SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT
(AMENDMENT NO. 26)
PURSUANT TO
SECTION 14(D(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
AMENDMENT NO. 36
TO
SCHEDULE 13D*
AND
AMENDMENT NO. 13
TO
SCHEDULE 13D**
CONRAIL INC.
(NAME OF SUBJECT COMPANY)
CSX CORPORATION
NORFOLK SOUTHERN 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 JAMES C. BISHOP, JR.
CSX CORPORATION NORFOLK SOUTHERN CORPORATION
ONE JAMES CENTER THREE COMMERCIAL PLACE
901 EAST CARY STREET NORFOLK, VIRGINIA 23510
RICHMOND, VIRGINIA 23219-4031 TELEPHONE: (757) 629-2750
TELEPHONE: (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 RANDALL H. DOUD
WACHTELL, LIPTON, ROSEN & KATZ SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
51 WEST 52ND STREET 919 THIRD AVENUE
NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10022
TELEPHONE: (212) 403-1000 TELEPHONE: (212) 735-3000
_____________________
* of CSX Corporation and Green Acquisition Corp.
** of Norfolk Southern Corporation.<PAGE>
This Statement amends and supplements the Tender Of-
fer 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., a Pennsylvania corporation
("Purchaser"), CSX Corporation, a Virginia corporation
("Parent" or "CSX"), and Norfolk Southern Corporation, a
Virginia corporation ("NSC"), to purchase all 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 Supplement thereto, dated December 19, 1996 (the
"First Supplement"), the Second Supplement thereto, dated March
7, 1997 (the "Second Supplement"), the Third Supplement
thereto, dated April 10, 1997 (the "Third Supplement") and the
related Letters of Transmittal (which, together with any
amendments or supplements thereto, constitute the "Second
Offer") at a purchase price of $115 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, the Supplement, the Second Supplement,
the Third Supplement and the Schedule 14D-1.
ITEM 10. ADDITIONAL INFORMATION.
(b) By letter dated May 8, 1997, the Honorable
Vernon A. Williams, Secretary of the STB, issued an informal
opinion, which is not binding on the STB, that the joint voting
trust, which CSX and NSC propose to hold all Shares previously
acquired and to be acquired by CSX and NSC, will effectively
insulate CSX and NSC from the violation of Subtitle IV of Title
49 of the United States Code and the policy of the STB that
would result if CSX and/or NSC were to acquire, without
authorization, what would otherwise be a controlling interest
in carrier subsidiaries of the Company. A copy of such letter
has been filed as Exhibit (c)(16), and the foregoing summary
description is qualified in its entirety by reference to such
exhibit.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(c)(16) Letter from the Honorable Vernon A. Williams, dated
May 8, 1997.<PAGE>
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: May 9, 1997<PAGE>
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.
NORFOLK SOUTHERN CORPORATION
By: /s/ JAMES C. BISHOP, JR.
Name: James C. Bishop, Jr.
Title: Executive Vice President-
Law
Dated: May 9, 1997<PAGE>
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.
ATLANTIC ACQUISITION CORPORATION
By: /s/ JAMES C. BISHOP, JR.
Name: James C. Bishop, Jr.
Title: Vice President and
General Counsel
Dated: May 9, 1997<PAGE>
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: Vice President, General
Counsel and Secretary
Dated: May 9, 1997<PAGE>
EXHIBIT INDEX
EXHIBIT NO.
*(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, Com-
mercial Banks, Trust Companies and Other Nominees.
*(a)(6) Guidelines for Certification of Taxpayer Identifica-
tion 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 Com-
pany 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 Com-
pany 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.
_____________________
* Previously filed.<PAGE>
*(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 Com-
pany on December 19, 1996.
*(a)(19) Letter from Parent to shareholders of the Company,
dated December 19, 1996.
*(a)(20) Text of Press Release issued by Parent on December
20, 1996.
*(a)(21) Text of Press Release issued by Parent and the Com-
pany on January 9, 1997.
