<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 4, 1997.
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
CSX CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COMMONWEALTH OF VIRGINIA 4011 62-1051971
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
OF INCORPORATION OR
ORGANIZATION)
ONE JAMES CENTER
901 EAST CARY STREET
RICHMOND, VIRGINIA 23219
(804) 782-1400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MARK G. ARON, ESQ.
EXECUTIVE VICE PRESIDENT-LAW AND PUBLIC AFFAIRS
CSX CORPORATION
ONE JAMES CENTER, 901 EAST CARY STREET
RICHMOND, VIRGINIA 23219
(804) 782-1400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE OF PROCESS)
----------------
COPY TO:
JOSEPH C. CARTER, III, ESQ.
MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.
ONE JAMES CENTER, 901 EAST CARY STREET
RICHMOND, VIRGINIA 23219
(804) 775-1000
(804) 775-1061 (FACSIMILE)
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
----------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE(2)(3)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.05% Debentures Due
2002.................. $ 350,000,000 100% $ 350,000,000
7.25% Debentures Due
2004.................. $ 300,000,000 100% $ 300,000,000
7.45% Debentures Due
2007.................. $ 450,000,000 100% $ 450,000,000
7.90% Debentures Due
2017.................. $ 400,000,000 100% $ 400,000,000
7.95% Debentures Due
2027.................. $ 500,000,000 100% $ 500,000,000
6.95% Debentures Due
2027.................. $ 100,000,000 100% $ 100,000,000
7.25% Debentures Due
2027.................. $ 250,000,000 100% $ 250,000,000
8.30% Debentures Due
2032.................. $ 150,000,000 100% $ 150,000,000
-------------- --------------
Total................ $2,500,000,000 100% $2,500,000,000 $757,576
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Estimated solely for purposes of calculating the registration fee.
(2) Calculated pursuant to Rule 457(f)(2).
(3) Payment of the registration fee due in connection with this Registration
Statement has been partially offset by previous overpayments by the
Registrant in the amount of $52,752.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 4, 1997
PRELIMINARY PROSPECTUS
CSX CORPORATION
OFFERS TO EXCHANGE
ALL OUTSTANDING REGISTERED
7.05% DEBENTURES DUE 2002 FOR 7.05% DEBENTURES DUE 2002
7.25% DEBENTURES DUE 2004 FOR 7.25% DEBENTURES DUE 2004
7.45% DEBENTURES DUE 2007 FOR 7.45% DEBENTURES DUE 2007
7.90% DEBENTURES DUE 2017 FOR 7.90% DEBENTURES DUE 2017
7.95% DEBENTURES DUE 2027 FOR 7.95% DEBENTURES DUE 2027
6.95% DEBENTURES DUE 2027 FOR 6.95% DEBENTURES DUE 2027
7.25% DEBENTURES DUE 2027 FOR 7.25% DEBENTURES DUE 2027
8.30% DEBENTURES DUE 2032 FOR 8.30% DEBENTURES DUE 2032
----------
THE EXCHANGE OFFERS
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1997 UNLESS EXTENDED.
----------
CSX Corporation, a Virginia corporation (the "Company"), hereby offers (the
"Exchange Offers"), upon the terms and subject to the conditions set forth in
this Prospectus (as the same may be amended or supplemented from time to time,
this "Prospectus") and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), to exchange its outstanding:
. 7.05% Debentures Due 2002 (the "Old 2002 Debentures"), of which an
aggregate of $350,000,000 in principal amount is outstanding as of the
date hereof, for an equal principal amount of newly issued 7.05%
Debentures Due 2002 (the "New 2002 Debentures"),
. 7.25% Debentures Due 2004 (the "Old 2004 Debentures"), of which an
aggregate of $300,000,000 in principal amount is outstanding as of the
date hereof, for an equal principal amount of newly issued 7.25%
Debentures Due 2004 (the "New 2004 Debentures"),
. 7.45% Debentures Due 2007 (the "Old 2007 Debentures"), of which an
aggregate of $450,000,000 in principal amount is outstanding as of the
date hereof, for an equal principal amount of newly issued 7.45%
Debentures Due 2007 (the "New 2007 Debentures"),
. 7.90% Debentures Due 2017 (the "Old 2017 Debentures"), of which an
aggregate of $400,000,000 in principal amount is outstanding as of the
date hereof, for an equal principal amount of newly issued 7.90%
Debentures Due 2017 (the "New 2017 Debentures"),
. 7.95% Debentures Due 2027 (the "Old 7.95% 2027 Debentures"), of which an
aggregate of $500,000,000 in principal amount is outstanding as of the
date hereof, for an equal principal amount of newly issued 7.95%
Debentures Due 2027 (the "New 7.95% 2027 Debentures"),
. 6.95% Debentures Due 2027 (the "Old 6.95% 2027 Debentures"), of which an
aggregate of $100,000,000 in principal amount is outstanding as of the
date hereof, for an equal principal amount of newly issued 6.95%
Debentures Due 2027 (the "New 6.95% 2027 Debentures"),
. 7.25% Debentures Due 2027 (the "Old 7.25% 2027 Debentures"), of which an
aggregate of $250,000,000 in principal amount is outstanding as of the
date hereof, for an equal principal amount of newly issued 7.25%
Debentures Due 2027 (the "New 7.25% 2027 Debentures"), and
. 8.30% Debentures Due 2032 (the "Old 2032 Debentures"), of which an
aggregate of $150,000,000 in principal amount is outstanding as of the
date hereof, for an equal principal amount of newly issued 8.30%
Debentures Due 2032 (the "New 2032 Debentures").
The form and terms of the New 2002 Debentures, New 2004 Debentures, New 2007
Debentures, New 2017 Debentures, New 7.95% 2027 Debentures, New 6.95% 2027
Debentures, New 7.25% 2027 Debentures, and New 2032 Debentures (collectively,
the "New Debentures") will be the same as the form and terms of the Old 2002
Debentures, Old 2004
(Continued)
This Prospectus, together with the Letter of Transmittal, is first being sent
on or about , 1997 to all Holders of Old Debentures (as defined below) known
to the Company.
