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6/26/2008



Rail News: Rail Industry Trends

Outcome of CSX board elections could take a month to sort out


And the winners are ... unknown. After a six-month proxy battle between CSX Corp. and the Children's Investment Fund Management L.L.P. (TCI)/3G Capital Partners Ltd. to install their nominees on the Class I's board, voting results from yesterday's annual shareholders meeting in New Orleans were "too close to call," CSX officials said in a statement released late in the day. So much so, it will take about a month to sort them out, they said.

CSX will reconvene the annual meeting July 25 at 10 a.m. (EST) at its Jacksonville, Fla., headquarters to receive certification of the voting results and announce the winners. Yesterday's meeting adjourned to allow an independent inspector of elections more time to tabulate the voting results.

"We have met with a large number of our shareholders over the past few months and we appreciate their candor and insights regarding our company," said CSX Chairman, President and Chief Executive Officer Michael Ward in the statement. "We remain committed to creating further value for all of our shareholders."

If certified voting results are available earlier than July 25, CSX will make them available at that time, says CSX spokesman Gary Sease, adding that the Class I is uncertain if results will be tabulated sooner.

However, TCI and 3G officials claimed four of their five nominees had been elected to CSX's 12-member board based on "preliminary voting results," they said in a prepared statement. In December, TCI and 3G formed a group — whose members own 8.7 percent of CSX's outstanding common shares — that nominated five candidates to CSX's board.

TCI and 3G officials identified Alex Behring, Chris Hohn, Gil Lamphere and Tim O'Toole as the elected directors. Behring is 3G's managing director; Hohn is TCI's founder; Lamphere is managing director of Lamphere Capital Management; and O'Toole is managing director of the London Underground. The group also nominated Northwest Airlines Co-Chairman Gary Wilson.

"This is a victory for all CSX shareholders. We are gratified by the strong support we have received from CSX shareholders and RiskMetrics Group - ISS Governance Services, both of which clearly recognize the value of adding our highly qualified nominees to the board," TCI and 3G officials said. "We look forward to working constructively with the board, management and employees of CSX to realize the company's full potential in the years ahead for the benefit of its customers, employees and owners."

CSX officials aren't sure how TCI and 3G executives monitored the voting yesterday and were able to determine four of their nominees had won board slots, says Sease.

Jeff Stagl


Contact Progressive Railroading editorial staff.

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