CSX CORP, SC 14D1, 1996-10-16

CSX CORP
SC 14D1, 1996-10-16
RAILROADS, LINE-HAUL OPERATING

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<PAGE> 1

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1

TENDER OFFER STATEMENT

PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND

SCHEDULE 13D
------------------------
CONRAIL INC.
(NAME OF SUBJECT COMPANY)
CSX CORPORATION
GREEN ACQUISITION CORP.
(BIDDERS)

COMMON STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS OF SECURITIES)
208368 10 0
(CUSIP NUMBER OF CLASS OF SECURITIES)

SERIES A ESOP CONVERTIBLE JUNIOR
PREFERRED STOCK, WITHOUT PAR VALUE
(TITLE OF CLASS OF SECURITIES)

NOT AVAILABLE
(CUSIP NUMBER OF CLASS OF SECURITIES)

MARK G. ARON
CSX CORPORATION
ONE JAMES CENTER
901 EAST CARY STREET
RICHMOND, VIRGINIA 23219-4031
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
WITH A COPY TO:

PAMELA S. SEYMON
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
TELEPHONE: (212) 403-1000
------------------------
CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
- --------------------------------- ---------------------------------
<S> <C>
$1,652,061,470 $330,413
</TABLE>

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* For purposes of calculating the filing fee only. This calculation assumes the
purchase of an aggregate of 17,860,124 Shares of Common Stock, par value
$1.00 per share, or Series A ESOP Convertible Junior Preferred Stock, without
par value, of Conrail Inc. at $92.50 net per share in cash.
** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent
of the aggregate value of cash offered by Green Acquisition Corp. for such
number of Shares.
------------------------
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.

<TABLE>
<S> <C>
Amount Previously Paid: Not applicable
Form or Registration No.: Not applicable
Filing Party: Not applicable
Date Filed: Not applicable
</TABLE>

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<PAGE> 2

CUSIP NO. 208368 10 0
Page 1 of 2 pages

14D-1

<TABLE>
<S> <C> <C>
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1. NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CSX CORPORATION
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /X/
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
BK, WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) / /
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
VIRGINIA
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7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0 See Section 13 of the Offer to Purchase, dated October 16, 1996 filed as Exhibit (a)(1)
hereto
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8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES / /
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9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%
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10. TYPE OF REPORTING PERSON
HC and CO
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</TABLE>
<PAGE> 3

page 2 of 2 pages

CUSIP NO. 208368 10 0

14D-1

<TABLE>
<S> <C> <C>
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1. NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GREEN ACQUISITION CORP.
- ----------------------------------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /X/
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(e) or 2(f) / /
- ----------------------------------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
PENNSYLVANIA
- ----------------------------------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- ----------------------------------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES / /
- ----------------------------------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%
- ----------------------------------------------------------------------------------------------------------
10. REPORTING PERSON
CO
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</TABLE>
<PAGE> 4

ITEM 1. SECURITY AND SUBJECT COMPANY.

(a) The name of the subject company is Conrail Inc., a Pennsylvania
corporation (the "Company"). The address of the Company's principal executive
offices is 2001 Market Street, Two Commerce Square, Philadelphia, Pennsylvania
19101-1417.

(b) This Statement on Schedule 14D-1 relates to the offer by Green
Acquisition Corp. ("Purchaser"), a Pennsylvania corporation and a wholly owned
subsidiary of CSX Corporation, a Virginia corporation ("Parent"), to purchase an
aggregate of 17,860,124 shares of (i) Common Stock, par value $1.00 per share
(the "Common Shares"), and (ii) Series A ESOP Convertible Junior Preferred
Stock, without par value (the "ESOP Preferred Shares" and, together with the
Common Shares, the "Shares"), of the Company, including, in each case, the
associated Common Stock Purchase Rights, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated October 16, 1996 and in the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the "Offer") at a purchase price of $92.50 per
Share, net to the tendering shareholder in cash. At October 10, 1996, 80,178,281
Common Shares and 9,571,086 ESOP Preferred Shares were outstanding. The
information set forth under "Introduction" in the Offer to Purchase annexed
hereto as Exhibit (a)(1) is incorporated herein by reference.

(c) The information set forth under "Price Range of Shares; Dividends" in
the Offer to Purchase is incorporated herein by reference.

ITEM 2. IDENTITY AND BACKGROUND.

(a)-(d); (g) This Statement is being filed by Purchaser and Parent. The
information set forth under "Introduction" and "Certain Information Concerning
Purchaser and Parent" in the Offer to Purchase and Schedule I thereto is
incorporated herein by reference.

(e)-(f) During the last five years, neither Purchaser, Parent nor any
persons controlling Purchaser, nor, to the best knowledge of Purchaser or
Parent, any of the persons listed on Schedule I to the Offer to Purchase (i) has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.

ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT
COMPANY.

(a)-(b) The information set forth under "Introduction," "Background of the
Offer; Contacts with the Company," "Purpose of the Offer and the Merger; Plans
for the Company," "Merger Agreement; Other Agreements," "Certain Information
Concerning the Company" and "Certain Information Concerning Purchaser and
Parent" in the Offer to Purchase is incorporated herein by reference.

ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

(a)-(b) The information set forth under "Introduction" and "Source and
Amount of Funds" in the Offer to Purchase is incorporated herein by reference.

ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.

(a)-(e) The information set forth under "Introduction," "Background of the
Offer; Contacts with the Company," "Purpose of the Offer and the Merger; Plans
for the Company" and "Merger Agreement; Other Agreements" in the Offer to
Purchase is incorporated herein by reference.

(f)-(g) The information set forth under "Introduction" and "Effect of the
Offer on the Market for the Common Shares; Exchange Listing and Exchange Act
Registration; Margin Regulations" in the Offer to Purchase is incorporated
herein by reference.

ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

(a)-(b) The information set forth under "Introduction," "Certain
Information Concerning Purchaser and Parent" and "Merger Agreement; Other
Agreements" in the Offer to Purchase is incorporated herein by reference.
<PAGE> 5

ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.

The information set forth under "Introduction," "Background of the Offer;
Contacts with the Company," "Purpose of the Offer and the Merger; Plans for the
Company," "Certain Information Concerning Purchaser and Parent," and "Merger
Agreement; Other Agreements" in the Offer to Purchase is incorporated herein by
reference.

ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

The information set forth under "Fees and Expenses" in the Offer to
Purchase is incorporated herein by reference.

ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.

The information set forth under "Certain Information Concerning Purchaser
and Parent" in the Offer to Purchase is incorporated herein by reference.

ITEM 10. ADDITIONAL INFORMATION.

(a) Not applicable.

(b)-(c) The information set forth under "Introduction" and "Certain Legal
Matters; Regulatory Approvals" in the Offer to Purchase is incorporated herein
by reference.

(d) The information set forth under "Effect of the Offer on the Market for
the Common Shares; Exchange Listing and Exchange Act Registration; Margin
Regulations" in the Offer to Purchase is incorporated herein by reference.

(e) The information set forth under "Certain Legal Matters; Regulatory
Approvals" in the Offer to Purchase is incorporated herein by reference.

(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, is incorporated herein by reference.

ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.

<TABLE>
<S> <C>
(a)(1) Offer to Purchase dated October 16, 1996.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7) Text of Press Release issued by Parent on October 15, 1996.
(a)(8) Form of Summary Advertisement dated October 16, 1996.
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of October 14, 1996, by and among Parent, Purchaser
and the Company.
(c)(2) Company Stock Option Agreement, dated as of October 14, 1996, between Parent and the
Company.
(c)(3) Parent Stock Option Agreement, dated as of October 14, 1996, between Parent and the
Company.
(c)(4) Form of Voting Trust Agreement.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>

2
<PAGE> 6

SIGNATURE

After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.

CSX CORPORATION

By: /s/ MARK G. ARON

----------------------------------------
Name: Mark G. Aron
Title: Senior Vice President -- Law and
Public Affairs

Dated: October 16, 1996
<PAGE> 7

SIGNATURE

After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.

GREEN ACQUISITION CORP.

By: /s/ MARK G. ARON

----------------------------------------
Name: Mark G. Aron
Title: General Counsel and Secretary

Dated: October 16 , 1996
<PAGE> 8

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO.
- --------
<S> <C> <C>
(a)(1) Offer to Purchase dated October 16, 1996.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7) Text of Press Release issued by Parent on October 15, 1996.
(a)(8) Form of Summary Advertisement dated October 16, 1996.
(b) Not applicable.
(c)(1) Agreement and Plan of Merger, dated as of October 14, 1996, by and among Parent,
Purchaser and the Company.
(c)(2) Company Stock Option Agreement, dated as of October 14, 1996, between Parent and the
Company.
(c)(3) Parent Stock Option Agreement, dated as of October 14, 1996, between Parent and the
Company.
(c)(4) Form of Voting Trust Agreement.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>

<PAGE> 1

OFFER TO PURCHASE FOR CASH

AN AGGREGATE OF 17,860,124 SHARES
OF
COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)

CONRAIL INC.
AT

$92.50 NET PER SHARE
BY

GREEN ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF

CSX CORPORATION

THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 15, 1996, UNLESS THE OFFER IS EXTENDED.
------------------------

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THE RECEIPT BY GREEN
ACQUISITION CORP. ("PURCHASER"), PRIOR TO THE EXPIRATION OF THE OFFER, OF AN
INFORMAL WRITTEN OPINION IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
PURCHASER FROM THE STAFF OF THE SURFACE TRANSPORTATION BOARD (THE "STB"),
WITHOUT THE IMPOSITION OF ANY CONDITIONS UNACCEPTABLE TO PURCHASER, THAT THE USE
OF A VOTING TRUST IN SUBSTANTIALLY THE FORM CONTEMPLATED BY THE MERGER AGREEMENT
(THE "VOTING TRUST") IS CONSISTENT WITH THE POLICIES OF THE STB AGAINST
UNAUTHORIZED ACQUISITIONS OF CONTROL OF A REGULATED CARRIER, (2) THE RECEIPT BY
PURCHASER, PRIOR TO THE EXPIRATION OF THE OFFER, OF AN INFORMAL STATEMENT FROM
THE PREMERGER NOTIFICATION OFFICE OF THE FEDERAL TRADE COMMISSION THAT THE
TRANSACTIONS CONTEMPLATED BY THE OFFER, THE MERGER AGREEMENT AND THE COMPANY
STOCK OPTION AGREEMENT (AS SUCH TERMS ARE DEFINED HEREIN) ARE NOT SUBJECT TO, OR
ARE EXEMPT FROM, THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED (THE "HSR ACT"), OR IN THE ABSENCE OF THE RECEIPT OF SUCH INFORMAL
STATEMENT, ANY APPLICABLE WAITING PERIOD UNDER THE HSR ACT SHALL HAVE EXPIRED OR
BEEN TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER, (3) PARENT AND PURCHASER
OBTAINING, PRIOR TO THE EXPIRATION OF THE OFFER, SUFFICIENT FINANCING, ON TERMS
REASONABLY ACCEPTABLE TO PARENT, TO ENABLE CONSUMMATION OF THE OFFER AND MERGER
AND (4) THERE BEING AT LEAST 17,860,124 SHARES (AS DEFINED HEREIN) VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER. SEE
SECTION 15.
------------------------

THE BOARD OF DIRECTORS OF CONRAIL INC. (THE "COMPANY") HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER, DETERMINED THAT THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY (INCLUDING THE OFFER AND THE MERGER) ARE IN
THE BEST INTERESTS OF THE COMPANY AND RECOMMENDS THAT SHAREHOLDERS OF THE
COMPANY WHO DESIRE TO RECEIVE CASH FOR THEIR SHARES ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
------------------------

IMPORTANT

Any shareholder desiring to tender all or any portion of such shareholder's
Common Shares (as defined herein) or ESOP Preferred Shares (as defined herein,
and together with the Common Shares, the "Shares") should either (i) complete
and sign the Letter of Transmittal (or a facsimile thereof) in accordance with
the instructions in the Letter of Transmittal, have such shareholder's signature
thereon guaranteed if required by Instruction 1 to the Letter of Transmittal,
mail or deliver the Letter of Transmittal (or such facsimile thereof) and any
other required documents to the Depositary and either deliver the certificates
for such Shares to the Depositary along with the Letter of Transmittal (or a
facsimile thereof) or deliver such Shares pursuant to the procedure for
book-entry transfer set forth in Section 3 prior to the expiration of the Offer
or (ii) request such shareholder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such shareholder. A
shareholder having Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such broker, dealer,
commercial bank, trust company or other nominee if such shareholder desires to
tender such Shares.

Any shareholder who desires to tender Shares and whose certificates for such
Shares are not immediately available, or who cannot comply with the procedures
for book-entry transfer described in this Offer to Purchase on a timely basis,
may tender such Shares by following the procedures for guaranteed delivery set
forth in Section 3.

Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal or other tender offer materials, may be
directed to the Information Agent (as defined herein) or the Dealer Manager (as
defined herein) at their respective addresses and telephone numbers set forth on
the back cover of this Offer to Purchase.

The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
October 16, 1996
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<C> <S> <C>
INTRODUCTION........................................................................... 1
1. Terms of the Offer; Proration; Expiration Date.................................... 4
2. Acceptance for Payment and Payment for Shares..................................... 6
3. Procedures for Tendering Shares................................................... 7
4. Withdrawal Rights................................................................. 10
5. Certain Federal Income Tax Consequences........................................... 11
6. Price Range of Shares; Dividends.................................................. 14
7. Effect of the Offer on the Market for the Common Shares; Exchange Listing and
Exchange Act Registration; Margin Regulations..................................... 15
8. Certain Information Concerning the Company........................................ 15
9. Certain Information Concerning Purchaser and Parent............................... 20
10. Source and Amount of Funds........................................................ 22
11. Background of the Offer; Contacts with the Company................................ 22
12. Purpose of the Offer and the Merger; Plans for the Company........................ 23
13. Merger Agreement; Other Agreements................................................ 23
14. Dividends and Distributions....................................................... 42
15. Conditions of the Offer........................................................... 43
16. Certain Legal Matters; Regulatory Approvals....................................... 44
17. Fees and Expenses................................................................. 50
18. Miscellaneous..................................................................... 51
Schedule I -- Information Concerning the Directors and Executive Officers of Parent and I-1
Purchaser............................................................................
</TABLE>

i
<PAGE> 3

TO THE HOLDERS OF COMMON STOCK AND SERIES A ESOP CONVERTIBLE
JUNIOR PREFERRED STOCK OF CONRAIL INC.:

INTRODUCTION

Green Acquisition Corp. ("Purchaser"), a Pennsylvania corporation and a
wholly owned subsidiary of CSX Corporation, a Virginia corporation ("Parent"),
hereby offers to purchase an aggregate of 17,860,124 shares of (i) common stock,
par value $1.00 per share (the "Common Shares"), and (ii) Series A ESOP
Convertible Junior Preferred Stock, without par value (the "ESOP Preferred
Shares" and, together with the Common Shares, the "Shares"), of Conrail Inc., a
Pennsylvania corporation (the "Company"), including, in each case, the
associated Common Stock Purchase Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of July 19, 1989, between the Company and First
Chicago Trust Company of New York, as Rights Agent (as amended, the "Rights
Agreement"), at a price of $92.50 per Share, net to the seller in cash, without
interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). Unless the context otherwise requires, all references to Common
Shares, ESOP Preferred Shares or Shares shall include the associated Rights, and
all references to the Rights shall include the benefits that may enure to
holders of the Rights pursuant to the Rights Agreement, including the right to
receive any payment due upon redemption of the Rights.

Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer. Purchaser will pay all charges and expenses of
Wasserstein Perella & Co., Inc., as Dealer Manager (in such capacity, the
"Dealer Manager"), IBJ Schroder Bank & Trust Company, as Depositary (the
"Depositary"), and MacKenzie Partners, Inc., as Information Agent (the
"Information Agent"), incurred in connection with the Offer. See Section 17.

Participants in the Company's Matched Savings Plan (the "ESOP") desiring
that Fidelity Management Trust Company, as trustee under the ESOP (the "ESOP
Trustee"), tender the ESOP Preferred Shares allocated to their accounts, which
will be converted into Common Shares upon consummation of the Offer, should so
instruct the ESOP Trustee by completing the form that will be provided to
participants for that purpose. ESOP participants cannot tender shares allocated
to their ESOP accounts by executing the Letter of Transmittal.

THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD" OR "BOARD OF DIRECTORS")
HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER (AS DEFINED BELOW), DETERMINED
THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY (INCLUDING
THE OFFER AND THE MERGER) ARE IN THE BEST INTERESTS OF THE COMPANY AND
RECOMMENDS THAT SHAREHOLDERS OF THE COMPANY WHO DESIRE TO RECEIVE CASH FOR THEIR
SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THE RECEIPT BY
PURCHASER, PRIOR TO THE EXPIRATION OF THE OFFER, OF AN INFORMAL WRITTEN OPINION
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO PURCHASER FROM THE STAFF OF THE
SURFACE TRANSPORTATION BOARD (THE "STB"), WITHOUT THE IMPOSITION OF ANY
CONDITIONS UNACCEPTABLE TO PURCHASER, THAT THE USE OF A VOTING TRUST IN
SUBSTANTIALLY THE FORM CONTEMPLATED BY THE MERGER AGREEMENT (THE "VOTING TRUST")
IS CONSISTENT WITH THE POLICIES OF THE STB AGAINST UNAUTHORIZED ACQUISITIONS OF
CONTROL OF A REGULATED CARRIER (SUCH CONDITION, THE "VOTING TRUST CONDITION"),
(2) THE RECEIPT BY PURCHASER, PRIOR TO THE EXPIRATION OF THE OFFER, OF AN
INFORMAL STATEMENT FROM THE PREMERGER NOTIFICATION OFFICE OF THE FEDERAL TRADE
COMMISSION (THE "FTC") THAT THE TRANSACTIONS CONTEMPLATED BY THE OFFER, THE
MERGER AGREEMENT AND THE COMPANY STOCK OPTION AGREEMENT (AS SUCH TERMS ARE
DEFINED HEREIN) ARE NOT SUBJECT TO, OR ARE EXEMPT FROM, THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), OR, IN THE
ABSENCE OF THE RECEIPT OF SUCH INFORMAL STATEMENT, ANY APPLICABLE WAITING PERIOD
UNDER THE HSR ACT SHALL HAVE EXPIRED OR BEEN TERMINATED PRIOR TO THE EXPIRATION
OF THE OFFER (SUCH CONDITION, THE "HSR CONDITION"), (3) PARENT AND PURCHASER
OBTAINING, PRIOR TO THE EXPIRATION OF THE OFFER, SUFFICIENT FINANCING, ON TERMS
REASONABLY ACCEPTABLE TO PARENT, TO ENABLE CONSUMMATION OF THE OFFER AND

1
<PAGE> 4

MERGER AND (4) THERE BEING AT LEAST 17,860,124 SHARES (THE "MINIMUM NUMBER OF
SHARES") VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF
THE OFFER (THE "MINIMUM CONDITION"). SEE SECTION 15.

The Company has advised Purchaser that each of Lazard Freres & Co. LLC
("Lazard Freres") and Morgan Stanley & Co. Incorporated ("Morgan Stanley") has
delivered to the Board its written opinion that as of the date of the Merger
Agreement (as defined below) the consideration to be received by the holders of
Shares pursuant to the Offer and the Merger, taken together, is fair from a
financial point of view to such holders. A copy of each such opinion is
contained in the Company's Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9"), which is being mailed to shareholders of the
Company herewith, and such shareholders are urged to read the opinion in its
entirety for a description of the assumptions made, factors considered,
procedures followed by, and certain information concerning, Lazard Freres and
Morgan Stanley.

The purpose of the Offer is for Parent, through Purchaser, to acquire a
significant equity interest in the Company as the first step in a business
combination of Parent and the Company. The Offer is being made pursuant to an
Agreement and Plan of Merger, dated as of October 14, 1996 (the "Merger
Agreement"), by and among the Company, Parent and Purchaser. The Merger
Agreement provides that, following the completion of the Offer and the
satisfaction or waiver of certain conditions, the Company will be merged with
and into Purchaser (the "Merger"), with Purchaser as the surviving corporation
(the "Surviving Corporation"), in accordance with the Pennsylvania Business
Corporation Law of 1988, as amended (the "Pennsylvania Law"). As more fully
described in Section 13, in the Merger, each outstanding Share (other than
Shares held in the treasury of the Company or owned by Parent, Purchaser or any
other wholly owned subsidiary of Parent or the Company) will be converted, at
the election of the holder of Shares and subject to certain limitations, into
the right to receive (i) $92.50 in cash, without interest, (ii) 1.85619 shares
of common stock, par value $1.00 per share, of Parent (the "Parent Common
Stock") or (iii) a combination of such cash and shares of Parent Common Stock.
However, the Merger Agreement contains provisions which will ensure that,
regardless of the number of Shares for which holders have elected to receive
cash or Parent Common Stock, as the case may be, the aggregate number of Shares
to be converted into Parent Common Stock pursuant to the Merger shall be equal
as nearly as practicable to 60% of all Shares outstanding immediately prior to
the Merger on a fully diluted basis (except for Shares issuable or outstanding
pursuant to the Company Stock Option, as hereinafter defined), and the aggregate
number of Shares to be converted into the right to receive cash pursuant to the
Merger, together with the Shares theretofore purchased by Purchaser (other than
upon exercise of the Company Stock Option), shall be equal as nearly as
practicable to 40% of all such Shares outstanding immediately prior to the
Merger. Accordingly, in the case of any particular shareholder, depending on the
aggregate number of Shares for which the holders have elected to receive cash or
Parent Common Stock, as the case may be, such shareholder may not receive in
respect of his or her Shares the amount of cash, Parent Common Stock or
combination thereof that such shareholder requested in his or her election. See
Section 13. The Surviving Corporation will be a wholly owned subsidiary of
Parent. The time at which the Merger is consummated in accordance with the
Merger Agreement is hereinafter referred to as the "Effective Time." The Offer
and the Merger are sometimes collectively referred to herein as the
"Transactions."

THE OFFER DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY PARENT COMMON STOCK. SUCH AN OFFER MAY BE MADE ONLY PURSUANT TO A
PROSPECTUS.

In connection with the execution of the Merger Agreement, the Company and
Parent entered into an option agreement (the "Company Stock Option Agreement")
pursuant to which the Company granted to Parent an option (the "Company Stock
Option"), exercisable only in certain events, to purchase 15,955,477 Common
Shares at an exercise price of $92.50 per Common Share, subject to adjustment as
set forth therein. Concurrently, Parent and the Company entered into an option
agreement (the "Parent Stock Option Agreement" and, together with the Company
Stock Option Agreement, the "Option Agreements") pursuant to which Parent
granted to the Company an option, exercisable only in certain events, to
purchase 43,090,773 shares of Parent Common Stock at an exercise price of $64.82
per share, subject to adjustment as set forth therein. See Section 13.

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<PAGE> 5

Simultaneously with the purchase of Shares pursuant to the Offer, the
Shares purchased will be deposited in an independent, irrevocable Voting Trust
in accordance with the terms of the proposed Voting Trust Agreement. See
Sections 13 and 16. The Offer is conditioned upon satisfaction of the Voting
Trust Condition.

Certain other conditions to the consummation of the Offer are described in
Section 15. Subject to the terms of the Merger Agreement, Purchaser reserves the
right to waive any one or more of the conditions to the Offer.

Under Subchapter E of Chapter 25 of the Pennsylvania Law (the "Pennsylvania
Control Transaction Law"), unless a corporation's articles of incorporation or
by-laws adopted by the shareholders otherwise provide, after the occurrence of a
"control transaction", any holder of voting shares of a "registered corporation"
(such as the Company) may make written demand on the "controlling person" for
payment of cash in an amount equal to the "fair value" of each voting share as
of the date on which the control transaction occurs. A "control transaction" is
the acquisition by a "controlling person" -- that is, a person or group of
persons acting in concert who have voting power over voting shares of the
registered corporation that would entitle the holders thereof to cast at least
20% of the votes that all shareholders would be entitled to cast in an election
of directors. See Section 16.

The Company's Articles of Incorporation (the "Company Articles") currently
do not contain a provision by which the Company "opts out" of the Pennsylvania
Control Transaction Law. Accordingly, unless and until such time as the Company
Articles are amended to include such an "opt out" provision, the Pennsylvania
Control Transaction Law effectively precludes Purchaser from purchasing more
than the Minimum Number of Shares pursuant to the Offer. The Company has filed
preliminary proxy materials with the Securities and Exchange Commission (the
"SEC") for a special meeting of the Company's shareholders (the "Pennsylvania
Special Meeting") expected to be held on November 14, 1996 for the purpose of
voting on an amendment to the Company Articles (the "Articles Amendment") to opt
out of the Pennsylvania Control Transaction Law. Under the Company Articles and
the Pennsylvania Law, the Articles Amendment must be approved by a majority of
the votes cast by the holders of outstanding Shares, voting as a single class
(the "Pennsylvania Shareholder Approval"). THE OFFER DOES NOT CONSTITUTE A
SOLICITATION OF PROXIES FOR THE PENNSYLVANIA SPECIAL MEETING. ANY SUCH
SOLICITATION WILL BE MADE ONLY BY THE COMPANY AND PURSUANT TO PROXY MATERIALS
COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED (THE "EXCHANGE ACT"), AND THE RULES AND REGULATIONS
THEREUNDER.

If the Articles Amendment is approved by the requisite vote of the
Company's shareholders at the Pennsylvania Special Meeting prior to the
expiration of the Offer, Purchaser may (but is not obligated to) increase the
Minimum Number of Shares to an amount equal to 40% of the outstanding Shares on
a fully diluted basis (excluding Common Shares issuable upon exercise of the
Company Stock Option) and, if Purchaser in its discretion determines to so
increase the Minimum Number of Shares and if required under the rules of the
SEC, Purchaser shall extend the Offer. See Section 1. Alternatively, if the
Pennsylvania Shareholder Approval is obtained (whether or not such approval is
obtained prior to the expiration of the Offer), Purchaser may, in its discretion
and depending upon the circumstances (but subject to the terms and conditions of
the Offer and the Merger Agreement), accept for payment Shares in the Offer and
thereafter purchase additional Shares in a later tender offer (the "Second
Offer"), pursuant to the Company Stock Option Agreement or otherwise. Such
additional Share purchases may be on terms different from the terms of the
Offer, provided that in the Merger Agreement Parent and Purchaser have agreed
that additional purchases pursuant to the Second Offer shall be at a price not
less than $92.50 and shall be on terms no less favorable to the Company's
shareholders than the Offer. In addition, under the terms of the Merger
Agreement, at any time following obtaining the Pennsylvania Shareholder
Approval, if Parent and its subsidiaries do not already own 40% or more of the
outstanding Shares (as determined above), the Company may require Parent to
commence the Second Offer. See Sections 1 and 13.

The obligations of Parent and Purchaser to consummate the Merger are
conditioned upon, among other things, the STB having issued a final decision
approving, exempting or otherwise authorizing consummation of the Merger and all
other material transactions contemplated by the Merger Agreement as may require
such authorization and which, among other things, does not impose on Parent, the
Company or any of their

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<PAGE> 6

respective subsidiaries, terms or conditions that materially and adversely
affect the long-term benefits expected to be received by Parent from the
transactions contemplated by the Merger Agreement. See Section 13.

The Merger is also conditioned upon, among other things, the approval and
adoption of the Merger Agreement by the requisite vote of the shareholders of
the Company. Under the Company Articles and the Pennsylvania Law, the
affirmative vote of the holders of a majority of the votes cast by the
outstanding Shares, voting as a single class, is required to approve and adopt
the Merger Agreement and the Merger.

Based on information supplied by the Company, as of October 10, 1996, (i)
80,178,281 Common Shares were issued and outstanding and 15,522,547 Common
Shares were reserved for issuance pursuant to outstanding employee stock options
or upon conversion of the ESOP Preferred Shares and (ii) 9,571,086 ESOP
Preferred Shares were issued and outstanding. Pursuant to the Company Articles,
each ESOP Preferred Share purchased pursuant to the Offer will automatically be
converted into one Common Share upon consummation of the Offer, and each
remaining ESOP Preferred Share will be automatically converted into one Common
Share immediately prior to the Effective Time.

THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.

1. TERMS OF THE OFFER; PRORATION; EXPIRATION DATE. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any extension or amendment), Purchaser will
accept for payment and pay for an aggregate of 17,860,124 Shares which are
validly tendered prior to the Expiration Date (as hereinafter defined) and not
properly withdrawn in accordance with Section 4. The term "Expiration Date"
means 12:00 Midnight, New York City time, on Friday, November 15, 1996, unless
and until Purchaser, in its sole discretion (but subject to the terms of the
Merger Agreement), shall have extended the period of time during which the Offer
is open, in which event the term "Expiration Date" shall refer to the latest
time and date at which the Offer, as so extended by Purchaser, shall expire. The
Merger Agreement provides that, in the event all conditions to Purchaser's
obligation to purchase Shares under the Offer at any scheduled expiration
thereof are satisfied other than the Minimum Condition, Purchaser shall, from
time to time, extend the Offer until the earlier of (i) 180 days following the
date of the Merger Agreement or (ii) such time as the Minimum Condition is
satisfied or waived in accordance with the Merger Agreement. The Merger
Agreement provides that, without the consent of the Company, Purchaser will not
waive the Minimum Condition.

Subject to Purchaser's right to increase the Minimum Number of Shares (as
described below), if more than 17,860,124 Shares are validly tendered prior to
the Expiration Date and not properly withdrawn, Purchaser will, upon the terms
and subject to the conditions of the Offer, accept for payment and pay for only
17,860,124 Shares, on a pro rata basis, with adjustments to avoid purchases of
fractional Shares, based upon the number of Shares validly tendered prior to the
Expiration Date and not properly withdrawn. If the Articles Amendment is
approved by the requisite vote of the Company's shareholders at the Pennsylvania
Special Meeting prior to the Expiration Date, Purchaser may (but is not
obligated to) increase the Minimum Number of Shares to an amount equal to 40% of
the outstanding Shares on a fully diluted basis (excluding Shares issuable upon
exercise of the Company Stock Option) and, if Purchaser in its discretion
determines to so increase the Minimum Number of Shares and if such action is
required under the rules of the SEC, Purchaser will extend the Offer.
Alternatively, if the Pennsylvania Shareholder Approval is obtained (whether or
not such approval is obtained prior to the Expiration Date), Purchaser may, in
its discretion and depending upon the circumstances (but subject to the terms
and conditions of the Offer and the Merger Agreement), accept for payment Shares
in the Offer and thereafter purchase additional Shares. See Introduction and
Section 13. In any event, the same proration factor will be applied in the Offer
to the Common Shares and the ESOP Preferred Shares.

Because of the difficulty of determining precisely the number of Shares
validly tendered and not withdrawn, if proration is required, Purchaser would
not expect to be able to announce the final results of proration or pay for
Shares until at least five New York Stock Exchange, Inc. ("NYSE") trading days
after

4
<PAGE> 7

the Expiration Date. Preliminary results of proration will be announced by press
release as promptly as practicable after the Expiration Date. Holders of Shares
may obtain such preliminary information from the Information Agent and may also
be able to obtain such preliminary information from their brokers.

The Merger Agreement provides that, at any time following the Pennsylvania
Shareholder Approval, if Parent and its subsidiaries do not, in the aggregate,
own 40% of the Shares outstanding, on a fully diluted basis as of the date of
the Merger Agreement (excluding Shares that would be outstanding upon exercise
of the Company Stock Option), Parent may, and at the written request of the
Company is required to, commence the Second Offer to purchase up to that number
of Shares which, when added to the aggregate number of Shares then beneficially
owned by Parent (other than pursuant to exercise of the Company Stock Option)
equals 40% of such outstanding Shares, at a price not less than $92.50. The
Company has agreed that it shall not make such written request at any time that
the Offer is outstanding and the Expiration Date is within 10 business days
thereof. The Second Offer, if it occurs, will be on terms no less favorable to
the shareholders of the Company than the Offer.

The Offer is conditioned upon, among other things, satisfaction of the
Voting Trust Condition. If the Voting Trust Condition is not satisfied or any or
all of the other events set forth in Section 15 shall have occurred prior to the
Expiration Date, Purchaser reserves the right (but shall not be obligated) to
(i) decline to purchase any of the Shares tendered in the Offer and terminate
the Offer, and return all tendered Shares to the tendering shareholders, (ii)
waive or amend any or all conditions to the Offer to the extent permitted by
applicable law and the provisions of the Merger Agreement, and, subject to
complying with applicable rules and regulations of the SEC, purchase all Shares
validly tendered, or (iii) extend the Offer and, subject to the right of
shareholders to withdraw Shares until the Expiration Date, retain the Shares
which have been tendered during the period or periods for which the Offer is
extended.

Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms of the Merger Agreement), at any time and from time to time, to
extend for any reason the period of time during which the Offer is open,
including the occurrence of any of the events specified in Section 15, by giving
oral or written notice of such extension to the Depositary. During any such
extension, all Shares previously tendered and not properly withdrawn will remain
subject to the Offer, subject to the rights of a tendering shareholder to
withdraw its Shares in accordance with the procedures set forth in Section 4.

Subject to the applicable regulations of the SEC, Purchaser also expressly
reserves the right, in its sole discretion (but subject to the terms of the
Merger Agreement), at any time and from time to time, (i) to delay acceptance
for payment of, or, regardless of whether such Shares were theretofore accepted
for payment, payment for, any Shares in order to comply in whole or in part with
any applicable law and (ii) to waive any condition or otherwise amend the Offer
in any respect by giving oral or written notice of such delay, waiver or
amendment to the Depositary and by making a public announcement thereof.

The Merger Agreement provides that, without the consent of the Company,
Purchaser will not, among other things, decrease the Offer Price, decrease the
Minimum Number of Shares, change the form of consideration to be paid pursuant
to the Offer, modify any of the conditions to the Offer, impose conditions to
the Offer in addition to those set forth in the Merger Agreement, except as set
forth in the proviso below, extend the Offer, or amend any term or condition of
the Offer in any manner adverse to the holders of Shares, it having been agreed
in the Merger Agreement that a waiver by Purchaser of any condition in its
discretion shall not be deemed to be adverse to the holders of Shares; provided,
however, that the Purchaser shall not waive the Minimum Condition without the
consent of the Company; and provided further that, if on any scheduled
Expiration Date (as it may be extended in accordance with the terms of the
Merger Agreement), all conditions to the Offer shall not have been satisfied or
waived, the Offer may be extended from time to time without the consent of the
Company for such period of time as is reasonably expected to be necessary to
satisfy the unsatisfied conditions. In the Merger Agreement Parent and Purchaser
also have agreed that, in the event all conditions to their obligation to
purchase Shares under the Offer at any scheduled Expiration Date are satisfied
other than the Minimum Condition, Purchaser shall, from time to time, extend the
Offer until the earlier of (i) 180 days following the date of the Merger
Agreement or (ii) such time as such condition is satisfied or waived in
accordance with the terms of the Merger Agreement. In addition, the Merger

5
<PAGE> 8

Agreement provides that, without the consent of the Company, the Offer Price and
the Minimum Number of Shares may be increased, and the Offer may be extended to
the extent required by law in connection with such an increase.

Purchaser acknowledges that (i) Rule 14e-1(c) under the Exchange Act
requires Purchaser to pay the consideration offered or return the Shares
tendered promptly after the termination or withdrawal of the Offer, and (ii)
Purchaser may not delay acceptance for payment of, or payment for (except as
provided in clause (i) of the first sentence of the second preceding paragraph),
any Shares upon the occurrence of any of the conditions specified in Section 15
without extending the period of time during which the Offer is open.

Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, with such
announcement in the case of an extension to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act, which require that material changes be
promptly disseminated to shareholders in a manner reasonably designed to inform
them of such changes) and without limiting the manner in which Purchaser may
choose to make any public announcement, Purchaser shall have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a press release to the Dow Jones News Service.

If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will disseminate additional tender offer materials and extend
the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances, including the relative
materiality of the changed terms or information. In the SEC's view, an offer
should generally remain open for a minimum of five business days from the date a
material change is first published, sent or given to shareholders. With respect
to a change in price or a change in percentage of securities sought (other than
an increase in the number of Shares sought not in excess of 2% of the
outstanding Shares), a minimum ten business day period is required to allow for
adequate dissemination to shareholders and investor response. As used in this
Offer to Purchase, "business day" has the meaning set forth in Rule 14d-1 under
the Exchange Act. Accordingly, if, prior to the Expiration Date, Purchaser
increases or decreases the number of Shares being sought, or increases or
decreases the consideration offered pursuant to the Offer, and if the Offer is
scheduled to expire at any time earlier than the period ending on the tenth
business day from the date that notice of such increase or decrease is first
published, sent or given to holders of Shares, except in respect of an increase
in the Minimum Number of Shares not in excess of 2% of the outstanding Shares,
the Offer will be extended at least until the expiration of such 10 business day
period.

As of the date of this Offer to Purchase, the Rights are evidenced by the
certificates representing Shares and do not trade separately. Accordingly, by
tendering a certificate representing Shares, a shareholder is automatically
tendering a similar number of associated Rights. If, however, pursuant to the
Rights Agreement or for any other reason, the Rights detach and separate
certificates representing rights ("Rights Certificates") are issued,
shareholders will be required to tender one Right for each Share tendered in
order to effect a valid tender of such Share.

The Company has provided Purchaser with the Company's shareholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase, the related Letter of Transmittal, and other
relevant materials will be mailed to record holders of Shares whose names appear
on the Company's shareholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.

2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), Purchaser
will purchase, by accepting for payment, and will pay for, an

6
<PAGE> 9

aggregate of 17,860,124 Shares which are validly tendered prior to the
Expiration Date (and not properly withdrawn in accordance with Section 4)
promptly after the later to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions set forth in Section 15. Purchaser
expressly reserves the right, in its discretion, to delay acceptance for payment
of, or, subject to applicable rules of the SEC, payment for, Shares in order to
comply in whole or in part with any applicable law.

In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) the certificates
evidencing such Shares (the "Share Certificates") or timely confirmation of a
book-entry transfer (a "Book-Entry Confirmation") of such Shares, if such
procedure is available, into the Depositary's account at The Depository Trust
Company or the Philadelphia Depository Trust Company (each a "Book-Entry
Transfer Facility" and, collectively, the "Book-Entry Transfer Facilities")
pursuant to the procedures set forth in Section 3, (ii) the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, or, in
the case of a book-entry transfer, an Agent's Message (as defined below) and
(iii) any other documents required by the Letter of Transmittal.

The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.

For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such Shares for payment. Payment for
Shares accepted pursuant to the Offer will be made by deposit of the purchase
price therefor with the Depositary, which will act as agent for tendering
shareholders for the purpose of receiving payments from Purchaser and
transmitting payments to such tendering shareholders. Under no circumstances
will interest on the purchase price for Shares be paid by Purchaser, regardless
of any delay in making such payment. Upon the deposit of funds with the
Depositary for the purpose of making payments to tendering shareholders,
Purchaser's obligation to make such payment shall be satisfied and tendering
shareholders must thereafter look solely to the Depositary for payment of
amounts owed to them by reason of the acceptance for payment of Shares pursuant
to the Offer. Purchaser will pay any stock transfer taxes incident to the
transfer to it of validly tendered Shares, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, as well as any charges and expenses
of the Depositary and the Information Agent.

If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer (including proration due to tenders of
more than 17,860,124 Shares), or if Share Certificates are submitted evidencing
more Shares than are tendered, Share Certificates evidencing unpurchased Shares
will be returned, without expense to the tendering shareholder (or, in the case
of Shares tendered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3,
such Shares will be credited to an account maintained at such Book-Entry
Transfer Facility), as promptly as practicable following the expiration or
termination of the Offer.

If, prior to the Expiration Date, Purchaser increases the consideration to
be paid per Share pursuant to the Offer, Purchaser will pay such increased
consideration for all such Shares purchased pursuant to the Offer, whether or
not such Shares were tendered prior to such increase in consideration.

Purchaser reserves the right to transfer or assign, in whole at any time,
or in part from time to time, to Parent or one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase all or any portion of the
Shares tendered pursuant to the Offer, provided that any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering shareholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.

3. PROCEDURES FOR TENDERING SHARES.

Valid Tender of Shares. In order for Shares to be validly tendered
pursuant to the Offer, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message (in the case of any book-entry transfer) and any other
required documents,

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<PAGE> 10

must be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase prior to the Expiration Date and either (i) the
Share Certificates evidencing tendered Shares must be received by the Depositary
at one of such addresses or Shares must be tendered pursuant to the procedure
for book-entry transfer described below and a Book-Entry Confirmation must be
received by the Depositary, in each case prior to the Expiration Date, or (ii)
the tendering shareholder must comply with the guaranteed delivery procedures
described below.

THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.

Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at each Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in either of the Book-Entry Transfer
Facilities' systems may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. However, although delivery of
Shares may be effected through book-entry transfer at a Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's Message
in connection with a book-entry delivery of Shares, and any other required
documents must, in any case, be transmitted to and received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase prior
to the Expiration Date or the tendering shareholder must comply with the
guaranteed delivery procedures described below. DELIVERY OF DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.

Signature Guarantee. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity that is a member in good standing of the Securities
Transfer Agents Medallion Program (each, an "Eligible Institution"), unless the
Shares tendered thereby are tendered (i) by a registered holder of Shares who
has not completed either the box entitled "Special Delivery Instructions" or the
box entitled "Special Payment Instructions" on the Letter of Transmittal or (ii)
for the account of an Eligible Institution. See Instruction 1 of the Letter of
Transmittal.

If a Share Certificate is registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made, or a Share
Certificate not accepted for payment or not tendered is to be returned, to a
person other than the registered holder(s), then the Share Certificate must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the Share
Certificate, with the signature(s) on such Share Certificate or stock powers
guaranteed as described above. See Instructions 1 and 5 of the Letter of
Transmittal.

Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share Certificates are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all the
following conditions are satisfied:

(i) the tender is made by or through an Eligible Institution;

(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser herewith, is
received by the Depositary as provided below prior to the Expiration Date;
and

8
<PAGE> 11

(iii) in the case of a guarantee of Shares, the Share Certificates for
all tendered Shares, in proper form for transfer, or a Book-Entry
Confirmation, together with a properly completed and duly executed Letter
of Transmittal (or manually signed facsimile thereof) with any required
signature guarantee (or, in the case of a book-entry transfer, an Agent's
Message) and any other documents required by such Letter of Transmittal,
are received by the Depositary within three NYSE trading days after the
date of execution of the Notice of Guaranteed Delivery.

Any Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.

Notwithstanding any other provision hereof, payment for Shares purchased
pursuant to the Offer will, in all cases, be made only after timely receipt by
the Depositary of (i) the Share Certificates evidencing such Shares, or a
Book-Entry Confirmation of the delivery of such Shares, if available, (ii) a
properly completed and duly executed Letter of Transmittal (or manually signed
facsimile thereof) (or in the case of a book-entry transfer, an Agent's Message)
and (iii) any other documents required by the Letter of Transmittal.

Distribution of Rights. Holders of Shares will be required to tender one
Right for each Share tendered to effect a valid tender of such Share. Unless and
until the Distribution Date (as defined in Section 8 below) occurs, the Rights
are represented by and transferred with the Shares. Accordingly, if the
Distribution Date does not occur prior to the Expiration Date of the Offer, a
tender of Shares will constitute a tender of the associated Rights. If a
Distribution Date has occurred, certificates representing a number of Rights
equal to the number of Shares being tendered must be delivered to the Depositary
in order for such Shares to be validly tendered. If a Distribution Date has
occurred, a tender of Shares without Rights constitutes an agreement by the
tendering shareholder to deliver certificates representing a number of Rights
equal to the number of Shares tendered pursuant to the Offer to the Depositary
within three NYSE trading days after the date such certificates are distributed.
Purchaser reserves the right to require that it receive such certificates prior
to accepting Shares for payment. Payment for Shares tendered and purchased
pursuant to the Offer will be made only after timely receipt by the Depositary
of, among other things, such certificates, if such certificates have been
distributed to holders of Shares. Purchaser will not pay any additional
consideration for the Rights tendered pursuant to the Offer.

Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares pursuant to any of the procedures described above will be
determined by Purchaser in its sole discretion, whose determination will be
final and binding on all parties. Purchaser reserves the absolute right to
reject any or all tenders of any Shares determined by it not to be in proper
form or if the acceptance for payment of, or payment for, such Shares may, in
the opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the
absolute right, in its sole discretion, to waive any of the conditions of the
Offer (subject to the terms of the Merger Agreement) or any defect or
irregularity in any tender with respect to Shares of any particular shareholder,
whether or not similar defects or irregularities are waived in the case of other
shareholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived.

Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding. None of Parent, Purchaser, the Company, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or will incur any
liability for failure to give any such notification.

Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of Purchaser as
such shareholder's proxies, each with full power of substitution, to the full
extent of such shareholder's rights with respect to the Shares tendered by such
shareholder and accepted for payment by Purchaser (and any and all noncash
dividends, distributions, rights, other Shares, or other securities issued or
issuable in respect of such Shares on or after the date of the Merger
Agreement). All such proxies shall be considered coupled with an interest in the
tendered Shares. This appointment will be effective if, when, and only to the
extent that, Purchaser accepts such Shares for payment pursuant to the Offer.
Upon such acceptance for payment, all prior proxies given by such shareholder
with respect to such

9
<PAGE> 12

Shares and other securities will, without further action, be revoked, and no
subsequent proxies may be given. The designees of Purchaser will, with respect
to the Shares and other securities for which the appointment is effective, be
empowered (subject to the Voting Trust so long as it shall be in effect with
respect to the Shares) to exercise all voting and other rights of such
shareholder as they in their sole discretion may deem proper at any annual,
special, adjourned or postponed meeting of the Company's shareholders, by
written consent or otherwise, and Purchaser reserves the right to require that,
in order for Shares or other securities to be deemed validly tendered,
immediately upon Purchaser's acceptance for payment of such Shares, Purchaser
(including through the Voting Trust) must be able to exercise full voting rights
with respect to such Shares.

TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT TO
CERTAIN SHAREHOLDERS OF THE PURCHASE PRICE FOR SHARES PURCHASED PURSUANT TO THE
OFFER, EACH SUCH SHAREHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH SHAREHOLDER'S
CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH SHAREHOLDER IS NOT
SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE
FORM W-9 IN THE LETTER OF TRANSMITTAL. IF BACKUP WITHHOLDING APPLIES WITH
RESPECT TO A SHAREHOLDER, THE DEPOSITARY IS REQUIRED TO WITHHOLD 31% OF ANY
PAYMENTS MADE TO SUCH SHAREHOLDER. SEE INSTRUCTION 9 OF THE LETTER OF
TRANSMITTAL.

ESOP Preferred Shares. According to documents filed by the Company with
the SEC, all outstanding ESOP Preferred Shares are owned of record by the ESOP
Trustee and, accordingly, only the ESOP Trustee can effect a valid tender of
such shares. The ESOP Trustee is required to request instructions from each
participant in the ESOP as to whether ESOP Preferred Shares allocated to such
participant's account should be tendered pursuant to the Offer, and to tender
such shares in accordance with such instructions. Pursuant to the organizational
documents of the ESOP, the ESOP Trustee may not tender allocated ESOP Preferred
Shares as to which no instructions are received. Unallocated shares are required
to be tendered or not tendered in the same proportion as allocated shares for
which instructions from participants are received.

Purchaser's acceptance for payment of Shares tendered pursuant to the Offer
will constitute a binding agreement between the tendering shareholder and
Purchaser upon the terms and subject to the conditions of the Offer.

4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are
irrevocable except that such Shares may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by Purchaser
pursuant to the Offer, may also be withdrawn at any time after December 14,
1996.

If Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares,
and such Shares may not be withdrawn except to the extent that tendering
shareholders are entitled to withdrawal rights as described in this Section 4.
Any such delay will be by an extension of the Offer to the extent required by
law.

For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Share Certificates, the serial numbers shown on such Share
Certificates must be submitted to the Depositary and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution, unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedure for book-entry transfer as set
forth in Section 3, any notice of withdrawal must also specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Shares.

10
<PAGE> 13

All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination will be final and binding. None of Parent, Purchaser, the
Company, the Depositary, the Information Agent or any other person will be under
any duty to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.

Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered at any time prior to the Expiration Date by following the procedures
described in Section 3.

5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following discussion is a
summary of the material federal income tax consequences of the Offer and Merger
to holders of Shares who hold the Shares as capital assets. The discussion set
forth below is for general information only and may not apply to certain
categories of holders of Shares subject to special treatment under the Internal
Revenue Code of 1986, as amended (the "Code"), such as foreign holders and
holders who acquired such Shares pursuant to the exercise of employee stock
options or otherwise as compensation. This summary is based upon laws,
regulations, rulings and decisions currently in effect, all of which are subject
to change, retroactively or prospectively, and to possibly differing
interpretations.

Tax Consequences of the Offer and the Merger Generally. It is unclear
whether the Offer and the Merger should be treated as a single integrated
transaction for federal income tax purposes. If the Offer and the Merger are so
treated and the Merger is in the form of a merger of the Company into Purchaser,
the Offer and the Merger should, in the aggregate, qualify as a reorganization
pursuant to Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code. In such event,
generally (i) no gain or loss will be recognized by Parent, Purchaser or the
Company pursuant to the Offer and the Merger, (ii) gain or loss will be
recognized by a shareholder of the Company who receives solely cash in exchange
for Shares pursuant to the Offer and/or the Merger, (iii) no gain or loss will
be recognized by a shareholder of the Company who does not exchange any Shares
pursuant to the Offer and who receives solely Parent Common Stock in exchange
for Shares pursuant to the Merger, and (iv) a shareholder of the Company who
receives a combination of cash and Parent Common Stock in exchange for such
shareholder's Shares, pursuant to the Offer and/or the Merger, will not
recognize loss but will recognize gain, if any, to the extent of the lesser of
(i) the cash received and (ii) the excess of the sum of the fair market value of
the Parent Common Stock and the amount of cash received over a shareholder's tax
basis in the Shares exchanged. If so integrated, the federal income tax
consequences to a shareholder may be, depending on such shareholder's particular
circumstances, less favorable than the federal income tax consequences to such
shareholder if the Offer and the Merger are not treated as integrated. Although
it is currently anticipated that counsel to the Company and Parent will each
render an opinion that the Merger constitutes a reorganization within the
meaning of Section 368 of the Code, in the event that counsel to the Company or
Parent is unable to render such opinion either because (1) the amount of cash
received in the Offer, as a percentage of the total consideration received by
holders of Common Shares and ESOP Preferred Shares, will be an amount that does
not satisfy certain "continuity of shareholder interests" requirements or (2)
for any other reason, then, pursuant to the Merger Agreement the form of the
Merger will be changed to a merger of Purchaser into the Company. In such case
the Offer and the Merger will not constitute a reorganization, and will be
taxable to shareholders of the Company who will recognize gain or loss equal to
the difference between the fair market value of the Parent Common Stock and cash
received and the shareholder's tax basis in the Shares exchanged.

If the Offer and the Merger were not treated as a single integrated
transaction for federal income tax purposes, the receipt of cash pursuant to the
Offer would be a sale or exchange, while the Merger should still qualify as a
reorganization pursuant to Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code,
if the Merger is in the form of the Company into Purchaser.

11
<PAGE> 14

TAX CONSEQUENCES IF THE OFFER AND THE MERGER ARE TREATED AS A SINGLE INTEGRATED
TRANSACTION
AND AS A REORGANIZATION

Exchange of Shares Solely for Cash. In general, a shareholder of the
Company who, pursuant to the Offer and/or the Merger, exchanges all of the
Shares actually and constructively owned by such shareholder solely for cash
will recognize capital gain or loss equal to the difference between the amount
of cash received and such shareholder's adjusted tax basis in the Shares
surrendered. The gain or loss will be long-term capital gain or loss if, as of
the date of the exchange, the holder thereof has held such Shares for more than
one year. Gain or loss will be calculated separately for each identifiable block
of Shares surrendered pursuant to the Offer and/ or the Merger.

Exchange of Shares Solely for Parent Common Stock. A shareholder of the
Company who, pursuant to the Merger, exchanges all of the Shares actually owned
by such shareholder solely for shares of Parent Common Stock (and who did not
exchange any Shares for cash in the Offer) will not recognize any gain or loss
upon such exchange. Such shareholder may recognize gain or loss, however, to the
extent cash is received in lieu of a fractional share of Parent Common Stock, as
discussed below. The aggregate adjusted tax basis of the shares of Parent Common
Stock received in such exchange will be equal to the aggregate adjusted tax
basis of the Shares surrendered therefor, and the holding period of Parent
Common Stock will include the period during which the Shares surrendered in
exchange therefor were held.

Exchange of Shares for Parent Common Stock and Cash. A shareholder of the
Company who, pursuant to the Offer and/or the Merger, exchanges all of the
Shares actually owned by such shareholder for a combination of shares of Parent
Common Stock and cash will not recognize any loss on such exchange. Such
shareholder will realize gain equal to the excess, if any, of the cash and the
aggregate fair market value of Parent Common Stock received pursuant to the
Offer and/or the Merger over such shareholder's adjusted tax basis in the Shares
exchanged therefor, but will recognize any realized gain only to the extent of
the cash received.

Any gain recognized by a shareholder of the Company who receives a
combination of Parent Common Stock and cash pursuant to the Offer and/or the
Merger will be treated as capital gain unless the receipt of the cash has the
effect of the distribution of a dividend for federal income tax purposes, in
which case such recognized gain will be treated as ordinary dividend income to
the extent of such shareholder's ratable share of the Company's accumulated
earnings and profits.

For purposes of determining whether the cash received pursuant to the Offer
and/or the Merger will be treated as a dividend for federal income tax purposes,
a shareholder of the Company will be treated as if such shareholder first
exchanged all of such shareholder's Shares solely for Parent Common Stock and
then Parent immediately redeemed a portion of such Parent Common Stock in
exchange for the cash such shareholder actually received.

In general, the determination as to whether the cash received will be
treated as received pursuant to a sale or exchange (generating capital gain) or
a dividend distribution (generating ordinary income) depends upon whether and to
what extent there is a reduction in the shareholder's deemed percentage stock
ownership of Parent. A shareholder of the Company who exchanges such
shareholder's Shares for a combination of Parent Common Stock and cash will
recognize capital gain rather than dividend income if the deemed redemption by
Parent (described in the preceding paragraph) is "not essentially equivalent to
a dividend" or is "substantially disproportionate" with respect to such
shareholder.

Whether the deemed exchange and subsequent redemption transaction are "not
essentially equivalent to a dividend" with respect to a Company shareholder will
depend upon such shareholder's particular circumstances. In order to reach such
conclusion, it must be determined that the transaction results in a "meaningful
reduction" in such Company shareholder's deemed percentage stock ownership of
Parent. In determining whether a reduction in a Company shareholder's deemed
percentage stock ownership has occurred, (i) the percentage of the outstanding
stock of Parent that such Company shareholder is deemed actually and
constructively to have owned immediately before the deemed redemption by Parent
should be compared to (ii) the percentage of the outstanding stock of Parent
actually and constructively owned by such

12
<PAGE> 15

shareholder immediately after the deemed redemption by Parent as a result of the
Offer, Merger or otherwise. The relevant constructive ownership rules treat
shareholders as owning stock held indirectly (through partnerships, estates,
trusts and corporations) and, under certain circumstances, treat persons as
owning stock owned by their partners, beneficiaries and shareholders.
Shareholders will also be treated as owning stock that could be acquired by
virtue of the exercise of any option to acquire stock, and individual
shareholders are treated as owning any stock owned by their family.

A Company shareholder will comply with the "substantially disproportionate"
rule if the percentage described in (ii) above is less than 80 percent of the
percentage described in (i) above. Even if a Company shareholder does not
qualify under such test, the Internal Revenue Service has ruled that a minority
shareholder in a publicly held corporation whose relative stock interest is
minimal and who exercises no control with respect to corporate affairs is
considered to have a "meaningful reduction" if such shareholder has a reduction
in such shareholder's percentage stock ownership. In most circumstances,
therefore, gain recognized by a shareholder of the Company who exchanges such
shareholder's Shares for a combination of Parent Common Stock and cash will be
capital gain, which will constitute long-term capital gain if the holding period
for such Shares was greater than one year as of the date of the exchange.

The aggregate tax basis of Parent Common Stock received by a Company
shareholder who, pursuant to the Offer and/or the Merger, exchanges such
shareholder's Shares for a combination of Parent Common Stock and cash will be
the same as the aggregate tax basis of the Shares surrendered therefor,
decreased by the cash received and increased by the amount of gain recognized,
if any (including any portion of such gain that is treated as a dividend). The
holding period of Parent Common Stock will include the holding period of the
Shares surrendered therefor.

Cash Received in Lieu of a Fractional Interest of Parent Common
Stock. Cash received in lieu of a fractional share of Parent Common Stock will
generally (subject to the discussion above) be treated as received in redemption
of such fractional interest and gain or loss will be recognized, measured by the
difference between the amount of cash received and the portion of the basis of
the Shares allocable to such fractional interest. Such gain or loss will
constitute capital gain or loss, and will generally be long-term capital gain or
loss if the holding period for such Shares was greater than one year as of the
date of the exchange.

TAX CONSEQUENCES IF THE OFFER AND THE MERGER ARE TREATED AS SEPARATE
TRANSACTIONS AND THE
MERGER IS TREATED AS A REORGANIZATION

If the Offer and the Merger were treated as separate transactions for
federal income tax purposes, the receipt of cash pursuant to the Offer would be
a taxable transaction, while the Merger should still qualify as a reorganization
pursuant to Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code, if the Merger is
a merger of the Company into Purchaser. Accordingly, a shareholder of the
Company who receives cash pursuant to the Offer would recognize gain or loss
equal to the difference between the amount of cash received and the
shareholder's adjusted tax basis in the Shares surrendered. The gain or loss
would be long-term capital gain or loss if, as of the date of the exchange, such
shareholder had held such stock for more than one year.

A shareholder of the Company who receives Parent Common Stock and/or cash
pursuant to the Merger would be subject to the federal income tax rules
concerning reorganizations discussed above under "Tax Consequences if the Offer
and the Merger are Treated as a Single Integrated Transaction" (but without
regard to the cash received, and Shares exchanged, in the Offer).

TAX CONSEQUENCES IF FORM OF MERGER IS A MERGER OF PURCHASER INTO THE COMPANY

If counsel to Parent or the Company are unable to render opinions that such
transaction would constitute a reorganization within the meaning of Section 368
of the Code because the "continuity of shareholder interests" requirements would
not be met or for any such reason, the Merger will be changed in form to a
merger of Purchaser into the Company (the "Reverse Merger"). In such a case, the
transaction would not constitute a reorganization within the meaning of Section
368 of the Code. This result would occur if the value of the Parent Common Stock
at the time of the Merger had declined significantly in value from its value as
of the date hereof.

13
<PAGE> 16

In the event of a Reverse Merger, a shareholder would recognize gain or
loss equal to the fair market value of the Parent Common Stock and cash received
over the shareholder's tax basis in the Shares exchanged, calculated separately
as to each block of Shares exchanged. The character of such gain or loss would
be determined as described above.

WITHHOLDING

Unless a shareholder complies with certain reporting and/or certification
procedures or is an exempt recipient under applicable provisions of the Code and
Treasury Regulations promulgated thereunder, such shareholder may be subject to
withholding tax of 31% with respect to any cash payments received pursuant to
the Offer and Merger. Shareholders should consult their brokers or the
Depositary to ensure compliance with such procedures. Foreign shareholders
should consult with their own tax advisors regarding withholding taxes in
general.

THE ABOVE DISCUSSION MAY NOT APPLY TO CERTAIN CATEGORIES OF SHAREHOLDERS
SUBJECT TO SPECIAL TREATMENT UNDER THE CODE, SUCH AS FOREIGN SHAREHOLDERS AND
SHAREHOLDERS WHOSE SHARES WERE ACQUIRED PURSUANT TO THE EXERCISE OF AN EMPLOYEE
STOCK OPTION OR OTHERWISE AS COMPENSATION. SHAREHOLDERS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS TO DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE OFFER
AND THE MERGER, INCLUDING ANY FEDERAL, STATE, LOCAL OR OTHER TAX CONSEQUENCES
(INCLUDING ANY TAX RETURN FILING OR OTHER TAX REPORTING REQUIREMENTS) OF THE
OFFER AND THE MERGER.

6. PRICE RANGE OF SHARES; DIVIDENDS. According to the Company's Annual
Report on Form 10-K for the year ended December 31, 1995 (the "Company Form
10-K"), the Common Shares are listed and principally traded on the NYSE, and are
also listed and traded on the Philadelphia Stock Exchange, and quoted under the
symbol "CRR". The following table sets forth, for the quarters indicated, the
high and low sales prices per Common Share on the NYSE and the amount of cash
dividends paid per Common Share, as reported in the Company Form 10-K for
periods in 1994 and 1995, and as reported by published financial sources with
respect to periods in 1996:

<TABLE>
<CAPTION>
CASH
HIGH LOW DIVIDENDS
---- --- ---------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994:
First Quarter........................................... $69 1/4 $56 1/2 $.325
Second Quarter.......................................... 59 1/8 50 3/8 .325
Third Quarter........................................... 58 1/8 48 3/8 .375
Fourth Quarter.......................................... 55 1/4 48 1/8 .375
YEAR ENDED DECEMBER 31, 1995:
First Quarter........................................... 57 5/8 50 1/2 .375
Second Quarter.......................................... 56 1/4 51 1/8 .375
Third Quarter........................................... 70 1/4 55 1/8 .425
Fourth Quarter.......................................... 74 3/8 65 1/2 .425
YEAR ENDED DECEMBER 31, 1996:
First Quarter........................................... 77 1/4 67 5/8 .425
Second Quarter.......................................... 73 66 1/4 .425
Third Quarter........................................... 74 5/8 63 3/4 .475
Fourth Quarter (through October 15, 1996)............... 88 68 1/2 N.A.
</TABLE>

On October 14, 1996, the last trading day prior to the date of the public
announcement of the execution of the Merger Agreement, the reported closing
sales price of the Common Shares on the NYSE Composite Tape was $71 per Share.
On October 15, 1996, the last full trading day prior to the date of this Offer
to Purchase, the reported closing sales price of the Common Shares on the NYSE
Composite Tape was $85 1/8 per Common Share. SHAREHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE COMMON SHARES.

