SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED
IN PROXY STATEMENT
SCHEDULE
14A
INFORMATION
Proxy
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Corporation
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CSX
Corporation today issued the following employee communication:
This
morning CSX issued the attached press release in response to a recent letter
from The Children’s Investment Fund (TCI). The TCI letter, which it
issued publicly last week, was critical of a recent amendment to the CSX
bylaws
allowing shareholders to request special meetings, under certain circumstances,
in addition to the annual shareholder meeting each spring.
A
public
exchange of ideas between a company like CSX and hedge funds like TCI is
not
unusual. We will keep you posted on future
developments.
FOR
IMMEDIATE
RELEASE
CSX
BOARD RESPONDS TO TCI
Jacksonville,
FL – February 14, 2008 – CSX Corporation (NYSE: CSX) today sent the following
letter to The Children’s Investment Fund (TCI):
Chris
Hohn, Managing Partner
The
Children’s Investment Fund
7
Clifford Street
London,
England
Dear
Mr.
Hohn:
The
CSX
Corporation Board of Directors has received the letter from The Children’s
Investment Fund (“TCI”) dated February 7, 2008. The Board takes its
responsibilities to CSX shareholders seriously and has reviewed the letter
and
considered your proposal to allow shareholders the right to request special
meetings for the purpose of electing directors throughout the year.
CSX’s
recent Bylaw amendments reflect the Board’s commitment to high standards of
corporate governance. These Bylaw amendments enable 15 percent of
shareholders to request special meetings, well below the 25-33 percent level
in
similar bylaw provisions recently implemented by a number of other public
companies.1 This
new right for CSX shareholders
is in addition to the strong rights CSX shareholders already have with respect
to governance and director elections.
1
These
companies
include Colgate-Palmolive, JPMorgan, Bank of America, Allegheny Energy
and El
Paso Corp.
Every
CSX
director stands for election every year and is subject to a majority voting
standard that empowers shareholders to “vote out” a director, even in an
uncontested election year. As the term implies, “special”
meetings are the place for shareholders to consider extraordinary matters,
not
the regular annual business of director elections.
The
recent CSX Bylaw amendments avoid the disruption and diversion of resources
associated with the potential for multiple director elections each
year. The CSX amendments strike the appropriate balance between
giving a small minority of shareholders the ability to request special
shareholder meetings and protecting the interests of all
shareholders.
Against
this background, TCI’s criticism of the CSX Bylaw amendments is both unwarranted
and disingenuous. Under the guise of providing shareholders with a
voice, TCI seeks to undermine the functioning of the CSX Board in furtherance
of
TCI’s own purposes. TCI wants the ability to
initiate a
perpetual “recall” contest through special meetings as a tool to pressure the
Board to implement TCI’s
proposals, regardless of their
merit. Taken together with TCI’s nomination of candidates to fill
five of CSX’s twelve Board seats, TCI’s criticism of the CSX Bylaw amendments
makes it clear that TCI’s interest is not in good corporate governance, but in
achieving effective control of the company notwithstanding its ownership
of only
4% of the shares.
The
CSX
Board and management team are proud to stand on a record of outstanding
performance. Since 2004, the performance of CSX has improved sharply on
virtually every performance and safety measure to levels at the forefront
of the
industry. Moreover, the value of CSX stock has increased nearly 150
percent, providing shareholders with a return better than the rest of the
North
American rail industry and 94 percent of all S&P 500 companies during this
same time period. We remain committed to protecting, and advancing,
the interest of all
shareholders.
On
behalf
of the CSX Corporation Board of Directors,
Edward
J.
Kelly, III, Presiding Director, CSX Corporation
About
CSX
CSX
Corporation, based in Jacksonville, Fla., is one of the nation's leading
transportation companies, providing rail, intermodal and rail-to-truck trainload
services. The company's transportation network spans approximately 21,000
miles,
with service to 23 eastern states and the District of Columbia, and connects
to
more than 70 ocean, river and lake ports. More information about CSX Corporation
and its subsidiaries is available at the company's web site, www.csx.com.
Forward-looking
statements
This
information and other statements by the company contain forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act
with respect to, among other items: projections and estimates of earnings,
revenues, cost-savings, expenses, or other financial items; statements of
management’s plans, strategies and objectives for future operation, and
management’s expectations as to future performance and operations and the time
by which objectives will be achieved; statements concerning proposed new
products and services; and statements regarding future economic, industry
or
market conditions or performance. Forward-looking statements are typically
identified by words or phrases such as “believe,” “expect,” “anticipate,”
“project,” “estimate” and similar expressions. Forward-looking statements speak
only as of the date they are made, and the company undertakes no obligation
to
update or revise any forward-looking statement. If the company does update
any
forward-looking statement, no inference should be drawn that the company
will
make additional updates with respect to that statement or any other
forward-looking statements.
Forward-looking
statements are subject to a number of risks and uncertainties, and actual
performance or results could differ materially from that anticipated by these
forward-looking statements. Factors that may cause actual results to differ
materially from those contemplated by these forward-looking statements include,
among others: (i) the company’s success in implementing its financial and
operational initiatives, (ii) changes in domestic or international economic
or business conditions, including those affecting the rail industry (such
as the
impact of industry competition, conditions, performance and consolidation);
(iii) legislative or regulatory changes; (iv) the inherent business
risks associated with safety and security; and (v) the outcome of claims
and litigation involving or affecting the company.
Other
important assumptions and factors that could cause actual results to differ
materially from those in the forward-looking statements are specified in
the
company’s SEC reports, accessible on the SEC’s website at www.sec.gov and the
company’s website at www.csx.com.
IMPORTANT
INFORMATION
CSX
Corporation ("CSX") plans to file with the SEC and furnish to its shareholders
a
Proxy Statement in connection with its 2008 Annual Meeting, and advises its
security holders to read the Proxy Statement relating to the 2008 Annual
Meeting
when it becomes available, because it will contain important information.
Security holders may obtain a free copy of the Proxy Statement and other
documents (when available) that CSX files with the SEC at the SEC’s website at
www.sec.gov. The Proxy Statement and these other documents may also be obtained
for free from CSX by directing a request to CSX Corporation, Attn: Investor
Relations, David Baggs, 500 Water Street C110, Jacksonville, FL
32202.
CERTAIN
INFORMATION CONCERNING PARTICIPANTS
CSX,
its
directors and named executive officers may be deemed to be participants in
the
solicitation of CSX’s security holders in connection with its 2008 Annual
Meeting. Security holders may obtain information regarding the names,
affiliations and interests of such individuals in CSX’s Annual Report on Form
10-K for the year ended December 29, 2006 and its proxy statement dated March
30, 2007, each of which is filed with the SEC. To the extent holdings
of CSX securities have changed since the amounts printed in the proxy statement,
dated March 30, 2007, such changes have been reflected on Statements of Change
in Ownership on Form 4 filed with the SEC.
Contacts
Analysts
&
Investors
David
Baggs
CSX
Investor Relations
904-359-4812
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Media
Garrick
Francis
CSX
Corporate Communications
904-359-1708
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Joele
Frank / Andrew Siegel
Joele
Frank, Wilkinson Brimmer Katcher
212-355-4449
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