<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
(AMENDMENT NO. 3)
PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
AMENDMENT NO. 13
TO
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
(804) 782-1400
(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
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CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
- --------------------------------- ---------------------------------
<S> <C>
$2,017,932,950.00 $403,586.59
</TABLE>
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* For purposes of calculating the filing fee only. This calculation assumes the
purchase of an aggregate of 18,344,845 Shares of Common Stock, par value
$1.00 per share, and Series A ESOP Convertible Junior Preferred Stock,
without par value, of Conrail Inc. at $110 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.
------------------------
[X] 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: $403,586.59
Form or Registration No.: Schedule 14D-1
Filing Party: CSX Corporation and Green
Acquisition Corp.
Date Filed: December 6, 1996
</TABLE>
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<PAGE> 2
This Statement amends and supplements the Tender Offer Statement on
Schedule 14D-1 filed with the Securities and Exchange Commission (the "SEC") on
December 6, 1996, as previously amended and supplemented (the "Schedule 14D-1"),
by Green Acquisition Corp. ("Purchaser"), a Pennsylvania corporation and a
wholly owned subsidiary of CSX Corporation, a Virginia corporation ("Parent"),
to purchase up to an aggregate of 18,344,845 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 (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, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
December 6, 1996 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer") at a purchase price of $110 per Share, net to the
tendering shareholder in cash. Capitalized terms used and not defined herein
shall have the meanings assigned such terms in the Offer to Purchase and the
Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
Item 1(c) is hereby amended and supplemented by reference to Section 2 of
the Supplement, which Section is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
Item 3(b) is hereby amended and supplemented by reference to Section 3 of
the Supplement, which Section is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
Item 5(a) is hereby amended and supplemented by reference to Section 1,
Section 4 and Section 5 of the Supplement, which Sections are incorporated
herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Item 7 is hereby amended and supplemented by reference to Section 1,
Section 4 and Section 5 of the Supplement, which Sections are incorporated
herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
Item 10(b) is hereby amended and supplemented by reference to Section 4 and
Section 6 of the Supplement, which Sections are incorporated herein by
reference.
Item 10(e) is hereby amended and supplemented by reference to Section 6 of
the Supplement, which Section is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(15) Supplement to Offer to Purchase, dated December 19, 1996.
(a)(16) Revised Letter of Transmittal.
(a)(17) Revised Notice of Guaranteed Delivery.
(a)(18) Text of Press Release issued by Parent and the Company on December 19, 1996.
(b)(1) Credit Agreement, dated November 15, 1996 (incorporated by reference to Exhibit (b)(2) to
Parent and Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October
16, 1996).
(c)(6) Second Amendment to Agreement and Plan of Merger, dated as of December 18, 1996, by and
among Parent, Purchaser and the Company.
(c)(7) Form of Amended and Restated Voting Trust Agreement.
(c)(8) Letter from Parent to shareholders of the Company, dated December 19, 1996.
</TABLE>
<PAGE> 3
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: Executive Vice President --
Law and Public Affairs
Dated: December 19, 1996
<PAGE> 4
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: December 19, 1996
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO.
- -------
<S> <C>
*(a)(1) Offer to Purchase, dated December 6, 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) Tender Offer Instructions for Participants of Conrail Inc. Dividend Reinvestment Plan.
*(a)(8) Text of Press Release issued by Parent and the Company on December 6, 1996.
*(a)(9) Form of Summary Advertisement, dated December 6, 1996.
*(a)(10) Text of Press Release issued by Parent on December 5, 1996.
*(a)(11) Text of Press Release issued by Parent and the Company on December 10, 1996.
*(a)(12) Text of Advertisement published by Parent and the Company on December 10, 1996.
*(a)(13) Text of Press Release issued by Parent on December 11, 1996.
*(a)(14) Text of Advertisement published by Parent and the Company on December 12, 1996.
(a)(15) Supplement to Offer to Purchase, dated December 19, 1996.
(a)(16) Revised Letter of Transmittal.
(a)(17) Revised Notice of Guaranteed Delivery.
(a)(18) Text of Press Release issued by Parent and the Company on December 19, 1996.
(b)(1) Credit Agreement, dated November 15, 1996 (incorporated by reference to Exhibit (b)(2) to
Parent and Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October
16, 1996).
*(c)(1) Agreement and Plan of Merger, dated as of October 14, 1996, by and among Parent, Purchaser
and the Company (incorporated by reference to Exhibit (c)(1) to Parent and Purchaser's
Tender Offer Statement on Schedule 14D-1, as amended, dated October 16, 1996).
*(c)(2) Company Stock Option Agreement, dated as of October 14, 1996, between Parent and the
Company (incorporated by reference to Exhibit (c)(2) to Parent and Purchaser's Tender Offer
Statement on Schedule 14D-1, as amended, dated October 16, 1996).
*(c)(3) Parent Stock Option Agreement, dated as of October 14, 1996, between Parent and the Company
(incorporated by reference to Exhibit (c)(3) to Parent and Purchaser's Tender Offer
Statement on Schedule 14D-1, as amended, dated October 16, 1996).
*(c)(4) Voting Trust Agreement, dated as of October 15, 1996, by and among Parent, Purchaser and
Deposit Guaranty National Bank (incorporated by reference to Exhibit (c)(4) to Parent and
Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October 16, 1996).
*(c)(5) First Amendment to Agreement and Plan of Merger, dated as of November 5, 1996, by and among
Parent, Purchaser and the Company (incorporated by reference to Exhibit (c)(7) to Parent
and Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October 16,
1996).
(c)(6) Second Amendment to Agreement and Plan of Merger, dated as of December 18, 1996, by and
among Parent, Purchaser and the Company.
(c)(7) Form of Amended and Restated Voting Trust Agreement.
(c)(8) Letter from Parent to shareholders of the Company, dated December 19, 1996.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
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* Previously filed.
<PAGE> 1
SUPPLEMENT TO THE OFFER TO PURCHASE DATED DECEMBER 6, 1996
CSX CORPORATION,
GREEN ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF CSX CORPORATION
AND
CONRAIL INC.
HAVE AMENDED THE MERGER AGREEMENT
THE SECOND OFFER HAS BEEN EXTENDED. THE SECOND OFFER, PRORATION
PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, JANUARY 22, 1997, UNLESS THE SECOND OFFER IS
FURTHER EXTENDED.
Except as otherwise set forth in this Supplement, the terms and conditions
previously set forth in the Offer to Purchase, dated December 6, 1996, remain
applicable in all respects to the Second Offer, and this Supplement should be
read in conjunction with the Offer to Purchase. Unless the context requires
otherwise, terms not defined herein have the meanings ascribed to them in the
Offer to Purchase.
The conditions to the Second Offer have not been changed. The Second Offer
is conditioned upon, among other things, the Pennsylvania Control Transaction
Law being inapplicable to Conrail Inc. (the "Company"), which will require
Company shareholder approval of an amendment to the Company Articles. See
Introduction and Section 15 of the Offer to Purchase and Introduction in this
Supplement. However, approval by the Surface Transportation Board (the "STB") is
no longer a condition to consummation of the Merger.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE SECOND OFFER AND THE
MERGER (AS HEREINAFTER DEFINED), DETERMINED THAT THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY (INCLUDING THE SECOND 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 A PORTION OF THEIR SHARES ACCEPT THE
SECOND OFFER AND TENDER THEIR SHARES PURSUANT TO THE SECOND OFFER.
The Merger Agreement has been amended to (1) increase the securities
portion of the per Share consideration to be received in the Merger by adding to
the 1.85619 shares of Parent Common Stock to be received $16 in Parent
convertible preferred stock, the terms of which will be set prior to the Merger
such that such securities would, in the opinion of certain financial advisors,
trade at par on a fully distributed basis, and (2) provide that the Merger will
occur as soon as practicable following approval by the shareholders of the
Company and Parent of the matters related to the Merger and prior to STB
approval (as hereinafter defined). The Merger Agreement also has been amended in
other respects. See Introduction and Section 4 of this Supplement.
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
shares of common stock, par value $1.00 per share ("Common Shares"), or shares
of Series A ESOP Convertible Junior Preferred Stock, without par value ("ESOP
Preferred Shares," and together with the Common Shares, "the Shares"), should
either (i) complete and sign the (blue) Letter of Transmittal (or a facsimile
hereof) circulated with the Offer to Purchase (as defined herein) or this
Supplement in accordance with the instructions set forth 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 such Letter of
Transmittal (or such facsimile thereof) and any other required documents to the
Depositary (as defined in the Offer in Purchase) and either deliver the
certificates for such Shares to the Depositary along with such Letter of
Transmittal (or a facsimile thereof) or deliver such Shares pursuant to the
procedure for book-entry transfer set forth in Section 3 of the Offer to
Purchase prior to the expiration of the Second 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 the Offer to Purchase on a timely basis,
may tender such Shares by following the procedures for guaranteed delivery set
forth in Section 3 of the Offer to Purchase.
Questions and requests for assistance or for additional copies of this
Supplement, the Offer to Purchase, the Letter of Transmittal or other tender
offer materials may be directed to the Information Agent or the Dealer Manager
(as such terms are defined in the Offer to Purchase) at their respective
addresses and telephone numbers set forth on the back cover of this Supplement.
The Dealer Manager for the Second Offer is:
WASSERSTEIN PERELLA & CO., INC.
December 19, 1996
<PAGE> 2
TO THE HOLDERS OF COMMON STOCK AND SERIES A ESOP CONVERTIBLE
JUNIOR PREFERRED STOCK OF CONRAIL INC.:
INTRODUCTION
The following information amends and supplements the Offer to Purchase,
dated December 6, 1996 (the "Offer to Purchase"), of Green Acquisition Corp.
("Purchaser"), a Pennsylvania corporation and a wholly owned subsidiary of CSX
Corporation, a Virginia corporation ("Parent"). Except as otherwise set forth in
this Supplement, the terms and conditions previously set forth in the Offer to
Purchase remain applicable in all respects to the Second Offer, and this
Supplement should be read in conjunction with the Offer to Purchase. Unless the
context requires otherwise, terms not defined herein have the meanings ascribed
to them in the Offer to Purchase.
THIS SUPPLEMENT IS BEING PROVIDED IN CONNECTION WITH THE SECOND AMENDMENT,
DATED AS OF DECEMBER 18, 1996 (THE "SECOND AMENDMENT"), TO THE AGREEMENT AND
PLAN OF MERGER, DATED AS OF OCTOBER 14, 1996 (THE "ORIGINAL MERGER AGREEMENT"
AND, AS AMENDED BY THE FIRST AMENDMENT AND THE SECOND AMENDMENT, THE "MERGER
AGREEMENT"). THE SECOND AMENDMENT PROVIDES, AMONG OTHER THINGS, FOR AN INCREASE
IN THE VALUE OF THE SECURITIES TO BE RECEIVED IN THE MERGER AND THAT THE MERGER
WILL OCCUR AS SOON AS PRACTICABLE FOLLOWING APPROVAL BY THE SHAREHOLDERS OF THE
COMPANY AND PARENT OF THE MATTERS RELATED TO THE MERGER AND PRIOR TO STB
APPROVAL. UNDER THE SECOND AMENDMENT, IN THE MERGER, EACH SHARE WILL BE
CONVERTED INTO THE RIGHT TO RECEIVE (X) 1.85619 SHARES OF PARENT COMMON STOCK
AND $16 IN CONVERTIBLE PREFERRED STOCK OF PARENT, THE TERMS OF WHICH WILL BE SET
PRIOR TO THE MERGER SUCH THAT SUCH SECURITIES ("MERGER PREFERRED STOCK," AND,
COLLECTIVELY WITH PARENT COMMON STOCK, "PARENT MERGER SECURITIES," AND ON A PER
SHARE BASIS, THE "PER SHARE MERGER CONSIDERATION") WOULD, IN THE OPINION OF
CERTAIN FINANCIAL ADVISORS, TRADE AT PAR ON A FULLY DISTRIBUTED BASIS OR, IF
APPLICABLE, (Y) $110 IN CASH, WITHOUT INTEREST THEREON. IF THE SECOND OFFER IS
FULLY SUBSCRIBED AND CONSUMMATED IN ACCORDANCE WITH ITS TERMS, ALL SHAREHOLDERS
OF THE COMPANY WILL RECEIVE PARENT MERGER SECURITIES IN THE MERGER AND WILL NOT
BE OFFERED THE OPPORTUNITY TO ELECT TO RECEIVE CASH IN THE MERGER. SEE SECTION
13 OF THE OFFER TO PURCHASE AND SECTIONS 4 AND 6 OF THIS SUPPLEMENT.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE SECOND OFFER AND THE
MERGER, DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY (INCLUDING THE SECOND 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 A PORTION OF THEIR SHARES ACCEPT THE SECOND OFFER AND TENDER
THEIR SHARES PURSUANT TO THE SECOND OFFER.