14
<PAGE> 17

All of the outstanding ESOP Preferred Shares are held of record by the ESOP
Trustee. There is no trading market for the ESOP Preferred Shares. Since
issuance of the ESOP Preferred Shares, the Company has paid quarterly cash
dividends on the ESOP Preferred Shares of $.54125 per share. Each ESOP Preferred
Share is convertible under certain circumstances into one Common Share.

7. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON SHARES; EXCHANGE
LISTING AND EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS. The purchase of
Common Shares pursuant to the Offer will reduce the number of Common Shares that
might otherwise trade publicly and could reduce the number of holders of Common
Shares, which could adversely affect the liquidity and market value of the
remaining Common Shares held by the public. Following the Offer, a large
percentage of the outstanding Common Shares will be owned by Purchaser.

According to the NYSE's published guidelines, the NYSE would consider
delisting the Common Shares if, among other things, the number of record holders
of at least 100 Common Shares should fall below 1,200, the number of publicly
held Common Shares (exclusive of holdings of officers, directors and their
families and other concentrated holdings of 10% or more ("NYSE Excluded
Holdings")) should fall below 600,000 or the aggregate market value of publicly
held Common Shares (exclusive of NYSE Excluded Holdings) should fall below
$5,000,000. If, as a result of the purchase of Common Shares pursuant to the
Offer or otherwise, the Common Shares no longer meet the requirements of the
NYSE for continued listing and the listing of the Common Shares is discontinued,
the market for the Common Shares could be adversely affected.

If the NYSE were to delist the Common Shares, it is possible that the
Common Shares would continue to trade on another securities exchange or in the
over-the-counter market and that price or other quotations would be reported by
such exchange or through the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or other sources. The extent of the public
market therefor and the availability of such quotations would depend, however,
upon such factors as the number of shareholders and/ or the aggregate market
value of such securities remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration under the Exchange Act as described below and other factors.
Purchaser cannot predict whether the reduction in the number of Common Shares
that might otherwise trade publicly would have an adverse or beneficial effect
on the market price for or marketability of the Common Shares or whether it
would cause future market prices to be greater or less than the Offer Price.

The Common Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the SEC if the
Common Shares are not listed on a national securities exchange and there are
fewer than 300 record holders of the Common Shares. The termination of
registration of the Common Shares under the Exchange Act would substantially
reduce the information required to be furnished by the Company to holders of
Common Shares and to the SEC and would make certain provisions of the Exchange
Act, such as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement in connection with shareholders'
meetings pursuant to Section 14(a), and the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions, no longer applicable
to the Common Shares. In addition, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the ability to
dispose of such securities pursuant to Rule 144 promulgated under the Securities
Act of 1933, as amended (the "Securities Act").

If registration of the Common Shares under the Exchange Act were
terminated, the Common Shares would no longer be eligible for NASDAQ reporting.

8. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise noted
below, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been taken from or based upon the
Company Form 10-K and other publicly available documents and records on file
with the SEC and other public sources. Neither Parent nor Purchaser assumes any
responsibility for the accuracy or completeness of the information concerning
the Company contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to Parent
or Purchaser.

15
<PAGE> 18

The Company is a Pennsylvania corporation whose principal executive offices
are located at 2001 Market Street, Two Commerce Square, Philadelphia,
Pennsylvania 19101. Through its wholly-owned subsidiary, Consolidated Rail
Corporation ("CRC"), a Pennsylvania corporation, the Company provides freight
transportation services within the northeast and midwest United States. The
Company interchanges freight with other United States and Canadian railroads for
transport to destinations within and outside the Company's service region. As of
December 31, 1995, CRC (excluding its subsidiaries) maintained 17,715 miles of
track on its 10,701 mile route system. Of total route miles, 8,860 are owned,
100 are leased or operated under contract and 1,741 are operated under trackage
rights, including approximately 300 miles operated pursuant to an easement over
Amtrak's Northeast Corridor. Also as of December 31, 1995, the Company had
(owned or subject to capital lease) 2,023 locomotives and 51,404 freight cars
(including 21,948 subject to operating leases), excluding locomotives and
freight cars held by subsidiaries other than CRC, which have an immaterial
number of locomotives and freight cars. The Company operates no significant line
of business other than the freight railroad business and does not provide common
carrier passenger or commuter train service.

The Company serves a heavily industrial region that is marked by dense
population centers which constitute a substantial market for consumer durable
and non-durable goods, and a market for raw materials used in manufacturing and
by electric utilities.

Financial Information. Set forth below is certain selected consolidated
financial information relating to the Company and its subsidiaries which has
been excerpted or derived from the financial statements contained in (i) the
Company Form 10-K, (ii) the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1996 (the "Company Form 10-Q") and (iii) the
Company's Annual Report on Form 10-K for the year ended December 31, 1994. More
comprehensive financial information is included in the Company Form 10-K and the
Company Form 10-Q and other documents filed by the Company with the SEC. The
financial information that follows is qualified in its entirety by reference to
the Company Form 10-K and the Company Form 10-Q and other documents, including
the financial statements and related notes contained therein. The Company Form
10-K and the Company Form 10-Q and other documents may be examined and copies
may be obtained from the offices of the SEC in the manner set forth below.

CONRAIL INC.

SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------- --------------------------
1996 1995 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues............................................ $1,838 $1,812 $3,686 $3,733 $3,453
Operating expenses.................................. 1,715 1,518 3,230 3,127 2,862
Operating income.................................... 123 294 456 606 591
Net income to common shareholders................... 57 178 264 324 160
INCOME PER COMMON SHARE INFORMATION:
Net earnings per Common Share before the cumulative
effect of changes in accounting principles
Primary........................................ $ 0.66 $ 2.17 $ 3.19 $ 3.90 $ 2.74
Fully diluted.................................. 0.64 1.98 2.94 3.56 2.51
Net per Common Share cumulative effect of changes in
accounting principles(1)
Primary........................................ -- -- -- -- (.92)
Fully diluted.................................. -- -- -- -- (.81)
Net earnings per Common Share
Primary........................................ 0.66 2.17 3.19 3.90 1.82
Fully diluted.................................. 0.64 1.98 2.94 3.56 1.70
</TABLE>

16
<PAGE> 19

<TABLE>
<CAPTION>
AT JUNE 30, AT DECEMBER 31,
---------------- --------------------------
1996 1995 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current assets...................................... $1,223 $1,124 $1,206 $1,125 $1,062
Property and equipment (net)........................ 6,446 6,660 6,408 6,498 6,313
Total assets........................................ 8,341 8,609 8,424 8,322 7,948
Current liabilities................................. 1,213 1,250 1,170 1,201 1,075
Long-term debt, excluding current portion........... 1,887 2,068 1,911 1,940 1,959
Total shareholders' equity.......................... 2,899 3,007 2,977 2,925 2,784
</TABLE>

- ---------------
(1) Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions" and SFAS 109, "Accounting for
Income Taxes."

The Company is subject to the information and reporting requirements of the
Exchange Act and is required to file reports and other information with the SEC
relating to its business, financial condition and other matters. Information, as
of particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities, any material interests of such persons in transactions
with the Company and other matters is required to be disclosed in proxy
statements distributed to the Company's shareholders and filed with the SEC.
These reports, proxy statements and other information should be available for
inspection at the public reference facilities of the SEC located in Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and also should be
available for inspection and copying at prescribed rates at the following
regional offices of the SEC: Seven World Trade Center, New York, New York 10048;
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this
material may also be obtained by mail, upon payment of the SEC's customary fees,
from the SEC's principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. The SEC also maintains an Internet web site at http://www.sec.gov that
contains reports, proxy statements and other information. Reports, proxy
statements and other information concerning the Company should also be available
for inspection at the offices of the NYSE, 20 Broad Street, New York, New York
10005.

Certain Projected Financial Information. In the course of its discussions
with Parent described in Section 11, the Company provided Parent and its
financial advisors with certain business and financial information which Parent
believes was not publicly available. Such information included, among other
things, certain financial projections for 1996 through 1999 (the "Company
Projections") prepared by management of the Company as a long-range plan. The
Company Projections do not take into account any of the potential effects of the
transactions contemplated by the Offer and the Merger. The Company does not as a
matter of course publicly disclose internal projections as to future revenues,
earnings or financial condition.

The Company Projections indicated the following income statement and cash
flow data: (i) projected net cash provided by operating activities for each of
the years ended December 31, 1996 through December 31, 1999 were $3,762 million,
$3,874 million, $3,988 million and $4,149 million, respectively; (ii) projected
operating expenses for each of such years were $2,987 million, $3,026 million,
$3,043 million and $3,112 million, respectively; (iii) projected operating
income for each of such years was $775 million, $848 million, $945 million and
$1,037 million, respectively; (iv) projected net income for each of such years
was $438 million, $485 million, $542 million and $599 million, respectively; (v)
projected net cash provided by operating activities for each of such years was
$855 million, $822 million, $890 million and $975 million, respectively; (vi)
projected capital expenditures for each of such years was $492 million, $510
million, $550 million and $550 million, respectively; (vii) projected net
internally generated funds (defined as net cash provided by operating activities
less capital expenditures) for each of such years were $363 million, $312
million, $340 million and $425 million, respectively; (viii) projected debt
issuance net of debt retirement for each of such years was $(49) million, $7
million, $(11) million and $(85) million, respectively; and (ix) projected net
change in cash for each of such years was $43 million, $0, $0 and $0,
respectively.

In connection with the Company Projections, the Company also furnished
Parent with projected balance sheets of the Company for the years 1996 through
1999. Such balance sheets projected total assets of the Company increasing from
$8,660 million in 1996 to $9,656 million in 1999, total long-term debt
(excluding

17
<PAGE> 20

current portion) decreasing from $1,862 million in 1996 to $1,773 million in
1999 and total shareholders' equity increasing from $3,057 million in 1996 to
$3,725 million in 1999.

THE COMPANY PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE
OR COMPLIANCE WITH PUBLISHED GUIDELINES OF THE SEC OR THE GUIDELINES ESTABLISHED
BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS. THE PROJECTIONS ARE
INCLUDED IN THIS OFFER TO PURCHASE ONLY BECAUSE SUCH INFORMATION WAS PROVIDED TO
PARENT. NONE OF PARENT, PURCHASER OR ANY PARTY TO WHOM THE PROJECTIONS WERE
PROVIDED ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OF SUCH INFORMATION. WHILE
PRESENTED WITH NUMERICAL SPECIFICITY, THESE PROJECTIONS ARE BASED UPON A VARIETY
OF ASSUMPTIONS RELATING TO THE BUSINESSES OF THE COMPANY WHICH, THOUGH PARENT
HAS BEEN ADVISED WERE CONSIDERED REASONABLE BY THE COMPANY AT THE TIME THEY WERE
FURNISHED TO PARENT, MAY NOT BE REALIZED AND ARE SUBJECT TO SIGNIFICANT
UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE
COMPANY. THERE CAN BE NO ASSURANCE THAT THE PROJECTIONS WILL BE REALIZED, AND
ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE SHOWN. THE PROJECTIONS HAVE NOT
BEEN EXAMINED OR COMPILED BY THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS. FOR
THESE REASONS, AS WELL AS THE BASES ON WHICH SUCH PROJECTIONS WERE COMPILED,
THERE CAN BE NO ASSURANCE THAT SUCH PROJECTIONS WILL BE REALIZED, OR THAT ACTUAL
RESULTS WILL NOT BE HIGHER OR LOWER THAN THOSE ESTIMATED. THE INCLUSION OF SUCH
PROJECTIONS HEREIN SHOULD NOT BE REGARDED AS AN INDICATION THAT PARENT,
PURCHASER OR ANY OTHER PARTY WHO RECEIVED SUCH INFORMATION CONSIDERS IT AN
ACCURATE PREDICTION OF FUTURE EVENTS.

Certain Operating Relationships. Various subsidiaries of each of Parent,
on the one hand, and the Company, on the other hand, have operating
relationships with each other. Approximately 6%, 6%, and 7% of the Company's
total loads in 1993, 1994 and 1995, respectively, were interchanged with Parent.
Major interchange locations between Parent and the Company include Cincinnati,
Ohio; Alexandria, Virginia; Philadelphia, Pennsylvania; and Toledo, Ohio.

In connection with interchanges, either or both railroads of Parent and the
Company may be the party billing the shipper of such interchange freight, and in
cases where one of the parties bills for the entire shipment, such party will
periodically remit to the other party the net amount of the proceeds due to such
other carrier in accordance with standard industry practice. In addition, Parent
and the Company often, together with other railroads, cooperate in terminal
switching operations at certain major locations including Chicago, Illinois and
East St. Louis, Illinois. Parent and the Company also have proprietary interests
in various terminal companies in their service territories, including the Belt
Railway of Chicago and The Lakefront Dock, Railroad Terminal Company.

In addition to the foregoing, Parent and the Company are parties to various
trackage rights agreements pursuant to which each carrier operates over the
other carrier's track.

The Rights. The following is based upon the Form 8-K dated July 31, 1989
filed by CRC, which is the Company's current operating subsidiary and which
prior to the Company's adoption of the holding company structure on February 17,
1993 operated on a stand alone basis (the "July 1989 Form 8-K"), the Company's
Form 8-B dated as of September 25, 1995 and other amendments to the Rights
Agreement filed with the SEC.

On July 19, 1989, the Board of Directors of CRC declared a dividend
distribution of one Common Stock Purchase Right (a "Right") for each share of
common stock of CRC and executed the Rights Agreement. Upon adoption by the
Company of a holding company structure on February 17, 1993, CRC assigned all of
CRC's title and interest under the Rights Agreement, as amended, to the Company
(the "Assignment"). On October 2, 1995, one Right was distributed with respect
to each outstanding ESOP Preferred Share. Under

18
<PAGE> 21

the Rights Agreement, as amended, each Right entitles the holder to purchase one
Common Share at an exercise price of $205.00, subject to adjustment.

Under the Rights Agreement, as amended, until the close of business on the
Distribution Date (which is defined as the earlier of (i) 10 days following a
public announcement that a person or group of affiliated or associated persons
(the "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 10% or more of the outstanding Shares and (ii) 10
business days (or such later date as the Board of Directors of the Company shall
determine) following the commencement of a tender offer or exchange offer which
would result in a person or group beneficially owning 10% or more of the
outstanding Shares), the Rights will be evidenced by the Share Certificates and
will be transferred with and only with such share certificates. As soon as
practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of the Shares as of the close of business on the Distribution
Date, and thereafter the separate Rights Certificates alone will evidence the
Rights.

The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on July 19, 1999 unless earlier redeemed by the
Company as described below.

In the event that the Company is acquired in a merger or consolidation in
which the Company is not the surviving corporation or 50% or more of the
Company's consolidated assets or earning power is sold or transferred, each
holder of a Right will thereafter have the right to receive, upon the exercise
thereof at then current exercise price of the Right, that number of shares of
common stock of the acquiring company which at the time of such transaction will
have a value equal to two times the exercise price of the Right.

In the event that an Acquiring Person becomes the beneficial owner of 10%
or more of the outstanding Shares, each holder of a Right will thereafter have
the right to receive, upon exercise, Common Shares (or, in certain
circumstances, cash, property or other securities of the Company), having a
value equal to two times the exercise price of the Right.

At any time prior to the announcement by the Company or an Acquiring Person
that an Acquiring Person has become such, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
Immediately upon the action of the Board of Directors of the Company ordering
redemption of the Rights, the Rights will terminate, and the only right to which
the holders of Rights will be entitled will be the right to receive the
Redemption Price.

Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including without limitation, the right
to vote or to receive dividends.

The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights in order to cure any
ambiguity, to correct or supplement any provision which is defective or
inconsistent with other provisions, or to make any other provision with respect
to the Rights which the Company may deem desirable; provided that from and after
such time an Acquiring Person becomes such, the Rights may not be amended in any
manner which would adversely affect the interests of holders of Rights.

The foregoing summary of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the July 1989 Form
8-K, the text of the Rights Agreement as an exhibit thereto filed with the SEC,
the Assignment, and subsequent amendments to the Rights Agreement as filed with
the SEC. Copies of these documents may be obtained in the manner set forth
above.

In conjunction with the execution of the Merger Agreement, the Board of
Directors of the Company amended the Rights Agreement to (i) render the Rights
Agreement inapplicable to the Merger and the other transactions contemplated by
the Merger Agreement and the Company Stock Option Agreement and (ii) ensure that
(a) neither Parent nor any of its wholly owned subsidiaries is an Acquiring
Person pursuant to the Rights Agreement and (b) a Shares Acquisition Date,
Distribution Date or Trigger Event (in each case as defined in the Rights
Agreement) does not occur by reason of the approval, execution or delivery of
the Merger Agreement and the Company Stock Option Agreement, the consummation of
the Merger, or the other transactions contemplated by the Merger Agreement or
the Company Stock Option Agreement and the Rights Agreement may not be further
amended by the Company without the prior consent of Parent in its sole

19
<PAGE> 22

discretion. The Company has also agreed to take any further action necessary to
render the Rights Agreement inapplicable to the Transactions.

Shareholders are required to tender one associated Right for each Share
tendered in order to effect a valid tender of such Share. If the Distribution
Date does not occur prior to the Expiration Date, a tender of Shares will
automatically constitute a tender of the associated Rights. See Section 3.

9. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT.

Purchaser. Purchaser is a Pennsylvania corporation organized in October
1996 and has not carried on any significant activities other than activities
undertaken in connection with the Offer and the Merger. The principal offices of
Purchaser are located at One James Center, 901 East Cary Street, Richmond,
Virginia 23219. Purchaser is a wholly owned subsidiary of Parent. Until
immediately prior to the time that Purchaser will purchase Shares pursuant to
the Offer, it is not expected that Purchaser will have any significant assets or
liabilities or engage in activities other than those incident to the
transactions contemplated by the Offer and the Merger.

Parent. Parent is a Virginia corporation with its principal executive
offices located at One James Center, 901 East Cary Street, Richmond, Virginia
23219.

Parent provides rail, intermodal, ocean container-shipping, barging,
trucking, and contract logistics services worldwide. Through its subsidiary CSX
Transportation ("CSXT"), Parent provides rail freight transportation and
distribution services over approximately 18,500 route miles in 20 states in the
United States east, midwest and south; and in Ontario, Canada. CSXT interchanges
freight with western railroads at key gateways in Chicago, East St. Louis,
Memphis and New Orleans. CSXT's service territory includes 26 port cities for
international transport. In 1995, the principal commodities hauled by CSXT were
coal, chemicals, automotive parts, finished vehicles, agricultural products,
forest products (including paper, paper products, and lumber products),
minerals, fertilizers, and metals.

Parent also transports freight through subsidiaries conducting
container-shipping, intermodal, and barge operations. Its subsidiary, Sea-Land
Service Inc. ("Sea-Land"), is the largest container-shipping line in the United
States and one of the three largest container-shipping companies in the world.
Sea-Land operates more than 100 container ships and nearly 200,000 containers
throughout the world. Parent's subsidiary, American Commercial Lines Inc., is
the largest and most diversified barge transportation firm in both North and
South America. CSX Intermodal provides shippers with nationwide intermodal
service for moving domestic and international freight in trailers, domestic
containers and international steamship containers, often in close alignment with
CSXT and Sea-Land.

Parent is subject to the information and reporting requirements of the
Exchange Act and is required to file reports and other information with the SEC
relating to its business, financial condition and other matters. Information, as
of particular dates, concerning Parent's directors and officers, their
remuneration, stock options granted to them, the principal holders of Parent's
securities, any material interests of such persons in transactions with Parent
and other matters is required to be disclosed in proxy statements distributed to
Parent's shareholders and filed with the SEC. These reports, proxy statements
and other information should be available for inspection and copies may be
obtained in the same manner as set forth for the Company in Section 8. The
shares of Parent common stock are listed on the NYSE, and reports, proxy
statements and other information concerning Parent should also be available for
inspection at the offices of the NYSE, 20 Broad Street, New York, New York
10005.

The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of Parent and Purchaser are set forth in Schedule I hereto.

Except as set forth in this Offer to Purchase, neither Parent nor
Purchaser, nor, to the best knowledge of Parent or Purchaser, any of the persons
listed in Schedule I hereto, or any associate or majority-owned subsidiary of
such persons, beneficially owns any equity security of the Company, and neither
Parent nor Purchaser, nor, to the best knowledge of Parent or Purchaser, any of
the other persons referred to above, or

20
<PAGE> 23

any of the respective directors, executive officers or subsidiaries of any of
the foregoing, has effected any transaction in any equity security of the
Company during the past 60 days. Mr. John Hall, a director of Parent, owns 50
Common Shares through an asset management fund, and Mr. Mark Aron, an executive
officer of Parent and Purchaser and a director of Purchaser, owns not more than
800 Common Shares. In addition, Mr. Robert Burrus, a director of Parent, in his
capacity as a trustee of a trust, sold 650 Common Shares on September 5, 1996 at
a price of $70 per share.

Except as set forth in this Offer to Purchase, neither Parent nor
Purchaser, nor, to the best knowledge of Parent or Purchaser, any of the persons
listed in Schedule I hereto has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, without limitation, any contract, arrangement, understanding
or relationship concerning the transfer or the voting of any securities of the
Company, joint ventures, loan or option arrangements, puts or calls, guaranties
of loans, guaranties against loss or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, neither Parent nor Purchaser,
nor, to the best knowledge of Parent or Purchaser, any of the persons listed in
Schedule I hereto has had any transactions with the Company, or any of its
executive officers, directors or affiliates that would require reporting under
the rules of the SEC.

Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between Parent or Purchaser, or their respective
subsidiaries, or, to the best knowledge of Parent or Purchaser, any of the
persons listed in Schedule I hereto, on the one hand, and the Company or its
executive officers, directors or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors, or a sale or other transfer of a material
amount of assets.

Financial Information. Set forth below is certain selected consolidated
financial information relating to Parent and its subsidiaries which has been
excerpted or derived from the financial statements contained in Parent's Annual
Reports on Form 10-K for the fiscal years ended December 29, 1995 and December
30, 1994 (the "Parent Form 10-Ks") and in Parent's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 28, 1996 (the "Parent Form 10-Q"). More
comprehensive financial information is included in the Parent Form 10-K and the
Parent Form 10-Q and other documents filed by Parent with the SEC. The financial
information that follows is qualified in its entirety by reference to the Parent
Form 10-K and the Parent Form 10-Q and other documents including the financial
statements and related notes contained therein. The Parent Form 10-Ks and the
Parent Form 10-Q and other documents may be examined and copies may be obtained
from the offices of the SEC in the manner set forth above.

CSX CORPORATION

SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED(2)
YEAR ENDED
-------------------- --------------------------------------------
JUNE 28, JUNE 30, DECEMBER 29, DECEMBER 30, DECEMBER 31,
1996 1995 1995 1994 1993
-------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating revenue...................... $ 5,186 $ 4,993 $ 10,504 $ 9,608 $ 8,940
Operating expense...................... 4,482 4,633 9,332 8,376 8,027
Operating income....................... 704 360 1,172 1,232 913
Net earnings........................... 380 140 618 652 359
PER SHARE INFORMATION:
Earnings per share(1).................. $ 1.80 $ 0.67 $ 2.94 $ 3.12 $ 1.73
</TABLE>

21
<PAGE> 24

<TABLE>
<CAPTION>
AT AT
-------------------- --------------------------------------------
JUNE 28, JUNE 30, DECEMBER 29, DECEMBER 30, DECEMBER 31,
1996 1995 1995 1994 1993
-------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current assets......................... $ 1,979 $ 1,752 $ 1,935 $ 1,665 $ 1,571
Properties -- net...................... 11,568 11,119 11,297 11,044 10,788
Total assets........................... 14,531 13,894 14,282 13,724 13,420
Long-term debt, current portion........ 395 397 486 312 146
Total current liabilities.............. 2,834 2,699 2,991 2,505 2,275
Long-term debt, excluding current
portion.............................. 2,271 2,577 2,222 2,618 3,133
Total shareholders' equity ............ 4,567 3,821 4,242 3,731 3,180
</TABLE>

- ---------------
(1) Adjusted for two-for-one stock split distributed December 21, 1995.
(2) For the six month periods ended June 28, 1996 and June 30, 1995, Parent
changed its financial presentation to exclude non-transportation activities
from operating revenue, operating expense, and operating income.

10. SOURCE AND AMOUNT OF FUNDS. Purchaser estimates that the total amount
of funds required to purchase Shares pursuant to the Offer, to pay the cash
portion of the consideration in the Merger and to pay all related costs and
expenses will be approximately $3.5 billion. See "Fees and Expenses."

Purchaser plans to obtain the necessary funds through capital contributions
or advances made by Parent. Parent plans to obtain the funds for such capital
contributions or advances from its available cash and working capital, and
either through the issuance of long- or short-term debt securities (including,
without limitation, commercial paper notes) or pursuant to a credit facility
that Parent will seek to obtain from one or more commercial banks.

Parent's commercial paper program involves the private placement of
unsecured, commercial paper notes with maturities of up to 270 days. The
commercial paper generally has an effective interest rate approximating the then
market rate of interest for commercial paper of similar rating, currently
approximately 5.45%. Parent may refinance any commercial paper borrowings used
to finance the purchase of Shares pursuant to the Offer through private
placements of additional commercial paper, borrowings under the credit facility
referred to above or, depending on market or business conditions, through such
other financing as Parent may deem appropriate.

It is anticipated that the indebtedness incurred by Parent in connection
with the transactions contemplated by the Merger Agreement will be repaid from
funds generated internally by Parent and its subsidiaries (including, after the
Merger, if consummated, dividends paid by the Surviving Corporation and its
subsidiaries), through additional borrowings, through application of proceeds of
dispositions or through a combination of two or more such sources. No final
decisions have been made concerning the method Parent will employ to repay such
indebtedness. Such decisions, when made, will be based on Parent's review from
time to time of the advisability of particular actions, as well as on prevailing
interest rates and financial and other economic conditions.

11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.

In the ordinary course of Parent's long-term strategic review process,
Parent and its subsidiaries routinely analyze potential combinations with
various railroad companies. In recent years, Parent has placed particular
emphasis on studies of the Company, considering it to be an ideal candidate for
such a combination.

From time to time since August 1994, Parent has conveyed to senior managers
of the Company Parent's continuing interest in discussing a business combination
and Parent's views as to the desirability of such a transaction. These contacts
by Parent led to a discussion in July 1996 between David M. LeVan, Chairman,
President and Chief Executive Officer of the Company, and John W. Snow,
Chairman, President and Chief Executive Officer of Parent, generally regarding
the consolidation in the railroad industry and the regulatory environment with
respect to such consolidation. Following such discussion, each of the parties
independently analyzed its strategic opportunities, including potential business
combination transactions. Shortly following preliminary discussions between Mr.
Snow and Mr. LeVan, on October 6, 1996, Mr. Snow and Mr. LeVan met to discuss
the possibility for and the terms of a business combination between Parent and
the Company.

22
<PAGE> 25

Following that meeting, senior management of both companies, together with their
financial and legal advisors, independently undertook to examine a possible
transaction and to conduct detailed business reviews. On October 8, 1996, Parent
and the Company entered into a confidentiality agreement in connection with
their discussions. Such discussions led to the negotiation of the Merger
Agreement and the Option Agreements, which were executed on October 14, 1996.

On October 16, 1996, Parent and Purchaser commenced the Offer.

12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY. The
purpose of the Offer is for Parent, through Purchaser, to acquire a significant
equity interest in the Company as a first step in consummating a business
combination between Parent and the Company. The purpose of the Merger is for
Parent to acquire all Shares not purchased pursuant to the Offer and thereby
accomplish the business combination transaction.

Upon consummation of the Merger, Parent intends to continue to review the
combined company and its assets, businesses, operations, properties, policies,
corporate structure, capitalization and management and consider if any changes
would be desirable in light of the circumstances then existing. Upon
consummation of the Merger, Parent also intends to continue to identify
synergies and cost savings, including its freight traffic arrangements with the
Company.

Based upon discussions with the Company, Parent believes that total
quantifiable benefits from the Merger will be approximately $550 million
annually, based on the realization of cost savings from operating efficiencies,
facility consolidations, overhead rationalization and other activities, and new
traffic volumes earned by enhanced service. Parent intends that the combined
company will make investments to support revenue growth, and will create a
streamlined organization that incorporates the best of Parent's and the
Company's organizations, while combining facilities and realizing economies of
scale. Parent expects that there will be some job losses as a result of
consolidations and the elimination of redundancies, but that these will be
offset substantially over time by new employment opportunities resulting from
growth of the business. Parent has not yet developed specific plans to implement
the foregoing. THE FOREGOING ESTIMATES OF COST SAVINGS AND SYNERGIES ARE
INHERENTLY SUBJECT TO SIGNIFICANT UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH
ARE BEYOND THE CONTROL OF PARENT. THERE CAN BE NO ASSURANCE THAT THEY WILL BE
ACHIEVED AND ACTUAL SAVINGS AND SYNERGIES MAY VARY MATERIALLY FROM THOSE
ESTIMATED. THE INCLUSION OF SUCH ESTIMATES HEREIN SHOULD NOT BE REGARDED AS AN
INDICATION THAT PARENT, PURCHASER OR ANY OTHER PARTY CONSIDERS SUCH ESTIMATES AN
ACCURATE PREDICTION OF FUTURE EVENTS.

The Merger Agreement provides that, following the consummation of the
Merger, Parent and the Company shall cause the corporate headquarters of Parent
to be located in Philadelphia, Pennsylvania. Except as noted in this Offer to
Purchase, neither Parent nor Purchaser has any present plans or proposals that
would result in an extraordinary corporate transaction, such as a
reorganization, liquidation, relocation of operations, or sale or transfer of
assets, involving the Company or any of its subsidiaries, or any material
changes in the Company's corporate structure, business or composition of its
board of directors, management or personnel.

13. MERGER AGREEMENT; OTHER AGREEMENTS.

MERGER AGREEMENT

THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE MERGER AGREEMENT.
THE SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT
WHICH IS INCORPORATED HEREIN BY REFERENCE. TERMS NOT OTHERWISE DEFINED HEREIN OR
IN THE FOLLOWING SUMMARY SHALL HAVE THE MEANINGS SET FORTH IN THE MERGER
AGREEMENT.

The Offer. The Merger Agreement provides that Purchaser will commence the
Offer and that, on the terms and subject to the prior satisfaction or waiver of
the conditions to the Offer, Purchaser will purchase all Shares validly tendered
pursuant to the Offer as soon as practicable after the later of the satisfaction
of the

23
<PAGE> 26

conditions of the Offer and the expiration of the Offer, except that Purchaser
will not purchase the Shares until after calculation of proration. The Merger
Agreement provides that, without the written consent of the Company, Purchaser
will not decrease the Offer Price, decrease the number of Shares sought in the
Offer, change the form of consideration to be paid pursuant to the Offer, impose
additional conditions to the Offer or amend any other term or any condition of
the Offer in any manner adverse to the holders of Shares, except that if on the
initially scheduled expiration date of the Offer (as it may be extended in
accordance with the terms of the Merger Agreement), all conditions to the Offer
are not satisfied or waived, the Offer may be extended from time to time without
the consent of the Company for a time reasonably expected to be necessary to
satisfy the unsatisfied conditions. The Company, Parent and Purchaser have
agreed that no waiver by Purchaser of any of the conditions to the Offer will be
deemed adverse to the holders of Shares, except that Purchaser may not waive the
Minimum Condition without the Company's consent. If all conditions to the Offer
are satisfied as of the Expiration Date except for the Minimum Condition,
Purchaser will extend the Offer from time to time until 180 days after the date
of the Merger Agreement or, if earlier, such time as the Minimum Condition is
satisfied or validly waived under the Merger Agreement. In addition, the Merger
Agreement provides that, without the Company's consent, the Offer Price may be
increased and the Offer may be extended to the extent required by law in
connection with the increase.

The Merger Agreement provides that, at any time following Pennsylvania
Shareholder Approval, if Parent and its subsidiaries do not own at such time 40%
of the Shares outstanding as of the date of the Merger Agreement (excluding
Shares that would be outstanding upon exercise of the Company Stock Option),
Parent may, and at the written request of the Company (which request may not be
made within the 10-day period before the then-scheduled Expiration Date) is
required to, commence the Second Offer to purchase up to that number of Shares
which, when added to the aggregate number of Shares then beneficially owned by
Parent (other than pursuant to the Company Option Agreement) equals 40% of such
outstanding Shares, at a price not less than $92.50. The Second Offer, if it
occurs, will be on terms no less favorable to the shareholders of the Company
than the Offer.

The Merger. The Merger Agreement provides that, subject to the terms and
conditions thereof and in accordance with the Pennsylvania Law, at the Effective
Time, the Company will be merged with and into Purchaser, the separate corporate
existence of the Company will cease, and Purchaser will be the surviving
corporation in the Merger and will continue to be governed by the laws of the
State of Pennsylvania. Pursuant to the Merger, the Articles of Incorporation of
Purchaser will be the Articles of Incorporation of the Surviving Corporation
until thereafter amended (except that the Articles of Incorporation of the
Surviving Corporation will provide that the Surviving Corporation will be named
Conrail Inc.), and the By-laws of Purchaser will be the By-laws of the Surviving
Corporation until thereafter amended. The Merger will have the effects set forth
in the Pennsylvania Law.

Conversion of Shares. The Merger Agreement provides that as of the
Effective Time, each issued and outstanding Share (other than Shares owned by
the Company as treasury stock and Shares owned by Parent, the Company or any of
their respective subsidiaries, which will be cancelled and retired) will be
converted into the right to receive either (i) $92.50 (the "Per Share Cash
Consideration") without interest, (ii) shares of Parent Common Stock or (iii) a
combination of the foregoing. Pursuant to the Merger Agreement, each of the
issued and outstanding shares of common stock, par value $1.00 per share, of
Purchaser will be converted at the Effective Time into a fully paid and
non-assessable share of common stock of the Surviving Corporation.

Unless, prior to the Effective Time, at least 40% of the outstanding Shares
have been purchased by Purchaser (other than upon exercise of the Company Stock
Option), in which case each Share will be converted into 1.85619 shares of
Parent Common Stock as provided in the second succeeding paragraph, each holder
of Shares, as more fully set forth in the Merger Agreement (other than holders
of Shares to be cancelled) will have the right to submit a request (an
"Election") specifying the number of Shares that the holder desires to have
converted into 1.85619 shares of Parent Common Stock per Share in the Merger (a
"Stock Election") and the number of Shares that the holder desires to have
converted into the right to receive the Per Share Cash Consideration in the
Merger (a "Cash Election").

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<PAGE> 27

The aggregate number of Shares to be converted into Parent Common Stock
will be equal as nearly as practicable to 60% of all outstanding Shares; and the
number of Shares to be converted into the right to receive the Per Share Cash
Consideration, together with the Shares acquired by Purchaser pursuant to the
Offer or otherwise (other than upon exercise of the Company Stock Option) (the
"Tendered Shares"), will be equal as nearly as practicable to 40% of all
outstanding Shares.

If Stock Elections are received for a number of Shares that is 60% or less
of the outstanding Shares, each Share covered by a Stock Election will be
converted in the Merger into 1.85619 shares of Parent Common Stock (the
"Conversion Ratio"). If, between the date of the Merger Agreement and the
Effective Time, the issued and outstanding shares of Parent Common Stock have
been changed into a different number of shares or a different class of shares
due to a stock split, reverse stock split, stock dividend, spin-off,
extraordinary dividend, recapitalization, reclassification or other similar
transaction with a record date within such period, the Conversion Ratio will be
appropriately adjusted.

If Stock Elections are received for more than 60% of the outstanding
Shares, each Share as to which an Election is not in effect (or deemed not to be
in effect pursuant to the Merger Agreement) on the last day on which an Election
may be made under the Merger Agreement (other than Tendered Shares) (a "Non-
Electing Share"), and each Share for which a Cash Election has been received,
will be converted into the right to receive the Per Share Cash Consideration in
the Merger, and Shares for which Stock Elections have been received will be
converted into Parent Common Stock and the right to receive the Per Share Cash
Consideration in the following manner:

(1) There will be distributed with respect to such Shares a number of
shares of Parent Common Stock equal to the Conversion Ratio with respect to
a fraction of such Shares, the numerator of which fraction will be 60% of
the number of outstanding Shares and the denominator of which will be the
aggregate number of Shares covered by Stock Elections; and

(2) Such Shares not fully converted into the right to receive Parent
Common Stock as set forth in clause (1) above will be converted in the
Merger into the right to receive the Per Share Cash Consideration for each
Share so converted.

If the number of Tendered Shares and Shares for which Cash Elections are
received in the aggregate is 40% or less of the outstanding Shares, each Share
covered by a Cash Election will be converted in the Merger into the right to
receive the Per Share Cash Consideration.

If the number of Tendered Shares and Shares for which Cash Elections are
received in the aggregate is more than 40% of the outstanding Shares, each
Non-Electing Share and each Share for which a Stock Election has been received
will be converted in the Merger into a number of shares of Parent Common Stock
equal to the Conversion Ratio, and the Shares for which Cash Elections have been
received will be converted into the right to receive the Per Share Cash
Consideration and Parent Common Stock in the following manner:

(1) There will be distributed with respect to such Shares the Per
Share Cash Consideration with respect to a fraction of such Shares, the
numerator of which fraction will be 40% of the number of outstanding Shares
minus the number of Tendered Shares and the denominator of which will be
the aggregate number of Shares covered by Cash Elections; and

(2) Such Shares not fully converted into the right to receive the Cash
Consideration as set forth in clause (1) above will be converted in the
Merger into the right to receive a number of shares of Parent Common Stock
equal to the Conversion Ratio for each Share so converted.

The Merger Agreement provides that if Stock Elections are not received for
more than 60% of the outstanding Shares, or if the number of Tendered Shares and
Shares for which Cash Elections are received together is not more than 40% of
the outstanding Shares, there will be distributed with respect to each Non-
Electing Share the Per Share Cash Consideration with respect to a fraction of
such Non-Electing Share, where such fraction is calculated in a manner that will
result in the sum of (i) the number of Shares converted into cash pursuant to
this paragraph, (ii) the number of Shares for which Cash Elections have been
received

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<PAGE> 28

and (iii) the number of Shares purchased pursuant to the Offer being as close as
practicable to 40% of the outstanding Shares. Each Non-Electing Share not
converted into the right to receive the Per Share Cash Consideration as set
forth in the preceding sentence will be converted in the Merger into the right
to receive a number of Shares of Parent Common Stock equal to the Conversion
Ratio for each Non-Electing Share so converted.

In lieu of any fractional share of Parent Common Stock, Parent will pay to
each former shareholder of the Company who otherwise would be entitled to
receive such a fractional share an amount in cash equal to (i) the average
closing sales price of a share of Parent Common Stock as reported on the NYSE
Composite Tape, calculated in the manner set forth in the Merger Agreement, on
the date on which the Effective Time occurs times (ii) the fractional interest
in a share of Parent Common Stock to which such holder would otherwise be
entitled.

For purposes of this section, "outstanding" shares means all Common Shares
outstanding immediately prior to the Effective Time on a fully diluted basis
(including Common Shares issuable upon conversion of ESOP Preferred Shares),
except for Common Shares outstanding or issuable upon exercise of the Company
Stock Option.

Board of Directors; Officers. The Merger Agreement provides that, until
their respective resignation or removal or until their respective successors are
duly elected and qualified and subject to the terms of the Merger Agreement,
from and after the Effective Time the current Chairmen of the Boards of the
Company and Parent will serve as members of the Board of Directors of Parent.
The Board of Directors of Parent will additionally consist of an even number of
outside directors to be agreed upon. Each of the Company and Parent are
permitted under the Merger Agreement to designate half of such outside
directors. Pursuant to the Merger Agreement, the Company and Parent have also
agreed to establish certain committees of the Board of Directors of Parent from
and after the Effective Time, and each of the Company and Parent shall have the
right to appoint 50% of each committee.

The Merger Agreement provides that, unless altered by a vote of 75% of the
directors of Parent after the Effective Time, during the two-year period after
the Effective Time the current Chairman and Chief Executive Officer of Parent
will be Chairman and Chief Executive Officer of Parent and the current Chairman
and Chief Executive Officer of the Company will be President and Chief Operating
Officer of Parent and President and Chief Executive Officer of each of Parent's
railroad subsidiaries. Following the two-year period, the current Chairman and
Chief Executive Officer of Parent will continue as Chairman of Parent for an
additional two-year period and Chairman Emeritus for a one-year period
thereafter and the current Chairman and Chief Executive Officer of the Company
will be elected to the additional office of Chief Executive Officer of Parent on
the second anniversary of the Effective Time, and will succeed as Chairman of
Parent at the end of such additional two-year period.

Shareholders' Meetings. Pursuant to the Merger Agreement, the Company and
Parent will prepare and file with the SEC a registration statement on Form S-4
relating to the shares of Parent Common Stock to be issued in the Merger in
which the joint proxy statement/prospectus (the "Proxy Statement") will be
included as a prospectus, and will use all reasonable efforts to have such
registration statement declared effective under the Securities Act as promptly
as possible and to have the Proxy Statement mailed as promptly as possible to
their respective shareholders. Further, the Company has filed with the SEC
preliminary proxy materials and has agreed to use reasonable efforts to clear
such materials and thereafter call and hold the Pennsylvania Special Meeting for
the purpose of obtaining the Pennsylvania Shareholder Approval to amend the
Company Articles to make inapplicable Subchapter E (Control Transactions) of
Chapter 25 of the Pennsylvania Law to the Company, and after any such approval
will take all necessary or advisable action to cause such amendment to become
effective (but not until immediately prior to a transaction that would cause
Parent to own 20% or more of the outstanding voting power of the Company). As
soon as practicable following the date of the Merger Agreement, the Company will
call and hold a meeting of its shareholders (the "Company Merger Meeting" and,
together with the Pennsylvania Special Meeting, the "Company Shareholders
Meetings") for the purpose of obtaining the approval of the shareholders of the
Company (the "Company Merger Approval") with respect to the Merger. Subject to
the terms of the Merger Agreement described under "-- No

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<PAGE> 29

Solicitation," the Merger Agreement provides that the Company's obligations
pursuant to the foregoing sentence are not affected by the commencement, public
proposal, public disclosure or communication to the Company of any Takeover
Proposal (as defined) in respect of the Company. The Company has agreed, through
its Board of Directors, to recommend to its shareholders the approval and
adoption of the Offer and the matters to be considered at the Company
Shareholders Meetings, except to the extent that the Board of Directors of the
Company shall have withdrawn or modified its approval or recommendation of the
Offer or such matters and terminated the Merger Agreement in accordance with the
provisions of the Merger Agreement described under "-- No Solicitation."
Pursuant to the Merger Agreement and subject to the Voting Trust Agreement,
Parent will cause all Shares acquired by it or its wholly owned subsidiaries
pursuant to the Offer or otherwise to be voted in favor of the matters to be
considered at the Company Merger Meeting.

The Merger Agreement requires Parent, as soon as practicable following the
date of the Merger Agreement, to duly call and hold a meeting of its
shareholders (the "Parent Shareholders Meeting") to obtain the approval of the
shareholders of Parent (the "Parent Shareholder Approval") with respect to an
amendment of the Articles of Incorporation of Parent as described in the Merger
Agreement (and after any such approval to take all necessary or advisable action
to cause the amendment to become effective) and with respect to the issuance of
Parent Common Stock in the merger for purposes of the rules of the NYSE. As more
fully described in the Merger Agreement, the amendment to the Parent Articles of
Incorporation to be voted upon at the Parent Shareholders Meeting is intended to
increase the number of shares of Purchaser Common Stock authorized under the
Parent Articles of Incorporation and to authorize the issuance of Parent Common
Stock in the Merger, to change the name of Parent to a new, neutral name and to
effect certain other changes. Subject to the provisions of the Merger Agreement
described under "-- No Solicitation," Parent has agreed that its obligations
pursuant to the foregoing sentence are not affected by the commencement, public
proposal, public disclosure or communication to Parent of any Takeover Proposal
in respect of Parent. Parent has agreed, through its Board of Directors, to
recommend to its shareholders the approval and adoption of the matters to be
considered at the Parent Shareholders Meeting, except to the extent that the
Board of Directors of Parent shall have withdrawn or modified its recommendation
of such matters and terminated this Agreement in accordance with the provisions
of the Merger Agreement described under "-- No Solicitation."

Parent and the Company have agreed to use reasonable efforts to hold the
Company Merger Meeting and the Parent Shareholders Meeting on the same date as
soon as practicable after the date of the Merger Agreement.

Voting Trust. The parties to the Merger Agreement have agreed that
simultaneously with the purchase of Shares pursuant to the Offer, the Company
Stock Option Agreement or otherwise, such Shares will be deposited in the Voting
Trust. The Voting Trust may not be modified or amended without the prior written
approval of the Company as to voting rights with respect to, or transfer
restrictions on, such Shares, or otherwise unless such modification or amendment
is not inconsistent with the Merger Agreement and is not adverse to the Company
or its shareholders. See "-- Voting Trust Agreement" and Section 16.

Interim Operations of the Company and Parent. Except as otherwise set
forth in the Merger Agreement, Parent and the Company have agreed that, from the
date of the Merger Agreement to the Effective Time, each of them will, and will
cause their respective subsidiaries to, carry on their respective businesses in
the ordinary course consistent with past practice and in compliance in all
material respects with all applicable laws and regulations and, to the extent
consistent therewith, will use all reasonable efforts to preserve intact their
current business organizations, use reasonable efforts to keep available the
services of their current officers and other key employees as a group and
preserve their relationships with those persons having business dealings with
them to the end that their goodwill and ongoing businesses will be unimpaired at
the Effective Time. Except as contemplated by or as otherwise set forth in the
Merger Agreement, without limiting the generality of the foregoing, from the
date of the Merger Agreement to the Effective Time, and

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<PAGE> 30

without the consent of the other except in certain circumstances specified
therein, neither the Company nor Parent will, or permit any of its respective
subsidiaries to:

(a) other than dividends and distributions (including liquidating
distributions) by a direct or indirect wholly owned subsidiary of the
Company or Parent, as applicable, to its parent, or by a subsidiary
that is partially owned by the Company or Parent, as applicable, or
any of their respective subsidiaries, provided that the Company or
Parent, as applicable, or any such subsidiary receives or is to
receive its proportionate share thereof, and other than the regular
quarterly dividends of $.475 per share with respect to Common Shares,
regular quarterly dividends of $.54125 per share with respect to ESOP
Preferred Shares in accordance with their terms and regular quarterly
dividends of $.26 per share with respect to Parent Common Stock (plus
increases of no more than 20% per year), (x) declare, set aside or pay
any dividends on, or make any other distributions in respect of, any
of its capital stock, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock, or (z) except in connection with the funding of
employee benefit plans, purchase, redeem, retire or otherwise acquire
any shares of its capital stock or of any of its subsidiaries that
would constitute a "significant subsidiary" within the meaning of Rule
1-02 of Regulation S-X of the SEC or any other securities thereof or
any rights, warrants or options to acquire any such shares or other
securities;

(b) issue, deliver, sell, pledge or otherwise encumber any shares of its
capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any
such shares, voting securities or convertible securities (other than
(v) in accordance with the Rights Agreement, or the Rights Agreement,
dated as of June 8, 1988, as amended (the "Parent Rights Agreement"),
relating to rights ("Parent Rights") to purchase shares of Junior
Participating Preferred Stock Series B, without par value, of Parent,
(w) the issuance of Shares or Parent Common Stock upon (1) the
exercise of the Company Employee Stock Options or Parent Employee
Stock Options, respectively, listed in the disclosure schedules to the
Merger Agreement and outstanding on the date of the Merger Agreement,
in accordance with their present terms or (2) pursuant to a grant
existing as of the date of the Merger Agreement or otherwise permitted
by the provisions of the Merger Agreement described in this section
under any Employee Benefit Plan (x) the grant or award of Company
Employee Stock Options or Parent Employee Stock Options (or the
issuance of Shares or Parent Common Stock upon exercise thereof)
consistent with past practice in amounts not to exceed, in any
12-month period, 110% of the amount issued in the prior 12-month
period, and, in the case of Parent, target bonus awards under Parent's
long-term incentive plans consistent with past practice in amounts not
to exceed, in any 12-month period, 110% of the amounts of the
aggregate target bonus awards issued in the prior 12-month period, (y)
the issuance of Shares upon conversion of ESOP Preferred Shares in
accordance with their terms and (z) the issuance of Shares or Parent
Common Stock pursuant to the Option Agreements);

(c) in the case of the Company or Parent, adopt, propose or agree to any
amendment to its articles of incorporation, by-laws or other
comparable organizational documents, except for such amendments as are
contemplated hereby, and, in the case of any subsidiary, adopt,
propose or agree to any amendment to its certificate of incorporation,
by-laws or other comparable organizational documents other than in the
ordinary course in a manner which does not have a material adverse
effect;

(d) sell, lease, license, mortgage or otherwise encumber or subject to any
lien or otherwise dispose of any of its properties or assets, other
than (x) transactions in the ordinary course of business consistent
with past practice and (y) transactions involving assets which do not
individually or in the aggregate exceed $50,000,000 in any 12-month
period;

(e) make or agree to make any acquisition (other than of inventory) or
capital expenditure;

(f) except in the ordinary course consistent with past practice, make any
tax election that could reasonably be expected to have a material
adverse effect on the Company or Parent, as applicable or settle or
compromise any material income tax liability;

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<PAGE> 31

(g) pay, discharge, settle or satisfy any material claims, liabilities or
obligations (whether absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge,
settlement or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms, of
liabilities (x) reflected or reserved against in, or contemplated by,
the most recent consolidated financial statements (or the notes
thereto) of the Company or of Parent included in any report, schedule,
form, statement or other document (including any exhibits, schedules
and documents incorporated by reference) required to be filed with the
SEC since January 1, 1995 by the Company or Purchaser, as applicable,
(y) incurred since the date of such financial statements in the
ordinary course of business consistent with past practice or (z) which
do not in the aggregate have a material adverse effect on the Company
or Parent, as applicable;

(h) except in the ordinary course of business or except as would not
reasonably be expected to have a material adverse effect on the
Company or Parent, as applicable, modify, amend or terminate any
material contract or agreement to which the Company or Parent, as
applicable, or any of their respective subsidiaries, is a party or
waive, release or assign any material rights or claims thereunder;

(i) make any material change to its accounting methods, principles or
practices, except as may be required by generally accepted accounting
principles;

(j) except as required by law or contemplated hereby, (and except for rail
labor agreements negotiated in the ordinary course) enter into, adopt
or amend in any material respect or terminate any collective
bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other plan,
arrangement or understanding providing benefits to any current or
former employee, officer or director of the Company or Purchaser, as
the case may be, or of any of their respective wholly owned
subsidiaries ("Employee Benefit Plans"), or any other agreement, plan
or policy involving the Company or Parent, as applicable, or any of
their respective subsidiaries, and one or more of their directors,
officers or employees, or materially change any actuarial or other
assumption used to calculate funding obligations with respect to any
pension plans, or change the manner in which contributions to any
pension plan are made or the basis on which such contributions are
determined;

(k) except for normal increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not
materially increase benefits or compensation expenses of the Company
or Parent, as applicable, or their respective subsidiaries, or as
contemplated hereby or by the terms of any contract the existence of
which does not constitute a violation of the Merger Agreement,
increase the compensation of any director, executive officer or other
key employee or pay any benefit or amount not required by a plan or
arrangement as in effect on the date of this Agreement to any such
person;

(l) enter into any agreement containing any provision or covenant (x)
limiting in any material respect its ability to compete with any
person which would bind the other party to the Merger Agreement or its
operations after the Effective Time or (y) granting concessions to any
railroad (whether through divestiture of lines or the grant of
trackage rights) other than in the ordinary course of business; or

(m) authorize, or commit or agree to take, any of the foregoing actions.

The Merger Agreement provides that Parent and the Company will coordinate
with one another regarding the declaration and payment of dividends in respect
of Parent Common Stock and Shares and the record dates and payment dates
relating thereto such that any holder of Shares will not receive two dividends,
or fail to receive one dividend, for any single calendar quarter with respect to
its Shares and/or any shares of Parent Common Stock any such holder receives in
exchange therefor pursuant to the Merger.

Pursuant to the Merger Agreement, except as required by law, the Company
and Parent have agreed that they will not, and will not permit any of their
respective subsidiaries to, voluntarily take any action that would, or that
could reasonably be expected to, result in (1) any of the representations and
warranties of such party

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<PAGE> 32

set forth in the Merger Agreement or the Option Agreements that are qualified as
to materiality becoming untrue, (2) any of such representations and warranties
that are not so qualified becoming untrue in any material respect, (3) any of
the conditions to the consummation of the transactions contemplated hereby not
being satisfied or (4) any material impairment or delay of STB approval.

No Solicitation. Under the terms of the Merger Agreement, neither the
Company nor Parent may, nor may it permit any of its subsidiaries, officers,
directors, employees or representatives to, directly or indirectly through
another person, (i) solicit, initiate or encourage (including by way of
furnishing information), or take any other action designed to facilitate,
directly or indirectly, any inquiries or the making of any proposal which
constitutes any Takeover Proposal or (ii) participate in any discussions or
negotiations regarding any Takeover Proposal; provided, however, that if, at any
time prior to the earlier of (x) the consummation of the Offer and (y) the
obtaining of the Company Merger Approval, in the case of the Company, or the
Parent Shareholder Approval, in the case of Parent, or after 180 days from the
date of the Merger Agreement and prior to the Approval Date (as defined in the
next paragraph), the Board of Directors of the Company or Parent, as applicable,
determines in good faith, based on the advice of outside counsel, that it is
necessary to do so to avoid a breach of its fiduciary duties to the Company
under applicable law, the Company or Parent, as applicable, may, in response to
a Takeover Proposal which was not solicited by it or which did not otherwise
result from a breach of the terms of the Merger Agreement described in this
paragraph, and subject to compliance with certain notice provisions of the
Merger Agreement, (x) furnish information with respect to it and its
subsidiaries to any person pursuant to a customary confidentiality agreement (as
determined by the party receiving such Takeover Proposal after consultation with
its outside counsel) the benefits of the terms of which, if more favorable to
the other party to such confidentiality agreement than those in place with the
other party to the Merger Agreement, shall be extended to the other party to the
Merger Agreement, and (y) participate in negotiations regarding such Takeover
Proposal. For purposes of the Merger Agreement, "Takeover Proposal" in respect
of the Company or Parent, as applicable, means any proposal or offer from any
person for the acquisition or purchase of more than 50% of the assets of such
party and its subsidiaries or more than 50% of the equity securities of such
party entitled to vote generally in the election of directors, any tender offer
or exchange offer that if consummated would result in any person beneficially
owning more than 50% of the equity securities of such party entitled to vote
generally in the election of directors, or any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving such party, other than the transactions contemplated by the Merger
Agreement or the Option Agreements.

Except as permitted by the Merger Agreement, the Company and Parent have
agreed that neither the Board of Directors of the Company or Parent, as
applicable, nor any committee thereof will (i) withdraw or modify (or propose
publicly to do so), in a manner adverse to the other party, its approval or
recommendation of the Offer or its adoption and approval of the matters to be
considered at the respective shareholders meetings of the Company or Parent,
(ii) approve or recommend (or propose publicly to do so), any Takeover Proposal,
or (iii) cause the Company or Parent, as applicable, to enter into any agreement
(an "Acquisition Agreement") related to a Takeover Proposal. However, the Merger
Agreement provides that if at any time following 180 days after the date of the
Merger Agreement and prior to the earlier of (a) the time that at least 40% of
the outstanding Shares on a fully diluted basis have been deposited in the
Voting Trust and (b) the obtaining of Company Merger Approval (in the case of
the Company) or Parent Shareholder Approval (in the case of Parent) (such
earlier date referred to in clause (x) or (y) being the "Approval Date") there
exists a Superior Proposal, and such Board of Directors determines that (x) in
the case of the Board of Directors of the Company, there is no substantial
probability that Parent will succeed in acquiring 40% of the Shares in the Offer
and/or the Second Offer or otherwise (or if the Pennsylvania Shareholder
Approval has not been obtained, there is no substantial probability that the
Company Merger Approval will be obtained), in either case due to the existence
of such Superior Proposal with respect to the Company or (y) in the case of the
Board of Directors of Parent, there is no substantial probability that the
Parent Shareholder Approval will be obtained due to the existence of such
Superior Proposal with respect to Parent, the Board of Directors of the Company
or Parent, as applicable, may (subject to this and the following sentences)
withdraw or modify its approval or recommendation of the Offer, the Merger or
the adoption and approval of the matters to be considered at their respective
shareholder meetings and approve or recommend such Superior Proposal or
terminate the Merger Agreement (and concurrently, if it so chooses, cause the
Company or Parent, as

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<PAGE> 33

applicable, to enter into an Acquisition Agreement with respect to such Superior
Proposal), but only after giving the notice required by the Merger Agreement. As
used in the Merger Agreement, a "Superior Proposal" means any proposal made by a
third party to acquire, directly or indirectly, for consideration consisting of
cash and/or securities, more than 50% of the voting equity securities of the
Company or Parent, as the case may be, or all or substantially all the assets of
the Company or Parent, as the case may be, and otherwise on terms which the
Board of Directors of such party determines in its good faith judgment (x)
(based on the written opinion of a nationally recognized financial advisor) to
be more favorable from a financial point of view to its shareholders than the
Transactions and for which any required financing is then committed and (y) to
be more favorable to such party than the Transactions after taking into account
all constituencies (including shareholders) and pertinent factors permitted
under the Pennsylvania Law or applicable Virginia law.

In addition to the obligations of the parties set forth in the two
immediately preceding paragraphs, the Merger Agreement provides that any party
that has received a Takeover Proposal must immediately advise the other orally
and in writing of any request for information or of any Takeover Proposal, the
material terms and conditions of such request or Takeover Proposal and the
identity of the person making such request or Takeover Proposal. Any party that
has received a Takeover Proposal is required to keep the other reasonably
informed of the status and details (including amendments or proposed amendments)
of any such request or Takeover Proposal.

The Merger Agreement provides that nothing contained in the provisions
described in this subsection prohibits Parent or the Company from taking and
disclosing to its shareholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to its
shareholders if, in the good faith judgment of its Board of Directors, based on
the advice of outside counsel, failure so to disclose would result in a
violation of applicable law; however, neither Parent nor the Company nor their
respective Board of Directors nor any committee thereof may, except as permitted
by the provisions of the Merger Agreement described in the second preceding
paragraph, withdraw or modify, or propose publicly to withdraw or modify, its
position with respect to the Offer or the matters to be considered at the
Company Shareholders Meetings or the Parent Shareholders Meeting, as applicable,
or approve or recommend, or propose publicly to approve or recommend, a Takeover
Proposal.

Reasonable Efforts; Regulatory Approval. Each of the parties to the Merger
Agreement has agreed to use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Merger and the other transactions contemplated by the Merger Agreement and the
Option Agreements, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from third parties and Governmental
Entities (as defined in the Merger Agreement) and the making of all necessary
registrations and filings and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the defending of any lawsuits or
any other legal proceedings challenging the Merger Agreement or the Option
Agreements or the consummation of the transactions contemplated thereby, and
(iii) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the purposes
of, the Merger Agreement and the Option Agreements.

Pursuant to the Merger Agreement, each of the parties will make and cause
its respective subsidiaries to make all necessary filings, as soon as
practicable, including those required with the STB and applicable transportation
regulations and laws in order to facilitate prompt consummation of the Offer,
the Merger and the transactions contemplated by the Merger Agreement and by the
Option Agreements; will use reasonable efforts to provide such information and
communications to Governmental Entities as may be reasonably requested; and will
provide to the other party copies of all applications made pursuant to the
foregoing, subject to the terms set forth in the Merger Agreement.

The Company and Parent have agreed, and each has agreed to cause each of
its subsidiaries, to take all such actions as are necessary to (i) cooperate
with one another to prepare and present to the STB as soon as

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practicable all filings and other presentations in connection with seeking any
STB approval, exemption or other authorization necessary to consummate the
transactions contemplated by the Merger Agreement and the Option Agreements,
(ii) prosecute such filings and other presentations with diligence, (iii)
diligently oppose any objections to, appeals from or petitions to reconsider or
reopen any such STB approval by persons not party to the Merger Agreement, and
(iv) take all such further action as reasonably may be necessary to obtain a
final order or orders of the STB approving such transactions consistent with the
Merger Agreement and the Option Agreements.

Anti-Takeover Laws. The Merger Agreement provides that the Company and
Parent will take all action necessary to ensure that no state anti-takeover
statute or similar statute or regulation is or becomes operative with respect to
the Offer, the Merger, the Merger Agreement, the Option Agreements or any of the
other transactions contemplated by the Merger Agreement or the Option
Agreements, and if any state anti-takeover statute or similar statute or
regulation becomes so operative, take all action necessary to ensure that the
Offer, the Merger and the other transactions contemplated by the Merger
Agreement and the Option Agreements may be consummated as promptly as
practicable.