----------
SEE "RISK FACTORS" COMMENCING ON PAGE 10 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY HOLDERS IN DECIDING WHETHER TO TENDER OLD DEBENTURES IN THE
EXCHANGE OFFERS.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1997
<PAGE>
The map below shows the proposed post-Transaction CSXT route system, as
defined herein. See "The Company--Joint CSX/NSC Acquisition of Conrail."
(MAP)
<PAGE>
(Cover page continued)
Debentures, Old 2007 Debentures, Old 2017 Debentures, Old 7.95% 2027
Debentures, Old 6.95% 2027 Debentures, Old 7.25% 2027 Debentures, and Old 2032
Debentures (collectively, the "Old Debentures"), respectively, except that (i)
the New Debentures will be registered under the Securities Act of 1933, as
amended (the "Securities Act"), and hence will not bear legends restricting
the transfer thereof and (ii) the holders of the New Debentures will not be
entitled to certain rights of holders of the Old Debentures under the
Registration Rights Agreement (as defined herein), which rights will terminate
upon the consummation of the Exchange Offers. The New 2002 Debentures, New
2004 Debentures, New 2007 Debentures, New 2017 Debentures, New 7.95% 2027
Debentures, New 6.95% 2027 Debentures, New 7.25% 2027 Debentures, and New 2032
Debentures will evidence the same debt as the Old 2002 Debentures, Old 2004
Debentures, Old 2007 Debentures, Old 2017 Debentures, Old 7.95% 2027
Debentures, Old 6.95% 2027 Debentures, Old 7.25% 2027 Debentures, and Old 2032
Debentures, respectively, and will be entitled to the benefits of an
indenture, dated as of August 1, 1990 and supplemented and amended by a First
Supplemental Indenture dated as of June 15, 1991 and a Second Supplemental
Indenture dated as of May 6, 1997 (as supplemented and amended, the
"Indenture"), governing the Old Debentures and the New Debentures. The
Indenture provides for the issuance of both the New Debentures and the Old
Debentures. The New 2002 Debentures and the Old 2002 Debentures are sometimes
referred to herein collectively as the "2002 Debentures"; the New 2004
Debentures and the Old 2004 Debentures are sometimes referred to herein
collectively as the "2004 Debentures"; the New 2007 Debentures and the Old
2007 Debentures are sometimes referred to herein collectively as the "2007
Debentures"; the New 2017 Debentures and the Old 2017 Debentures are sometimes
referred to herein collectively as the "2017 Debentures"; the New 7.95% 2027
Debentures and the Old 7.95% 2027 Debentures are sometimes referred to herein
collectively as the "7.95% 2027 Debentures"; the New 6.95% 2027 Debentures and
the Old 6.95% 2027 Debentures are sometimes referred to herein collectively as
the "6.95% 2027 Debentures"; the New 7.25% 2027 Debentures and the Old 7.25%
2027 Debentures are sometimes referred to herein collectively as the "7.25%
2027 Debentures"; the Old 2032 Debentures and the New 2032 Debentures are
sometimes referred to herein collectively as the "2032 Debentures"; and the
2002 Debentures, the 2004 Debentures, the 2007 Debentures, the 2017
Debentures, the 7.95% 2027 Debentures, the 6.95% 2027 Debentures, the 7.25%
2027 Debentures, and the 2032 Debentures are sometimes referred to herein
collectively as the "Debentures."
Interest on each series of the Debentures will be paid semiannually on May 1
and November 1 of each year, commencing on November 1, 1997. The 2032
Debentures are not redeemable prior to May 1, 2007. On or after that date, the
2032 Debentures will be redeemable at the option of the Company, as a whole or
in part, at any time on at least 30 days' notice, at the respective prices
indicated herein. None of the other series of Debentures are redeemable at the
Company's option prior to maturity. Each holder of the 6.95% 2027 Debentures
may require the Company to repurchase all or a portion of such series owned by
such holder on May 1, 2002 at a purchase price equal to 100% of the principal
amount thereof plus accrued interest thereon. Each holder of the 7.25% 2027
Debentures may require the Company to repurchase all or a portion of such
series owned by such holder on May 1, 2005 at a purchase price equal to 100%
of the principal amount thereof. None of the series of Debentures is subject
to any sinking fund. See "Description of New Debentures."
Prior to the Exchange Offers, there has been no public market for the Old
Debentures. The Company does not intend to list the New Debentures on any
securities exchange or to seek approval for quotation through any automated
quotation system. There can be no assurance that an active market for the New
Debentures will develop. To the extent that a market for the New Debentures
does develop, the market value of the New Debentures will depend on market
conditions (such as yields on alternative investments), general economic
conditions, the Company's financial condition and other conditions. Such
conditions might cause the New Debentures, to the extent that they are
actively traded, to trade at a significant discount from face value.
Except as discussed below, the New Debentures will be available only in
book-entry form. The Company expects that the New Debentures issued pursuant
to the Exchange Offers will be issued in the form of one or more fully
registered global debentures that will be deposited with, or on behalf of, The
Depository Trust Company ("DTC") and registered in its name or in the name of
Cede & Co., as its nominee. Beneficial interests
i
<PAGE>
in the global debentures representing the New Debentures will be shown on, and
transfers thereof will be effected only through, records maintained by DTC and
its participants. After the initial issuance of such global debentures, New
Debentures in certificated form will be issued in exchange for the global
debentures only in accordance with the terms and conditions set forth in the
Indenture. See "Description of the New Debentures--Book-Entry, Delivery and
Form" and "Description of the New Debentures--Certificated Debentures."
The Company will accept for exchange any and all Old Debentures which are
properly tendered in the Exchange Offers prior to 5:00 p.m., New York City
time, on , 1997 (if and as extended, the "Expiration Date"). Tenders of Old
Debentures may be withdrawn at any time prior to 5:00 p.m., New York City
time, on the Expiration Date. The Exchange Offers are not conditioned upon any
minimum principal amount of Old Debentures being tendered for exchange. Old
Debentures may be tendered only in integral multiples of $1,000. The Company
may terminate the Exchange Offers in certain circumstances described herein.