THE CONDITIONS TO THE SECOND OFFER HAVE NOT BEEN CHANGED. THE SECOND OFFER
IS CONDITIONED UPON, AMONG OTHER THINGS, THE PENNSYLVANIA CONTROL TRANSACTION
LAW BEING INAPPLICABLE TO THE COMPANY, WHICH WILL REQUIRE COMPANY SHAREHOLDER
APPROVAL OF AN AMENDMENT TO THE COMPANY ARTICLES. SEE INTRODUCTION AND SECTION
15 OF THE OFFER TO PURCHASE. HOWEVER, STB APPROVAL IS NO LONGER A CONDITION TO
CONSUMMATION OF THE MERGER.
The Second Offer is being made pursuant to the Merger Agreement which
provides that, subject to the satisfaction or waiver of certain conditions
contained therein, 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) $110 in cash, without interest, (ii) the Per Share Merger
Consideration or (iii) a combination of such cash and Parent Merger Securities.
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 Merger Securities, as the case may be, the aggregate number of
Shares to be converted into Parent Merger Securities 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), and the aggregate
number of Shares to be
<PAGE> 3
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 holders have elected to receive cash or Parent Merger Securities, as
the case may be, such shareholder may not receive in respect of his or her
Shares the amount of cash, Parent Merger Securities or combination thereof that
such shareholder requested in his or her election. If the Second Offer is fully
subscribed and consummated in accordance with its terms, Parent will have
purchased in the First Offer and the Second Offer an aggregate of 40% of the
outstanding Shares on a fully diluted basis and, accordingly, all Company
shareholders will receive Parent Merger Securities in the Merger and will not
have the opportunity to elect to receive cash. See Section 13 of the Offer to
Purchase and Section 4 of this Supplement. The time at which the Merger is
consummated in accordance with the Merger Agreement is hereinafter referred to
as the "Effective Time."
The Merger Agreement also provides that the period of time during which
each of the Company and Parent has agreed that it will not discuss or agree to
any takeover proposal with a third party has been extended to the December 31,
1998 termination date of the Merger Agreement. See Section 4 of this Supplement.
As set forth in greater detail in the Offer to Purchase (see Introduction
and Sections 15 and 16 of the Offer to Purchase), the Second Offer is
conditioned upon the Company Articles being amended to include an "opt out"
provision from the Pennsylvania Control Transaction Law. Unless such condition
is satisfied, Purchaser effectively is precluded from purchasing Shares pursuant
to the Second Offer and consummating the Merger in accordance with the Merger
Agreement. The Company has mailed proxy materials for the Pennsylvania Special
Meeting that was scheduled to be held on December 23, 1996. In connection with
the Second Amendment, the Company has announced that such meeting has been
rescheduled to January 17, 1996, and the Company is expected to mail
supplemental proxy materials in connection with such rescheduled meeting shortly
following the date of this Supplement. The Company has advised Purchaser that
the record date for such meeting will remain December 5, 1996.
Under the Merger Agreement, the Company has agreed not to convene, adjourn
or postpone the Pennsylvania Special Meeting without the prior consent of
Parent, which consent will not be unreasonably withheld. Pursuant to the Merger
Agreement, either Parent or the Company can require that additional special
meetings be held for the purpose of considering the Articles Amendment, and a
new record date could be set for any such special meeting (and a new record date
would be required if such a special meeting is held after March 5, 1997). See
Section 13 of the Offer to Purchase. By a December 17, 1996 decision by the
United States District Court for the Eastern District of Pennsylvania, the Court
enjoined the Company from postponing the Pennsylvania Special Meeting if the
basis for the Company's decision was the Company's failure to receive sufficient
proxies to assure approval of the Articles Amendment. See Section 6 of this
Supplement.
THE SECOND 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, AND THE RULES
AND REGULATIONS THEREUNDER. THE SECOND OFFER ALSO DOES NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY PARENT MERGER SECURITIES. SUCH AN
OFFER MAY BE MADE ONLY PURSUANT TO A PROSPECTUS.
Procedures for tendering Shares are set forth in Section 3 of the Offer to
Purchase. Tendering shareholders may use either the original (blue) Letter of
Transmittal and the original (gray) Notice of Guaranteed Delivery previously
circulated with the Offer to Purchase or the revised (blue) Letter of
Transmittal and revised (gray) Notice of Guaranteed Delivery circulated with
this Supplement. Shareholders who have previously validly tendered and not
withdrawn Shares pursuant to the Second Offer are not required to take any
further action in order to receive, subject to the terms and conditions of the
Second Offer, the tender price of $110 per Share, if the Shares are accepted for
payment and paid for by Purchaser pursuant to
2
<PAGE> 4
the Second Offer, except as may be required by the guaranteed delivery procedure
if such procedure was utilized. See Section 3 of the Offer to Purchase and
Section 1 of this Supplement.
THE OFFER TO PURCHASE, THIS SUPPLEMENT AND THE LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE SECOND OFFER.
1. Expiration Date. The discussion set forth in Section 1 of the Offer to
Purchase and the amendments thereto are hereby amended and supplemented as
follows:
The term "Expiration Date" means 5:00 p.m., New York City time, on
Wednesday, January 22, 1997 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 Second Offer is open, in which event the term
"Expiration Date" shall refer to the latest time and date at which the Second
Offer, as so extended by Purchaser, shall expire.
This Supplement, the revised (blue) 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.
Purchaser acknowledges that it cannot, consistent with the requirement that
withdrawal rights be extended while the Second Offer is open, terminate the
Second Offer, eliminate withdrawal rights, and delay acceptance for payment for
Shares until all conditions are satisfied or waived.
2. Price Range of Shares; Dividends. The discussion set forth in Section 6
of the Offer to Purchase and the amendments thereto are hereby amended and
supplemented as follows:
According to published financial sources, the Company paid its regular
quarterly cash dividend of $.475 per Common Share on December 16, 1996.
On December 18, 1996, the last full trading day prior to the announcement
of the Second Amendment, the closing price per Common Share as reported on the
NYSE composite tape was $99. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET
QUOTATION FOR THE COMMON SHARES.
3. Background of the Second Offer Since December 6, 1996; Contacts with the
Company. The discussion set forth in Section 11 of the Offer to Purchase and
the amendments thereto are hereby amended and supplemented as follows:
On December 6, 1996, Parent and Purchaser commenced the Second Offer.
On December 10, 1996, Parent and the Company issued the following press
release:
CSX AND CONRAIL ANNOUNCE JOINT EFFORT
TO BRING COMPETITIVE BENEFITS TO CUSTOMERS
Richmond, VA and Philadelphia, PA (December 10, 1996) -- CSX
Corporation (CSX) [NYSE: CSX] and Conrail Inc. (Conrail) [NYSE: CRR]
announced today that they have jointly begun an effort that will bring even
more competitive benefits to customers who will be served by their merged
railroad.
The companies said that a joint CSX-Conrail team would work to assure
that so-called two-to-one customers -- customers who are today served by
only CSX and Conrail -- will fully participate in the benefits of this
pro-competitive merger. The joint team will meet with representatives of
other major carriers who have expressed interest in the opportunities
afforded by this process.
The negotiations are confidential business discussions, and the
companies will not comment on them until agreements have been reached. At
that time, the agreements will be made available to the public and
submitted to the Surface Transportation Board as part of the merger review
process.
3
<PAGE> 5
CSX Corporation, headquartered in Richmond, VA, is an international
transportation company offering a variety of rail, container-shipping,
intermodal, trucking, barge and contract logistics management services.
CSX's home page can be reached at http://www.CSX.com.
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. Conrail's home page
can be reached at http://www.CONRAIL.com.
On December 11, 1996, Parent issued the following press release in response
to a "pledge letter" by Norfolk Southern to shareholders of the Company:
CSX DISMISSES NORFOLK SOUTHERN'S
"PLEDGE" LETTER AS ANOTHER "NON-EVENT"
Richmond, VA., December 11, 1996 -- CSX Corp. (CSX)(NYSE: CSX) today
dismissed Norfolk Southern's "pledge letter" to Conrail shareholders as
another "non-event" in which Norfolk Southern again misrepresents its
ability to close its hostile tender offer. In a statement, CSX said:
"This is more of the same Norfolk Southern smokescreen intended to cloud
reality. The facts, however, are clear. Norfolk Southern could not close
its hostile tender offer on its previous expiration date of Dec. 16, 1996,
nor can it close on its revised expiration date of Jan. 10, 1997, or at any
time thereafter until well into the summer of 1997 at the earliest, in
accordance with the terms of the Conrail-CSX merger agreement. This has
been resoundingly upheld in federal court."
CSX Corporation, headquartered in Richmond, VA., is an international
transportation company offering a variety of rail, container-shipping,
intermodal, trucking, barge and contract logistics management services.
CSX's home page can be reached at http://www.CSX.com. Conrail's home page
can be reached at http://www.CONRAIL.com.
Since the commencement of the Second Offer, Parent and the Company have
held discussions and engaged in negotiations relative to the Merger Agreement
and the Second Amendment. On December 18, 1996, Parent and the Company entered
into the Second Amendment.
4. Merger Agreement; Other Agreements. The discussion set forth in Section
13 of the Offer to Purchase and the amendments thereto are hereby amended and
supplemented as set forth below. The following is a summary of certain
provisions of the Second Amendment and is qualified in its entirety by the full
text of the Second Amendment, a copy of which has been filed with the SEC by
Purchaser as an exhibit to the Schedule 14D-1.
The Merger. The Merger Agreement provides that, subject to the terms and
conditions thereof and in accordance with the Pennsylvania Law, a wholly owned
Pennsylvania subsidiary of Purchaser ("Merger Sub") will be merged with and into
the Company (the "First Merger"). The Company will be the surviving corporation
of the First Merger and shall succeed to and assume all rights and obligations
of Merger Sub in accordance with the Pennsylvania Law. As soon as practicable on
or after the closing of the First Merger, the parties will file articles of
merger or other appropriate documents (such documents, collectively, the "First
Articles of Merger") as may be required under the Pennsylvania Law. The First
Merger will become effective when the First Articles of Merger are filed or at
such subsequent date or time as Parent and the Company specify in the First
Articles of Merger (the time the First Merger becomes effective being the "First
Effective Time" or, unless otherwise specified, the "Effective Time").
Subject to the terms and conditions of the Merger Agreement and in
accordance with the Pennsylvania Law, on the first business day immediately
following the First Effective Time, the Company shall be merged with and into
Purchaser (the "Second Merger" and, together with the First Merger, the
"Merger"). Purchaser will be the surviving corporation (the "Surviving
Corporation") of the Second Merger and shall succeed to and assume all rights
and obligations of the Company in accordance with the Pennsylvania Law. As soon
as practicable on or after the closing of the Second Merger, the parties will
file articles of merger or other appropriate documents (such documents,
collectively, the "Second Articles of Merger"). The Second Merger
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will become effective when the Second Articles of Merger are filed or at such
subsequent date or time as Parent and the Company specify in the Second Articles
of Merger (the time the Second Merger becomes effective being the "Second
Effective Time").
The Articles of Incorporation and By-laws of the Company, as in effect
immediately prior to the First Effective Time and the Second Effective Time,
shall be the Articles of Incorporation and By-laws, respectively, of the
surviving corporation of each of the First Merger and the Second Merger,
respectively. The officers and directors of the Company immediately prior to the
First Effective Time and the Second Effective Time will be the officers and
directors of the corporation surviving each of the First Merger and the Second
Merger, respectively. The Merger shall have the effects set forth in the
Pennsylvania Law.
Conversion of Shares. The Merger Agreement provides that all shares of
common stock, par value $1.00 per share, of Merger Sub issued and outstanding
immediately prior to the First Effective Time shall, at the First Effective
Time, by virtue of the First Merger and without any action on the part of any
person, become such number of duly authorized, validly issued, fully paid and
nonassessable Common Shares as, when aggregated with all Common Shares then
owned by Parent, Purchaser or its affiliates, represents 80% of the then
outstanding capital stock of the Company. Each share of Common Stock, par value
$1.00 per share, of Purchaser issued and outstanding immediately prior to the
Second Effective Time shall, at the Second Effective Time, by virtue of the
Second 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.
In the First Merger, such percentage of the respective shareholdings of
each holder (other than Parent, Purchaser or its affiliates) of Shares which,
when added to the Common Shares then held by Parent, Purchaser or its
affiliates, represents 80% of the Shares issued and outstanding immediately
prior to the Effective Time shall, at the First Effective Time, by virtue of the
First Merger and without any action on the part of the holder thereof, be
converted into the right to receive (x) such number of duly authorized, validly
issued, fully paid and nonassessable shares of Parent Common Stock and such
number of shares of Merger Preferred Stock having the other terms determined as
described below, or (y) cash, without interest thereon, in the case of each of
(x) and (y), as determined pursuant to the Merger Agreement. Each Share
(fractional or otherwise) issued and outstanding immediately prior to the Second
Effective Time shall, at the Second Effective Time, by virtue of the Second
Merger and without any action on the part of the holder thereof, be converted
into the right to receive the Per Share Merger Consideration.