Directors' and Officers' Insurance and Indemnification. Under the Merger
Agreement, Parent has agreed that all rights to indemnification and exculpation
from liabilities for acts or omissions occurring at or prior to the Effective
Time existing as of the date of the Merger Agreement in favor of the current or
former directors or officers of the Company and its subsidiaries, the existence
of which does not constitute a breach of the Merger Agreement, will be assumed
by the Surviving Corporation in the Merger as of the Effective Time and will
survive the Merger and continue in full force and effect in accordance with
their terms. The Merger Agreement also provides that, from and after the
Effective Time, directors and officers of the Company who become directors or
officers of Parent will be entitled to the same indemnity rights and protections
as are afforded to other directors and officers of Parent.

Pursuant to the Merger Agreement, in the event that Parent or any of its
successors or assigns consolidates with or merges into any other person and is
not the continuing or surviving corporation or entity of such consolidation or
merger or transfers or conveys all or substantially all of its properties and
assets to any person, then proper provision will be made so that the successors
and assigns of Parent assume the obligations under the Merger Agreement
described in this section.

The Company and Parent have agreed that, for three years after the
Effective Time, Parent is to provide, if available on commercially reasonable
terms, officers' and directors' liability insurance in respect of acts or
omissions occurring prior to the Effective Time, including the transactions
contemplated by the Merger Agreement, covering each person covered by the
Company's officers' and directors' liability insurance policy as of the date of
the Merger Agreement, or who becomes so covered before the Effective Time, on
terms with respect to coverage and amount no less favorable than those of such
policy in effect on the date of the Merger Agreement, provided that in
satisfying the foregoing obligation Parent is not required to pay premiums in
excess of 150% of the amount per annum the Company paid in its last full fiscal
year ending prior to the date of the Merger Agreement, and provided further that
Parent is nevertheless obligated to provide such coverage as may be obtained for
such amount.

Compensation and Benefits; Stock Options. The Merger Agreement provides
that, following the Effective Time, Parent will cause the Surviving Corporation
to honor all obligations under employment agreements, employee benefit plans,
programs, policies and arrangements of the Company or Parent the existence of
which does not constitute a violation of the Merger Agreement in accordance with
the terms thereof, and Parent will provide employees of the Company with
benefits no less favorable in the aggregate than those provided to similarly
situated Parent employees. For two years after the Effective Time, Parent or the
Surviving Corporation will provide severance and termination benefits to all
non-union employees of the Company and Parent terminated as a result of or in
connection with the Merger, which benefits shall be determined consistent with
industry standards and taking into account those benefits provided in recent
similar transactions in the industry.

The Merger Agreement also provides that, as soon as practicable following
the date of such Agreement, the Board of Directors of the Company (or, if
appropriate, any administering committee) will take such action

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as may be required to (a) adjust the terms of all outstanding employee stock
options or other rights ("Company Employee Stock Options") to purchase or
receive Shares granted under the Company employee stock plans set forth in the
disclosure schedules to the Merger Agreement (the "Company Stock Plans"),
whether vested or unvested, as necessary to provide that, at the Effective Time,
each Company Employee Stock Option outstanding immediately prior to such time
will be deemed to constitute an option to acquire, on the same terms and
conditions as were applicable under the Company Employee Stock Option, the same
number of shares of Parent Common Stock as the holder of the Company Employee
Stock Option would have been entitled to receive pursuant to the Merger had that
holder exercised the Company Employee Stock Option in full immediately prior to
the Effective Time, at a price per share of Parent Common Stock equal to (A) the
aggregate exercise price for the Shares otherwise purchasable pursuant to the
Company Employee Stock Option divided by (B) the aggregate number of shares of
Parent Common Stock deemed purchasable pursuant to the Company Employee Stock
Option (each, as so adjusted, an "Adjusted Option"); except that in the case of
any qualified stock option (as defined in the Merger Agreement), the option
price, the number of shares purchasable pursuant to such option and the terms
and conditions of exercise of such option will be determined in order to comply
with Section 424 of the Code; and (b) make such other changes to the Company
Stock Plans as the Company and Parent may agree are appropriate to give effect
to the Merger.

Pursuant to the Merger Agreement, Parent will deliver to the holders of
Company Employee Stock Options as soon as practicable after the Effective Time
appropriate notices setting forth the holders' rights under the respective
Company Stock Plans and the agreements evidencing the grants of the Company
Employee Stock Options. The notices will also state that the Company Employee
Stock Options and agreements will be assumed by Parent and will continue in
effect on the same terms and conditions (subject to the adjustments described in
the immediately preceding paragraph). Parent will comply with the terms of the
Company Stock Plans and ensure, to the extent required by, and subject to the
provisions of, such Company Stock Plans, that the Company Employee Stock Options
which qualified as qualified stock options prior to the Effective Time continue
to qualify as qualified stock options after the Effective Time.

Under the Merger Agreement, Parent has agreed to take such actions as are
reasonably necessary for the assumption of the Company Stock Plans described in
the first paragraph of this section, including the reservation, issuance and
listing of Parent Common Stock as is necessary to effectuate the transactions
contemplated therein. As soon as reasonably practicable after the Effective
Time, Parent will prepare and file with the SEC one or more registration
statements on Form S-8 or other appropriate form with respect to shares of
Parent Common Stock subject to Company Employee Stock Options issued under the
Company Stock Plans and will use all reasonable efforts to maintain the
effectiveness of a registration statement or registration statements covering
the Company Employee Stock Options (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as the Company
Employee Stock Options remain outstanding. With respect to those individuals, if
any, who subsequent to the Effective Time will be subject to the reporting
requirements under Section 16(a) of the Exchange Act, where applicable, Parent
has agreed to use all reasonable efforts to administer the Company Stock Plans
assumed pursuant to the Merger Agreement in a manner that complies with Rule
16b-3 promulgated under the Exchange Act to the extent the applicable Company
Stock Plan complied with such rule prior to the Merger.

Pursuant to the Merger Agreement, a holder of an Adjusted Option may
exercise that Adjusted Option in whole or in part in accordance with its terms
by delivering a properly executed notice of exercise to Parent, together with
the consideration therefor and the federal withholding tax information, if any,
required in accordance with the related Company Stock Plan.

Except as otherwise contemplated by the provisions of the Merger Agreement
described in this section or required by the terms of the Company Employee Stock
Options, all restrictions or limitations on transfer and vesting with respect to
Company Employee Stock Options awarded under the Company Stock Plans or any
other plan, program or arrangement of the Company or any of its subsidiaries, to
the extent that such restrictions or limitations shall not have already lapsed,
will remain in full force and effect with respect to those options after giving
effect to the Merger and the assumption by Parent as described above.

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<PAGE> 36

Tax-Free Reorganization. The Merger Agreement provides that neither the
Company or Parent or any affiliate thereof will take any action that would cause
the Merger not to qualify as a tax-free reorganization under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code.

Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and Purchaser with
respect to, among other things, its organization, subsidiaries, qualification,
authorization, capital structure, public filings, employee benefit plans,
defaults, information in the Proxy Statement and other documents filed with the
SEC in connection with the Transactions, compliance with laws, consents and
approvals, brokers' fees, undisclosed liabilities, shareholder voting
requirements and the absence of certain events. In the Merger Agreement, Parent
and Purchaser have made customary representations and warranties to the Company
with respect to, among other things, organization, subsidiaries, authorization,
capital structure, public filings, employee benefit plans, information in the
Proxy Statement, compliance with laws, consents and approvals, brokers' fees,
undisclosed liabilities, shareholder voting requirements and the absence of
certain events.

Conditions to the Merger. The respective obligations of the Company, on
the one hand, and Parent and Purchaser, on the other, to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date (as
defined in the Merger Agreement) of the following conditions: (a) each of the
Company Merger Approval and the Parent Shareholder Approval shall have been
obtained; (b) any applicable waiting period (and any extension thereof) under
the HSR Act shall have been terminated or shall have expired; (c) no judgment,
order, decree, statute, law, ordinance, rule, regulation, temporary restraining
order, preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued by any court of competent jurisdiction or other
Governmental Entity or other legal restraint or prohibition (collectively,
"Restraints") preventing the consummation of the Merger may be in effect,
provided the party asserting this condition shall have used reasonable efforts
to prevent the entry of any such Restraints and to appeal as promptly as
possible any such Restraints that may be entered, and there shall not be any
Restraint enacted, entered, enforced or promulgated that is reasonably likely to
result in a material adverse effect on the Company and Parent on a combined
basis; and (d) the shares of Parent Common Stock issuable to the Company's
shareholders pursuant to the Merger Agreement and under the Company Stock Plans
shall have been approved for listing on the NYSE, subject to official notice of
issuance.

The obligation of Parent to effect the Merger is further subject to
satisfaction or waiver of the following conditions: (a) the Company shall not
have breached or failed to observe or perform in any material respect any of its
covenants or agreements under the Merger Agreement to be performed by it at or
prior to the Closing Date (as defined in the Merger Agreement), and the
representations and warranties of the Company in the Merger Agreement shall be
true and accurate both when made and at and as of the Closing Date, as if made
at and as of such time (except to the extent expressly made as of an earlier
date, in which case as of such date), except where the failure of such
representations and warranties to be so true and correct (without giving effect
to any limitation as to "materiality" or "material adverse effect" set forth
therein), does not have, and is not likely to have, individually or in the
aggregate, a material adverse effect on the Company; (b) at any time after the
date of the Merger Agreement there will not have occurred any material adverse
change relating to the Company; (c) Purchaser shall have purchased the Shares in
the Offer or, if not, Parent and Purchaser shall have obtained sufficient
financing, on terms reasonably acceptable to Parent, to enable consummation of
the Merger; (d) the STB will have issued a decision (which decision will not
have been stayed or enjoined) that (A) constitutes a final order approving,
exempting or otherwise authorizing consummation of the Merger and all other
material transactions contemplated by the Merger Agreement (or subsequently
presented to the STB by agreement of the Company and Parent) as may require such
authorization and (B) does not (1) change or disapprove of the consideration to
be given in the Merger or other material provisions of Article II of the Merger
Agreement or (2) impose on Parent, the Company or any of their respective
subsidiaries any other terms or conditions (including, without limitation, labor
protective provisions but excluding conditions heretofore imposed by the
Interstate Commerce Commission in New York Dock Railway -- Control -- Brooklyn
Eastern District, 360 I.C.C. 60 (1979)) that materially and adversely affect the
long-term benefits expected to be received by Parent from the transactions
contemplated by the Merger Agreement; and (e) all actions by or in respect of or
filings with any Governmental Entity required to permit the consummation of the

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<PAGE> 37

Merger (other than approval of the STB, which is addressed in clause (d) above)
will have been obtained, excluding any consent, approval, clearance or
confirmation the failure to obtain which would not have a material adverse
effect on Parent, the Company or, after the Effective Time, the Surviving
Corporation.

The obligation of the Company to effect the Merger is further subject to
satisfaction or waiver of the following conditions: (a) Parent shall not have
breached or failed to observe or perform in any material respect any of its
covenants or agreements under the Merger Agreement to be performed by it at or
prior to the Closing Date, and the representations and warranties of Parent in
the Merger Agreement shall be true and accurate both when made and at and as of
the Closing Date, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such date), except
where the failure of such representations and warranties to be so true and
correct (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein), does not have, and is not likely
to have, individually or in the aggregate, a material adverse effect on Parent;
(b) at any time after the date of the Merger Agreement there will not have
occurred any material adverse change relating to Parent; (c) the STB will have
issued a decision (which decision will not have been stayed or enjoined) that
(i) constitutes a final order approving, exempting or otherwise authorizing
consummation of the Merger and all other material transactions contemplated
thereby or subsequently presented to the STB by agreement of Parent and the
Company as may require such authorization and (ii) does not change or disapprove
of the consideration to be given in the Merger or other material provisions of
Article II of the Merger Agreement.

Neither Parent nor the Company are permitted under the Merger Agreement to
rely on the failure of any condition described in the three immediately
preceding paragraphs, as the case may be, to be satisfied if such failure was
caused by such party's failure to use reasonable efforts to consummate the
Merger and the other transactions contemplated by the Merger Agreement, as
required by and subject to the provisions of the Merger Agreement described
under "-- Reasonable Efforts."

Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether before or after the Pennsylvania Shareholder
Approval, the Company Merger Approval or the Parent Shareholder Approval, only
as provided below:

(a) by mutual written consent of Parent and the Company;

(b) by either Parent or the Company: (i) if the Merger has not been
consummated by December 31, 1998; except that the right to terminate the
Merger Agreement pursuant to this provision will not be available to any
party whose failure to perform any of its obligations under the Merger
Agreement results in the failure of the Merger to be consummated by such
time; (ii) if, at a Company Merger Meeting duly convened therefor or at any
adjournment or postponement thereof, the Company Merger Approval is not
obtained; (iii) if, at a Parent Shareholders Meeting duly convened therefor
or at any adjournment or postponement thereof, the Parent Shareholder
Approval is not obtained; or (iv) if any Governmental Entity has issued a
Restraint or taken any other action permanently enjoining, restraining or
otherwise prohibiting the consummation of the Merger or any of the other
transactions contemplated by the Merger Agreement and such Restraint or
other action has become final and nonappealable; except that the party
seeking to terminate the Merger Agreement pursuant to this clause (iv) must
have used all reasonable efforts to prevent the entry of and to remove such
Restraint or other action;

(c) by Parent, if the Company has breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in the Merger Agreement, which breach or failure to
perform (A) would constitute the failure of the condition to the Merger
described in clause (a) of the second paragraph under "-- Conditions to the
Merger," and (B) cannot be or has not been cured within 30 days after the
giving of written notice to the Company of such breach (as long as Parent
is not then in material breach of any representation, warranty, covenant or
other agreement contained in the Merger Agreement and provided that, if
such breach is curable through the exercise of the Company's best efforts,
the Merger Agreement may not be terminated for so long as the Company is
using its best efforts to cure such breach);

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<PAGE> 38

(d) by Parent in accordance with the terms of the Merger Agreement
described under "-- No Solicitation," as long as Parent has complied with
all such terms, including the notice provisions therein, and as long as
Parent complies with applicable requirements of the terms of the Merger
Agreement described under "-- Certain Fees and Expenses";

(e) by Parent if (i) the Board of Directors of the Company or, if
applicable, any committee thereof, has withdrawn or modified in a manner
adverse to Parent its approval or recommendation of the Offer or the Merger
or the matters to be considered at the Company Shareholders Meetings or
failed to reconfirm its recommendation within 15 business days after a
written request to do so, or approved or recommended any Takeover Proposal
in respect of the Company or (ii) the Board of Directors of the Company or
any committee thereof has resolved to take any of the foregoing actions;

(f) by Parent, if the Company or any of its officers, directors,
employees, representatives or agents take any of the actions that would be
proscribed by the terms of the Merger Agreement described under "-- No
Solicitation" but for the exceptions therein allowing certain actions to be
taken pursuant to the proviso in the first sentence of such section or the
second sentence of the second paragraph of such section;

(g) by the Company, if Parent has breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in the Merger Agreement, which breach or failure to
perform (A) would constitute the failure of a condition to the Merger, as
described under "-- Conditions to the Merger," and (B) cannot be or has not
been cured within 30 days after the giving of written notice to Parent of
such breach (as long as the Company is not then in material breach of any
representation, warranty, covenant or other agreement contained in the
Merger Agreement and provided that, if such breach is curable through the
exercise of Parent's best efforts, the Merger Agreement may not be
terminated pursuant to this provision of the Merger Agreement for so long
as Parent is so using its best efforts to cure such breach);

(h) by the Company in accordance with the provisions of the Merger
Agreement described in the second paragraph under "-- No Solicitation," as
long as Parent has complied with all such provisions, including the notice
provisions therein, and complies with applicable requirements of the
provisions of the Merger Agreement described under "-- Certain Fees and
Expenses";

(i) by the Company if (i) the Board of Directors of Parent or, if
applicable, any committee thereof has withdrawn or modified in a manner
adverse to the Company its approval or recommendation of the matters to be
considered at the Parent Shareholders Meeting, or failed to reconfirm its
recommendation within 15 business days after a written request to do so, or
approved or recommended any Takeover Proposal in respect of Parent or (ii)
the Board of Directors of Parent or any committee thereof has resolved to
take any of the foregoing actions; or

(j) by the Company, if Parent or any of its officers, directors,
employees, representatives or agents takes any of the actions that would be
proscribed by the terms of the Merger Agreement described under "-- No
Solicitation" but for the exceptions therein allowing certain actions to be
taken pursuant to the proviso in the first sentence of such section or the
second sentence of the second paragraph of such section.

Certain Fees and Expenses. The Merger Agreement provides that, in the
event that (i) a Takeover Proposal in respect of the Company shall have been
made known to the Company or any of its subsidiaries or has been made directly
to its shareholders generally or any person shall have publicly announced an
intention (whether or not conditional) to make such a Takeover Proposal and
thereafter the Merger Agreement is terminated by either Parent or the Company
pursuant to clauses (i) or (ii) of paragraph (b) under "-- Termination," or (ii)
the Merger Agreement is terminated (x) by the Company pursuant to paragraph (h)
under "-- Termination," or (y) by Parent pursuant to paragraph (e) under
"-- Termination," then the Company will (A) promptly, but in no event later than
two days after the date of the termination, pay Parent a fee equal to $300
million (the "Termination Fee") (except that no Termination Fee will be payable
pursuant to clause (i) of this sentence unless and until within 24 months of
such termination the Company or

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<PAGE> 39

any of its subsidiaries enters into an Acquisition Agreement or consummates a
Takeover Proposal). The Company has agreed that, if it fails promptly to pay the
amount due pursuant to the foregoing provision, and, in order to obtain such
payment, Parent commences a suit which results in a judgment against the Company
for such fee, the Company will pay to Parent its costs and expenses (including
attorneys' fees and expenses) in connection with such suit, together with
interest on the amount of the fee.

The Merger Agreement also provides that, in the event that (i) a Takeover
Proposal in respect of Parent shall have been made known to Parent or any of its
subsidiaries or has been made directly to its shareholders generally or any
person shall have publicly announced an intention (whether or not conditional)
to make such a Takeover Proposal and thereafter the Merger Agreement is
terminated by either Parent or the Company pursuant to clause (i) or (iii) of
paragraph (b) under "-- Termination," or (ii) the Merger Agreement is terminated
(x) by Parent pursuant to paragraph (d) under "-- Termination" or (y) by the
Company pursuant to paragraph (i) under "-- Termination," Parent is required to
(A) promptly, but in no event later than two days after the date of the
termination, pay the Company the Termination Fee (except that no Termination Fee
shall be payable pursuant to clause (i) of this sentence unless and until within
24 months of such termination Parent or any of its subsidiaries enters into an
Acquisition Agreement or consummates a Takeover Proposal). If Parent fails
promptly to pay the amount due pursuant to the foregoing provision, and, in
order to obtain such payment, the Company commences a suit which results in a
judgment against Parent for the fee set forth in the foregoing provision, Parent
is required pay to the Company its costs and expenses (including attorneys' fees
and expenses) in connection with such suit, together with interest on the amount
of the fee.

Parent or Purchaser will pay any sales, transfer or similar tax arising as
a result of the consummation of the Transactions and imposed on shareholders of
the Company.

Amendment. The Merger Agreement may be amended by the parties, by an
instrument in writing signed on behalf of each party, at any time before or
after the Pennsylvania Shareholder Approval, the Company Merger Approval or the
Parent Shareholder Approval. However, after any such approval, the Merger
Agreement does not permit the parties to make any amendment that by law requires
further approval by the shareholders of the Company or Parent without the
further approval of such shareholders.

Registration Rights. Under the terms of the Merger Agreement, the Company
or Parent, as applicable (the "issuing party") will, if requested by the other
party to the Merger Agreement (the "requesting party") within three years after
the termination of the Merger Agreement, as expeditiously as possible prepare
and file up to three registration statements under the Securities Act if
necessary to permit the sale or other disposition of any or all securities
deposited in the Voting Trust, in the case of Parent, or acquired through
exercise of the Parent Stock Option Agreement, in the case of the Company, in
accordance with the intended method of sale or other disposition stated by the
requesting party. The issuing party will also use its best efforts to qualify
such securities under applicable state securities laws and will take certain
steps to cause any sale or other disposition pursuant to such registration
statement to be effected on a widely distributed basis. The issuing party will
use reasonable efforts to cause each such registration statement to become
effective, to obtain any or all required consents or waivers, and to keep such
registration statement effective for such period not in excess of 180 calendar
days as is reasonably necessary to effect such sale or other disposition. The
foregoing obligations of the issuing party may be suspended for certain limited
periods if the Board of Directors of the issuing party determines that carrying
out such obligations during such periods would require disclosure of nonpublic
information that would materially and adversely affect the issuing party. The
Merger Agreement provides that if the issuing party effects a registration under
the Securities Act of the issuing party's securities for its own account or for
any of its shareholders, then with certain exceptions the other party to the
Merger Agreement will have the right to participate in such registration without
affecting the obligation of the issuing party to effect demand registration
statements for the requesting party as described above, subject to certain
reductions if the managing underwriters of such registration advise the issuing
party that the number of securities requested to be included in such offering
exceed the number that can be sold.

Listing. Parent has agreed to use reasonable efforts to cause the shares
of Parent Common Stock to be issued in the Merger, under the Company Stock Plans
and pursuant to the Parent Stock Option Agreement,

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<PAGE> 40

and the Company has agreed to use reasonable efforts to cause Shares to be
issued pursuant to the Company Stock Option Agreement to be approved for listing
on the NYSE prior to the Closing Date.

Rights Agreements. The Board of Directors of the Company will take all
further action, if any, reasonably requested in writing by Parent (including
redeeming the Rights immediately prior to the Effective Time or amending the
Rights Agreement) in order to render the Rights inapplicable to the transactions
contemplated by the Merger Agreement and the Company Stock Option Agreement.
Except for the foregoing, the Board of Directors of the Company will not amend
or take any action with respect to the Rights Agreement, including a redemption
of the Rights or any action to facilitate a Takeover Proposal in respect of the
Company.

The Board of Directors of Parent will take all further action, if any,
reasonably requested in writing by the Company in order to render the Parent
Rights inapplicable to the Parent Stock Option Agreement. The Board of Directors
of Parent will not otherwise amend or take any action with respect to the Parent
Rights Agreement to facilitate a Takeover Proposal in respect of Parent.

DISSENTERS' RIGHTS

In accordance with the United States Supreme Court decision, Schwabacher v.
United States, 334 U.S. 182 (1948), shareholders of the Company will not have
any dissenters' rights under state law, unless the STB or a court of competent
jurisdiction determines that state-law dissenters' rights are available to
holders of Shares. Parent considers it unlikely that the STB or a court will
determine that state-law dissenters' rights are available to holders of Shares.
As part of the approval of the Merger, Parent and the Company intend to seek a
determination of the STB that the terms of the Merger are just and reasonable.
It is Parent's and the Company's understanding that upon the issuance of such a
determination, dissenters' rights under state law will be preempted.
Shareholders of the Company will have an opportunity to participate in this STB
proceeding.

If dissenters' rights are available to holders of Shares, such rights will
be provided in accordance with Section 1571 et seq. of the Pennsylvania Law. In
such event, any issued and outstanding Shares held by persons who object to the
Merger and comply with all the provisions of the Pennsylvania Law concerning the
right of holders of Shares to dissent from the Merger and require valuation of
their Shares (a "Dissenting Shareholder") will not be converted into the right
to receive the Offer Price, without interest, pursuant to the Merger Agreement
but will become the right to receive payment of the "fair value" of their Shares
at the Effective Time (exclusive of any element of appreciation or depreciation
in anticipation of the Merger); provided, however, that the Shares outstanding
immediately prior to the Effective Time and held by a Dissenting Shareholder who
will, after the Effective Time, withdraw his demand for payment or lose his
right to dissent, in either case pursuant to the Pennsylvania Law, will be
deemed to be converted as of the Effective Time into the right to receive the
Offer Price, payable to the holder thereof, without interest.

Dissenters' rights cannot be exercised at this time. Shareholders who will
be entitled to dissenters' rights, if any, in connection with the Merger (or
similar business combination) will receive additional information concerning any
available dissenters' rights and the procedures to be followed in connection
therewith before such shareholders have to take any action relating thereto.

Shareholders who sell shares in the Offer will not be entitled to exercise
any dissenters' rights with respect to Shares purchased but, rather, will
receive the Offer Price.

OPTION AGREEMENTS

Concurrently with the Merger Agreement, the parties have entered into the
Option Agreements, granting each other the right to purchase certain shares of
their common stock under certain circumstances.

Pursuant to the Company Stock Option Agreement, the Company granted Parent
an option to purchase 15,955,477 Common Shares at a price of $92.50 per share,
subject to adjustment for changes in the Company's capitalization as described
in the Company Stock Option Agreement (the "Purchase Price"), payable in cash.
Such option becomes exercisable, in whole but not in part, after the first to
occur of (i) any

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<PAGE> 41

event which entitles Parent to receive the Termination Fee and (ii) the
consummation of the Offer (the first such occurrence being a "Purchase Event").
The option terminates upon the first to occur of (i) the Effective Date, (ii) 18
months after the first occurrence of a Purchase Event, and (iii) the termination
of the Merger Agreement (unless Parent is entitled to the Termination Fee, in
which case the option shall not terminate until the later of (a) six months
following the time the Termination Fee becomes payable and (b) the expiration of
the period in which Parent has the right to receive the Termination Fee). Any
purchase of Common Shares under the Company Stock Option Agreement is subject to
the Voting Trust Condition, and any Common Shares so purchased will be delivered
immediately to the trustee thereunder.

If, during the time that the option under the Company Stock Option
Agreement is exercisable, the Company enters into an agreement pursuant to which
all outstanding Common Shares are to be purchased for or converted into, in
whole or in part, cash (other than in respect of fractional shares), then such
agreement will make proper provision so that, upon consummation of the
transaction (which will be the date of acceptance for payment in the case of a
transaction involving a tender offer), in exchange for cancellation of the
option, Parent shall receive an amount in cash equal to the difference (if
positive) between the closing market price per Common Share on the day
immediately prior to the consummation of such transaction and the Purchase
Price. In the event (i) the Company enters into an agreement to consolidate
with, merge into, or sell substantially all of the Company's assets to any
person, other than Parent, Purchaser or a direct or indirect subsidiary thereof,
and the Company is not the surviving corporation, or (ii) the Company allows any
person, other than Parent, Purchaser or a direct or indirect subsidiary thereof,
to merge into or consolidate with the Company in a series of transactions in
which the Common Shares or other securities of the Company represent less than
50% of the outstanding voting securities of the merged corporation, then such
agreement will make proper provision so that the option will be adjusted,
exchanged, or converted into an option with identical terms as those described
in the Company Stock Option Agreement, appropriately adjusted for such
transaction. Parent may require the Company to register Common Shares purchased
under the option pursuant to the Securities Act of 1933 on the terms set forth
in the Merger Agreement. The Common Shares purchased under the option may not be
transferred or otherwise disposed of except as provided in the Voting Trust
Agreement.

Pursuant to the Parent Stock Option Agreement, Parent granted the Company
an option to purchase 43,090,773 million shares of Parent Common Stock, at a
price of $64.82 per share, subject to adjustments substantially the same as
those in the Company Stock Option Agreement. Such option becomes exercisable, in
whole but not in part, after any event which entitles the Company to receive the
Termination Fee (a "Purchase Event"). The option terminates upon the earlier of
(i) the Merger, (ii) 18 months after the first occurrence of a Purchase Event,
and (iii) the termination of the Merger Agreement (unless the Company is
entitled to a Termination Fee, in which case the option shall not terminate
until the later of (a) six months following the time such Termination Fee
becomes payable and (b) the expiration of the period in which the Company has
the right to receive a Termination Fee). Any purchase of shares of Parent Common
Stock under the Parent Stock Option Agreement is subject to the conditions set
forth therein, and any Parent Common Stock so purchased will be delivered
immediately to the trustee of the applicable voting trust. The Parent Stock
Option Agreement also provides for adjustments for certain business combinations
on substantially the same terms as those of the Company Stock Option Agreement.

The foregoing description of the Merger Agreement and the Option Agreements
is qualified in its entirety by reference to the texts of such Agreements,
copies of which have been filed by Parent as exhibits to the Schedule 14D-1
filed by Parent with the SEC.

VOTING TRUST AGREEMENT

Pursuant to a proposed Voting Trust Agreement (the "Voting Trust
Agreement") to be entered into by and among Parent, Purchaser and a voting
trustee that is expected to be a banking corporation (the "Trustee"), the
Trustee will agree to act as trustee in respect of the Voting Trust. In such
capacity, the Trustee will vote all Shares (the "Trust Stock") acquired by
Purchaser in the Offer, the Second Offer or pursuant to the Company Stock Option
Agreement or otherwise to approve the Merger, in favor of any proposal necessary
to effectuate Parent's acquisition of the Company pursuant to the Merger
Agreement, and,

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so long as the Merger Agreement is in effect (subject to certain exceptions),
against any other proposed merger, business combination or similar transaction
involving the Company. On other matters (including the election or removal of
directors), the Trustee will vote the Trust Stock in the same proportion as all
other Shares are voted with respect to such matters.

Pending the termination of the Voting Trust, the Trustee will pay over to
Purchaser all cash dividends and cash distributions paid on the Trust Stock.

The Voting Trust Agreement will provide that Parent at any time may not
sell or make any other disposition of the whole or any part of the Trust Stock,
whether or not the Merger or a similar transaction has been approved by the STB
or is otherwise permitted, unless and until the Merger Agreement has been
terminated or as otherwise consented to by the Company. The Trustee shall take
all actions reasonably requested by the Parent with respect to any proposed sale
or other disposition of the whole or any part of the Trust Stock by Purchaser or
Parent, including in connection with the exercise by Parent of any rights under
the Merger Agreement, provided that such disposition of the Trust Stock must be
made pursuant to one or more broadly distributed public offerings and subject to
all necessary regulatory approvals, if any, or as otherwise directed by Parent
with the prior written consent of the Company.

The Voting Trust Agreement also will provide that, in the event the STB
approves or exempts the Merger or a similar transaction, or in the event that
the law is amended to allow Purchaser, Parent or their affiliates to acquire
control of the Company without obtaining STB or other governmental approval (and
upon delivery of an opinion of independent counsel that no order of the STB or
other governmental authority is required), the Trustee, with the prior written
consent of the Company, will either transfer the Trust Stock to the Purchaser,
or if shareholder approval has not previously been obtained, vote the Trust
Stock in favor of the Merger.

It is anticipated that the Voting Trust Agreement will provide that, in the
event that the Merger Agreement terminates in accordance with its terms, Parent
will use its best efforts to sell the Trust Stock in the manner described above
during the succeeding two-year period. Any such disposition shall be subject to
any jurisdiction of the STB to oversee Parent's divestiture of Trust Stock. In
connection with such an event, the Trustee would continue to perform its duties
under the Voting Trust Agreement and, if Parent fails to so sell or distribute
the Trust Stock, the Trustee will as soon as practicable sell the Trust Stock
for cash to one or more eligible purchasers in the manner described above for
such price as the Trustee in its discretion shall deem reasonable after
consultation with Parent. An "eligible purchaser" is a person or entity not
affiliated with Parent and that has all necessary regulatory authority, if any,
to purchase the Trust Stock. Pursuant to the Voting Trust Agreement, Parent will
agree to cooperate with the Trustee in so disposing of the Trust Stock and the
Trustee has agreed to act in accordance with any direction made by Parent as to
any specific terms or method of disposition, to the extent not inconsistent with
any of the terms of the Voting Trust Agreement and with the requirements of the
terms of any STB or court order. The proceeds of the sale would be distributed
to Parent.

The Voting Trust Agreement provides that the Trustee shall receive
reasonable and customary compensation and indemnification from Parent and
Purchaser.

Pursuant to the Merger Agreement, the Voting Trust may not be modified or
amended without the prior written approval of the Company, which is an express
third party beneficiary of the Voting Trust Agreement, unless such modification
or amendment is not inconsistent with the Merger Agreement or the Option
Agreements and is not adverse to the Company or its shareholders (and Parent and
the Company have agreed in the Merger Agreement that any change to the terms of
the Voting Trust Agreement relating to voting rights or rights and restrictions
relating to the transfer of Trust Stock shall in any event require the prior
approval of the Company), and no power of Parent or Purchaser provided for in
the Voting Trust Agreement may be exercised so as to violate the Merger
Agreement.

Upon execution of the Voting Trust Agreement, Parent will request the staff
of the STB to render an informal written opinion that the use of the Voting
Trust is consistent with the policies of the STB. See Section 16.

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EMPLOYMENT AGREEMENTS

Snow Employment Agreement. Parent and John W. Snow have entered into an
employment agreement dated as of October 14, 1996 (the "Snow Employment
Agreement"), which will be effective for a five-year period beginning at the
Effective Time (the "Employment Period"). The Snow Employment Agreement provides
that Mr. Snow will serve as Chairman of the Board and Chief Executive Officer of
Parent for two years following the Merger (the "First Employment Segment"); as
Chairman of the Board during the subsequent two years (the "Second Employment
Segment"); and as Chairman Emeritus during the following year (the "Third
Employment Segment"). The Employment Agreement further provides that during the
First Employment Segment Mr. Snow will receive base compensation at least equal
to the base compensation he received in the year prior to the Merger, and that
during the Second and Third Employment Segments Mr. Snow will receive base
compensation in an amount no less than that received by the Chief Executive
Officer of Parent during the Second Employment Segment.

If, during the Employment Period, Parent terminates Mr. Snow's employment
for a reason other than Cause or Disability (as defined in the Snow Employment
Agreement), or Mr. Snow terminates employment for Good Reason (as defined in the
Employment Agreement), Mr. Snow will be entitled to the following:

(1) a lump-sum payment aggregating (a) accrued obligations to Mr. Snow,
such as unpaid or deferred compensation, (b) the greater of (i) the
amount Mr. Snow would receive in compensation (including bonus) during
the remainder of the Employment Period and (ii) the amount equal to
three times Mr. Snow's most recent annual compensation (including
bonus), and (c) an amount equal to the excess of (i) the actuarial
equivalent of the benefit under Parent's retirement plans which Mr.
Snow would receive assuming he continued employment with Parent for the
longer of three years and the time remaining in the Employment Period
over (ii) the actuarial equivalent of Mr. Snow's actual benefit under
Parent's retirement plans;

(2) a payment in an amount such that after the payment of all income and
excise taxes, Mr. Snow will be in the same after-tax position as if no
excise tax under Section 4999 of the Code had been imposed;

(3) continued employee welfare benefits for the longer of three years and
the number of years remaining in the Employment Period; and

(4) the immediate vesting of outstanding stock-based awards.

The Snow Employment Agreement provides that the Merger will not constitute
a Change of Control for the purpose of the Severance Agreement between Mr. Snow
and Parent dated as of February 1, 1995.

LeVan Employment Agreement. Parent, the Company, and David M. LeVan have
entered into an employment agreement dated as of October 14, 1996 (the "LeVan
Employment Agreement"), which will be effective for a period equal to the
Employment Period. The LeVan Employment Agreement provides that Mr. LeVan will
serve as Chief Operating Officer and President of Parent, and as Chief Executive
Officer and President of the railroad businesses of the Company and Parent, from
the Effective Time until the second anniversary of such date or, if earlier, the
termination of Mr. Snow's employment or of his status as Chief Executive Officer
of Parent (the "First Employment Segment"). Additionally, Mr. LeVan will serve
as Chief Executive Officer of Parent during the period beginning immediately
after the First Employment Segment and ending on the fourth anniversary of the
Effective Time or, if earlier, upon the termination of Mr. Snow's employment or
of his status as Chairman of the Board (the "Second Employment Segment"). During
the period commencing immediately after the Second Employment Segment, or, if
earlier, upon the termination of Mr. Snow's status as Chairman of the Board (the
"Third Employment Segment"), Mr. LeVan will additionally serve as Chairman of
the Board of Parent. The LeVan Employment Agreement further provides that during
the First Employment Segment Mr. LeVan shall receive annual base compensation at
least equal to 90% of the amount received by the Chief Executive Officer of
Parent, but not less than $810,000, and bonus and other incentive compensation
at least equal to 90% of the amount received by the Chief Executive Officer of
Parent, and that during the Second and Third Employment Segments Mr. LeVan will
receive compensation

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in an amount no less than that received by the Chief Executive Officer during
the First Employment Segment, but not less than $900,000.

If, during the Employment Period, Parent terminates Mr. LeVan's employment
for a reason other than Cause or Disability (as defined in the LeVan Employment
Agreement), or Mr. LeVan terminates employment for Good Reason (as defined in
the LeVan Employment Agreement), Mr. LeVan will be entitled to the following:

(1) a lump-sum payment aggregating (a) accrued obligations to Mr. LeVan,
such as unpaid or deferred compensation, (b) the greater of (i) the
amount Mr. LeVan would have received in compensation (including bonus)
during the remainder of the Employment Period, assuming an annual base
salary and bonus during the Second and Third Segments equal to the
greater of Mr. LeVan's base salary and bonus and that of Mr. Snow
during the First Employment Segment and (ii) the amount equal to three
times Mr. LeVan's most recent annual compensation (including bonus),
and (c) an amount equal to the excess of (i) the actuarial equivalent
of the benefit under Parent's retirement plans which Mr. LeVan would
receive assuming he continued employment with Parent for the longer of
three years and the time remaining in the Employment Period over (ii)
the actuarial equivalent of Mr. LeVan's actual benefit under Parent's
retirement plans;

(2) a payment in an amount such that after the payment of all income and
excise taxes, Mr. LeVan will be in the same after-tax position as if no
excise tax under Section 4999 of the Code had been imposed;

(3) continued employee welfare benefits for the longer of three years and
the number of years remaining in the Employment Period; and

(4) the immediate vesting of outstanding stock-based awards.

The Employment Agreement provides that it supersedes, at the Effective
Time, the severance agreement between Mr. LeVan and the Company dated as of
August 1, 1995.

14. DIVIDENDS AND DISTRIBUTIONS. If, on or after the date of the Merger
Agreement, the Company should (i) split, combine or otherwise change the Shares
or its capitalization, (ii) issue or sell any additional securities of the
Company or otherwise cause an increase in the number of outstanding securities
of the Company or (iii) acquire currently outstanding Shares or otherwise cause
a reduction in the number of outstanding Shares, then, without prejudice to
Purchaser's rights under Sections 1 and 15, Purchaser, in its sole discretion,
may make such adjustments as it deems appropriate in the purchase price and
other terms of the Offer and the Merger, including, without limitation, the
amount and type of securities offered to be purchased.

If, on or after the date of the Merger Agreement, the Company should
declare or pay any dividend on the Shares, other than regular quarterly
dividends, or make any distribution (including, without limitation, the issuance
of additional Shares pursuant to a stock dividend or stock split, the issuance
of other securities or the issuance of rights for the purchase of any
securities) with respect to the Shares that is payable or distributable to
shareholders of record on a date prior to the transfer to the name of Purchaser
or its nominee or transferee on the Company's stock transfer records of the
Shares purchased pursuant to the Offer, then, without prejudice to Purchaser's
rights under Sections 1 and 15, (i) the purchase price per Share payable by
Purchaser pursuant to the Offer will be reduced by the amount of any such cash
dividend or cash distribution and (ii) any such non-cash dividend, distribution
or right to be received by the tendering shareholders will be received and held
by such tendering shareholders for the account of Purchaser and will be required
to be promptly remitted and transferred by each such tendering shareholder to
the Depositary for the account of Purchaser, accompanied by appropriate
documentation of transfer. Pending such remittance and subject to applicable
law, Purchaser will be entitled to all rights and privileges as owner of any
such non-cash dividend, distribution or right and may withhold the entire
purchase price or deduct from the purchase price the amount of value thereof, as
determined by Purchaser in its sole discretion.

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The Company has agreed in the Merger Agreement that it will not pay any
dividends, other than regular quarterly dividends, on its capital stock,
including the Shares, prior to the Effective Time without the consent of Parent.
The Company has also agreed that, without the consent of Parent, it will not (a)
take certain actions that would change the number of shares of its capital stock
outstanding or result in the reclassification of any of its capital stock, or
(b) purchase, retire or otherwise acquire any shares of its capital stock, or
(c) issue, pledge or otherwise encumber its capital stock or any securities
convertible into or representing the right to acquire its capital stock, with
certain exceptions set forth in the Merger Agreement. See "Merger Agreement;
Other Agreements -- Merger Agreement -- Interim Operations of the Company and
Parent."

15. CONDITIONS OF THE OFFER. Notwithstanding any other provisions of the
Offer, and in addition to (and not in limitation of) Purchaser's rights to
extend and amend the Offer at any time in its sole discretion (subject to the
provisions of the Merger Agreement), Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate the Offer as to any Shares not then paid for, if (1)
(i) Purchaser does not receive prior to the expiration of the Offer an informal
written opinion in form and substance reasonably satisfactory to Purchaser from
the staff of the STB, without the imposition of any conditions unacceptable to
Purchaser, that the use of the Voting Trust is consistent with the policies of
the STB against unauthorized acquisitions of control of a regulated carrier, or
(ii) Purchaser does not receive prior to the expiration of the Offer an informal
statement from the Premerger Notification Office of the FTC that the
transactions contemplated by the Offer, the Merger Agreement and the Company
Stock Option Agreement are not subject to, or are exempt from, the HSR Act, or
in the absence of the receipt of such informal statement, any applicable waiting
period under the HSR Act shall have expired or been terminated prior to the
expiration of the Offer (see Section 16), or (2) at any time on or after October
14, 1996 and prior to the acceptance for payment of Shares, any of the following
events shall occur (defined terms used below shall have the meanings ascribed in
the Merger Agreement):

(a) there shall be instituted or pending any action or proceeding by
any government or governmental authority or agency, domestic or foreign,
(i) challenging or seeking to make illegal, to delay materially or
otherwise directly or indirectly to restrain or prohibit the making of the
Offer, the acceptance for payment of or payment for some of or all the
Shares by Parent or Purchaser or the consummation by Parent or Purchaser of
the Merger, seeking to obtain material damages relating to the Merger
Agreement, the Option Agreements or any of the transactions contemplated
thereby or otherwise seeking to prohibit directly or indirectly the
transactions contemplated by the Offer or the Merger Agreement, or
challenging or seeking to make illegal the transactions contemplated by the
Option Agreements or otherwise directly or indirectly to restrain, prohibit
or delay the transactions contemplated by the Option Agreements, (ii)
except for the Voting Trust, seeking to restrain, prohibit or delay
Parent's, Purchaser's or any of their subsidiaries' ownership or operation
of all or any material portion of the business or assets of the Company and
its subsidiaries, taken as a whole, or to compel Parent or any of its
subsidiaries to dispose of or hold separate all or any material portion of
the business or assets of the Company and its subsidiaries, taken as a
whole, (iii) except for the Voting Trust, seeking to impose or confirm
material limitations on the ability of Parent, Purchaser or any of their
subsidiaries or affiliates effectively to exercise full rights of ownership
of the Common Shares, including, without limitation, the right to vote any
Common Shares acquired or owned by Parent, Purchaser or any of their
subsidiaries on all matters properly presented to the Company's
shareholders, or (iv) seeking to require divestiture by Parent or Purchaser
or any of their subsidiaries of any Common Shares, in the case of any of
(i) through (iv) above, which actions or proceedings are reasonably likely
to have a material adverse effect on Parent; or

(b) there shall be any action taken, or any statute, rule, regulation,
injunction, order or decree enacted, enforced, promulgated, issued or
deemed applicable to the transactions contemplated by the Offer or the
Merger Agreement, by or before any court, government or governmental
authority or agency, domestic or foreign, that, directly or indirectly,
results in any of the consequences referred to in paragraph (a) above; or

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<PAGE> 46

(c) prior to the expiration of the Offer there shall not have been
validly tendered and not withdrawn an aggregate of at least 17,860,124
Shares; or

(d) the Board of Directors of the Company shall have withdrawn,
modified or changed in a manner adverse to Parent or Purchaser its approval
or recommendation of the Offer or the matters to be considered at the
Company Shareholders Meetings or shall have recommended a Takeover Proposal
(as defined in the Merger Agreement) or other business combination, or the
Company shall have entered into an agreement in principle (or similar
agreement) or definitive agreement providing for a Takeover Proposal or
other business combination with a person or entity other than Parent or
Purchaser (or the Board of Directors of the Company resolves to do any of
the foregoing); or

(e) the Company shall have breached or failed to observe or perform in
any material respect any of its covenants or agreements under the Merger
Agreement, or any of the representations and warranties of the Company set
forth in the Merger Agreement shall not be true and accurate both when made
and as of the date of consummation of the Offer, as if made at and as of
such time (except to the extent expressly made as of an earlier date, in
which case as of such date), except where the breach or failure to observe
or perform such covenants or agreements, or the failure of such
representations and warranties to be so true and correct (without giving
effect to any limitation as to "materiality" or " material adverse effect"
set forth therein), does not have, and is not likely to have, individually
or in the aggregate, a material adverse effect on the Company; or

(f) the Merger Agreement shall have been terminated in accordance with
its terms; or

(g) Parent or Purchaser shall not have obtained sufficient financing,
on terms reasonably acceptable to Parent, to enable consummation of the
Offer and the Merger;

which, in the reasonable judgment of Parent or Purchaser in any such case, and
regardless of the circumstances (including any action or omission by Parent or
Purchaser not inconsistent with the terms of the Merger Agreement) giving rise
to any such condition, makes it inadvisable to proceed with such acceptance for
payment or payment.

The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser regardless of the circumstances
giving rise to any such condition (including any action or omission by Parent or
Purchaser not inconsistent with the terms of the Merger Agreement) or may be
waived by Parent or Purchaser in whole or in part at any time and from time to
time in their reasonable discretion (subject to Section 1.1(a) of the Merger
Agreement -- see Section 1). The failure by Parent or Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances; and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.

16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.

General. Except as otherwise disclosed herein, based on representations
and warranties made by the Company in the Merger Agreement and a review of
publicly available information by the Company with the SEC, neither Purchaser
nor Parent is aware of (i) any license or regulatory permit that appears to be
material to the business of the Company and its subsidiaries, taken as a whole,
that might be adversely affected by the acquisition of Shares by Parent or
Purchaser pursuant to the Offer or the Merger, respectively, or (ii) any
approval or other action by any governmental, administrative or regulatory
agency or authority, domestic or foreign, that would be required for the
acquisition or ownership of Shares by Parent or Purchaser as contemplated
herein. Should any such approval or other action be required, Parent and
Purchaser currently contemplate that such approval or action would be sought.
While Purchaser does not currently intend to delay the acceptance for payment of
Shares tendered pursuant to the Offer pending the outcome of any such matter,
there can be no assurance that any such approval or action, if needed, would be
obtained or would be obtained without substantial conditions or that adverse
consequences might not result to the business of the Company, Purchaser or
Parent or that certain parts of the businesses of the Company, Purchaser or
Parent might not have to be disposed of in the event that such approvals were
not obtained or any other actions were not taken.

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Purchaser's obligation under the Offer to accept for payment and pay for Shares
is subject to certain conditions. See Section 15.

Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division of the
Department of Justice (the "Antitrust Division") and the FTC and certain waiting
period requirements have been satisfied. The notice and waiting period
requirements of the HSR Act do not apply to the Merger, provided that
information and documentary material filed with the STB in connection with the
seeking of STB approval of the Merger are contemporaneously filed with the
Antitrust Division and the FTC. Parent intends to comply with these
contemporaneous filing requirements and therefore believes that the notice and
waiting period requirements do not apply to the Merger. Parent and Purchaser
believe that the Offer, the Merger and the Company Option Agreement are not
subject to, or are exempt from, the HSR Act. Parent and Purchaser will request
the Premerger Notification Office of the FTC to confirm this understanding. See
Section 15.

STB Matters; The Voting Trust. Certain activities of subsidiaries of the
Company are regulated by the STB. Provisions of subtitle IV, title 49 of the
United States Code require approval of, or the granting of an exemption from
approval by, the STB for the acquisition of control of two or more carriers
subject to the jurisdiction of the STB ("Carriers") by a person that is not a
Carrier and for the acquisition or control of a Carrier by a person that is not
a Carrier but that controls any number of Carriers. STB approval or exemption is
required for, among other things, Purchaser's acquisition of control of the
Company. Parent and Purchaser do not believe that the grant of the Company
Option by the Company to the Purchaser, whether or not Purchaser acquires Shares
pursuant to the Offer, would give Parent and its affiliates control of the
Company. Parent and Purchaser do not believe that either the STB or its
predecessor has ruled on whether the grant of an option can in any circumstance
confer control of the issuer. There can be no assurance, however, that the STB
would not find that the grant of the Company Option would give Parent and its
affiliates control of the Company. Parent and Purchaser do not believe that
ownership by Purchaser of the Shares to be purchased pursuant to the Offer or
the Company Option Agreement would give Parent and its affiliates control of the
Company and its affiliates. Nonetheless, Purchaser intends, simultaneous with
the acquisition of the Shares pursuant to the Offer and the Company Option
Agreement, to deposit the Shares purchased pursuant to the Offer and the Option
Agreement in the Voting Trust in order to ensure that Parent and its affiliates
do not acquire and directly or indirectly exercise control over the Company and
its affiliates prior to obtaining necessary STB approvals or exemptions. STB
approval of the proposed Merger is not a condition to the Offer. The Offer is
conditioned upon the issuance by the staff of the STB of an informal, nonbinding
opinion, without the imposition of any conditions unacceptable to Purchaser,
that the use of the Voting Trust is consistent with the policies of the STB
against unauthorized acquisitions of control of a regulated carrier. Parent will
request the staff of the STB to issue such an opinion. Under STB regulations
that have been in effect since 1979, the STB staff has the power to issue such
opinions. The proposed Voting Trust Agreement is modeled closely upon voting
trust agreements that have been approved by the STB. However, there can be no
assurance that the STB will not seek changes in, or request public comment
regarding, the Voting Trust Agreement. See "The Merger Agreement; Other
Agreements -- Voting Trust Agreement."

It is possible that the Department of Justice or railroad competitors of
Parent and the Company, or others, may argue that Purchaser should not be
permitted to use the voting trust mechanism to acquire Shares prior to final STB
approval of the acquisition of control of the Company. Purchaser believes it is
unlikely that such arguments would prevail, but there can be no assurance in
this regard, nor can there be any assurance that if such arguments are made, it
will not cause delay in obtaining a favorable STB staff opinion regarding the
Voting Trust Agreement.

Pursuant to the terms of the Voting Trust Agreement, it is expected that
the Trustee would hold such Shares until (i) the receipt of STB approval or (ii)
the Shares are disposed of. The Voting Trust Agreement that has been submitted
to the staff of the STB for approval provides that Trustee will have sole power
to vote the Shares in the Trust, will vote those Shares in favor of the Merger
and, so long as the Merger Agreement is in effect, against any other acquisition
transaction, will vote the Shares in favor of any permitted disposition of the
Shares and, on all other matters, will vote the Shares in proportion to the vote
of all other shareholders of

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the Company. The Voting Trust Agreement contains certain other terms and
conditions designed to ensure that neither Purchaser nor Parent will control the
Company during the pendency of the STB proceedings. In addition, the Voting
Trust Agreement provides that Purchaser or its successor in interest will be
entitled to receive any such dividend paid by the Company.

STB Matters; Acquisition of Control. Set forth below is information
relating to approval by the STB of the acquisition of control over the Company
by Parent and Purchaser. On or before March 1, 1997 (but not before January 15,
1997), Parent, the Company and various of their affiliates plan to file an
application (the "STB Application") seeking approval of the STB for the
acquisition of control over the Company and its affiliates by Parent and its
affiliates, the Merger, and related transactions. Under applicable law and
regulations, the STB will hold a public hearing on such application, unless it
determines that a public hearing is not necessary in the public interest. In
ruling on the STB Application, it is expected that the STB will consider at
least the following: (a) the effect of the proposed control transaction on the
adequacy of transportation to the public; (b) the effect on the public interest
of including, or failing to include, other rail carriers in the area involved in
the proposed transaction; (c) the total fixed charges that result from the
proposed transaction; (d) the interest of rail carrier employees affected by the
proposed transaction; and (e) whether the proposed transaction would have an
adverse effect on competition among rail carriers in the affected region or in
the national rail system. The STB has the authority to impose conditions on its
approval of a control transaction to alleviate competitive or other concerns. If
such conditions are imposed, the applicants can elect to consummate the control
transaction subject to the conditions or can elect not to consummate the
transaction. Parent has indicated a willingness to agree to conditions to
preserve rail competition where Parent and the Company are the only rail
competitors. The obligations of Parent and Purchaser to consummate the Merger
are conditioned upon, among other things, the issuance by the STB of a decision
(which decision shall not have been stayed or enjoined) that (A) constitutes a
final order approving, exempting or otherwise authorizing consummation of the
Merger and all other transactions contemplated by the Merger Agreement and the
Option Agreements (or subsequently presented to the STB by agreement of Parent
and the Company) as may require such authorization and (B) does not (1) change
or disapprove of the consideration to be given in the Merger or other material
provisions of Article II of the Merger Agreement or (2) impose on Parent, the
Company or any of their respective Subsidiaries (as defined in the Merger
Agreement) any other terms or conditions (including, without limitation, labor
protective provisions but excluding conditions heretofore imposed by the
Interstate Commerce Commission in New York Dock Railway -- Control -- Brooklyn
Eastern District, 360 I.C.C. 60 (1979)) that materially and adversely affect the
long-term benefits expected to be received by Parent from the transactions
contemplated by the Merger Agreement or the Company Option Agreement. There is
no assurance that STB approval will be obtained or obtained on terms that would
be acceptable to Parent. See "-- Merger Agreement -- Conditions to the Merger"
in Section 13.

Three of the five factors listed above are, in Parent's view, unlikely to
affect whether the STB Application is approved by the STB. As to factor (b)
- -- inclusion of other carriers -- the STB disfavors this remedy, it has rarely
been requested, and Parent believes it is unlikely to be requested by any
railroad in a Parent/Company proceeding. As to factor (c) -- effect on fixed
charges -- the capital structure of the resulting company will be sufficiently
strong that this factor is unlikely, in Parent's view, to be given weight by the
STB in deciding whether to approve a combination of the Company and Parent. As
to factor (d) -- the interest of affected carrier employees -- the STB has
adopted a standard set of labor protective conditions -- the New York Dock
conditions referred to above -- which it imposes in rail merger and control
transactions, and Parent expects that those conditions would be imposed upon a
merger of Purchaser and the Company and that this would not affect approval of
the transaction.

The remaining two factors -- factor (a) -- effect on the adequacy of
transportation -- and factor (e) -- effect on rail competition -- are reflected
in the public interest balancing test that the STB applies in reviewing railroad
mergers like the proposed combination of Parent and the Company. On the one
hand, the STB considers the public benefits of the transaction in terms of
better service to shippers, efficiencies, cost savings and the like. On the
other hand, the STB considers any public harms from the transaction. The
principal harm of concern to the STB, and the principal issue that is likely to
be raised by parties opposing

46
<PAGE> 49

approval of a merger of Purchaser and the Company or seeking the imposition of
conditions thereto, is reduction in competition. In applying the public interest
balancing test, the STB is guided by Congress' intent to encourage mergers,
consolidations, and joint use of facilities that tend to rationalize and improve
the Nation's rail system.

In light of the policies of the STB expressed in its recent decision
relating to the combination of the Union Pacific and Southern Pacific Railroads,
in connection with the Merger and upon its consummation, Parent and the Company
are willing to provide competitive access to another railroad in those
situations where Parent and the Company now are the only rail competitors. Such
access may take the form of grant of trackage rights over rail properties, or
other forms, any of which could diminish the value to Parent or the Surviving
Corporation of its rail properties. The identity of the railroad or railroads
that will be provided such competitive access, the forms it will take, and the
terms and conditions that would apply thereto have not been determined and will
be subject to negotiations. The STB may impose and enforce those arrangements,
when reached, as conditions to its approval of the Merger and may require the
modification of such arrangements or require other arrangements regarding rail
competition or other aspects of the public interest, which could be more
burdensome, as conditions to its approval of the Merger.

Parent and the Company intend to present to the STB their case that the
acquisition of control of the Company by Parent satisfies the public interest
balancing test. First, Parent and the Company will seek to show that a
combination of the Company and Parent has significant public benefits. Second,
Parent and the Company will seek to show that a combination of the Company and
Parent, especially with competition-preserving conditions that Parent is
prepared to agree to, will have no significant adverse effect on rail
competition, and indeed will strengthen such competition. While Parent and the
Company will seek to present a highly persuasive case, there can be no assurance
that the STB Application will not be denied, or will not be granted subject to
conditions that are so onerous that the Merger is not consummated.

Under existing law, the STB is required to enter a final order with respect
to the STB Application within approximately 15 months after such application is
accepted. However, the STB can process such cases more quickly. Parent, the
Company and various of their affiliates plan to ask the STB to adopt a more
expedited schedule. Under existing law, other railroads and other interested
parties may seek to intervene to oppose the STB Application or to seek
protective conditions in the event approval by the STB is granted. In addition,
any appeals from the STB final order might not be resolved for a substantial
period of time after the entry of such order by the STB.

Pending receipt of the STB approval, it is expected that the business and
operations of the Company will be conducted in the usual and ordinary course of
business, and the Company's employees and management will continue in their
present positions.

State Takeover Statutes. A number of states throughout the United States
have enacted takeover statutes that purport, in varying degrees, to be
applicable to attempts to acquire securities of corporations that are
incorporated or have assets, shareholders, executive offices or places of
business in such states. In Edgar v. Mite Corp., the Supreme Court of the United
States held that the Illinois Business Takeover Act, which involved state
securities laws that made the takeover of certain corporations more difficult,
imposed a substantial burden on interstate commerce and therefore was
unconstitutional. In CTS Corp. v. Dynamics Corp. of America, however, the
Supreme Court of the United States held that a state may, as a matter of
corporate law and, in particular, those laws concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without prior approval of the remaining shareholders,
provided that such laws were applicable only under certain conditions.

The Pennsylvania Takeover Disclosure Law ("PTDL") purports to regulate
certain attempts to acquire a corporation which (1) is organized under the laws
of Pennsylvania or (2) has its principal place of business and substantial
assets located in Pennsylvania. The PTDL requires, among other things, that the
offeror, 20 days prior to any takeover offer, file a registration statement for
the takeover offer with the Pennsylvania Securities Commission (the "PSC") and
publicly disclose the offering price of the disclosed offer. However, in Crane
Co. v. Lam, 509 F. Supp. 782 (E.D. Pa. 1981), the United States District Court
for the Eastern District of Pennsylvania preliminarily enjoined, on grounds
arising under the United States Constitution,

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<PAGE> 50

enforcement of at least the portion of the PTDL involving the pre-offer waiting
period thereunder. Section 8(a) of the PTDL provides an exemption for any offer
to purchase securities as to which the board of directors of the target company
recommends acceptance to its shareholders, if at the time such recommendation is
first communicated to shareholders the offeror files with the PSC a copy of the
Schedule 14D-1 and certain other information and materials, including an
undertaking to notify security holders of the target company that a notice has
been filed with the PSC which contains substantial additional information about
the offer and which is available for inspection at the PSC's principal office
during business hours. While reserving and not waiving its right to challenge
the constitutionality or validity of the PTDL, its applicability to the Offer or
the jurisdiction of the PSC, Purchaser is making such a filing with the PSC in
order to qualify for such exemption from the PTDL. Additional information about
the Offer has been filed with the Pennsylvania Securities Commission pursuant to
the PTDL and is available for inspection at the Pennsylvania Securities
Commission's office at Eastgate Office Building, Second Floor, 1010 North 7th
Street, Harrisburg, PA 17102-1410, during business hours.

Chapter 25 of the Pennsylvania Law contains other provisions relating
generally to takeovers and acquisitions of certain publicly owned Pennsylvania
corporations such as the Company that have a class or series of shares entitled
to vote generally in the election of directors registered under the Exchange Act
(a "registered corporation"). The following discussion is a general and highly
abbreviated summary of certain features of such chapter, is not intended to be
complete or to completely address potentially applicable exceptions or
exemptions, and is qualified in its entirety by reference to the full text of
Chapter 25 of the Pennsylvania Law.

In addition to other provisions not applicable to the Offer or the Merger,
Subchapter 25D of the Pennsylvania Law includes provisions requiring approval of
a merger of a registered corporation with an "interested shareholder" in which
the "interested shareholder" is treated differently from other shareholders, by
the affirmative vote of the shareholders entitled to cast at least a majority of
the votes that all shareholders other than the interested shareholder are
entitled to cast with respect to the transaction without counting the votes of
the interested shareholders. This disinterested shareholder approval requirement
is not applicable to a transaction (i) approved by a vote of the board of
directors, without counting the votes of directors who are directors or officers
of, or who have a material equity interest in, the interested shareholder, (ii)
in which the consideration to be received by shareholders is not less than the
highest amount paid by the interested shareholder in acquiring his shares, or
(iii) effected without submitting the Merger to a vote of shareholders as
permitted in Section 1924(b)(1)(ii) of the Pennsylvania Law. Purchaser believes
that the disinterested shareholder approval requirement of Subchapter 25D will
not be applicable to the contemplated Merger because of prior disinterested
Company Board approval.