*(a)(22) Text of Press Release issued by Parent and the Com-
pany on January 13, 1997.
*(a)(23) Text of Press Release issued by Parent and the Com-
pany on January 15, 1997.
*(a)(24) Text of Press Release issued by Parent on January 17,
1997.
(a)(25) Deleted.
*(a)(26) Text of Letter issued by Parent and the Company dated
January 22, 1997.
*(a)(27) Text of Advertisement published by Parent and the
Company on January 29, 1997.
*(a)(28) Text of Press Release issued by Parent and the
Company on January 31, 1997.
*(a)(29) Text of Press Release issued by Parent on February
14, 1997.
_____________________
* Previously filed.
- 2 -<PAGE>
*(a)(30) Text of Press Release issued by Parent on March 3,
1997.
*(a)(31) Second Supplement to Offer to Purchase, dated March
7, 1997.
*(a)(32) Revised Letter of Transmittal.
*(a)(33) Revised Notice of Guaranteed Delivery.
*(a)(34) Text of Press Release issued by Parent on March 7,
1997.
*(a)(35) Form of Summary Advertisement, dated March 10, 1997.
*(a)(36) Letter from Parent to employees of the Company,
published on March 12, 1997.
*(a)(37) Text of Press Release issued by Parent and NSC on
April 8, 1997.
*(a)(38) Third Supplement to Offer to Purchase, dated April
10, 1997.
*(a)(39) Revised Letter of Transmittal circulated with the
Third Supplement.
*(a)(40) Revised Notice of Guaranteed Delivery circulated with
the Third Supplement.
*(b)(1) Credit Agreement, dated November 15, 1996 (incorpo-
rated by reference to Exhibit (b)(2) to Parent and
Purchaser's Tender Offer Statement on Schedule 14D-1,
as amended, dated October 16, 1996).
*(b)(2) Credit Agreement, dated as of February 10, 1997, by
and among NSC, Morgan Guaranty Trust Company of New
York, as administrative agent, Merrill Lynch Capital
Corporation, as documentation agent, and the banks
from time to time parties thereto (incorporated by
reference to NSC's and Atlantic Acquisition
Corporation's Tender Offer Statement on Schedule
14D-1, dated February 12, 1997).
_____________________
* Previously filed.
- 3 -<PAGE>
*(b)(3) Commitment Letter, dated April 22, 1997, among Morgan
Guaranty Trust Company of New York, J.P. Morgan
Securities Inc., Merrill Lynch Capital Corporation,
Merrill Lynch & Co. and Norfolk Southern Corporation.
*(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 Par-
ent and Purchaser's Tender Offer Statement on Sched-
ule 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 (incorpo-
rated 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 (incorpo-
rated 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 State-
ment on Schedule 14D-1, as amended, dated October 16,
1996).
*(c)(5) First Amendment to Agreement and Plan of Merger, dat-
ed as of November 5, 1996, by and among Parent, Pur-
chaser 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 Octo-
ber 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) Deleted.
_____________________
* Previously filed.
- 4 -<PAGE>
*(c)(9) Text of STB Decision No. 5 of STB Finance Docket No.
33220, dated January 8, 1997.
(c)(10) Deleted.
*(c)(11) Text of opinion of Judge Donald VanArtsdalen of the
United States District Court for the Eastern District
of Pennsylvania as delivered from the bench on Janu-
ary 9, 1997.
*(c)(12) Third Amendment to Agreement and Plan of Merger,
dated as of March 7, 1997, by and among Parent,
Purchaser and the Company.
*(c)(13) Form of Amended and Restated Voting Trust Agreement.
*(c)(14) Letter Agreement between CSX and NSC, dated April 8,
1997.
*(c)(15) Fourth Amendment to Agreement and Plan of Merger,
dated as of April 8, 1997, by and among CSX,
Purchaser and the Company.
(c)(16) Letter from the Honorable Vernon A. Williams, dated
May 8, 1997.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
_____________________
* Previously filed.