The Merger Preferred Stock will be convertible preferred stock (or trust
convertible preferred stock) of Parent with a liquidation preference of $50 per
share; a quarterly yield to be determined such that the securities are expected
to trade at par on a fully distributed basis; a maturity, which currently is not
fixed, of seven to ten years or perpetual; a conversion premium, which currently
is not fixed, of 20% to 25%; and call protection, which currently is not fixed,
for 3 to 4 years. The terms of the Merger Preferred Stock that are not fixed as
described above (such terms, the "Other Terms") will not be inconsistent with
the terms so fixed and will be determined in accordance with the following
procedure such that the Merger Preferred Stock to be distributed with respect to
each Share as described in clause (x) in the preceding paragraph shall have a
value on a fully distributed basis, as of the date of the opinions referred to
below, as close as possible equal to $16:
(1) the Other Terms shall be determined by mutual agreement of two
investment banking firms of national reputation, one selected by the
Company and one selected by Parent, such that in their respective opinions
the Merger Preferred Stock to be issued in respect of each Share will have
a value on a fully distributed basis, as of the date of their opinions,
equal to $16 per Share; or
(2) if such two investment banking firms are unable to agree on the
Other Terms or if either such firm is unable to provide the opinion
referred to in clause (1) above within four business days following the
fifteenth business day prior to the Company Merger Meeting, each such
investment banking firm within two business days following such
four-business day period shall propose its version of the Other Terms and
shall mutually select a third investment banking firm of national
reputation, and within four business days thereafter the third firm shall
select the proposal of one or the other of the two firms that, in the
opinion of the third firm, is the closer of the two proposals to giving, as
of the date of its opinion, a
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value on a fully distributed basis for the Merger Preferred Stock to be
issued in respect of each Share equal to $16 per Share.
The Other Terms of the Merger Preferred Stock will be determined in accordance
with the foregoing no later than five business days prior to the date of the
Company Merger Meeting.
In the First Merger, all Common Shares owned by Parent, Purchaser or its
affiliates shall be retained. In the Second Merger, all Common Shares that are
owned by the Company as treasury stock and any Common Shares owned by Parent,
the Company or any of their respective subsidiaries will, at the Second
Effective Time, be canceled and retired and will cease to exist, and, except as
otherwise provided in the Merger Agreement, no shares of Parent Common Stock or
other consideration shall be delivered or owing in exchange therefor.
On and after the First Effective Time and the Second Effective Time, as
applicable, holders of Shares will no longer have any rights as shareholders of
the Company, except, as applicable, the right to receive the Per Share Merger
Consideration with respect to each Share held by them.
Boards of Directors; Officers. On the Control Date, the Board of
Directors, committees of the Board of Directors, composition of such committees
(including chairmen thereof) and officers of Parent and/or the Surviving
Corporation will be as set forth in the Second Amendment and summarized under
"Board of Directors; Officers" in Section 13 of the Offer to Purchase.
Voting Trust. The Merger Agreement provides that (i) simultaneously with
the purchase by Parent, Purchaser or their affiliates of Shares pursuant to the
First Offer, the Second Offer, the Company Stock Option Agreement or otherwise,
such Shares shall be deposited in the Voting Trust in accordance with the terms
and conditions of the Voting Trust Agreement and (ii) upon consummation of each
of the First Merger and the Second Merger, all outstanding shares of common
stock of the surviving corporation of such Merger owned directly or indirectly
by Parent, Purchaser or their affiliates will be deposited in the Voting Trust.
Prior to the Control Date, the Voting Trust may not be modified or amended
without the prior written approval of the Company 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; provided that, the Voting
Trust may be modified or amended in any manner without the prior written
approval of the Company at any time after the earlier of (i) December 31, 1998
and (ii) the date of any STB denial (as hereinafter defined). See Section 6 for
a description of the Amended Voting Trust Agreement.
Conditions to the Merger. The Second Amendment provides that the STB
condition described in clause (d) of the second paragraph and clause (c) of the
third paragraph under "Conditions to the Merger" in Section 13 of the Offer to
Purchase is no longer applicable.
Pre-Control Date Operations of Parent. The Merger Agreement provides that,
during the period from the Second Effective Time until the Control Date, Parent
shall not, nor shall it permit any of its subsidiaries to (without the consent
of the Company):
(i) operate its railroad business other than in the ordinary course of
business consistent with past practice, provided that (x) the direct or
indirect acquisition or disposition of a significant portion of the assets
of its railroad business, and (y) a merger, consolidation or other business
combination with any other company involved in the railroad business that
would have the effect set forth in clause (x) shall not be considered in
the ordinary course of business consistent with past practice; or
(ii) enter into any new line of business (including by merger,
acquisition of assets or securities or otherwise), in a material way, other
than those engaged in by Parent as of the date of the Merger Agreement; or
(iii) authorize, or commit or agree to take, any of the foregoing
actions.
No Solicitation. The Second Amendment provides that the "270 days from the
date of the Merger Agreement" periods described under "No Solicitation" in
Section 13 of the Offer to Purchase has been changed to December 31, 1998.
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Tax-Free Reorganization. The Merger Agreement provides that none of the
Company, Parent, Purchaser, or any of their subsidiaries or affiliates has taken
any action or is aware of any fact that would jeopardize the qualification of
the First Offer, the Second Offer, the First Merger and the Second Merger, if
integrated and treated as a single transaction, as a reorganization under
Section 368 of the Code.
Termination. The Second Amendment provides that the "270 days after the
date of the Original Merger Agreement" period under clause (b)(ii) under
"Termination" in Section 13 of the Offer to Purchase has been changed to
December 31, 1998.
Listing. The Second Amendment provides that the Parent Merger Securities
issuable to shareholders of the Company pursuant to the Merger Agreement and
under the Company Stock Plans will be approved for listing on the NYSE prior to
the Closing Date, subject to official notice of issuance.
Compensation and Benefits; Stock Options. The Merger Agreement provides
that, with respect to all outstanding Company Employee Stock Options granted
under Company Stock Plans, which, immediately prior to the First Effective Time,
are vested ("Vested Company Employee Stock Options"), the Board of Directors
will take such action as may be required to adjust the terms of such Company
Employee Stock Options as is necessary to provide that, at the First Effective
Time, each Vested Company Employee Stock Option outstanding immediately prior to
the First Effective Time shall be deemed to constitute an option to acquire, on
the same terms and conditions as were applicable under such Vested Company
Employee Stock Option, the same number of shares of Parent Common Stock as the
holder of such Vested Company Employee Stock Option would have been entitled to
receive pursuant to the Merger had such holder exercised such Vested Company
Employee Stock Option in full immediately prior to the First Effective Time and
had the holder received additional shares of Parent Common Stock, in lieu of
shares of Merger Preferred Stock, of equivalent value to such Merger Preferred
Stock (based, for this purpose, upon an assumed $16 value for the Merger
Preferred Stock deliverable in respect of each Common Share and a per share
price of Parent Common Stock based upon the average per share closing price of
Parent Common Stock reported on the NYSE Composite Tape for the five consecutive
trading days preceding the First Effective Time), at a price per share of (x)
Parent Common Stock equal to (A) the aggregate exercise price for the Common
Shares otherwise purchasable pursuant to such Vested Company Employee Stock
Option divided by (B) the aggregate number of shares of Parent Common Stock
deemed purchasable pursuant to such Vested Company 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.
With respect to all outstanding Company Employee Stock Options granted
under Company Stock Plans which, immediately prior to the First Effective Time,
are unvested ("Other Company Options"), the Board of Directors will take such
action as may be required to adjust the terms of such Other Company Options to
provide that in no event shall Other Company Options become exercisable prior to
(x) the date that the STB approval is obtained, in which case such Other Company
Options will then be adjusted as provided in clause (a) above, or (y) the date
following STB denial on which a disposition of Shares held in the Voting Trust
in accordance with paragraph 8 of the Amended Voting Trust Agreement, in which
case, such Other Company Options will then be exercisable for Common Shares and
such options will be equitably adjusted as necessary to preserve the value of
such options in connection with any such disposition.
In lieu of any further option grants by the Company on or after the First
Effective Time, the Company may grant incentive awards to its employees provided
that (i) such awards are granted under arrangements which are in accordance with
applicable law and (ii) such awards are of no greater aggregate value on the
grant date than the aggregate value of the options which could otherwise have
been awarded by the Company pursuant to Section 4.1(a)(ii)(x)(A) of the Merger
Agreement.
The Company has agreed not to issue Common Shares or rights to acquire
Common Shares for any reason following the Merger without the prior consent of
Parent.
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Interim Operations of the Company and Parent. The paragraph described
under (a) under "Interim Operations of the Company and Parent" in Section 13 of
the Offer to Purchase has been modified to provide that, following the First
Effective Time, subject to applicable legal restrictions and financial covenants
contained in instruments relating to outstanding indebtedness, the surviving
corporation of each of the First Merger and the Second Merger shall not decrease
the aggregate amount of dividends and other distributions paid in respect of the
Company's outstanding capital stock from the level paid immediately prior to the
First Effective Time or the Second Effective Time, as applicable.
STB Matters. For purposes of the Merger Agreement, STB approval means the
issuance by the STB of a decision, which decision shall become effective and
which decision shall not have been stayed or enjoined, that (A) constitutes a
final agency action approving, exempting or otherwise authorizing the
acquisition of control over the Company's railroad operations by Parent 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) unless
Parent chooses to assume control despite such conditions, 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 ICC in New York Dock Railway -- Control --
Brooklyn Eastern District, 360 I.C.C. 60 (1979)), other than those proposed by
the applicants, that materially and adversely affect the long-term benefits
expected to be received by Parent from the transactions contemplated by this
Agreement; the Control Date means the date on which Parent lawfully is permitted
to assume control over the Company's railroad operations pursuant to STB
approval or exemption; STB denial, for all purposes under the Merger Agreement,
means (i) STB approval shall not have been obtained by December 31, 1998 or (ii)
the STB shall have, by an order which shall have become final and no longer
subject to reconsideration by the STB or review by the courts, either (x)
refused to approve the acquisition of control of the Company by Parent or (y)
approved such acquisition of control subject to conditions that cause such
approval not to constitute STB approval; and following the Second Effective
Time, all rights and obligations of the Company under this Agreement shall be
exercisable or performed by the Surviving Corporation (as successor to the
Company), and any consent or approval of the Company hereunder following the
First Effective Time or the Second Effective Time shall mean the consent or
approval of the Surviving Corporation's board of directors (or its duly
authorized representatives).
Continuing Obligations. The Merger Agreement provides that the provisions
of Articles IV and V of the Merger Agreement shall be binding through the
Control Date, provided that the provisions of Article IV (other than Sections
4.1(a)(xii), Section 4.1(d), the last sentence of Section 4.1(c), Section 4.1(e)
and Section 4.3) and Section 5.15 shall not be binding as against Parent and its
subsidiaries following the First Effective Time; provided, however, that all
obligations of Parent or its affiliates under the Merger Agreement shall
terminate upon the earlier of (i) December 31, 1998 and (ii) the date of STB
denial.
5. Certain Federal Income Tax Consequences. The discussion set forth in
Section 5 of the Offer to Purchase and the amendments thereto are hereby amended
and replaced in their entirety by the following:
The following discussion is a summary of the material federal income tax
consequences of the Offers and the 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 Offers and the Merger Generally. It is unclear
whether the Offers and the Merger should be treated as a single integrated
transaction for federal income tax purposes. If the Offers and the Merger are so
treated, the Offers 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 Offers 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 either Offer and/or the Merger, (iii) no gain
or loss will be recognized by a shareholder of the
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Company who does not exchange any Shares pursuant to the Offers and who receives
solely Parent Merger Securities that qualify as stock for federal income tax
purposes ("Parent Merger Stock") in exchange for Shares pursuant to the Merger,
and (iv) a shareholder of the Company who receives a combination of cash and
Parent Merger Securities in exchange for such shareholder's Shares, pursuant to
either Offer and/or the Merger, will not recognize loss but will recognize gain,
if any, to the extent of the lesser of (a) the sum of the cash and fair market
value of Parent Merger Securities that do not qualify as stock for federal
income tax purposes ("Parent Merger Non Stock Securities") received and (b) the
excess of the sum of the fair market value of the Parent Merger Securities 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 Offers and the Merger are not treated as integrated.
If the Offers and the Merger were not treated as a single integrated
transaction for federal income tax purposes, the receipt of cash pursuant to
either Offer would be on sale or exchange, while the Second Merger should still
qualify as a reorganization pursuant to Section 368(a)(1)(A) of the Code,
assuming Parent is not required to dispose of the Company or its assets by the
STB and, as discussed more fully below, the First Merger may be treated as a
sale or exchange or as a reorganization pursuant to Section 368 of the Code.
TAX CONSEQUENCES IF THE OFFERS 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 either 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 either Offer and/or the Merger.
Exchange of Shares Solely for Parent Merger Stock. A shareholder of the
Company who, pursuant to the Merger, exchanges all of the Shares actually owned
by such shareholder solely for Parent Merger Stock (and who did not exchange any
Shares for cash in either 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 Merger Stock, as
discussed below. The aggregate adjusted tax basis of the Parent Merger Stock
received in such exchange will be equal to the aggregate adjusted tax basis of
the Shares surrendered therefor allocated between the Parent Common Stock and
Merger Preferred Stock in proportion to their relative fair market values, and
the holding period of Parent Common Stock and Merger Preferred Stock will
include the period during which the Shares surrendered in exchange therefor were
held.