See "The Exchange Offers." In the event the Company terminates any or all of
the Exchange Offers and does not accept for exchange any of the Old 2002
Debentures, Old 2004 Debentures, Old 2007 Debentures, Old 2017 Debentures, Old
7.95% 2027 Debentures, Old 6.95% 2027 Debentures, Old 7.25% 2027 Debentures,
or Old 2032 Debentures, as the case may be, the Company will promptly return
all previously tendered Old 2002 Debentures, Old 2004 Debentures, Old 2007
Debentures, Old 2017 Debentures, Old 7.95% 2027 Debentures, Old 6.95% 2027
Debentures, Old 7.25% 2027 Debentures, and Old 2032 Debentures, as the case
may be, to the holders thereof.
Based on a previous interpretation by the staff of the Securities and
Exchange Commission (the "Commission") set forth in no-action letters to third
parties, the Company believes that the New Debentures issued pursuant to the
Exchange Offers in exchange for Old Debentures may be offered for resale,
resold, and otherwise transferred by a holder thereof (other than (i) a
broker-dealer who purchases such New Debentures directly from the Company to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act or (ii) a person that is an affiliate of the Company (within
the meaning of Rule 405 under the Securities Act)) without compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided that the holder is acquiring the New Debentures in such holder's
ordinary course of business and is not participating, and has no arrangement
or understanding with any person to participate, in the distribution of the
New Debentures. Holders of Old Debentures wishing to accept any or all of the
Exchange Offers must represent to the Company that such conditions have been
met.
Each broker-dealer that receives New Debentures for its own account pursuant
to any or all of the Exchange Offers must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with
any resale of such New Debentures. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter," within the meaning of the
Securities Act, in connection with the resale of New Debentures received in
exchange for Old Debentures where such Old Debentures were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 180 days after the
Expiration Date, it will make this Prospectus available to any broker-dealer
for use in connection with any such resale. See "Plan of Distribution."
The Company believes that none of the registered holders of the Old
Debentures is an affiliate (as such term is defined in Rule 405 under the
Securities Act) of the Company. The Company has not entered into any
arrangement or understanding with any person to distribute the New Debentures
to be received in the Exchange Offers, and to the best of the Company's
information and belief, each person participating in any or all of the
Exchange Offers is acquiring the New Debentures in the ordinary course of
business and has no arrangement or understanding with any person to
participate in the distribution of the New Debentures to be received in any or
all of the Exchange Offers.
The Company will not receive any proceeds from the Exchange Offers. The
Company has agreed to bear the expenses of the Exchange Offers. No underwriter
is being used in connection with the Exchange Offers.
ii
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information may
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549, and at the Commission's Regional Offices in New York (Seven World
Trade Center, 13th Floor, New York, New York 10048), and Chicago (Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661). Copies
of these materials may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Commission maintains a site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Reports, proxy statements and other information concerning the
Company may also be inspected at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005, where the Company's common stock is
listed.
This Prospectus constitutes a part of a Registration Statement on Form S-4,
as amended (the "Registration Statement"), filed by the Company with the
Commission under the Securities Act. This Prospectus omits certain of the
information contained in the Registration Statement in accordance with the
rules and regulations of the Commission. Reference is hereby made to the
Registration Statement and related exhibits for further information with
respect to the Company and the Debentures. Statements contained herein
concerning the provisions of any documents are not necessarily complete and,
in each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
27, 1996, the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 28, 1997 and the Company's Current Report on Form 8-K dated May
23, 1997, have been filed by the Company with the Commission and are
incorporated herein by reference. In addition, there is incorporated herein by
reference the CSX/NSC Agreement (as defined herein), which has been filed by
the Company with the Commission as an exhibit to Amendment No. 24 to the
Company's Tender Offer Statement on Schedule 14D-1, filed on April 11, 1997.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this
Prospectus and prior to the termination of any offering of securities made
hereby shall be deemed to be incorporated by reference into this Prospectus
and to be a part of this Prospectus from the respective dates of filing of
such documents. Any statement contained herein or in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement or document so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute part of this Prospectus. As used herein, the terms "Prospectus" and
"herein" mean this Prospectus, including the documents incorporated or deemed
incorporated by reference, as the same may be amended, supplemented or
otherwise modified from time to time. Statements contained in this Prospectus
as to the contents of any contract or other document referred to herein do not
purport to be complete and are qualified in all respects by reference to all
of the provisions of such contract or other document.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
of any and all of the documents described above that are incorporated by
reference herein other than exhibits to such documents which are not
specifically incorporated by reference in such documents. Written or telephone
requests should be directed to: Alan A. Rudnick, Vice President--General
2
<PAGE>
Counsel and Corporate Secretary, CSX Corporation, One James Center, 901 East
Cary Street, Richmond, Virginia 23219, telephone number (804) 782-1400.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE
MADE BY , 1997.
3
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus or incorporated herein by reference.
THE EXCHANGE
THE EXCHANGE OFFERS............. The Company is offering to exchange $1,000
principal amount of New 2002 Debentures, New
2004 Debentures, New 2007 Debentures, New
2017 Debentures, New 7.95% 2027 Debentures,
New 6.95% 2027 Debentures, New 7.25% 2027 De-
bentures, and New 2032 Debentures, respec-
tively, for each $1,000 principal amount of
Old 2002 Debentures, Old 2004 Debentures, Old
2007 Debentures, Old 2017 Debentures, Old
7.95% 2027 Debentures, Old 6.95% 2027 Deben-
tures, Old 7.25% 2027 Debentures, and Old
2032 Debentures, respectively, that are prop-
erly tendered and accepted. The Company will
issue the New 2002 Debentures, New 2004 De-
bentures, New 2007 Debentures, New 2017 De-
bentures, New 7.95% 2027 Debentures, New
6.95% 2027 Debentures, New 7.25% 2027 Deben-
tures, and New 2032 Debentures on or promptly
after the Expiration Date. There is
$350,000,000 aggregate principal amount of
the Old 2002 Debentures outstanding,
$300,000,000 aggregate principal amount of
the Old 2004 Debentures outstanding,
$450,000,000 aggregate principal amount of
the Old 2007 Debentures outstanding,
$400,000,000 aggregate principal amount of
the Old 2017 Debentures outstanding,
$500,000,000 aggregate principal amount of
the Old 7.95% 2027 Debentures outstanding,
$100,000,000 aggregate principal amount of
the Old 6.95% 2027 Debentures outstanding,
$250,000,000 aggregate principal amount of
the Old 7.25% 2027 Debentures outstanding,
and $150,000,000 aggregate principal amount
of the Old 2032 Debentures outstanding. See
"The Exchange Offers."