Subchapter 25E of the Pennsylvania Law, which addresses "control
transactions," requires under certain circumstances any person who acquires at
least 20% of the voting power of a registered corporation, upon written demand
from any shareholder, to purchase for cash up to the balance of the voting
shares of the corporation at the price determined under the statute, which may
not be less than the highest price per share paid by the controlling person or
group at any time during the 90-day period ending on and including the date of
the control transaction, plus, to the extent not reflected in such price, an
increment representing a proportion of any value payable for acquisition of
control of the corporation. A "control transaction" would occur if, without the
Pennsylvania Shareholder Approval, Purchaser were to acquire voting power over
20% or more of the Shares pursuant to the Offer, the Company Stock Option
Agreement or otherwise (except in the Merger). Because Purchaser intends to
acquire less than 20% of the voting power of the Company until such time as the
Pennsylvania Shareholder Approval is obtained, Subchapter 25E would not be
applicable. See Section 13.

Subchapter 25F of the Pennsylvania Law prohibits under certain
circumstances certain "business combinations," including mergers and sales or
pledges of significant assets, of a registered corporation with an "interested
shareholder" for a period of five years. Subchapter 25F exempts, among other
things, business combinations approved by the board or directors prior to a
shareholder becoming an interested shareholder. Since the Board of Directors of
the Company approved the Merger prior to such time as Parent and Purchaser

48
<PAGE> 51

may be deemed to have become an interested shareholder, Purchaser believes that
Subchapter 25F is not applicable to the contemplated Merger.

Subchapter 25G of the Pennsylvania Law, relating to "control-share
acquisitions," prevents under certain circumstances the owner of a control-share
block of shares of a registered corporation from voting such shares unless a
majority of the "disinterested" shares approve such voting rights. Failure to
obtain such approval may result in a forced sale by the control-share owner of
the control-share block to the corporation at a possible loss. The Company
Articles specifically provide that Subchapter 25G does not apply to the Company.

Subchapter 25H of the Pennsylvania Law, relating to disgorgement by certain
controlling shareholders of a registered corporation, provides that under
certain circumstances any profit realized by a controlling person from the
disposition of shares of the corporation to any person (including to the
corporation under Subchapter 25G or otherwise) will be recoverable by the
corporation. The Company Articles specifically provide that Subchapter 25H does
not apply to the Company.

Subchapter 25I of the Pennsylvania Law entitles "eligible employees" of a
registered corporation to a lump sum payment of severance compensation under
certain circumstances if the employee is terminated, other than for willful
misconduct, within two years after voting rights lost as a result of a
control-share acquisition are restored by a vote of disinterested shareholders
("Control-share Approval") or, in the event the termination was accomplished
pursuant to an agreement, arrangement or understanding with the acquiring
person, within 90 days prior to Control-share Approval. Subchapter 25J of
Pennsylvania Law provides protection against termination or impairment under
certain circumstances of "covered labor contracts" of a registered corporation
as a result of a "business combination" transaction if the business operation to
which the covered labor contract relates was owned by the registered corporation
at the time voting rights are restored by shareholder vote after a control-share
acquisition. Subchapters I and J apply only in the event of a "control-share
acquisition" specified in Subchapter G. The Company Articles specifically
provide that Subchapter G does not apply to the Company.

Section 2504 of the Pennsylvania Law provides that the applicability of
Chapter 25 of the Pennsylvania Law to a registered corporation having a class or
series of shares entitled to vote generally in the election of directors
registered under the Exchange Act or otherwise satisfying the definition of a
registered corporation under Section 2502(1) of the Pennsylvania Law shall
terminate immediately upon the termination of the status of the corporation as a
registered corporation. Purchaser intends to seek to cause the Company to
terminate the registration of the Shares under the Exchange Act as soon after
consummation of the Merger as the requirements for termination of the
registration of the Common Shares are met.

Except for the filing pursuant to Section 8(a) of the PTDL described above,
neither Purchaser nor Parent has currently complied with any state takeover
statute or regulation. Purchaser reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
or the Merger and nothing in this Offer to Purchaser or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any state takeover statute is applicable to the Offer or
the Merger and an appropriate court does not determine that it is inapplicable
or invalid as applied to the Offer or the Merger, Purchaser might be required to
file certain information with, or to receive approvals from, the relevant state
authorities, and Purchaser might be unable to accept for payment or pay for
Shares tendered pursuant to the Offer, or be delayed in consummating the Offer
or the Merger. In such case, Purchaser may not be obliged to accept for payment
or pay for any Shares tendered pursuant to the Offer.

A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, shareholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme
Court of the United States invalidated on constitutional grounds the Illinois
Business Takeover Statute, which, as a matter of state securities law, made
takeovers of corporations meeting certain requirements more difficult. However,
in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that
the State of Indiana may, as a matter of corporate law, and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without the prior approval of

49
<PAGE> 52

the remaining shareholders. The state law before the Supreme Court was by its
terms applicable only to corporations that had a substantial number of
shareholders in the state and were incorporated there.

The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer and has not complied with any such laws. Should any
person seek to apply any state takeover law, Purchaser will take such action as
then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws are applicable to the
Transaction, and an appropriate court does not determine that such law is, or
such laws are inapplicable or invalid as applied to the Offer, Purchaser might
be required to file certain information with, or receive approvals from, the
relevant state authorities. In addition, if enjoined, Purchaser might be unable
to accept for payment any Shares tendered pursuant to the Offer, or be delayed
in continuing or consummating the Offer. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See Section 15.

17. FEES AND EXPENSES. Wasserstein Perella & Co., Inc. ("Wasserstein
Perella") is acting as the Dealer Manager in connection with the Offer and is
acting as financial advisor to Parent in connection with its acquisition of the
Company. Parent has agreed to pay Wasserstein Perella for its services in
conjunction with the Offer and other transactions contemplated by the Merger
Agreement an aggregate fee (the "Transaction Fee") of $19 million. The first
$2.85 million of the Transaction Fee was payable upon the public announcement
that the Company and Parent had entered into the Merger Agreement.
An additional $2.85 million of the Transaction Fee and an additional $5.7
million of the Transaction Fee are payable upon completion of certain events
with respect to the Transactions. The remaining unpaid balance of the
Transaction Fee is payable upon the closing of the Merger. If the Merger
Agreement is terminated or abandoned prior to the consummation of an acquisition
transaction, and Parent or Purchaser receives a termination fee in connection
with such termination or abandonment, then, immediately following Parent's
receipt of such termination fee, Wasserstein Perella will receive an additional
fee of $5 million; provided that such additional fee shall have credited against
it certain prior payments. Parent has agreed to reimburse Wasserstein Perella
for its out-of-pocket expenses, including the fees and expenses of its legal
counsel, incurred in connection with its engagement, and to indemnify
Wasserstein Perella and certain related persons against certain liabilities and
expenses in connection with its engagement, including certain liabilities under
the federal securities laws.

Wasserstein Perella has rendered various investment banking and other
advisory services to Parent and its affiliates in the past and is expected to
continue to render such services, for which it has received and will continue to
receive customary compensation from Parent and its affiliates. In the ordinary
course of business, Wasserstein Perella and its affiliates may actively trade
the debt and equity securities of Parent and its affiliates and the Company for
their own account and for the accounts of customers and, accordingly, may at any
time hold a long or short position in such securities.

Purchaser has retained MacKenzie Partners, Inc. to act as the Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, facsimile, telegraph and personal interviews and may
request brokers, dealers and other nominee shareholders to forward materials
relating to the Offer to beneficial owners of Shares. The Information Agent will
receive reasonable and customary compensation for its services, will be
reimbursed for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities and expenses in connection therewith, including
certain liabilities under the federal securities laws.

In addition, IBJ Schroder Bank & Trust Company has been retained as the
Depositary. The Depositary has not been retained to make solicitations or
recommendations in its role as Depositary. The Depositary will receive
reasonable and customary compensation for its services, will be reimbursed for
certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith, including certain
liabilities under the federal securities laws.

Except as set forth above, Purchaser will not pay any fees or commissions
to any broker or dealer or any other person for soliciting tenders of Shares
pursuant to the Offer. Brokers, dealers, commercial banks and

50
<PAGE> 53

trust companies will, upon request only, be reimbursed by Purchaser for
customary mailing and handling expenses incurred by them in forwarding material
to their customers.

18. MISCELLANEOUS. Purchaser is not aware of any jurisdiction where the
making of the Offer is prohibited by any administrative or judicial action
pursuant to any valid state statute. If Purchaser becomes aware of any valid
state statute prohibiting the making of the Offer or the acceptance of the
Shares pursuant thereto, Purchaser will make a good faith effort to comply with
such state statute. If, after such good faith effort, Purchaser cannot comply
with any such state statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by one or more registered brokers or dealers which are
licensed under the laws of such jurisdiction.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR PURCHASER NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.

Parent and Purchaser have filed with the SEC the Schedule 14D-1, together
with exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under
the Exchange Act, furnishing certain additional information with respect to the
Offer. The Schedule 14D-1, and any amendments thereto, may be inspected at, and
copies may be obtained from, the same places and in the same manner as set forth
in Section 8 (except that they will not be available at the regional offices of
the SEC).

GREEN ACQUISITION CORP.

October 16, 1996

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<PAGE> 54

SCHEDULE I

INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND PURCHASER

1. Directors and Executive Officers of Parent. The following table sets
forth the name, business address, present principal occupation, and employment
and material occupations, positions, offices, or employments for the past five
years of each director and executive officer of Parent. The principal business
address of each executive officer of Parent is One James Center, 901 East Cary
Street, Richmond, VA 23219. Unless otherwise indicated, each occupation set
forth opposite an individual's name refers to employment with Parent. Where no
date is given for the commencement of the indicated office or position, such
office or position was assumed prior to October 16, 1991. Directors are
indicated by an asterisk. Each director and executive officer listed below is a
citizen of the United States.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME AND CURRENT EMPLOYMENT; MATERIAL POSITIONS
BUSINESS ADDRESS HELD DURING THE PAST FIVE YEARS
- ------------------------------ ------------------------------------------------------------
<S> <C>
John Q. Anderson.............. Executive Vice President, Sales and Marketing, CSX
Transportation, Inc. ("CSXT") since May 1996. Prior thereto,
Senior Vice President -- Coal, Metals and Minerals Business
of Burlington Northern Santa Fe Corporation.
Mark G. Aron.................. Executive Vice President -- Law and Public Affairs since
April 1995. Prior thereto, Senior Vice President -- Law and
Public Affairs.
Elizabeth E. Bailey*.......... John C. Hower Professor of Public Policy and Management, The
3620 Spruce Street Wharton School of the University of Pennsylvania. Director
Philadelphia, PA 19104 of Honeywell, Inc. and Philip Morris Companies, Inc.
Director of Parent since November 1989.
Robert L. Burrus, Jr.*........ Partner in and Chairman of McGuire, Woods, Battle & Boothe,
One James Center a law firm. Director of Concepts Direct, Inc.; Heilig-Meyers
901 East Cary Street Company; O'Sullivan Corporation; S&K Famous Brands, Inc. and
Richmond, VA 23219 Smithfield Foods, Inc.; Director of Parent since April 1993.
Alvin R. Carpenter............ President, CSXT since January 1992. Prior thereto, President
of CSX Distribution Services, Inc.
John P. Clancey............... President and Chief Executive Officer, Sea-Land Service Inc.
("Sea-Land").
Donald D. Davis............... Senior Vice President -- Employee Relations, CSXT since
April 1992. Prior thereto, Senior Vice President -- Human
Resources.
James Ermer................... Executive Vice President -- Corporate Planning and
Development since April 1995. Prior thereto, Senior Vice
President -- Finance.
Andrew B. Fogarty............. Senior Vice President -- Finance & Planning, Sea-Land since
June 1996. Vice President -- Audit and Advisory Services
from February 1995 to June 1996. Vice President -- Executive
Department.
Paul R. Goodwin............... Executive Vice President -- Finance and Chief Financial
Officer since April 1995. From February 1995 to April 1995,
Executive Vice President -- Finance and Administration,
CSXT. Prior thereto, Senior Vice President -- Finance, CSXT.
Bruce C. Gottwald*............ Chairman and Chief Executive Officer of Ethyl Corporation, a
330 South Forth Street worldwide producer of petroleum additives. Director of
P.O. Box 2189 Albemarle Corporation; First Colony Corporation; First
Richmond, VA 23219 Colony Life Insurance Co.; James River Corporation and
Tredegar Industries, Inc. Director of Parent since April
1988.
</TABLE>

I-1
<PAGE> 55

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME AND CURRENT EMPLOYMENT; MATERIAL POSITIONS
BUSINESS ADDRESS HELD DURING THE PAST FIVE YEARS
- ------------------------------ ------------------------------------------------------------
<S> <C>
Robert J. Gross............... Senior Vice President -- Atlantic-AME since June 1996. Prior
thereto, Senior Vice President -- Finance and Planning.
Michael C. Hagan.............. President and Chief Executive Officer, American Commercial
Lines, Inc. since May 1992. Prior thereto, President and
Chief Operating Officer of American Commercial Lines.
John R. Hall*................. Chairman and Chief Executive Officer of Ashland Inc.
100 Ashland Dr. Director of Banc One Corporation; The Canada Life Assurance
Russell, KY 41169 Company; Humana Inc.; Reynolds Metals Company and UCAR
International Inc. Director of Parent since May 1994.
Richard H. Klem............... Vice President -- Corporate Strategy since May 1992. Prior
thereto, Vice President -- Economic Analysis and Corporate
Strategy.
Robert D. Kunisch*............ Chairman, President and Chief Executive Officer of PHH
11333 McCormick Rd. Corporation, provider of value added business services,
Hunt Valley, MD 21031 including vehicle management services, real estate services,
and mortgage banking services. Director of Mercantile
Bankshares Corporation and GenCorp. Director of Parent since
October 1990.
Hugh L. McColl Jr.*........... Chairman and Chief Executive Officer of NationsBank
NationsBank Corporate Center Corporation, a bank holding company. Prior thereto, Chairman
Charlotte, NC 28255 and Chief Executive Officer of NCNB Corporation, a
predecessor of NationsBank Corporation. Director of
Jefferson-Pilot Corporation; Jefferson-Pilot Life Insurance
Company; Ruddick Corporation and Sonoco Products Co.
Director of Parent since February 1992.
James W. McGlothlin*.......... Chairman and Chief Executive Officer of The United Company,
P.O. Box 1280 a diversified energy company. Director of Basset Furniture
Bristol, VA 24203 Industries, Inc. Director of Parent since November 1989.
Southwood J. Morcott*......... Chairman and Chief Executive Officer of Dana Corporation, a
4500 Dorr Street manufacturer of automotive and truck parts and provider of
Toledo, OH 43615 commercial credit. Previously, Chairman, President and Chief
Executive Officer of Dana Corporation. Director of Johnson
Controls, Inc. and Phelps Dodge Corporation. Director of
Parent since July 1990.
Jesse R. Mohorovic............ Vice President -- Executive Department since February 1995.
From April 1994 to February 1995, Vice
President -- Corporate Communications of CTX. Prior thereto,
Vice President -- Corporate Communications of Sea-Land.
Richard E. Murphy............. Senior Vice President -- Corporate Marketing since 1996.
From 1995 to 1996, Senior Vice President -- Atlantic AME;
Vice President -- Pacific Services, from 1993-1995; prior
thereto, Vice President -- Pacific Services, Sea-Land.
Gerald L. Nichols............. Executive Vice President and Chief Operating Officer, CSXT
since February 1995. Prior thereto, Senior Vice
President -- Administration of CSXT
M. McNeil Porter.............. Chairman, CSX Intermodal, Inc. since January 1996. Prior
thereto, President and CEO of CSX Intermodal, Inc.
Charles G. Raymond............ Senior Vice President -- Operations, Sea-Land.
Charles E. Rice*.............. Chairman and Chief Executive Officer of Barnett Banks, Inc.,
50 North Laura Street a bank holding company. Director of Spring Corporation.
Jacksonville, FL 32202 Director of Parent since April 1990.
</TABLE>

I-2
<PAGE> 56

2. Directors and Executive Officers of Purchaser. Set forth below are the
name and position with Purchaser of each director and executive officer of
Purchaser. The principal address of Purchaser and the current business address
of each individual listed below is One James Center, 901 East Cary Street,
Richmond, VA 23219. Each such person is a citizen of the United States. The
present principal occupation or employment (in addition to the position with
Purchaser indicated below), and material occupations, positions, offices or
employments for the past five years of each person is set forth in Part 1 above
(except for Alan A. Rudnick whose principal occupation since May, 1991 is Vice
President -- General Counsel and Corporate Secretary). Directors are indicated
by an asterisk.

<TABLE>
<CAPTION>
PRESENT POSITION
NAME WITH THE PURCHASER
--------------------------------- --------------------------------------
<S> <C>
Mark G. Aron*.................... General Counsel and Secretary
Paul R. Goodwin*................. Chief Financial Officer and Treasurer
Alan A. Rudnick.................. Assistant Secretary
John W. Snow*.................... Chief Executive Officer
</TABLE>

I-3
<PAGE> 57

Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for the Shares
and any other required documents should be sent by each shareholder of the
Company or his broker, dealer, commercial bank, trust company or other nominee
to the Depositary at one of its addresses set forth below:

The Depositary for the Offer is:

IBJ SCHRODER BANK & TRUST COMPANY

<TABLE>
<CAPTION>
By Hand or
By Mail: By Facsimile Transmission: Overnight Delivery:
<S> <C> <C>
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Attn: Reorganization New York, New York 10004
New York, New York 10274-0084 Operations Department Attn: Securities
Attn: Reorganization Processing Window,
Operations Department Subcellar One
Confirm Facsimile by Telephone:
(212) 858-2103
</TABLE>

------------------------

Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at their respective
telephone numbers and locations listed below. You may also contact your broker,
dealer, commercial bank or trust company or other nominee for assistance
concerning the Offer.

The Information Agent for the Offer is:

MACKENZIE PARTNERS, INC.

156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL FREE (800) 322-2885

The Dealer Manager for the Offer is:

WASSERSTEIN PERELLA & CO., INC.

31 West 52nd Street
New York, New York 10019
Call Collect:
(212) 969-2700

<PAGE> 1

LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED
STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)

OF
CONRAIL INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED OCTOBER 16, 1996
BY

GREEN ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY
OF
CSX CORPORATION

THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 15, 1996, UNLESS THE OFFER IS EXTENDED.

The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY

<TABLE>
<S> <C>
By Mail: By Hand or Overnight Delivery:
P.O. Box 84 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attn: Securities Processing
Attn: Reorganization Operations Window,
Department Subcellar One
</TABLE>

By Facsimile Transmission:

(212) 858-2611
Attn: Reorganization Operations Department

Confirm Facsimile by telephone:

(212) 858-2103

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OR TELEX TRANSMISSION
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST
SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 PROVIDED BELOW.

THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

This Letter of Transmittal is to be completed by shareholders of Conrail
Inc. either if certificates ("Share Certificates") evidencing shares of common
stock, par value $1.00 per share (the "Common Shares") or shares of Series A
ESOP Convertible Junior Preferred Stock, without par value (the "ESOP Preferred
Shares" and, together with the Common Shares, the "Shares") are to be forwarded
herewith or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company (each, a "Book-Entry Transfer Facility" and
collectively, the "Book-Entry Transfer Facilities") pursuant to the book-entry
transfer procedure described in "Procedures for Tendering Shares" of the Offer
to Purchase (as defined below). Delivery of documents to a Book-Entry Transfer
Facility in accordance with such Book-Entry Transfer Facility's procedures does
not constitute delivery to the Depositary.
<PAGE> 2

Holders of Shares will be required to tender one Right for each Share
tendered to effect a valid tender of such Share. Until the Distribution Date (as
defined in the Offer to Purchase) occurs, the Rights are represented by and
transferred with the Shares. Accordingly, if the Distribution Date does not
occur prior to the Expiration Date (as defined in the Offer to Purchase), a
tender of Shares will constitute a tender of the associated Rights. If a
Distribution Date has occurred, certificates representing a number of Rights
equal to the number of Shares being tendered must be delivered to the Depositary
in order for such Shares to be validly tendered. If a Distribution Date has
occurred, a tender of Shares without Rights constitutes an agreement by the
tendering shareholder to deliver certificates representing a number of Rights
equal to the number of Shares tendered pursuant to the Offer to the Depositary
within three New York Stock Exchange, Inc. trading days after the date such
certificates are distributed. Purchaser (as defined in the Offer to Purchase)
reserves the right to require that it receive such certificates prior to
accepting Shares for payment. Payment for Shares tendered and purchased pursuant
to the Offer will be made only after timely receipt by the Depositary of, among
other things, such certificates, if such certificates have been distributed to
holders of Shares. Purchaser will not pay any additional consideration for the
Rights tendered pursuant to the Offer.

Shareholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other documents required hereby
to the Depositary prior to the Expiration Date (as defined in "Terms of the
Offer; Proration; Expiration Date" of the Offer to Purchase) or who cannot
complete the procedure for delivery by book-entry transfer on a timely basis and
who wish to tender their Shares must do so pursuant to the guaranteed delivery
procedure described in "Procedures for Tendering Shares" of the Offer to
Purchase. See Instruction 2.

/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:

Name of Tendering Institution:

Check Box of Applicable Book-Entry Transfer Facility:

/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company

Account Number ____________ Transaction Code Number

/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:

Name(s) of Registered Holder(s):

Window Ticket No. (if any):

Date of Execution of Notice of Guaranteed Delivery:

Name of Institution which Guaranteed Delivery:

If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer
Facility:

/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company

Account Number ____________ Transaction Code Number
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED

<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK)
<S> <C> <C> <C>

</TABLE>
<TABLE>
<CAPTION>

<S> <C> <C>
SHARE CERTIFICATE(S) TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)

<CAPTION>
TOTAL NUMBER OF SHARES NUMBER OF SHARES
CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) TENDERED**
<S> <C> <C>
TOTAL SHARES
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares being delivered to the
Depositary are being tendered. See Instruction 4.
</TABLE>

NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
<PAGE> 4

Ladies and Gentlemen:

The undersigned hereby tenders to Green Acquisition Corp., a Pennsylvania
corporation ("Purchaser") and a wholly owned subsidiary of CSX Corporation, a
Virginia corporation, the above-described shares of common stock, par value
$1.00 per share (the "Common Shares") or shares of Series A ESOP Convertible
Junior Preferred Stock, without par value (the "ESOP Preferred Shares" and,
together with the Common Shares, the "Shares"), of Conrail Inc., a Pennsylvania
corporation (the "Company"), including, in each case, the associated Common
Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement
dated as of July 19, 1989, between the Company and First Chicago Trust Company
of New York, as Rights Agent (as amended, the "Rights Agreement"), pursuant to
Purchaser's offer to purchase an aggregate of 17,860,124 Shares, including, in
each case, the associated Rights, at a price of $92.50 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated October 16, 1996 (the "Offer to Purchase"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer"). All references
herein to the Common Shares, ESOP Preferred Shares or Shares includes the
associated Rights.

The undersigned understands that Purchaser reserves the right to transfer
or assign, in whole at any time, or in part from time to time, to one or more of
its affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering shareholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.

Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of, Purchaser all right, title and interest in and to all the Shares that
are being tendered hereby (and any and all non-cash dividends, distributions,
rights, other Shares or other securities issued or issuable in respect of such
Shares or declared, paid or distributed in respect of such Shares on or after
October 14, 1996 (collectively, "Distributions")), and irrevocably appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares and all Distributions, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver certificates for such Shares
(individually, a "Share Certificate") and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by a Book-Entry Transfer Facility, together, in either case, with all
accompanying evidence of transfer and authenticity to, or upon the order of
Purchaser, (ii) present such Shares and all Distributions for transfer on the
books of the Company and (iii) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.

If, on or after October 14, 1996, the Company should declare or pay any
cash or stock dividend, other than regular quarterly cash dividends, or make any
distribution with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer to the name of Purchaser
or its nominee or transferee on the Company's stock transfer records of the
Shares accepted for payment pursuant to the Offer, then, subject to the
provisions of Section 14 of the Offer to Purchase, (i) the purchase price per
Share payable by Purchaser pursuant to the Offer will be reduced by the amount
of any such cash dividend or cash distribution and (ii) any such non-cash
dividend, distribution or right to be received by the tendering shareholder will
be received and held by such tendering shareholder for the account of Purchaser
and will be required to be promptly remitted and transferred by each such
tendering shareholder to the Depositary for the account of Purchaser,
accompanied by appropriate documentation of transfer. Pending such remittance,
Purchaser will be entitled to all rights and privileges as owner of any such
non-cash dividend, distribution or right and may withhold the entire purchase
price or deduct from the purchase price the amount of value thereof, as
determined by Purchaser in its sole discretion.

By executing this Letter of Transmittal, the undersigned irrevocably
appoints John W. Snow, Mark G. Aron and Alan A. Rudnick as proxies of the
undersigned, each with full power of substitution, to the full extent of the
undersigned's rights with respect to the Shares tendered by the undersigned and
accepted for payment by Purchaser (and any and all Distributions). All such
proxies shall be considered coupled with an interest in the tendered Shares.
This appointment will be effective if, when, and only to the extent that,
Purchaser accepts such Shares for payment pursuant to the Offer. Upon such
acceptance for payment, all prior proxies given by the undersigned with respect
to such Shares, Distributions and other securities will, without further action,
be revoked, and no subsequent proxies may be given. The individuals named above
as proxies will, with respect to the Shares, Distributions and other securities
for which the appointment is effective, be empowered (subject to the terms of
the Voting Trust Agreement (as defined in the Offer to Purchase) so long as it
shall be in effect with respect to the Shares) to exercise all voting and other
rights of the undersigned as they in their sole discretion may deem proper at
any annual, special, adjourned or postponed meeting of the Company's
shareholders, by written consent or otherwise, and Purchaser reserves the right
to require that, in order for Shares, Distributions or other securities to be
deemed validly tendered, immediately upon Purchaser's acceptance for payment of
such Shares Purchaser must be able to exercise full voting rights with respect
to such Shares.
<PAGE> 5

The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, that the undersigned own(s) the Shares
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that such
tender of Shares complies with Rule 14e-4 under the Exchange Act, and that when
such Shares are accepted for payment by Purchaser, Purchaser will acquire good,
marketable and unencumbered title thereto and to all Distributions, free and
clear of all liens, restrictions, charges and encumbrances, and that none of
such Shares and Distributions will be subject to any adverse claim. The
undersigned, upon request, shall execute and deliver all additional documents
deemed by the Depositary or Purchaser to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of Purchaser all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price, the amount or value of such
Distribution as determined by Purchaser in its sole discretion.

No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.

The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in "Procedures for Tendering Shares" of the Offer to
Purchase and in the Instructions hereto will constitute the undersigned's
acceptance of the terms and conditions of the Offer. Purchaser's acceptance for
payment of Shares tendered pursuant to the Offer will constitute a binding
agreement between the undersigned and Purchaser upon the terms and subject to
the conditions of the Offer. The undersigned recognizes that under certain
circumstances set forth in the Offer to Purchase, Purchaser may not be required
to accept for payment any of the Shares tendered hereby.

Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions," please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. Unless otherwise indicated herein in the box entitled
"Special Payment Instructions," please credit any Shares tendered hereby and
delivered by book-entry transfer, but which are not purchased, by crediting the
account at the Book-Entry Transfer Facility designated above. The undersigned
recognizes that Purchaser has no obligation, pursuant to the Special Payment
Instructions, to transfer any Shares from the name of the registered holder(s)
thereof if Purchaser does not accept for payment any of the Shares tendered
hereby.
<PAGE> 6

SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7 OF
THIS LETTER OF TRANSMITTAL)

To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
issued in the name of someone other than the undersigned, or if Shares delivered
by book-entry transfer which are not purchased are to be returned by credit to
an account maintained at a Book-Entry Transfer Facility other than that
designated above.

Issue check and/or certificates to:

Name
(PLEASE PRINT)

Address

- ------------------------------------------------------
(ZIP CODE)

- ------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)

(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)

/ / Credit unpurchased Shares delivered by book-entry transfer to the Book-Entry
Transfer Facility account set forth below:

Check appropriate box:

/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company

- ------------------------------------------------------
(ACCOUNT NUMBER)

SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7
OF THIS LETTER OF TRANSMITTAL)

To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
sent to someone other than the undersigned, or to the undersigned at an address
other than that shown above.

Mail check and/or certificates to:

Name
(PLEASE PRINT)

Address

- ------------------------------------------------------
(ZIP CODE)
<PAGE> 7

SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)

X
- --------------------------------------------------------------------------------

X
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))

Date , 1996

(Must be signed by registered holder(s) exactly as name(s) appear(s) on common
or preferred stock certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, please provide the following
information. See Instruction 5 of this Letter of Transmittal.)

Name(s)
(PLEASE PRINT)
Capacity (Full Title)
Address
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
Tax Identification or Social Security No.
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)

GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5 OF THIS LETTER OF TRANSMITTAL)
Authorized Signature
Name
(PLEASE PRINT)
Title
Name of Firm
Address
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number

Date , 1996
<PAGE> 8

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is a
bank, broker, dealer, credit union, savings association, or other entity that is
a member in good standing of the Securities Transfer Agent's Medallion Program
(each, an "Eligible Institution"). No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the reverse
hereof, or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5. If a Share Certificate is registered in the name
of a person other than the signer of this Letter of Transmittal, or if payment
is to be made, or a Share Certificate not accepted for payment or not tendered
is to be returned, to a person other than the registered holder(s), then the
Share Certificate must be endorsed or accompanied by appropriate stock powers,
in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on the Share Certificate, with the signature(s) on such Share
Certificate or stock powers guaranteed as described above. See Instruction 5.

2. Delivery of Letter of Transmittal and Share Certificates. This Letter
of Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if Shares are to be delivered by book-entry transfer pursuant to the
procedure set forth in "Procedures for Tendering Shares" of the Offer to
Purchase. Share Certificates evidencing all tendered Shares, or confirmation of
a book-entry transfer of such Shares, if such procedure is available, into the
Depositary's account at one of the Book-Entry Transfer Facilities pursuant to
the procedures set forth in "Procedures for Tendering Shares" of the Offer to
Purchase, together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees (or,
in the case of a book-entry transfer, an Agent's Message, as defined below) and
any other documents required by this Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth on the reverse hereof prior to
the Expiration Date (as defined in "Terms of the Offer Proration; Expiration
Date" of the Offer to Purchase). If Share Certificates are forwarded to the
Depositary in multiple deliveries, a properly completed and duly executed Letter
of Transmittal must accompany each such delivery. Stockholders whose Share
Certificates are not immediately available, who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis may tender their Shares pursuant to the guaranteed
delivery procedure described in "Procedures for Tendering Shares" of the Offer
to Purchase. Pursuant to such procedure: (i) such tender must be made by or
through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by Purchaser
herewith, must be received by the Depositary prior to the Expiration Date; and
(iii) in the case of a guarantee of Shares, the Share Certificates, in proper
form for transfer, or a confirmation of a book-entry transfer of such Shares, if
such procedure is available, into the Depositary's account at one of the
Book-Entry Transfer Facilities, together with a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three New York Stock
Exchange, Inc. trading days after the date of execution of the Notice of
Guaranteed Delivery, all as described in "Procedures for Tendering Shares" of
the Offer to Purchase. The term "Agent's Message" means a message, transmitted
by a Book-Entry Transfer Facility to, and received by the Depositary and forming
a part of a Book-Entry Confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares, that such participant has
received and agrees to be bound by the terms of this Letter of Transmittal and
that the Purchaser may enforce such agreement against the participant.

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.

No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering stockholders waive any right to receive
any notice of the acceptance of their Shares for payment.

3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.

4. Partial Tenders. (Not applicable to stockholders who tender by
book-entry transfer.) If fewer than all the Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares which are to be tendered in the box entitled "Number of
Shares Tendered." In such cases, new Share Certificate(s) evidencing the
remainder of the Shares that were evidenced by the Share Certificates delivered
to the Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions," as soon as practicable after the expiration or termination of the
Offer. All Shares evidenced by Share Certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
<PAGE> 9

5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.

If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.

If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
certificates.

If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.

If this Letter of Transmittal or any Share Certificate(s) or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.

6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to Purchaser of the payment of such taxes, or exemption
therefrom, is submitted.

EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATE(S) EVIDENCING THE
SHARES TENDERED HEREBY.

7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered," the appropriate boxes on this Letter
of Transmittal must be completed. Shares tendered hereby by book-entry transfer
may request that Shares not purchased be credited to such account maintained at
a Book-Entry Transfer Facility as such stockholder may designate in the box
entitled "Special Payment Instructions" on the reverse hereof. If no such
instructions are given, all such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated on the
reverse hereof as the account from which such Shares were delivered.

8. Requests for Assistance or Additional Copies. Requests for assistance
may be directed to the Information Agent or Dealer Manager at their respective
addresses or telephone numbers set forth below. Additional copies of the Offer
to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and
the Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 may be obtained from the Information Agent or the Dealer Manager or
from brokers, dealers, commercial banks or trust companies.

9. Substitute Form W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such shareholder is not subject to backup withholding of federal income tax. If
a tendering shareholder has been notified by the Internal Revenue Service that
such shareholder is subject to backup withholding, such shareholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
shareholder has since been notified by the Internal Revenue Service that such
shareholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering shareholder to
31% federal income tax withholding on the payment of the purchase price of all
Shares purchased from such shareholder. If the tendering shareholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such shareholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the purchase price to such stockholder until a TIN is provided to
the Depositary.

10. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the shareholder should
promptly notify the Depositary. The shareholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed.
<PAGE> 10

IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, WITH ANY REQUIRED SIGNATURE GUARANTEES, OR AN
AGENT'S MESSAGE (TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY
EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR
TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).

IMPORTANT TAX INFORMATION

Under the federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is such shareholder's social security
number. If the Depositary is not provided with the correct TIN, the shareholder
may be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such shareholder with respect to Shares and
Rights purchased pursuant to the Offer may be subject to backup withholding of
31%.

Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such statements
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.

If backup withholding applies with respect to a shareholder, the Depositary
is required to withhold 31% of any payments made to such shareholder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.

PURPOSE OF SUBSTITUTE FORM W-9

To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that
(i) such shareholder has not been notified by the Internal Revenue Service that
such shareholder is subject to backup withholding as a result of a failure to
report all interest or dividends or (ii) the Internal Revenue Service has
notified such shareholder that such shareholder is no longer subject to backup
withholding.

WHAT NUMBER TO GIVE THE DEPOSITARY

The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the shareholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% of all payments of the purchase price to such
stockholder until a TIN is provided to the Depositary.
<PAGE> 11

- --------------------------------------------------------------------------------

PAYER'S NAME: IBJ SCHRODER BANK & TRUST COMPANY, AS DEPOSITARY

<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
PART I -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR
BOX AT RIGHT AND CERTIFY BY SIGNING AND / /
DATING BELOW.
Employer Identification Number
(If awaiting TIN write "Applied For")
--------------------------------------------------------------------------------------------
PART II -- For Payees Exempt From Backup Withholding, see the enclosed Guidelines and complete
as instructed therein. CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or a Taxpayer
Identification Number has not been issued to me and either (a) I have mailed or delivered
an application to receive a Taxpayer Identification Number to the appropriate Internal
Revenue Service ("IRS") or Social Security Administration office or (b) I intend to mail or
deliver an application in the near future. I understand that if I do not provide a Taxpayer
Identification Number within sixty (60) days, 31% of all reportable payments made to me
thereafter will be withheld until I provide a number), and
(2) I am not subject to backup withholding either because I have not been notified by the IRS
that I am subject to backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup withholding.
--------------------------------------------------------------------------------------------
CERTIFICATE INSTRUCTIONS -- You must cross out item (2)
above if you have been notified by the IRS that you are
subject to backup withholding because of underreporting
interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup
withholding you received another notification from the IRS
that you are no longer subject to backup withholding, do not
cross out item (2).
(Also see instructions in the enclosed Guidelines.)
----------------------------- DATE ________________, 1996
SIGNATURE
</TABLE>

- --------------------------------------------------------------------------------

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

Questions and requests for assistance or additional copies
of the Offer to Purchase, Letter of Transmittal and
other tender offer materials may be directed to the
Information Agent or the Dealer Manager as set forth below:

The Information Agent for the Offer is:

MACKENZIE PARTNERS, INC.

156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL FREE (800) 322-2885

The Dealer Manager for the Offer is:

WASSERSTEIN PERELLA & CO., INC.

31 West 52nd Street
New York, New York 10019
Call Collect:
(212) 969-2700
SUBSTITUTE
FORM W-9
DEPARTMENT OF
THE TREASURY
INTERNAL
REVENUE SERVICE
PAYER'S REQUEST
FOR TAXPAYER
IDENTIFICATION
NUMBER (TIN)

<PAGE> 1

NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED
STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)

OF
CONRAIL INC.
TO

GREEN ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CSX CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)

This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if (i) certificates
("Share Certificates") evidencing shares of common stock, par value $1.00 per
share (the "Common Shares") or shares of Series A ESOP Convertible Junior
Preferred Stock, without par value (the "ESOP Preferred Shares" and, together
with the Common Shares, the "Shares"), of Conrail Inc., a Pennsylvania
corporation (the "Company"), including the associated Common Stock Purchase
Rights (the "Rights") issued pursuant to the Rights Agreement, dated July 19,
1989, between the Company and First Chicago Trust Company of New York, as Rights
Agent (as amended, the "Rights Agreement"), are not immediately available, (ii)
time will not permit all required documents to reach IBJ Schroder Bank and Trust
Company, as Depositary (the "Depositary"), prior to the Expiration Date (as
defined in "Terms of the Offer; Proration; Expiration Date" of the Offer to
Purchase (as defined below)) or (iii) the procedure for book-entry transfer
cannot be completed on a timely basis. All references herein to the Common
Shares, ESOP Preferred Shares or Shares include the associated Rights. This
Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary. See "Procedures for
Tendering Shares" of the Offer to Purchase.

The Depositary for the Offer is:

IBJ SCHRODER BANK & TRUST COMPANY

<TABLE>
<CAPTION>
By Hand or
By Mail: By Facsimile Transmission: Overnight Delivery:
<S> <C> <C>
Bowling Green Station (212) 858-2611 One State Street
P.O. Box 84 Attn: Reorganization New York, New York 10004
New York, New York 10274-0084 Operations Department Attn: Securities Processing
Attn: Reorganization Window,
Operations Department Subcellar One
Confirm Facsimile by Telephone:
(212) 858-2103
</TABLE>

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2

Ladies and Gentlemen:

The undersigned hereby tenders to Green Acquisition Corp., a Pennsylvania
corporation and a wholly owned subsidiary of CSX Corporation, a Virginia
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated October 16, 1996 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, as amended from time to time, together constitute
the "Offer"), receipt of each of which is hereby acknowledged, the number of
Shares specified below pursuant to the guaranteed delivery procedures described
in "Procedures for Tendering Shares" of the Offer to Purchase.

<TABLE>
<S> <C>
Number of Shares: Name(s) of Record Holder(s):
- ------------------------------------------------ ------------------------------------------------
Certificate Nos. (if available):
- ------------------------------------------------ ------------------------------------------------
PLEASE PRINT
Check ONE box if Shares will be tendered by
book-entry transfer: Address(es):
/ / The Depository Trust Company
------------------------------------------------
/ / Philadelphia Depository Trust Company ZIP CODE
Area Code and Tel. No.:
Account Number:
------------------------------------------------
Dated: , 1996
</TABLE>

GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)

The undersigned, a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States, hereby (a) represents that the tender of Shares effected hereby complies
with Rule 14e-4 of the Securities Exchange Act of 1934, as amended, and (b)
guarantees delivery to the Depositary, at one of its addresses set forth above,
of certificates evidencing the Shares tendered hereby in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's accounts at The Depository Trust Company or the Philadelphia
Depository Trust Company, in each case with delivery of a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees, or an Agent's Message (as defined in "Acceptance for
Payment and Payment for Shares" of the Offer to Purchase), and any other
documents required by the Letter of Transmittal, (a) in the case of Shares,
within three New York Stock Exchange, Inc. trading days after the date of
execution of this Notice of Guaranteed Delivery, or (b) in the case of Rights, a
period ending the latter of (i) three New York Stock Exchange, Inc. trading days
after the date of execution of this Notice of Guaranteed Delivery or (ii) three
business days after the date Right Certificates are distributed to stockholders.

The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in financial loss to such Eligible Institution.

<TABLE>
<S> <C>
- ------------------------------------------------ ------------------------------------------------
NAME OF FIRM AUTHORIZED SIGNATURE
- ------------------------------------------------ ------------------------------------------------
ADDRESS TITLE
Name:
- ------------------------------------------------
ZIP CODE PLEASE PRINT
Area Code and Tel. No.: Date: , 1996
</TABLE>

NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

<PAGE> 1

<TABLE>
<S> <C>
wasserstein logo Wasserstein, Perella & Co., Inc.
31 West 52nd Street
New York, New York 10019
Tel: (212) 969-2700
</TABLE>

OFFER TO PURCHASE FOR CASH
AN AGGREGATE OF 17,860,124 SHARES OF
COMMON STOCK
AND
SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
CONRAIL INC.
AT
$92.50 NET PER SHARE
BY

GREEN ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CSX CORPORATION

THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 15, 1996, UNLESS THE OFFER IS EXTENDED.

October 16, 1996

To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:

We have been appointed by Green Acquisition Corp., a Pennsylvania
corporation ("Purchaser") and a wholly owned subsidiary of CSX Corporation, a
Virginia corporation ("Parent"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase an aggregate of 17,860,124 shares of (i) common
stock, par value $1.00 per share (the "Common Shares"), and (ii) Series A ESOP
Convertible Junior Preferred Stock, without par value (the "ESOP Preferred
Shares" and, together with the Common Shares, the "Shares"), of Conrail Inc., a
Pennsylvania corporation (the "Company"), including in each case, the associated
Common Stock Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement, dated July 19, 1989, by and between the Company and First Chicago
Trust Company of New York, as Rights Agent (as amended, the "Rights Agreement")
at a price of $92.50 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated October 16,
1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") enclosed herewith.
All references herein to the Common Shares, ESOP Preferred Shares or Shares
shall include the associated Rights.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THE RECEIPT BY
PURCHASER, PRIOR TO THE EXPIRATION OF THE OFFER, OF AN INFORMAL WRITTEN OPINION
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO PURCHASER FROM THE STAFF OF THE
SURFACE TRANSPORTATION BOARD (THE "STB"), WITHOUT THE IMPOSITION OF ANY
CONDITIONS UNACCEPTABLE TO PURCHASER, THAT THE USE OF A VOTING TRUST (THE
"VOTING TRUST") IN SUBSTANTIALLY THE FORM CONTEMPLATED BY THE MERGER AGREEMENT
IS CONSISTENT WITH THE POLICIES OF THE STB AGAINST UNAUTHORIZED ACQUISITIONS OF
CONTROL OF A REGULATED CARRIER (SUCH CONDITION, THE "VOTING TRUST CONDITION"),
(2) THE RECEIPT BY PURCHASER, PRIOR TO THE EXPIRATION OF THE OFFER, OF AN
INFORMAL STATEMENT FROM THE PREMERGER NOTIFICATION OFFICE OF THE FEDERAL TRADE
COMMISSION THAT THE TRANSACTIONS CONTEMPLATED BY THE OFFER, THE MERGER AGREEMENT
AND THE COMPANY STOCK OPTION AGREEMENT (AS DEFINED IN THE OFFER TO PURCHASE) ARE
NOT SUBJECT TO, OR ARE EXEMPT FROM, THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS
ACT OF 1976, AS AMENDED (THE "HSR ACT"), OR IN THE ABSENCE OF THE RECEIPT OF
SUCH INFORMAL STATEMENT, ANY APPLICABLE WAITING PERIOD UNDER THE HSR ACT SHALL
HAVE EXPIRED OR BEEN TERMINATED, (3) PARENT AND PURCHASER OBTAINING, PRIOR TO
THE EXPIRATION OF THE OFFER, SUFFICIENT FINANCING, ON TERMS REASONABLY
ACCEPTABLE TO PARENT, TO ENABLE CONSUMMATION OF THE OFFER AND THE MERGER AND (4)
THERE BEING AT LEAST 17,860,124 SHARES VALIDLY TENDERED AND NOT WITHDRAWN PRIOR
TO THE EXPIRATION OF THE OFFER.
<PAGE> 2

For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:

1. Offer to Purchase, dated October 16, 1996;

2. Letter of Transmittal to be used by holders of Shares in accepting the
Offer and tendering Shares;

3. Notice of Guaranteed Delivery to be used to accept the Offer if the
certificates evidencing such Shares (the "Share Certificates") are not
immediately available or time will not permit all required documents to reach
IBJ Schroder Bank & Trust Company (the "Depositary") prior to the Expiration
Date (as defined in the Offer to Purchase) or the procedure for book-entry
transfer cannot be completed on a timely basis;

4. A letter to shareholders of the Company from David M. LeVan, Chairman,
President and Chief Executive Officer, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company;

5. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominees, with space
provided for obtaining such clients' instructions with regard to the Offer;

6. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9; and

7. Return envelope addressed to the Depositary.

Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will purchase, by accepting for payment, and will pay
for, an aggregate of 17,860,124 Shares validly tendered prior to the Expiration
Date promptly after the later to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions set forth in "Conditions of the Offer"
of the Offer to Purchase. For purposes of the Offer, Purchaser will be deemed to
have accepted for payment, and thereby purchased, tendered Shares if, as and
when Purchaser gives oral or written notice to the Depositary of Purchaser's
acceptance of such Shares for payment. In all cases, payment for Shares
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) the Share Certificates or timely confirmation of a book-entry
transfer of such Shares, if such procedure is available, into the Depositary's
account at The Depository Trust Company or the Philadelphia Depository Trust
Company pursuant to the procedures set forth in "Procedures for Tendering
Shares" of the Offer to Purchase, (ii) the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, or an Agent's Message (as
defined in "Acceptance for Payment and Payment for Shares" of the Offer to
Purchase) and (iii) any other documents required by the Letter of Transmittal.

Purchaser will not pay any fees or commissions to any broker or dealer or
any other person (other than the Dealer Manager and the Information Agent as
described in "Fees and Expenses" of the Offer to Purchase) in connection with
the solicitation of tenders of Shares pursuant to the Offer. Purchaser will,
however, upon request, reimburse you for customary mailing and handling expenses
incurred by you in forwarding the enclosed materials to your clients.

Purchaser will pay any stock transfer taxes incident to the transfer to it
of validly tendered Shares, except as otherwise provided in Instruction 6 of the
Letter of Transmittal.

YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 15, 1996,
UNLESS THE OFFER IS EXTENDED.

In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Shares should be delivered
or such Shares should be tendered by book-entry transfer, all in accordance with
the Instructions set forth in the Letter of Transmittal and the Offer to
Purchase.

If holders of Shares wish to tender Shares, but it is impracticable for
them to forward their certificates or other required documents prior to the
Expiration Date, a tender may be effected by following the guaranteed delivery
procedures specified under "Procedures for Tendering Shares" of the Offer to
Purchase.

Any inquiries you may have with respect to the Offer should be addressed to
the Dealer Manager or the Information Agent at their respective addresses and
telephone numbers set forth on the back cover page of the Offer to Purchase.

Additional copies of the enclosed materials may be obtained from the
undersigned, at Wasserstein Perella & Co., Inc., telephone (212) 969-2700
(Collect) or by calling the Information Agent, MacKenzie Partners, Inc.,
telephone 1-800-322-2885 (Toll Free), or from brokers, dealers, commercial banks
or trust companies.

Very truly yours,

Wasserstein Perella & Co., Inc.
<PAGE> 3

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF PARENT, PURCHASER, THE DEPOSITARY, THE
INFORMATION AGENT OR THE DEALER MANAGER, OR ANY AFFILIATE OF ANY OF THE
FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.

<PAGE> 1

OFFER TO PURCHASE FOR CASH

AN AGGREGATE OF 17,860,124 SHARES OF
COMMON STOCK
AND
SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)

OF
CONRAIL INC.
AT

$92.50 NET PER SHARE
BY

GREEN ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CSX CORPORATION

THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 15, 1996 UNLESS THE OFFER IS EXTENDED.

October 16, 1996

To Our Clients:

Enclosed for your consideration is an Offer to Purchase, dated October 16,
1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") in connection with
the Offer by Green Acquisition Corp., a Pennsylvania corporation ("Purchaser")
and a wholly owned subsidiary of CSX Corporation, a Virginia corporation
("Parent"), to purchase an aggregate of 17,860,124 shares of (i) common stock,
par value $1.00 per share (the "Common Shares"), and (ii) Series A ESOP
Convertible Junior Preferred Stock, no par value (the "ESOP Preferred Shares"
and, together with the Common Shares, the "Shares"), of Conrail Inc., a
Pennsylvania corporation (the "Company"), including, in each case, the
associated Common Stock Purchase Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of July 19, 1989, between the Company and First
Chicago Trust Company of New York, as Rights Agent (as amended, the "Rights
Agreement") at a price of $92.50 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer. All references
herein to the Common Shares, ESOP Preferred Shares, or Shares shall include the
associated Rights.

Shareholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other documents required by the Letter of Transmittal to the Depositary
prior to the Expiration Date (as defined in "Terms of the Offer; Proration;
Expiration Date" of the Offer to Purchase) or who cannot complete the procedure
for delivery by book-entry transfer to the Depositary's account at a Book-Entry
Transfer Facility (as defined in "Acceptance for Payment and Payment for Common
Shares" of the Offer to Purchase) on a timely basis and who wish to tender their
Shares must do so pursuant to the guaranteed delivery procedure described in
"Procedures for Tendering Shares" of the Offer to Purchase. See Instruction 2 of
the Letter of Transmittal. Delivery of documents to a Book-Entry Transfer
Facility in accordance with the Book-Entry Transfer Facility's procedures does
not constitute delivery to the Depositary.

THE MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD BY
US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE HOLDER OF RECORD
OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY
BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.

We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.

Your attention is invited to the following:

1. The tender price is $92.50 per Share, net to the seller in cash.

2. The Offer, proration period and withdrawal rights will expire at
12:00 Midnight, New York City time, on Friday, November 15, 1996, unless
the Offer is extended.

3. The Offer is being made for an aggregate of 17,860,124 Shares.
<PAGE> 2

4. The Board of Directors of the Company has unanimously approved the
Offer and the Merger (as defined in the Offer to Purchase), has determined
that the Merger Agreement and the transactions contemplated thereby
(including the Offer and the Merger) are in the best interests of the
Company and recommends that shareholders of the Company who desire to
receive cash for their Shares accept the Offer and tender their Shares
pursuant to the Offer.

5. The Offer is conditioned upon, among other things, (a) the receipt
by Purchaser, prior to the expiration of the Offer, of an informal written
opinion in form and substance reasonably satisfactory to Purchaser from the
staff of the Surface Transportation Board (the "STB"), without the
imposition of any conditions unacceptable to Purchaser, that the use of a
voting trust in substantially the form contemplated by the Merger Agreement
is consistent with the policies of the STB against unauthorized
acquisitions of control of a regulated carrier, (b) the receipt by
Purchaser, prior to the expiration of the Offer, of an informal statement
from the Premerger Notification Office of the Federal Trade Commission that
the transactions contemplated by the Offer, the Merger Agreement and the
Company Stock Option Agreement (as such terms are defined in the Offer to
Purchase) are not subject to, or are exempt from, the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), or, in the
absence of the receipt of such informal statement, any applicable waiting
period under the HSR Act shall have expired or been terminated, (c) Parent
and Purchaser obtaining, prior to the expiration of the Offer, sufficient
financing, on terms reasonably acceptable to Parent, to enable consummation
of the Offer and the Merger and (d) there being at least 17,860,124 Shares
validly tendered and not properly withdrawn prior to the expiration of the
Offer.

6. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer.

The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Purchaser is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will make a good faith effort to comply
with such state statute. If, after such good faith effort, Purchaser cannot
comply with such state statute, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by the Dealer Manager or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.

If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified on the instruction form set forth in this
letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
<PAGE> 3

INSTRUCTIONS
WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
AN AGGREGATE OF 17,860,124 SHARES OF
COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
OF CONRAIL INC.

The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated October 16, 1996, and the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"), in
connection with the offer by Green Acquisition Corp., a Pennsylvania corporation
("Purchaser") and a wholly owned subsidiary of CSX Corporation, a Virginia
corporation ("Parent"), to purchase an aggregate of 17,860,124 shares of (i)
common stock, par value $1.00 per share (the "Common Shares") and (ii) Series A
ESOP Convertible Junior Preferred Stock, no par value (the "ESOP Preferred
Shares" and, together with the Common Shares, the "Shares"), of Conrail Inc., a
Pennsylvania corporation (the "Company") including, in each case, the associated
Common Stock Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement, dated July 19, 1989, between the Company and First Chicago Trust
Company of New York, as Rights Agent (as the "Rights Agreement"). All references
herein to the Common Shares, ESOP Preferred Shares or Shares shall include the
associated Rights.

This will instruct you to tender to Purchaser the number of Shares
indicated below (or, if no number is indicated in either appropriate space
below, all Shares) held by you for the account of the undersigned, upon the
terms and subject to the conditions set forth in the Offer.

<TABLE>
<S> <C>
Number of Shares to be Tendered*: SIGN HERE
Shares
Account Number: SIGNATURE(S)
Dated: , 1996 PLEASE TYPE OR PRINT NAME(S) HERE
PLEASE TYPE OR PRINT ADDRESS(ES) HERE
AREA CODE AND TELEPHONE NUMBER
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY
NUMBER(S)
</TABLE>

- ---------------

* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.

<PAGE> 1

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<CAPTION>
------------------------------------------------------------
GIVE THE TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, either
person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the
minor is the only
contributor, the
minor(1)
6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent person(3)
minor, or incompetent person
7. a. The usual revocable savings trust The grantor-
account (grantor is also trustee) trustee(1)
b. So-called trust account that is not The actual owner(1)
a legal or valid trust under State
law
8. Sole proprietorship account The owner(4)

<CAPTION>
------------------------------------------------------------
GIVE THE TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
------------------------------------------------------------
<S> <C>
9. A valid trust, estate or pension trust The Legal entity (Do
not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name The partnership
of the business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or
prison) that receives agricultural
program payments
</TABLE>

- ------------------------------------------------------------
- ------------------------------------------------------------

(1) List first and circle the name of the person whose number you furnish.

(2) Circle the minor's name and furnish the minor's social security number.

(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.

(4) Show the name of the owner.

(5) List first and circle the name of the legal trust, estate, or pension trust.

NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2

OBTAINING A NUMBER

If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.

PAYEES EXEMPT FROM BACKUP WITHHOLDING

Payees specifically exempted from backup withholding on ALL payments include the
following:

- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.

Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:

- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.

Payments of interest generally subject to backup withholding include the
following:

- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.

Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.

Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.

PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file a tax return. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.

PENALTIES

(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.

(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 20% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.

(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- if you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.

(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE

<PAGE> 1
EXHIBIT (a)(7)

CONTACTS: CSX Corporation Conrail Inc.
Thomas E. Hoppin Craig R. MacQueen
(804) 782-1450 (215) 209-4594

FOR IMMEDIATE RELEASE

CSX AND CONRAIL TO COMBINE
IN PRO-COMPETITIVE, STRATEGIC MERGER

RICHMOND AND PHILADELPHIA -- Oct. 15, 1996 -- CSX Corporation (CSX)
(NYSE: CSX) and Conrail Inc. (Conrail) (NYSE: CRR), leading transportation
companies with complementary eastern rail routes, announced today they have
agreed to a strategic merger. The merger agreement calls for Conrail
shareholders to receive a combination of cash and CSX shares valued at
approximately $8.4 billion, or $92.50 per Conrail share, based on the recent
trading prices for CSX's common stock. The parties will propose a schedule that
contemplates completion of the transaction in late 1997.

The merger will create the leading freight transportation and logistics
company in the world with annual revenues of more than $14 billion, offering
domestic and international customers rail, container-shipping, barge,
intermodal and contract logistics services. The newly created transportation
system will offer much more extensive single-line rail service opportunities to
shippers and receivers in 22 states and will have a 29,645 mile system,
covering a territory from Chicago, Boston and New York to Miami and New
Orleans.

John W. Snow, chairman, president and chief executive officer of CSX,
said, "This merger of equals represents a strategic combination that will
provide excellent value for our customers and our shareholders, and is
consistent with sound public policy. This is the right merger at the right time
between the right companies.

"This dynamic combination is a 'win-win' transaction for the
shareholders of both companies, our customers and the communities we both
serve. We will have the financial strength to make substantial infrastructure
investments and service improvements. The transaction will have an immediate,
positive effect on cash flow and will be accretive to earnings per share in the
second year. Together, the companies will have stronger revenue, cash flow and
earnings growth than they would have had on their own. The merged company will
be the premier freight transportation company in North America and, as such, we
should command a premium price/earnings multiple -- thus creating greater value
for our shareholders," Snow said.

<PAGE> 2

"Our new company will provide new single-line rail service to major
markets east of the Mississippi and will greatly benefit shippers, the
communities served and the nation as a whole. The merger will extend our
customers' market reach, speeding service and enhancing their competitive
positions at home and abroad. It makes the most efficient use of existing
transportation infrastructure, thereby lowering the total cost of transporting
American products," Snow said.

"Moreover," Snow said, "this transaction offers an opportunity to
improve passenger safety and service and to begin to address the need to
separate freight and passenger service in high-density commuter and Amtrak
corridors, including Philadelphia, Baltimore and Washington, D.C. We hope to
consolidate much of our freight service on the CSX line between Philadelphia
and Washington, thereby reducing freight operations on Amtrak's northeast
corridor south of Philadelphia. Additionally, the contemplated ability to
reroute some freight trains from other routes should free up capacity on other
CSX lines, such as the Harper's Ferry-Washington line used by Maryland commuter
trains. Such improvements can be addressed only through this transaction."

"We are delighted to be merging with our ideal partner," said David M.
LeVan, Conrail's chairman, president, and chief executive officer. "Conrail
today is a strong railroad, but recent changes in industry structure and in
U.S. patterns of distribution require a broader market reach. The new company
we are creating will be more competitive with trucks and other modes of
transportation. Where new, single-line services are possible, we will provide
our customers one point of contact, and eliminate the costs and delays now
layered over every step in the service process.

"Our customers will enjoy significantly improved, more competitive
freight transportation service that will result in greater service innovation
and competitive pricing. The merger will allow us to build on the coal,
merchandise, intermodal and logistics strengths of both companies. Importantly,
our companies share an uncompromising commitment to safety, operating
excellence and superior service and have compatible cultures that will expedite
realization of the benefits of the merger," LeVan said.

Under the terms of the transaction, 40 percent of the fully diluted
shares of Conrail's common stock and ESOP preferred stock will be acquired for
cash at $92.50 per share, and the remaining 60 percent will be acquired for
stock at an exchange ratio of 1.85619 CSX shares for each Conrail share.

CSX will promptly commence a cash tender offer at $92.50 per Conrail
share for an aggregate of about 17.9 million shares of Conrail common stock and
ESOP preferred stock, or approximately 19.9 percent of the Conrail outstanding
voting stock. The offer will be subject to the usual conditions, including
Surface Transportation Board (STB) informal approval of a customary voting
trust and obtaining the necessary financing.

2
<PAGE> 3
A Pennsylvania statute effectively precludes CSX from acquiring 20
percent or more of Conrail's voting shares in the tender offer, unless the
Conrail shareholders vote to opt-out of the statute by a majority of the Conrail
shares voting at a meeting. A meeting to vote on the opt-out is expected to be
held prior to the expiration of the tender offer. Following approval, the Merger
Agreement effectively provides that an aggregate of 40 percent of the fully
diluted shares will be purchased for cash in this tender offer or in another
offer that may be made. If approval is not obtained, the cash not paid in the
offer would be paid in the subsequent merger.

The companies also have granted each other an option to purchase 19.9
percent of the other's common shares under certain conditions. The 19.9 percent
option held by CSX also would be exercisable if it purchases shares in the
offer.

Following STB approval of the merger, and after other conditions have
been met, the companies will complete their merger through an expected tax-free
exchange of stock at an exchange ratio of 1.85619 CSX shares for each remaining
Conrail share. The application for STB approval of the transaction is expected
to be filed in early 1997, and the parties will propose a schedule that
contemplates a decision toward that year's end. Pending STB review, the shares
purchased will be placed in the voting trust.

Total benefits from the merger will be about $550 million annually,
based on the realization of cost savings from operating efficiencies, facility
consolidations, overhead rationalization, and other activities, and new traffic
volumes earned by enhanced service. The combined company will make investments
to support revenue growth, and will create a streamlined organization that
incorporates the best of both companies while combining facilities and
realizing economies of scale. The companies stated they expect there will be
some job losses as a result of consolidations and the elimination of
redundancies, but these will be offset over time by new employment
opportunities resulting from growth of the business.

The merger will yield new, competitive services that neither railroad
can now offer on its own. The new system will have faster schedules, more
frequent and reliable service, with shorter routes and improved equipment
supply and utilization. The new system will create major, new single-line
service routes between north-south markets. Moreover, the creation of a
single-line route along the Atlantic corridor will provide a much needed,
cost-effective and environmentally superior intermodal alternative to truck
traffic now being hauled over I-95 and other north-south interstate highways.
Many shippers will be attracted from the heavily congested highways and urban
centers by the quality of service offered by the combined company.

"The ability to compete more effectively for truck traffic is an
exciting growth opportunity that offers significant public benefits including
the reduction of highway traffic, improved environmental conditions and greater
safety," LeVan said.

