999 | 122,540 | | Travis Kelly | 51,291 | 74,999 | 126,290 | | Malcolm F. Moore | 66,291 | 74,999 | 141,290 |