Based on an interpretation of the staff of
the Commission set forth in no-action letters
issued to third parties, the Company believes
that New Debentures issued pursuant to the
Exchange Offers in exchange for Old Deben-
tures may be offered for resale, resold and
otherwise transferred by any holder thereof
(other than (i) a broker-dealer who purchases
such New Debentures directly from the Company
to resell pursuant to Rule 144A or any other
available exemption under the Securities Act
or (ii) any such holder which is an "affili-
ate" of the Company within the meaning of
Rule 405 under the Securities Act) without
compliance with the registration and prospec-
tus delivery provisions of the Securities
Act, provided that such New Debentures are
acquired in the ordinary course of such hold-
er's business and that such holder has no ar-
rangement or
4
<PAGE>
understanding with any person to participate
in the distribution of such New Debentures.
In the event that the Company's belief is in-
accurate, holders of New Debentures who
transfer New Debentures in violation of the
prospectus delivery provisions of the Securi-
ties Act and without an exemption from regis-
tration thereunder may incur liability there-
under. The Company does not assume, or indem-
nify holders against, such liability. The Ex-
change Offers are not being made to, nor will
the Company accept surrenders for exchange
from, holders of Old Debentures (i) in any
jurisdiction in which the Exchange Offers or
the acceptance thereof would not be in com-
pliance with the securities or blue sky laws
of such jurisdiction or (ii) if any holder is
engaged or intends to engage in a distribu-
tion of New Debentures. Each broker-dealer
that receives New Debentures for its own ac-
count in exchange for Old Debentures, where
such Old Debentures were acquired by such
broker-dealer as a result of market-making
activities or other trading activities, must
acknowledge that it will deliver a prospectus
meeting the requirements of the Securities
Act in connection with any resale of such New
Debentures. See "Plan of Distribution."
EXPIRATION DATE................. The Exchange Offers will expire at 5:00 p.m.,
New York City time, on , 1997, unless any
or all Exchange Offers are extended, in which
case the term "Expiration Date" shall mean,
with respect to each Exchange Offer, the lat-
est date and time to which such Exchange Of-
fer is extended. The Company will accept for
exchange any and all Old Debentures which are
properly tendered in the Exchange Offers
prior to 5:00 p.m., New York City time, on
the Expiration Date. The New Debentures is-
sued pursuant to the Exchange Offers will be
delivered on or promptly after the Expiration
Date.
CONDITIONS TO THE EXCHANGE
OFFERS......................... The Exchange Offers are not conditioned on
any minimum principal amount of Old Deben-
tures being tendered for exchange. The Com-
pany may terminate the Exchange Offers if it
determines that its ability to proceed with
any or all of the Exchange Offers could be
materially impaired due to any legal or gov-
ernmental action, any new law, statute, rule
or regulation, any interpretation by the
staff of the Commission of any existing law,
statute, rule or regulation or the failure to
obtain any necessary approvals of governmen-
tal agencies or holders of the Old Deben-
tures. The Company does not expect any of the
foregoing conditions to occur, although there
can be no assurances any such conditions will
not occur. The Exchange Offers are subject to
certain other customary conditions, each of
which may be waived by the Company. See "The
Exchange Offers--Certain Conditions to the
Exchange Offers."
5
<PAGE>
PROCEDURES FOR TENDERING OLD
DEBENTURES..................... Each holder of Old Debentures wishing to ac-
cept any or all of the Exchange Offers must
complete, sign and date the Letter of Trans-
mittal, or a facsimile thereof, in accordance
with the instructions contained herein and
therein, and mail or otherwise deliver such
Letter of Transmittal, or such facsimile, to-
gether with such Old Debentures and any other
required documentation to The Chase Manhattan
Bank, as Exchange Agent, at the address set
forth herein. By executing the Letter of
Transmittal or by transmitting an Agent's
Message (as defined below) in lieu thereof,
each holder will represent to the Company
that, among other things, the New Debentures
acquired pursuant to the Exchange Offers are
being obtained in the ordinary course of
business of the person receiving such New De-
bentures, such person does not have an ar-
rangement or understanding with any person to
participate in the distribution of such New
Debentures and that neither the holder nor
any such other person is an "affiliate," as
defined in Rule 405 under the Securities Act,
of the Company. Certain brokers, dealers,
commercial banks, trust companies and other
nominees may also effect tenders by book-en-
try transfer, including an Agent's Message in
lieu of a Letter of Transmittal.
BENEFICIAL OWNERS............... Any beneficial owner whose Old Debentures are
registered in the name of a broker, dealer,
commercial bank, trust company or other nomi-
nee and who wishes to tender such Old Deben-
tures in any or all of the Exchange Offers
should contact such registered holder
promptly and instruct such registered holder
to tender on such beneficial owner's behalf.
If such beneficial owner wishes to tender on
such owner's own behalf, such owner must,
prior to completing and executing the Letter
of Transmittal and delivering such owner's
Old Debentures, either make appropriate ar-
rangements to register ownership of the Old
Debentures in such owner's name or obtain a
properly completed bond power from the regis-
tered holder. The transfer of registered own-
ership may take considerable time and may not
be able to be completed prior to the Expira-
tion Date.