3
<PAGE> 4
In rail corridors where CSX and Conrail both have routes, there will be
significant operating benefits and, in many cases, major reductions in length
of haul. Where their routes are end to end, there will be extensive new
single-line service for shippers. Integrating the entire network, moreover,
will produce significant additional benefits in traffic handling and marketing,
and in facility and equipment utilization.

As a result of these many service and efficiency benefits, competition
will be enhanced. Where CSX and Conrail are now the only rail competitors, the
merger partners are willing to agree to grant competitive access. There,
shippers will continue to enjoy two-railroad competition, and will receive the
competitive benefits of a more efficient CSX/Conrail system and single-line
routes to many new destinations.

Snow will become chairman and chief executive officer of the new holding
company. LeVan will become the new holding company's president and chief
operating officer. The board of directors will be composed of an equal number of
members from the boards of CSX and Conrail. Upon consummation of the
transaction, LeVan will be president and chief executive officer of the two
railroads. LeVan will succeed Snow as chief executive officer of the new company
two years after consummation of the merger, and Snow will serve as chairman of
the corporation for the two years thereafter.

The new holding company will be headquartered in Philadelphia, with a
significant presence in Richmond. Operating headquarters for the two railroads
will remain in Philadelphia and Jacksonville for the foreseeable future. A new
name for the combined company will be announced at a later time.

The transaction has been unanimously approved by the boards of
directors of both companies. It is subject to the approval of shareholders of
both companies and STB approval. Under the terms of the agreement, CSX or
Conrail is each entitled, under certain circumstances, to receive a termination
fee of $300 million from the other in the event the merger is not completed
because of a competing offer for the other company.

CSX is being advised on the transaction by Wasserstein Perella & Co.,
which has also provided a fairness opinion. Salomon Brothers Inc. has also been
retained to advise CSX on post-transaction financing matters. Conrail is being
advised by and has received fairness opinions from Lazard Freres & Co. LLC and
Morgan Stanley Incorporated.

CSX Corporation, headquartered in Richmond, VA, is an International
transportation company offering a variety of rail, container-shipping,
intermodal, trucking, barge, and contract logistics services.

4
<PAGE> 5

Conrail, with corporate headquarters in Philadelphia, PA, operates an
11,000-mile rail freight network in 12 northeastern and midwestern states, the
District of Columbia, and the Province of Quebec.

Additional information regarding this announcement can be found on the
companies' Web sites on the Internet. CSX's home page can be reached at
http://www.CSX.com. Conrail's home page can be reached at
http://www.CONRAIL.com.

NOTE TO BROADCAST EDITORS:

A live satellite feed of B-roll from both CSX and Conrail will be available:

Tuesday, October 15 from 10:00 a.m. to 10:30 a.m. (EDT) -- coordinates are
C-Band Telstar 401, Transponder 5

Tuesday, October 15 from 1:30 p.m. to 2:00 p.m. (EDT) -- coordinates are C-Band
Telstar 402, Transponder 18

# # #

<PAGE> 1

EXHIBIT (a)(8)

This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase
dated October 16, 1996 and the related Letter of Transmittal and is
being made to all holders of Shares. The Offer is not being made
to (nor will tenders be accepted from or on behalf of) holders
of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction. In those jurisdictions
where securities, blue sky or other laws require the Offer
to be made by a licensed broker or dealer, the Offer
shall be deemed to be made on behalf of Green
Acquisition Corp. by Wasserstein Perella &
Co., Inc. or one or more registered
brokers or dealers licensed under
the laws of of such jurisdiction.

Notice of Offer to Purchase for Cash
An Aggregate of 17,860,124 Shares
of Common Stock

and

Series A ESOP Convertible Junior Preferred Stock
(including, in each case, the associated Common Stock Purchase Rights)

Conrail Inc.

$92.50 Net Per Share

Green Acquisition Corp.,
a wholly owned subsidiary of

CSX Corporation

Green Acquisition Corp. ("Purchaser"), a Pennsylvania corporation and a
wholly owned subsidiary of CSX Corporation, a Virginia corporation ("Parent"),
hereby offers to purchase an aggregate of 17,860,124 shares of (i) common stock,
par value $1.00 per share (the "Common Shares"), and (ii) Series A ESOP
Convertible Junior Preferred Stock, without par value (the "ESOP Preferred
Shares" and, together with the Common Shares, the "Shares"), of Conrail Inc., a
Pennsylvania corporation (the "Company"), including, in each case, the
associated Common Stock Purchase Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of July 19, 1989, between the Company and First
Chicago Trust Company of New York, as Rights Agent (as amended, the "Rights
Agreement"), at a price of $92.50 per Share, net to the seller in cash, without
interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase dated October 16, 1996 (the "Offer
to Purchase") and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer"). Unless the context otherwise
requires, all references to Common Shares, ESOP Preferred Shares or Shares shall
include the associated Rights, and all references to the Rights shall include
the benefits that may enure to holders of the Rights pursuant to the Rights
Agreement, including the right to receive any payment due upon redemption of the
rights.
If, prior to the expiration of the Offer, the shareholders of the Company
approve an

- 1 -
<PAGE> 2
amendment to the Company's Articles of Incorporation to opt out of the
provisions of Chapter 25, Subchapter E of the Pennsylvania Business Corporation
Law (related to "control transactions"), Purchaser may, depending on the
circumstances, increase the number of Shares that will be accepted in the Offer
to 40% of the outstanding Shares on a fully diluted basis as of October 14,
1996 (excluding Shares issuable pursuant to the Company Stock Option Agreement
(as defined in the Offer to Purchase)). The Company has agreed in the Merger
Agreement (as defined below) to seek such approval as soon as practicable after
execution of the Merger Agreement.

THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 15, 1996, UNLESS THE
OFFER IS EXTENDED.

The Offer is conditioned upon, among other things, prior to the expiration
of the Offer, (1) the receipt by Purchaser of an informal written opinion in
form and substance reasonably satisfactory to Purchaser from the staff of the
Surface Transportation Board (the "STB"), without the imposition of any
conditions unacceptable to Purchaser, that the use of a Voting Trust in
substantially the form contemplated by the Merger Agreement is consistent with
the policies of the STB against unauthorized acquisitions of control of a
regulated carrier, (2) the receipt by Purchaser of an informal statement from
the Premerger Notification Office of the Federal Trade Commission that the
transactions contemplated by the Offer, the Merger Agreement and the Company
Stock Option Agreement are not subject to, or are exempt from, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), or, in the absence of the receipt of such informal statement, any
applicable waiting period under the HSR Act shall have expired or been
terminated, (3) Parent and Purchaser having obtained, on terms reasonably
acceptable to Parent, sufficient financing to enable consummation of the Offer
and the Merger and (4) there being at least 17,860,124 Shares validly tendered
and not withdrawn.
The Board of Directors of the Company has unanimously approved the Offer
and the Merger, determined that the Merger Agreement and the transactions
contemplated thereby (including the Offer and the Merger) are in the best
interests of the Company and recommends that shareholders of the Company who
desire to receive cash for their Shares accept the Offer and tender their Shares
pursuant to the Offer.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of October 14, 1996 (the "Merger Agreement"), by and among the Company,
Parent and Purchaser. The Merger Agreement provides, among other things, that
subject to the satisfaction or waiver of certain conditions set forth in the
Merger Agreement (including approval of the Merger by the STB), the Company will
merge (the "Merger") with and into Purchaser, with Purchaser continuing as the
surviving corporation. In the Merger, each outstanding Share (other than Shares
held in the treasury of the Company or owned by Parent, Purchaser or any other
wholly owned subsidiary of Parent or the Company) will be converted, at the
election of the holder of Shares,

- 2 -
<PAGE> 3
subject to certain terms and conditions, into the right to receive $92.50 in
cash, 1.85619 shares of common stock, par value $1.00 per share ("Parent Common
Stock"), of Parent, or a combination of such cash and shares of Parent Common
Stock. The Merger Agreement provides that the aggregate number of Shares to be
converted into Parent Common Stock pursuant to the Merger shall be equal as
nearly as practicable to 60% of all outstanding Shares (excluding Shares
outstanding pursuant to the Company Stock Option Agreement), and that the
aggregate number of Shares to be converted into the right to receive $92.50 in
cash per Share pursuant to the Merger, together with the Shares acquired by
Purchaser (other than pursuant to the Company Stock Option Agreement), shall be
equal as nearly as practicable to 40% of such outstanding Shares.
Simultaneously with the execution of the Merger Agreement, Parent and the
Company also entered into the Parent Stock Option Agreement (as defined in the
Offer to Purchase) and the Company Stock Option Agreement, each of which is
described in Section 13 of the Offer to Purchase.
Purchaser expressly reserves the right, in its sole judgment and subject to
the terms of the Merger Agreement, at any time and from time to time and
regardless of whether any of the events set forth in Section 15 of the Offer to
Purchase shall have occurred or shall have been determined by Purchaser to have
occurred, (i) to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and the payment for, any Shares, by
giving oral or written notice of such extension to the Depositary (as defined in
the Offer to Purchase) and (ii) to amend the Offer in any respect by giving oral
or written notice of such amendment to the Depositary. Any such extension or
amendment will be followed as promptly as practicable by a public announcement
thereof, such announcement in the case of an extension, to be issued not later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date (as defined in the Offer to Purchase).
During any such extension, all Shares previously tendered and not withdrawn will
remain subject to the Offer, subject to the right of a tendering shareholder to
withdraw such shareholder's Shares.
Purchaser will, upon the terms and subject to the conditions of the Offer,
purchase an aggregate of 17,860,124 Shares on a pro rata basis (with adjustments
to avoid purchase of fractional Shares) based upon the number of Shares properly
tendered on or prior to the Expiration Date and not withdrawn. Due to the
difficulty of determining the precise number of Shares properly tendered and not
withdrawn, if proration is required, Purchaser does not expect to announce the
final results of proration or pay for Shares until at least five New York Stock
Exchange trading days after the Expiration Date. Preliminary results of
proration will be announced by press release as promptly as practicable after
the Expiration Date. Holders of Shares may obtain such preliminary information
when it becomes available from the Information Agent and may be able to obtain
such information from their brokers.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's

- 3 -
<PAGE> 4
acceptance of such Shares for payment pursuant to the Offer. In all cases, upon
the terms and subject to the conditions of the Offer, payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for tendering
shareholders for the purpose of receiving payment from Purchaser and
transmitting payment to validly tendering shareholders. Under no circumstances
will interest on the purchase price for Shares be paid by Purchaser by reason
of any delay in making such payment. In all cases, payment for Shares purchased
pursuant to the Offer will be made only after timely receipt by the Depositary
of (a) certificates for such Shares ("Certificates") or a book-entry
confirmation of the book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company or the Philadelphia Depository Trust
Company (collectively, the "Book-Entry Transfer Facilities"), pursuant to the
procedures set forth in Section 3 of the Offer to Purchase, (b) the Letter of
Transmittal (or facsimile thereof) properly completed and duly executed, with
any required signature guarantees, or an Agent's Message (as defined in the
Offer to Purchase) in connection with a book-entry transfer, and (c) any other
documents required by the Letter of Transmittal.
If, for any reason whatsoever, acceptance for payment of any Shares tendered
pursuant to the Offer is delayed, or if Purchaser is unable to accept
for payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to Purchaser's rights set forth in the Offer to Purchase, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares and
such Shares may not be withdrawn except to the extent that the tendering
shareholder is entitled to and duly exercises withdrawal rights as described in
Section 4 of the Offer to Purchase. Any such delay will be followed by an
extension of the Offer to the extent required by law.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer (including proration due to tenders of
more than 17,860,124 Shares), or if Share Certificates are submitted evidencing
more Shares than are tendered, Share Certificates evidencing unpurchased Shares
will be returned, without expense to the tendering shareholder (or, in the case
of Shares tendered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3,
such Shares will be credited to an account maintained at such Book-Entry
Transfer Facility), as promptly as practicable following the expiration or
termination of the Offer.
Except as otherwise provided in Section 4 of the Offer to Purchase, tenders
of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant
to the Offer may be withdrawn at any time prior to 12:00 Midnight, New York City
time, on Friday, November 15, 1996 (or if Purchaser shall have extended the
period of time for which the Offer is open, at the latest time and date at which
the Offer, as so extended by Purchaser, shall expire) and unless theretofore
accepted for payment and paid for by Purchaser pursuant to the Offer, may also
be withdrawn at any time after December 14, 1996. In order for a withdrawal to
be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the

- 4 -
<PAGE> 5
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn, and,
if Certificates for Shares have been tendered, the name of the registered
holder of the Shares as set forth in the tendered Certificate, if different
from that of the person who tendered such Shares. If Certificates for Shares to
be withdrawn have been delivered or otherwise identified to the Depositary,
then prior to the physical release of such Certificates, the serial numbers
shown on such Certificates evidencing the Shares to be withdrawn must be
submitted to the Depositary and the signature on the notice of withdrawal must
be guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity that is a member in good standing of the Securities
Transfer Agent's Medallion Program (an "Eligible Institution"), unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedures for book-entry transfer set forth
in Section 3 of the Offer to Purchase, any notice of withdrawal must also
specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures. Withdrawal of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will be deemed
not to be validly tendered for purposes of the Offer. Withdrawn Shares may,
however, be retendered by repeating one of the procedures set forth in Section
3 of the Offer to Purchase at any time before the Expiration Date. Purchaser,
in its sole judgment, will determine all questions as to the form and validity
(including time of receipt) of notices of withdrawal, and such determination
will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Purchaser with the Company's shareholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the shareholder
list, or, if applicable, who are listed as participants in a clearing agency's
security position listing for subsequent transmittal to beneficial owners of
Shares.
The Offer to Purchase and the related Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance or for additional copies of the Offer
to Purchase, the Letter of Transmittal or other tender offer materials may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers as set forth below, and copies will be furnished
promptly at Purchaser's expense. No fees or commissions will be paid to brokers,
dealers or other

- 5 -

<PAGE> 6
persons (other than the Information Agent and the Dealer Manager) for
soliciting tenders of Shares pursuant to the Offer.

The Information Agent for the Offer is:

MACKENZIE PARTNERS, INC.

156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)

CALL TOLL-FREE (800) 322-2885

The Dealer Manager for the Offer is:

WASSERSTEIN PERELLA & CO., INC.

31 West 52nd Street
New York, New York 10019
(212) 969-2700 (Call Collect)

October 16, 1996

- 6 -

<PAGE> 1
EXHIBIT (c)(1)
EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

by and among

CONRAIL INC.,

a Pennsylvania corporation,

GREEN ACQUISITION CORP.,

a Pennsylvania corporation,

and

CSX CORPORATION,

a Virginia corporation,

Dated as of October 14, 1996.
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----

<S> <C>

ARTICLE I

THE OFFER AND THE MERGER . . . . . . . . . . .. . . . . . . . . . . . . . . . 2

SECTION 1.1. The Offer . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2. Green Actions . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.3. The Merger . . . . . . . . . . . . . . . . . . . . . . . 6
section 1.4. Closing . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 1.5. Effective Time . . . . . . . . . . . . . . . . . . . . . 6
SECTION 1.6. Effects of the Merger . . . . . . . . . . . . . . . . . 7
SECTION 1.7. Articles of Incorporation and By-laws;
Directors and Officers . . . . . . . . . . . . . . . . 7
SECTION 1.8. Boards, Committees and Officers. . . . . . . . . . . . . 7
SECTION 1.9. Voting Trust . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE II

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES . . . . . . . . . . . .. . . 8

SECTION 2.1. Conversion of Shares . . . . . . . . . . . . . . . . . . 8
SECTION 2.2. Election Procedures . . . . . . . . . . . . . . . . . . . 9
SECTION 2.3. Issuance of White Common Stock
and Payment of Cash; Proration . . . . . . . . . . . . 11
SECTION 2.4. Issuance of White Common Stock . . . . . . . . . . . . . 14
SECTION 2.5. Payment of Cash Consideration . . . . . . . . . . . . . . 14
SECTION 2.6. Stock Transfer Books . . . . . . . . . . . . . . . . . . 15
SECTION 2.7. No Dissenter's Rights . . . . . . . . . . . . . . . . . . 15
SECTION 2.8. No Further Ownership Rights . . . . . . . . . . . . . . . 15
SECTION 2.9. Termination of Exchange Trust . . . . . . . . . . . . . . 15
SECTION 2.10. No Liability . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.11. Lost Certificates . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.12. Withholding Rights . . . . . . . . . . . . . . . . . . . 16

ARTICLE III

REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . 17

SECTION 3.1. Representations and Warranties of Green. . . . . . . . . . 17
SECTION 3.2. Representations and Warranties of White
and Tender Sub . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
<PAGE> 3

<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE IV

COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . . 36

SECTION 4.1. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.2. No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . 40

ARTICLE V

ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

SECTION 5.1. Preparation of the Form S-4 and the Joint
Proxy Statement; Shareholders Meetings. . . . . . . . . . . . . 43
SECTION 5.2. Letters of Accountants . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.3. Tax-Free Reorganization . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.4. Access to Information; Confidentiality . . . . . . . . . . . . . 46
SECTION 5.5. Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.6. Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.7. Certain Employee Matters . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.8. Indemnification, Exculpation and Insurance . . . . . . . . . . . 51
SECTION 5.9. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 5.10. Public Announcements . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 5.11. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.12. NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.13. Shareholder Litigation . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.14. Green Rights Agreement . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.15. White Rights Agreement . . . . . . . . . . . . . . . . . . . . . 55
SECTION 5.16. Corporate Headquarters . . . . . . . . . . . . . . . . . . . . . 55
SECTION 5.17. Registration Rights . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 5.18. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

ARTICLE VI

CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

SECTION 6.1. Conditions to Each Party's Obligation To
Effect the Merger . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.2. Conditions to Obligations of White . . . . . . . . . . . . . . . 57
SECTION 6.3. Conditions to Obligation of Green . . . . . . . . . . . . . . . . 58
SECTION 6.4. Frustration of Closing Conditions . . . . . . . . . . . . . . . . 59

ARTICLE VII

TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . 59

SECTION 7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.2. Effect of Termination. . . . . . . . . . . . . . . . . . . . . . 61
</TABLE>

-ii-
<PAGE> 4

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 7.3. Amendment. . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.4. Extension; Waiver. . . . . . . . . . . . . . . . . . . . 62
SECTION 7.5. Procedure for Termination, Amendment,
Extension or Waiver. . . . . . . . . . . . . . . . . . 62

ARTICLE VIII

GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

SECTION 8.1. Nonsurvival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.3. Definitions . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.4. Interpretation . . . . . . . . . . . . . . . . . . . . . 64
SECTION 8.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.6. Entire Agreement; No Third-Party
Beneficiaries . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.7. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.8. Assignment . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.9. ENFORCEMENT. . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.10. Headings . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.11. Severability . . . . . . . . . . . . . . . . . . . . . . 66

EXHIBIT A Corporate Governance . . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Affiliate Letter . . . . . . . . . . . . . . B-1
EXHIBIT C Form of Amended and Restated
Articles of Incorporation . . . . . . . . . . . . . . C-1
EXHIBIT D Conditions to the Offer . . . . . . . . . . . . . . . D-1
EXHIBIT E Form of Voting Trust Agreement . . . . . . . . . . . E-1
EXHIBIT F Form of Conrail Tax Letter . . . . . . . . . . . . . F-1
EXHIBIT G Form of CSX Tax Letter . . . . . . . . . . . . . . . G-1
</TABLE>

-iii-
<PAGE> 5

DEFINED TERMS

<TABLE>
<CAPTION>
Page Section
---- -------
<S> <C> <C>
Acquisition Agreement 41 Section 4.2
Adjusted Option 49 Section 5.6
affiliate 63 Section 8.3
Agreement 1 Preamble
Amended Green Articles 45 Section 5.1
Amended White Articles 45 Section 5.1
Approval Date 41 Section 4.2
Articles of Merger 6 Section 1.5
Average White Share Price 14 Section 2.3
Cash Election 9 Section 2.2
Cash Portion G-2 Exhibit G
Certificates 9 Section 2.1
Closing 6 Section 1.4
Closing Date 6 Section 1.4
Code 1 Recitals
Company F-1 Exhibit F
Company Capital Stock F-1 Exhibit F
Company Common Stock F-1 Exhibit F
Confidentiality Agreement 47 Section 5.4
Conversion Ratio 11 Section 2.3
disposition F-3 Exhibit F
Effective Time 6 Section 1.5
Election 9 Section 2.2
Election Deadline 10 Section 2.2
Employee Benefit Plans
Environmental Laws 22 Section 3.1
ESOP Preferred Stock F-1 Exhibit F
Exchange Act 2 Section 1.1
Exchange Agent 10 Section 2.2
Exchange Trust 14 Section 2.4
Form S-4 22 Section 3.1
Form of Election 9 Section 2.2
Governmental Entity 20 Section 3.1
Green 1 Preamble
Green Advisors 6 Section 1.2
Green Articles 45 Section 5.1
Green Benefit Plans 24 Section 3.1
Green Common Stock 1 Recitals
Green Disclosure Schedule 17 Section 3.1
</TABLE>

-iv-

<PAGE> 6

<TABLE>
<S> <C> <C>
Green Employee Stock Options 18 Section 3.1
Green ESOP Preferred Stock 1 Recitals
Green Filed SEC Documents 23 Section 3.1
Green Fairness Opinions 6 Section 1.2
Green Filed SEC Documents 23 Section 3.1
Green Material Breach 60 Section 7.1
Green Merger Shareholder Approval 25 Section 3.1
Green Merger Shareholders Meeting 44 Section 5.1
Green Option 1 Recitals
Green Pennsylvania Proxy Statement 20 Section 3.1
Green Pennsylvania Shareholder
Approval 25 Section 3.1
Green Pennsylvania Shareholders
Meeting 43 Section 5.1
Green Permits 24 Section 3.1
Green Preferred Stock 18 Section 3.1
Green Rights 19 Section 3.1
Green Rights Agreement 19 Section 3.1
Green Rights Plan Amendment 26 Section 3.1
Green SEC Documents 21 Section 3.1
Green Shareholder Approvals 25 Section 3.1
Green Shareholders Meetings 44 Section 5.1
Green Stock Option Agreement 1 Recitals
Green Stock Plans 18 Section 3.1
GSOP Stock F-2 Exhibit F
HSR Act 20 Section 3.1
issuing party 55 Section 5.17
Joint Proxy Statement 20 Section 3.1
key employee 24 Section 3.1
knowledge 64 Section 8.3
Liens 18 Section 3.1
material 64 Section 8.3
material adverse change 63 Section 8.3
material adverse effect 63 Section 8.3
materially 64 Section 8.3
Merger 6 Section 1.3
Merger Agreement F-1 Exhibit F
Non-Electing Shares 13 Section 2.3
NYSE 21 Section 3.1
Offer 2 Section 1.1
</TABLE>

-v-
<PAGE> 7

<TABLE>
<S> <C> <C>
Offer Price 2 Section 1.1
Offer to Purchase 2 Section 1.1
Offer Documents 3 Section 1.1
Option Agreements 2 Recitals
Parent G-1 Exhibit G
Parent Common Stock F-2 Exhibit F
Pennsylvania Law 6 Section 1.3
Per Share Cash Consideration 9 Section 2.2
Per Share Merger Consideration 9 Section 2.1
person 64 Section 8.3
Proxy Statements 21 Section 3.1
qualified stock options 49 Section 5.6
Railroad CEO A-1 Exhibit A
requesting party 55 Section 5.17
Restraints 56 Section 6.1
Rule 145 B-1 Exhibit B
Schedule 14D-1 3 Section 1.1
Schedule 14D-9 5 Section 1.2
SEC 3 Section 1.1
Second Offer 4 Section 1.1
Securities B-4 Annex I to
Exh. B
Securities Act 21 Section 3.1
Significant Subsidiary 17 Section 3.1
significant subsidiary 17 Section 3.1
STB 15 Section 2.7
Stock Election 9 Section 2.2
Sub F-1 Exhibit F
subsidiary 64 Section 8.3
Superior Proposal 42 Section 4.2
Surviving Corporation 6 Section 1.3
Takeover Proposal 41 Section 4.2
Tax Opinions 46 Section 5.3
Tendered Shares 11 Section 2.3
Tender Sub 1 Preamble
Termination Fee 52 Section 5.9
Transfer Taxes 53 Section 5.9
Voting Trust 8 Section 1.9
White 1 Preamble
White Articles 45 Section 5.1
</TABLE>

-vi-
<PAGE> 8

<TABLE>
<S> <C> <C>
White Benefit Plans 34 Section 3.2
White Common Stock 2 Recitals
White Disclosure Schedule 27 Section 3.2
White Employee Stock Options 28 Section 3.2
White Filed SEC Documents 32 Section 3.2
White Material Breach 60 Section 7.1
White Option 2 Recitals
White Permits 33 Section 3.2
White Preferred Stock 27 Section 3.2
White Rights 29 Section 3.2
White Rights Agreement 29 Section 3.2
White Rights Plan Amendment 35 Section 3.2
White SEC Documents 31 Section 3.2
White Securities B-1 Exhibit B
White Shareholder Approval 35 Section 3.2
White Shareholders Meeting 44 Section 5.1
White Stock Option Agreement 2 Recitals
White Stock Plans 28 Section 3.2
</TABLE>

-vii-
<PAGE> 9

AGREEMENT AND PLAN OF MERGER, dated as of October 14, 1996 (this
"Agreement"), by and among CONRAIL INC., a Pennsylvania corporation ("Green"),
GREEN ACQUISITION CORP., a Pennsylvania corporation and a wholly owned
subsidiary of White ("Tender Sub"), and CSX CORPORATION, a Virginia corporation
("White").

WITNESSETH:

WHEREAS, the Board of Directors of Green has approved, and deems
it advisable and in the best interests of Green to consummate, the business
combination contemplated hereby upon the terms and subject to the conditions
set forth herein;

WHEREAS, the respective Boards of Directors of Tender Sub and
White have approved, and deem it advisable and in the best interests of their
respective shareholders to consummate, the business combination contemplated
hereby upon the terms and subject to the conditions set forth herein;

WHEREAS, it is intended that the business combination
contemplated hereby be accomplished by Tender Sub commencing a cash tender
offer for shares of common stock, par value $1.00 per share, of Green
(including the associated Green Rights, "Green Common Stock"), and for shares
of Series A ESOP Convertible Junior Preferred Stock, without par value, of
Green (including the associated Green Rights, "Green ESOP Preferred Stock"), to
be followed by a merger of Green with and into Tender Sub, with Tender Sub
being the surviving corporation, upon the terms and subject to the conditions
set forth herein;

WHEREAS, Green, Tender Sub and White desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated hereby and also to prescribe various conditions to
the transactions contemplated hereby;

WHEREAS, for United States federal income tax purposes, it is
intended that the Merger provided for herein shall qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the rules and regulations

<PAGE> 10

promulgated thereunder, and this Agreement is intended to be and is adopted as
a plan of reorganization within the meaning of Section 368 of the Code;

WHEREAS, concurrently with the execution and delivery of this
Agreement, Green and White are entering into a stock option agreement (the
"Green Stock Option Agreement"), pursuant to which White shall be granted the
option (the "Green Option") to purchase shares of Green Common Stock, upon the
terms and subject to the conditions set forth therein; and

WHEREAS, concurrently with the execution and delivery of this
Agreement, White and Green are entering into a stock option agreement (the
"White Stock Option Agreement", and, together with the Green Stock Option
Agreement, the "Option Agreements"), pursuant to which Green shall be granted
the option (the "White Option") to purchase shares of common stock, par value
$1.00 per share, of White ("White Common Stock"), upon the terms and subject to
the conditions set forth therein.

NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the parties,
intending to be legally bound, agree as follows:

ARTICLE I

THE OFFER AND THE MERGER

SECTION 1.1. The Offer. (a) As promptly as practicable (but in no
event later than five business days after the public announcement of the
execution hereof), Tender Sub shall commence (within the meaning of Rule 14d-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") an
offer (the "Offer") to purchase for cash an aggregate of 17,860,124 shares of
Green Common Stock and Green ESOP Preferred Stock at a price of $92.50 per
share, net to the seller in cash (such price, or such higher price per share as
may be paid in the Offer, being referred to herein as the "Offer Price"),
subject to the conditions set forth in Exhibit D hereto. Tender Sub shall, on
the terms and subject to the prior satisfaction or waiver of the conditions of
the Offer, accept for payment and pay for shares of Green Common Stock and
Green ESOP Preferred Stock tendered as soon as practicable after the later of
the satisfaction of the

-1-
<PAGE> 11

conditions to the Offer and the expiration of the Offer; provided, however,
that no such payment shall be made until after calculation of proration;
provided further that immediately upon the acceptance for payment of and
payment for shares of Green ESOP Preferred Stock pursuant to the Offer, such
shares shall be automatically converted on a one-for-one basis into shares of
Green Common Stock in accordance with the terms of the Green Articles. The
obligations of Tender Sub to commence the Offer and to accept for payment and
to pay for any shares of Green Common Stock or Green ESOP Preferred Stock
validly tendered shall be subject only to the conditions set forth in Exhibit D
hereto. The Offer shall be made by means of an offer to purchase (the "Offer
to Purchase") containing the terms set forth in this Agreement and the
conditions set forth in Exhibit D hereto. Without the written consent of
Green, Tender Sub shall not decrease the Offer Price, decrease the aggregate
number of shares of Green Common Stock and Green ESOP Preferred Stock sought,
change the form of consideration to be paid pursuant to the Offer, modify any
of the conditions to the Offer set forth in Exhibit D hereto, impose conditions
to the Offer in addition to those set forth in Exhibit D hereto, except as
provided in the proviso below, extend the Offer, or amend any other term or
condition of the Offer in any manner which is adverse to the holders of shares
of Green Common Stock, it being agreed that a waiver by Tender Sub of any
condition in its discretion shall not be deemed to be adverse to the holders of
Green Common Stock; provided, however, that Tender Sub shall not waive the
condition set forth in paragraph (c) of Exhibit D without the consent of Green;
and provided further that, if on any scheduled expiration date of the Offer (as
it may be extended in accordance with the terms hereof), all conditions to the
Offer shall not have been satisfied or waived, the Offer may be extended from
time to time without the consent of Green for such period of time as is
reasonably expected to be necessary to satisfy the unsatisfied conditions.
White and Tender Sub agree that, in the event all conditions to their
obligation to purchase shares under the Offer at any scheduled expiration date
thereof are satisfied other than the condition set forth in paragraph (c) of
Exhibit D, Tender Sub shall, from time to time, extend the Offer until the
earlier of (i) 180 days following the date hereof or (ii) such time as such
condition is satisfied or waived in accordance herewith. In addition, the
Offer Price and the number of shares of Green Common Stock or Green ESOP
Preferred Stock sought may be increased and the Offer may be extended to the
extent required by law in connection with such increase, in each case without
the consent of Green. It is agreed that the conditions to the Offer are for
the benefit of White and Tender Sub and may be asserted by White or Tender Sub
regardless of the circumstances giving rise to any such condition (including
any action or inaction by White or Tender Sub not inconsistent with the terms
hereof) or may be waived by White or Tender Sub, in whole or in part at any
time and from time to time, in its sole discretion.

(b) White and Tender Sub shall file with the United States
Securities and Exchange Commission (the "SEC") as soon as practicable on the
date the Offer is commenced, a Tender Offer Statement on Schedule 14D-1 with
respect to the Offer (together with all amendments and supplements thereto and
in

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<PAGE> 12

cluding the exhibits thereto, the "Schedule 14D-1") which shall include, as
exhibits, the Offer to Purchase and a form of letter of transmittal and summary
advertisement (the Schedule 14D-1 and such documents, collectively, together
with any amendments and supplements thereto, the "Offer Documents"). Each of
White and Tender Sub agrees to take all steps necessary to cause the Offer
Documents to be filed with the SEC and to be disseminated to Green's
shareholders, in each case as and to the extent required by applicable federal
securities laws. Each of White and Tender Sub, on the one hand, and Green, on
the other hand, agrees promptly to correct any information provided by it for
use in the Offer Documents if and to the extent that it shall have become false
and misleading in any material respect, and White and Tender Sub further agree
to take all steps necessary to cause the Offer Documents as so corrected to be
filed with the SEC and to be disseminated to Green's shareholders, in each case
as and to the extent required by applicable federal securities laws. Green and
its counsel shall be given the opportunity to review the Offer Documents before
they are filed with the SEC. In addition, White and Tender Sub agree to
provide Green and its counsel in writing with any comments White, Tender Sub or
their counsel may receive from time to time from the SEC or its staff with
respect to the Offer Documents promptly after the receipt of such comments.
White and Tender Sub shall cooperate with Green in responding to any comments
received from the SEC with respect to the Offer and amending the Offer in
response to any such comments.

(c) Subject to the terms and conditions of the Offer, White
shall provide or cause to be provided to Tender Sub on a timely basis the funds
necessary to accept for payment, and pay for, shares of Green Common Stock and
Green ESOP Preferred Stock that Tender Sub becomes obligated to accept for
payment, and pay for, pursuant to the Offer.

(d) At any time following the obtaining of the Green
Pennsylvania Shareholder Approval, if White and its subsidiaries do not already
own 40% or more of the outstanding shares of Green Common Stock on a fully
diluted basis as of the date hereof (excluding for purposes of this Section
1.1(d) shares that would be outstanding upon exercise of the Green Stock Option
Agreement), White may, and at the written request of Green shall, commence an
offer (the "Second Offer") to

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<PAGE> 13

purchase up to that number of shares of Green Common Stock and Green ESOP
Preferred Stock which, when added to the aggregate number of shares of Green
Common Stock and Green ESOP Preferred Stock then beneficially owned by White
(other than pursuant to the Green Stock Option Agreement) equals 40% of such
outstanding shares of Green Common Stock, at a price not less than $92.50.
Green agrees that it shall not make such written request at any time that the
Offer is outstanding and has a scheduled expiration date within 10 business
days of such time. White and Green agree that if the Second Offer is commenced
they will file such documents and make such recommendations and take such other
action as is required by this Agreement in respect of the Offer, and the Second
Offer shall be on terms no less favorable to the shareholders of Green than the
Offer.

SECTION 1.2. Green Actions.

(a) Green hereby approves of and consents to the Offer and
represents that its Board of Directors, at a meeting duly called and held, has
unanimously by the vote of all directors present (i) determined that this
Agreement and the transactions contemplated hereby (including the Offer and the
Merger), the Option Agreements and the transactions contemplated thereby, are
in the best interests of Green, (ii) approved this Agreement and the
transactions contemplated hereby (including the Offer and the Merger), and
approved the Option Agreements and the transactions contemplated thereby, such
determination and approval constituting approval thereof by the Board of
Directors for all purposes of the Pennsylvania Law, and (iii) resolved to
recommend that the shareholders of Green who desire to receive cash for their
shares of Green Common Stock or Green ESOP Preferred Stock accept the Offer and
tender their shares of Green Common Stock or Green ESOP Preferred Stock
thereunder to Tender Sub and that all shareholders of Green approve and adopt
this Agreement and the transactions contemplated hereby; provided, however,
that prior to the purchase by Tender Sub of shares of Green Common Stock and
Green ESOP Preferred Stock pursuant to the Offer, Green may modify, withdraw or
change such recommendation, but only to the extent that Green complies with
Section 4.2 hereof. Green hereby consents to the inclusion in the Offer
Documents of the recommendations of Green's Board of Directors described in
this Section.

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<PAGE> 14

(b) Concurrently with the commencement of the Offer, Green
shall file with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto and including the
exhibits thereto, the "Schedule 14D-9") which shall contain the recommendation
referred to in clauses (i), (ii) and (iii) of Section 1.2(a) hereof; provided,
however, that Green may modify, withdraw or change such recommendation, but
only to the extent that Green complies with Section 4.2 hereof. Green agrees
to take all steps necessary to cause the Schedule 14D-9 to be filed with the
SEC and to be disseminated to Green's shareholders, in each case as and to the
extent required by applicable federal securities laws. Each of Green, on the
one hand, and White and Tender Sub, on the other hand, agrees promptly to
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent that it shall have become false and misleading in any material
respect, and Green further agrees to take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated
to Green's shareholders, in each case as and to the extent required by
applicable federal securities laws. White and its counsel shall be given the
opportunity to review the Schedule 14D-9 before it is filed with the SEC. In
addition, Green agrees to provide White, Tender Sub and their counsel in
writing with any comments Green or its counsel may receive from time to time
from the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments. Green shall cooperate with White and Tender Sub in
responding to any comments received from the SEC with respect to the Schedule
14D-9 and amending the Schedule 14D-9 in response to any such comments.

(c) In connection with the Offer, if requested by Tender Sub,
Green shall promptly furnish or cause to be furnished to Tender Sub mailing
labels, security position listings and any available listing or computer file
containing the names and addresses of the record holders of the shares of Green
Common Stock as of a recent date, and shall furnish Tender Sub with such
information and assistance (including updated information) as Tender Sub or its
agents may reasonably request in communicating the Offer to the shareholders of
Green.

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<PAGE> 15

(d) Green has received the written opinions of Lazard Freres &
Co. and Morgan Stanley & Co. Incorporated (the "Green Advisors"), each dated as
of the date of this Agreement, to the effect that, as of such date, the
consideration to be received by Green shareholders (other than Tender Sub and
its affiliates) pursuant to the Offer and Merger, taken together, is fair from
a financial point of view to such holders (the "Green Fairness Opinions").
Green has delivered to Tender Sub a copy of the Green Fairness Opinions.

SECTION 1.3. The Merger. (a) Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Pennsylvania
Business Corporation Law of 1988, as amended (the "Pennsylvania Law"), Green
shall be merged with and into Tender Sub at the Effective Time (the "Merger").
Tender Sub shall be the surviving corporation (the "Surviving Corporation") of
the Merger and shall succeed to and assume all rights and obligations of Green
in accordance with the Pennsylvania Law.

(b) If for any reason the parties hereto are unable to obtain
either of the Tax Opinions referred to in Section 5.3(a) on or as of the
Closing Date, then the Merger shall be effected such that Tender Sub shall be
merged with and into Green, with Green being the "Surviving Corporation" for
all purposes hereunder, and such transaction shall be the "Merger" for all
purposes hereunder. In such event, the parties agree to execute an appropriate
amendment to this Agreement in order to reflect the foregoing.

SECTION 1.4. Closing. The closing of the Merger (the "Closing")
shall take place at 10:00 a.m. on a date to be specified by the parties (the
"Closing Date"), which (subject to satisfaction or waiver of the conditions set
forth in Article VI) shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Section 6.1, unless
another time or date is agreed to by the parties hereto. The Closing shall be
held at such location in the City of New York as is agreed to by the parties
hereto.

SECTION 1.5. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file articles of merger or other appropriate documents (such documents,
collectively, the "Articles of Merger") executed in accordance with the
relevant provisions of the Pennsylvania Law and shall make all other filings or
recordings as may be required under the Pennsylvania Law. The Merger shall
become effective at such time as the Articles of Merger are duly filed with the
Pennsylvania Department of State, or at such subsequent date or time as White,
Tender Sub and Green shall agree and shall be specified in the Articles of
Merger (the time the Merger becomes effective being hereinafter referred to as
the "Effective Time").

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<PAGE> 16

SECTION 1.6. Effects of the Merger. The Merger shall have the
effects set forth in Chapter 19 of the Pennsylvania Law.

SECTION 1.7. Articles of Incorporation and By-laws; Directors and
Officers.

(a) The articles of incorporation and by-laws of Tender Sub, as
in effect immediately prior to the Effective Time, shall be the articles of
incorporation and by-laws, respectively, of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law,
provided that the articles of incorporation of the Surviving Corporation shall
provide that the Surviving Corporation shall be named "Conrail Inc."

(b) Subject to Section 1.8, the directors of Tender Sub and the
officers of Green at the Effective Time shall, from and after the Effective
Time, be the initial directors and officers, respectively, of the Surviving
Corporation, until their successors shall have been duly elected or appointed
or qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's articles of incorporation and by-laws.

SECTION 1.8. Boards, Committees and Officers. The Board of
Directors, committees of the Board of Directors, composition of such committees
(including chairmen thereof) and officers of White and/or the Surviving
Corporation (as indicated on Exhibit A hereto) shall be as set forth on
Exhibit A hereto until the earlier of the resignation or removal of any
individual listed on or designated in accordance with Exhibit A or until their
respective successors are duly elected and qualified, as the case may be, it
being agreed that if any director shall be unable to serve as a director
(including as a member or chairman of any committee) at the Effective Time the
party which designated such individual as indicated in Exhibit A shall
designate another individual to serve in such individual's place. If any
officer listed on or appointed in accordance with Exhibit A ceases to be a
full-time employee of Green, Tender Sub or White prior to the Effective Time,
the parties shall agree upon another person to serve in such person's stead.
The committees of the Board of Directors of White shall have such authority as
may, subject to applicable law, be delegated to them by the Board of Directors
of White.
SECTION 1.9. Voting Trust. The parties agree that, simultaneously
with the purchase by White, Tender Sub or their affiliates of shares of Green
Common Stock and Green ESOP Preferred Stock pursuant to the Offer, the Green
Stock Option Agreement or otherwise, such shares of Green Common Stock
(including pursuant to the automatic conversion of Green ESOP Preferred Stock)
shall be deposited in a voting trust (the "Voting Trust") in accordance with
the terms and conditions of a voting

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<PAGE> 17

trust agreement substantially in the form attached hereto as Exhibit E. The
Voting Trust may not be modified or amended without the prior written approval
of Green unless such modification or amendment is not inconsistent with this
Agreement or the Option Agreements and is not adverse to Green or its
shareholders (it being understood that any change to the terms of the Voting
Trust relating to voting rights or rights and restrictions relating to the
transfer of such shares of Green Common Stock shall in any event require the
prior approval of Green). No power of White or Tender Sub provided for in the
Voting Trust Agreement may be exercised in a manner which violates this
Agreement.

ARTICLE II

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES

SECTION 2.1. Conversion of Shares.

(a) Each share of Common Stock, par value $1.00 per share, of
Tender Sub issued and outstanding immediately prior to the Effective Time
shall, at the Effective Time, by virtue of the Merger and without any action on
the part of any person, become one duly authorized, validly issued, fully paid
and nonassessable share of common stock of the Surviving Corporation.

(b) Each share of Green Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares of Green Common
Stock to be canceled pursuant to Section 2.1(c) hereof) shall, at the Effective
Time, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive such number of duly authorized,
validly issued, fully paid and nonassessable shares of White Common Stock or
cash, without any interest thereon, as specified in Section 2.3 hereof.

(c) All shares of Green Common Stock that are owned by Green as
treasury stock and any shares of Green Common Stock owned by White, Green or
any of their respective subsidiaries shall, at the Effective Time, be canceled
and retired and shall cease to exist, and no shares of White Common Stock or
other consideration shall be delivered or owing in exchange therefor.

(d) On and after the Effective Time, holders of certificates
which immediately prior to the Effective Time represented issued and
outstanding shares of Green Common Stock, including those issuable upon
conversion of the shares of Green ESOP Preferred Stock (which conversion shall
occur automatically pursuant to the terms of the Green Articles prior to the
Effective Time so that, immediately prior to the Effective Time, no shares of
Green ESOP Preferred Stock shall be issued and outstanding), ("Certificates")
shall cease to have any rights as shareholders of Green, except the right to
receive the consideration set

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<PAGE> 18

forth in this Article II (the "Per Share Merger Consideration") with respect to
each share held by them.

SECTION 2.2 Election Procedures. Unless, prior to the Effective
Time, Tendered Shares constitute at least 40% of all outstanding shares of
Green Common Stock and Green ESOP Preferred Stock (in which case each share of
Green Common Stock (including shares of Green Common Stock into which the
shares of Green ESOP Preferred Stock shall have been converted) shall be
converted in the Merger into White Common Stock as provided in Section 2.3(b)
hereof), each holder of shares of Green Common Stock (other than holders of
shares of Green Common Stock to be canceled as set forth in Section 2.1(c)) and
Green ESOP Preferred Stock shall have the right to submit a request specifying
the number of shares that such holder desires to have converted into shares of
White Common Stock in the Merger, and the number of shares that such holder
desires to have converted into the right to receive $92.50, per share, without
interest (the "Per Share Cash Consideration"), in the Merger in accordance with
the following procedures:

(a) Each holder of shares of Green Common Stock and
Green ESOP Preferred Stock may specify in a request made in
accordance with the provisions of this Section 2.2 (herein
called an "Election") (i) the number of shares owned by such
holder that such holder desires to have converted into shares of
White Common Stock in the Merger (a "Stock Election") and (ii)
the number of shares owned by such holder that such holder
desires to have converted into the right to receive the Per
Share Cash Consideration in the Merger (a "Cash Election").

(b) White shall prepare a form reasonably acceptable to
Green (the "Form of Election") which shall be mailed to Green's
shareholders in accordance with this Section 2.2 so as to permit
Green's shareholders to exercise their right to make an Election
prior to the Election Deadline.

(c) White shall use reasonable efforts to make the Form
of Election available to all shareholders of Green at least ten
business days prior to the Election Deadline.

(d) Any Election shall have been made properly only if
the person authorized to receive Elections and to act as exchange
agent under this Agreement (the "Exchange Agent") shall have
received, by 5:00 p.m. local time in the city in which the
principal office of such Exchange Agent is located, on the date
of the Election Deadline, a Form of Election properly completed
and signed and accompanied by Certificates to which such Form of
Election relates (or by an appropriate guarantee of delivery of
such Certificates, as set forth in such Form of Election, from a
member of any registered national securities exchange or of the
National Association of Securities Dealers, Inc. or a commercial
bank or trust company in the United States provided such
Certificates are in fact delivered to the Exchange Agent

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<PAGE> 19

by the time required in such guarantee of delivery). Failure to
deliver shares covered by such a guarantee of delivery within
the time set forth on such guarantee shall be deemed to
invalidate any otherwise properly made Election. As used
herein, "Election Deadline" means the date announced by White,
in a news release delivered to the Dow Jones News Service, as
the last day on which Forms of Election will be accepted;
provided that such date shall be a business day no earlier than
twenty business days prior to the Effective Time and no later
than the date on which the Effective Time occurs and shall be at
least five business days following the date of such news
release; provided further that White shall have the right to set
a later date as the Election Deadline so long as such later date
is no later than the date on which the Effective Time occurs.

(e) Any Green shareholder may at any time prior to the
Election Deadline change his or her Election by written notice
received by the Exchange Agent prior to the Election Deadline
accompanied by a properly completed and signed, revised Form of
Election.

(f) Any Green shareholder may, at any time prior to the
Election Deadline, revoke his or her Election by written notice
received by the Exchange Agent prior to the Election Deadline or
by withdrawal prior to the Election Deadline of his or her
Certificates, or of the guarantee of delivery of such
Certificates, previously deposited with the Exchange Agent. All
Elections shall be revoked automatically if the Exchange Agent
is notified in writing by White or Green that this Agreement has
been terminated. Any Green shareholder who shall have deposited
Certificates with the Exchange Agent shall have the right to
withdraw such Certificates by written notice received by the
Exchange Agent and thereby revoke his Election as of the
Election Deadline if the Merger shall not have been consummated
prior thereto.

(g) White shall have the right to make rules, not
inconsistent with the terms of this Agreement, governing the
validity of the Forms of Election, the manner and extent to
which Elections are to be taken into account in making the
determinations prescribed by Section 2.3, the issuance and
delivery of certificates for shares of White Common Stock into
which shares of Green Common Stock are converted in the Merger
and the payment of cash for shares of Green Common Stock
converted into the right to receive Per Share Cash Consideration
in the Merger.

SECTION 2.3. Issuance of White Common Stock and Payment of Cash;
Proration. The manner in which each share of Green Common Stock (other than
shares of Green Common Stock to be canceled as set forth in Section 2.1(c))
shall be converted into shares of White Common Stock or the right

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<PAGE> 20

to receive cash on the Effective Date shall be as set forth in this Section
2.3. All references to "outstanding" shares of Green Common Stock in Section
2.2 and this Section 2.3 shall mean all shares of Green Common Stock issued and
outstanding immediately prior to the Effective Time on a fully diluted basis,
including all shares of Green Common Stock issuable upon conversion of the
shares of Green ESOP Preferred Stock, held by the Green Employee Benefits Trust
and issuable upon exercise of outstanding Green Employee Stock Options and all
shares of Green Common Stock acquired by Tender Sub pursuant to the Offer or
otherwise, except for shares of Green Common Stock acquired by White pursuant
to the Green Stock Option Agreement (the "Tendered Shares").

(a) As is more fully set forth below, the aggregate number of
shares of Green Common Stock to be converted into shares of White Common Stock
pursuant to the Merger shall be equal as nearly as practicable to 60% of all
outstanding shares of Green Common Stock; and the number of shares of Green
Common Stock to be converted into the right to receive the cash in the Merger
pursuant to this Agreement, together with the Tendered Shares, shall be equal
as nearly as practicable to 40% of all outstanding shares of Green Common
Stock.

(b) If Stock Elections are received for a number of shares of
Green Common Stock that is 60% or less of the outstanding shares of Green
Common Stock, each share of Green Common Stock covered by a Stock Election
shall be converted in the Merger into 1.85619 shares of White Common Stock (the
"Conversion Ratio"). In the event that between the date of this Agreement and
the Effective Time, the issued and outstanding shares of White Common Stock
shall have been affected or changed into a different number of shares or a
different class of shares as a result of a stock split, reverse stock split,
stock dividend, spin-off, extraordinary dividend, recapitalization,
reclassification or other similar transaction with a record date within such
period, in each case which is prohibited pursuant to Section 4.1 without the
consent of Green, the Conversion Ratio shall be appropriately adjusted.

(c) If Stock Elections are received for more than 60% of the
outstanding shares of Green Common Stock, each Non-Electing Share (as defined
in Section 2.3(g)) and each share of Green Common Stock for which a Cash
Election has been received shall be converted into the right to receive cash in
the Merger, and the shares of Green Common Stock for which Stock Elections have
been received shall be converted into shares of White Common Stock and the
right to receive cash in the following manner:

(1) The Exchange Agent shall distribute with respect
to shares of Green Common Stock as to which a stock election has
been made a number of shares of White Common Stock equal to the
conversion ratio per share of Green Common Stock with respect to a
fraction of such shares of Green Common Stock, the numerator of
which fraction shall be 60% of the number of outstanding shares of
Green Common Stock

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<PAGE> 21

and the denominator of which shall be the aggregate number of
shares of green common stock covered by stock elections.

(2) Shares of Green Common Stock covered by a Stock
Election and not fully converted into the right to receive
shares of White Common Stock as set forth in clause (1) above
shall be converted in the Merger into the right to receive the
Per Share Cash Consideration for each share of Green Common
Stock so converted.

d. If the number of Tendered Shares and shares of Green
Common Stock for which Cash Elections are received in the aggregate is 40% or
less of the outstanding shares of Green Common Stock, each share of Green
Common Stock covered by a Cash Election shall be converted in the Merger into
the right to receive the Per Share Cash Consideration.

e. If the number of Tendered Shares and shares of Green
Common Stock for which Cash Elections are received in the aggregate is more
than 40% of the outstanding shares of Green Common Stock, each Non-Electing
Share and each share of Green Common Stock for which a Stock Election has been
received shall be converted in the Merger into a number of shares of White
Common Stock equal to the Conversion Ratio, and, the shares of Green Common
Stock for which Cash Elections have been received shall be converted into the
right to receive the Per Share Cash Consideration and shares of White Common
Stock in the following manner:

(1) The Exchange Agent shall distribute with respect
to shares of Green Common Stock as to which a cash election has
been made the per share cash consideration per share of Green
Common Stock with respect to a fraction of such shares of Green
Common Stock, the numerator of which fraction shall be 40% of the
difference of the number of outstanding shares of Green Common
Stock minus the number of tendered shares and the denominator of
which shall be the aggregate number of shares of Green Common
Stock covered by cash elections.

(2) Shares of Green Common Stock covered by a cash
election and not fully converted into the right to receive the per
share cash consideration as set forth in clause (1) above shall be
converted in the merger into the right to receive a number of
shares of White Common Stock equal to the conversion

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<PAGE> 22

Ratio for Each Share of Green Common Stock so Converted.

(f) If Non-Electing Shares are not converted under either
Section 2.3(c) or Section 2.3(e), the Exchange Agent shall distribute with
respect to each such Non-Electing Share, the Per Share Cash Consideration with
respect to a fraction of such Non-Electing Share, where such fraction is
calculated in a manner that will result in the sum of (i) the number of shares
of Green Common Stock converted into cash pursuant to this Section 2.3(f), (ii)
the number of shares of Green Common Stock for which Cash Elections have been
received and (iii) the number of Tendered Shares purchased pursuant to the
Offer being as close as practicable to 40% of the outstanding shares of Green
Common Stock. Each Non-Electing Share not converted into the right to receive
cash as set forth in the preceding sentence shall be converted in the Merger
into the right to receive a number of shares of White Common Stock equal to the
Conversion Ratio for each Non-Electing Share so converted.

(g) For the purposes of this Section 2.3, outstanding shares
of Green Common Stock as to which an Election is not in effect at the
Election Deadline (other than Tendered Shares) shall be called "Non-Electing
Shares". If White and Green shall determine that any Election is not properly
made with respect to any shares of Green Common Stock, such Election shall be
deemed to be not in effect, and the shares of Green Common Stock covered by
such Election shall, for purposes hereof, be deemed to be Non-Electing Shares.

(h) No certificates or scrip representing fractional shares
of White Common Stock shall be issued upon the surrender for exchange of
Certificates, no dividend or distribution with respect to shares shall be
payable on or with respect to any fractional share and such fractional share
interests shall not entitle the owner thereof to vote or to any other rights of
a shareholder of White. In lieu of any such fractional share of White Common
Stock, White shall pay to each former shareholder of Green who otherwise would
be entitled to receive a fractional share of White Common Stock an amount in
cash determined by multiplying (i) the Average White Share Price on the date on
which the Effective Time occurs by (ii) the fractional interest in a share of
White Common Stock to which such holder would otherwise be entitled. For
purposes hereof, the "Average White Share Price" shall mean the average closing
sales price, rounded to four decimal points, of the White Common Stock as
reported on the New York Stock Exchange Composite Tape, for the twenty (20)
consecutive trading days ending on the trading day which is five (5) trading
days prior to the Effective Time.

SECTION 2.4. Issuance of White Common Stock. Immediately
following the Effective Time, White shall deliver, in trust (the "Exchange
Trust"), to the Exchange Agent, for the benefit of Green shareholders,
certificates representing an aggregate number of shares of White Common Stock
as nearly as practicable equal to the product of the Conversion Ratio and the
number of shares of Green Common Stock to be converted into shares of White
Common Stock as determined in Section 2.3.

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<PAGE> 23

As soon as practicable after the Effective Time, each holder of shares of Green
Common Stock converted into shares of White Common Stock pursuant to Section
2.1(a), upon surrender to the Exchange Agent (to the extent not previously
surrendered with a Form of Election) of one or more Certificates for
cancellation, shall be entitled to receive certificates representing the number
of whole shares of White Common Stock into which such shares of Green Common
Stock shall have been converted in the Merger. No dividends or distributions
that have been declared and having a record date after the Effective Time shall
be paid to persons entitled to receive certificates for shares of White Common
Stock until such persons surrender their Certificates, at which time all such
dividends shall be paid. In no event shall the persons entitled to receive
such dividends be entitled to receive interest on such dividends. If any
certificate for such White Common Stock is to be issued in a name other than
that in which the Certificate surrendered in exchange therefor is registered,
it shall be a condition of such exchange that the person requesting such
exchange shall pay to the Exchange Agent any transfer or other taxes required
by reason of issuance of certificates for such White Common Stock in a name
other than the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax has been paid
or is not applicable.

SECTION 2.5. Payment of Cash Consideration. At the
Closing, White shall deposit into the Exchange Trust, for the benefit of Green
shareholders, an amount in cash equal to the Per Share Cash Consideration
multiplied by the number of shares of Green Common Stock, if any, to be
converted into the right to receive the Per Share Cash Consideration as
determined in Section 2.3. As soon as practicable after the Effective Time,
the Exchange Agent shall distribute to holders of shares of Green Common Stock
converted into the right to receive the Per Share Cash Consideration pursuant
to Section 2.1(a), upon surrender to the Exchange Agent (to the extent not
previously surrendered with a Form of Election) of one or more Certificates for
cancellation, a bank check for an amount equal to $92.50 times the number of
shares of Green Common Stock so converted. In no event shall the holder of any
such surrendered Certificates be entitled to receive interest on any cash to be
received in the Merger. If such check is to be issued in the name of a person
other than the person in whose name the Certificates surrendered for exchange
therefor are registered, it shall be a condition of the exchange that the
person requesting such exchange shall pay to the Exchange Agent any transfer or
other taxes required by reason of issuance of such check to a person other than
the registered holder of the Certificates surrendered, or shall establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
applicable.

SECTION 2.6. Stock Transfer Books. At the Effective
Time, the stock transfer books of Green shall be closed and there shall be no
further registration of transfers of stock on the records of Green. If, after
the Effective Time, certificates representing shares of Green capital stock are
presented to the Surviving Corporation, they shall be canceled and exchanged
for cash and/or certificates representing White Common Stock pursuant to this
Article II.

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<PAGE> 24

SECTION 2.7. No Dissenter's Rights. In accordance with
Schwabacher v. United States, 334 U.S. 182 (1948), shareholders of Green shall
not have any dissenter's or like rights; provided, however, that if the Surface
Transportation Board (the "STB") or a court of competent jurisdiction
determines that dissenter's rights are available to holders of shares of Green
capital stock, then such holders shall be provided with dissenter's rights in
accordance with the Pennsylvania Law.

SECTION 2.8. No Further Ownership Rights. All shares of
White Common Stock issued upon the surrender for exchange of Certificates in
accordance with the terms of this Article II (including any cash paid pursuant
to this Article II) shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to the shares theretofore represented by
such Certificates, subject, however, to the Surviving Corporation's obligation
to pay any dividends or make any other distributions with a record date prior
to the Effective Time which may have been declared or made by Green on such
shares of Green Common Stock or Green ESOP Preferred Stock which remain unpaid
at the Effective Time.

SECTION 2.9. Termination of Exchange Trust. Any portion
of the Exchange Trust which remains undistributed to the holders of
Certificates for six months after the Effective Time shall be delivered to
White, upon demand, and any holders of Certificates who have not theretofore
complied with this Article II shall thereafter look only to White for payment
of their claim for the Per Share Cash Consideration or shares of White Common
Stock, any cash, dividends or distributions with respect to White Common Stock.

SECTION 2.10. No Liability. None of White, Green or the
Exchange Agent shall be liable to any person in respect of any shares of White
Common Stock (or dividends or distributions with respect thereto) or cash
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If any Certificate shall not have been surrendered
prior to seven years after the Effective Time (or immediately prior to such
earlier date on which any cash, shares of White Common Stock or any cash
dividends or distributions payable to the holder of such Certificate would
otherwise escheat to or become the property of any Governmental Entity), any
such Per Share Cash Consideration or shares of White Common Stock or cash,
dividends or distributions in respect of such Certificate shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously entitled
thereto.

SECTION 2.11. Lost Certificates. If any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by White or the Surviving Corporation, the posting
by such person of a bond in such reasonable amount as White or the Surviving
Corpo ration may direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent shall issue in exchange
for such lost, stolen or destroyed Certificate the

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<PAGE> 25

cash or shares of White Common Stock and, if applicable, any cash, dividends
and distributions on shares of White Common Stock deliverable in respect
thereof pursuant to this Agreement.

SECTION 2.12 Withholding Rights. White, Tender Sub or
the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
shares of Green Common Stock such amounts as White, Tender Sub or the Exchange
Agent is required to deduct and withhold with respect to the making of such
payment under the Code, or any provision of state, local or foreign tax law.
To the extent that amounts are so withheld and paid over to the appropriate
taxing authority by White, Tender Sub or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Green Common Stock in respect of which such
deduction and withholding was made by White, Tender Sub or the Exchange Agent.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1 Representations and Warranties of Green.
Except as disclosed in the Green Filed SEC Documents or as set forth on the
Disclosure Schedule delivered by Green to White prior to the execution of this
Agreement (the "Green Disclosure Schedule"), Green represents and warrants to
White and Tender Sub as follows:

(a) Organization, Standing and Corporate Power. Each
of Green and its Significant Subsidiaries is a corporation or other
legal entity duly organized, validly existing and in good standing or
validly subsisting (with respect to jurisdictions which recognize such
concept) under the laws of the jurisdiction in which it is organized
and has the requisite corporate or other power, as the case may be,
and authority to carry on its business as now being conducted, except
where the failure to be so organized, existing and in good standing or
validly subsisting or to have such power and authority would not have
a material adverse effect with respect to Green. Each of Green and
its Significant Subsidiaries is duly qualified or licensed to do
business and is in good standing or validly subsisting (with respect
to jurisdictions which recognize such concept) in each jurisdiction in
which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed or to be in good standing or validly subsisting
individually or in the aggregate would not have a material adverse
effect on Green. Green has delivered to White prior to the execution
of this Agreement complete and correct copies of its certificate of
incorporation and by-laws and the certificates of incorporation and
by-laws (or compa-

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<PAGE> 26

rable organizational documents) of its Significant Subsidiaries, in each
case as amended to date. As used in this Agreement, a "Significant
Subsidiary" means any subsidiary of Green or White, as the case may be,
that would constitute a "significant subsidiary" of such party within
the meaning of Rule 1-02 of Regulation S-X of the SEC.

