Schedule 14A
We note that CSX filed a definitive proxy statement relating to its annual meeting on March 22, 2022. We also note that a preliminary proxy statement on Schedule 14A was filed by Chris Larson on April 12, 2022, constituting a "solicitation in opposition," as defined in Note 3 to paragraph (a) of Exchange Act Rule 14a-6.Rest of the question
In light of the information summarized in the following bullet points, suggesting that CSX knew, or reasonably should have known, of the existence of such solicitation in opposition, please advise why CSX did not file its annual proxy statement in preliminary form pursuant to Exchange Act Rule 14a-6(a). In responding to this comment, please refer to I.G.2 of the Division of Corporation Finance: Manual of Publicly Available Telephone Interpretations, Third Supplement, July 2001. It is our understanding that: • in correspondence dated February 2, 2022 from Mr. Larson addressed to Nathan Goldman, Corporate Secretary of CSX, Mr. Larson gave notice to Mr. Goldman that Mr. Larson "intends to solicit proxies from shareholders in support of the shareholder Board nominee" and that "such solicitation shall be in compliance regarding proxy solicitation as required pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended." • in an email from Mark Austin, Assistant Corporate Secretary to Mr. Larson, dated February 11, 2022, Mr. Austin asked that Mr. Larson confirm whether he planned to file a proxy statement with the SEC and deliver proxy statements to CSX shareholders "representing at least half of CSX's outstanding common stock." We note that such email did not seek confirmation as to whether Mr. Larson planned to deliver proxy statements to any CSX shareholders, e.g. shareholders representing less than half of CSX's outstanding common stock. • in an email from Mr. Larson to Mr. Austin, dated February 14, 2022, replying to Mr. Austin's request for confirmation, Mr. Larson indicated that he was not seeking to deliver a proxy statement and/or form of proxy to "holders of at least the percentage of the Corporation's outstanding capital stock required to elect the nominee." We note that such correspondence from Mr. Larson does not appear to refute the statement in his February 2 correspondence suggesting that he would solicit some CSX shareholders. Please also advise us of CSX's intent with respect to disclosing to its shareholders the existence of this solicitation in opposition along with the additional disclosure specified by Items 4(b) and 5(b) in Exchange Act Rule 14a-101.
No reply letter found.
We note that CSX has disseminated its proxy statement, including a white proxy card. Please confirm the participants will be using a color of proxy card other than white.
I am transmitting our response to the comment of the staff of the Division of Corporation Finance (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) regarding the Company’s Definitive Proxy Statement on Schedule 14A dated April 18, 2022 (the “CSX Proxy Statement”) concerning its upcoming Annual Meeting of Shareholders to be held on May 4, 2022 (the “CSX Annual Meeting”). When used in this letter, the words “Company,” “CSX,” “we,” “us,” and “our” refer to CSX Corporation. Set forth below is our response to the Staff’s comment. For convenience, the Staff comment is reproduced in bold italics below, and is followed by our response.One letter for all the questions, without numbered answers. Read the reply ↗Rest of the letter
We note that CSX filed a definitive proxy statement relating to its annual meeting on March 22, 2022. We also note that a preliminary proxy statement on Schedule 14A was filed by Chris Larson on April 12, 2022, constituting a “solicitation in opposition,” as defined in Note 3 to paragraph (a) of Exchange Act Rule 14a-6. In light of the information summarized in the following bullet points, suggesting that CSX knew, or reasonably should have known, of the existence of such solicitation in opposition, please advise why CSX did not file its annual proxy statement in preliminary form pursuant to Exchange Act Rule 14a-6(a). In responding to this comment, please refer to I.G.2 of the Division of Corporation Finance: Manual of Publicly Available Telephone Interpretations, Third Supplement, July 2001. · in correspondence dated February 2, 2022 from Mr. Larson addressed to Nathan Goldman, Corporate Secretary of CSX, Mr. Larson gave notice to Mr. Goldman that Mr. Larson “intends to solicit proxies from shareholders in support of the shareholder Board nominee” and that “such solicitation shall be in compliance regarding proxy solicitation as required pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.” an email from Mark Austin, Assistant Corporate Secretary to Mr. Larson, dated February 11, 2022, Mr. Austin asked that Mr. Larson confirm whether he planned to file a proxy statement with the SEC and deliver proxy statements to CSX shareholders “representing at least half of CSX's outstanding common stock.” We note that such email did not seek confirmation as to whether Mr. Larson planned to deliver proxy statements to any CSX shareholders, e.g. shareholders representing less than half of CSX’s outstanding common stock. an email from Mr. Larson to Mr. Austin, dated February 14, 2022, replying to Mr. Austin’s request for confirmation, Mr. Larson indicated that he was not seeking to deliver a proxy statement and/or form of proxy to “holders of at least the percentage of the Corporation's outstanding capital stock required to elect the nominee.” We note that such correspondence from Mr. Larson does not appear to refute the statement in his February 2 correspondence suggesting that he would solicit some CSX shareholders. Please also advise us of CSX’s intent with respect to disclosing to its shareholders the existence of this solicitation in opposition along with the additional disclosure specified by Items 4(b) and 5(b) in Exchange Act Rule 14a-101. The Company acknowledges the Staff’s comment, and in light of the preliminary proxy statement on Schedule 14A filed by Mr. Chris Larson (“Mr. Larson”) on