Exchange of Shares for Parent Merger Stock and Cash and/or Parent Merger
Non Stock Securities. A shareholder of the Company who, pursuant to either
Offer and/or the Merger, exchanges all of the Shares actually owned by such
shareholder for a combination of shares of Parent Merger Stock and cash and/or
Parent Merger Non-Stock Securities 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 Merger Securities received pursuant to
either 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 and the fair market value of Parent Merger Non Stock
Securities received.
Any gain recognized by a shareholder of the Company who receives a
combination of Parent Merger Stock and cash and/or Parent Merger Non Stock
Securities pursuant to either 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 and/or Parent Merger Non Stock
Securities received pursuant to either Offer and/or the Merger will be treated
as a dividend for federal income tax purposes, a
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shareholder of the Company will be treated as if such shareholder first
exchanged all of such shareholder's Shares solely for Parent Merger Stock and
then Parent immediately redeemed a portion of such Parent Merger Stock in
exchange for the cash and/or Parent Merger Non Stock Securities (together,
"Nonqualifying Consideration") such shareholder actually received.
In general, the determination as to whether the Nonqualifying Consideration
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
Nonqualifying Consideration 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 shareholder immediately after the
deemed redemption by Parent. 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% 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 Merger Stock and Nonqualifying
Consideration 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 Merger Stock received by a Company
shareholder who, pursuant to either Offer and/or the Merger, exchanges such
shareholder's Shares for a combination of Parent Merger Stock and Nonqualifying
Consideration will be the same as the aggregate tax basis of the Shares
surrendered therefor, decreased by the Value of the Nonqualifying Consideration
received and increased by the amount of gain recognized, if any (including any
portion of such gain that is treated as a dividend), allocated between the
different Classes of Parent Stock as described above. The holding period of
Parent Merger 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.
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TAX CONSEQUENCES IF THE OFFERS AND THE MERGER ARE TREATED AS SEPARATE
TRANSACTIONS
If the Offers and the Merger were treated as separate transactions for
federal income tax purposes, the receipt of cash pursuant to either Offer and
the receipt of Parent Merger Securities pursuant to the First Merger would be a
taxable transaction, while the Second Merger should still qualify as a
reorganization pursuant to Section 368(a)(1)(A) of the Code. Accordingly, a
shareholder of the Company who receives Nonqualifying Consideration and/or
Parent Merger Stock pursuant to either Offer or the First Merger would recognize
gain or loss equal to the difference between the amount of Nonqualifying
Consideration and Parent Merger Stock received and the shareholder's adjusted
tax basis in the Shares surrendered, calculated separately with respect to each
block of Shares exchanged. 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 cash and/or Parent Merger
Securities pursuant to the Second Merger would be subject to the federal income
tax rules concerning reorganizations discussed above under "Tax Consequences if
the Offers and the Merger are Treated as a Single Integrated Transaction and as
a Reorganization" (but without regard to the cash received, and Shares
exchanged, in either Offer). Additionally, it is possible that the First Merger
would be integrated with the Second Merger and treated as a single transaction,
in which case a shareholder of the Company who receives Parent Common Stock
and/or cash and/or Parent Merger Securities pursuant to the First Merger and the
Second Merger would be subject to the federal income tax rules concerning
reorganizations (as described in the preceding sentence) without regard to the
cash received in either Offer.
TAX CONSEQUENCES IF THE MERGER IS NOT TREATED AS A REORGANIZATION
In the event that Parent is required to dispose of the Company or its
assets by the STB, certain "continuity of business enterprise" requirements that
are a condition to reorganization treatment may not be met. In this event, a
shareholder would recognize gain or loss equal to the fair market value of the
Parent Merger Securities 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
either Offer and/or the 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.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT TO
CERTAIN SHAREHOLDERS OF THE PURCHASE PRICE FOR SHARES PURCHASED PURSUANT TO THE
SECOND 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.
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 OFFERS
AND THE MERGER, INCLUDING ANY
11
<PAGE> 13
FEDERAL, STATE, LOCAL OR OTHER TAX CONSEQUENCES (INCLUDING ANY TAX RETURN
FILING OR OTHER TAX REPORTING REQUIREMENTS) OF THE OFFERS AND THE MERGER.
6. Certain Legal Matters; Regulatory Approvals. The discussion set forth
in Section 13 of the Offer to Purchase and the amendments thereto are hereby
amended and supplemented as follows:
STB Matters; Acquisition of Control. STB approval or exemption of the
Merger is not a condition to the Merger. However, the acquisition of control
over the Company by Parent and Purchaser requires STB approval or exemption. The
STB approval process described in "STB Matters; Acquisition of Control,"
"Conditions" and "Judicial Review -- Stay" in Section 16 of the Offer to
Purchase is applicable to the application to be filed by Parent and the Company
seeking STB approval of Parent's acquisition of control over the Company, except
that references to approval and consummation of the Merger should be understood
to refer to approval of Parent's acquisition of control of the Company.
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 exemption, Purchaser intends,
simultaneously with the acquisition of Shares pursuant to the Second Offer, the
Company Stock Option Agreement, the First Merger or otherwise, to deposit the
Shares so acquired in the Voting Trust, and upon consummation of the Second
Merger, to deposit in the Voting Trust all outstanding shares of common stock
and any other voting stock of the surviving corporation in such merger owned by
Parent and its affiliates.
STB Matters; The Voting Trust. The parties to the Voting Trust Agreement,
with the Company's consent, propose to amend the Voting Trust Agreement (the
"Amended Voting Trust Agreement") to reflect the proposed consummation of the
Merger prior to STB approval or exemption of the acquisition of control of the
Company by Parent. Amendment of the Voting Trust Agreement requires approval of
the STB or an opinion of counsel that STB approval of such amendment is not
required and that the amendment is consistent with the STB's regulations
regarding voting trusts. Parent intends to obtain such an opinion of counsel and
to seek informal assurance from the STB that use of the Voting Trust pursuant to
the Amended Voting Trust Agreement would effectively insulate Parent and its
affiliates from a violation of the governing statute and STB policy that would
result from an unauthorized acquisition by Parent of a sufficient interest in
the Company to result in control of the Company. While Parent believes that the
Amended Voting Trust Agreement is consistent with the STB's regulations
regarding voting trusts, there can be no assurance that the STB will provide the
requested assurance.
It is possible that the U.S. Department of Justice or railroad competitors
of Parent and the Company, or others, may argue that Parent and Purchaser should
not be permitted to use the voting trust mechanism to acquire Shares and
effectuate the Merger prior to final STB approval of the acquisition of control
of the Company. Parent and Purchaser believe it is unlikely that such arguments
would prevail, but there can be no assurance in this regard.
Under the terms of the Amended Voting Trust Agreement, the Voting Trustee
is required to vote all Shares deposited in the Voting Trust (the "Trust Stock")
in favor of the Merger, in favor of any proposal necessary or desirable to
effectuate Parent's combination with the Company pursuant to the Merger
Agreement, and, if there shall be with respect to the Board of Directors an
"Election Contest" as defined in the proxy rules of the SEC, in which one slate
of nominees shall support the effectuation of the Merger and another slate
oppose it, to vote in favor of the slate supporting the effectuation of the
Merger. In addition, for so long as the Merger Agreement is in effect, subject
to certain exceptions, the Voting Trustee shall vote against any other proposed
merger, business combination or similar transaction involving the Company, but
not Parent or one of its affiliates. On certain other matters, the Voting
Trustee is to vote the Trust Stock in the same proportion as all other Shares
are voted with respect to such matters, except that, subject to certain
exceptions, from and after the effectiveness of the First Merger, the Voting
Trustee is to vote the Trust Stock in accordance with the instructions of a
majority of the persons who are then directors of the Company and who are
currently the directors of the Company and/or nominees of the current directors
of the Company. If there are no directors of the Company qualified to give such
instructions or such instructions are not given, the Voting Trustee is to vote
the Trust Stock in its sole discretion, having due regard for the Parent solely
as an investor in the stock of the Company.
12
<PAGE> 14
The Voting Trustee has agreed to take all actions reasonably requested by
Parent with respect to any proposed sale or disposition of the Trust Stock by
Parent or Purchaser, including, without limitation, in connection with the
exercise of registration rights under the Merger Agreement. Upon (i) approval or
exemption by the STB of the acquisition of control of the Company by Parent or
its affiliates or (ii) if the law is amended, delivery to the Voting Trustee of
an opinion of independent legal counsel that no STB or other governmental
approval is required, and, in the event that shareholder approval of the First
Merger shall not have previously been obtained, with the prior written consent
of the Company, the Voting Trustee shall either transfer the Trust Stock to
Parent or Purchaser or, if shareholder approval of the First Merger or Second
Merger has not previously been obtained, vote the Trust Stock in favor of the
First Merger or the Second Merger.
In the event that (i) STB approval is not obtained by December 31, 1998 or
(ii) there shall have been an STB denial, Parent has agreed to use its best
efforts to sell the Trust Stock in one or more broadly distributed public
offerings subject to all necessary regulatory approvals or otherwise dispose of
it within two years or such extension of that period as the STB shall approve.
The Amended Voting Trust Agreement provides that the Company's prior written
approval is required for dispositions of Trust Stock only in the event any
disposition of the Trust Stock is made prior to the earlier of December 31, 1998
or the date of an STB denial. Disposition of the Trust Stock pursuant to the
Amended Voting Trust Agreement shall be subject to any jurisdiction of the STB
to oversee Parent's divestiture of the Trust Stock. The Voting Trustee shall
continue to perform its duties under the Voting Trust Agreement and, should
Parent be unsuccessful in its effort to sell the Trust Stock during the two-year
period, the Voting Trustee shall as soon as practicable sell the Trust Stock for
cash to eligible purchasers in such manner and for such prices as the Voting
Trustee in its discretion shall deem reasonable after consultation with Parent.
(An "eligible purchaser" thereunder 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.) The Amended Voting Trust Agreement further
provides that Parent will cooperate with the Voting Trustee in effecting such
disposition and that the Voting Trustee will act in accordance with any
direction made by Parent as to any specific terms or method of disposition, to
the extent not inconsistent with the terms of the Voting Trust Agreement and the
requirements of the terms of any STB or court order. The proceeds of any such
sale will be distributed to Parent.
Pursuant to the Merger Agreement, prior to the Control Date, the Amended
Voting Trust Agreement may not be modified or amended without the prior written
approval of the Company, unless such modification or amendment is not
inconsistent with the Merger Agreement and is not adverse to the Company or its
shareholders, except that the Amended Voting Trust Agreement may be amended or
modified in any manner without the prior written approval of the Company at any
time after the earlier of December 31, 1998 or the date of an STB denial.
The Amended Voting Trust Agreement provides that the Company is an express
third-party beneficiary of the Amended Voting Trust Agreement, but that this
status shall exist only through the earlier of December 31, 1998, if STB
approval has not by then been obtained, or the date of an STB denial.
Norfolk Southern and Shareholder Litigation. On December 13, 1996, NSC
amended its complaint to assert the claims (a) that any postponement by the
Company of the Pennsylvania Special Meeting scheduled for December 23, 1996
(assuming such postponement was caused by the Company having failed to receive
the requisite number of votes for approval) would be a breach of the fiduciary
duties of the directors of the Company, and (b) that Parent has, in effect,
acquired more than 20% of the shares of the Company (within the meaning of the
Pennsylvania Control Transaction Law) by virtue of the allegation that shares
owned by Parent should be aggregated with shares owned by directors of the
Company, and employee benefit plan shares as to which directors of the Company
allegedly have the power to direct the vote, and, accordingly, that Parent is
obligated to pay "fair value" in cash, to be determined pursuant to the
Pennsylvania Control Transaction Law, to all shareholders of the Company other
than Parent.
13
<PAGE> 15
On December 9, 1996, plaintiffs in the purported shareholder derivative and
class actions amended their complaint against Parent, the Company and directors
of the Company. The amendment adds the following additional claims to the
shareholder plaintiffs' complaint:
(i) that the existing share ownership of Parent and the directors of
the Company as individuals should be aggregated for purposes of
determinations under the Pennsylvania Control Transaction Law because
Parent and the individual directors of the Company are allegedly "acting in
concert" for purposes of the statute, and accordingly the requirement in
the Pennsylvania Control Transaction Law requiring persons who have 20% or
more of the voting power of a Pennsylvania corporation to offer to purchase
for cash the remaining shares (for "fair value") has allegedly been
triggered; and
(ii) that it is a breach of the fiduciary duties of the directors of
the Company to have agreed to postpone the Pennsylvania Special Meeting in
the event that insufficient votes are received to assure approval of the
Articles Amendment providing for the Company to opt out of the Pennsylvania
Control Transaction Law.
As relief, the shareholder plaintiffs seek a declaration that Parent and
the directors of the Company are obligated to make the "fair value" payments
required by the Pennsylvania Control Transaction Law and that the Pennsylvania
Special Meeting may not be postponed and that no second vote upon the Articles
Amendment may be held.
On December 17, 1996, the Court preliminarily enjoined the Company from
failing to convene, and/or from postponing, and/or from adjourning the
Pennsylvania Special Meeting scheduled for December 23, 1996 if the basis for
the Company's decision was the Company's failure to receive sufficient proxies
to assure approval of the Articles Amendment.
