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CSX Accepts 2 For Board; 2 Seats Still Under Review

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The Associated Press

Published: July 26, 2008

JACKSONVILLE - Railroad giant CSX said it has asked two nominees of activist hedge fund shareholders TCI and 3G Capital to join its board, but said it will await a vote review and court action before seating its two remaining members.

Jacksonville-based CSX Corp. said Friday that nominees Gilbert H. Lamphere and Alexandre Behring will join the board immediately.
Lamphere is managing director of private investment firm Lamphere Capital Management and a former director at Canadian National Railway Co.; Behring is 3G managing director.

"We look forward to welcoming our new board members and working together to continue delivering record performance for all our shareholders," said Michael Ward, CSX chairman.

Ward said the continuing legal fight over control of the board being waged by CSX against TCI and 3G was not hurting the company and pointed to a second-quarter earnings rise of 19 percent.

"That's not an issue," Ward said after the meeting.

The vote to elect two other hedge fund board candidates, TCI founder Chris Hohn and Timothy T. O'Toole, managing director of the London Underground, remains too close to call.

Ward said the most recent preliminary draft report of an independent inspector of elections shows that the candidates competing for those seats have a difference in votes that is now less than one-fifth of 1 percent of the shares entitled to vote at the meeting, and that the status of a number of votes is still unclear.

Ward said the vote review process may be completed as early as next week.

Both of those seats are pending the company's court appeal with the 2nd U.S. Court of Appeals. The company expects the appeal to be resolved within two months.

In a statement released Friday, TCI and 3G took exception to CSX's refusal to seat all elected directors upon certification of the election results.

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