April 12, 2022, the Company filed a revised definitive proxy statement (DEFR14A) with the Commission on April 22, 2022, to disclose Mr. Larson’s solicitation in opposition and provide the additional disclosure specified by Items 4(b) and 5(b) in Rule 14a-101 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). At the time of filing its definitive proxy statement on March 22, 2022, based on the Company’s then-current understanding of Mr. Larson’s likely intentions from email and telephone communications with Mr. Larson, the Company did not believe that a preliminary proxy statement under Rule 14a-6(a) of the Exchange Act was required. The Company regrets any confusion between it and Mr. Larson regarding his intentions. The Company filed its definitive proxy statement under a good faith belief that a preliminary proxy statement was not required. Staff’s comment, on February 4, 2022, Mr. Larson notified the Corporate Secretary of CSX of his intention to nominate himself for election as a director at the CSX Annual Meeting. In connection with his notice to the Corporate Secretary of CSX, Mr. Larson delivered an “Advanced Proxy Solicitation Notice,” that indicated his intention “to solicit proxies from shareholders in support of [his nomination].” Article I, Section 11(a)(ii)(C)(5) of the Amended and Restated Bylaws of CSX Corporation (the “Bylaws”) requires “a representation whether the shareholder or the beneficial owner, if any, intends or is part of a group that intends (a) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (b) otherwise to solicit proxies from shareholders in support of such proposal or nomination” (emphasis added). This Bylaw provision corresponds to Rule 14a-4(c)(2) of the Exchange Act, which permits a registrant to exercise discretionary voting authority even if it has received timely notice of a shareholder proposal pursuant to Rule 14a-4(c)(1) if the proponent has not, among other things, provided “the registrant with a written statement, within the time-frame determined under paragraph (c)(1) of [Rule 14a-4 of the Exchange Act], that the proponent intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the company’s voting shares required under applicable law to carry the proposal.” “Advanced Proxy Solicitation Notice” lacked information required under the Bylaws, the Company sought clarification from him. On February 14, 2022, Mr. Larson provided such clarification, noting in his cover email that “The short answer is no, I will not be soliciting the percentage of the company’s voting shares required to carry the nomination.” Likewise, in a letter attached to this email, he stated: “Should solicitation occur, I am not seeking to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to elect the nominee.” The Company recognized Mr. Larson’s right to nomination, and communications from Company representatives to Mr. Larson were focused on whether he would meet the requirements under Commission rules for a solicitation in opposition. That emphasis, including the use of specific language from the rules, may have resulted in confusion between the parties. The Company’s good faith belief that Mr. Larson would likely not conduct a solicitation in opposition was buttressed by a lack of communication from Mr. Larson following his February 14, 2022 email, the fact that Mr. Larson had not requested the Company’s shareholder list or contacted Broadridge Financial Solutions and therefore the Company believed he had no way of distributing a proxy statement and/or form of proxy to any of CSX’s shareholders and Mr. Larson’s ambiguous and indefinite statements to the Company regarding his potential solicitation, including in his formal letter response, dated February 14, 2022 (“[s]hould solicitation occur”). The Company ultimately determined that it could properly exercise discretionary voting authority with respect to Mr. Larson’s nomination at the CSX Annual Meeting and following a review of the Commission’s Compliance and Disclosure Interpretations Question (“C&DI”) 124.08, the Company believed it was not required to file contested proxy materials in preliminary form. Instead, the Company, consistent with C&DI 124.08, filed a definitive proxy statement with the Commission on March 22, 2022. Based on the guidance set forth in C&DI 124.08, the CSX Proxy Statement included a description of the nature of Mr. Larson’s nomination and a discussion of how CSX intended to exercise its discretion to vote on his nomination if properly presented at the CSX Annual Meeting, without reference to or discussion of any solicitation in opposition with respect to Mr. Larson’s nomination. The Company also believed that this approach was consistent with Rule 14a-6(a), including the guidance that the “exclusion from filing preliminary proxy material does not apply if the registrant comments upon or refers to a solicitation in opposition in connection with the meeting in its proxy material” (emphasis added)). Company’s good faith belief as described above, we do not believe that filing a definitive proxy statement on March 22, 2022 was inconsistent with the I.G.2 of the Division of Corporation Finance: Manual of Publicly Available Telephone Interpretations, Third Supplement, July 2001 (the “Telephone Interpretation”) in light of the facts known at the time. Specifically, the Telephone Interpretation makes clear that a corporation cannot avoid its responsibility to file a preliminary proxy statement because a dissident has not yet filed a solicitation statement in opposition that the company “knows, or reasonably should know, of.” For the reasons explained above, we do not believe this was the case here. Given Mr. Larson did ultimately file a preliminary proxy statement on April 12, 2022, including his solicitation in opposition, the Company promptly filed a revised definitive proxy statement with the Commission on April 22, 2022 to describe and respond to certain elements of Mr. Larson’s solicitation in opposition and provide the additional disclosure specified by Items 4(b) and 5(b) in Exchange Act Rule 14a-101.
