Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 27, 2022, NiSource Inc. (the "Company") announced that Joe Hamrock,
the Company's President and Chief Executive Officer, will retire from his role
as President and Chief Executive Officer and as a director, effective
February 14, 2022. In addition, the Company also announced on January 27, 2022
that, as a result of a long-planned succession process, the Board of Directors
(the "Board") appointed Lloyd Yates as the Company's President and Chief
Executive Officer, effective February 14, 2022. Mr. Yates, who joined the Board
in 2020, will continue to serve as a director. Following the transition,
Mr. Hamrock will facilitate the CEO transition for a short time in a
non-executive role, and then will retire from the Company.
Mr. Yates, 61, most recently served as Executive Vice President, Customer and
Delivery Operations, and President, Carolinas Region, since 2014 at Duke Energy
Corporation ("Duke Energy"), until his retirement in 2019. In that role, he was
responsible for aligning customer-focused products and services to deliver a
personalized end-to-end customer experience to position Duke Energy for
long-term growth, as well as for the profit/loss, strategic direction and
performance of Duke Energy's regulated utilities in North Carolina and South
Carolina. Previously, he served as Executive Vice President of Regulated
Utilities at Duke Energy, overseeing Duke Energy's utility operations in six
states, federal government affairs, and environmental and energy policy at the
state and federal levels, as well as Executive Vice President, Customer
Operations, where he led the transmission, distribution, customer services, gas
operations and grid modernization functions for millions of utility customers.
He held various senior leadership roles at Progress Energy, Inc., prior to its
merger with Duke Energy, from 2000 to 2012.
In connection with Mr. Yates' appointment as President and Chief Executive
Officer, Mr. Yates will receive an annual base salary of $1,000,000, a one-time
cash bonus of $500,000, payment of relocation expenses and an annual incentive
award under the Company's short-term cash-based incentive program ("STI") with a
target payout of 115% of his annual base salary. Mr. Yates will also receive a
long-term incentive grant under the Company's long-term incentive program
("LTI") with a grant date value of $4,500,000. This grant will be awarded as a
combination of service-based restricted stock units (20%) and performance-based
stock units (80%), each vesting during the first quarter of 2025, unless
otherwise determined by the Compensation Committee. Vesting of the
performance-based stock units is contingent on satisfaction of pre-determined
performance criteria. The terms of these awards are consistent with the forms of
restricted stock unit award agreement and performance share unit award
agreement, which were previously filed as Exhibits 10.53 and 10.54,
respectively, to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2020 ("Form 10-K").
Mr. Yates will also be entitled to participate in the Company's benefit plans
and the executive severance policy. In addition, it is anticipated that
Mr. Yates and the Company will enter into a change in control and termination
agreement that provides for a lump sum payment equal to three times his annual
base salary and target incentive bonus compensation and 130% of COBRA
continuation premiums due for the three-year period following termination. The
forms of the executive severance policy and the change in control and
termination agreement were previously filed as Exhibits 10.49 and 10.23,
respectively, to the Form 10-K, and these programs are described in the
Company's definitive proxy statement, dated April 19, 2021.
Mr. Yates has no family relationships with any director or executive officer of
the Company. There are no arrangements or understandings between Mr. Yates and
any other persons pursuant to which he was selected as an officer of the
Company, and Mr. Yates does not have any direct or indirect material interest in
any transaction or proposed transaction involving the Company required to be
reported under Item 404(a) of Regulation S-K.
On January 27, 2022, the Board appointed Sondra Barbour as a director of the
Company, effective immediately. On January 27, 2022, the Board also appointed
Cassandra Lee as a director of the Company, effective as of February 14, 2022.
Each of Mses. Barbour and Lee will stand for election at the Company's 2022
Annual Meeting of Stockholders. Mses. Barbour and Lee, respectively, will
replace Dr. Carolyn Woo, whose retirement from the Board was previously
announced and which is effective immediately, and Mr. Hamrock, whose retirement
from the Board will be effective February 14, 2022. Each of Dr. Woo's and
Mr. Hamrock's respective decisions to retire from the Board was not due to any
disagreement with the Company on any matter relating to the Company's
operations, policies or practices. The Board thanks Dr. Woo and Mr. Hamrock for
their leadership and service to the Company.
Ms. Barbour, 59, retired as Executive Vice President, Information Systems &
Global Solutions, of Lockheed Martin Corporation in 2016 and served in a
transition role at Leidos Holdings until her retirement in 2017. Prior to that,
Ms. Barbour was employed by Lockheed Martin beginning in 1986 and served in
various leadership capacities there. She has extensive technology experience,
notably in the design and development of large-scale information systems. From
2008 to 2013, she served as Senior Vice President, Enterprise Business Services
and Chief Information Officer, heading all of Lockheed's internal information
technology operations, including protecting the company's infrastructure and
information from cyber threats. Prior to that role she served as Vice President,
Corporate Shared Services and Vice President, Corporate Internal Audit providing
oversight of supply chain activities, internal controls, and risk management.
Ms. Barbour also serves as a director of AGCO Corporation and was previously a
director for 3M Company until 2019, and a director for Perspecta Inc. until
2021.
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Ms. Lee, 53, is the Chief Audit Executive at AT&T Inc., a leading provider of
telecommunications, media and technology services globally, a position she has
held since 2021. Ms. Lee has been employed by AT&T in various accounting and
finance roles of increasing responsibility since joining the company in 1993,
including as Senior Vice President and Chief Financial Officer, Network,
Technology and Capital Management from 2018 to 2021, and as Vice President,
Finance from 2016 to 2018. In her nearly three-decade tenure at AT&T, Ms. Lee
has gained significant experience in retail operations, distribution strategy,
global supply chain, mergers, acquisitions, and integration, capital management,
network and other capacity planning, and shared services operations. Ms. Lee is
a Certified Public Accountant and serves on the Board of Directors of Andretti
Acquisition Corp., a special purpose acquisition company, where she chairs the
Audit Committee.
There is no arrangement or understanding between Ms. Barbour and any other
person, or Ms. Lee and any other person, pursuant to which each individual was
selected as a director of the Company. Neither Ms. Barbour nor Ms. Lee has any
direct or indirect material interest in any transaction or proposed transaction
involving the Company required to be reported under Item 404(a) of Regulation
S-K.
Consistent with the Company's compensation practices for non-employee directors,
each of Mses. Barbour and Lee will receive an annualized retainer of $255,000,
consisting of $105,000 in cash and an award of restricted stock units valued at
$150,000 at the time of the award. The form of restricted stock unit award
agreement for non-employee directors was previously filed as Exhibit 10.43 to
the Form 10-K.
Copies of the Company's press releases, dated January 27, 2022, to announce the
CEO transition and Mses. Barbour's and Lee's appointments are attached as
Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit
No. Description
99.1 Press Release Announcing CEO Transition, dated January 27, 2022
99.2 Press Release Announcing Board Appointments, dated January 27, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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