- 5 -
Surface Transportation Board
Washington, D.C 20423-0001
Office of the Secretary
May 8, 1997
Richard A. Allen, Esq.
Zuckert, Scoutt & Rasenberger, L.L.P.
888 Seventeenth St., N.W.
Washington, D.C. 20006-3939
Re: STB Finance Docket No. 33388, CSX Corporation and CSX
Transportation, Inc., Norfolk Southern Corporation and Norfolk
Southern Railway Company--Control and
Operating Leases/Agreements--Conrail Inc. and Consolidated Rail
Corporation
Dear Mr. Allen:
SUMMARY. By letter dated April 24, 1997, you submitted, on behalf
of Norfolk Southern Corporation (NSC),1 CSX Corporation (CSXC),2 and
Green Acquisition Corporation (Acquisition), and pursuant to 49 CFR
1013.3(a), an Amended and Restated Voting Trust Agreement (hereinafter
referred to as Joint-VTA-1) that NSC, CSXC, and Acquisition propose to
enter into with an institutional trustee, Deposit Guaranty National Bank
(Deposit Guaranty or Trustee), and a limited liability company to be
formed shortly (LLC). NSC and CSXC intend that the Trustee will hold, in
the voting trust (hereinafter referred to as the Joint Voting Trust) to
be established pursuant to Joint-VTA-1, all common shares of Conrail Inc.
(CRI).3 (1) acquired previously, and separately, by NSC and CSXC and
currently held in the separate voting trusts referenced below; or (2)
hereafter acquired by NSC and CSXC pursuant to the Third Supplement (the
Third Supplement, dated April 10, 1997) to the Second Offer to Purchase
(the Second Offer,
1 NSC is the parent holding company of Norfolk Southern Railway
Company (NSR). NSC and NSR are referred to collectively as NS.
2 CSXC is the parent holding Company of CSX Transportation, Inc.
(CSXT). CSXC and CSXT are referred to collectively as CSX.
3 CRI is the parent holding company of Consolidated Rail
Corporation (CRC). CRI and CRC are referred to collectively as Conrail.<PAGE>
Richard A. Allen STB Finance Docket No. 33388
May 7, 1997
Page 2
dated December 6, 1996).4 NSC and CSXC intend that the Joint Voting
Trust to be established pursuant to Joint-VTA-1 will be a single
consolidated voting trust ultimately superseding and replacing the
previously established separate voting trusts.
In my opinion, the Joint Voting Trust to be established under Joint-
VTA-1 will effectively insulate NSC and CSXC, and their respective
affiliates, from the violation of Subtitle IV of Title 49 of the United
States Code (Subtitle IV of Title 49) and the policy of the Surface
Transportation Board (the Board) that would result if NSC and/or CSXC
were to acquire, without authorization, what would otherwise be a
controlling interest in CRI's carrier subsidiaries.
BACKGROUND: THE CSX-VTA'S. By letter dated October 23, 1996, Mr.
Dennis G. Lyons submitted, on behalf of CSXC and Acquisition (which was
then a wholly owned subsidiary of CSXC), a voting trust agreement
(hereinafter referred to as CSX-VTA-1) proposed to be entered into by and
between CSXC, Acquisition, and a trustee, for use in connection with the
acquisition, by CSXC and Acquisition, of a controlling interest in CRI.
On November 1, 1996, Mr. Lyons submitted a revised VTA (hereinafter
referred to as CSX-VTA-2), which provided that Deposit Guaranty was to be
the trustee in place of the previously designated trustee. By letter
dated November 1, 1996, I advised that, in my opinion, the voting trust
to be established under CSX-VTA-2 would effectively insulate CSXC and its
affiliates from the violation of Subtitle IV of Title 49 and the policy
of the Board that would result if CSXC were to acquire, without
authorization, what would otherwise be a controlling interest in CRI's
carrier subsidiaries.
On November 26, 1996, CSXC, acting through Acquisition, bought and
paid for approximately 19.9% of the common stock of CRI. This stock was
deposited in a voting trust (hereinafter referred to as the CSX Voting
Trust) pursuant to a voting trust agreement in the form of CSX-VTA-2.