GUARANTEED DELIVERY
PROCEDURES..................... Holders of Old Debentures who wish to tender
their Old Debentures and who cannot deliver
their Old Debentures or the Letter of Trans-
mittal to The Chase Manhattan Bank, as Ex-
change Agent, prior to the Expiration Date,
or the procedures for book-entry transfer
cannot be completed on a timely basis, must
tender their Old Debentures according to the
guaranteed delivery procedures set forth in
"The Exchange Offers--Guaranteed Delivery
Procedures."
WITHDRAWAL RIGHTS............... Tenders of Old Debentures may be withdrawn at
any time prior to 5:00 p.m., New York City
time, on the Expiration Date.
6
<PAGE>
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES................... For a discussion of certain federal income
tax consequences relating to the exchange of
New Debentures for Old Debentures, see "Cer-
tain Federal Income Tax Consequences of Par-
ticipation in the Exchange Offers."
EXCHANGE AGENT.................. The Chase Manhattan Bank is the Exchange
Agent. Its telephone number is (212) 946-
3068. The address of the Exchange Agent is
set forth in "The Exchange Offers--Exchange
Agent." The Chase Manhattan Bank also serves
as trustee under the Indenture.
SHELF REGISTRATION STATEMENT.... Under certain circumstances described in the
Registration Rights Agreement (as defined be-
low), certain holders of Debentures (includ-
ing holders who are not permitted to partici-
pate in the Exchange Offers or who may not
freely resell New Debentures received in the
Exchange Offers) may require the Company to
file, and use its best efforts to cause to
become effective, a shelf registration state-
ment (the "Shelf Registration Statement") un-
der the Securities Act, which would cover re-
sales of Debentures by such holders. See "De-
scription of the New Debentures--Registration
Rights Agreement."
SUMMARY DESCRIPTION OF THE NEW DEBENTURES
The terms of the New Debentures and the Old Debentures are identical in all
material respects, except for certain transfer restrictions and registration
rights relating to the Old Debentures. Whenever defined terms of the Indenture
not otherwise defined herein are referred to, such defined terms are
incorporated herein by reference. In the event that (i) by November 2, 1997 (or
November 4, 1997 with respect to the Old 2032 Debentures), neither the
Registration Statement of which this Prospectus is a part (sometimes referred
to herein as the "Exchange Offer Registration Statement") is declared effective
nor (if the Exchange Offers are not permitted as described above) the Shelf
Registration Statement is filed with the Commission, or (ii) by December 2,
1997 (or December 4, 1997 with respect to the Old 2032 Debentures) , one or
more of the Exchange Offers with respect to any series of Debentures is not
consummated or the Shelf Registration Statement is not declared effective with
respect thereto (each such event referred to in clauses (i) or (ii), a
"Registration Default"), interest will accrue on the applicable Old Debentures
(in addition to stated interest on such Old Debentures) from and including the
next day following each such Registration Default. In each case such additional
interest (the "Special Interest") will be payable in cash semiannually in
arrears each May 1 and November 1, at a rate per annum equal to 0.25% of the
principal amount of such Old Debentures for each such Registration Default. The
aggregate amount of Special Interest payable pursuant to the above provisions
will in no event exceed 0.25% per annum of the principal amount of such Old
Debentures. Upon (a) the effectiveness of the Exchange Offer Registration
Statement or the filing of the Shelf Registration Statement after the date set
forth in clause (i) above or (b) the consummation of the Exchange Offer for
such Old Debentures or the effectiveness of a Shelf Registration Statement, as
the case may be, after the date set forth in clause (ii) above, the Special
Interest payable on such Old Debentures as a result of the applicable
Registration Default will cease to accrue.
The New Debentures will bear interest from the most recent date to which
interest has been paid on the Old Debentures or, if no interest has been paid
on the Old Debentures, from May 1, 1997. Accordingly, registered
7
<PAGE>
holders of New Debentures on the relevant record date for the first interest
payment date following the consummation of the Exchange Offers will receive
interest accruing from the most recent date to which interest has been paid on
the Old Debentures or, if no interest has been paid, from May 1, 1997. Old
Debentures accepted for exchange will cease to accrue interest from and after
the date of consummation of the Exchange Offers. Holders whose Old Debentures
are accepted for exchange will not receive any payment in respect of interest
on such Old Debentures otherwise payable on any interest payment date, the
record date for which occurs on or after consummation of the Exchange Offers.
THE NEW DEBENTURES
NEW DEBENTURES OFFERED.......... $350,000,000 principal amount of 7.05% Deben-
tures Due 2002, $300,000,000 principal amount
of 7.25% Debentures Due 2004, $450,000,000
principal amount of 7.45% Debentures Due
2007, $400,000,000 principal amount of 7.90%
Debentures Due 2017, $500,000,000 principal
amount of 7.95% Debentures Due 2027,
$100,000,000 principal amount of 6.95% Deben-
tures Due 2027, $250,000,000 principal amount
of 7.25% Debentures Due 2027 and $150,000,000
principal amount of 8.30% Debentures Due
2032.
MATURITY........................ The New 2002 Debentures will mature on May 1,
2002, the New 2004 Debentures will mature on
May 1, 2004, the New 2007 Debentures will ma-
ture on May 1, 2007, the New 2017 Debentures
will mature on May 1, 2017, the New 7.95%
2027 Debentures will mature on May 1, 2027,
the New 6.95% 2027 Debentures will mature on
May 1, 2027, the New 7.25% 2027 Debentures
will mature on May 1, 2027, and the New 2032
Debentures will mature on May 1, 2032.
INTEREST PAYMENT DATES.......... Interest on the New Debentures is payable
semiannually on each May 1 and November 1,
commencing November 1, 1997.
REDEMPTION...................... The New 2032 Debentures will not be redeem-
able prior to May 1, 2007. On and after that
date, the New 2032 Debentures will be redeem-
able at the option of the Company, as a whole
or in part, at any time on at least 30 days'
notice, at the respective prices indicated
herein. None of the other series of New De-
bentures will be redeemable prior to maturi-
ty. See "Description of the New Debentures--
Redemption."
