Children's Investment Fund, 3G Capital Partners seek proxies for CSX annual meeting on June 25

By Lisa Kerner

Charlotte, N.C., April 28 - The Children's Investment Fund Management (UK) LP and its affiliates, along with 3G Capital Partners Ltd. and certain of its affiliates (together, TCI/3G Group), are soliciting proxies to be used at the CSX Corp. annual meeting on June 25 in support of several proposals.

According to a schedule 14A filing with the Securities and Exchange Commission, TCI/3G Group is soliciting proxies to:

• Elect Christopher Hohn, Alexandre Behring, Gilbert H. Lamphere, Timothy T. O'Toole and Gary L. Wilson to become directors;

• Adopt a proposal to amend CSX's bylaws to permit one or more shareholders holding 15% or more of the outstanding shares of capital stock of CSX having voting power to call a special meeting of the shareholders;

• Vote against the company's alternative bylaw amendment related to the calling of special meetings, which restricts the purposes for which a special meeting may be called;

• Adopt a resolution to repeal any changes made by the CSX board to the bylaws from Jan. 1 up to and including the date of the 2008 annual meeting; and

• Abstain from voting on the audit committee selection of Ernst & Young LLP as the company's independent registered public accounting firm for 2008.

The TCI/3G Group said it beneficially owns a total of 35,054,952 shares, or some 8.7%, of the common stock with a value of $2.2 billion.

In the filing, TCI/3G Group said it will vote its shares for the election of its nominees and for the candidates who have been nominated by CSX other than Elizabeth Bailey, Steven Halverson, Robert Kunisch, William Richardson and Frank Royal.

On April 25, CSX said its board unanimously recommended its shareholders vote for the company's director nominees and to reject the five-member slate announced by Children's Investment Master Fund in December.

Of the company's nominees to the 12-person board, 11 are currently on the board, including CSX chairman, president and chief executive officer Michael J. Ward.

In March, CSX filed a federal lawsuit against the Children's Investment Fund and 3G Capital Partners alleging violations of federal securities laws, it was previously reported.

The hedge funds had formed a group to nominate a slate of directors to stand for election at the 2008 CSX annual meeting, according to a prior company news release.

CSX, concerned about the effects of the possible violations, changed the date of its 2008 annual meeting to June 25.

In February, Children's Investment Fund disagreed with CSX's bylaw changes that limited shareholders' ability to request that the board call a special meeting of shareholders.

CSX is a Jacksonville, Fla.-based railroad and transportation company.

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