14
<PAGE> 16
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 Second Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
By Hand: By Mail: By Overnight Carrier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Trust Window c/o Citicorp Data c/o Citicorp Data
111 Wall Street, 5th Floor Distribution, Inc. Distribution, Inc.
New York, New York 10043 P.O. Box 7072 404 Sette Drive
Paramus, New Jersey 07653 Paramus, New Jersey 07652
</TABLE>
Facsimile for Eligible Institutions: (201) 262-3240
To confirm fax only: (800) 422-2077
Any questions or requests for assistance or additional copies of this
Supplement, 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 Second Offer.
The Information Agent for the Second Offer is:
[mackenzie logo]
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 Second 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 DECEMBER 6, 1996
AND THE SUPPLEMENT THERETO
DATED DECEMBER 19, 1996
BY
GREEN ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CSX CORPORATION
THE SECOND OFFER HAS BEEN EXTENDED. THE SECOND OFFER, PRORATION PERIOD AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON WEDNESDAY,
JANUARY 22, 1997, UNLESS THE SECOND OFFER IS FURTHER EXTENDED.
The Depositary for the Second Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
By Hand: By Mail: By Overnight Carrier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Trust Window c/o Citicorp Data Distribution, Inc. c/o Citicorp Data Distribution, Inc.
111 Wall Street, 5th Floor P.O. Box 7072 404 Sette Drive
New York, New York 10043 Paramus, New Jersey 07653 Paramus, New Jersey 07652
</TABLE>
Facsimile for Eligible Institutions: (201) 262-3240
To confirm fax only: (800) 422-2077
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.
This revised (blue) Letter of Transmittal or the previously circulated
(blue) Letter of Transmittal is to be completed by shareholders either if
certificates evidencing Shares (as defined below) 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 Section 3 of the Offer to Purchase (as defined
below). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITORY.
<PAGE> 2
Holders of Shares will be required to tender one Right (as defined below)
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 Supplement),
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 Second Offer (as defined
below) to the Depositary within three New York Stock Exchange, Inc. trading days
after the date such certificates are distributed. Purchaser (as defined below)
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 Second 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 Second 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 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>
DESCRIPTION OF SHARES TENDERED
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK)
</TABLE>
<TABLE>
<CAPTION>
<S> <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 up to an aggregate of 18,344,845 Shares,
including, in each case, the associated Rights, at a price of $110 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated December 6, 1996 (the "Offer to
Purchase"), as amended and supplemented by the Supplement thereto, dated
December 19, 1996 (the "Supplement"), receipt of which is hereby acknowledged,
and in this Letter of Transmittal (which, as amended from time to time, together
constitute the "Second Offer"). All references herein to 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 Second Offer, but any such transfer or assignment will not
relieve Purchaser of its obligations under the Second 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 Second Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Second Offer (including,
if the Second Offer is further 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 December 6, 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 Second Offer.
If, on or after December 6, 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 Second 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 Second 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 Second 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) or the
Amended Voting Trust Agreement (as defined in the Supplement), if applicable, 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 or the Supplement, 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 Second Offer. Purchaser's
acceptance for payment of Shares tendered pursuant to the Second Offer will
constitute a binding agreement between the undersigned and Purchaser upon the
terms and subject to the conditions of the Second 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 , 199
-------------------------- --
(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 , 199
-------------------------- --
<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 Second 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
Second 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 Second 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, Supplement, 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 Second 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 Second 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: CITIBANK, N.A., AS DEPOSITARY
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
SUBSTITUTE PART I -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND / /
DEPARTMENT OF DATING BELOW.
THE TREASURY Employer Identification Number
INTERNAL (If awaiting TIN write "Applied For")
REVENUE SERVICE -------------------------------------------------------------------------------------------------
PAYER'S REQUEST PART II -- For Payees Exempt From Backup Withholding, see the enclosed Guidelines and complete
FOR TAXPAYER as instructed therein. CERTIFICATION -- Under penalties of perjury, I certify that:
IDENTIFICATION (1) The number shown on this form is my correct Taxpayer Identification Number (or a Taxpayer
NUMBER (TIN) 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.
-------------------------------------------------------------------------------------------------
CERTIFICATION 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 ________________, 199__
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 SECOND 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, Supplement, 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 Second Offer is:
[mackenzie logo]
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 Second Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, New York 10019
Call Collect:
(212) 969-2700
<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 Second 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, are not immediately available, (ii) time will not permit all required
documents to reach Citibank, N.A., as Depositary (the "Depositary"), prior to
the Expiration Date (as defined in "Terms of the Second 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 Second Offer is:
CITIBANK, N.A.
<TABLE>
<CAPTION>
By Hand: By Mail: By Overnight Carrier:
<S> <C> <C>
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Trust Window c/o Citicorp Data Distribution, c/o Citicorp Data Distribution,
111 Wall Street, 5th Floor Inc. Inc.
New York, New York 10043 P.O. Box 7072 404 Sette Drive
Paramus, New Jersey 07653 Paramus, New Jersey 07652
Facsimile for Eligible Institutions: (201) 262-3240
To confirm fax only: (800) 422-2077
</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 December 6, 1996 (the "Offer to Purchase"), as amended and
supplemented by the Supplement thereto, dated December 19, 1996 (the
"Supplement"), and the related Letters of Transmittal (which, as amended from
time to time, together constitute the "Second 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
Account Number: Area Code and Tel. No.:
- ------------------------------------------------ ------------------------------------------------
Dated: , 199
----------------------------------- --
</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: , 199
------------------------- ----------------------------------- --
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
FOR IMMEDIATE RELEASE
CONTACTS:
CSX Corporation Conrail Inc.
Thomas E. Hoppin Craig R. MacQueen
(804) 782-1450 (215) 209-4594
Kekst and Company Abernathy MacGregor Group
Richard Wolff Joele Frank / Dan Katcher
(212) 593-2655 (212) 371-5999
CSX AND CONRAIL INCREASE MERGER CONSIDERATION
BY $16 PER SHARE
VOTING TRUST TO PERMIT EARLY 1997 PAYMENT
OF MERGER CONSIDERATION TO CONRAIL SHAREHOLDERS
CASH PORTION TO REMAIN AT $110 PER CONRAIL SHARE
TENDER OFFER EXTENDED UNTIL JANUARY 22, 1997
SPECIAL CONRAIL SHAREHOLDER MEETING NOW SCHEDULED
FOR JANUARY 17, 1997
PHILADELPHIA, PA AND RICHMOND, VA (DECEMBER 19, 1996) -- Conrail Inc.
[NYSE:CRR] and CSX Corporation [NYSE:CSX] announced today that they have
amended their merger agreement to increase the merger consideration by $16 per
Conrail share, or approximately $870 million in the aggregate. Conrail
shareholders will also benefit from the significant value of receiving the
merger consideration earlier than previously contemplated. Conrail shareholders
will now receive in the merger, for 60% of their shares, an additional $16 per
share in CSX convertible preferred stock, the terms of which will be set prior
to the merger so that such securities would trade at par on a fully distributed
basis. This is in addition to the tax-free 1.85619 shares of CSX common stock
to be received in the merger.
The amended agreement also provides that the merger will occur at the
time of the CSX and Conrail shareholders meeting for approval of matters
related to the merger. These meetings are expected to be held in the first
quarter of 1997. Upon shareholder approval and consummation of the merger, the
Conrail shareholders would receive the merger consideration of CSX common stock
and CSX Convertible Preferred Stock. All the Conrail Stock acquired by CSX,
both in the tender and in the merger, would be placed in a voting trust pending
the outcome of the Surface Transportation Board's (STB) proceeding.
CSX has already purchased 19.9% of Conrail's common and ESOP preferred
stock, through a tender offer for $110 in cash per Conrail share. CSX is
currently offering to purchase up to an additional 18,344,845 shares of
Conrail through a second cash tender offer at $110 per share.
David M. LeVan, chairman, president and chief executive officer of
Conrail, said "Because of the actions taken by the Conrail board, our
shareholders are receiving extraordinary value in our strategic
merger-of-equals with CSX. The original terms of the merger provided our
shareholders with a price at the high end of what has been paid in railroad
mergers. That price has since been increased by more than $1.5 billion before
taking into account the significant value associated with receiving the merger
consideration in early 1997. In every respect, this merger holds great
potential and clearly offers the best possible result for Conrail. This
amendment to the merger agreement reaffirms the decision of the Conrail board
that it is not willing to agree to the sale of Conrail to Norfolk Southern."
John W. Snow, chairman, president and chief executive officer of CSX
said "The actions taken by the CSX and Conrail boards allow us to move on to
the next stage of the process, the filing of our merger application with the
STB. We are confident that we will present a strong case and look forward to
building the world's leading transportation and logistics company."
The amended merger agreement provides that the period of time during
which each of Conrail and CSX has agreed that it will not discuss or agree to
any takeover proposal with a third party has been extended to the termination
date under the merger agreement, December 31, 1998. CSX and Conrail also
announced that the CSX tender offer has been extended to 5:00 p.m., Eastern
Standard Time, on January 22, 1997 and the special shareholders meeting seeking
approval of the opt-out of the Pennsylvania statute has been postponed to 2:00
p.m., Eastern Standard Time, on January 17, 1997. CSX has been advised by the
depositary, on a preliminary basis, that fewer than 100,000 shares have been
tendered into the CSX offer as of the close of business on December 18, 1996.
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. Conrail's home page on the
Internet can be reached at http://www.CONRAIL.com.
CSX, headquarters in Richmond, VA, is an international transportation
company offering a variety of rail, container-shipping, intermodal, trucking,
barge and contract logistics management services. CSX's home page on the
Internet can be reached at http://www.CSX.com.
# # #
<PAGE> 1
EXECUTION COPY
--------------
SECOND AMENDMENT
TO
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 December 18, 1996.
<PAGE> 2
SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of
December 18, 1996 (this "Second Amendment"), 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, Green, Tender Sub and White have entered into an
Agreement and Plan of Merger, dated as of October 14, 1996 (the "October 14
Merger Agreement");
WHEREAS, Green, Tender Sub and White have entered into a First
Amendment to the Merger Agreement, dated as of November 5, 1996 (the "First
Amendment", and the Merger Agreement, as amended thereby, the "Merger
Agreement"), pursuant to which Tender Sub has made certain amendments to the
October 14 Merger Agreement;
WHEREAS, pursuant to the Merger Agreement, Tender Sub has
consummated a cash tender offer for an aggregate of 17,860,124 shares of Green
Common Stock and Green ESOP Preferred Stock and has commenced a cash tender
offer for up to an aggregate of 18,344,845 shares of Green Common Stock and
Green ESOP Preferred Stock;
WHEREAS, pursuant to this Second Amendment, subject to the terms
and conditions set forth herein, following such offers, a wholly owned
Pennsylvania subsidiary of Tender Sub ("Merger Sub") will merge with and into
Green in a transaction (the "First Merger") in which each shareholder of Green
(excluding White, Tender Sub and its affiliates) shall retain a percentage of
their respective shareholdings of Green such that the amount not retained, when
aggregated with all shares of Green Common Stock then owned by White, Tender Sub
or its affiliates, collectively represents 80% of the shares of Green's
outstanding capital stock, and all shareholdings of such shareholder not so
retained shall be converted into the right to receive the White securities as
provided herein;
WHEREAS, pursuant to this Second Amendment, subject to the terms
and conditions set forth herein, following the First Merger, Green will merge
with and into Tender Sub pursuant to Section 1924(b)(1)(ii) of the Pennsylvania
Law in a transaction (the "Second Merger" and, together with the First Merger,
the "Merger") in which all outstanding shares of capital stock of Green (other
than those to be canceled, as provided herein) shall be converted into the right
to receive the White securities as provided herein;
WHEREAS, in consideration of Green's willingness to enter into
this Second Amendment, White and Tender Sub are willing to make the amendments
to the Merger Agreement set forth herein;
WHEREAS, in consideration of White's and Tender Sub's
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<PAGE> 3
willingness to enter into this Second Amendment, Green is willing to make the
amendments to the Merger Agreement set forth herein;
WHEREAS, the Board of Directors of Green has approved, and deems
it advisable and in the best interests of Green to enter into, this Second
Amendment;
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 enter into, this Second Amendment; and
WHEREAS, except as amended by this Second Amendment, the Merger
Agreement shall remain in full force and effect;
WHEREAS, capitalized terms used herein and not defined herein
shall have the respective meanings given in the Merger Agreement;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Second Amendment, the
parties, intending to be legally bound, agree as follows:
ARTICLE I
1.
SECTION 1. The following is hereby added to the end of Section 1.2
of the Merger Agreement:
(h) Green hereby approves of and consents to the Second 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, as amended by the First Amendment and
the Second Amendment, and the transactions contemplated hereby
(including the Second Offer and the Merger) are in the best interests
of Green, (ii) approved this Agreement, as amended by the First
Amendment and the Second Amendment, and the transactions contemplated
hereby (including the Second Offer and the Merger), 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 shareholders of Green who desire to receive cash for a
portion of their shares of Green Common Stock or Green ESOP Preferred
Stock accept the Second 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, as amended
by the First Amendment and the Second Amendment, 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 Second Offer, Green may modify, withdraw or
change such recommendation, but only to the
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<PAGE> 4
extent that Green complies with Section 4.2 hereof. Green hereby
consents to the inclusion in the tender offer documents relating to the
Second Offer of the recommendations of Green's Board of Directors
described in this Section.