PURCHASE AT OPTION OF HOLDER.... Each holder of the New 6.95% 2027 Debentures
may require the Company to repurchase all or
a portion of such series owned by such holder
on May 1, 2002 at a purchase price equal to
100% of the principal amount thereof plus ac-
crued interest. Each holder of the New 7.25%
2027 Debentures may require the Company to
repurchase all or a portion of such series
owned by such holder on May 1, 2005 at a pur-
chase
8
<PAGE>
price equal to 100% of the principal amount
thereof plus accrued interest. No such repur-
chase right will be available to holders of
the other series of New Debentures. See "De-
scription of New Debentures--Purchase at Op-
tion of Holder."
RANKING......................... The New Debentures will be senior securities
of the Company, ranking pari passu with all
other unsubordinated and unsecured indebted-
ness of the Company.
9
<PAGE>
RISK FACTORS
Holders of Old Debentures should carefully review the information contained
elsewhere in this Prospectus and should particularly consider the following
matters.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD DEBENTURES
The Old Debentures have not been registered under the Securities Act or any
state securities laws and therefore may not be offered, sold or otherwise
transferred except in compliance with the registration requirements of the
Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case
in compliance with certain other conditions and restrictions. Old Debentures
which remain outstanding after consummation of the Exchange Offers will
continue to bear a legend reflecting such restrictions on transfer. In
addition, upon consummation of the Exchange Offers, holders of Old Debentures
which remain outstanding will not be entitled to any rights to have such Old
Debentures registered under the Securities Act or to any similar rights under
the Registration Rights Agreement (subject to certain limited exceptions as
described herein). See "Description of the New Debentures--Registration Rights
Agreement." The Company does not intend to register under the Securities Act
any Old Debentures which remain outstanding after consummation of the Exchange
Offers (subject to such limited exceptions, if applicable). To the extent that
Old Debentures are tendered and accepted in the Exchange Offers, a holder's
ability to sell untendered Old Debentures could be adversely affected. See
"The Exchange Offers--Consequences of Failure to Exchange Old Debentures."
ABSENCE OF PUBLIC MARKET
The Old Debentures were issued to, and the Company believes are currently
owned by, a relatively small number of beneficial owners. The Old Debentures
have not been registered under the Securities Act and will be subject to
restrictions on transferability to the extent that they are not exchanged for
the New Debentures. Although the New Debentures will generally be permitted to
be resold or otherwise transferred by the holders (who are not affiliates of
the Company) without compliance with the registration requirements under the
Securities Act, they will constitute a new issue of securities with no
established trading market. Any market-making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offers. Accordingly, no assurance can be given that an
active public or other market will develop for the New Debentures or the Old
Debentures or as to the liquidity of or the trading market for the New
Debentures or the Old Debentures. If an active public market does not develop,
the market price and liquidity of the New Debentures may be adversely
affected.
If a public trading market for the New Debentures develops, future trading
prices of such securities will depend on many factors, including, among other
things, prevailing interest rates, results of operations and the market for
similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of the
Company, the New Debentures may trade at a discount.
Notwithstanding the registration of the New Debentures in the Exchange
Offers, holders who are "affiliates" (as defined under Rule 405 of the
Securities Act) of the Company may publicly offer for sale or resell the New
Debentures only in compliance with the provisions of Rule 144 under the
Securities Act.
Each broker-dealer that receives New Debentures for its own account in
exchange for Old Debentures, where such Old Debentures were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Debentures. See "Plan of Distribution."
EXCHANGE OFFER PROCEDURES
Unless tenders are made by book-entry transfer, issuance of the New
Debentures in exchange for Old Debentures pursuant to the Exchange Offers will
be made only after timely receipt by the Exchange Agent of
10
<PAGE>
such Old Debentures, a properly completed and duly executed Letter of
Transmittal and all other required documents. Therefore, holders of the Old
Debentures desiring to tender such Old Debentures in exchange for New
Debentures should allow sufficient time to ensure timely delivery. Neither the
Exchange Agent nor the Company is under any duty to give notification of
defects or irregularities with respect to the tenders of Old Debentures for
exchange.
THE COMPANY
The Company is an international transportation company with operations in
the following business units: CSX Transportation, Inc. ("CSXT"), Sea-Land
Service, Inc. ("Sea-Land"), American Commercial Lines, Inc. ("ACL"), CSX
Intermodal, Inc. ("CSXI"), Customized Transportation, Inc. ("CTI") and non-
transportation businesses. In 1996, the Company generated approximately $10.5
billion of operating revenue and $1.5 billion of operating income.
CSXT is an eastern Class I freight railroad, providing rail freight
transportation and distribution services over 18,504 route miles of track in
20 states in the East, Midwest and South of the United States and in the
Province of Ontario, Canada. In 1996, CSXT accounted for 47% of the total
operating revenue and 74% of the operating income of CSX.
Sea-Land is a worldwide leader in container-shipping transportation and
logistics services. Sea-Land operates 28 preferential and exclusive marine
terminal facilities across its global network. In addition, Sea-Land operates
a fleet of 99 container ships and approximately 208,000 containers in United
States and foreign trade and serves 120 ports. In 1996, Sea-Land accounted for
38% of the total operating revenue and 21% of the operating income of CSX.
ACL is the nation's leader in barge transportation, operating 137 towboats
and more than 3,700 barges on both United States and South American waterways.
In 1996, ACL accounted for 6% of the total operating revenue and 7% of the
operating income of CSX.
CSXI provides transcontinental intermodal transportation services and
operates a network of dedicated intermodal facilities across North America. In
1996, CSXI contributed 6% of the total operating revenue and 2% of the
operating income of CSX.
CTI is a provider of contract logistics, distribution, warehousing, assembly
and just-in-time delivery services. In 1996, CTI provided 3% of the total
operating revenue and 1% of the operating income of CSX.