(b) Subsidiaries. Exhibit 21 to the Annual Report of Green
on Form 10-K for the fiscal year ended December 31, 1995 includes all
subsidiaries of Green which as of the date of this Agreement are
Significant Subsidiaries. All the outstanding shares of capital stock
of, or other equity interests in, each such Significant Subsidiary have
been validly issued and are fully paid and nonassessable and are owned
directly or indirectly by Green, free and clear of all pledges, claims,
liens, charges, encumbrances and security interests of any kind or
nature whatsoever (collectively, "Liens").

(c) Capital Structure. The authorized capital stock
of Green consists of 250,000,000 shares of Green Common Stock and
25,000,000 shares of preferred stock, without par value, of Green
("Green Preferred Stock"), of which 10,000,000 shares have been
designated as Green ESOP Preferred Stock. At the close of business on
October 10, 1996, (i) 80,178,281 shares of Green Common Stock were
issued and outstanding, (ii) 5,433,970 shares of Green Common Stock
were held by Green (or its subsidiary) in its treasury, (iii) 5,951,461
shares of Green Common Stock were reserved for issuance pursuant to the
Green 1987 Long-Term Incentive Plan and the Green 1991 Long-Term
Incentive Plan, as amended (such plans, collectively, the "Green Stock
Plans"), (iv) 9,571,086 shares of Green Common Stock were reserved for
issuance upon conversion of the Green ESOP Preferred Stock, (v)
9,571,086 shares of Green ESOP Preferred Stock were issued and
outstanding, which shares will be automatically converted into
9,571,086 shares of Green Common Stock prior to the Effective Time
pursuant to the Green Articles, (vi) no shares of Green ESOP Preferred
Stock were held by Green (or its subsidiary) in its treasury, and (vii)
other than the Green ESOP Preferred Stock, no other shares of Green
Preferred Stock have been designated or issued. Except as set forth
above and except for 15,955,477 shares of Green Common Stock reserved
for issuance upon the exercise of the Green Option, at the close of
business on October 10, 1996, no shares of capital stock or other
securities of Green were issued, reserved for issuance or outstanding.
At the close of business on October 10, 1996, there were no outstanding
stock appreciation rights or rights (other than employee stock options
or other rights ("Green Employee Stock Options") to purchase or receive
Green Common Stock granted under the Green Stock Plans) to receive
shares of Green Common Stock on a deferred basis granted under the
Green Stock Plans or otherwise. The Green Disclosure Schedule sets
forth a complete and correct list, as of October 10, 1996, of the
number of shares of Green Common Stock subject to Green Employee Stock
Options and the exercise prices thereof. All outstanding shares of
capital stock of Green are, and all shares

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<PAGE> 27

which may be issued will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive
rights. As of the close of business on October 10, 1996, there were no
bonds, debentures, notes or other indebtedness of Green having the right
to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which shareholders of Green may vote.
Except as set forth above or as contemplated by the Option Agreements,
as of the close of business on October 10, 1996, there were no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Green or
any of its subsidiaries is a party or by which any of them is bound
obligating Green or any of its subsidiaries to issue, deliver or sell,
or cause to be issued, delivered or sold, additional shares of capital
stock or other securities of Green or of any of its Significant
Subsidiaries or obligating Green or any of its Significant Subsidiaries
to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking.
Except for agreements entered into with respect to the Green Stock
Plans, as of the close of business on October 10, 1996, there were no
outstanding contractual obligations of Green or any of its Significant
Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of Green or any of its Significant Subsidiaries. As of
the close of business on October 10, 1996, there were no outstanding
contractual obligations of Green to vote or to dispose of any shares of
the capital stock of any of its Significant Subsidiaries. Green has
delivered to White a complete and correct copy of the Rights Agreement,
dated as of July 19, 1989, as amended and supplemented to the date
hereof (the "Green Rights Agreement"), relating to rights ("Green
Rights") to purchase Green Common Stock.

(d) Authority; Noncontravention. Green has all
requisite corporate power and authority to enter into this Agreement and,
subject to the Green Merger Shareholder Approval, in the case of the
Merger, to consummate the transactions contemplated by this Agreement.
Green has all requisite corporate power and authority to enter into the
Option Agreements and to consummate the transactions contemplated
thereby. The execution and delivery of this Agreement and the Option
Agreements by Green and the consummation by Green of the transactions
contemplated by this Agreement and the Option Agreements have been duly
authorized by all necessary corporate action on the part of Green,
subject, in the case of the Merger, to the Green Merger Shareholder
Approval and subject to the Green Pennsylvania Shareholder Approval, in
the case of the Second Offer. This Agreement and the Option Agreements
have been duly executed and delivered by Green and constitute legal,
valid and binding obligations of Green, enforceable against Green in
accordance with their terms. The execution and delivery of this
Agreement and the Option Agreements do not, and the consummation of the
transactions contemplated by this Agreement and the Option Agreements and
compliance with the provisions of this Agreement and the Option
Agreements will not, conflict with, or result in any violation of,

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<PAGE> 28

or default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancelation or acceleration of any
obligation or loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of Green or
any of its Significant Subsidiaries under, (i) the certificate of
incorporation or by-laws of Green or the comparable organizational
documents of any of its Significant Subsidiaries, (ii) subject to giving
such notices and obtaining such consents as may be listed in Section
3.1(d) of the Green Disclosure Schedule, any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Green or any of
its Significant Subsidiaries or their respective properties or assets,
or (iii) subject to the governmental filings and other matters referred
to in the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Green or any of its
Significant Subsidiaries or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, losses or Liens that individually or in
the aggregate would not (x) have a material adverse effect on Green, (y)
impair the ability of Green to perform its obligations under this
Agreement (including obligations respecting the Offer and the Merger) or
the Option Agreements, or (z) prevent or materially delay the
consummation of any of the transactions contemplated by this Agreement
(including the Offer and the Merger) or the Option Agreements. No
consent, approval, order or authorization of, or registration,
declaration or filing with, any federal, state, local or foreign
government or any court, administrative or regulatory agency or
commission or other governmental authority or agency (a "Governmental
Entity") is required by or with respect to Green or any of its
Significant Subsidiaries in connection with the execution and delivery
of this Agreement or the Option Agreements by Green or the consummation
by Green of the transactions contemplated by this Agreement or the
Option Agreements, except for: (1) compliance with any applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"); (2) compliance with any applicable
requirements relating to approval of the Merger by the STB; (3) the
filing with the SEC of (A) a proxy statement relating to the Green
Pennsylvania Shareholders Meeting, as contemplated by Section 5.1(b)
hereof (such proxy statement, as amended or supplemented from time to
time, the "Green Pennsylvania Proxy Statement"), (B) a proxy statement
relating to the Green Merger Shareholders Meeting (such proxy statement,
together with the proxy statement relating to the White Shareholders
Meeting, in each case as amended or supplemented from time to time, the
"Joint Proxy Statement" which, together with the Green Pennsylvania
Proxy Statement, are referred to herein as the "Proxy Statements"), (C)
the Schedule 14D-9 and (D) such reports under Section 13(a), 13(d),
15(d) or 16(a) of the Exchange Act, as may be required in connection
with this Agreement, the Option Agreements and the transactions
contemplated by this Agreement and the Option Agreements; (4) the filing
of the Articles of Merger as provided in Section 1.3, the Amended Green
Articles as

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<PAGE> 29

provided in Section 5.1(f) and appropriate documents with the relevant
authorities of other states in which Green is qualified to do business
and such filings with Governmental Entities to satisfy the applicable
requirements of state securities or "blue sky" laws; (5) such filings
with and approvals of the New York Stock Exchange, Inc. (the "NYSE") to
permit the shares of Green Common Stock that are to be issued pursuant
to the Green Stock Option Agreement to be listed on the NYSE; (6) such
other filings and consents as may be required under any environmental,
health or safety law or regulation pertaining to any notification,
disclosure or required approval necessitated by the Offer, the Merger or
the transactions contemplated by this Agreement and the Option
Agreements, the failure of which to be made or obtained would not
reasonably be expected to have a material adverse effect on Green; and
(7) such consents, approvals, orders or authorizations the failure of
which to be made or obtained would not reasonably be expected to have a
material adverse effect on Green.

(e) SEC Documents; Undisclosed Liabilities. Green has
filed all required reports, schedules, forms, statements and other
documents with the SEC since January 1, 1995 (including exhibits,
schedules and documents incorporated by reference, the "Green SEC
Documents"). As of their respective dates, the Green SEC Documents
complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to such Green SEC Documents, and
none of the Green SEC Documents when filed contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. Except to the extent that information
contained in any Green SEC Document has been revised or superseded by
a later Green Filed SEC Document, none of the Green SEC Documents
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of Green
included in the Green SEC Documents comply as to form, as of their
respective dates of filing with the SEC, in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position of Green and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal recurring
year-end audit adjustments). Except (i) as reflected in such
financial statements or in the notes thereto, (ii) as con-

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<PAGE> 30

templated hereunder or under the Option Agreements, (iii) for
liabilities incurred in connection with this Agreement or the
transactions contemplated hereby and (iv) for liabilities and
obligations incurred since July 1, 1996 in the ordinary course of
business consistent with past practice, neither Green nor any of its
subsidiaries has any material liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise), including
liabilities arising under any laws relating to the protection of
health, safety or the environment ("Environmental Laws"), required by
generally accepted accounting principles to be reflected in a
consolidated balance sheet of Green and its consolidated subsidiaries
(including the notes thereto) and which, individually or in the
aggregate, could reasonably be expected to have a material adverse
effect on Green.

(f) Information Supplied. None of the information
supplied or to be supplied by Green for inclusion or incorporation by
reference in the registration statement on Form S-4 to be filed with
the SEC by White in connection with the issuance of White Common Stock
in the Merger (the "Form S-4") will, at the time the Form S-4 is filed
with the SEC or at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading. None of the Schedule 14D-9 or
the Green Pennsylvania Proxy Statement nor any of the information
supplied or to be supplied by Green for inclusion or incorporation by
reference in the Offer Documents or the Joint Proxy Statement will, at
the date such documents are first published, sent or delivered to
shareholders and, in the case of the Green Pennsylvania Proxy
Statement, at the time of the Green Pennsylvania Shareholders Meeting,
and, in the case of the Joint Proxy Statement, at the time of the
Green Merger Shareholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. The
Schedule 14D-9, the Green Pennsylvania Proxy Statement and the Joint
Proxy Statement will comply as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, no representation or
warranty is made by Green with respect to statements made or
incorporated by reference therein based on information supplied by
White for inclusion or incorporation by reference in any of the
foregoing documents.

(g) Absence of Certain Changes or Events. Except (i)
as disclosed in the Green SEC Documents filed and publicly available
prior to the date of this Agreement (as amended to the date of this
Agreement, the "Green Filed SEC Documents"), (ii) for the transactions
provided for or permitted by this Agreement or in the Option
Agreements, and (iii) for liabilities incurred in connection with or
as a result of this Agreement or the Option Agreements, since the date
of the most recent audited financial

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<PAGE> 31

statements included in the Green Filed SEC Documents, Green has
conducted its business only in the ordinary course, and there has not
been (1) any material adverse change in Green, (2) any declaration,
setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of Green's
capital stock, other than regular quarterly cash dividends of $.475
per share on the Green Common Stock and $.54125 per share on the Green
ESOP Preferred Stock in accordance with the terms thereof, (3) any
split, combination or reclassification of any of Green's capital stock
or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of
Green's capital stock, except for issuances of Green Common Stock upon
conversion of Green ESOP Preferred Stock or upon the exercise of Green
Employee Stock Options in accordance with the terms thereof, (4)
except as would have been permitted under Section 4.1, (A) any
granting by Green or any of its Significant Subsidiaries to any
current or former employee, officer or director of Green of any
increase in compensation, except for normal increases in the ordinary
course of business consistent with past practice or as required under
employment agreements in effect as of the date of the most recent
financial statements included in the Green Filed SEC Documents, (B)
any granting by Green or any of its Significant Subsidiaries to any
current or former employee, officer or director of any increase in
severance or termination pay, except as required under any employment,
severance or termination agreements in effect as of the date of the
most recent financial statements included in the Green Filed SEC
Documents, or (C) any entry by Green or any of its subsidiaries into
any employment, consulting, severance, termination or indemnification
agreements, arrangements, or understandings with any such current or
former employee, officer or director, or (5) except insofar as may
have been disclosed in the Green Filed SEC Documents or required by a
change in generally accepted accounting principles, any change in
accounting methods, principles or practices by Green materially
affecting its assets, liabilities or business. For purposes of this
Agreement, "key employee" means any employee whose current salary and
targeted bonus exceeds $100,000 per annum.

(h) Compliance with Applicable Laws. Green and its
subsidiaries hold all permits, licenses, variances, exemptions, orders
and approvals of all Governmental Entities which are material to the
operation of the businesses of Green and its subsidiaries, taken as a
whole (the "Green Permits"). Green and its subsidiaries are in
compliance with the terms of the Green Permits and all applicable
statutes, laws, ordinances, rules and regulations, including
Environmental Laws, except where the failure so to comply,
individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on Green. The businesses of Green and
its subsidiaries are not being conducted in violation of any law,
ordinance or regulation of any Governmental Entity, including
Environmental Laws, except for possible violations which could not
reasonably be expected to have a material adverse effect on Green. As
of the date of this Agreement, no action, demand, requirement or

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<PAGE> 32

investigation by any Governmental Entity with respect to Green or any
of its subsidiaries is pending or, to the knowledge of Green,
threatened, other than, in each case, those the outcome of which,
individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on Green.

(i) Absence of Changes in Benefit Plans. Section 3.1(i) of
the Green Disclosure Schedule sets forth a true and complete
list of all material Green Benefit Plans as of the date hereof.
Except for rail labor agreements negotiated in the ordinary course,
since the date of the most recent financial statements included in the
Green Filed SEC Documents, there has not been any adoption or
amendment in any material respect by Green or any of its subsidiaries
of any collective bargaining agreement or any bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding providing benefits
to any current or former employee, officer or director of Green or any
of its wholly owned subsidiaries (collectively, the "Green Benefit
Plans").

(j) ERISA Compliance. (i) With respect to the Green
Benefit Plans, individually and in the aggregate, no event has occurred
and, to the knowledge of Green, there exists no condition or set of
circumstances, in connection with which Green or any of its subsidiaries
could be subject to any liability that is reasonably likely to have a
material adverse effect on Green (except liability for benefits claims
and funding obligations payable in the ordinary course) under ERISA, the
Code or any other applicable law.

(ii) Each Green Benefit Plan has been administered in
accordance with its terms except for any failures so to administer any
Green Benefit Plan as would not individually or in the aggregate have a
material adverse effect on Green. Green, its subsidiaries and all the
Green Benefit Plans are in compliance with the applicable provisions of
ERISA, the Code and all other applicable laws and the terms of all
applicable collective bargaining agreements, except for any failures to
be in such compliance as would not individually or in the aggregate have
a material adverse effect on Green.

(iii) Except for all equity-based and other awards, the
vesting and exercisability of which will, by their

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<PAGE> 33

terms, be accelerated as a result of the transactions contemplated
hereunder, no employee of Green will be entitled to any additional
benefits or any acceleration of the time of payment or vesting of any
benefits under any Green Benefit Plan as a result of the transactions
contemplated by this Agreement or the Option Agreements.

(k) Voting Requirements. The affirmative vote of the
holders of a majority of the votes cast by all outstanding shares of
Green Common Stock and Green ESOP Preferred Stock, voting as a single
class, (A) at the Green Pennsylvania Shareholders Meeting (the "Green
Pennsylvania Shareholder Approval") to adopt and approve an amendment
to the Green Articles, providing that Subchapter E (Control
Transactions) of Chapter 25 of the Pennsylvania Law shall not be
applicable to Green and (B) at the Green Merger Shareholders Meeting
(the "Green Merger Shareholder Approval" and, together with the Green
Pennsylvania Shareholder Approval, the "Green Shareholder Approvals")
to adopt and approve this Agreement and the transactions contemplated
hereby, are the only votes of the holders of any class or series of
Green capital stock or indebtedness necessary to approve and adopt
this Agreement, the Option Agreements and the transactions
contemplated by this Agreement (including the Offer and the Merger)
and the Option Agreements.

(l) State Takeover Statutes. Subject to receipt of the
Green Pennsylvania Shareholder Approval, in the case of Subchapter E
(Control Transactions) of Chapter 25 of the Pennsylvania Law, and
assuming that White, together with its affiliates, does not have
voting power with respect to 20% or more of the votes that all Green
shareholders would be entitled to cast in an election of directors
prior to the date of filing of the Amended Green Articles, the Board
of Directors of Green has taken all action necessary or advisable so
as to render inoperative with respect to the transactions contemplated
hereby (including the Offer and the Merger) or by the Option
Agreements all applicable state anti-takeover statutes.

(m) Brokers. No broker, investment banker, financial
advisor or other person, other than the Green Advisors, the fees and
expenses of which shall be paid by Green, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement and
the Option Agreements based upon arrangements made by or on behalf of
Green. Green has furnished to White true and complete copies of all
agreements under which any such fees or expenses are payable and all
indemnification and other agreements related to the engagement of the
persons to whom such fees are payable.

(n) Green Rights Agreement and By-laws. (A) The Green
Rights Agreement has been amended (the "Green Rights Plan Amendment")
to (i) render the Green Rights Agreement inapplicable to

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<PAGE> 34

the Offer, the Merger and the other transactions contemplated by this
Agreement and the Option Agreements and (ii) ensure that (y) neither
White nor any of its wholly owned subsidiaries is an Acquiring Person
(as defined in the Green Rights Agreement) pursuant to the Green
Rights Agreement and (z) a Shares Acquisition Date, Distribution Date
or Trigger Event (in each case as defined in the Green Rights
Agreement) does not occur by reason of the approval, execution or
delivery of this Agreement, and the Green Stock Option Agreement, the
consummation of the Offer, the Merger or the consummation of the other
transactions contemplated by this Agreement and the Green Stock Option
Agreement, and the Green Rights Agreement may not be further amended
by Green without the prior consent of White in its sole discretion.

(B) The Green by-laws have been amended to reduce the notice
period required in connection with a meeting of shareholders to the
minimum period permitted by the Pennsylvania Law with respect to the
transactions contemplated hereby.

(o) Tax Status. Neither Green nor any of its
subsidiaries has taken any action or, as of the date hereof, is aware
of any fact that would jeopardize the qualification of the Merger as a
reorganization under Sections 368(a)(1)(A) and 368(a)(2)(D) of the
Code.

SECTION 3.2. Representations and Warranties of White and
Tender Sub. Except as disclosed in the White Filed SEC Documents or as set
forth on the Disclosure Schedule delivered by White to Green prior to the
execution of this Agreement (the "White Disclosure Schedule"), White and Tender
Sub represent and warrant to Green as follows:

(a) Organization, Standing and Corporate Power. Each of
Tender Sub and White and its Significant Subsidiaries is a corporation
or other legal entity duly organized, validly existing and in good
standing or validly subsisting (with respect to jurisdictions which
recognize such concept) under the laws of the jurisdiction in which it
is organized and has the requisite corporate or other power, as the
case may be, and authority to carry on its business as now being
conducted, except where the failure to be so organized, existing and
in good standing or validly subsisting or to have such power and
authority would not have a material adverse effect with respect to
White. Each of Tender Sub and White and its Significant Subsidiaries
is duly qualified or licensed to do business and is in good standing
or validly subsisting (with respect to jurisdictions which recognize
such concept) in each jurisdiction in which the nature of its business
or the ownership, leasing or operation of its properties makes such
qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed or to be in good
standing or validly subsisting individually or in the aggregate would
not have a

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<PAGE> 35

material adverse effect on White. White has delivered to Green prior
to the execution of this Agreement complete and correct copies of its
certificate of incorporation and by-laws and the certificates of
incorporation and by-laws (or comparable organizational documents) of
its Significant Subsidiaries and of Tender Sub, in each case as
amended to date.

(b) Subsidiaries. Exhibit 21 to the Annual Report of
White on Form 10-K for the fiscal year ended December 31, 1995
includes all the subsidiaries of White which as of the date of this
Agreement are Significant Subsidiaries. All the outstanding shares of
capital stock of, or other equity interests in, each such Significant
Subsidiary have been validly issued and are fully paid and
nonassessable and are owned directly or indirectly by White, free and
clear of all Liens.

(c) Capital Structure. The authorized capital stock of
White consists of 300,000,000 shares of White Common Stock and
25,000,000 shares of preferred stock, without par value, of White
("White Preferred Stock"). At the close of business on October 11,
1996, (i) 216,536,551 shares of White Common Stock were issued and
outstanding, (ii) 28,020,494 shares of White Common Stock were
reserved for issuance pursuant to the White 1987 Long-Term
Performance Plan, White 1990 Stock Award Plan, White Shareholders
Dividend Reinvestment Plan, White Employees Stock Purchase and
Dividend Reinvestment Plan, White Stock Plan for Directors and the
White Stock Purchase and Loan Plan (such plans, collectively, the
"White Stock Plans"), and (iii) no shares of White Preferred Stock
have been designated (other than 250,000 shares designated as the
$7.00 Cumulative Convertible Preferred Stock, Series A and 3,000,000
shares designated as the Junior Participating Preferred Stock, Series
B) or issued. Except as set forth above and except for 43,090,773
shares of White Common Stock reserved for issuance upon the exercise
of the White Option, at the close of business on October 11, 1996, no
shares of capital stock or other voting securities of White were
issued, reserved for issuance or outstanding. At the close of
business on October 11, 1996, there were no outstanding stock
appreciation rights or rights (other than employee stock options or
other rights ("White Employee Stock Options") to purchase or receive
White Common Stock granted under the White Stock Plans) to receive
shares of White Common Stock on a deferred basis granted under the
White Stock Plans or otherwise. The White Disclosure Schedule sets
forth a complete and correct list, as of October 11, 1996, of the
number of shares of White Common Stock subject to White Employee Stock
Options and the exercise prices thereof. All outstanding shares of
capital stock of White are, and all shares which may be issued will
be, when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. As of the close
of business on October 11, 1996, there were no bonds, debentures,
notes or other indebtedness of White having the right to vote (or
convertible into, or exchangeable for, securities having the right to
vote) on any matters on which shareholders of White may vote. Except
as set

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<PAGE> 36

forth above or as contemplated by the Option Agreements, as of the
close of business on October 11, 1996, there were no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which White or any of its
subsidiaries is a party or by which any of them is bound obligating
White or any of its subsidiaries to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock or
other securities of White or of any of its Significant Subsidiaries or
obligating White or any of its Significant Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. Except for
agreements entered into with respect to the White Stock Plans, as of
the close of business on October 11, 1996, there were no outstanding
contractual obligations of White or any of its subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of
White or any of its Significant Subsidiaries. As of the close of
business on October 11, 1996, there were no outstanding contractual
obligations of White to vote or to dispose of any shares of the
capital stock of any of its Significant Subsidiaries. White has
delivered to Green a complete and correct copy of the Rights Agreement
dated as of June 8, 1988, as amended and supplemented to the date
hereof (the "White Rights Agreement"), relating to rights ("White
Rights") to purchase shares of Junior Participating Preferred Stock,
Series B, without par value. As of the date of this Agreement, the
authorized capital stock of Tender Sub consists of 100 shares of
common stock, par value $1.00 per share, all of which have been
validly issued, are fully paid and nonassessable and are owned by
White free and clear of any Lien.

(d) Authority; Noncontravention. White and Tender Sub
have all requisite corporate power and authority to enter into this
Agreement and, subject to the White Shareholder Approval, in the case
of the Merger, to consummate the transactions contemplated by this
Agreement. White has all requisite corporate power and authority to
enter into the Option Agreements and to consummate the transactions
contemplated thereby. The execution and delivery of this Agreement by
White and Tender Sub and the Option Agreements by White and the
consummation of the transactions contemplated by this Agreement by
White and Tender Sub, and the consummation of the transactions
contemplated by the Option Agreements by White, have been duly
authorized by all necessary corporate action on the part of White and
Tender Sub, subject, in the case of the issuance of White Common Stock
in connection with the Merger, to the White Shareholder Approval.
This Agreement has been duly executed and delivered by White and
Tender Sub and constitutes a legal, valid and binding obligation of
White and Tender Sub, enforceable against White and Tender Sub in
accordance with its terms. The Option Agreements have been duly
executed and delivered by White and constitute legal, valid and
binding obligations of White, enforceable against White in accordance
with their terms. The execution and delivery of this Agreement and
the Option Agreements do not, and the consummation of the transactions
contemplated by this

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<PAGE> 37

Agreement and the Option Agreements and compliance with the provisions
of this Agreement and the Option Agreements will not, conflict with,
or result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or loss of a material
benefit under, or result in the creation of any Lien upon any of the
properties or assets of Tender Sub or White or any of its Significant
Subsidiaries under, (i) the certificate of incorporation or by-laws of
Tender Sub or White or the comparable organizational documents of any
of its Significant Subsidiaries, (ii) subject to giving such notices
and obtaining such consents as may be listed in Section 3.2(d) of the
White Disclosure Schedule, any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to Tender Sub or White or
any of its Significant Subsidiaries or their respective properties or
assets, or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Tender Sub
or White or any of its Significant Subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and
(iii), any such conflicts, violations, defaults, rights, losses or
Liens that individually or in the aggregate would not (x) have a
material adverse effect on White, (y) impair the ability of White or
Tender Sub to perform their obligations under this Agreement or the
Option Agreements (including obligations respecting the Offer and the
Merger), or (z) prevent or materially delay the consummation of any of
the transactions contemplated by this Agreement (including the Offer
and the Merger) or the Option Agreements. No consent, approval, order
or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Tender Sub or
White or any of its Significant Subsidiaries in connection with the
execution and delivery of this Agreement or the Option Agreements or
the consummation of the transactions contemplated by this Agreement or
the Option Agreements, except for (1) compliance with any applicable
requirements of the HSR Act; (2) compliance with any applicable
requirements relating to approval of the Merger by the STB; (3) the
filing with the SEC of (A) the Schedule 14D-1, (B) the Joint Proxy
Statement relating to the White Shareholders Meeting, (C) the Form S-4
and (D) such reports under Section 13(a), 13(d), 15(d) or 16(a) of the
Exchange Act as may be required in connection with this Agreement, the
Option Agreements and the transactions contemplated by this Agreement
and the Option Agreements; (4) the filing of the Articles of Merger as
provided in Section 1.3, the Amended White Articles as provided in
Section 5.1(e) and appropriate documents with the relevant authorities
of other states in which White is qualified to do business and such
filings with Governmental Entities to satisfy the applicable
requirements of state securities or "blue sky" laws; (5) such filings
with and approvals of the NYSE to permit the shares of White Common
Stock that are to be issued in the Merger, under the Green Stock Plans
and pursuant to the White Stock Option Agreement to be listed on the
NYSE; (6) such other filings and consents as may be

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<PAGE> 38

required under any environmental, health or safety law or regulation
pertaining to any notification, disclosure or required approval
necessitated by the Offer, the Merger or the transactions contemplated
by this Agreement and the Option Agreements, the failure of which to
be made or obtained would not reasonably be expected to have a
material adverse effect on White; and (7) such consents, approvals,
orders or authorizations the failure of which to be made or obtained
would not reasonably be expected to have a material adverse effect on
White.

(e) SEC Documents; Undisclosed Liabilities. White has
filed all required reports, schedules, forms, statements and other
documents with the SEC since January 1, 1995 (including exhibits,
schedules and documents incorporated by reference, the "White SEC
Documents"). As of their respective dates, the White SEC Documents
complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such
White SEC Documents, and none of the White SEC Documents when filed
contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. Except to the extent that
information contained in any White SEC Document has been revised or
superseded by a later White Filed SEC Document, none of the White SEC
Documents contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements
of White included in the White SEC Documents comply as to form, as of
their respective dates of filing with the SEC, in all material
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles
(except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly
present in all material respects the consolidated financial position
of White and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to
normal recurring year-end audit adjustments). Except (i) as reflected
in such financial statements or in the notes thereto, (ii) as
contemplated hereunder or under the Option Agreements, (iii) for
liabilities incurred in connection with this Agreement or the
transactions contemplated hereby and (iv) for liabilities and
obligations incurred since June 29, 1996 in the ordinary course of
business consistent with past practice, neither White nor any of its
subsidiaries has any material liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise), including
liabilities arising under any Environmental Laws, required by
generally accepted accounting principles to be reflected in a

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<PAGE> 39

consolidated balance sheet of White and its consolidated subsidiaries
(including the notes thereto) and which, individually or in the
aggregate, could reasonably be expected to have a material adverse
effect on White.

(f) Information Supplied. None of the information
supplied or to be supplied by White for inclusion or incorporation by
reference in the Form S-4 will, at the time the Form S-4 is filed with
the SEC or at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. None of the Offer Documents nor
any of the information supplied or to be supplied by White for
inclusion or incorporation by reference in Green Pennsylvania Proxy
Statement or the Joint Proxy Statement will, at the date such
documents are first published, sent or delivered to shareholders and,
in the case of the Green Pennsylvania Proxy Statement, at the time of
the Green Pennsylvania Shareholders Meeting, and, in the case of the
Joint Proxy Statement, at the time of the White Shareholders Meeting,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they are made, not misleading. The Schedule 14D-1 and the Joint Proxy
Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, no representation or
warranty is made by White with respect to statements made or
incorporated by reference therein based on information supplied by
Green for inclusion or incorporation by reference in any of the
foregoing documents.

(g) Absence of Certain Changes or Events. Except (i) as
disclosed in the White SEC Documents filed and publicly available
prior to the date of this Agreement (as amended to the date of this
Agreement, the "White Filed SEC Documents"), (ii) for the transactions
provided for or permitted by this Agreement or in the Option
Agreements, and (iii) for liabilities incurred in connection with or
as a result of this Agreement or the Option Agreements, since the date
of the most recent audited financial statements included in the White
Filed SEC Documents, White has conducted its business only in the
ordinary course, and there has not been (1) any material adverse
change in White, (2) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property)
with respect to any of White's capital stock, other than regularly
quarterly cash dividends of $.26 per share on the White Common Stock,
(3) any split, combination or reclassification of any of White's
capital stock or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution for
shares of White's capital stock, except for issuances of White Common
Stock upon the exercise of White Employee Stock Options in accordance
with the terms thereof, (4) except as would have been permitted under
Section 4.1 (A) any granting by White or any of its Significant
Subsidiaries

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<PAGE> 40

to any current or former employee, officer or director of White of any
increase in compensation, except for normal increases in the ordinary
course of business consistent with past practice or as required under
employment agreements in effect as of the date of the most recent
financial statements included in the White Filed SEC Documents, (B)
any granting by White or any of its Significant Subsidiaries to any
such officer or director of any increase in severance or termination
pay, except as required under any employment, severance or termination
agreements in effect as of the date of the most recent financial
statements included in the White Filed SEC Documents, or (C) any entry
by White or any of its subsidiaries into any employment, consulting,
severance, termination or indemnification agreements, arrangements or
understandings with any current or former employee, officer or
director or (5) except insofar as may have been disclosed in the White
Filed SEC Documents or required by a change in generally accepted
accounting principles, any change in accounting methods, principles or
practices by White materially affecting its assets, liabilities or
business.

(h) Compliance with Applicable Laws. White and its
subsidiaries hold all permits, licenses, variances, exemptions, orders
and approvals of all Governmental Entities which are material to the
operation of the businesses of White and its subsidiaries, taken as a
whole (the "White Permits"). White and its subsidiaries are in
compliance with the terms of the White Permits and all applicable
statutes, laws, ordinances, rules and regulations, including
Environmental Laws, except where the failure so to comply,
individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on White. The businesses of White and
its subsidiaries are not being conducted in violation of any law,
ordinance or regulation of any Governmental Entity, including
Environmental Laws, except for possible violations which could not
reasonably be expected to have a material adverse effect on White. As
of the date of this Agreement, no action, demand, requirement or
investigation by any Governmental Entity with respect to White or any
of its subsidiaries is pending or, to the knowledge of White,
threatened, other than, in each case, those the outcome of which,
individually or in the aggregate could not reasonably be expected to
have a material adverse effect on White.

(i) Absence of Changes in Benefit Plans. Section 3.2(i)
of the White Disclosure Schedule sets forth a true and complete list
of all material White Benefit Plans as of the date hereof. Except for
rail labor agreements negotiated in the ordinary course, since the
date of the most recent financial statements included in the White
Filed SEC Documents, there has not been any adoption or amendment in
any material respect by White or any of its subsidiaries of any
collective bargaining agreement or any bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, medical or
other plan, arrangement or understanding providing benefits to any
current or former employee, officer or

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<PAGE> 41

director of White or any of its wholly owned subsidiaries
(collectively, the "White Benefit Plans" and, together with the Green
Benefit Plans, the "Employee Benefit Plans").

(j) ERISA Compliance. (i) With respect to the
White Benefit Plans, individually and in the aggregate, no event has
occurred and, to the knowledge of White, there exists no condition or
set of circumstances, in connection with which White or any of its
subsidiaries could be subject to any liability that is reasonably likely
to have a material adverse effect on White (except liability for
benefits claims and funding obligations payable in the ordinary course)
under ERISA, the Code or any other applicable law.

(ii) Each White Benefit Plan has been administered in
accordance with its terms, except for any failures so to administer any
White Benefit Plans as would not individually or in the aggregate have a
material adverse effect on White. White, its subsidiaries and all the
White Benefit Plans are in compliance with the applicable provisions of
ERISA, the Code and all other applicable laws and the terms of all
applicable collective bargaining agreements, except for any failures to
be in such compliance as would not individually or in the aggregate have
a material adverse effect on White.

(iii) Except for all equity-based and other awards, the
vesting and exercisability of which will, by their terms, be accelerated
as a result of the transactions contemplated hereunder, no employee of
White will be entitled to any additional benefits or any acceleration
of the time of payment or vesting of any benefits under any White
Benefit Plan as a result of the transactions contemplated by this
Agreement or the Option Agreements.

(k) Voting Requirements. The affirmative vote of the holders
of a majority of all outstanding shares of White Common Stock, voting
as a single class, at the White Shareholders Meeting (the "White
Shareholder Approval") to adopt and approve the Amended White Articles
(as contemplated by Section 5.1(e) hereof), which approval shall also
constitute approval of the issuance of the White Common Stock in the
Merger in accordance with the rules of the NYSE, is the only vote of
the holders of any class or series of White capital stock or
indebtedness necessary to approve and adopt this

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Agreement, the Option Agreements and the transactions contemplated by
this Agreement and the Option Agreements.

(l) State Takeover Statutes. The Board of Directors of
White has taken all action necessary or advisable so as to render
inoperative with respect to the transactions contemplated hereby or by
the Option Agreements all applicable state anti-takeover statutes.

(m) Brokers. No broker, investment banker, financial
advisor or other person, other than Wasserstein Perella & Co., Inc.
and Salomon Brothers Inc, the fees and expenses of which shall be paid
by White, is entitled to any broker's, finder's, financial advisor's
or other similar fee or commission in connection with the transactions
contemplated by this Agreement and the Option Agreements based upon
arrangements made by or on behalf of White. White has furnished to
Green true and complete copies of all agreements under which any such
fees or expenses are payable and all indemnification and other
agreements related to the engagement of the persons to whom such fees
are payable.

(n) White Rights Agreement. The White Rights Agreement
has been amended (the "White Rights Plan Amendment") to (i) render the
White Rights Agreement inapplicable to the transactions contemplated
by the White Stock Option Agreement and (ii) ensure that (y) neither
Green nor any of its wholly owned subsidiaries is an Acquiring Person
(as defined in the White Rights Agreement) pursuant to the White
Rights Agreement by virtue of the approval, execution or delivery of
the White Stock Option Agreement or the consummation of the
transactions contemplated thereby and (z) a Shares Acquisition Date or
Distribution Date (in each case as defined in the White Rights
Agreement) does not occur by reason of the approval, execution or
delivery of the White Stock Option Agreement, the consummation of the
Merger, or the consummation of the other transactions contemplated by
this Agreement and the White Stock Option Agreement and such amendment
may not be further amended by White without the prior consent of Green
in its sole discretion.

(o) Tax Status. None of White, Tender Sub, or any
subsidiary of White or Tender Sub has taken any action or, as of the
date hereof, is aware of any fact that would jeopardize the
qualification of the Merger as a reorganization under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code.

ARTICLE IV

COVENANTS RELATING TO CONDUCT OF BUSINESS

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SECTION 4.1. Conduct of Business. (a) Conduct of
Business. Except as contemplated by this Agreement or as set forth in Section
4.1 of the Green Disclosure Schedule or the White Disclosure Schedule, as
applicable, during the period from the date of this Agreement to the Effective
Time, Green and White shall, and shall cause their respective subsidiaries to,
carry on their respective businesses in the ordinary course consistent with
past practice and in compliance in all material respects with all applicable
laws and regulations and, to the extent consistent therewith, shall use all
reasonable efforts to preserve intact their current business organizations, use
reasonable efforts to keep available the services of their current officers and
other key employees as a group and preserve their relationships with those
persons having business dealings with them to the end that their goodwill and
ongoing businesses shall be unimpaired at the Effective Time. Except as
contemplated by this Agreement or as set forth in Section 4.1 of the Green
Disclosure Schedule or the White Disclosure Schedule, as applicable, without
limiting the generality of the foregoing, during the period from the date of
this Agreement to the Effective Time, neither Green nor White shall, nor shall
such parties permit any of their respective subsidiaries to (without the
consent of the other party hereto, provided that such consent shall not be
required in respect of subsections (iv) or (v) below if, based on the advice of
outside counsel to either party, the discussion of such matters or related
disclosures of information by the parties hereto would be inappropriate):

(i) other than dividends and distributions (including
liquidating distributions) by a direct or indirect wholly owned
subsidiary of Green or White, as applicable, to its parent, or by a
subsidiary that is partially owned by Green or White, as applicable, or
any of their respective subsidiaries, provided that Green or White, as
applicable, or any such subsidiary receives or is to receive its
proportionate share thereof, and other than the regular quarterly
dividends of $.475 per share with respect to Green Common Stock, regular
quarterly dividends of $.54125 per share with respect to Green ESOP
Preferred Stock in accordance with its terms and regular quarterly
dividends of $.26 per share with respect to White Common Stock (plus
such increases as may be properly authorized not to exceed 20% per
annum), (x) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, (y) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or (z) except in
connection with the funding of employee benefit plans, purchase, redeem,
retire or otherwise ac-

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<PAGE> 44

quire any shares of its capital stock or the capital stock of any of its
Significant Subsidiaries or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;

(ii) issue, deliver, sell, pledge or otherwise encumber
any shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
(other than (u) in accordance with the terms of the Green Rights
Agreement or the White Rights Agreement, (w) the issuance of Green
Common Stock or White Common Stock (A) upon the exercise of Green
Employee Stock Options or White Employee Stock Options, respectively,
and listed in the Green Disclosure Schedule and the White Disclosure
Schedule outstanding on the date of this Agreement and in accordance
with their present terms or (B) pursuant to a grant existing as of the
date hereof or otherwise permitted under this Section under any Employee
Benefit Plan, (x) the grant or award of (A) Green Employee Stock Options
or White Employee Stock Options (or the issuance of Green Common Stock
or White Common Stock upon exercise thereof) consistent with past
practice in amounts not to exceed, in any 12-month period, 110% of the
amount issued in the prior 12-month period, and (B) in the case of
White, target bonus awards under White's long-term incentive plans
consistent with past practice in amounts not to exceed, in any 12-month
period, 110% of the amounts of the aggregate target bonus awards issued
in the prior 12-month period, (y) the issuance of Green Common Stock
upon conversion of Green ESOP Preferred Stock in accordance with its
terms and (z) the issuance of Green Common Stock or White Common Stock
pursuant to the Option Agreements);

(iii) in the case of Green or White, adopt, propose or agree
to any amendment to its articles of incorporation, by-laws or other
comparable organizational documents, except for such amendments as are
contemplated hereby, and, in the case of any subsidiary, adopt, propose
or agree to any amendment to its certificate of incorporation, by-laws
or other comparable organizational documents other than in the ordinary
course in a manner

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<PAGE> 45

which does not have a material adverse effect on Green or White, as
applicable;

(iv) sell, lease, license, mortgage or otherwise encumber
or subject to any Lien or otherwise dispose of any of its properties or
assets, other than (x) transactions in the ordinary course of business
consistent with past practice and (y) transactions involving assets
which do not individually or in the aggregate exceed $50,000,000 in any
12-month period;

(v) make or agree to make any acquisition (other than of
inventory) or capital expenditure;

(vi) except in the ordinary course consistent with past
practice, make any tax election that could reasonably be expected to
have a material adverse effect on Green or White, as applicable, or
settle or compromise any material income tax liability;

(vii) pay, discharge, settle or satisfy any material
claims, liabilities or obligations (whether absolute, accrued, asserted
or unasserted, contingent or otherwise), other than the payment,
discharge, settlement or satisfaction (A) in the ordinary course of
business consistent with past practice or in accordance with their
terms, (B) of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or
the notes thereto) of Green included in the Green Filed SEC Documents or
of White included in the White Filed SEC Documents, as applicable, (C)
incurred since the date of such financial statements in the ordinary
course of business consistent with past practice or (D) which do not in
the aggregate have a material adverse effect on Green or White, as
applicable;

(viii) except in the ordinary course of business or except
as would not reasonably be expected to have a material adverse effect on
Green or White, as applicable, modify, amend or terminate any material
contract or agreement to which Green or White, as applicable, or any of
their respective subsidiaries, is a party or waive, release or assign
any material rights or claims thereunder;

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<PAGE> 46

(ix) make any material change to its accounting methods,
principles or practices, except as may be required by generally accepted
accounting principles;

(x) except as required by law or contemplated hereby and
except for rail labor agreements negotiated in the ordinary course,
enter into, adopt or amend in any material respect or terminate any
Green Benefit Plan or White Benefit Plan, as applicable, or any other
agreement, plan or policy involving Green or White, as applicable, or
any of their respective subsidiaries, and one or more of their
directors, officers or employees, or materially change any actuarial or
other assumption used to calculate funding obligations with respect to
any pension plan, or change the manner in which contributions to any
pension plan are made or the basis on which such contributions are
determined;

(xi) except for normal increases in the ordinary course of
business consistent with past practice that, in the aggregate, do not
materially increase benefits or compensation expenses of Green or White,
as applicable, or their respective subsidiaries, or as contemplated
hereby or by the terms of any contract the existence of which does not
constitute a violation of this Agreement, increase the compensation of
any director, executive officer or other key employee or pay any benefit
or amount not required by a plan or arrangement as in effect on the
date of this Agreement to any such person;

(xii) enter into any agreement containing any provision or
covenant (x) limiting in any material respect the ability to compete
with any person which would bind the other party hereto (or its
operations) after the Effective Time or (y) other than in the ordinary
course of business, granting concessions to any railroad (whether
through divestiture of lines or the grant of trackage rights); or

(xiii) authorize, or commit or agree to take, any of the
foregoing actions.

(b) Coordination of Dividends. White and Green shall
coordinate with one another regarding the declaration and payment of dividends
in respect of White Common Stock and Green Common Stock and the

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record dates and payment dates relating thereto, it being the intention of
White and Green that any holder of Green Common Stock shall not receive two
dividends, or fail to receive one dividend, for any single calendar quarter
with respect to its shares of Green Common Stock and/or any shares of White
Common Stock any such holder receives in exchange therefor pursuant to the
Merger.

(c) Other Actions. Except as required by law, Green and White
shall not, and shall not permit any of their respective subsidiaries to,
voluntarily take any action that would, or that could reasonably be expected to,
result in (i) any of the representations and warranties of such party set forth
in this Agreement or the Option Agreements that are qualified as to materiality
becoming untrue, (ii) any of such representations and warranties that are not so
qualified becoming untrue in any material respect or (iii) any of the conditions
to the consummation of the transactions contemplated hereby not being satisfied.
Without limiting the foregoing, Green and White shall not, and shall not permit
any of their respective subsidiaries to, take any action that could reasonably
be expected to impair, or delay in any material respect, obtaining the STB
approval contemplated by Sections 6.2(d) and 6.3(c) or complying with or
satisfying the terms thereof.

(d) Advice of Changes. Green and White shall promptly advise the
other party orally and in writing of (i) any representation or warranty made by
it contained in this Agreement or the Option Agreements that is qualified as to
materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect, (ii) the failure by it to comply in any
material respect with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it under this Agreement or the
Option Agreements and (iii) any change or event having, or which, insofar as can
reasonably be foreseen, could reasonably be expected to have, a material adverse
effect on such party or on the truth of their respective representations and
warranties or the ability of the conditions to the consummation of the
transactions contemplated hereby to be satisfied; provided, however, that no
such notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement or the Option
Agreements.

SECTION 4.2. No Solicitation. (a) Neither Green nor White
shall, nor shall it permit any of its subsidiaries to, nor shall it authorize or
permit any of its officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its subsidiaries to, directly or indirectly through another person,
(i) solicit, initiate or encourage (including by way of furnishing information),
or take any other action designed to facilitate, directly or indirectly, any
inquiries or the making of any proposal which constitutes any Takeover Proposal
or (ii) participate in any discussions or negotiations regarding any Takeover
Proposal; provided, however, that if, at any time prior to the earlier of

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(x) the consummation of the Offer and (y) the obtaining of the Green Merger
Shareholder Approval, in the case of Green, or the White Shareholder Approval,
in the case of White, or after 180 days from the date hereof and prior to the
Approval Date, the Board of Directors of Green or White, as applicable,
determines in good faith, based on the advice of outside counsel, that it is
necessary to do so to avoid a breach of its fiduciary duties to Green under
applicable law, Green or White, as applicable, may, in response to a Takeover
Proposal which was not solicited by it or which did not otherwise result from a
breach of this Section 4.2(a), and subject to such party's compliance with
Section 4.2(c), (A) furnish information with respect to it and its
subsidiaries to any person pursuant to a customary confidentiality agreement
(as determined by the party receiving such Takeover Proposal after consultation
with its outside counsel), the benefits of the terms of which, if more
favorable to the other party to such confidentiality agreement than those in
place with the other party hereto, shall be extended to the other party hereto,
and (B) participate in negotiations regarding such Takeover Proposal. For
purposes of this Agreement, "Takeover Proposal" in respect of Green or White,
as applicable, means any proposal or offer from any person for the acquisition
or purchase of more than 50% of the assets of such party and its subsidiaries
or more than 50% of the equity securities of such party entitled to vote
generally in the election of directors, any tender offer or exchange offer that
if consummated would result in any person beneficially owning more than 50% of
the equity securities of such party entitled to vote generally in the election
of directors, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
such party, other than the transactions contemplated by this Agreement or the
Option Agreements.

(b) Except as expressly permitted by this Section 4.2,
neither the Board of Directors of Green or White, as applicable, nor any
committee thereof shall (i) withdraw or modify, or propose publicly to withdraw
or modify, in a manner adverse to the other party hereto, the approval or
recommendation by such Board of Directors or such committee of the Offer or the
adoption and approval of the matters to be considered at the Green Shareholders
Meetings, in the case of Green, and the White Shareholders Meeting, in the case
of White, (ii) approve or recommend, or propose publicly to approve or
recommend, any Takeover Proposal, or (iii) cause Green or White, as applicable,
to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, an "Acquisition Agreement") related
to any Takeover Proposal. Notwithstanding the foregoing, in the event that, at
any time following 180 days after the date hereof and prior to the earlier of
(x) the time that Tendered Shares constituting at least 40% of the outstanding
shares of Green Common Stock and Green ESOP Preferred Stock on a fully diluted
basis have been deposited in the Voting Trust and (y) the obtaining of the
Green Merger Shareholder Approval, in the case of Green, or the White
Shareholder Approval, in the case of White (such earlier date referred to in
(x) or (y), the "Approval Date"), there exists a Superior Proposal and such
Board of Directors determines that (x) in the case of the Board of Directors of
Green, there is not a substantial probability that White will be successful in
acquiring 40% of the shares of Green Common Stock and Green ESOP Preferred
Stock in the Offer and/or the Second

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Offer or otherwise (or, if the Green Pennsylvania Stockholder Approval has not
then been obtained, there is not a substantial probability that the Green
Merger Shareholder Approval will be obtained), in either case due to the
existence of such Superior Proposal with respect to Green or (y) in the case of
the Board of Directors of White, there is not a substantial probability that
the White Shareholder Approval will be obtained due to the existence of such
Superior Proposal with respect to White, the Board of Directors of Green or
White, as applicable, may (subject to this and the following sentences)
withdraw or modify its approval or recommendation of the Offer, the Merger or
the adoption and approval of the matters to be considered at the Green
Shareholders Meetings, in the case of Green, and the White Shareholders
Meeting, in the case of White, the Board of Directors of Green or White, as
applicable, may (subject to this and the following sentences) approve or
recommend such Superior Proposal or terminate this Agreement (and concurrently
with such termination, if it so chooses, cause Green or White, as applicable,
to enter into any Acquisition Agreement with respect to such Superior
Proposal), but only at a time that is after the fifth business day following
the other party's receipt of written notice advising such other party that the
Board of Directors of Green or White, as applicable, has received a Superior
Proposal, specifying the material terms and conditions of such Superior
Proposal and identifying the person making such Superior Proposal. For
purposes of this Agreement, a "Superior Proposal" means in respect of Green or
White, as applicable, any proposal made by a third party to acquire, directly
or indirectly, for consideration consisting of cash and/or securities, more
than 50% of the equity securities of Green or White, as the case may be,
entitled to vote generally in the election of directors or all or substantially
all the assets of Green or White, as the case may be, and otherwise on terms
which the Board of Directors of such party determines in its good faith
judgment (x) (based on the written opinion of a financial advisor of nationally
recognized reputation (which opinion shall be provided to the other party
hereto)) to be more favorable from a financial point of view to its
shareholders than the Offer, the Merger and the transactions contemplated
hereby and for which financing, to the extent required, is then committed and
(y) also to be more favorable to such party than the Offer, the Merger and the
transactions contemplated hereby after taking into account all constituencies
(including shareholders) and pertinent factors permitted under the Pennsylvania
Law or applicable Virginia law.

(c) In addition to the obligations of the parties set
forth in paragraphs (a) and (b) of this Section 4.2, any party that has
received a Takeover Proposal shall immediately advise the other party hereto
orally and in writing of any request for information or of any Takeover
Proposal, the material terms and conditions of such request or Takeover
Proposal and the identity of the person making such request or Takeover
Proposal. Any party that has received a Takeover Proposal will keep the other
party hereto reasonably informed of the status and details (including
amendments or proposed amendments) of any such request or Takeover Proposal.

(d) Nothing contained in this Section 4.2 shall prohibit
either party hereto from taking and disclosing to its shareholders a

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position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
from making any disclosure to its shareholders if, in the good faith judgment
of its Board of Directors, based on the advice of outside counsel, failure so
to disclose would result in a violation of applicable law; provided, however,
that neither party nor its Board of Directors nor any committee thereof shall,
except as permitted by Section 4.2(b), withdraw or modify, or propose publicly
to withdraw or modify, its position with respect to the Offer or the matters to
be considered at the Green Shareholders Meetings or the White Shareholders
Meeting, as applicable, or approve or recommend, or propose publicly to approve
or recommend, a Takeover Proposal.

ARTICLE V

ADDITIONAL AGREEMENTS

SECTION 5.1. Preparation of the Form S-4 and the Joint Proxy
Statement; Shareholders Meetings. (a) As soon as practicable following the
date of this Agreement, Green and White shall prepare and file with the SEC the
Joint Proxy Statement and White shall prepare and file with the SEC the Form
S-4, in which the Joint Proxy Statement will be included as a prospectus. Each
of Green and White shall use all reasonable efforts to have the Form S-4
declared effective under the Securities Act as promptly as practicable after
such filing. Green will use all reasonable efforts to cause the Joint Proxy
Statement to be mailed to Green's shareholders, and White will use all
reasonable efforts to cause the Joint Proxy Statement to be mailed to White's
shareholders, in each case as promptly as practicable after the Form S-4 is
declared effective under the Securities Act. White shall also take any action
(other than qualifying to do business in any jurisdiction in which it is not now
so qualified or to file a general consent to service of process) required to be
taken under any applicable state securities laws in connection with the issuance
of White Common Stock in the Merger and under the Green Stock Plans and White
Stock Plans, and Green shall furnish all information concerning Green and the
holders of Green Common Stock as may be reasonably requested in connection with
any such action.

(b) Green shall, as soon as practicable following the date of
this Agreement, file with the SEC preliminary proxy materials and use reasonable
efforts to clear such materials and thereafter duly call, give notice of,
convene and hold on a date mutually agreed to by White and Green a meeting of
its shareholders (the "Green Pennsylvania Shareholders Meeting") for the purpose
of amending the Green Articles to explicitly provide that Subchapter E (Control
Transactions) of Chapter 25 of the Pennsylvania Law shall not apply to Green;
and shall, as soon as practicable following the date of this Agreement, duly
call, give notice of, convene and hold a meeting of its shareholders (the "Green
Merger Shareholders Meeting" and, together with the Green Pennsylvania
Shareholders Meeting, the "Green Shareholders Meetings") for the purpose of
obtaining

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the Green Merger Shareholder Approval. The parties agree that the solicitation
of the proxies for the Green Pennsylvania Shareholder Approval shall be
solicited solely by Green and its agents. Without limiting the generality of
the foregoing, but subject to Section 4.2(b), Green agrees that its obligations
pursuant to the first sentence of this Section 5.1(b) shall not be affected by
the commencement, public proposal, public disclosure or communication to Green
of any Takeover Proposal in respect of Green. Green shall, through its Board
of Directors, recommend to its shareholders the approval and adoption of the
Offer and the matters to be considered at the Green Shareholders Meetings,
except to the extent that the Board of Directors of Green shall have withdrawn
or modified its approval or recommendation of the Offer or the matters to be
considered at the Green Shareholders Meetings or terminated this Agreement in
accordance with Section 4.2(b). Subject to the terms of the Voting Trust
Agreement, White shall cause all shares of Green Common Stock and Green ESOP
Preferred Stock acquired by it or its wholly owned subsidiaries pursuant to the
Offer (which shall be deposited in the Voting Trust) or otherwise to be voted
in favor of approval and adoption of the matters to be considered at the Green
Shareholders Meetings. In the event that the matters to be considered at the
Green Pennsylvania Shareholders Meeting are not approved at a meeting called
for such purpose, from time to time Green may, and shall at the request of
White, duly call, give notice of, convene and hold one or more meeting(s) of
shareholders thereafter for the purpose of obtaining the Green Pennsylvania
Shareholder Approval, in which case all obligations hereunder respecting the
Green Pennsylvania Shareholders Meeting shall apply in respect of such other
meeting(s).

(c) White shall, as soon as practicable following the date of
this Agreement, duly call, give notice of, convene and hold a meeting of its
shareholders (the "White Shareholders Meeting") for the purpose of obtaining the
White Shareholder Approval. Without limiting the generality of the foregoing
but subject to Section 4.2(b), White agrees that its obligations pursuant to the
first sentence of this Section 5.1(c) shall not be affected by the commencement,
public proposal, public disclosure or commencement of any Takeover Proposal in
respect of White. White shall, through its Board of Directors, recommend to its
shareholders the approval and adoption of the matters to be considered at the
White Shareholders Meeting, except to the extent that the Board of Directors of
White shall have withdrawn or modified its recommendation of the matters to be
considered at the White Shareholders Meeting and terminated this Agreement in
accordance with Section 4.2(b).

(d) White and Green shall use reasonable efforts to hold the
Green Merger Shareholders Meeting and the White Shareholders Meeting on the same
date.

(e) As promptly as practicable following the date of the White
Shareholder Approval, White shall take such action as may be necessary or
advisable so that, subject to the terms and conditions hereof, the articles of
incorporation of White shall, at the Effective Time, be amended to be
substantially in the form of Exhibit C hereto (such articles, as in effect on
the date hereof, the "White Articles" and, as so

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amended, the "Amended White Articles"), including the filing of the Amended
White Articles with the State Corporation Commission of Virginia.

(f) As promptly as practicable following the date of the Green
Pennsylvania Shareholder Approval, if obtained, Green shall take such action as
may be necessary or advisable so that, subject to the terms and conditions
hereof, the articles of incorporation of Green shall be amended to reflect the
inapplicability of Subchapter E (Control Transactions) of Chapter 25 of the
Pennsylvania Law as contemplated by Section 3.1(k) hereof (such articles, as in
effect on the date hereof, the "Green Articles" and, as so amended, the "Amended
Green Articles"), including the filing of the Amended Green Articles with the
Pennsylvania Department of State, provided that the Amended Green Articles shall
not be filed until immediately prior to the consummation of any purchase of
Green Common Stock that would cause White to own 20% or more of the outstanding
voting power of Green (including, as applicable, consummation of the Offer or
the Second Offer, exercise of the Green Stock Option Agreement or otherwise) and
White shall give Green prior notice thereof.

SECTION 5.2. Letters of Accountants. (a) Green shall use
reasonable efforts to cause to be delivered to White two letters from Green's
independent accountants, one dated a date within two business days before the
date on which the Form S-4 shall become effective and one dated a date within
two business days before the date of the applicable shareholders meeting, each
addressed to White, in form and substance reasonably satisfactory to White and
customary in scope and substance for comfort letters delivered by independent
public accountants in connection with registration statements similar to the
Form S-4.

(b) White shall use reasonable efforts to cause to be delivered
to Green two letters from White's independent accountants, one dated a date
within two business days before the date on which the Form S-4 shall become
effective and one dated a date within two business days before the date of the
applicable shareholders meeting, each addressed to Green, in form and substance
reasonably satisfactory to Green and customary in scope and substance for
comfort letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.

SECTION 5.3. Tax-Free Reorganization. (a) The parties intend the
transaction to qualify as a reorganization under Sections 368(a)(1)(A) and
368(a)(2)(D) of the Code. Each party and its affiliates shall use reasonable
efforts to cause the Merger to so qualify and to obtain, as of the Closing Date,
the opinions (the "Tax Opinions") of Wachtell, Lipton, Rosen & Katz, counsel to
White, and Cravath, Swaine & Moore, counsel to Green, in each case to the effect
that the Merger (whether or not the Offer and/or the Second Offer is integrated
with the Merger for federal income tax purposes) shall qualify as a
reorganization within the meaning of Section 368 of the Code; it being
understood that in rendering such Tax Opinions, such tax counsel shall be
entitled to rely upon representations of officers of Green and White
substantially in the form of Exhibits F and G. Neither party nor its affiliate
shall take any

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action that would cause the Merger not to qualify as a reorganization under
those Sections except to the extent that such action is specifically
contemplated by this Agreement. The parties shall take the position for all
purposes that the Merger qualifies as a reorganization under those Sections
unless and until the parties fail to obtain either of such Tax Opinions as of
the Closing Date.

(b) White and Green agree that while the Merger will
constitute a "Change of Control" for purposes of the White Benefit Plans and
the Green Benefit Plans, they will not treat the Merger as a change in the
ownership or effective control of White or a change in the ownership of a
substantial portion of the assets of White, each within the meaning of Section
280G of the Code, unless otherwise required to do so by a determination (as
defined in Section 1313 of the Code).

SECTION 5.4. Access to Information; Confidentiality.
Subject to the Confidentiality Agreement, each of Green and White shall, and
shall cause each of its respective subsidiaries to, afford to the other party
and to the officers, employees, accountants, counsel, financial advisors and
other representatives of such other party, reasonable access during normal
business hours during the period prior to the Effective Time to all their
respective properties, books, contracts, commitments, personnel and records
and, during such period, each of Green and White shall, and shall cause each of
its respective subsidiaries to, furnish promptly to the other party (a) a copy
of each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of federal or state securities
laws and (b) all other information concerning its business, properties and
personnel as such other party may reasonably request; provided, however, that
access to certain Green or White information may require the entry of a
protective order by the STB, after which date full access shall be granted to
such information consistent with this paragraph and subject to the terms of
such order. Each of Green and White shall hold, and shall cause its respective
officers, employees, accountants, counsel, financial advisors and other
representatives and affiliates to hold, any nonpublic information in accordance
with the terms of the Confidentiality Agreement, dated October 8, 1996, between
White and Green, as amended and supplemented (the "Confidentiality Agreement").

SECTION 5.5. Reasonable Efforts. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to act in good faith toward and to use all reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Offer, the Merger and the other transactions
contemplated by this Agreement and the Option Agreements, including (i) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities, such
as those referred to in Sections 3.1(d) and 3.2(d)) and the taking of all
reasonable steps as may be necessary to

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obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the Option Agreements or the consummation of the transactions contemplated by
this Agreement or the Option Agreements, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed, and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement and the Option Agreements.
Nothing set forth in this Section 5.5(a) shall limit or affect actions
permitted to be taken pursuant to Section 4.2. Without limiting the generality
of the foregoing, the parties (x) shall make and cause their respective
subsidiaries to make all necessary filings, as soon as practicable, including
those required with the STB and applicable transportation regulations and laws
in order to facilitate prompt consummation of the Offer, the Merger and the
transactions contemplated hereby and by the Option Agreements, (y) shall use
reasonable efforts to provide such information and communications to
Governmental Entities as such Governmental Entities may reasonably request and
(z) shall provide to the other party copies of all applications in advance of
filing or submission of such applications to Governmental Entities in
connection with this Agreement or the Option Agreements and shall keep the
other party apprised of the status of matters relating to completion of the
transactions contemplated hereby; provided that either party may redact
confidential portions as may be necessary or appropriate.

