CSX Motion to Dismiss
p. 2
Ignoring the $22 billion dollar increase in CSX's market capitalization since Mr. Harrison publicly expressed interest in joining CSX, Plaintiffs allege that hte Board's decision to hire Mr. Harrison injured CSX. They allege that his compensation and the reimbursement payment made to Mantle Ridge totaling roughly $84 million was "outrageous" in light of Mr. Harrison's untimely death in December 2017. Likewise, Plaintiffs contend that the Board's supposed failure to vet Mr. Harrison's medical condition led to his compensation and the reimbursement being "lost and wasted" because "a vibrant and fully functioning Harrison was necessary for any possible chance of success," even though CSX's market capitalization has continued to grow by the billions in the months after Mr. Harrison's passing.
Ignoring the $22 billion dollar increase in CSX's market capitalization since Mr. Harrison publicly expressed interest in joining CSX, Plaintiffs allege that hte Board's decision to hire Mr. Harrison injured CSX. They allege that his compensation and the reimbursement payment made to Mantle Ridge totaling roughly $84 million was "outrageous" in light of Mr. Harrison's untimely death in December 2017. Likewise, Plaintiffs contend that the Board's supposed failure to vet Mr. Harrison's medical condition led to his compensation and the reimbursement being "lost and wasted" because "a vibrant and fully functioning Harrison was necessary for any possible chance of success," even though CSX's market capitalization has continued to grow by the billions in the months after Mr. Harrison's passing.
p. 3
In Virginia, where CSX is incorporated, shareholders must first make a demand on the board to take action, and then allow the board or a duly appointed committee of disinterested directors to review and evaluate the demand and determine whether litigation is in the corporation's best interests.
In Virginia, where CSX is incorporated, shareholders must first make a demand on the board to take action, and then allow the board or a duly appointed committee of disinterested directors to review and evaluate the demand and determine whether litigation is in the corporation's best interests.
p. 4
A committee reviewed the case and said the Board "excercised its good faith business judgment and did take steps to vet Mr. Harrison's medical condition" … "what is more, the Report noted that hte expense and negative impact of pursuing litigation against the Company's directors would outweigh any particular recovery."
A committee reviewed the case and said the Board "excercised its good faith business judgment and did take steps to vet Mr. Harrison's medical condition" … "what is more, the Report noted that hte expense and negative impact of pursuing litigation against the Company's directors would outweigh any particular recovery."
p. 6
Harrison and Mantle Ridge had insisted that CSX reimburse them for vested and about-to-vest compensation and benefits that Harrison forfeited in order to be released from his non-compete.
Harrison and Mantle Ridge had insisted that CSX reimburse them for vested and about-to-vest compensation and benefits that Harrison forfeited in order to be released from his non-compete.
p. 9
The committee concluded unanimously that "the process through which Mr. Harrison became CEO … were the results of rational, disinterested, independent, and good faith decision-making processes;" that, as reflected in "the dramatic increase in the trading price of CSX stock, Mr. Harrison 'led a transformational change to the company's operations that rapidly and sustainably provided enormous value to the company's stockholders.'"
The committee concluded unanimously that "the process through which Mr. Harrison became CEO … were the results of rational, disinterested, independent, and good faith decision-making processes;" that, as reflected in "the dramatic increase in the trading price of CSX stock, Mr. Harrison 'led a transformational change to the company's operations that rapidly and sustainably provided enormous value to the company's stockholders.'"