Please revise the proxy card to comply with the requirements in Exchange Act Rule 14a4(a)(3).
See the reply above.
The first sentence following the voting boxes in Item 1 states that Chris Larson "intends to use this proxy to vote (i) FOR Chris Larson and (ii) FOR the candidates who have been nominated by the Company to serve as directors, other than Paul C.Rest of the question
Hilal..." Please consider including clarifying language following this sentence that notes that shareholders may withhold authority to vote for one or more additional company nominees, by writing the name of the nominee(s) in the blanks provided above. Refer to Section II.I ("Amendment to the Bona Fide Nominee Rule") in Exchange Act Release No. 31326 and the example referred to in that section.
See the reply above.
The proxy card states that "Chris Larson does not expect that he will not be unable to stand for election, but, in the event that he is unable to serve or for good cause will not serve, the shares of common stock represented by this proxy card will be voted for substitute nominee(s), to the extent this is not prohibited under the Company's organizational documents and applicable law." Please revise to explain theRest of the question
reference to "good cause."
See the reply above.
The proxy card indicates that "Chris Larson has reserved the right to nominate substitute person(s) if the Company makes or announces any changes to its organizational documents or takes or announces any other action that has, or if consummated would have, the effect of disqualifying any nominee, to the extent this is not prohibited under the Company's organizational documents and applicable law.Rest of the question
In any such case, shares of common stock represented by this proxy card will be voted for such substitute nominee(s)." Please explain how this would be permitted under the Company’s organizational documents, given that the nomination deadline contained in the Company’s bylaws appears to have passed.
See the reply above.
Please revise to use the appropriate cover page. Refer to Exchange Act Rule 14a-101.
See the reply above.
Please consider including page numbers in future amendments to this proxy statement and locating the proxy card at the back of the proxy statement.
See the reply above.
The proxy statement states that "[t]his proxy statement and the WHITE proxy card (proxy materials) will only be available through the internet." Under the heading "Notice of Internet Availability & Obtaining A Proxy," disclosure similarly states "In accordance with rules adopted by the SEC, I may furnish proxy materials, including this Proxy Statement, to the shareholders by providing access to such documents on theRest of the question
Internet instead of mailing printed copies (the Notice)." Given the Annual Meeting will be held on May 4, 2022, and CSX’s definitive proxy statement was filed on March 22, 2022, it appears that the deadlines under Rule 14a-16(l)(2) passed on March 25, 2022, and April 1, 2022, respectively, such that it does not appear you may use or reference the Notice of Internet Availability of Proxy Materials. Please revise accordingly.
See the reply above.
The proxy statement appears to omit the following information required by Exchange Act Rule 14a-3 and specified in Schedule 14A (Exchange Act Rule 14a-101). Please revise accordingly. • Item 1(a) of Schedule 14A - the place of the meeting • Item 1(c) of Schedule 14A - (i) the date on which proposals of stockholders intended to be presented at the 2023 annual meeting of CSX’s shareholders must be received by theRest of the question
Company in order to be included in the Company’s proxy materials for that meeting and (ii) the date after which shareholder proposals for the 2023 annual meeting of CSX’s shareholders will be considered untimely • Item 2 of Schedule 14A - this item requires the proxy statement to state whether or not the person giving the proxy has the power to revoke such proxy and the procedures for such revocation; however, disclosure currently only describes how to revoke a previously delivered proxy card furnished by CSX and fails to describe how and where to send a revocation notice with respect to your proxy card, or the time by which such revocations must be received in order to be effective • Item 4 of Schedule 14Ao Item 4(a)(2) requires the the names of the participants in the solicitation, including “any person who solicits proxies,” and your proxy statement provides that “[p]roxies may be solicited in person, by telephone or by electronic communications by Chris Larson or his supporters acting without compensation” (emphasis added). Revise to identify "his supporters." o Item 4(b)(4) o Item 4(b)(5) • Item 5 of Schedue 14Ao Item 5(b) - if there are participants other than Chris Larson, given the point above regarding the reference to "or his supporters," please provide the disclosure required by Item 5(b) with respect to such participants o If Mr. Larson is the sole participant in the proxy solicitation, please revise the proxy to provide the disclosure described in Item 5(b)(1)(i), (ii), (vi), (vii), (viii), (ix), (x), (xi), (xii) and Item 5(b)(2) • Item 6(d) • Item 7o Item 7(a) o Item 7(b) - specifically, the disclosure described in Items 401(a), (e)(1), (e)(2), (f) and 407 of Regulation S-K • Item 21(b)
See the reply above.