(b) In furtherance of the foregoing, Green and White
shall, and each shall cause each of its subsidiaries to, take all such actions
as are necessary to (i) cooperate with one another to prepare and present to
the STB as soon as practicable all filings and other presentations in
connection with seeking any STB approval, exemption or other authorization
necessary to consummate the transactions contemplated by this Agreement and the
Option Agreements, (ii) prosecute such filings and other presentations with
diligence, (iii) diligently oppose any objections to, appeals from or petitions
to reconsider or reopen any such STB approval by persons not party to this
Agreement and (iv) take all such further action as reasonably may be necessary
to obtain a final order or orders of the STB approving such transactions
consistent with this Agreement and the Option Agreements.

(c) In connection with and without limiting the foregoing,
Green and White shall (i) take all action necessary to ensure that no
state anti-takeover statute or similar statute or regulation is or becomes
operative with respect to the Offer, the Merger, this Agreement, the Option
Agreements or any of the other transactions contemplated by this Agreement or
the Option Agreements and (ii) if any state anti-takeover statute or similar
statute or regulation is or becomes operative with respect to the Offer, the
Merger, this Agreement, the Option Agreements or any other transaction
contemplated by this Agreement or the Option Agreements, take all action
necessary to ensure that the Offer, the Merger and the other transactions
contemplated by this Agreement and the

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Option Agreements may be consummated as promptly as practicable on the terms
contemplated by this Agreement and the Option Agreements and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
transactions contemplated by this Agreement and the Option Agreements.

SECTION 5.6. Stock Options. (a) As soon as practicable
following the date of this Agreement, the Board of Directors of Green
(or, if appropriate, any committee administering the Green Stock Plans)
shall adopt such resolutions or take such other actions as may be required to
effect the following:

(i) adjust the terms of all outstanding Green Employee
Stock Options granted under Green Stock Plans, whether vested or
unvested, as necessary to provide that, at the Effective Time, each
Green Employee Stock Option outstanding immediately prior to the
Effective Time shall be deemed to constitute an option to acquire, on
the same terms and conditions as were applicable under such Green
Employee Stock Option, the same number of shares of White Common Stock
as the holder of such Green Employee Stock Option would have been
entitled to receive pursuant to the Merger had such holder exercised
such Green Employee Stock Option in full immediately prior to the
Effective Time, at a price per share of White Common Stock equal to (A)
the aggregate exercise price for the shares of Green Common Stock
otherwise purchasable pursuant to such Green Employee Stock Option
divided by (B) the aggregate number of shares of White Common Stock
deemed purchasable pursuant to such Green Employee Stock Option (each,
as so adjusted, an "Adjusted Option"); provided, however, that in the
case of any option to which Section 421 of the Code applies by reason of
its qualification under any of Sections 422 through 424 of the Code
("qualified stock options"), the option price, the number of shares
purchasable pursuant to such option and the terms and conditions of
exercise of such option shall be determined in order to comply with
Section 424 of the Code; and

(ii) make such other changes to the Green Stock Plans as
Green and White may agree are appropriate to give effect to the Merger.

(b) As soon as practicable after the Effective Time, White
shall deliver to the holders of Green Employee Stock Options appropriate
notices setting forth such holders' rights pursuant to the

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respective Green Stock Plans and the agreements evidencing the grants of such
Green Employee Stock Options and that such Green Employee Stock Options and
agreements shall be assumed by White and shall continue in effect on the same
terms and conditions (subject to the adjustments required by this Section 5.6
after giving effect to the Merger). White shall comply with the terms of the
Green Stock Plans and ensure, to the extent required by, and subject to the
provisions of, such Green Stock Plans, that the Green Employee Stock Options
which qualified as qualified stock options prior to the Effective Time continue
to qualify as qualified stock options after the Effective Time.

(c) White shall take such actions as are reasonably necessary
for the assumption of the Green Stock Plans pursuant to Section 5.6(a),
including the reservation, issuance and listing of White Common Stock as is
necessary to effectuate the transactions contemplated by Section 5.6(a). As soon
as reasonably practicable after the Effective Time, White shall prepare and file
with the SEC one or more registration statement(s) on Form S-8 or other
appropriate form with respect to shares of White Common Stock subject to Green
Employee Stock Options issued under such Green Stock Plans and shall use all
reasonable efforts to maintain the effectiveness of such registration statement
or registration statements covering such Green Employee Stock Options (and
maintain the current status of the prospectus or prospectuses contained therein)
for so long as such Green Employee Stock Options remain outstanding. With
respect to those individuals, if any, who subsequent to the Effective Time will
be subject to the reporting requirements under Section 16(a) of the Exchange
Act, where applicable, White shall use all reasonable efforts to administer the
Green Stock Plans assumed pursuant to Section 5.6(b) in a manner that complies
with Rule 16b-3 promulgated under the Exchange Act to the extent the applicable
Green Stock Plan complied with such rule prior to the Merger.

(d) A holder of an Adjusted Option may exercise such Adjusted
Option in whole or in part in accordance with its terms by delivering a properly
executed notice of exercise to White, together with the consideration therefor
and the federal withholding tax information, if any, required in accordance with
the related Green Stock Plan.

(e) Except as otherwise contemplated by this Section 5.6 and
except to the extent required under the respective terms of the Green Employee
Stock Options, all restrictions or limitations on transfer and vesting with
respect to Green Employee Stock Options awarded under the Green Stock Plans or
any other plan, program or arrangement of Green or any of its subsidiaries, to
the extent that such restrictions or limitations shall not have already lapsed,
shall remain in full force and effect with respect to such options after giving
effect to the Merger and the assumption by White as set forth above.

SECTION 5.7. Certain Employee Matters. Following the Effective
Time, White shall cause the Surviving Corporation to honor all obligations under
employment agreements and employee benefit plans, programs, policies and
arrangements of Green or White the existence of which does not constitute a
violation of this Agreement in accordance with

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the terms thereof and agrees to provide employees of Green with benefits no
less favorable in the aggregate than those provided to similarly situated White
employees. Notwithstanding the foregoing, for a period of two years following
the Effective Time, White shall, or shall cause the Surviving Corporation to,
establish and maintain a plan to provide severance and termination benefits to
all non-union employees of Green and White terminated as a result of, or in
connection with, the Merger, which benefits shall be determined consistent with
industry standards and taking into account those benefits provided in recent
similar transactions in the industry.

SECTION 5.8. Indemnification, Exculpation and Insurance. (a)
White agrees that all rights to indemnification and exculpation from liabilities
for acts or omissions occurring at or prior to the Effective Time now existing
in favor of the current or former directors or officers of Green and its
subsidiaries as provided in their respective certificates of incorporation or
by-laws (or comparable organizational documents) and any indemnification
agreements of Green, the existence of which does not constitute a breach of this
Agreement, shall be assumed by the Surviving Corporation in the Merger, without
further action, as of the Effective Time and shall survive the Merger and shall
continue in full force and effect in accordance with their terms. In addition,
from and after the Effective Time, directors and officers of Green who become
directors or officers of White shall be entitled to the same indemnity rights
and protections as are afforded to other directors and officers of White.

(b) In the event that White or any of its successors or assigns
(i) consolidates with or merges into any other person and is not the continuing
or surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets to
any person, then, and in each such case, proper provision will be made so that
the successors and assigns of White assume the obligations set forth in this
Section.

(c) For three years after the Effective Time, White shall
provide, if available on commercially reasonable terms, officers' and directors'
liability insurance in respect of acts or omissions occurring prior to the
Effective Time, including but not limited to the transactions contemplated by
this Agreement, covering each person currently covered by Green's officers' and
directors' liability insurance policy, or who becomes covered by such policy
prior to the Effective Time, on terms with respect to coverage and amount no
less favorable than those of such policy in effect on the date hereof, provided
that in satisfying its obligation under this Section White shall not be
obligated to pay premiums in excess of 150% of the amount per annum Green paid
in its last full fiscal year, and provided further that White shall nevertheless
be obligated to provide such coverage as may be obtained for such amount.

(d) The provisions of this Section 5.8 (i) are intended to be for
the benefit of, and will be enforceable by, each indemnified party, his or her
heirs and his or her representatives and (ii) are in

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addition to, and not in substitution for, any other rights to indemnification
or contribution that any such person may have by contract or otherwise.

SECTION 5.9. Fees and Expenses. (a) Except as set forth in
this Section 5.9, all fees and expenses incurred in connection with the Offer,
the Merger, this Agreement, the Option Agreements and the transactions
contemplated by this Agreement and the Option Agreements shall be paid by the
party incurring such fees or expenses, whether or not the Merger is consummated,
except that each of White and Green shall bear and pay one-half of the costs and
expenses incurred in connection with (i) the filing, printing and mailing of
the Offer Documents, the Schedule 14D-9, the Green Pennsylvania Proxy Statement,
the Form S-4 and the Joint Proxy Statement (including SEC filing fees) and (ii)
the application to be filed with the STB (including filing fees).

(b) In the event that (i) a Takeover Proposal in respect
of Green shall have been made known to Green or any of its subsidiaries or has
been made directly to its shareholders generally or any person shall have
publicly announced an intention (whether or not conditional) to make such a
Takeover Proposal and thereafter this Agreement is terminated by either White
or Green pursuant to Section 7.1(b)(i) or (ii), or (ii) this Agreement is
terminated (x) by Green pursuant to Section 7.1(h) or (y) by White pursuant to
Section 7.1(e), then Green shall promptly, but in no event later than two days
after the date of such termination, pay White a fee equal to $300 million by
wire transfer of same day funds (the "Termination Fee"); provided, however,
that no Termination Fee shall be payable to White pursuant to clause (i) of
this paragraph (b) unless and until within 24 months of such termination Green
or any of its subsidiaries enters into any Acquisition Agreement or consummates
any Takeover Proposal, and such Termination Fee shall be payable upon entering
into such Acquisition Agreement or consummating such Takeover Proposal. Green
acknowledges that the agreements contained in this Section 5.9(b) are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, White would not enter into this Agreement;
accordingly, if Green fails promptly to pay the amount due pursuant to this
Section 5.9(b), and, in order to obtain such payment, White commences a suit
which results in a judgment against Green for the fee set forth in this Section
5.9(b), Green shall pay to White its costs and expenses (including attorneys'
fees and expenses) in connection with such suit, together with interest on the
amount of the fee at the prime rate of Citibank N.A. in effect on the date such
payment was required to be made.

(c) In the event that (i) a Takeover Proposal in respect of
White shall have been made known to White or any of its subsidiaries or has been
made directly to its shareholders generally or any person shall have publicly
announced an intention (whether or not conditional) to make such a Takeover
Proposal and thereafter this Agreement is terminated by either White or Green
pursuant to Section 7.1(b)(i) or (iii), or (ii) this Agreement is terminated (x)
by White pursuant to Section 7.1(d) or (y) by Green pursuant to

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Section 7.1(i), then White shall promptly, but in no event later than two days
after the date of such termination, pay Green the Termination Fee by wire
transfer of same day funds; provided, however, that no Termination Fee shall
be payable to Green pursuant to clause (i) of this paragraph (c) unless and
until within 24 months of such termination White or any of its subsidiaries
enters into any Acquisition Agreement or consummates any Takeover Proposal,
and such Termination Fee shall be payable upon entering into such Acquisition
Agreement or consummating such Takeover Proposal. White acknowledges that the
agreements contained in this Section 5.9(c) are an integral part of the
transactions contemplated by this Agreement, and that, without these
agreements, Green would not enter into this Agreement; accordingly, if White
fails promptly to pay the amount due pursuant to this Section 5.9(c), and, in
order to obtain such payment, Green commences a suit which results in a
judgment against White for the fee set forth in this Section 5.9(c), White
shall pay to Green its costs and expenses (including attorneys' fees and
expenses) in connection with such suit, together with interest on the amount of
the fee at the prime rate of Citibank N.A. in effect on the date such payment
was required to be made.

(d) Green and White agree that either White or Tender Sub shall
pay any state or local sales, use, transfer tax or similar tax (including any
real property transfer or gains tax) imposed on the shareholders of Green and
which is attributable to the transfer (or deemed transfer) of the assets held by
Green or any subsidiary of Green, including any penalties and interest relating
to such tax, and in any case arising as a result of the consummation of the
Offer, the Second Offer (if any) and/or the Merger (collectively, "Transfer
Taxes"). Green and White agree to cooperate with each other in the filing of
any returns with respect to Transfer Taxes, and in the filing of any returns
relating to similar taxes imposed on Green, including supplying in a timely
manner a complete list of all real property interests held by Green and its
subsidiaries and any information with respect to such property that is
reasonably necessary to complete such returns. The portion of the consideration
allocable to the assets giving rise to such Transfer Tax shall be agreed to by
Green and White.

SECTION 5.10. Public Announcements. White and Green shall
consult with each other before issuing, and provide each other the opportunity
to review, comment upon and concur with, any press release or other public
statements with respect to the transactions contemplated by this Agreement,
including the Offer and the Merger, and the Option Agreements, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as either party may determine is required by applicable
law, court process or by obligations pursuant to any listing agreement with any
national securities exchange. The parties agree that the initial press release
to be issued with respect to the transactions contemplated by this Agreement and
the Option Agreements shall be in the form heretofore agreed to by the parties.

SECTION 5.11. Affiliates. Prior to the Closing Date, Green shall
deliver to White a letter identifying all persons who are, at

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the time this Agreement is submitted for adoption by it to the shareholders of
Green, "affiliates" of Green for purposes of Rule 145 under the Securities Act.
Green shall use all reasonable efforts to cause each such person to deliver to
White on or prior to the Closing Date a written agreement substantially in the
form attached as Exhibit B hereto.

SECTION 5.12. NYSE Listing. White shall use reasonable efforts
to cause the shares of White Common Stock to be issued in the Merger, under the
Green Stock Plans and pursuant to the White Stock Option Agreement to be
approved for listing on the NYSE, subject to official notice of issuance, prior
to the Closing Date. Green shall use reasonable efforts to cause the shares of
Green Common Stock to be issued pursuant to the Green Stock Option Agreement to
be approved for listing on the NYSE, subject to official notice of issuance,
prior to the Closing Date.

SECTION 5.13. Shareholder Litigation. Each of Green and White
shall give the other the reasonable opportunity to participate in the defense of
any shareholder litigation against Green or White, as applicable, and its
directors relating to the transactions contemplated by this Agreement and the
Option Agreements.

SECTION 5.14. Green Rights Agreement. The Board of Directors of
Green shall take all further action (in addition to that referred to in Section
3.1(n)) reasonably requested in writing by White (including redeeming the Green
Rights immediately prior to the Effective Time or amending the Green Rights
Agreement) in order to render the Green Rights inapplicable to the Offer, the
Merger and the other transactions contemplated by this Agreement and the Green
Stock Option Agreement. Except as provided above with respect to the Offer, the
Merger and the other transactions contemplated by this Agreement and the Green
Stock Option Agreement, the Board of Directors of Green shall not (a) amend the
Green Rights Agreement or (b) take any action with respect to, or make any
determination under, the Green Rights Agreement, including a redemption of the
Green Rights or any action to facilitate a Takeover Proposal in respect of
Green.

SECTION 5.15. White Rights Agreement. The Board of Directors of
White shall take all further action (in addition to that referred to in Section
3.2(n)) reasonably requested in writing by Green in order to render the White
Rights inapplicable to the White Stock Option Agreement. The Board of Directors
of White shall not (a) amend the White Rights Agreement or (b) take any action
with respect to, or make any determination under, the White Rights Agreement, to
facilitate a Takeover Proposal in respect of White.

SECTION 5.16. (a) Corporate Headquarters. White and Green agree
that, following the consummation of the Merger, the corporate headquarters of
White shall be located in Philadelphia, Pennsylvania, and each agrees to take
all necessary action to effect the relocation of White's corporate
headquarters.

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(b) Governance. The Board of Directors of each party
shall take action to cause the governance of White at the Effective Time to be
as provided in Exhibit A.

SECTION 5.17. Registration Rights. Green or White, as
applicable (such party, the "issuing party"), shall, if requested by the other
party hereto (such party, the "requesting party") at any time and from time to
time within three years after the termination of this Agreement, as
expeditiously as possible prepare and file up to three registration statements
under the Securities Act if such registration is necessary in order to permit
the sale or other disposition of any or all securities that have been deposited
in the Voting Trust in the case of White, or acquired by exercise of the White
Stock Option Agreement, in the case of Green, in accordance with the intended
method of sale or other disposition stated by the requesting party, including a
"shelf" registration statement under Rule 415 under the Securities Act or any
successor provision; and the issuing party shall use its best efforts to
qualify such securities under any applicable state securities laws. The
requesting party agrees to use reasonable efforts to cause, and to cause any
underwriters of any sale or other disposition to cause, any sale or other
disposition pursuant to such registration statement to be effected on a widely
distributed basis. The issuing party shall use reasonable efforts to cause
each such registration statement to become effective, to obtain all consents or
waivers of other parties which are required therefor, and to keep such
registration statement effective for such period not in excess of 180 calendar
days from the day such registration statement first becomes effective as may be
reasonably necessary to effect such sale or other disposition. The obligations
of the issuing party hereunder to file a registration statement and to maintain
its effectiveness may be suspended for one or more periods of time not
exceeding 60 calendar days in the aggregate with respect to any registration
statement if the Board of Directors of the issuing party shall have determined
that the filing of such registration statement or the maintenance of its
effectiveness would require disclosure of nonpublic information that would
materially and adversely affect the issuing party. Any registration statement
prepared and filed under this Section, and any sale covered thereby, shall be
at the issuing party's expense except for underwriting discounts or commission,
brokers' fees and the fees and disbursements of the requesting party's counsel
related thereto. The requesting party shall provide all information reasonably
requested by the issuing party for inclusion in any registration statement to
be filed hereunder. If, during the time periods referred to in the first
sentence of this Section, the issuing party effects a registration under the
Securities Act of the issuing party's securities for its own account or for any
other of its shareholders (other than on Form S-4 or Form S-8, or any
successor form), it shall allow the other party hereto (in such case, the
"requesting party") the right to participate in such registration, and such
participation shall not affect the obligation of the issuing party to effect
demand registration statements for the requesting party under this Section;
provided that, if the managing underwriters of such offering advise the issuing
party in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering, the issuing party shall include the securities requested to be

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included therein by White pro rata with the securities intended to be included
therein by the issuing party. In connection with any registration pursuant to
this Section, Green and White shall provide each other and any underwriter of
the offering with customary representations, warranties, covenants,
indemnification, and contribution in connection with such registration.

SECTION 5.18. Financing. White shall use its best efforts to
obtain as soon as practicable sufficient financing, on terms reasonably
acceptable to White, to enable consummation of the Offer and the Merger.

ARTICLE VI

CONDITIONS PRECEDENT

SECTION 6.1. Conditions to Each Party's Obligation To Effect
the Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:

(a) Shareholder Approvals. Each of the Green Merger
Shareholder Approval and the White Shareholder Approval shall have
been obtained.

(b) HSR Act. Any applicable waiting period (and any
extension thereof) under the HSR Act shall have been terminated or
shall have expired.

(c) No Injunctions or Restraints. No judgment, order,
decree, statute, law, ordinance, rule, regulation, temporary
restraining order, preliminary or permanent injunction or other order
enacted, entered, promulgated, enforced or issued by any court of
competent jurisdiction or other Governmental Entity or other legal
restraint or prohibition (collectively, "Restraints") preventing the
consummation of the Merger shall be in effect; provided, however, that
the party seeking to assert this condition shall have used reasonable
efforts to prevent the entry of any such Restraints and to appeal as
promptly as possible any such Restraints that may be entered. In
addition, there shall not be any Restraint enacted, entered, enforced
or promulgated that is reasonably likely to result, directly or
indirectly, in a material adverse effect with respect to Green and
White on a combined basis; provided, however, that the party seeking
to assert this condition shall have used reasonable efforts to prevent
the entry of any such Restraints and to appeal as promptly as possible
any such Restraints that may be entered.

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(d) NYSE Listing. The shares of White Common Stock
issuable to Green's shareholders pursuant to this Agreement and under
the Green Stock Plans shall have been approved for listing on the
NYSE, subject to official notice of issuance.

SECTION 6.2. Conditions to Obligation of White. The
obligation of White to effect the Merger is further subject to satisfaction or
waiver of the following conditions:

(a) Compliance. Green shall not have breached or
failed to observe or perform in any material respect any of its
covenants or agreements hereunder to be performed by it at or prior to
the Closing Date, and the representations and warranties of Green set
forth herein shall be true and accurate both when made and at and as
of the Closing Date, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such
date), except where the breach or failure to observe or perform such
covenants or agreements, or the failure of such representations and
warranties to be so true and correct (without giving effect to any
limitation as to "materiality" or "material adverse effect" set forth
therein), does not have, and is not likely to have, individually or in
the aggregate, a material adverse effect on Green.

(b) No Material Adverse Change. At any time after the
date of this Agreement there shall not have occurred any material
adverse change relating to Green.

(c) Offer. Tender Sub shall have purchased shares of
Green Common Stock in the Offer or, if not, White and Tender Sub shall
have obtained sufficient financing, on terms reasonably acceptable to
White, to enable consummation of the Merger.

(d) Regulatory Approval. The STB shall have issued a
decision (which decision shall not have been stayed or enjoined) that
(A) constitutes a final order approving, exempting or otherwise
authorizing consummation of the Merger and all other material
transactions contemplated by this Agreement (or subsequently presented
to the STB by agreement of Green and White) as may require such
authorization and (B) does not (1) change or disapprove of the
consideration to be given in the Merger or other material provisions
of Article II of this Agreement or (2) impose on White, Green, or any
of their respective subsidiaries any other terms or conditions
(including, without limitation, labor protective provisions but
excluding conditions heretofore imposed by the ICC in New York Dock
Railway--Control--Brooklyn Eastern District, 360 I.C.C. 60 (1979))
that materially and adversely affect the long-term benefits expected
to be received by White from the transactions contemplated by this
Agreement.

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(e) Other Governmental Entity Actions. All actions by or in
respect of or filings with any Governmental Entity required to permit
the consummation of the Merger (other than approval of the STB, which
is addressed above) shall have been obtained but excluding any consent,
approval, clearance or confirmation the failure to obtain which would
not have a material adverse effect on White, Green or, after the
Effective Time, the Surviving Corporation.

SECTION 6.3. Conditions to Obligation of Green. The
obligation of Green to effect the Merger is further subject to satisfaction or
waiver of the following conditions:

(a) Compliance. White shall not have breached or failed to
observe or perform in any material respect any of its covenants or
agreements hereunder to be performed by it at or prior to the Closing
Date, and the representations and warranties of White set forth herein
shall be true and accurate both when made and at and as of the Closing
Date, as if made at and as of such time (except to the extent expressly
made as of an earlier date, in which case as of such date), except
where the breach or failure to observe or perform such covenants and
agreements, or the failure of such representations and warranties to be
so true and correct (without giving effect to any limitation as to
"materiality" or "material adverse effect" set forth therein), does not
have, and is not likely to have, individually or in the aggregate, a
material adverse effect on White.

(b) No Material Adverse Change. At any time after the date of
this Agreement there shall not have occurred any material adverse
change relating to White.

(c) Regulatory Approval. The STB shall have issued a decision
(which decision shall not have been stayed or enjoined) that
(i) constitutes a final order approving, exempting or otherwise
authorizing consummation of the Merger and all other material
transactions contemplated hereby and thereby or subsequently presented
to the STB by agreement of the White and Green, as may require such
authorization and (ii) does not change or disapprove of the
consideration to be given in the Merger or other material provisions
of Article II of this Agreement.

SECTION 6.4. Frustration of Closing Conditions. Neither
White nor Green may rely on the failure of any condition set forth in Section
6.1, 6.2 or 6.3, as the case may be, to be satisfied if such failure was caused
by such party's failure to use reasonable efforts to consummate the Merger and
the other transactions contemplated by this Agreement and the Option
Agreements, as required by and subject to Section 5.5.

ARTICLE VII

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TERMINATION, AMENDMENT AND WAIVER

SECTION 7.1 Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether before or after
either of the Green Shareholder Approvals or the White Shareholder Approval
only as provided below:

(a) by mutual written consent of White and Green;

(b) by either White or Green:

(i) if the Merger shall not have been consummated by
December 31, 1998; provided, however, that the right to terminate this
Agreement pursuant to this Section 7.1(b)(i) shall not be available to
any party whose failure to perform any of its obligations under this
Agreement results in the failure of the Merger to be consummated by such
time;

(ii) if, at a Green Merger Shareholders Meeting duly
convened therefor or at any adjournment or postponement thereof, the
Green Merger Shareholder Approval shall not have been obtained;

(iii) if, at a White Shareholders Meeting duly convened
therefor or at any adjournment or postponement thereof, the White
Shareholder Approval shall not have been obtained; or

(iv) if any Governmental Entity shall have issued a
Restraint or taken any other action permanently enjoining, restraining
or otherwise prohibiting the consummation of the Merger or any of the
other transactions contemplated by this Agreement and such Restraint or
other action shall have become final and nonappealable; provided,
however, that the party seeking to terminate this Agreement pursuant to
this clause (iv) shall have used all reasonable efforts to prevent the
entry of and to remove such Restraint or other action;

(c) by White, if Green shall have breached or failed to
perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement,
which breach or failure to perform (A) would give rise to

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the failure of the condition set forth in Section 6.2(a), and (B) cannot
be or has not been cured within 30 days after the giving of written
notice to Green of such breach (a "Green Material Breach") (provided
that White is not then in White Material Breach of any representation,
warranty, covenant or other agreement contained in this Agreement and
provided that, if such breach is curable through the exercise of Green's
best efforts, this Agreement may not be terminated hereunder for so long
as Green is so using its best efforts to cure such breach);

(d) by White in accordance with Section 4.2(b); provided
that it has complied with all provisions contained in Section 4.2,
including the notice provisions therein, and that it complies with
applicable requirements of Section 5.9;

(e) by White if (i) the Board of Directors of Green (or,
if applicable, any committee thereof) shall have withdrawn or modified
in a manner adverse to White its approval or recommendation of the
Offer or the Merger or the matters to be considered at the Green
Shareholders Meetings or failed to reconfirm its recommendation within
15 business days after a written request to do so, or approved or
recommended any Takeover Proposal in respect of Green or (ii) the
Board of Directors of Green or any committee thereof shall have
resolved to take any of the foregoing actions;

(f) by White, if Green or any of its officers, directors,
employees, representatives or agents shall take any of the
actions that would be proscribed by Section 4.2 but for the exceptions
therein allowing certain actions to be taken pursuant to the proviso
in the first sentence of Section 4.2(a) or the second sentence of
Section 4.2(b);

(g) by Green, if White shall have breached or failed to
perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement,
which breach or failure to perform (A) would give rise to the failure
of the condition set forth in Section 6.3(a), and (B) cannot be or has
not been cured within 30 days after the giving of written notice to
White of such breach (a "White Material Breach") (provided that Green
is not then in Green Material Breach of any representation, warranty,
covenant or other agreement contained in this Agreement and provided
that, if such breach is curable through the exercise of White's best
efforts, this Agreement may not be terminated hereunder for so long as
White is so using its best efforts to cure such breach);

(h) by Green in accordance with Section 4.2(b); provided
that it has complied with all provisions contained in Section 4.2,
including the notice provisions therein, and that it complies with
applicable requirements of Section 5.9;

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(i) by Green if (i) the Board of Directors of White (or,
if applicable, any committee thereof) shall have withdrawn or modified
in a manner adverse to Green its approval or recommendation of the
matters to be considered at the White Shareholders Meeting, or failed
to reconfirm its recommendation within 15 business days after a
written request to do so, or approved or recommended any White
Takeover Proposal or (ii) the Board of Directors of White or any
committee thereof shall have resolved to take any of the foregoing
actions; or

(j) by Green, if White or any of its officers, directors,
employees, representatives or agents shall take any of the
actions that would be proscribed by Section 4.2 but for the exceptions
therein allowing certain actions to be taken pursuant to the proviso
in the first sentence of Section 4.2(a) or the second sentence of
Section 4.2(b).

SECTION 7.2 Effect of Termination. In the event of
termination of this Agreement by either Green or White as provided in Section
7.1, this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of White or Green, other than the
provisions of Section 1.9, Section 3.1(m), Section 3.2(m), the last sentence of
Section 5.4, Section 5.9, Section 5.17, this Section 7.2 and Article VIII,
which provisions survive such termination, and except to the extent that such
termination results from the willful and material breach by a party of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.

SECTION 7.3 Amendment. This Agreement may be amended
by the parties at any time before or after any of the Green Shareholder
Approvals or the White Shareholder Approval; provided, however, that after any
such approval, there shall not be made any amendment that by law requires
further approval by the shareholders of Green or White without the further
approval of such shareholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.

SECTION 7.4 Extension; Waiver. At any time prior to
the Effective Time, a party may (a) extend the time for the performance of any
of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties of the other parties
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the proviso of Section 7.3, waive compliance by the
other party with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf
of such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.

SECTION 7.5 Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to

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Section 7.1, an amendment of this Agreement pursuant to Section 7.3 or an
extension or waiver pursuant to Section 7.4 shall, in order to be effective,
require, in the case of White or Green, action by its Board of Directors or,
with respect to any amendment to this Agreement, the duly authorized committee
of its Board of Directors.

ARTICLE VIII

GENERAL PROVISIONS

SECTION 8.1 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.1 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time.

SECTION 8.2 Notices. All notices, requests, claims,
demands and other communications under this Agreement shall be in writing and
shall be deemed given if delivered personally, telecopied (which is confirmed)
or sent by overnight courier (providing proof of delivery) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):

(a) if to White or Tender Sub, to

CSX Corporation
One James Center
901 East Cary Street
Richmond, VA 23219

Telecopy No.: (804) 783-1380

Attention: Mark Aron

with copies to:

CSX Corporation
One James Center
901 East Cary Street
Richmond, VA 23219

Telecopy No.: (804) 783-1355

Attention: Peter Shudtz

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Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019

Telecopy No.: (212) 403-2000

Attention: Pamela S. Seymon, Esq.; and

(b) if to Green, to

Conrail Inc.
2001 Market Street
Philadelphia, PA 19103

Telecopy No.: (215) 209-4068
Attention: Bruce B. Wilson
Senior Vice President - Law

with a copy to:

Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019

Telecopy No.: (212) 474-3700

Attention: Robert A. Kindler, Esq.

SECTION 8.3. Definitions. For purposes of this Agreement:

(a) an "affiliate" of any person means another person
that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
first person;

(b) "material adverse change" or "material adverse
effect" means, when used in connection with Green or White, any
change, effect, event or occurrence that is materially adverse to the
business, financial condition or results of operations of such party
and its subsidiaries taken as a whole or materially impairs the
ability of such person to consummate the transactions contemplated
hereby (including the Offer and the Merger) and by the

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Option Agreements other than any change, effect, event or occurrence
relating to the United States economy in general or to the
transportation industry in general, and not specifically relating to
Green or White or their respective subsidiaries;

(c) "material" means, when used in connection with
Green or White, material to the business, financial condition or
results of operations of such party and its subsidiaries taken as a
whole or materially impairing the ability of such person to consummate
the transactions contemplated hereby (including the Offer and the
Merger) and by the Option Agreements other than any change, effect,
event or occurrence relating to the United States economy in general
or to the transportation industry in general, and not specifically
relating to Green or White or their respective subsidiaries, and the
term "materially" has a correlative meaning;

(d) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity;

(e) a "subsidiary" of any person means another person,
an amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if
there are no such voting interests, 50% or more of the equity
interests of which) is owned directly or indirectly by such first
person; and

(f) "knowledge" of any person which is not an individual means
the knowledge of such person's executive officers after reasonable
inquiry.

SECTION 8.4 Interpretation. When a reference is made
in this Agreement to an Article, Section or Exhibit, such reference shall be to
an Article or Section of, or an Exhibit to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. All
terms defined in this Agreement shall have the defined meanings when used in
any certificate or other document made or delivered pursuant hereto unless
otherwise defined therein. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by

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waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and references to all attachments thereto and instruments
incorporated therein. References to a person are also to its permitted
successors and assigns.

SECTION 8.5. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.

SECTION 8.6. Entire Agreement; No Third-Party Beneficiaries.
This Agreement (including the documents and instruments referred to herein),
the Option Agreements and the Confidentiality Agreement (a) constitute the
entire agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of this
Agreement and (b) except for the provisions of Article II, Section 5.6 and
Section 5.8, are not intended to confer upon any person other than the parties
any rights or remedies.

SECTION 8.7. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICT OF LAWS THEREOF; PROVIDED, HOWEVER, THAT THE LAWS OF THE
RESPECTIVE STATES OF INCORPORATION OF EACH OF THE PARTIES HERETO SHALL GOVERN
THE RELATIVE RIGHTS, OBLIGATIONS, POWERS, DUTIES AND OTHER INTERNAL AFFAIRS OF
SUCH PARTY AND ITS BOARD OF DIRECTORS.

SECTION 8.8. Assignment. Neither this Agreement nor any
of the rights, interests or obligations under this Agreement shall be assigned,
in whole or in part, by operation of law or otherwise by either of the parties
hereto without the prior written consent of the other party. Any assignment in
violation of the preceding sentence shall be void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.

SECTION 8.9. ENFORCEMENT. THE PARTIES AGREE THAT
IRREPARABLE DAMAGE WOULD OCCUR AND THAT THE PARTIES WOULD NOT HAVE ANY ADEQUATE
REMEDY AT LAW IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE
NOT PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE
BREACHED. IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN
INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OF THIS AGREEMENT AND TO ENFORCE
SPECIFICALLY THE TERMS AND PROVISIONS OF THIS AGREEMENT IN ANY FEDERAL COURT
LOCATED IN THE STATE OF NEW YORK OR IN NEW YORK STATE COURT, THIS BEING IN
ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY.
IN ADDITION, EACH OF THE PARTIES HERETO (A) CONSENTS TO SUBMIT ITSELF TO THE
PERSONAL JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE STATE OF NEW YORK OR
ANY NEW YORK STATE COURT IN THE EVENT ANY DISPUTE ARISES OUT OF THIS AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, (B) AGREES THAT IT
WILL NOT ATTEMPT TO

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DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR OTHER REQUEST FOR LEAVE
FROM ANY SUCH COURT, AND (C) AGREES THAT IT WILL NOT BRING ANY ACTION RELATING
TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN
ANY COURT OTHER THAN A FEDERAL COURT SITTING IN THE STATE OF NEW YORK OR A NEW
YORK STATE COURT.

SECTION 8.10. Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

SECTION 8.11. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

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IN WITNESS WHEREOF, Conrail Inc., Green Acquisition Corp. and CSX
Corporation have caused this Agreement to be signed by their respective
officers thereunto duly authorized, all as of the date first written above.

CONRAIL INC.

---------------------------
Name:
Title:

GREEN ACQUISITION CORP.

---------------------------
Name:
Title:

CSX CORPORATION

---------------------------
Name:
Title:

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EXHIBIT A

CORPORATE GOVERNANCE

Board of Directors Following the Effective Time

The Board of Directors of White will consist of the current
Chairman of the Boards of each of White and Green and an even number of other
directors (all of whom shall be outside directors) to be agreed upon, of whom
50% shall be designated by each of White and Green.

Committees of the Board of Directors and Chairpersons of Committees

The Board of Directors of White shall initially have six
committees: the finance and planning committee, the executive committee, the
audit committee, the ethics committee, the compensation committee and the
nominating committee. Each committee will be comprised of four directors, of
which two shall be designated by each of White and Green. The only committees
on which the current Chairman of the Board of each of White and Green will
serve will be the executive committee and the finance and planning committee,
and the current Chairman and Chief Executive Officer of White will chair the
executive committee and designate the chair of the finance and planning
committee. White will designate the chairperson of the compensation committee
and the audit committee and Green will designate the chairperson of the
nominating committee and the ethics committee.

Executive Management

Immediately following the Effective Time and for two years
thereafter, the current Chairman and Chief Executive Officer of White shall
continue as the Chairman and Chief Executive Officer of White and the current
Chairman of the Board and Chief Executive Officer of Green shall be President
and Chief Operating Officer of White and President and Chief Executive Officer
of each of its railroad subsidiaries (the "Railroad CEO"). Immediately
following such period, the current Chairman and Chief Executive Officer of
White shall continue as Chairman of White for an additional two-year period
(and Chairman Emeritus for a one-year period

<PAGE> 75

thereafter) and the current Chairman of the Board and Chief Executive Officer
of Green shall be elected to the additional office of Chief Executive Officer
of White on the second anniversary of the Effective Time and shall succeed as
Chairman of White at the end of such additional two-year period. The foregoing
arrangements under this heading "Executive Management" may be altered only by
a vote, following the Effective Time, of 75% of the members of the Board of
Directors of White.

White Articles of Incorporation

On the Closing Date, the Articles of Incorporation of White shall
be amended to change the corporate name of White to a new neutral name not
including, except with the prior written consent of each of Green and White,
any aspect of the names of either Green or White or their subsidiaries or
predecessors.

White By-laws

On the Closing Date, the White By-laws shall be amended to
provide that any amendment to or modification of the arrangements set forth
under the heading "Executive Management" or of the employment agreements with
the current Chairman of White and Green entered into as of the date of this
Agreement shall require a vote of 75% of the members of the Board of Directors
of White.

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EXHIBIT C

FORM OF

AMENDED AND RESTATED

ARTICLES OF INCORPORATION(*)

Article I

NAME

The name of the Corporation is [TO BE DETERMINED IN ACCORDANCE WITH MERGER
AGREEMENT].

Article II

PURPOSE

The purpose for which the Corporation is organized is to transact
any lawful business not required to be specifically stated in the Articles of
Incorporation.

Article III

AUTHORIZED STOCK

3.1 Number and Designation. (a) The Corporation shall have
authority to issue five hundred million (500,000,000) shares of Common Stock,
par value $1.00 per share, twenty-five million (25,000,000) shares of Serial
Preferred Stock, without par value, and twenty-five million (25,000,000) shares
of Preferred Stock, without par value.

(b) The Board of Directors may determine the preferences,
limitations and relative rights, to the extent permitted by the Virginia Stock
Corporation Act, of any class of shares of Preferred Stock before the issuance
of any shares of that class, or of one or more series within a class before the
issuance of any shares of that series. Each class or

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(*) Amendments are underlined herein

<PAGE> 77

EXHIBIT C

series shall be appropriately designated by a distinguishing designation prior
to the issuance of any shares thereof. Except to the extent otherwise
permitted by the Virginia Stock

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Corporation Act, the Preferred Stock of a series shall have preferences,
limitations and relative rights identical with those of other shares of the
same series and, except to the extent otherwise provided in the description of
the series, with those of shares of other series of the same class.

(c) Prior to the issuance of any shares of a class or series of
Preferred Stock, (1) the Board of Directors shall establish such class or
series by adopting a resolution and by filing with the State Corporation
Commission of Virginia articles of amendment setting forth the designation and
number of shares of the class or series and the preferences, limitations and
relative rights thereof and (2) the State Corporation Commission of Virginia
shall have issued a certificate of amendment with respect thereto.

3.2 Preemptive Rights. No holder of capital stock of the
Corporation of any class shall have any preemptive right to subscribe to or
purchase (i) any shares of capital stock of this Corporation, (ii) any
securities convertible into such shares or (iii) any options, warrants or
rights to purchase such shares or securities convertible into any such shares.

Article IV

SERIAL PREFERRED STOCK

4.1 Issuance in Series. The Board of Directors is hereby
empowered to cause the Serial Preferred Stock of the Corporation to be issued
in series with such of the variations permitted by clauses (a)-(h), both
inclusive, of this Section 4.1 as shall have been fixed and determined by the
Board of Directors with respect to any series prior to the issue of any shares
of such series.

The shares of the Serial Preferred Stock of different series may
vary as to:

(a) the number of shares constituting such series and the
designation of such series, which shall be such

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as to distinguish the shares thereof from the shares of all other series and
classes;

(b) the rate of dividend, the time of payment and, if
cumulative, the dates from which dividends shall be cumulative, and
the extent of participation rights, if any;

(c) any right to vote with holders of shares of any
other series or class and any right to vote as a class, either
generally or as a condition to specified corporate action;

(d) the price at and the terms and conditions on which
shares may be redeemed;

(e) the amount payable upon shares in event of involuntary
liquidation;

(f) the amount payable upon shares in event of voluntary
liquidation;

(g) any sinking fund provisions for the redemption or
purchase of shares; and

(h) the terms and conditions on which shares may be
converted, if the shares of any series are issued with the privilege
of conversion.

The shares of all series of Serial Preferred Stock shall
be identical except as, within the limits set forth above in this Section 4.1,
shall have been fixed and determined by the Board of Directors prior to the
issuance thereof.

[Deleted] On the date of these Amended and Restated
Articles of Incorporation, there were authorized, but unissued, 3,000,000
shares of the Series B Junior Participating Preferred Stock. The date on which
such series was authorized by the Board of Directors and the preferences,
limitations and relative rights of the shares of such series not is set forth
in Article X hereof. Prior to the date of these Amended and Restated Articles
of Incorporation, the

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Corporation had issued the Series A $7.00 Cumulative Convertible Preferred
Stock, the Market Auction Preferred Stock, Series C-1 and the Market Auction
Preferred Stock, Series C-2. On that date all of the shares of each of the
aforesaid series which had been issued had been redeemed by the Corporation and
no share of any such series remained issued and outstanding. Each such series
provided that shares of the series, when purchased, redeemed or otherwise
acquired by the Corporation, would become authorized but unissued shares of
Preferred Stock, undesignated as to series.

4.2 Dividends. The holders of the Serial Preferred Stock of
each series shall be entitled to receive, if and when declared payable by the
Board of Directors, dividends in lawful money of the United States of America,
at the dividend rate for such series, and not exceeding such rate except to the
extent of any participation right. Such dividends shall be payable on such
dates as shall be fixed for such series. Dividends, if cumulative and in
arrears, shall not bear interest.

No dividends shall be declared or paid upon or set apart for the
Common Stock or for stock of any other class hereafter created ranking junior
to the Serial Preferred Stock in respect of dividends or assets (hereinafter
called Junior Stock), and no shares of Serial Preferred Stock, Common Stock or
Junior Stock shall be purchased, redeemed or otherwise reacquired for a
consideration, nor shall any funds be set aside for or paid to any sinking fund
therefor, unless and until (i) full dividends on the outstanding Serial
Preferred Stock at the dividend rate or rates therefor, together with the full
additional amount required by any participation right, shall have been paid or
declared and set apart for payment with respect to all past dividend periods,
to the extent that the holders of the Serial Preferred Stock are entitled to
dividends with respect to any past dividend period, and the current dividend
period, and (ii) all mandatory sinking fund payments that shall have become due
in respect of any series of the Serial Preferred Stock shall have been made.
Unless full dividends with respect to all past dividend periods on the
outstanding Serial Preferred Stock at the dividend rate or rates therefor, to
the extent the holders of the Serial Preferred Stock are entitled to dividends
with respect to any particular past dividend period, together with

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the full additional amount required by any participation right, shall have been
paid or declared and set apart for payment and all mandatory sinking fund
payments that shall have become due in respect of any series of the Serial
Preferred Stock shall have been made, no distributions shall be made to the
holders of the Serial Preferred Stock of any series unless distributions are
made to the holders of the Serial Preferred Stock of all series then
outstanding in proportion to the aggregate amounts of the deficiencies in
payments due to the respective series, and all payments shall be applied,
first, to dividends accrued and in arrears, next, to any amount required by any
participation right, and, finally, to mandatory sinking fund payments. The
terms "current dividend period" and "past dividend period" mean, if two or more
series of Serial Preferred Stock having different dividend periods are at the
same time outstanding, the current dividend period or any past dividend period,
as the case may be, with respect to each such series.

4.3 Preference on Liquidation. In the event of any liquidation,
dissolution or winding up of the Corporation, the holders of the Serial
Preferred Stock of each series shall be entitled to receive, for each share
thereof, the fixed liquidation price for such series, plus, in case such
liquidation, dissolution or winding up shall have been voluntary, the fixed
liquidation premium for such series, if any, together in all cases with a sum
equal to all dividends accrued or in arrears thereon and the full additional
amount required by any participation right, before any distribution of the
assets shall be made to holders of the Common Stock or Junior Stock; but the
holders of the Serial Preferred Stock shall be entitled to no further
participation in such distribution. If, upon any such liquidation, dissolution
or winding up, the assets distributable among the holders of the Serial
Preferred Stock shall be insufficient to permit the payment of the full
preferential amounts aforesaid, then such assets shall be distributed among the
holders of the Serial Preferred Stock then outstanding ratably in proportion to
the full preferential amounts to which they are respectively entitled. For the
purposes of this Section 4.3, the expression "dividends accrued or in arrears"
means, in respect of each share of the Serial Preferred Stock of any series at
a particular time, an amount equal to the product of the rate of

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dividend per annum applicable to the shares of such series multiplied by the
number of years and any fractional part of a year that shall have elapsed from
the date when dividends on such shares became cumulative to the particular time
in question less the total amount of dividends actually paid on the shares of
such series or declared and set apart for payment thereon; provided, however,
that, if the dividends on such shares shall not be fully cumulative, such
expression shall mean the dividends, if any, cumulative in respect of such
shares for the period stated in the articles of serial designation creating
such shares less all dividends paid in or with respect to such period.

Article V

COMMON STOCK

5.1 Dividends. Subject to the provisions of law and the rights
of holders of shares at the time outstanding of all classes of stock having
prior rights as to dividends, the holders of Common Stock at the time
outstanding shall be entitled to receive such dividends at such times and in
such amounts as the Board of Directors may deem advisable.

5.2 Liquidation. In the event of any liquidation, dissolution
or winding up (whether voluntary or involuntary) of the Corporation, after the
payment or provision for payment in full for all debts and other liabilities of
the Corporation and all preferential amounts to which the holders of shares at
the time outstanding of all classes of stock having prior rights thereto shall
be entitled, the remaining net assets of the Corporation shall be distributed
ratably among the holders of the shares at the time outstanding of Common
Stock.

5.3 Voting Rights. The holders of Common Stock shall be
entitled to one vote per share on all matters.

Article VI

NUMBER OF DIRECTORS

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The number of directors shall be fixed by the By-Laws or, in the
absence of a By-law fixing the number, the number shall be four.

Article VII

LIMIT ON LIABILITY AND INDEMNIFICATION

7.1 Definitions. For purposes of this Article the following
definitions shall apply:

(a) "Corporation" means this Corporation, including
Chessie System, Inc. and Seaboard Coast Line Industries, Inc. and no
other predecessor entity or other legal entity;

(b) "expenses" include counsel fees, expert witness
fees, and costs of investigation, litigation and appeal, as well as
any amounts expended in asserting a claim for indemnification;

(c) "liability" means the obligation to pay a judgment,
settlement, penalty, fine, or other such obligation, including,
without limitation, any excise tax assessed with respect to
an employee benefit plan;

(d) "legal entity" means a corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise;

(e) "predecessor entity" means a legal entity the
existence of which ceased upon its acquisition by the Corporation in a
merger or otherwise; and

(f) "proceeding" means any threatened, pending, or
completed action, suit, proceeding or appeal whether civil, criminal,
administrative or investigative and whether formal or informal.

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7.2 Limit on Liability. In every instance permitted by the
Virginia Stock Corporation Act, as it exists on the date hereof or may
hereafter be amended, the liability of a director or officer of the Corporation
to the Corporation or its shareholders arising out of a single transaction,
occurrence or course of conduct shall be limited to one dollar.

7.3 Indemnification of Directors and Officers. The Corporation
shall indemnify any individual who is, was or is threatened to be made a party
to a proceeding (including a proceeding by or in the right of the Corporation)
because such individual is or was a director or officer of the Corporation, or
because such individual is or was serving the Corporation or any other legal
entity in any capacity at the request of the Corporation, against all
liabilities and reasonable expenses incurred in the proceeding except such
liabilities and expenses as are incurred because of such individual's willful
misconduct or knowing violation of the criminal law. Service as a director or
officer of a legal entity controlled by the Corporation shall be deemed service
at the request of the Corporation. The determination that indemnification
under this Section 7.3 is permissible and the evaluation as to the
reasonableness of expenses in a specific case shall be made, in the case of a
director, as provided by law, and in the case of an officer, as provided in
Section 7.4 of this Article; provided, however, that if a majority of the
directors of the Corporation has changed after the date of the alleged conduct
giving rise to a claim for indemnification, such determination and evaluation
shall, at the option of the person claiming indemnification, be made by special
legal counsel agreed upon by the Board of Directors and such person. Unless a
determination has been made that indemnification is not permissible, the
Corporation shall make advances and reimbursements for expenses incurred by a
director or officer in a proceeding upon receipt of an undertaking from such
director or officer to repay the same if it is ultimately determined that such
director or officer is not entitled to indemnification. Such undertaking shall
be an unlimited, unsecured general obligation of the director or officer and
shall be accepted without reference to such director's or officer's ability to
make repayment. The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not of

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itself create a presumption that a director or officer acted in such a manner
as to make such director or officer ineligible for indemnification. The
Corporation is authorized to contract in advance to indemnify and make advances
and reimbursements for expenses to any of its directors or officers to the same
extent provided in this Section 7.3.

7.4 Indemnification of Others. The Corporation may, to a lesser
extent or to the same extent that it is required to provide indemnification and
make advances and reimbursements for expenses to its directors and officers
pursuant to Section 7.3 of this Article, provide indemnification and make
advances and reimbursements for expenses to its employees and agents, the
directors, officers, employees and agents of its subsidiaries and predecessor
entities, and any person serving any other legal entity in any capacity at the
request of the Corporation, and may contract in advance to do so. The
determination that indemnification under this Section 7.4 is permissible, the
authorization of such indemnification and the evaluation as to the
reasonableness of expenses in a specific case shall be made as authorized from
time to time by general or specific action of the Board of Directors, which
action may be taken before or after a claim for indemnification is made, or is
otherwise provided by law. No person's rights under Section 7.3 of this
Article shall be limited by the provisions of this Section 7.4.

7.5 Miscellaneous. The rights of each person entitled to
indemnification under this Article shall inure to the benefit of such person's
heirs, executors and administrators. Special legal counsel selected to make
determinations under this Article may be counsel for the Corporation.
Indemnification pursuant to this Article shall not be exclusive of any other
right of indemnification to which any person may be entitled, including
indemnification pursuant to a valid contract, indemnification by legal entities
other than the Corporation and indemnification under policies of insurance
purchased and maintained by the Corporation or others. However, no person
shall be entitled to indemnification by the Corporation to the extent such
person is indemnified by another, including an insurer. The Corporation is
authorized to purchase and maintain insurance against any liability it may have
under this Article or to

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protect any of the persons named above against any liability arising from their
service to the Corporation or any other legal entity at the request of the
Corporation regardless of the Corporation's power to indemnify against such
liability. The provisions of this Article shall not be deemed to preclude the
Corporation from entering into contracts otherwise permitted by law with any
individuals or legal entities, including those named above. If any provision
of this Article or its application to any person or circumstances is held
invalid by a court of competent jurisdiction, the invalidity shall not affect
other provisions or applications of this Article, and to this end the
provisions of this Article are severable.

7.6 Application; Amendments. The provisions of this Article
shall be applicable from and after its adoption even though some or all of the
underlying conduct or events relating to a proceeding may have occurred before
its adoption. No amendment, modification or repeal of this Article shall
diminish the rights provided hereunder to any person arising from conduct or
events occurring before the adoption of such amendment, modification or repeal.

Article VIII

UNSURRENDERED SHARES OF CHESSIE SYSTEM, INC. AND

SEABOARD COAST LINE INDUSTRIES, INC.

8.1 Conversion of Shares. On October 31, 1980 (the "Merger
Date"), the outstanding shares of Chessie Systems, Inc. ("Chessie") and
Seaboard Coast Line Industries, Inc. ("Industries") were converted by operation
of law into shares of the Corporation.

8.2 Failure to Surrender Shares. No holder of a Chessie or
Industries common stock certificate shall be entitled to vote at any meeting of
stockholders of the Corporation or to receive any dividends from the
Corporation until surrender of his certificate in exchange for a certificate
for shares of the Corporation's Common Stock. Upon such surrender, there shall
be paid to the holder the amount of

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dividends (without interest thereon) that have theretofore become payable, but
that have not been paid by reason of the foregoing, with respect to the number
of whole shares of the Corporation's Common Stock represented by the
certificates issued in exchange. The Corporation shall, however, be entitled
after the Merger Date to treat the certificates of outstanding common stock of
Chessie and Industries as evidencing the ownership of the number of full shares
of the Corporation's Common Stock into which the Chessie and Industries shares,
represented by such certificates, shall have been converted, notwithstanding
the failure to surrender such certificates.

Article IX

[Deleted.]

Article X

SERIAL PREFERRED STOCK, SERIES B

Pursuant to a resolution adopted by the Board of Directors of the
Corporation on April 29, 1986, 3,000,000 shares of Serial Preferred Stock
constitute a series of Serial Preferred Stock designated as the Junior
Participating Preferred Stock, Series B (the "Series B Stock"), the shares of
which have the following rights and preferences:

10.1 Designation and Amount. The shares of such series shall be
designated as "Junior Participating Preferred Stock, Series B" and the number
of shares constituting such series shall be 3,000,000. Such number of shares
may be increased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of the Series B
Stock to a number less than that of the shares then outstanding.

10.2 Dividends and Distributions.

(a) Subject to the prior and superior rights of the holders of
any shares of any

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series of Preferred Stock ranking prior and superior to the shares of the
Series B Stock with respect to dividends, the holders of shares of the
Series B Stock, in preference to the holders of Common Stock of the
Corporation and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the
fifteenth day (or, if not a business day, the preceding business day) of
March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance of
a share or fraction of a share of the Series B Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 or
(b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-class
dividends or other distributions, other than a dividend payable in
shares of Common Stock, or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of the Series B
Stock. In the event the Corporation shall at any time declare or pay
any dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which
holders of shares of the Series B Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common

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Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.

(b) The Corporation shall declare a dividend or distribution on
the Series B Stock as provided in paragraph (a) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Series B
Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.

(c) Dividends shall begin to accrue and be cumulative
on outstanding shares of the Series B Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares
of the Series B Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of the Series B Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of the Series B Stock in an amount less
than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of
shares of the Series B Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.

C-13
<PAGE> 90

10.3 Voting Rights. The holders of shares of the Series B Stock
shall have the following voting rights:

(a) Subject to the provision for adjustment
hereinafter set forth, each share of the Series B Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the number of votes
per share to which holders of shares of the Series B Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.

(b) Except as otherwise provided herein or by law, the
holders of shares of the Series B Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.

(c) Except as set forth herein, holders of the Series
B Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.

10.4 Certain Restrictions.

(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of the Series B Stock
outstanding shall have been paid in full, the Corporation shall not:

C-14
<PAGE> 91

(i) declare, set apart or pay dividends on or
make any other distributions on the Common Stock or any shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series B Stock;

(ii) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series B
Stock, except dividends paid ratably on the Series B Stock and all such parity
stock on which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled; or

(iii) redeem or purchase or otherwise acquire
for consideration shares of the Series B Stock, any such parity stock or any
stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) with the Series B Stock, or set aside for or pay to any sinking
fund therefor.

(b) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph (a)
of this Section 4 purchase or otherwise acquire such shares at such time and in
such manner.

10.5 Reacquired Shares. Any shares of the Series B Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.

10.6 Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of Common Stock or of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series B Stock unless, prior thereto, the holders of

C-15
<PAGE> 92

shares of the Series B Stock shall have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
the Series B Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of Common
Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series B
Stock, except distributions made ratably on the Series B Stock and all other
such parity stock in proportion to the total amounts to which the holders of
all such shares are entitled upon such liquidation, dissolution or winding up.
In the event the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of the Series B Stock
were entitled immediately prior to such event under the provision of clause (1)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.

10.7 Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares
of the Series B Stock shall at the same time be similarly exchanged or changed
in an amount per share (subject to the provision for adjustment hereinafter set
forth) equal to 100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend on Common Stock
payable

C-16
<PAGE> 93

in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of the Series B Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

10.8 No Redemption. The shares of the Series B Stock shall not
be redeemable.

10.9 Rank. The Series B Stock shall rank junior to all other
series of the Corporation's preferred stock outstanding as of April 29, 1986,
as to the payment of dividends and the distribution of assets.

10.10 Amendment. The Articles of Incorporation shall not be
amended in any manner which would materially alter or change the power,
preferences or special rights of the Series B Stock so as to affect them
adversely without the affirmative vote of the holders of at least two-thirds of
the outstanding shares of the Series B Stock, voting together as a single
voting group.

Article XI

CERTAIN VOTING MATTERS

(a) As to each voting group entitled to vote on an amendment or
restatement of these Articles of Incorporation the vote required for approval
shall be (i) the vote required by the terms of these Articles of Incorporation,
as amended or as restated from time to time, if such terms specifically require
the approval of more than a majority of the votes entitled to be cast thereon
by such voting group; or (ii) if clause (i) of this Article is not applicable,
a majority of the votes entitled to be cast thereon.

C-17
<PAGE> 94

(b) As to any plan of merger or share exchange to which the
Corporation is a party, or any sale, lease, exchange or other disposition of
all or substantially all of the assets or property of the Corporation other
than in the usual and regular course of business, for which the Virginia Stock
Corporation Act requires an affirmative vote of more than two-thirds of the
votes cast by shareholders entitled to vote thereon, but which requirement may
be reduced to a lesser percentage under the Virginia Stock Corporation Act if
the lesser percentage is specified in the articles of incorporation of the
Corporation, the affirmative vote of the holders of a majority of the
outstanding shares of each voting group entitled to vote on the transaction at
a meeting at which a quorum of the voting group exists shall be required in
lieu of the affirmative vote otherwise required under the Virginia Stock
Corporation Act.

C-18
<PAGE> 95

EXHIBIT D

CONDITIONS TO THE OFFER

Notwithstanding any other provisions of the Offer, and in addition to
(and not in limitation of) Tender Sub's rights to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), Tender Sub shall not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
under the Exchange Act (relating to Tender Sub's obligation to pay for or
return tendered shares of Green Common Stock or Green ESOP Preferred Stock
promptly after termination or withdrawal of the Offer), pay for, and may delay
the acceptance for payment of or, subject to the restriction referred to above,
the payment for, any tendered shares of Green Common Stock or Green ESOP
Preferred Stock, and may terminate the Offer as to any shares of Green Common
Stock or Green ESOP Preferred Stock not then paid for, if (1) (i) Tender Sub
does not receive prior to the expiration of the Offer an informal written
opinion in form and substance reasonably satisfactory to Tender Sub from the
staff of the STB, without the imposition of any conditions unacceptable to
Tender Sub, that the use of the voting trust substantially reflected in the
form of voting trust agreement contemplated by the Merger Agreement (the
"Voting Trust") is consistent with the policies of the STB against unauthorized
acquisitions of control of a regulated carrier, or (ii) Tender Sub does not
receive prior to the expiration of the Offer an informal statement from the
Premerger Notification Office that the transactions contemplated by the Offer,
the Merger Agreement and the Green Stock Option Agreement are not subject to,
or are exempt from, the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), or in the absence of the receipt of such informal
statement, any applicable waiting period under the HSR Act shall have expired
or been terminated prior to the expiration of the Offer, or (2) at any time on
or after October 14, 1996 and prior to the acceptance for payment of shares of
Green Common Stock and Green ESOP Preferred Stock, any of the following events
shall occur:

(a) there shall be instituted or pending any action or proceeding by
any government or governmental authority or agency, domestic or foreign, (i)
challenging or

<PAGE> 96

EXHIBIT D

seeking to make illegal, to delay materially or otherwise directly or
indirectly to restrain or prohibit the making of the Offer, the acceptance for
payment of or payment

D-1

<PAGE> 97

for some of or all the shares of Green Common Stock or Green ESOP Preferred
Stock by White or Tender Sub or the consummation by White or Tender Sub of the
Merger, seeking to obtain material damages relating to the Merger Agreement,
the Option Agreements or any of the transactions contemplated thereby or
otherwise seeking to prohibit directly or indirectly the transactions
contemplated by the Offer or the Merger Agreement, or challenging or seeking to
make illegal the transactions contemplated by the Option Agreements or
otherwise directly or indirectly to restrain, prohibit or delay the
transactions contemplated by the Option Agreements, (ii) except for the Voting
Trust, seeking to restrain, prohibit or delay White's, Tender Sub's or any of
their subsidiaries' ownership or operation of all or any material portion of
the business or assets of Green and its subsidiaries, taken as a whole, or to
compel White or any of its subsidiaries to dispose of or hold separate all or
any material portion of the business or assets of Green and its subsidiaries,
taken as a whole, (iii) except for the Voting Trust, seeking to impose or
confirm material limitations on the ability of White, Tender Sub or any of
their subsidiaries or affiliates effectively to exercise full rights of
ownership of the shares of Green Common Stock, including, without limitation,
the right to vote any shares of Green Common Stock acquired or owned by White,
Tender Sub or any of their subsidiaries on all matters properly presented to
Green's shareholders, or (iv) seeking to require divestiture by White or Tender
Sub or any of their subsidiaries of any shares of Green Common Stock, in the
case of any of (i) through (iv) above, which actions or proceedings are
reasonably likely to have a material adverse effect on White; or

(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree enacted, enforced, promulgated, issued
or deemed applicable to the transactions contemplated by the Offer or the
Merger Agreement, by or before any court, government or governmental authority
or agency, domestic or foreign, that, directly or indirectly, results in any of
the consequences referred to in paragraph (a) above; or

D-2
<PAGE> 98

(c) prior to the expiration of the Offer there shall not have been
validly tendered and not withdrawn an aggregate of at least 17,860,124 shares
of Green Common Stock and Green ESOP Preferred Stock; or

(d) the Board of Directors of Green shall have withdrawn, modified or
changed in a manner adverse to White or Tender Sub its approval or
recommendation of the Offer or the matters to be considered at the Green
Shareholders Meetings or shall have recommended a Takeover Proposal or other
business combination, or Green shall have entered into an agreement in
principle (or similar agreement) or definitive agreement providing for a
Takeover Proposal (as defined in the Merger Agreement) or other business
combination with a person or entity other than White or Tender Sub (or the
Board of Directors of Green resolves to do any of the foregoing); or

(e) Green shall have breached or failed to observe or perform in any
material respect any of its covenants or agreements under the Merger Agreement,
or any of the representations and warranties of Green set forth in the Merger
Agreement shall not be true and accurate both when made and as of the date of
consummation of the Offer, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such date),
except where the breach or failure to observe or perform such covenants or
agreements, or the failure of such representations and warranties to be so true
and correct (without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein), does not have, and is not likely
to have, individually or in the aggregate, a material adverse effect on Green.