By letter dated December 27, 1996, Mr. Lyons submitted, again on
behalf of CSXC and Acquisition, another revised VTA (hereinafter referred
to as CSX-VTA-3) proposed to be entered into by and between CSXC,
Acquisition, and Deposit Guaranty. By letter dated January 8, 1997, I
advised that, in my opinion, the voting trust to be established under
CSX-VTA-3 would effectively insulate CSXC and its affiliates from the
violation of Subtitle IV of Title 49
4 The Second Offer, dated December 6, 1996, was made by CSXC. The
Third Supplement, dated April 10, 1997, includes NSC as a co-bidder.<PAGE>
Richard A. Allen STB Finance Docket No. 33388
May 7, 1997
Page 3
and the policy of the Board that would result if CSXC were to acquire,
without authorization, what would otherwise be a controlling interest in
CRI's carrier subsidiaries.5
BACKGROUND: THE NS-VTA'S. By letter dated October 25, 1996, you
submitted, on behalf of NSC and Atlantic Acquisition Corporation
(Acquiror), a voting trust agreement (hereinafter referred to as NS-VTA-
1) proposed to be entered into by and between NSC, Acquiror, and a Bank
(to be named as trustee) for use in connection with the acquisition, by
NSC and Acquiror, of a controlling interest in CRI. By letter dated
November 1, 1996 (addressed to your colleague, Mr. James A. Calderwood),
I advised that, in my opinion, the voting trust to be established under
NS-VTA-1 would effectively insulate NSC and its affiliates from the
violation of Subtitle IV of Title 49 and the policy of the Board that
would result if NSC were to acquire, without authorization, what would
otherwise be a controlling interest in CRI's carrier subsidiaries.
By letter dated November 6, 1996, you submitted, again on behalf of
NSC and Acquiror, an alternative version of NS-VTA-1 (hereinafter
referred to as NS-VTA-2). By letter dated November 18, 1996, I advised
that, in my opinion, the voting trust to be established under NS-VTA-2
would effectively insulate NSC and its affiliates from the violation of
Subtitle IV of Title 49 and the policy of the Board that would result if
NSC were to acquire, without authorization, what would otherwise be a
controlling interest in CRI's carrier subsidiaries.
By letter dated January 31, 1997 (as supplemented by an errata
letter dated February 3, 1997), you submitted, again on behalf of NSC and
Acquiror: NS-VTA-3, which was another alternative version of NS-VTA-1;
and NS-VTA-4, which was an entirely new voting trust agreement. By
letter dated February 14, 1997, I advised that, in my opinion, the voting
trusts to be established under NS-VTA-3 and NS-VTA-4 would effectively
insulate NSC and its affiliates from the violation of Subtitle IV of
Title 49 and the policy of the Board that would result if NSC were to
acquire, without authorization, what would otherwise be a controlling
interest in CRI's carrier subsidiaries.6
5 The letters and other submissions respecting the CSX-VTA's were
docketed in STB Finance Docket No. 33220.
6 The letters and other submissions respecting the NS-VTA's were
docketed in STB Finance Docket No. 33286.<PAGE>
Richard A. Allen STB Finance Docket No. 33388
May 7, 1997
Page 4
On February 18, 1997, NSC, acting through Acquiror, bought and paid
for approximately 9.9% of the common stock of CRI. This stock was
deposited in a voting trust (hereinafter referred to as the NS Voting
Trust) pursuant to a voting trust agreement substantially in the form of
NS-VTA-3.
THE JOINT CONRAIL ACQUISITION TRANSACTION. Joint-VTA-1 reflects the
fact that whereas NSC and CSXC formerly planned to pursue two separate
CRI acquisition transactions, they now plan to pursue one joint CRI
acquisition transaction. Under the Third Supplement to the Second Offer,
CSXC and NSC, acting in concert through Acquisition, are now offering to
purchase all outstanding common shares of CRI for $115 per share in cash.
