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Rail News: CSX Transportation

TCI/3G nominees beat out CSX candidates for four board seats, final election results show


The final vote tally is in and the election results didn't change. Yesterday, CSX Corp. announced an election inspector released a final report on board votes cast at the annual shareholders meeting that shows four of the Children's Investment Fund Management L.L.P. (TCI)/3G Capital Partners Ltd.'s five nominees received more votes than CSX candidates.

The winning nominees are Gilbert Lamphere, Alexandre Behring, Christopher Hohn and Timothy O'Toole, all of whom led vote counts in preliminary tallies. Behring is 3G's managing director; Lamphere is managing director of Lamphere Capital Management; Hohn is TCI's founder; and O'Toole is managing director of the London Underground. CSX already invited Lamphere and Behring to join the board, and they assumed their seats on July 28.

CSX plans to continue to "work diligently" to resolve all remaining issues associated with the election, possibly before the annual shareholders meeting is reconvened again on Sept. 24, the company said. The final outcome remains uncertain for two reasons: a judicial appeal and questions about the vote count, CSX officials said in a prepared statement.

The two seats involving O'Toole and Hohn will be determined by an appellate court decision at an expedited hearing to be held Aug. 25. CSX asked the court to prevent TCI/3G from voting 6.4 percent of their CSX shares.

"If the court decides in favor of the CSX position, O'Toole and Hohn will not have the votes needed to be elected to the board," CSX officials said. "The case goes to the integrity of the election, and the company is hopeful that it will be completed before the Sept. 24 meeting and before the next regularly scheduled board meeting in October.

A seta involving Hohn and CSX nominee Frank Royal also is the subject of controversy surrounding the tabulation of votes from other shareholders, CSX said. The Class I challenged the inspectors' failure to count more than half a million votes cast under three union-sponsored 401k plans, notwithstanding a "clear intention of the plan trustee to cast those votes for Royal," CSX officials said.

"If these and other challenged votes were counted as the company believes they should have been, Royal would have received more votes than Hohn, regardless of the outcome of the pending litigation in the second circuit appeal," they said.

TCI/3G officials expressed satisfaction that certified results confirmed that their four nominees had been elected to CSX's board.

"They bring valuable railroad and management experience to the CSX board and look forward to working constructively with their fellow directors for the benefit of all CSX stakeholders," they said in a statement. "We thank our fellow shareholders for their patience during this lengthy process and expect all newly elected board members to be seated without further delay."

The certified results also confirmed that TCI/3G's special meeting proposal — which would allow special meetings to be called for any purpose by holders of 15 percent of outstanding shares — was approved and a bylaw amendment proposed by CSX that would prohibit shareholders from calling special meetings was rejected, TCI/3G officials said. In addition, their proposal to repeal any recent bylaw amendments, including a recent one limiting the right of shareholders to call a special meeting, also was approved, they said.

Contact Progressive Railroading editorial staff.

More News from 8/1/2008