The proxy statement identifies two different figures for the shares of CSX Common Stock outstanding as of the Record Date for the Annual Meeting. In one location of your filing, you state that “as of the Record Date, there were 2,193,389,444 shares of Common Stock outstanding.” In another location, you state with respect to the Record Date that “on March 8, 2022, there were issued and outstanding 2,178,580,270Rest of the question
shares of CSX Common Stock.” According to the Company's definitive proxy statement filed on March 22, 2022, there were 2,178,580,270 shares of CSX Common Stock outstanding as of the Record Date. Please revise accordingly.
See the reply above.
It is our understanding that neither Paul Hilal nor Edward J. Kelly, III, a former CSX director, have ever been directors or officers at Bottomline Technologies, Inc. We note that Bottomline Technologies' most recent proxy statement lists two directors with the same last names as Messrs. Hilal and Kelly, but they are different individuals. Please revise accordingly.
See the reply above.
Please revise the proxy statement to address the following factual inaccuracies: • Neither Edmund L. Harris, a former CSX officer, nor Mr. Hilal were ever listed on a proxy statement for National Energy Services Reunited Corp. • Edmund L. Harris was never a director of CSX. • Mr. Hilal was never listed on proxy statements for Lazard Global Total Return & Income Fund, Inc. • Neither Mr. Halverson nor Mr.Rest of the question
Reilley have been listed in a Dollar Tree, Inc. proxy statement. It is our understanding that an affiliate of Mr. Hilal nominated those individuals to stand for election as directors at Dollar Tree, but they did not join the Dollar Tree board. Also, while Mr. Hilal recently became a director at Dollar Tree, he has not been included in any Dollar Tree proxy statement as of the date of your preliminary proxy statement. • Your preliminary proxy claims there is “increased injury risk” at the Company, yet the Company has reported an improved safety record since 2017. The Company reported a Federal Railroad Administration (“FRA”) Personal Injury Frequency Index of 0.92 and a FRA Train Accident Rate of 2.90 for fiscal year 2021, compared to fiscal year 2017, when the Company reported a FRA Personal Injury Frequency Index of 1.19 and a FRA Train Accident Rate of 3.17. Refer to CSX’s Annual Report on Form 10-K for fiscal year 2021, filed with the Commission on February 16, 2022 and its Annual Report on Form 10-K for fiscal year 2017, filed with the Commission on February 7, 2018. • Your preliminary proxy states that the Company faces “a future of diminished opportunity and lower revenues.” It is our understanding that CSX saw revenues increase by 18%, or $1.9 billion, from fiscal year 2020 to fiscal year 2021. In addition, since 2016, CSX’s market capitalization has increased from approximately $33 billion to approximately $76 billion in 2022, and over the last five years, and as of December 31, 2021, the Company had a total shareholder return of 236%, which led all Class 1 rails. Please refer to CSX’s Annual 16, 2022 and CSX’s Definitive Additional Materials, filed with the Commission on April 14, 2022. • Your preliminary proxy statement cites financial figures relating to “Total Railway Operating Revenues,” which do not appear to be Company metrics disclosed by CSX. Please revise to disclose the components of such measure and where such components are reflected in CSX's documents filed with the Commission or other reputable source. • Your preliminary proxy statement suggests that long-term debt has only begun increasing over the last five years when it states that “from 2012 to 2015 long term debt was trending from $1,214 billion to $974 million.” However, in 2012, long-term debt was actually $9,052 million compared to $10,683 million in 2015. Refer to CSX’s Annual Report on Form 10-K for fiscal year 2012, filed with the Commission on February 19, 2013 and its Annual Report on Form 10-K for fiscal year 2015, filed with the Commission on February 10, 2016. In addition, your proxy statement states that that “from 2017 to 2020 [l]ong term debt reversed course and began shooting up” such that “[l]ong term debt went from $1,041 Billion in 2017 to $1,148 Billion dollars in 2020.” However, long-term debt was $11,790 million in 2017 compared to $16,304 million in 2020 and CSX’s net leverage has remained the same from 2017. Refer to CSX’s Annual Report on Form 10-K for fiscal year 2017, filed with the Commission on February 7, 2018 and its Annual Report on Form 10-K for fiscal year 2020, filed with the Commission on February 10, 2021.
See the reply above.