Unless further extended, the Second Offer will expire on May 23, 1997.
NSC and CSXC have agreed that, upon consummation of the Second Offer
(as supplemented by the Third Supplement), they will establish a single
consolidated voting trust to hold: (i) the CRI shares previously
acquired by NSC and CSXC and now held in the separate voting trusts; and
(ii) the remaining CRI shares to be acquired in the Second Offer (as
supplemented by the Third Supplement). This single consolidated voting
trust will be an amended and restated version of the CSX Voting Trust
(i.e., the voting trust established pursuant to CSX-VTA-2), which is
currently holding the 19.9% of the common stock of CRI acquired by
Acquisition for CSXC on November 26, 1996.
NSC and CSXC intend to form a new limited liability company (LLC),
to which CSXC will contribute both 100% of the stock of Acquisition and
also a specified amount of cash, and to which NSC will contribute both
100% of its interest in the approximately 9.9% of the common stock of CRI
now held in the NS Voting Trust and also a specified amount of cash. NSC
and CSXC will have equal voting control of LLC, but it is contemplated
that NSC will own 58% of the equity of LLC and that CSXC will own 42% of
the equity of LLC. The cash contributed by NSC and CSXC to LLC will be
transferred to Acquisition to pay for the remaining CRI shares that
Acquisition will acquire pursuant to the Second Offer (as supplemented by
the Third Supplement). Upon consummation of the Second Offer (as
supplemented by the Third Supplement), Acquiror will cause the trustee of
the NS Voting Trust to transfer to the Trustee of the Joint Voting Trust
to be established pursuant to Joint-VTA-1 the approximately 9.9% of the
common stock of CRI now held in the NS Voting Trust. Once this stock has
been transferred, the NS Voting Trust will be terminated.
THE JOINT VOTING TRUST: MY OPINION. In my opinion, the Joint
Voting Trust to be established under Joint-VTA-1 will effectively
insulate NSC and CSXC, and their respective affiliates, from the
violation of Subtitle IV of Title 49 and the policy of the Board that
would<PAGE>
Richard A. Allen STB Finance Docket No. 33388
May 7, 1997
Page 5
result if NSC and/or CSXC were to acquire, without authorization, what
would otherwise be a controlling interest in CRI's carrier subsidiaries.
By and large, the language of Joint-VTA-1 mirrors the language of the
prior VTA's submitted by NSC and CSXC (respecting such matters as the
irrevocability of the voting trust, the independence of the Trustee, the
ban on direct or indirect business arrangements or dealings between the
Trustee and either NSC or CSXC, etc.), and, like the language in the
prior VTA's, effectively insulates NSC and CSXC from premature control of
CRI.
The key issue concerns the control of CRI prior to such time (if
ever) as the Board approves, and NSC and CSXC consummate, control of CRI.
Joint-VTA-1 provides, in general, that, prior to the merger of an
Acquisition subsidiary into CRI (at which time CRI shall become a wholly
owned subsidiary of Acquisition), the Trustee shall vote the Trust Stock
with respect to all matters in the same proportion as all shares of CRI
Common Stock other than Trust Stock are voted with respect to such
matters. This provision is acceptable because, during the time it is
effective, it will leave control of CRI in the hands of CRI shareholders
other than NSC and CSXC.
Joint-VTA-1 further provides, in general, that, after the merger of
an Acquisition subsidiary into CRI, the Trustee shall vote the Trust
Stock "in accordance with the instructions of a majority of the persons
who are currently the directors of [CRI] and their nominees as successors
and who shall then be directors of [CRI]." This provision is acceptable
because, during the time it is effective, it will leave control of CRI in
the hands of its current directors and/or successors nominated by the
current directors.
Joint-VTA-1 further provides "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 [CRI], determined without reference to such holders' interests in
railroads other than the subsidiaries of [CRI]." This provision is
acceptable because, during the time it is effective, it will leave
control of CRI in the hands of an independent Trustee.