(i) Green has received the written opinions of each of the Green
Advisors, each dated as of the date of the Second Amendment, 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 Amended Offer, the Second Offer and Merger, taken together, is
fair from a financial point of view to such holders (the "Third Green
Fairness Opinions"). Green has delivered to Tender Sub a copy of the
Third Green Fairness Opinions.
SECTION 2. Section 1.3, Section 1.4, Section 1.5, Section 1.6,
Section 1.7, Section 1.8 and Section 1.9 of the Merger Agreement are hereby
deleted and replaced in their entirety with the following:
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"), Merger Sub shall be merged with and into Green in
the First Merger. Green shall be the surviving corporation of the First
Merger and shall succeed to and assume all rights and obligations of
Merger Sub in accordance with the Pennsylvania Law.
(b) Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the Pennsylvania Law (including,
without limitation, Section 1924(b)(1)(ii) thereof), on the first
business day immediately following the First Effective Time, Green
shall be merged with and into Tender Sub in the Second Merger. Tender
Sub shall be the surviving corporation (the "Surviving Corporation") of
the Second Merger and shall succeed to and assume all rights and
obligations of Green in accordance with the Pennsylvania Law.
SECTION 1.4 Closing. (a) The closing of the First Merger (the
"Closing") shall take place at 5:00 p.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.
(b) The closing of the Second Merger shall take place at 9:00 a.m.
on the first business day
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<PAGE> 5
immediately following the Closing Date, subject to the satisfaction of
the condition therefor set forth in Article VI, unless another time or
date is agreed to by the parties hereto. The closing of the Second
Merger 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. (a) 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 "First 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 First Merger shall become effective at
such time as the First Articles of Merger are duly filed with the
Pennsylvania Department of State, or at such subsequent date or time as
White and Green shall agree and shall be specified in the First
Articles of Merger (the time the First Merger becomes effective being
hereinafter referred to as the "First Effective Time").
(b) Subject to the provisions of this Agreement, as soon as
practicable on or after the closing of the Second Merger, the parties
shall file articles of merger or other appropriate documents (such
documents, collectively, the "Second Articles of Merger" and, together
with the First Articles of Merger, 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 Second Merger shall become effective at such time
as the Second Articles of Merger are duly filed with the Pennsylvania
Department of State, or at such subsequent date or time as White and
Green shall agree and shall be specified in the Second Articles of
Merger (the time the Second Merger becomes effective being hereinafter
referred to as the "Second Effective Time").
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 Green, as in
effect immediately prior to the First Effective Time and the Second
Effective Time, shall be the articles of incorporation and by-laws,
respectively, of the surviving corporation of each of the First Merger
and the Second Merger, respectively, until thereafter changed or
amended as provided therein or by applicable law.
(b) Subject to Section 1.8, the directors and
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<PAGE> 6
the officers of Green at the First Effective Time and the Second
Effective Time shall, from and after such time, be the initial
directors and officers, respectively, of the surviving corporation of
each of the First Merger and the Second Merger, respectively, until
their successors shall have been duly elected or appointed or qualified
or until their earlier death, resignation or removal in accordance with
the articles of incorporation and by-laws of the applicable surviving
corporation.
SECTION 1.8 Boards, Committees and Officers. At the Control Date,
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), 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 or White, as applicable, prior to the
Control Date, 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, (i)
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 Amended Offer or the Second 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 trust
agreement substantially in the form attached hereto as Exhibit E and
(ii) upon consummation of each of the First Merger and the Second
Merger, all outstanding shares of common stock of the surviving
corporation of such merger owned directly or indirectly by White,
Tender Sub or their affiliates shall be deposited in the Voting Trust.
Prior to the Control Date, 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
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<PAGE> 7
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); provided that, notwithstanding the foregoing, the
Voting Trust may be modified or amended in any manner without the prior
written approval of Green at any time after the earlier of (i) December
31, 1998 and (ii) the date of STB denial. No power of White or Tender
Sub provided for in the Voting Trust Agreement may be exercised in a
manner which violates this Agreement.
SECTION 3. Section 2.1 of the Merger Agreement is hereby deleted
and replaced in its entirety with the following:
SECTION 2.1 Conversion of Shares.
(a) All shares of Common Stock, par value $1.00 per share, of
Merger Sub issued and outstanding immediately prior to the First
Effective Time shall, at the First Effective Time, by virtue of the
First Merger and without any action on the part of any person, become
such number of duly authorized, validly issued, fully paid and
nonassessable shares of common stock of Green as, when aggregated with
all shares of Green Common Stock then owned by White, Tender Sub or its
affiliates, represents 80% of the then outstanding capital stock of
Green. Each share of Common Stock, par value $1.00 per share, of Tender
Sub issued and outstanding immediately prior to the Second Effective
Time shall, at the Second Effective Time, by virtue of the Second
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) (i) In the First Merger, such percentage of the respective
shareholdings of each holder (other than White, Tender Sub or their
affiliates) of shares of Green Common Stock and Green ESOP Preferred
Stock which, when added to the shares of Green Common Stock then held
by White, Tender Sub and its affiliates, represents 80% of the Shares
issued and outstanding immediately prior to the Effective Time shall,
at the First Effective Time, by virtue of the First Merger and without
any action on the part of the holder thereof, be converted into the
right to receive (x) such number of duly authorized, validly issued,
fully paid and nonassessable shares of White Common Stock and such
number of Shares of Convertible Preferred Stock of White that is duly
authorized and validly issued and fully paid and nonassessable, having
the terms determined as provided in clause (ii) below (each, a "White
Merger Security" and, collectively, "White Merger Securities") or (y)
cash, without interest thereon, as specified in
<PAGE> 8
Section 2.3 hereof (the "Per Share Merger Consideration"). Each share
(fractional or otherwise) of Green Common Stock issued and outstanding
immediately prior to the Second Effective Time (other than shares of Green
Common Stock to be canceled pursuant to Section 2.1(c) hereof) shall, at the
Second Effective Time, by virtue of the Second Merger and without any action on
the part of the holder thereof, be converted into the right to receive the Per
Share Merger Consideration.
(ii) The White Merger Securities shall be convertible preferred
stock of White having the terms set forth in Exhibit H hereto. The terms of the
White Merger Securities that are not fixed pursuant to Exhibit H (such terms,
determined as provided in clause (1) or (2) below, the "Other Terms"), shall not
be inconsistent with the terms so fixed and shall be determined in accordance
with the following procedure such that the number of shares of White Merger
Securities to be distributed with respect to each share of Green Common Stock
(including pursuant to the automatic conversion of the Green ESOP Preferred
Stock) pursuant to clause (i) above shall have a value on a fully distributed
basis, as of the date of the opinions referred to below, as close as possible
equal to $16:
(1) the Other Terms shall be determined by mutual agreement of two
investment banking firms of national reputation, one selected by Green
and one selected by White, such that in their respective opinions the
White Merger Securities have a value on a fully distributed basis, as
of the date of their opinions, equal to $16 per share of Green Common
Stock; or
(2) if such two investment banking firms are unable to agree on
the Other Terms or if either such firm is unable to provide the opinion
referred to in clause (1) above within four business days following the
fifteenth business day prior to the date of the Green Merger
Shareholders Meeting, each such investment banking firm within two
business days following such four- business-day period shall propose
its version of the Other Terms and shall mutually select a third
investment banking firm of national reputation, and within four
business days thereafter the third firm shall select the proposal of
one or the other of the two firms that, in the opinion of the third
firm, is the closer of the two proposals to giving the White Merger
Securities a value on a fully distributed basis, as of the date of its
opinion, equal to $16 per share of Green Common Stock.
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<PAGE> 9
The parties agree that the Other Terms shall be determined in
accordance with the foregoing no later than five business days prior
to the date of the Green Merger Shareholders Meeting.
(c) In the First Merger, all shares of Green Common Stock owned by
White, Tender Sub or its affiliates shall be retained. In the Second
Merger, 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 Second
Effective Time, be canceled and retired and shall cease to exist, and,
except as otherwise provided herein, no shares of White Common Stock,
White Merger Securities or other consideration shall be delivered or
owing in exchange therefor.
(d) On and after the First Effective Time and the Second Effective
Time, as applicable, holders of certificates ("Certificates") which
immediately prior to such 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 so
that, no later than immediately prior to the First Effective Time, no
shares of Green ESOP Preferred Stock shall be issued and outstanding),
shall cease to have any rights as shareholders of Green, except the
right to receive the Per Share Merger Consideration with respect to
each share held.
SECTION 4. Section 2.3(h) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
(h) No certificates or scrip representing shares of White Common
Stock issuable to a Green shareholder which would be fractional shares
(when the consideration due such shareholder hereunder in the First
Merger and the Second Merger are aggregated) shall be issued upon the
surrender for exchange of Certificates, no dividend or distribution
with respect to fractional shares shall be payable on or with respect
to any such fractional share and any 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 (when the consideration due such shareholder hereunder in
the First Merger and the Second Merger are aggregated) an amount in
cash determined by multiplying (i) the Average White Share Price on the
date on which the First 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
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<PAGE> 10
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 First Effective Time.
SECTION 5. (a) The words "Effective Time" in Section 4.1, Section
5.4, Section 5.7, Section 5.16(b) and Section 7.4 of the Merger Agreement and
"consummation of the Merger" in Section 5.16(a) of the Merger Agreement are
hereby deleted and replaced with the words "Control Date".
(b) The words "Effective Time" in the Merger Agreement (except as
part of "First Effective Time" or "Second Effective Time") shall be deemed to
refer to the words "First Effective Time", other than in the first and second
sentences of Section 2.4 and in Section 2.6, which shall be deemed to refer to
the words "Second Effective Time".
(c) The words "Effective Date" in the first sentence of Section
2.3 of the Merger Agreement are hereby deleted and replaced in their entirety
with the words "in the Merger".
(d) The words "Section 2.1(a)" in the second sentence of Section
2.4 of the Merger Agreement are hereby deleted and replaced in their entirety
with the words "Section 2.1(b)".
(e) Notwithstanding the provisions of Section 5.1(e) of the Merger
Agreement, White shall not be obligated to effect the change of name to be
contained in the Amended White Articles, as contemplated by Exhibit A, until the
Control Date.
SECTION 6. (a) The words "or White Merger Securities" are hereby
added immediately following the words "White Common Stock" in Section 2.10 of
the Merger Agreement.
(b) The words "and White Merger Securities" are hereby added
immediately following the words "White Common Stock" in Section 2.2, Section 2.3
(other than Section 2.3(b) and Section 2.3(h)), Section 2.4, Section 2.6,
Section 2.8, Section 2.9, Section 2.11, Section 3.1(f), Section 3.2(d), Section
5.1(a) and Section 5.6(c) of the Merger Agreement.
SECTION 7. The first sentence of Section 2.3(b) is hereby deleted
and replaced in its entirety with the following: "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 (i) 1.85619
shares of White Common Stock (the "Common Stock Conversion Ratio") and (ii) such
number or amount of White Merger Securities determined pursuant to Section
2.1(b)(ii) (the "White Merger Security Conversion Ratio" and, together with the
Common Stock Conversion Ratio, the "Conversion Ratios")".
SECTION 8. Section 5.6(a)(i) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
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<PAGE> 11
(i)(A) With respect to all outstanding Green Employee Stock
Options granted under Green Stock Plans, which, immediately prior to
the First Effective Time, are vested (the "Vested Green Employee Stock
Options"), adjust the terms of such Vested Green Employee Stock Options
as necessary to provide that, at the First Effective Time, each Vested
Green Employee Stock Option outstanding immediately prior to the First
Effective Time shall be deemed to constitute an option to acquire, on
the same terms and conditions as were applicable under such Vested
Green Employee Stock Option, the same number of shares of White Common
Stock as the holder of such Vested Green Employee Stock Option would
have been entitled to receive pursuant to the Merger had such holder
exercised such Vested Green Employee Stock Option in full immediately
prior to the First Effective Time and had the holder received
additional White Common Stock, in lieu of White Merger Securities, of
equivalent value to such White Merger Securities (based, for this
purpose, upon an assumed $16 value for the White Merger Securities
deliverable in respect of each share of Green Common Stock and a per
share price of White Common Stock based upon the average per share
closing price of White Common Stock reported on the New York Stock
Exchange Composite Tape for the five consecutive trading days preceding
the First Effective Time), at a price per share of (x) White Common
Stock equal to (A) the aggregate exercise price for the shares of Green
Common Stock otherwise purchasable pursuant to such Vested Green
Employee Stock Option divided by (B) the aggregate number of shares of
White Common Stock deemed purchasable pursuant to such Vested 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.