(f) the Merger Agreement shall have been terminated in accordance
with its terms; or

(g) White and Tender Sub shall not have obtained sufficient
financing, on terms reasonably acceptable to White, to enable consummation of
the Offer and the Merger;

D-3
<PAGE> 99

which, in the reasonable judgment of White or Tender Sub in any such case, and
regardless of the circumstances (including any action or omission by White or
Tender Sub not inconsistent with the terms of the Merger Agreement) giving rise
to any such condition, makes it inadvisable to proceed with such acceptance for
payment or payment.

The foregoing conditions are for the sole benefit of White and Tender
Sub and may be asserted by White or Tender Sub regardless of the circumstances
giving rise to any such condition (including any action or omission by White or
Tender Sub not inconsistent with the terms of the Merger Agreement) or may be
waived by White or Tender Sub in whole or in part at any time and from time to
time in their reasonable discretion (subject to Section 1.1(a) of the Merger
Agreement). The failure by White or Tender Sub at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and other circumstances
shall not be deemed a waiver with respect to any other facts and circumstances;
and each such right shall be deemed an ongoing right that may be asserted at
any time and from time to time.

D-4

<PAGE> 1
EXECUTION COPY

GREEN STOCK OPTION AGREEMENT

GREEN STOCK OPTION AGREEMENT, dated as of October 14, 1996 (the
"Agreement"), by and between Conrail Inc., a Pennsylvania corporation
("Issuer"), and CSX Corporation, a Virginia corporation ("Grantee").

RECITALS

A. Issuer and Grantee have entered into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), providing for,
among other things, the merger of Issuer with and into a subsidiary of Grantee
with such subsidiary as the surviving corporation in the Merger.

B. As a condition and inducement to Grantee's willingness to
enter into the Merger Agreement and the White Stock Option Agreement, Grantee
has requested that Issuer agree, and Issuer has agreed, to grant Grantee the
Option.

C. As a condition and inducement to Issuer's willingness to
enter into the Merger Agreement and this Agreement, Issuer has requested that
Grantee agree, and Grantee has agreed, to grant Issuer an option to purchase
shares of Grantee's common stock on substantially the same terms as the Option.

D. Terms not defined herein shall have the meanings set forth
in the Merger Agreement.

NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein Issuer and Grantee agree as follows:

1. Grant of Option. Subject to the terms and conditions set
forth herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase up to 15,955,477 (as adjusted as set forth herein) shares
(the "Option Shares") of Common Stock, par value $1.00 per share ("Issuer
Common Stock"), of Issuer at a purchase price of $92.50 (as adjusted as set
forth herein) per Option Share (the "Purchase Price").

2. Exercise of Option. (a) Subject to any applicable requirements
of law, Grantee may exercise the Option, in whole but not in part, at any one
<PAGE> 2

time after the first to occur of (x) any event as a result of which the Grantee
is entitled to receive the Termination Fee pursuant to the Merger Agreement and
(y) the consummation of the Offer (the first of such events to occur, a
"Purchase Event"); provided, however, that except as provided in the last
sentence of this Section 2(a), the Option shall terminate and be of no further
force and effect upon the earliest to occur of (A) the Effective Time, (B) 18
months after the first occurrence of a Purchase Event and (C) termination of
the Merger Agreement in accordance with its terms prior to the occurrence of a
Purchase Event, unless the Grantee has the right to receive a Termination Fee
following such termination upon the occurrence of certain events, in which case
the Option shall not terminate until the later of (x) six months following the
time such Termination Fee becomes payable and (y) the expiration of the period
in which the Grantee has such right to receive a Termination Fee.
Notwithstanding the termination of the Option, Grantee shall be entitled to
purchase the Option Shares if it has exercised the Option in accordance with
the terms hereof prior to the termination of the Option and the termination of
the Option shall not affect any rights hereunder which by their terms do not
terminate or expire prior to or as of such termination.

(b) In the event that Grantee wishes to exercise the Option,
it shall send to Issuer a written notice (the date of which being herein
referred to as the "Notice Date") to that effect which notice also specifies a
date not earlier than three business days nor later than 20 business days from
the Notice Date for the closing of such purchase (the "Option Closing Date");
provided, however, that (i) if the closing of the purchase and sale pursuant to
the Option (the "Option Closing") cannot be consummated by reason of any
applicable judgment, decree, order, law or regulation, the period of time that
otherwise would run pursuant to this sentence shall run instead from the date
on which such restriction on consummation has expired or been terminated and
(ii) without limiting the foregoing, if prior notification to or approval of
any regulatory authority is required in connection with such purchase, Grantee
and Issuer shall promptly file the required notice or application for approval
and shall cooperate in the expeditious filing of such notice or application,
and the period of time that otherwise would run pursuant to this sentence shall
run instead from the date on which, as the case may be, (A) any required
notification period has expired or been terminated or (B) any required approval
has been obtained, and in either event, any requisite waiting period has
expired or been terminated. The place of the Option Closing shall be at the
offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York, and
the time of the Option Closing shall be 10:00 a.m. (Eastern Time) on the Option
Closing Date.

3. Payment and Delivery of Certificates. (a) At the Option
Closing, Grantee shall pay to Issuer in immediately available funds by wire
transfer to a bank account designated in writing by Issuer an amount equal to
the Purchase Price multiplied by the number of Option Shares.

-2-
<PAGE> 3

Shares pursuant to the exercise of the Option hereunder, Issuer shall not have
redeemed the Green Rights, or shall have issued any similar securities, then
each Option Share issued pursuant to such exercise shall also represent a
corresponding Green Right or new rights with terms substantially the same as
and at least as favorable to Grantee as are provided under the Green Rights
Agreement or any similar agreement then in effect.

(c) Certificates for the Option Shares delivered at the Option
Closing shall have typed or printed thereon a restrictive legend which shall
read substantially as follows:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. SUCH
SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT, DATED AS
OF OCTOBER 14, 1996, A COPY OF WHICH MAY BE OBTAINED FROM THE
SECRETARY OF GREEN CORPORATION AT ITS PRINCIPAL EXECUTIVE
OFFICES."

It is understood and agreed that the reference to restrictions arising under
the Securities Act in the above legend shall be removed by delivery of
substitute certificate(s) without such reference upon the sale of the Option
Shares pursuant to the registration rights under the Merger Agreement.

4. Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee as follows:

(a) Due Authorization. Issuer has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Issuer and the consummation by Issuer of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Issuer. This Agreement has
been duly executed and delivered by Issuer and constitutes a legal,
valid and binding obligation of Issuer, enforceable against Issuer in
accordance with its terms.

(b) Authorized Stock. Issuer's representations and
warranties in Section 3.1(c) of the Merger Agreement are incorporated
herein by reference. Without limiting the generality or effect of the
foregoing, Issuer has taken all necessary corporate and other action to
authorize and reserve and, to permit it to issue, and, at all times from
the date hereof until the obligation to deliver Option Shares upon the
exercise of the Option terminates,

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<PAGE> 4

shall have reserved for issuance, upon exercise of the Option, shares of
Issuer Common Stock necessary for Grantee to exercise the Option, and
Issuer shall take all necessary corporate action to authorize and
reserve for issuance all additional shares of Issuer Common Stock or
other securities which may be issued pursuant to Section 6 upon exercise
of the Option. The shares of Issuer Common Stock to be issued upon due
exercise of the Option, including all additional shares of Issuer Common
Stock or other securities which may be issuable upon exercise of the
Option or any Substitute Option pursuant to Section 6, upon issuance
pursuant hereto, shall be duly and validly issued, fully paid and
nonassessable, and shall be delivered free and clear of all liens,
claims, charges and encumbrances of any kind or nature whatsoever,
including without limitation any preemptive rights of any stockholder of
Issuer.

(c) No Conflicts. The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of
this Agreement shall not, conflict with, or result in any violation of,
or default (with or without notice or lapse of time or both) under, or
give rise to a right of termination, cancellation, or acceleration of
any obligation or loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of Issuer or
any of its Significant Subsidiaries under, (i) the certificate of
incorporation or by-laws of Issuer or the comparable organizational
documents of any Significant Subsidiary of Issuer, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, or license
applicable to Issuer or any Significant Subsidiary of Issuer or their
respective properties or assets, or (iii) subject to approval of the STB
of the Voting Trust to the extent contemplated by Exhibit D to the
Merger Agreement, any judgment, order, decree, statute, law, ordinance,
rule, or regulation applicable to Issuer or any of its Significant
Subsidiaries or their respective properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, violations,
defaults, rights, losses, or Liens that individually or in the aggregate
would not (x) have a material adverse effect on Issuer, (y) impair the
ability of Issuer to perform its obligations under this Agreement or the
Merger Agreement or (z) prevent or materially delay the consummation of
any of the transactions contemplated by this Agreement.

(d) State Takeover Statutes. Assuming that Grantee,
together with its affiliates, does not have voting power with respect to
such number of shares of Issuer capital stock as would represent,
together with the Option Shares, 20% or more of the votes that all
Issuer shareholders would be entitled to cast in an election of
directors as of the date of exercise of the Option, the Board of
Directors of Issuer has taken all action necessary or advisable so as to
render inoperative with respect to the transactions contemplated hereby
all applicable state anti-takeover statutes.

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<PAGE> 5

(e) Issuer Rights Amendment. The Green Rights
Agreement has been amended as set forth in the Merger Agreement, and
such amendment, insofar as it relates to the transactions contemplated
by this Agreement, shall not be further amended or revoked (including by
adopting another rights (or similar) agreement without any such
amendment) without the prior consent of Grantee in its sole discretion.

5. Representations and Warranties of Grantee. Grantee hereby
represents and warrants to Issuer that:

(a) Due Authorization. Grantee has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Grantee and the consummation by Grantee of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Grantee. This Agreement has
been duly executed and delivered by Grantee and constitutes a legal,
valid and binding obligation of Grantee, enforceable against Grantee in
accordance with its terms.

(b) No Conflicts. The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of
this Agreement hereby shall not, conflict with or result in any
violation of, or default (with or without notice or lapse of time or
both) under, or give rise to a right of termination, cancellation, or
acceleration of any obligation or loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or assets
of Grantee or any of its Significant Subsidiaries under, (i) the
certificate of incorporation or by-laws of Grantee or the comparable
organizational documents of any Significant Subsidiary of Grantee, (ii)
any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise, or license
applicable to Grantee or any Significant Subsidiary of Grantee or their
respective properties or assets, or (iii) assuming approval by the STB
of the Voting Trust to the extent contemplated by Exhibit D to the
Merger Agreement, any judgment, order, decree, statute, law, ordinance,
rule, or regulation applicable to Grantee or any of its Significant
Subsidiaries or their respective properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, violations,
defaults, rights, losses, or Liens that individually or in the aggregate
would not (x) have a material adverse effect on Grantee, (y) impair the
ability of Grantee to perform its obligations under this Agreement or
the Merger Agreement or (z) prevent or materially delay the consummation
of any of the transactions contemplated by this Agreement.

(c) Purchase Not for Distribution. Any Option Shares
or other securities acquired by Grantee upon exercise of the Option
shall not be transferred or otherwise disposed of except in a

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<PAGE> 6
transaction registered, or exempt from registration, under the
Securities Act.

6. Adjustment upon Changes in Capitalization, Etc. (a) In
the event of any change in Issuer Common Stock by reason of a stock dividend,
split-up, merger, recapitalization, combination, exchange of shares, or similar
transaction, the type and number of shares or securities subject to the Option,
and the Purchase Price therefor, shall be adjusted appropriately, and proper
provision shall be made in the agreements governing such transaction, so that
Grantee shall receive upon exercise of the Option the number and class of
shares or other securities or property that Grantee would have received in
respect of Issuer Common Stock if the Option had been exercised immediately
prior to such event or the record date therefor, as applicable. Subject to
Section 1, and without limiting the parties' relative rights and obligations
under the Merger Agreement, if any additional shares of Issuer Common Stock are
issued after the date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 6(a)), the number of shares of
Issuer Common Stock subject to the Option shall be adjusted so that, after such
issuance, it equals 19.9% of the number of shares of Issuer Common Stock then
issued and outstanding, without giving effect to any shares subject to or
issued pursuant to the Option.

(b) Without limiting the parties' relative rights and
obligations under the Merger Agreement, in the event that Issuer enters into an
agreement (i) to consolidate with or merge into any person, other than Grantee
or one of its subsidiaries, and Issuer shall not be the continuing or surviving
corporation in such consolidation or merger, (ii) to permit any person, other
than Grantee or one of its subsidiaries, to merge into Issuer and Issuer shall
be the continuing or surviving corporation, but in connection with such merger,
the shares of Issuer Common Stock outstanding immediately prior to the
consummation of such merger shall be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other property,
or the shares of Issuer Common Stock outstanding immediately prior to the
consummation of such merger shall, after such merger, represent less than 50%
of the outstanding voting securities of the merged company, or (iii) to sell or
otherwise transfer all or substantially all of its assets to any person, other
than Grantee or one of its subsidiaries, then, and in each such case, the
agreement governing such transaction shall make proper provision so that the
Option shall, upon the consummation of any such transaction and upon the terms
and conditions set forth herein, be converted into, or exchanged for, an option
with identical terms appropriately adjusted to acquire the number and class of
shares or other securities or property that Grantee would have received in
respect of Issuer Common Stock if the Option had been exercised immediately
prior to such consolidation, merger, sale, or transfer, or the record date
therefor, as applicable.

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<PAGE> 7

Issuer covenants that proper provision shall be made in such agreement to
provide that, if the Option shall not theretofore have been exercised, then
upon the consummation of the Transaction (which in the case of a Transaction
involving a tender offer shall be when shares of Issuer Common Stock are
accepted for payment), Grantee shall receive in exchange for the cancellation
of the Option an amount in cash equal to the Cash Consideration. For purposes
of this Agreement, the term "Cash Consideration" means the number of Option
Shares multiplied by the difference between (A) the closing market price per
share of Issuer Common Stock on the day immediately prior to the consummation
of such Transaction and (B) the Purchase Price.

7. Registration Rights. The registration rights under the
Merger Agreement shall be applicable to the Option Shares.

8. Transfers; Exercise; Voting Trust. The Option Shares may
not be sold, assigned, transferred, or otherwise disposed of except as provided
in the Voting Trust Agreement. The Option may not be exercised except under,
and in all respects subject to the terms of, the Voting Trust Agreement.

9. Listing. If Issuer Common Stock or any other securities to
be acquired upon exercise of the Option are then listed on the NYSE (or any
other national securities exchange or national securities quotation system),
Issuer, upon the request of Grantee, shall promptly file an application to list
the shares of Issuer Common Stock or other securities to be acquired upon
exercise of the Option on the NYSE (and any such other national securities
exchange or national securities quotation system) and shall use reasonable
efforts to obtain approval of such listing as promptly as practicable.

10. Loss or Mutilation. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer shall execute and deliver a new Agreement of
like tenor and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of Issuer, whether
or not the Agreement so lost, stolen, destroyed, or mutilated shall at any time
be enforceable by anyone.

11. Miscellaneous.

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<PAGE> 8

(a) Expenses. Except as otherwise provided in the Merger
Agreement, each of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.

(b) Amendment. This Agreement may not be amended, except by
an instrument in writing signed on behalf of each of the parties.

(c) Extension; Waiver. Any agreement on the part of a party
to waive any provision of this Agreement, or to extend the time for
performance, shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.

(d) Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Merger Agreement (including the documents and instruments
referred to therein) and the Confidentiality Agreement (i) constitute the
entire agreement, and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter of
this Agreement, and (ii) except as provided in Section 8.6 of the Merger
Agreement, are not intended to confer upon any person other than the parties
any rights or remedies.

(e) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS THEREOF; PROVIDED, HOWEVER, THAT THE LAWS OF THE RESPECTIVE STATES OF
INCORPORATION OF EACH OF THE PARTIES HERETO SHALL GOVERN THE RELATIVE RIGHTS,
OBLIGATIONS, POWERS, DUTIES AND OTHER INTERNAL AFFAIRS OF SUCH PARTY AND ITS
BOARD OF DIRECTORS.

(f) Notices. All notices, requests, claims, demands, and
other communications under this Agreement must be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed), or sent
by overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):

(i) if to Grantee, to

CSX Corporation
One James Center
901 East Cary Street
Richmond, VA 23219

Telecopy No.: (804) 783-1380

Attention: Mark Aron

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<PAGE> 9

with copies to:

CSX Corporation
One James Center
901 East Cary Street
Richmond, VA 23219

Telecopy No.: (804) 783-1355

Attention: Peter Shudtz

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019

Telecopy No.: (212) 403-2000

Attention: Pamela S. Seymon, Esq.; and

(ii) if to Issuer, to

Conrail Inc.
2001 Market Street
Philadelphia, PA 19103

Telecopy No.: (215) 209-4068

Attention: Bruce B. Wilson
Senior Vice President - Law

with a copy to:

Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019

Telecopy No.: (212) 474-3700

Attention: Robert A. Kindler, Esq.

(g) Assignment. Neither this Agreement nor any of the rights,
interests, or obligations under this Agreement may be assigned or

-9-
<PAGE> 10

delegated, in whole or in part, by operation of law or otherwise, by Issuer or
Grantee without the prior written consent of the other. Any assignment or
delegation in violation of the preceding sentence shall be void.

(h) Further Assurances. In the event of any exercise of the
Option by Grantee, Issuer and Grantee shall execute and deliver all other
documents and instruments and take all other Section that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise.

(i) ENFORCEMENT. THE PARTIES AGREE THAT IRREPARABLE DAMAGE
WOULD OCCUR AND THAT THE PARTIES WOULD NOT HAVE ANY ADEQUATE REMEDY AT LAW IN
THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN
ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED. IT IS
ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR
INJUNCTIONS TO PREVENT BREACHES OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY
THE TERMS AND PROVISIONS OF THIS AGREEMENT IN ANY FEDERAL COURT LOCATED IN THE
STATE OF NEW YORK OR IN NEW YORK STATE COURT, THE FOREGOING BEING IN ADDITION
TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. IN
ADDITION, EACH OF THE PARTIES HERETO (I) CONSENTS TO SUBMIT ITSELF TO THE
PERSONAL JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE STATE OF NEW YORK OR
ANY NEW YORK STATE COURT IN THE EVENT ANY DISPUTE ARISES OUT OF THIS AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, (II) AGREES THAT IT
SHALL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR
OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT, AND (III) AGREES THAT IT SHALL NOT
BRING ANY ACTION RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT IN ANY COURT OTHER THAN A FEDERAL COURT SITTING
IN THE STATE OF NEW YORK OR A NEW YORK STATE COURT.

-10-
<PAGE> 11

IN WITNESS WHEREOF, Issuer and Grantee have caused this Agreement
to be signed by their respective officers thereunto duly authorized as of the
day and year first written above.

CONRAIL INC.

By: /s/
---------------
Name:
Title:

CSX CORPORATION

By: /s/
---------------
Name:
Title:

-11-

<PAGE> 1
EXECUTION COPY

WHITE STOCK OPTION AGREEMENT

WHITE STOCK OPTION AGREEMENT, dated as of October 14,
1996 (the "Agreement"), by and between Conrail Inc., a Pennsylvania corporation
("Grantee"), and CSX Corporation, a Virginia corporation ("Issuer").

RECITALS

A. Issuer and Grantee have entered into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger Agreement"),
providing for, among other things, the merger of Grantee with and into a
subsidiary of Issuer with such subsidiary as the surviving corporation in the
Merger.

B. As a condition and inducement to Grantee's
willingness to enter into the Merger Agreement and the Green Stock Option
Agreement, Grantee has requested that Issuer agree, and Issuer has agreed, to
grant Grantee the Option.

C. As a condition and inducement to Issuer's
willingness to enter into the Merger Agreement and this Agreement, Issuer has
requested that Grantee agree, and Grantee has agreed, to grant Issuer an option
to purchase shares of Grantee's common stock on substantially the same terms as
the Option.

D. Terms not defined herein shall have the meanings
set forth in the Merger Agreement.

NOW, THEREFORE, in consideration of the foregoing and
the respective representations, warranties, covenants and agreements set forth
herein Issuer and Grantee agree as follows:

1. Grant of Option. Subject to the terms and
conditions set forth herein, Issuer hereby grants to Grantee an irrevocable
option (the "Option") to purchase up to 43,090,773 (as adjusted as set forth
herein) shares (the "Option Shares") of Common Stock, par value $1.00 per share
("Issuer Common Stock"), of Issuer at a purchase price of $64.82 (as adjusted
as set forth herein) per Option Share (the "Purchase Price").

2. Exercise of Option. (a) Subject to any
applicable requirements of law including, without limitation, the establish-
<PAGE> 2
ment of a voting trust (the "Voting Trust") substantially in the form of
Exhibit E to the Merger Agreement as may be required under applicable
transportation law, Grantee may exercise the Option, in whole but not in part,
at any one time after any event as a result of which the Grantee is entitled to
receive the Termination Fee pursuant to the Merger Agreement (a "Purchase
Event"); provided, however, that except as provided in the last sentence of
this Section 2(a), the Option shall terminate and be of no further force and
effect upon the earliest to occur of (A) the Effective Time, (B) 18 months
after the first occurrence of a Purchase Event and (C) termination of the
Merger Agreement in accordance with its terms prior to the occurrence of a
Purchase Event, unless the Grantee has the right to receive a Termination Fee
following such termination upon the occurrence of certain events, in which case
the Option shall not terminate until the later of (x) six months following the
time such Termination Fee becomes payable and (y) the expiration of the period
in which the Grantee has such right to receive a Termination Fee.
Notwithstanding the termination of the Option, Grantee shall be entitled to
purchase the Option Shares if it has exercised the Option in accordance with
the terms hereof prior to the termination of the Option and the termination of
the Option shall not affect any rights hereunder which by their terms do not
terminate or expire prior to or as of such termination.

-2-
<PAGE> 3

the expeditious filing of such notice or application, and the period of time
that otherwise would run pursuant to this sentence shall run instead from the
date on which, as the case may be, (A) any required notification period has
expired or been terminated or (B) any required approval has been obtained, and
in either event, any requisite waiting period has expired or been terminated.
The place of the Option Closing shall be at the offices of Cravath, Swaine &
Moore, 825 Eighth Avenue, New York, New York, and the time of the Option
Closing shall be 10:00 a.m. (Eastern Time) on the Option Closing Date.

3. Payment and Delivery of Certificates. (a) At
the Option Closing, Grantee shall pay to Issuer in immediately available funds
by wire transfer to a bank account designated in writing by Issuer an amount
equal to the Purchase Price multiplied by the number of Option Shares.

(b) At the Option Closing, simultaneously with
the delivery of immediately available funds as provided in Section 3(a), Issuer
shall deliver to the trustee under the Voting Trust a certificate or
certificates representing the Option Shares to be purchased at the Option
Closing, which Option Shares shall be free and clear of all liens, claims,
charges and encumbrances of any kind whatsoever. If at the time of issuance of
the Option Shares pursuant to the exercise of the Option hereunder, Issuer
shall not have redeemed the Green Rights, or shall have issued any similar
securities, then each Option Share issued pursuant to such exercise shall also
represent a corresponding Green Right or new rights with terms substantially
the same as and at least as favorable to Grantee as are provided under the
Green Rights Agreement or any similar agreement then in effect.

(c) Certificates for the Option Shares delivered
at the Option Closing shall have typed or printed thereon a restrictive legend
which shall read substantially as follows:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY BE REOFFERED

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<PAGE> 4
OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK
OPTION AGREEMENT, DATED AS OF OCTOBER 14, 1996, A COPY OF WHICH
MAY BE OBTAINED FROM THE SECRETARY OF GREEN CORPORATION AT ITS
PRINCIPAL EXECUTIVE OFFICES."

4. Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee as follows:

(b) Authorized Stock. Issuer's representations and
warranties in Section 3.2(c) of the Merger Agreement are incorporated
herein by reference. Without limiting the generality or effect of the
foregoing, Issuer has taken all necessary corporate and other action
to authorize and reserve and, to permit it to issue, and, at all times
from the date hereof until the obligation to deliver Option Shares
upon the exercise of the Option terminates, shall have reserved for
issuance, upon exercise of the Option, shares of Issuer Common Stock
necessary for Grantee to exercise the Option, and Issuer shall take
all

-4-
<PAGE> 5

necessary corporate action to authorize and reserve for issuance all
additional shares of Issuer Common Stock or other securities which may
be issued pursuant to Section 6 upon exercise of the Option. The
shares of Issuer Common Stock to be issued upon due exercise of the
Option, including all additional shares of Issuer Common Stock or
other securities which may be issuable upon exercise of the Option or
any Substitute Option pursuant to Section 6, upon issuance pursuant
hereto, shall be duly and validly issued, fully paid and
nonassessable, and shall be delivered free and clear of all liens,
claims, charges and encumbrances of any kind or nature whatsoever,
including without limitation any preemptive rights of any stockholder
of Issuer.

(c) No Conflicts. The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of
this Agreement shall not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time or both)
under, or give rise to a right of termination, cancellation, or
acceleration of any obligation or loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or
assets of Issuer or any of its Significant Subsidiaries under, (i) the
certificate of incorporation or by-laws of Issuer or the comparable
organizational documents of any Significant Subsidiary of Issuer, (ii)
any loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise, or
license applicable to Issuer or any Significant Subsidiary of Issuer
or their respective properties or assets, or (iii) subject to approval
of the STB of the Voting Trust to the extent contemplated by Exhibit D
to the Merger Agreement, any judgment, order, decree, statute, law,
ordinance, rule, or regulation applicable to Issuer or any of its
Significant Subsidiaries or their respective properties or assets,
other than, in the case

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<PAGE> 6
of clauses (ii) and (iii), any such conflicts, violations, defaults,
rights, losses, or Liens that individually or in the aggregate would
not (x) have a material adverse effect on Issuer, (y) impair the
ability of Issuer to perform its obligations under this Agreement or
the Merger Agreement or (z) prevent or materially delay the
consummation of any of the transactions contemplated by this
Agreement.

(d) State Takeover Statutes. Assuming that Grantee, together
with its affiliates, does not have voting power with respect to such
number of shares of Issuer capital stock as would represent more than
10% of any class of outstanding voting shares of the Issuer as of the
date hereof, the Board of Directors of Issuer has taken all action
necessary or advisable so as to render inoperative with respect to the
transactions contemplated hereby all applicable state anti-takeover
statutes.

(e) Issuer Rights Amendment. The White Rights Agreement
has been amended as set forth in the Merger Agreement, and such
amendment, insofar as it relates to the transactions contemplated by
this Agreement, shall not be further amended or revoked (including by
adopting another rights (or similar) agreement without any such
amendment) without the prior consent of Grantee in its sole
discretion.

5. Representations and Warranties of Grantee. Grantee hereby
represents and warrants to Issuer that:

(a) Due Authorization. Grantee has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Grantee and the consummation by Grantee
of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of Grantee. This Agreement
has been duly executed and delivered by Grantee and constitutes a
legal, valid and binding

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<PAGE> 7

obligation of Grantee, enforceable against Grantee in accordance with
its terms.

(b) No Conflicts. The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of
this Agreement hereby shall not, conflict with or result in any
violation of, or default (with or without notice or lapse of time or
both) under, or give rise to a right of termination, cancellation, or
acceleration of any obligation or loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or
assets of Grantee or any of its Significant Subsidiaries under, (i)
the certificate of incorporation or by-laws of Grantee or the
comparable organizational documents of any Significant Subsidiary of
Grantee, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise, or license applicable to Grantee or any Significant
Subsidiary of Grantee or their respective properties or assets, or
(iii) assuming approval by the STB of the Voting Trust to the extent
contemplated by Exhibit D to the Merger Agreement, any judgment,
order, decree, statute, law, ordinance, rule, or regulation applicable
to Grantee or any of its Significant Subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and
(iii), any such conflicts, violations, defaults, rights, losses, or
Liens that individually or in the aggregate would not (x) have a
material adverse effect on Grantee, (y) impair the ability of Grantee
to perform its obligations under this Agreement or the Merger
Agreement or (z) prevent or materially delay the consummation of any
of the transactions contemplated by this Agreement.

(c) Purchase Not for Distribution. Any Option Shares or
other securities acquired by Grantee upon exercise of the Option shall
not be transferred or otherwise

-7-
<PAGE> 8
disposed of except in a transaction registered, or exempt from
registration, under the Securities Act.

-8-
<PAGE> 9

each such case, the agreement governing such transaction shall make proper
provision so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option with identical terms appropriately adjusted
to acquire the number and class of shares or other securities or property that
Grantee would have received in respect of Issuer Common Stock if the Option had
been exercised immediately prior to such consolidation, merger, sale, or
transfer, or the record date therefor, as applicable.

(c) If, prior to the termination of the Option in
accordance with Section 2 or the Notice Date, Issuer enters into any agreement
pursuant to which all outstanding shares of Issuer Common Stock are to be
purchased for, or converted into the right to receive in whole or in part
(other than in respect of fractional shares) cash (a "Transaction"), Issuer
covenants that proper provision shall be made in such agreement to provide
that, if the Option shall not theretofore have been exercised, then upon the
consummation of the Transaction (which in the case of a Transaction involving a
tender offer shall be when shares of Issuer Common Stock are accepted for
payment), Grantee shall receive in exchange for the cancellation of the Option
an amount in cash equal to the Cash Consideration. For purposes of this
Agreement, the term "Cash Consideration" means the number of Option Shares
multiplied by the difference between (A) the closing market price per share of
Issuer Common Stock on the day immediately prior to the consummation of such
Transaction and (B) the Purchase Price.

7. Registration Rights. The registration rights under the
Merger Agreement shall be applicable to the Option Shares.

8. Transfers; Exercise; Voting Trust. The Option Shares may
not be sold, assigned, transferred, or otherwise disposed of except as provided
in the Voting Trust Agreement. The Option may not be exercised except under,
and is in all respects subject to the terms of, the Voting Trust Agreement.

9. Listing. If Issuer Common Stock or any other securities
to be acquired upon exercise of the Option are then listed

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<PAGE> 10
on the NYSE (or any other national securities exchange or national securities
quotation system), Issuer, upon the request of Grantee, shall promptly file an
application to list the shares of Issuer Common Stock or other securities to be
acquired upon exercise of the Option on the NYSE (and any such other national
securities exchange or national securities quotation system) and shall use
reasonable efforts to obtain approval of such listing as promptly as
practicable.

11. Miscellaneous.

(a) Expenses. Except as otherwise provided in the Merger
Agreement, each of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.

(b) Amendment. This Agreement may not be amended, except
by an instrument in writing signed on behalf of each of the parties.

(c) Extension; Waiver. Any agreement on the part of a
party to waive any provision of this Agreement, or to extend the time for
performance, shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.

(d) Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Merger Agreement (including the documents and

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<PAGE> 11

instruments referred to therein) and the Confidentiality Agreement (i)
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter of this Agreement, and (ii) except as provided in Section 8.6 of
the Merger Agreement, are not intended to confer upon any person other than the
parties any rights or remedies.

(e) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, REGARDLESS
OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT
OF LAWS THEREOF; PROVIDED, HOWEVER, THAT THE LAWS OF THE RESPECTIVE STATES OF
INCORPORATION OF EACH OF THE PARTIES HERETO SHALL GOVERN THE RELATIVE RIGHTS,
OBLIGATIONS, POWERS, DUTIES AND OTHER INTERNAL AFFAIRS OF SUCH PARTY AND ITS
BOARD OF DIRECTORS.

(i) if to Issuer, to

CSX Corporation
One James Center
901 East Cary Street
Richmond, VA 23219

Telecopy No.: (804) 783-1380

Attention: Mark Aron

with copies to:

CSX Corporation
One James Center
901 East Cary Street

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<PAGE> 12
Richmond, VA 23219

Telecopy No.: (804) 783-1355

Attention: Peter Shudtz

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019

Telecopy No.: (212) 403-2000

Attention: Pamela S. Seymon, Esq.; and

(ii) if to Grantee, to

Conrail Inc.
2001 Market Street
Philadelphia, PA 19103

Telecopy No.: (215) 209-4068

Attention: Bruce B. Wilson
Senior Vice President - Law

with a copy to:

Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019

Telecopy No.: (212) 474-3700

Attention: Robert A. Kindler, Esq.

(g) Assignment. Neither this Agreement nor any of the
rights, interests, or obligations under this Agreement may be assigned or
delegated, in whole or in part, by operation of law or otherwise, by Issuer or
Grantee without the prior written consent of

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<PAGE> 13

the other. Any assignment or delegation in violation of the preceding sentence
shall be void.

(h) Further Assurances. In the event of any exercise of
the Option by Grantee, Issuer and Grantee shall execute and deliver all other
documents and instruments and take all other Section that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise.

(i) ENFORCEMENT. THE PARTIES AGREE THAT IRREPARABLE
DAMAGE WOULD OCCUR AND THAT THE PARTIES WOULD NOT HAVE ANY ADEQUATE REMEDY AT
LAW IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT
PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED.
IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR
INJUNCTIONS TO PREVENT BREACHES OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY
THE TERMS AND PROVISIONS OF THIS AGREEMENT IN ANY FEDERAL COURT LOCATED IN THE
STATE OF NEW YORK OR IN NEW YORK STATE COURT, THE FOREGOING BEING IN ADDITION
TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. IN
ADDITION, EACH OF THE PARTIES HERETO (I) CONSENTS TO SUBMIT ITSELF TO THE
PERSONAL JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE STATE OF NEW YORK OR
ANY NEW YORK STATE COURT IN THE EVENT ANY DISPUTE ARISES OUT OF THIS AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, (II) AGREES THAT IT
SHALL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR
OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT, AND (III) AGREES THAT IT SHALL NOT
BRING ANY ACTION RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT IN ANY COURT OTHER THAN A FEDERAL COURT SITTING
IN THE STATE OF NEW YORK OR A NEW YORK STATE COURT.

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<PAGE> 14
IN WITNESS WHEREOF, Issuer and Grantee have caused this
Agreement to be signed by their respective officers thereunto duly authorized
as of the day and year first written above.

CONRAIL, INC.

By: /s/
------------------------------------------
Name:
Title:

CSX CORPORATION

By: /s/
------------------------------------------
Name:
Title:

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EXHIBIT E

THE VOTING TRUST AGREEMENT

THIS VOTING TRUST AGREEMENT, dated as of _____________, 1996,
by and among White Corporation, a Virginia corporation ("Parent"), Green
Acquisition Corp., a Pennsylvania corporation and a wholly-owned subsidiary of
Parent ("Acquiror"), and The ___________________ Bank (the "Trustee"),

W I T N E S S E T H:

WHEREAS, Parent, Acquiror and Green, a Pennsylvania
corporation (the "Company"), have entered into an Agreement and Plan of Merger,
dated as of October 14, 1996 (as it may be amended from time to time, the
"Merger Agreement"; capitalized terms used but not defined herein shall have
the meanings set forth therein), pursuant to which (i) Acquiror shall commence
the Offer (and in certain circumstances a Second Offer) (collectively, the
"Tender Offer") for shares of Common Stock of the Company (all such shares
accepted for payment pursuant to the Tender Offer or otherwise received,
acquired or purchased by or on behalf of Parent or Acquiror, including pursuant
to the Option Agreement, the "Acquired Shares"), and (ii) the Company will
merge with Acquiror pursuant to the Merger;

WHEREAS, Parent, Acquiror and the Company have entered into a
Stock Option Agreement, dated as of October 14,

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1996 (as it may be amended from time to time, the "Option Agreement") providing
Parent and Acquiror the option to purchase 15,955,477 shares of common stock of
the Company;

WHEREAS, Parent and Acquiror wish (and are obligated pursuant
to the Merger Agreement and the Option Agreement), simultaneously with the
acceptance for payment of such Acquired Shares pursuant to the Tender Offer,
the Option Agreement or otherwise to deposit such Shares of Common Stock in an
independent, irrevocable voting trust, pursuant to the rules of the Surface
Transportation Board (the "STB"), in order to avoid any allegation or assertion
that the Parent or the Acquiror is controlling or has the power to control the
Company prior to the receipt of any required STB approval or exemption;

WHEREAS, neither the Trustee nor any of its affiliates has any
officers or board members in common or any direct or indirect business
arrangements or dealings (as described in Paragraph 9 hereof) with the Parent
or the Acquiror or any of their affiliates; and

WHEREAS, the Trustee is willing to act as voting trustee
pursuant to the terms of this Trust Agreement and the rules of the Surface
Transportation Board ("STB"),

NOW THEREFORE, the parties hereto agree as follows:

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1. Creation of Trust - The Parent and the
Acquiror hereby appoint the ____________ Bank as Trustee hereunder, and the
Bank hereby accepts said appointment and agrees to act as Trustee under this
Trust Agreement as provided herein.

2. Trust Is Irrevocable - This Trust Agreement
and the nomination of the Trustee during the term of the trust shall be
irrevocable by the Parent and the Acquiror and their affiliates and shall
terminate only in accordance with, and to the extent of, the provisions of
Paragraphs 8 and 14 hereof.

3. Deposit of Trust Stock - The Parent and the
Acquiror agree that, prior to acceptance of Acquired Shares purchased pursuant
to the Tender Offer, the Acquiror will direct the depositary for the Tender
Offer to transfer to the Trustee any such Acquired Shares purchased pursuant to
the Tender Offer. The Parent and the Acquiror also agree that simultaneously
with receipt, acquisition or purchase of any additional shares of Common Stock
by either of them, directly or indirectly, or by any of their affiliates,
including, without limitation, upon any exercise of the option provided for in
the Option Agreement, they will transfer to the Trustee the certificate or
certificates for such shares. All such certificates shall be duly endorsed or
accompanied by proper instruments duly executed for transfer thereof to the
Trustee

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or otherwise validly and properly transferred, and shall be exchanged for one
or more Voting Trust Certificates substantially in the form attached hereto as
Exhibit A (the "Trust Certificates"), with the blanks therein appropriately
filled in. All shares of Common Stock at any time delivered to the Trustee
hereunder are called the "Trust Stock." The Trustee shall present to the
Company all certificates representing Trust Stock for surrender and
cancellation and for the issuance and delivery to the Trustee of new
certificates registered in the name of the Trustee or its nominee.

4. Powers of Trustee - The Trustee shall be present, in
person or represented by proxy, at all annual and special meetings of
shareholders of the Company so that all Trust Stock may be counted for the
purposes of determining the presence of a quorum at such meetings. Parent and
Acquiror agree, and the Trustee acknowledges, that the Trustee shall not
participate in or interfere with the management of the Company and shall take no
other actions with respect to the Company except in accordance with the terms
hereof. The Trustee shall exercise all voting rights in respect of the Trust
Stock to approve and effect the Merger, and in favor of any proposal or action
necessary or desirable to effect, or consistent with the effectuation of, the
Parent and Acquiror's acquisition of the Company, pursuant to the Merger
Agreement, and without limiting the generality of the

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foregoing, if there shall be with respect to the Board of Directors of the
Company an "Election Contest" as defined in the Proxy Rules of the Securities
and Exchange Commission, in which one slate of nominees shall support the
effectuation of the Merger and another oppose it, in favor of the slate
supporting the effectuation of the Merger. In addition, for so long as the
Merger Agreement is in effect, the Trustee shall exercise all voting rights in
respect of the Trust Stock, to cause any other proposed merger, business
combination or similar transaction (including, without limitation, any
consolidation, sale or purchase of assets, reorganization, recapitalization,
liquidation or winding up of or by the Company) involving the Company, but not
involving the Parent or one of its subsidiaries or affiliates (otherwise than
in connection with a disposition pursuant to Paragraph 8), not to be effected.
In addition, the Trustee shall exercise all voting rights in respect of the
Trust Stock in favor of any proposal or action necessary or desirable to
dispose of Trust Stock in accordance with Paragraph 8 hereof. Except as
provided in the three immediately preceding sentences, the Trustee shall vote
all shares of Trust Stock with respect to all matters, including without
limitation the election or removal of directors, voted on by the shareholders
of the Company (whether at a regular or special meeting or pursuant to a
unanimous written consent) in the same proportion as all shares of Common Stock
(other than Trust Stock)

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are voted with respect to such matters. In exercising its voting rights in
accordance with this Paragraph 4, the Trustee shall take such actions at all
annual, special or other meetings of stockholders of the Company or in
connection with any and all consents of shareholders in lieu of a meeting.

5. Further Provisions Concerning Voting of Trust Stock - The
Trustee shall be entitled and it shall be its duty to exercise any and all
voting rights in respect of the Trust Stock either in person or by proxy, as
hereinafter provided (including without limitation Paragraphs 4 and 8(b)
hereof), unless otherwise directed by the STB or a court of competent
jurisdiction. Subject to Paragraph 4, the Trustee shall not exercise the voting
powers of the Trust Stock in any way so as to create any dependence or
intercorporate relationship between (i) any or all of the Parent, the Acquiror
and their affiliates, on the one hand, and (ii) the Company or its affiliates,
on the other hand. The term "affiliate" or "affiliates" wherever used in this
Trust Agreement shall have the meaning specified in Section 11323(c) of Title 49
of the United States Code, as amended. The Trustee shall not, without the
prior approval of the STB, vote the Trust Stock to elect any officer, director,
nominee or representative of the Parent, the Acquiror or their affiliates as an
officer or director of the Company or of any affiliate of the Company. The
Trustee shall be kept informed

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respecting the business operations of the Company by means of the financial
statements and other public disclosure documents periodically filed by the
Company and affiliates of the Company with the Securities and Exchange
Commission (the "SEC") and the STB, and by means of information respecting the
Company contained in such statements and other documents filed by the Parent
with the SEC and the STB, copies of which shall be promptly furnished to the
Trustee by the Company or the Parent, as the case may be, and the Trustee shall
be fully protected in relying upon such information. The Trustee shall not be
liable for any mistakes of fact or law or any error of judgment, or for any act
or omission, except as a result of the Trustee's willful misconduct or gross
negligence. Notwithstanding the foregoing provisions of this Paragraph 5,
however, the registered holder of any Trust Certificate may at any time with
the prior written approval of the Company -- but only with the prior written
approval of the STB -- instruct the Trustee in writing to vote the Trust Stock
represented by such Trust Certificate in any manner, in which case the Trustee
shall vote such shares in accordance with such instructions.

6. Transfer of Trust Certificates - The Trust Certificates
shall be transferable only with the prior written consent of the Company. They
may be transferred on the books of the Trustee by the registered holder upon the
surrender thereof properly assigned, in accordance with rules

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from time to time established for the purpose by the Trustee. Until so
transferred, the Trustee may treat the registered holder as owner for all
purposes. Each transferee of a Trust Certificate issued hereunder shall, by
his acceptance thereof, assent to and become a party to this Trust Agreement,
and shall assume all attendant rights and obligations. Any such transfer in
violation of this Paragraph 6 shall be null and void.

7. Dividends and Distributions - Pending the termination of
this Trust as hereinafter provided, the Trustee shall, immediately following the
receipt of each cash dividend or cash distribution as may be declared and paid
upon the Trust Stock, pay the same over to or as directed by the Acquiror or to
or as directed by the holder of the Trust Certificates hereunder as then
appearing on the books of the Trustee. The Trustee shall receive and hold
dividends and distributions other than cash upon the same terms and conditions
as the Trust Stock and shall issue Trust Certificates representing any new or
additional securities that may be paid as dividends or otherwise distributed
upon the Trust Stock to the registered holders of Trust Certificates in
proportion to their respective interests.

8. Disposition of Trust Stock; Termination of Trust - (a) This
Trust is accepted by the Trustee subject to the right hereby reserved in the
Parent at any time to sell or make any other disposition of the whole or any
part of the Trust Stock, but only as

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permitted by subparagraph (e) below, whether or not an event described in
subparagraph (b) below has occurred. The Trustee shall take all actions
reasonably requested by the Parent (including, without limitation, exercising
all voting rights in respect of Trust Stock in favor of any proposal or action
necessary or desirable to effect, or consistent with the effectuation of or
with respect to any proposed sale or other disposition of the whole or any part
of the Trust Stock by the Acquiror or Parent that is otherwise permitted
pursuant to this Paragraph 8, including, without limitation, in connection with
the exercise by Parent of its registration rights under the Merger Agreement.
The Trustee shall be entitled to rely on a certification from the Parent,
signed by its President or one of its Vice Presidents and under its corporate
seal, that a disposition of the whole or any part of the Trust Stock is being
made in accordance with the requirements of subparagraph (e) below. In the
event of a permitted sale of Trust Stock by the Acquiror, the Trustee shall, to
the extent the consideration therefor is payable to or controllable by the
Trustee, promptly pay, or cause to be paid, upon the order of the Acquiror the
net proceeds of such sale to the registered holders of the Trust Certificates
in proportion to their respective interests. It is the intention of this
Paragraph that no violation of 49 U.S.C. Section 11323 will result from a
termination of this Trust.

(b) In each case under this subparagraph (b), subject to the
prior written consent of the Company, in the event the STB by final order shall
(i) approve or exempt the acquisition of control of the Company by the Acquiror,
the

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Parent or any of their affiliates or (ii) approve or exempt a merger between
the Company and the Acquiror, the Parent or any of their affiliates, then
immediately upon the direction of the Parent and the delivery of a certified
copy of such order of the STB or other governmental authority with respect
thereof, or, in the event that Subtitle IV of Title 49 of the United States
Code, or other controlling law, is amended to allow the Acquiror, the Parent or
their affiliates to acquire control of the Company without obtaining STB or
other governmental approval, upon delivery of an opinion of independent counsel
selected by the Trustee that no order of the STB or other governmental
authority is required, the Trustee shall either (x) transfer to or upon the
order of the Acquiror, the Parent or the holder or holders of Trust
Certificates hereunder as then appearing on the records of the Trustee, its
right, title and interest in and to all of the Trust Stock then held by it in
accordance with the terms, conditions and agreements of this Trust Agreement
and not theretofore transferred by it as provided in subparagraph (a) hereof,
or (y) if shareholder approval has not previously been obtained, vote the Trust
Stock with respect to any such merger between the Company and the Acquiror,
the Parent or any affiliate of either as directed by the holder or holders of a
majority in interest of the Trust Certificates, and upon any such merger this
Trust shall cease and come to an end.

(c)(i) Upon consummation of the Merger, the Trust Stock
shall be canceled and retired and shall cease to exist in accordance with
Section 2.1(c) of the Merger Agreement, and thereafter this Trust shall cease
and come to an end.

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(ii) In the event that the Merger Agreement terminates in
accordance with its terms, Parent shall use its best efforts to sell the Trust
Stock during a period of two years after such termination or such extension of
that period as the STB shall approve and the Company shall reasonably approve.
Any such disposition shall be subject to the requirements of subparagraph (e)
below, and to any jurisdiction of the STB to oversee Parent's divestiture of
Trust Stock. At all times, the Trustee shall continue to perform its duties
under this Trust Agreement and, should Parent be unsuccessful in its efforts to
sell or distribute the Trust Stock during the period referred to, the Trustee
shall then as soon as practicable, and subject to the requirements of
subparagraph (e) below, sell the Trust Stock for cash to eligible purchasers in
such manner and for such price as the Trustee in its discretion shall deem
reasonable after consultation with Parent. (An "eligible purchaser" hereunder
shall be a person or entity that is not affiliated with Parent and which has
all necessary regulatory authority, if any, to purchase the Trust Stock.)
Parent agrees to cooperate with the Trustee in effecting such disposition and
the Trustee agrees to act in accordance with any direction made by Parent as to
any specific terms or method of disposition, to the extent not inconsistent
with any of the terms of this Trust Agreement, including subparagraph (e)
below, and with the requirements of the terms of any STB or court order. The
proceeds of the sale

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shall be distributed to or upon the order of Parent or, on a pro rata basis, to
the holder or holders of the Trust Certificates hereunder as then known to the
Trustee. The Trustee may, in its reasonable discretion, require the surrender
to it of the Trust Certificates hereunder before paying to the holder his share
of the proceeds. Upon disposition of all the Trust Stock pursuant to this
paragraph 8(c)(ii), this Trust shall cease and come to an end.

(d) Unless sooner terminated pursuant to any other provision
herein contained, this Trust Agreement shall terminate on December 31, 2016, and
may be extended by the parties hereto, so long as no violation of 49 U.S.C.
Section 11323 will result from such termination or extension. All Trust Stock
and any other property held by the Trustee hereunder upon such termination shall
be distributed to or upon the order of the Acquiror. The Trustee may, in its
reasonable discretion, require the surrender to it of the Trust Certificates
hereunder before the release or transfer of the stock interests evidenced
thereby.

(e) No disposition of Trust Stock shall be made except
pursuant to one or more broadly distributed public offerings and subject to all
necessary regulatory approvals, if any. Notwithstanding the foregoing, Trust
Stock may be distributed as otherwise directed by Parent, with the prior written
consent of the Company, in which case the Trustee shall be entitled to rely on a
certificate of Parent (acknowledged by the Company) that such person or entity
to whom the Trust Stock is disposed is not any affiliate of the Parent and has
all necessary regu-

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latory authority, if any is necessary, to purchase such Trust Stock. The
Trustee shall promptly inform the STB of any transfer or disposition of Trust
Stock pursuant to this Paragraph 8.

(f) Except as expressly provided in this Paragraph 8, the
Trustee shall not dispose of, or in any way encumber, the Trust Stock, and any
transfer, sale or encumbrance in violation of the foregoing shall be null and
void.

9. Independence of the Trustee - Neither the Trustee nor any
affiliate of the Trustee may have (i) any officers, or members of their
respective boards of directors, in common with the Acquiror, the Parent, or any
affiliate of either, or (ii) any direct or indirect business arrangements or
dealings, financial or otherwise, with the Acquiror, the Parent or any affiliate
of either, other than dealings pertaining to the establishment and carrying out
of this voting trust. Mere investment in the stock or securities of the
Acquiror or the Parent or any affiliate of either by the Trustee, short of
obtaining a controlling interest, will not be considered a proscribed business
arrangement or dealing, but in no event shall any such investment by the Trustee
in voting securities of the Acquiror, the Parent or their affiliates exceed five
percent of their outstanding voting securities and in no event shall the Trustee
hold a proportion of such voting securities so substantial as to permit the
Trustee in any way to control or direct the affairs

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of the Acquiror, the Parent or their affiliates. Neither the Acquiror, the
Parent nor their affiliates shall purchase the stock or securities of the
Trustee or any affiliate of the Trustee.

10. Compensation of the Trustee - The Trustee shall be
entitled to receive reasonable and customary compensation for all services
rendered by it as Trustee under the terms hereof and said compensation to the
Trustee, together with all counsel fees, taxes, or other expenses reasonably
incurred hereunder, shall be promptly paid by the Acquiror or the Parent.

11. Trustee May Act Through Agents - The Trustee may at any
time or from time to time appoint an agent or agents and may delegate to such
agent or agents the performance of any administrative duty of the Trustee.

12. Concerning the Responsibilities and Indemnification of
the Trustee - The Trustee shall not be answerable for the default or misconduct
of any agent or attorney appointed by it in pursuance hereof if such agent or
attorney has been selected with reasonable care. The duties and
responsibilities of the Trustee shall be limited to those expressly set forth in
this Trust Agreement. The Trustee shall not be responsible for the sufficiency
or the accuracy of the form, execution, validity or genuineness of the Trust
Stock, or of any documents relating thereto, or for any lack

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of endorsement thereon, or for any description therein, nor shall the Trustee
be responsible or liable in any respect on account of the identity, authority
or rights of the persons executing or delivering or purporting to execute or
deliver any such Trust Stock or document or endorsement or this Trust
Agreement, except for the execution and delivery of this Trust Agreement by
this Trustee. The Acquiror and the Parent agree that they will at all times
protect, indemnify and save harmless the Trustee from any loss, cost or expense
of any kind or character whatsoever in connection with this Trust except those,
if any, growing out of the negligence or willful misconduct of the Trustee, and
will at all times themselves undertake, assume full responsibility for, and
pay all costs and expense of any suit or litigation of any character, including
any proceedings before the STB, with respect to the Trust Stock of this Trust
Agreement, and if the Trustee shall be made a party thereto, the Acquiror or
the Parent will pay all costs and expenses, including reasonable counsel fees,
to which the Trustee may be subject by reason thereof; provided, however, that
the Acquiror and the Parent shall not be responsible for the cost and expense
of any suit that the Trustee shall settle without first obtaining the Parent's
written consent. The Trustee may consult with counsel and the opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken or omitted

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or suffered by the Trustee hereunder in good faith and in accordance with such
opinion.

13. Trustee to Give Account to Holders - To the
extent requested to do so by the Acquiror or any registered holder of a Trust
Certificate, the Trustee shall furnish to the party making such request full
information with respect to (i) all property theretofore delivered to it as
Trustee, (ii) all property then held by it as Trustee, and (iii) all actions
theretofore taken by it as Trustee.

14. Resignation, Succession, Disqualification
of Trustee - The Trustee, or any trustee hereafter appointed, may at any time
resign by giving sixty days' written notice of resignation to the Parent and
the STB. The Parent shall at least fifteen days prior to the effective date of
such notice appoint a successor trustee which shall (i) satisfy the
requirements of Paragraph 9 hereof and (ii) be a corporation organized and
doing business under the laws of the United States or of any State thereof and
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority. If no successor trustee shall
have been appointed and shall have accepted appointment at least fifteen days
prior to the effective date of such notice of resignation, the resigning
Trustee may petition any competent authority or

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court of competent jurisdiction for the appointment of a successor trustee.
Upon written assumption by the successor trustee of the Trustee's powers and
duties hereunder, a copy of the instrument of assumption shall be delivered by
the Trustee to the Parent and the STB and all registered holders of Trust
Certificates shall be notified of its assumption, whereupon the Trustee shall
be discharged of the powers and duties of the Trustee hereunder and the
successor trustee shall become vested with such powers and duties. In the
event of any material violation by the Trustee of the terms and conditions of
this Trust Agreement, the Trustee shall become disqualified from acting as
trustee hereunder as soon as a successor trustee shall have been selected in
the manner provided by this paragraph.

15. Amendment - Subject to the requirements of
Section 1.9 of the Merger Agreement, this Trust Agreement may from time to time
be modified or amended by agreement executed by the Trustee, the Acquiror (if
executed prior to the Merger), the Parent and all registered holders of the
Trust Certificates (i) pursuant to an order of the STB, (ii) with the prior
approval of the STB, (iii) in order to comply with any order of the STB or (iv)
upon receipt of an opinion of counsel satisfactory to the Trustee and the
holders of Trust Certificates that an order of the STB approving such
modification or amendment is not required and

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that the amendment is consistent with the STB's regulations regarding voting
trusts.

16. Governing Law; Powers of the STB - The provisions of
this Trust Agreement and of the rights and obligations of the parties hereunder
shall be governed by the laws of the Commonwealth of Pennsylvania, except that
to the extent any provision hereof may be found inconsistent with subtitle IV,
title 49, United States Code or regulations promulgated thereunder, such statute
and regulations shall control and such provision hereof shall be given effect
only to the extent permitted by such statute and regulations. In the event that
the STB shall, at any time hereafter by final order, find that compliance with
law requires any other or different action by the Trustee than is provided
herein, the Trustee shall act in accordance with such final order instead of the
provisions of this Trust Agreement.

17. Counterparts - This Trust Agreement is executed in four
counterparts, each of which shall constitute an original, and one of which shall
be held by each of the Parent and the Acquiror and the other two shall be held
by the Trustee, one of which shall be subject to inspection by holders of Trust
Certificates on reasonable notice during business hours.

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18. Filing With the STB - A copy of this Agreement and any
amendments or modifications thereto shall be filed with the STB by the Acquiror.

19. Successors and Assigns - This Trust Agreement shall be
binding upon the successors and assigns to the parties hereto, including without
limitation successors to the Acquiror and the Parent by merger, consolidation or
otherwise. The parties agree that the Company shall be an express third party
beneficiary of this Trust Agreement. Except as otherwise expressly set forth
herein, any consent required from the Company hereunder shall be granted or
withheld in the Company's sole discretion.

20. Succession of Functions - The term "STB" includes any
successor agency or governmental department that is authorized to carry out the
responsibilities now carried out by the STB with respect to the consideration of
the consistency with the public interest of rail mergers and combinations, the
regulation of voting trusts in respect of the acquisition of securities of rail
carriers or companies controlling them, and the exemption of approved rail
mergers and combinations from the antitrust laws.

21. Notices - Any notice which any party hereto may give to
the other hereunder shall be in writing and shall be given by hand delivery,
or by first class

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registered mail, or by overnight courier service, or by facsimile transmission
confirmed by one of the aforesaid methods, sent,

If to Purchaser or Acquiror, to
White Corporation

---------------------------
---------------------------
Attention: General Counsel

If to the Trustee, to

---------------------------
---------------------------
---------------------------

And if to the holders of Trust Certificates, to them at their
addresses as shown on the records maintained by the Trustee.

22. Remedies - Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement, each non-breaching
party would be irreparably and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto (a) will
waive, in any action for specific performance, the defense of adequacy of a
remedy at law and (b) shall be entitled, in addition to any other remedy to
which they may be entitled at law or in equity, to an order compelling specific
performance of this Agreement in any

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action instituted in any state or federal court sitting in Philadelphia,
Pennsylvania. Each party hereto consents to personal jurisdiction in any such
action brought in any state or federal court sitting in Philadelphia,
Pennsylvania.

IN WITNESS WHEREOF, White Corporation and Green Acquisition
Corp. have caused this Trust Agreement to be executed by their authorized
officers and their corporate seals to be affixed, attested by their Secretaries
or Assistant Secretaries, and the Bank has caused this Trust
Agreement to be executed by one of its Assistant Vice Presidents and its
corporate seal to be affixed, attested to by one of its Assistant Corporate
Trust Officers, all as of the day and year first above written.

Attest: WHITE CORPORATION

_______________________________ By_____________________________
Secretary

Attest: GREEN ACQUISITION CORP.

_______________________________ By_____________________________
Secretary

Attest: __________________BANK

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________________________________ _______________________________
No. EXHIBIT A
_____________________________ _____________ Shares

VOTING TRUST CERTIFICATE
FOR
COMMON STOCK,
of
_____________________CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF______________________________

THIS IS TO CERTIFY that ___________________ will be entitled, on the surrender
of this Certificate, to receive on the termination of the Voting Trust
Agreement hereinafter referred to, or otherwise as provided in Paragraph 8 of
said Voting Trust Agreement, a certificate or certificates for _________ shares
of the Common Stock, $ par value, of_________________ Corporation, a_________
corporation (the "Company"). This Certificate is issued pursuant to, and the
rights of the holder hereof are subject to and limited by, the terms of a
Voting Trust Agreement, dated as of____________ , 1996, executed by ___________
Corporation, a corporation,__________________ Corporation, a___________________
corporation, and the ___________ Bank, as Voting Trustee, a copy of which
Voting Trust Agreement is on file in the registered office of said corporation
at__________, and open to inspection of any stockholder of the Company and the
holder hereof. The Voting Trust Agreement, unless earlier terminated (or
extended) pursuant to the terms thereof, will terminate on December 31, 2016,
so long as no violation of 49 U.S.C. Section 11323 will result from such
termination.

The holder of this Certificate shall be entitled to the benefits
of said Voting Trust Agreement, including the right to receive payment equal to
the cash dividends, if any, paid by the Company with respect to the number of
shares represented by this Certificate.

This Certificate shall be transferable only on the books of the
undersigned Voting Trustee or any successor, to be kept by it, on surrender
hereof by the registered holder in person or by attorney duly authorized in
accordance with the

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provisions of said Voting Trust Agreement, and until so transferred, the Voting
Trustee may treat the registered holder as the owner of this Voting Trust
Certificate for all purposes whatsoever, unaffected by any notice to the
contrary.

By accepting this Certificate, the holder hereof assents to all
the provisions of, and becomes a party to, said Voting Trust Agreement.

IN WITNESS WHEREOF, the Voting Trustee has caused this
Certificate to be signed by its officer duly authorized.

Dated:

THE ________________ BANK

By____________________________________
Authorized Officer

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[FORM OF BACK OF VOTING TRUST CERTIFICATE]

FOR VALUE RECEIVED________________________________ hereby sells,
assigns, and transfers unto___________________ the within Voting Trust
Certificate and all rights and interests represented thereby, and does hereby
irrevocably constitute and appoint _________________________ Attorney to
transfer said Voting Trust Certificate on the books of the within mentioned
Voting Trustee, with full power of substitution in the premises.

_____________________________

Dated:

In the Presence of:

____________________________

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