Non-Transportation: Resort holdings include the Mobil Five-Star and AAA
Five-Diamond rated hotel, The Greenbrier in White Sulphur Springs, West
Virginia, and the Grand Teton Lodge Company in Moran, Wyoming. CSX Real
Property, Inc. is responsible for sales, leasing and development of CSX-owned
properties. CSX holds a majority interest in Yukon Pacific Corporation, which
is promoting construction of the Trans-Alaska Gas System to transport Alaska's
North Slope natural gas to Valdez for export to Asian markets.
The Company was incorporated in Virginia in 1978. The Company's principal
executive offices are located at One James Center, 901 East Cary Street,
Richmond, Virginia 23219 (telephone 804-782-1400). Unless the context
indicates otherwise, references herein to the Company or CSX are to CSX
Corporation and its consolidated subsidiaries.
JOINT CSX/NSC ACQUISITION OF CONRAIL
CSX/NSC Agreement
On April 8, 1997, the Company and Norfolk Southern Corporation, a Virginia
corporation ("NSC"), entered into an agreement (the "CSX/NSC Agreement")
providing for their joint acquisition of Conrail Inc., a
11
<PAGE>
Pennsylvania corporation ("Conrail"), and the division of Conrail's routes and
other assets. Conrail is a holding company of which the principal subsidiary
is Consolidated Rail Corporation, a Class I freight railroad that operates
approximately 10,500 route miles in the Northeast and Midwest of the United
States and the Province of Quebec, Canada, and which possesses superior access
to certain major northeast markets, including the New York and Boston
metropolitan areas. NSC owns an eastern Class I freight railroad, Norfolk
Southern Railway Company.
Under the CSX/NSC Agreement, the Company and NSC acquired all outstanding
shares of Conrail not already owned by them (the "Shares") for $115 in cash
per Share through a jointly owned acquisition entity (the "Acquisition
Entity"). Each of the Company and NSC possesses 50% of the voting and
management rights of the Acquisition Entity, and non-voting equity is
apportioned between the parties to achieve overall economic allocations of 42%
for CSX and 58% for NSC (their respective "Percentages"). Following approval
by the Surface Transportation Board (the "STB") as described below, Conrail's
assets will be segregated within Conrail, and the Company and NSC will each
benefit from the operation of a specified portion of the Conrail routes and
other assets through the use of various operating arrangements, and certain
Conrail assets will be operated for the joint benefit of the Company and NSC.
Acquisition of most of the Conrail Shares was effected under a tender offer,
initiated by the Company in December 1996 and amended in April 1997 to include
NSC as a co-bidder (the "Joint Tender Offer"), which closed in May 1997.
Shortly thereafter, Conrail was merged with a wholly-owned subsidiary of the
Acquisition Entity and all remaining Conrail Shares not tendered were
converted into the right to receive $115 in cash per share. The aggregate cost
of the Joint Tender Offer, the merger and the shares of Conrail already
acquired by the Company and NSC was approximately $9.9 billion. Pursuant to
the CSX/NSC Agreement, the Company has paid 42%, or approximately $4.2
billion, and NSC has paid 58%, or approximately $5.7 billion, of such cost.
These totals include approximately $2.0 billion spent by the Company and $1.0
billion spent by NSC to acquire approximately 30%, in the aggregate, of
Conrail's shares prior to the Joint Tender Offer. Including its capitalized
transaction costs, the Company's aggregate purchase price was approximately
$4.3 billion.
Conrail Shares purchased in the Joint Tender Offer and the merger, together
with all Conrail shares previously purchased by the Company and NSC, have been
deposited into a voting trust pending STB approval of the joint acquisition,
control and division of Conrail by the Company and NSC. Furthermore, by
entering into the CSX/NSC Agreement, the Company is obligated under the
Pennsylvania anti-takeover laws to purchase any Conrail Shares "put" to the
Company in accordance with the procedures of such laws for at least $115 per
share in cash.
Joint CSX/NSC STB Application
The exercise of control over Conrail by the Company and NSC remains subject
to a number of conditions and approvals, including approval by the STB, which
has the authority to modify contract terms and impose additional conditions,
including with respect to divestitures, grants of trackage rights and other
terms of continuing operations. The Company and NSC intend to file a joint
application with the STB in June 1997 for control and division of Conrail and
for such other matters as may be required to be approved by the STB. The joint
STB application will address traffic flows, operations and related matters;
will outline the capital investments each company plans to make in new
connections and facilities and to increase capacity on critical routes; and
will detail operating savings and other public benefits resulting from the
transaction. The application also will contain certain historical and pro
forma financial information required by the STB. The STB has issued a
scheduling order that provides for issuance of a final STB decision no later
than 350 days after the Company and NSC file their joint application. No
assurance can be given with respect to the receipt of STB approval or the
modifications or conditions that may be imposed in connection therewith.
Proposed Division of Conrail Routes
Until the date the Company and NSC are permitted by the STB to assume
control over Conrail (the "Control Date"), Conrail will continue to be managed
by its current Board of Directors and management. After
12
<PAGE>
the Control Date, Conrail will segregate its assets primarily into two groups
to facilitate their separate operation pursuant to leasing, operating,
partnership or other similar arrangements. The remaining assets and
liabilities of Conrail, including joint facilities, generally will either be
shared or allocated ratably between the Company and NSC according to their
Percentages. In arriving at the proposed division of Conrail and their
Percentages, the Company and NSC negotiated with a view toward producing the
best fits with their existing systems and optimizing service to their
respective customers. The maps reprinted on the front inside cover and back
inside cover of this Prospectus show, respectively, the proposed post-
Transaction (as defined below) CSXT route system and the approximate division
of Conrail's routes as contemplated by the CSX/NSC Agreement. These maps are
included for illustrative purposes only and are qualified in their entirety by
reference to the CSX/NSC Agreement. See "Incorporation of Certain Documents by
Reference."
The acquisition by the Company of the Conrail Shares and the right to use
the assets allocated to or shared by the Company pursuant to the CSX/NSC
Agreement and the liabilities allocated to or shared by it pursuant to the
CSX/NSC Agreement will be referred to in this Prospectus as the "Transaction."