(B) With respect to all outstanding Green Employee Stock Options
granted under Green Stock Plans which, immediately prior to the First
Effective Time, are unvested ("Other Green Options"), adjust the terms
of such Other Green Options to provide that in no event shall any
Other Green Option become exercisable prior to the date that the STB
approval is obtained, in which case, such Other Green Options will
then be adjusted as provided in clause (a) above, or (y) the date
following STB denial on which a disposition of shares held in the
Voting Trust occurs pursuant to Paragraph 8 of the Voting Trust
Agreement, in which case such Other Green Options will be exercisable
solely for Green Common Stock (on such date or dates as provided in the
option agreements evidencing such Other Green Options),
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<PAGE> 12
and such options will be equitably adjusted as necessary to
preserve the value of such options in connection with any such
disposition.
(C) In lieu of any further option grants by Green on or after
the First Effective Time, Green may grant incentive awards to its
employees provided that (i) such awards are granted under arrangements
which are in accordance with applicable law and (ii) such awards are
of no greater aggregate value on the grant date than the aggregate
value of the options which could otherwise have been awarded by Green
by the Company pursuant to Section 4.1(a)(ii)(x)(A) hereof.
(D) Notwithstanding any provision to the contrary herein, Green
agrees that it shall not issue Green Common Stock or rights to acquire
Green Common Stock for any reason following the First Merger without
the prior consent of White.
SECTION 9. Section 3.01(o) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
(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 Amended Offer, the Second
Offer, the First Merger and the Second Merger, if integrated and
treated as a single transaction, as a reorganization under Section 368
of the Code.
SECTION 10. Section 3.02(o) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
(o) Tax Status. Neither White, merger Sub, 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 Amended Offer, the Second Offer, the First Merger
and the Second Merger, if integrated and treated as a single
transaction, as a reorganization under Section 368 of the Code.
SECTION 11. The following is hereby added to the end of Section
4.1(a)(i) of the Merger Agreement:
and provided further that, following the First Effective Time, subject
to applicable legal restrictions and financial covenants contained in
instruments relating to outstanding indebtedness, the surviving
corporation of each of the First Merger and the Second Merger shall not
decrease the aggregate amount of dividends and other distributions paid
in respect of Green's outstanding capital stock from the level paid
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<PAGE> 13
immediately prior to the First Effective Time or the Second Effective
Time, as applicable.
SECTION 12. The last sentence of Section 4.1(c) of the Merger
Agreement is hereby deleted and replaced in its entirety with the following:
Without limiting the foregoing, Green and White shall use
reasonable efforts to not, and to 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 or complying with or satisfying the terms
thereof.
SECTION 13. The following is hereby added to the end of Section
4.1 of the Merger Agreement:
(e) Additional Pre-Control Date Covenants of White. During the
period from the Second Effective Time until the Control Date, White
shall not, nor shall it permit any of its subsidiaries to (without the
consent of Green):
(i) operate its railroad business other than in the
ordinary course of business consistent with past practice provided
that, without limiting the generality of the foregoing or of
Section 4.1(a)(xii) or Section 4.3, (x) the direct or indirect
acquisition or disposition of a significant portion of the assets
of its railroad business, and (y) a merger, consolidation or other
business combination with any other company involved in the
railroad business that would have the effect set forth in clause
(x) shall not be considered in the ordinary course of business
consistent with past practice; or
(ii) enter into (including by merger, acquisition of assets
or securities or otherwise) any new line of business, in a
material way, other than those engaged in by White as of the date
of this Agreement; or
(iii) authorize, or commit or agree to take, any of the
foregoing actions.
SECTION 14. (a) Section 5.3(a) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
The Parties intend that the Amended Offer, the Second
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<PAGE> 14
Offer, the First Merger and the Second Merger, if integrated and
treated as a single transaction (the "Reorganization"), shall qualify
as a reorganization within the meaning of Section 368 of the Code. Each
party and its affiliates shall use reasonable efforts to cause the
Reorganization 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 Reorganization 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 (with appropriate
conforming modification thereto to reflect the changes made by the
Second Amendment). Each party agrees that from and after the time
hereof it will not (and will not permit its affiliates to) take any
action that would result in the Reorganization failing to qualify as a
reorganization within the meaning of Section 368 of the Code except to
the extent that such action is specifically contemplated by this
Agreement or is required by the STB. The parties shall take the
position for all purposes that the Reorganization qualifies as a
reorganization within the meaning of Section 368 of the Code unless and
until the parties fail to obtain either of the Tax Opinions as of the
Closing Date. The provisions of this Section 5.3 shall not terminate on
the Control Date and shall survive indefinitely.
(b) The first use of the word "will" in Section 5.3(b) of the
Merger Agreement is hereby deleted and replaced with the word "may".
SECTION 15. (a) The words "For three years after the Effective
Time" in the first sentence of Section 5.8(c) of the Merger Agreement are hereby
deleted and replaced in their entirety with the words "From the Control Date
through the third anniversary of the Effective Time".
(b) The second and third uses of the words "Effective Time" in
Section 5.8(c) is hereby deleted and replaced with the words "Control Date".
SECTION 16. The following is hereby added to the end of Section
5.12 of the Merger Agreement:
White shall use reasonable efforts to cause the White Merger Securities
to be issued in the Merger or under the Green Stock Plans to be listed
on the NYSE prior to the Closing Date, subject to official notice of
issuance.
SECTION 17. (a) The following is added at the end of Section 6.1
of the Merger Agreement:
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<PAGE> 15
(a) Additional Condition to Second Merger. The First Effective
Time shall have occurred and White shall own at least 80% of Green's
outstanding capital stock, on a fully diluted basis; and at a meeting
duly called and held after the First Effective Time, Green's Board of
Directors shall have approved the Second Merger (as a plan of merger
and liquidation under Section 332, Section 337 and Section 368 of the
Code). Except as provided in this Section 6.1, there shall be no other
conditions to the consummation of the Second Merger, and as of the
First Effective Time, all consents of shareholders of White, Tender Sub
or Green necessary to consummate the Second Merger shall have been
given.
(b) The term "Merger" in Sections 6.2 and 6.3 of the Merger
Agreement is hereby deleted and replaced with the term "First Merger".
SECTION 18. Section 6.1(d) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
(d) Listing. The White Common Stock and the White Merger
Securities issuable to Green's shareholders pursuant to this Agreement
and under the Green Stock Plans shall have been approved for listing on
the NYSE prior to the Closing Date, subject to official notice of
issuance.
SECTION 19. Section 6.2(d) and Section 6.3(c) of the Merger
Agreement are hereby deleted in their respective entireties, and all references
to such Sections are hereby deleted in their respective entireties.
SECTION 20. The words "which is addressed above" in Section 6.2(e)
of the Merger Agreement are hereby deleted in their entirety.
SECTION 21. The following is hereby added to the end of Section
8.1 of the Merger Agreement:
The parties agree that the provisions of Articles IV and V shall be
binding through the Control Date, provided that the provisions of
Article IV (other than Sections 4.1(a)(xii), Section 4.1(d), the last
sentence of Section 4.1(c), Section 4.1(e) and Section 4.3) and Section
5.15 shall not be binding as against White and its subsidiaries
following the Effective Time; provided, however, that all obligations
of White or its affiliates under this Agreement shall terminate upon
the earlier of (i) December 31, 1998 and (ii) the date of STB denial.
SECTION 22. The following is hereby added to the end of Section
8.3(f) of the Merger Agreement:
(g) "STB approval," for all purposes under this Agreement, means
the issuance by the STB of a decision, which decision shall become
effective and which
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<PAGE> 16
decision shall not have been stayed or enjoined, that (A) constitutes a
final agency action approving, exempting or otherwise authorizing the
acquisition of control over Green's railroad operations by White 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) unless White chooses to assume control despite such
conditions, 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)), other than those
proposed by the applicants, that materially and adversely affect the
long-term benefits expected to be received by White from the
transactions contemplated by this Agreement;
(h) the "Control Date" means the date on which White lawfully is
permitted to assume control over Green's railroad operations pursuant
to STB approval or exemption;
(i) "STB denial," for all purposes under this Agreement, means (i)
STB approval shall not have been obtained by December 31, 1998 or (ii)
the STB shall have, by an order which shall have become final and no
longer subject to review by the courts, either (x) refused to approve
the acquisition of control of Green by White or (y) approved such
acquisition of control subject to conditions that cause such approval
not to constitute STB approval; and
(j) following the Second Effective Time, all rights and
obligations of Green under this Agreement shall be exercisable or
performed by the Surviving Corporation (as successor to Green), and any
consent or approval of Green hereunder following the First Effective
Time or the Second Effective Time shall mean the consent or approval of
the Surviving Corporation's board of directors (or its duly authorized
representatives).
SECTION 23. The term "Merger Agreement" or "this Agreement" as
used in the Merger Agreement shall be deemed to refer to the Merger Agreement
as amended by the First Amendment and the Second Amendment (provided that the
terms "date hereof" or "date of this Agreement" as used in the Merger Agreement
shall mean October 14, 1996); the "Merger" as used in the Merger Agreement shall
be deemed to refer to the First Merger and the Second Merger; and the term
"Green Fairness Opinions" as used in the Merger Agreement shall be deemed to
include the Second Green Fairness Opinions and the Third Green Fairness
Opinions.
SECTION 24. The words "270 days from the date hereof," "270 days
after the date hereof", "270 days after October 14, 1996" and "270 days after
October 14, 1996" in
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<PAGE> 17
Section 4.2(a), Section 4.2(b), Section 7.1(b)(ii) and Section 7.1(b)(iii),
respectively, of the Merger Agreement are hereby deleted and replaced with the
words "December 31, 1998".
SECTION 25. Exhibit H hereto is hereby added as such an exhibit
to the Merger Agreement.
SECTION 26. Exhibits A and E to the Merger Agreement are hereby
deleted and replaced in their entireties with Exhibits A and E hereto
respectively.
SECTION 27. Exhibit C will be amended as may be necessary to
permit the issuance of the White Merger Securities.
ARTICLE II
GENERAL
SECTION 1. Merger Agreement. Except as amended hereby, the
provisions of the Merger Agreement shall remain in full force and effect.
SECTION 2. Counterparts. This Second Amendment 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 3. Entire Agreement; No Third-Party Beneficiaries. Other
than the Merger Agreement (and subject to Section 8.6 thereof), this Second
Amendment (a) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter of this Second Amendment and (b) is not intended
to confer upon any person other than the parties hereto any rights or remedies.
SECTION 4. GOVERNING LAW. THIS SECOND AMENDMENT 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 5. Assignment. Neither this Second Amendment nor any of
the rights, interests or obligations under this Second Amendment 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 Second Amendment will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors
and assigns.
SECTION 6. 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
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<PAGE> 18
PROVISIONS OF THIS SECOND AMENDMENT 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 SECOND AMENDMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS OF
THIS SECOND AMENDMENT 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 SECOND AMENDMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS SECOND AMENDMENT, (B) AGREES THAT IT WILL NOT ATTEMPT TO
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 SECOND AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS SECOND
AMENDMENT IN ANY COURT OTHER THAN A FEDERAL COURT SITTING IN THE STATE OF NEW
YORK OR A NEW YORK STATE COURT.
SECTION 7. Headings. The headings contained in this Second
Amendment are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Second Amendment.
SECTION 8. Severability. If any term or other provision of this
Second Amendment is invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other conditions and provisions of this Second
Amendment 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 Second
Amendment 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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<PAGE> 19
IN WITNESS WHEREOF, Conrail Inc., Green Acquisition Corp. and CSX
Corporation have caused this Second Amendment to be signed by their respective
officers thereunto duly authorized, all as of the date first written above.
CONRAIL INC.
by
_________________________
Name:
Title:
GREEN ACQUISITION CORP.
by
_________________________
Name:
Title:
CSX CORPORATION
by
_________________________
Name:
Title:
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<PAGE> 20
EXHIBIT A
CORPORATE GOVERNANCE
Board of Directors of White
Immediately following the Control Date, the Board of Directors of White
shall consist of the current Chairmen 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
Immediately following the Control Date:
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 shall 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 shall serve shall be
the executive committee and the finance and planning committee, and the current
Chairman and Chief Executive Officer of White shall chair the executive
committee and designate the chair of the finance and planning committee. White
shall designate the chairperson of the compensation committee and the audit
committee and Green shall designate the chairperson of the nominating committee
and the ethics committee.
Executive Management
At the Control Date 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 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 Control Date 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 Control Date of 75% of the members of the Board of
Directors of White.
A-1
<PAGE> 21
White Articles of Incorporation
At or prior to the Control 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
At or prior to the Control 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 Chairmen of White and Green entered into as of the date of this
Agreement shall require a vote of 75% following the Control Date of the members
of the Board of Directors of White.
A-2
<PAGE> 22
EXHIBIT H
Convertible Preferred Stock
Type: Convertible preferred stock(1)
Amount: $ million ($16 per share) - million shares
Liquidation
Preference: $50 per share
Maturity: [7-10 years, perpetual]
Yield: Quarterly, market yield such that securities are
expected to trade at par on a fully distributed basis.
Conversion
Premium: [20%-25%] Established relative to [10-20] day average
closing price ending 2 days before distribution of the
security.
Call
Protection: [3-4] years. Standard redemption schedule thereafter.
