Activists Win CSX Board Battle

CSX has had an ongoing proxy battle with The Children’s Investment Fund Management and 3G Capital Partners.  TCI and 3G announced in a statement that despite CSX's objections, four TCI and 3G nominees have been elected to CSX’s board of directors. The proxy battle ended with the elections of Alex Behring, Chris Hohn, Gil Lamphere, and Tim O’Toole to the 12-member board.

Last month, CSX sent a letter to shareholders recommending that they re-elect its directors and disregard TCI and 3G’s four nominees. In the letter, CSX Chairman, President, and CEO Michael J. Ward urged choose between CSX's "experienced board" or TCI's nominees. He said, "TCI has violated securities laws, testified falsely in Federal Court and made numerous suggestions that could have destroyed value in CSX."

However, despite Ward's letter, on June 25, TCI and 3G announced in a statement that they anticipated succeeding in their endeavors after seeing preliminary voting results.

The official announcement that TCI and 3G's four nominees had been elected occurred on July 16.

In addition to the new board appointments a special meeting proposal, proposed by TCI and 3G, which allows special meetings to be called for any reason by holders of 15% of the outstanding shares, was approved. Separately, the CSX bylaw amendment, which would prohibit shareholders from calling special meetings to elect directors, was rejected.

TCI and 3G also won approval for their proposal to repeal any recent bylaws, including a recent restrictive bylaw regarding the right of shareholders to call a special meeting.

Of the victory, TCI and 3G said, “The election of four of TCI and 3G’s nominees is a great victory for all CSX shareholders.”