DIVESTITURE. I think it appropriate to reiterate and emphasize what
I said in my prior letters concerning the divestiture of the CRI stock
that will be necessary in the event that either: (a) the CRI control
transaction does not receive regulatory authorization; or (b) the CRI
control transaction does receive regulatory authorization, but NSC and
CSXC choose not to exercise that authorization. If the CRI control
transaction ultimately collapses, the Board will have the<PAGE>
Richard A. Allen STB Finance Docket No. 33388
May 7, 1997
Page 6
authority to approve both a plan of divestiture and the sale (or other
disposition) of the CRI stock, whenever such divestiture and disposition
take place, and whether or not the person acquiring the CRI stock
requires 49 U.S.C. 11323 authority to consummate such acquisition. See
Santa Fe Southern Pacific Corp.--Control--SPT Co., 2 I.C.C.2d 709, 834
(1986) (the jurisdiction of the Interstate Commerce Commission "to
oversee the orderly divestiture" of the Trust Stock is "inherently within
[its] authority to approve consolidations and acquisitions of control.").
INFORMAL STAFF OPINION NOT BINDING ON BOARD. My opinion respecting
the Joint Voting Trust to be established under Joint-VTA-1 is an informal
staff opinion that is not binding on the Board. See 49 CFR 1013.3(a).
MERITS NOT CONSIDERED. In arriving at my opinion respecting the
Joint Voting Trust to be established under Joint-VTA-1, I have given no
consideration whatsoever to the merits of the 49 U.S.C. 11323-25 control
application that NSC and CSXC have indicated they intend to file on or
about June 10, 1997. Thus, my opinion should not be interpreted by any
person as an indication that I think the Board will or will not approve
any such application.
ANCILLARY MATTER. By letter dated April 25, 1997, Mr. Michael F.
McBride, representing American Electric Power Service Corporation,
Atlantic City Electric Company, Delmarva Power & Light Company,
Indianapolis Power & Light Company, and The Ohio Valley Coal Company, has
asked that, in arriving at my opinion respecting the Joint Voting Trust
to be established under Joint-VTA-1, I consider certain pleadings
(hereinafter referred to as the ACE-1 and CURE-1 pleadings) that were
filed in STB Finance Docket No. 33388 on or about April 18, 1997. See
Decision No. 4, slip op. at 1-2 (reference to the ACE-1 and CURE-1
pleadings). See also Decision No. 4, slip op. at 2-3 (discussion of the
issues raised in the ACE-1 and CURE-1 pleadings).
For the reasons below, in arriving at the opinion expressed in this
letter, I have given no consideration to the ACE-1 and CURE-1 pleadings.
My opinion is limited to the question whether the Joint Voting Trust to
be established under Joint-VTA-1 will effectively insulate NSC and CSXC,
and their affiliates, from the violation of Subtitle IV of Title 49 and
the policy of the Board that would result if NSC and/or CSXC were to
acquire, without authorization, what would otherwise be a controlling
interest in CRI's other subsidiaries. The ACE-1, and CURE-1 pleadings
are not directed to this question; rather, these pleadings (particularly
the ACE-1 pleading) are directed to the question whether the price NSC
and CSXC have agreed to pay for the CRI shares still outstanding is too
high. This is a matter that the Board has addressed. See Decision No.
4, slip op. at 3 (any arguments respecting the reasonableness of the
purchase price<PAGE>
Richard A. Allen STB Finance Docket No. 33388
May 7, 1997
Page 7
will be addressed by the Board in its review of the merits of the 49
U.S.C. 11323-25 control application).
PUBLIC DOCKET. A copy of this letter will be placed in the public
docket in STB Finance Docket No. 33388.
Sincerely,
/s/ Vernon A. Williams
Vernon A. Williams
Secretary
cc: Dennis G. Lyons
Arnold & Porter
555 Twelfth Street, N.W.
Washington, D.C. 20004-1202
Michael F. McBride
LeBoeuf, Lamb, Greene & MacRae
1875 Connecticut Avenue, N.W.
Washington, D.C. 20009-5728