Fundamental
Change: Upon the occurrence of a fundamental change (i.e. a
merger or acquisition of the issuer for consideration
which is not all or substantially all common stock) the
conversion price will be adjusted downward if necessary
to insure that the preferred share is convertible into
consideration worth at least the prevailing redemption
price. (Standard for convertible preferred stock
underwritten by Conrail's and CSX's financial
advisors).
Antidilution
Language: Standard for convertible preferred stock underwritten by
Conrail's and CSX's financial advisors.
- --------------------
(1) May be trust convertible preferred stock.
<PAGE> 1
EXHIBIT (C)(7)
AMENDED AND RESTATED VOTING TRUST AGREEMENT
THIS AMENDED AND RESTATED VOTING TRUST AGREEMENT, dated as of
December 18, 1996, by and among CSX Corporation, a Virginia corporation
("Parent"), Green Acquisition Corp., a Pennsylvania corporation and a
wholly-owned subsidiary of Parent ("Acquiror"), and Deposit Guaranty National
Bank, a national banking association (the "Trustee"),
W I T N E S S E T H:
WHEREAS, Parent, Acquiror and Conrail Inc., a Pennsylvania
corporation (the "Company"; which term shall instead refer, from and after the
effectiveness of the Second Merger, to the corporation resulting from the Second
Merger), have entered into an Agreement and Plan of Merger, dated as of October
14, 1996 (as it has been and 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 was to commence and
did commence the Offer and 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) a subsidiary of Acquiror will merge into the
Company pursuant to the First Merger and thereafter the Company will merge into
Acquiror pursuant to the Second Merger. As it is in the Merger Agreement,
<PAGE> 2
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the word "Merger" shall herein be a collective reference to the First Merger and
the Second Merger taken together.
WHEREAS, Parent, Acquiror and the Trustee have entered into a
Voting Trust Agreement, dated as of October 15, 1996 (the "Original Voting Trust
Agreement");
WHEREAS, Parent, Acquiror and the Company entered into a First
Amendment to the Merger Agreement dated November 5, 1996, and a Second Amendment
thereto dated December 18, 1996;
WHEREAS, Parent, Acquiror and the Company have entered into a Stock
Option Agreement, dated as of October 14, 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, the parties intend that, prior to the authorization and
approval of the Surface Transportation Board (the "STB"), neither Parent nor
Acquiror nor any of their affiliates shall control the Company and the Company
shall not have as a director any officer, director, nominee or representative of
the Parent, the Acquiror or any of their affiliates;
WHEREAS, Parent and Acquiror wish (and are obligated pursuant to
the Merger Agreement and the Option Agreement), simultaneously with the
acceptance for payment of Acquired Shares pursuant to the Tender Offer, the
Option Agreement, the First Merger, or otherwise to deposit such Shares of
<PAGE> 3
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Common Stock, and upon the consummation of the Second Merger shall deposit all
of the common stock and any other voting stock of the Company (being then the
corporation resulting from the Second Merger), in an independent, irrevocable
voting trust, pursuant to the rules of 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, Parent, Acquiror and the Trustee wish to amend the
Original Voting Trust Agreement to reflect certain changes made in the Merger
Agreement by the Second Amendment thereto, and the Company has consented to such
amendment, and Parent, Acquiror and the Trustee wish to restate the Voting Trust
Agreement as so amended;
WHEREAS, the holder of all outstanding Trust Certificates has
assented to such amendment of the Original Voting Trust Agreement, and all
requirements for the amendment of the Original Voting Trust Agreement contained
therein have been satisfied;
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 continue to act as voting
trustee pursuant to the terms of this Trust Agreement and the rules of the STB,
<PAGE> 4
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NOW THEREFORE, the parties hereto agree as follows:
1. CREATION OF TRUST -- The Parent and the Acquiror hereby appoint
Deposit Guaranty National Bank as Trustee hereunder, and Deposit Guaranty
National 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. The Parent and the Acquiror also agree that simultaneously with the
receipt by them or by any of their affiliates of any shares of common stock or
other voting stock of the Company upon the effectiveness of the First Merger or
the Second Merger, they will transfer to the Trustee the certificate or
certificates for such shares, including
<PAGE> 5
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without limitation, shares of common stock or other voting securities of the
corporation resulting from the Second Merger. All such certificates shall be
duly endorsed or accompanied by proper instruments duly executed for transfer
thereof to the Trustee 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. Voting Trust Certificates executed in the form attached
to the Original Voting Trust Agreement as Exhibit A shall continue to be valid
and obligatory and shall, from and after the execution and delivery of this
instrument, be deemed in every respect to be Trust Certificates executed and
delivered under this instrument. All shares of Common Stock all other shares of
common stock or other voting securities 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
<PAGE> 6
- 6 -
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 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 ("SEC"), in which one slate of nominees
shall support the effectuation of the Merger and another slate oppose it, then
the Trustee shall vote 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) are voted with
respect to such matters; provided that, except as provided in the three
immediately preceding sentences, from and after the effectiveness of the First
Merger, the Trustee shall vote all shares of Trust Stock in accordance with the
instructions of a majority of the persons who are currently the directors of the
<PAGE> 7
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Company and their nominees as successors and who shall then be directors of the
Company, except that the Trustee shall not vote the Trust Stock in favor of
taking or doing any act which violates the Merger Agreement or which if taken or
done prior to the consummation of the Merger would have been a violation of the
Merger Agreement; and except further that if there shall be no such persons
qualified to give such instructions hereunder, or if a majority of such persons
refuse or fail to give such instructions, then the Trustee shall vote the Trust
Stock in its sole discretion, having due regard for the interests of the holders
of Trust Certificates as investors in the stock of the Company, determined
without reference to such holders' interests in other railroads than the
subsidiaries of the Company. 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
herein 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.
<PAGE> 8
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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 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 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. Notwithstanding the
foregoing provisions of this Paragraph 5 or any other provision of this
Agreement, 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 -- Until the earlier of STB
Denial or December 31, 1998, 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 from time to time established for
that 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
<PAGE> 9
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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 direct the sale or other disposition of the whole or any
part of the Trust Stock, but only as 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
<PAGE> 10
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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 the event the STB Approval shall have been granted, 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, and, in the event that shareholder approval of the First Merger
shall not have previously been obtained, with the prior written consent of the
Company, 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
<PAGE> 11
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then held by it (or such portion as is represented by the Trust Certificates in
the case of such an order by such holders) 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 for the First Merger or the Second
Merger, vote the Trust Stock in favor of the First Merger or the Second Merger,
and upon any such transfer of all of the Trust Stock, or any such merger
following such STB approval or law amendment permitting control without
governmental approval, this Trust shall cease and come to an end.
(c) In the event that (i) the STB Approval shall not have been
obtained by December 31, 1998, or (ii) there shall have been an STB Denial,
Parent shall use its best efforts to sell the Trust Stock during a period of two
years after such date or STB Denial, or such extension of that period as the STB
shall 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
<PAGE> 12
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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 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), 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 under this paragraph 8 or
otherwise hereunder 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 (but, if prior to the earlier of (i) December 31,
1998, if STB Approval shall not have by then been granted or (ii) the occurrence
of an STB
<PAGE> 13
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Denial, only with the prior written consent of the Company), subject to any
order of the STB pursuant to any of its jurisdiction, 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
an affiliate of the Parent and has all necessary regulatory 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.
Upon the transfer of all of the Trust Stock pursuant to this paragraph 8(e),
this Trust shall cease and come to an end.
(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
<PAGE> 14
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substantial as to permit the Trustee in any way to control or direct the affairs
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 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. 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 of endorsement thereon, or for any description therein, nor shall the
Trustee be responsible or
<PAGE> 15
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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, its directors, officers, employees and agents 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 gross 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 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.
<PAGE> 16
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14. RESIGNATION, SUCCESSION, DISQUALIFICATION OF TRUSTEE -- The
Trustee, or any trustee hereafter appointed, may at any time resign by giving
forty-five 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 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.
<PAGE> 17
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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 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 State 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
<PAGE> 18
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the Trustee, one of which shall be subject to inspection by holders of Trust
Certificates on reasonable notice during business hours.
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 through and including the earlier of (i)
December 31, 1998, if STB Approval shall not have been granted or (ii) the
occurrence of an STB Denial, but that thereafter the Company shall not be any
such third-party beneficiary. Except as otherwise expressly set forth herein,
any consent or approval required from the Company hereunder shall mean the prior
written consent or approval by a duly adopted resolution of the Company's board
of directors, or by its duly authorized officer or other representative, and
shall be granted or withheld in the sole discretion of such board, officer or
representative.
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.
<PAGE> 19
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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 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:
CSX Corporation
One James Center
901 East Cary Street
Richmond, Virginia 23219
Attention: General Counsel
If to the Trustee, to:
Deposit Guaranty National Bank
One Deposit Guaranty Plaza,
8th Floor
Jackson, Mississippi 39201
Attention: Corporate Trust Department
With a required copy to:
Deposit Guaranty National Bank
c/o Commercial National Bank In Shreveport
333 Texas Street
Shreveport, LA 71101
Attention: Corporate Trust Department
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,
<PAGE> 20
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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 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, CSX Corporation and Green Acquisition Corp.
have caused this Amended and Restated Trust Agreement to be executed by their
authorized officers and their corporate seals to be affixed, attested by their
Secretaries or Assistant Secretaries, and Deposit Guaranty National Bank has
caused this Amended and Restated Trust Agreement to be executed by its
authorized officer or agent and its corporate seal to be affixed, attested to by
its
<PAGE> 21
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Secretary or one of its Assistant Secretaries or other authorized agent,
all as of the day and year first above written.
Attest: CSX CORPORATION
By
- ----------------------------------- --------------------------------------
Secretary
Attest: GREEN ACQUISITION CORP.
By
- ----------------------------------- --------------------------------------
Secretary
Attest: DEPOSIT GUARANTY NATIONAL BANK
By
- ----------------------------------- --------------------------------------
<PAGE> 22
No. ________________ EXHIBIT A
_______ Shares
VOTING TRUST CERTIFICATE
FOR
COMMON STOCK
OF
CONRAIL INC.
INCORPORATED UNDER THE LAWS OF
THE STATE OF PENNSYLVANIA
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, $1.00 par value, of Conrail Inc., a Pennsylvania
corporation (the "Company," which term shall instead refer, from and after the
effectiveness of the Second Merger, to the corporation resulting from the Second
Merger, as defined under the Voting Trust Agreement). This Certificate is issued
pursuant to, and the rights of the holder hereof are subject to and limited by,
the terms of an Amended and Restated Voting Trust Agreement, dated as of
December 18, 1996, executed by CSX Corporation, a Virginia corporation, Green
Acquisition Corp., a Pennsylvania corporation, and Deposit Guaranty National
Bank, as Trustee (as it may be amended from time to time, the "Voting Trust
Agreement"), a copy of which Voting Trust Agreement is on file in the office of
said Trustee at One Deposit Guaranty Plaza, 8th Floor, Jackson, Mississippi
39201 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.
<PAGE> 23
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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 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 provisions of said Voting Trust Agreement, and until so transferred,
the 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 Trustee has caused this Certificate to be
signed by its officer duly authorized.
Dated:
DEPOSIT GUARANTY
NATIONAL BANK
By
------------------------
Authorized Officer
<PAGE> 24
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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 Trustee, with full power of substitution in
the premises.
______________________________
Dated:
In the Presence of:
______________________________
<PAGE> 1
ONE JAMES CENTER
CSX RICHMOND, VIRGINIA 23219
CORPORATION (904)782-1400
- --------------------------------------------------------------------------------
December 19, 1996
Dear Conrail Shareholder:
We are pleased to enclose a supplement to CSX's tender offer to purchase
20.1% of Conrail voting shares outstanding for $110 per share in cash.
The $110 CSX tender offer has been extended until 5:00 p.m. EST on January
22, 1997, and the conditions remain the same, including obtaining shareholder
approval to opt out of Subchapter 25E of the Pennsylvania statute. Conrail has
scheduled this special shareholders meeting for 12:00 noon EST on January 17,
1997.
The supplement describes in detail the terms of our amended merger
agreement with Conrail Inc., which will provide you with increased consideration
in the merger of $16 per Conrail share in CSX convertible preferred stock. The
$16 per share is in addition to the 1.85619 shares of CSX common stock to be
received in the merger.
You will also benefit from the significant value of receiving the merger
consideration upon shareholder approval and consummation of the merger, which is
significantly earlier than previously contemplated and prior to regulatory
approval.
We urge you to give this supplement to our tender offer prompt
consideration. We believe that the tender offer, combined with our earlier
purchase of 19.9% of Conrail shares at $110 per share in cash, gives
shareholders the advantages of a significant and immediate payment of cash
combined with the upside potential of continued stock ownership.
If you have any questions, or require assistance in tendering your shares,
please call MacKenzie Partners, the information agent for our tender offer,
toll-free at 800-322-2885 or collect at 212-929-5500.
We look forward to building the world's leading transportation and
logistics company by joining forces with Conrail.
Sincerely,
/s/ John W. Snow
John W. Snow
Chairman and
Chief Executive Officer
- POST OFFICE BOX 85629, RICHMOND, VIRGINIA 23285-5629 -