Many of the terms of the Transaction will be detailed in further definitive
documentation that is currently being negotiated between CSX and NSC (the
"Definitive Documentation").
For additional information regarding the Transaction and the CSX/NSC
Agreement, reference is made to the Company's Tender Offer Statement on
Schedule 14D-1, together with exhibits thereto, initially filed with the
Commission on December 6, 1996, as amended.
Financing Arrangements
The Company spent approximately $2.2 billion to purchase its portion of the
outstanding Shares pursuant to the Joint Tender Offer and the merger. The
Company previously paid approximately $2 billion to acquire about 20% of
Conrail's shares in November 1996. At that time, the Company arranged a five-
year $4.8 billion bank credit facility (the "Credit Agreement") to finance an
acquisition of Conrail and to meet general working capital needs. The Company
used the majority of the net proceeds from the sale of the Old Debentures to
finance the balance of its contribution under the Joint Tender Offer and the
merger. On May 6, 1997, in connection with the consummation of the sale of Old
Debentures, the Company reduced by $2.3 billion the lenders' commitments under
the Credit Agreement. See "Capitalization."
Such financings have resulted in the Company's having outstanding a
combination of long-term debt with staggered maturities and commercial paper.
The Company expects its long-term debt levels (including the Company's portion
of Conrail debt) to peak in 1998 at approximately $6.8 billion, with related
interest charges (including interest payments on the Company's portion of
Conrail debt) to peak at approximately $520.0 million. While the Definitive
Documentation is not complete, the Company and NSC contemplate that payments
to Conrail under operating or similar arrangements and through capital
contributions to the Acquisition Entity will be sufficient to pay obligations
on Conrail's outstanding debt instruments in accordance with their terms, or
to refinance such obligations, as appropriate. The Company and NSC have agreed
in the CSX/NSC Agreement that such debt will be shared ratably according to
their Percentages.
BENEFITS OF THE TRANSACTION
Broadest Geographic Network in Eastern United States
The Transaction will significantly enhance the Company's position as a
leading global transportation company. The Company will remain the largest
railroad in the eastern United States and become the third largest railroad in
the nation, measured in terms of route miles and ton-miles. The Company, as a
result of the Transaction, will be adding approximately 3,500 route miles, or
19%, to its rail network, and sharing with NSC approximately 1,200 additional
route miles. The Company will have approximately 22,000 route miles in 22
states, the District of Columbia and the Provinces of Ontario and Quebec,
Canada, and will provide direct access to virtually every major metropolitan
area east of the Mississippi River and to eleven of the largest east coast and
gulf ports.
13
<PAGE>
Enhanced Operating Efficiencies and Revenue Growth
Management expects the integration of Conrail operations resulting from the
Transaction to add approximately $1.6 billion, or 15%, to the Company's annual
revenue beginning in the first twelve months following the Control Date.
Management believes that the Transaction will also result in growth of the
Company's rail revenue base through expansion of single-line service and the
Company's ability to compete more effectively on certain routes along which
large quantities of goods are now transported by truck. Single-line service is
preferred by shippers over joint-line service because of lower transaction
costs, reduced delays, less damage from interchange operations and single-
carrier accountability. The addition of Conrail lines to the Company's rail
network also will improve operational efficiency through better asset
utilization. Optimization of train sizes, increased length of haul, improved
backhauls, shorter routes to many destinations and fewer empty movements are
all expected to produce cost reductions for the combined rail network. Other
significant savings will be achieved through the realization of economies of
scale, rationalization of administrative and other overhead expenses and
consolidation of duplicative facilities.
Financial Effects
The Company expects that the benefits from the Transaction will begin to
build from the Control Date and should be largely realized within a three-year
period thereafter. Therefore, for the purposes of the following discussion,
Year 1, Year 2 and Year 3 correspond to the three consecutive 12-month periods
following the Control Date. Based on joint efforts of the Company and Conrail
to identify potential cost savings, management currently estimates that the
Transaction will lead to quantifiable pretax benefits from increased traffic
and cost efficiencies of approximately $75 million, $170 million and $240
million annually in Years 1, 2 and 3, respectively, compared to the separate
operation of the Company and its share of Conrail. These benefits include
estimated incremental operating income of $25 million, $54 million and $75
million expected through increased traffic in Years 1, 2 and 3, respectively.
The remaining pretax benefits will be in the form of operating cost savings,
with $50 million, $116 million and $165 million expected to be realized in
Years 1, 2 and 3, respectively. Further, management expects a reduction in the
requirement for annual capital expenditures of approximately $12 million, $28
million and $40 million in Years 1, 2 and 3, respectively. Management
estimates that the Company will, in Years 1 and 2, incur one-time transition
capital expenditures in connection with the integration of operations. Those
are expected to be $310 million in Year 1 and $178 million in Year 2. The
Company is continuing to evaluate the foregoing estimates, some or all of
which may be refined in the joint application to be filed with the STB.
The overall purchase price, including transaction costs, paid by the Company
is expected to exceed the historical net book value of the Company's share of
the underlying Conrail assets by approximately $2.9 billion. Although purchase
accounting adjustments will not be finalized until the Transaction is
completed, a substantial portion of the excess purchase price is expected to
be allocated to specific net assets and amortized over the remaining useful
lives of those assets. The remainder of the excess purchase price will be
allocated to goodwill and amortized over 40 years.
Because of the time required to obtain necessary regulatory and other
approvals, the Company does not expect integrated operations to have a
significant effect on operating and financial results prior to fiscal 1998.
The primary impact of the proposed Transaction on net earnings prior to the
integration of operations is likely to be the after-tax effect of the
Company's share of Conrail's net earnings, reported under the equity method of
accounting, less amortization of the excess purchase price and interest on
debt incurred to acquire Conrail shares. Net cash flow prior to operational
integration is expected to be reduced by interest payments on such debt. The
average interest rate in 1996 on debt incurred to acquire Conrail shares was
approximately 5.6%. The degree of negative impact on net earnings or net cash
flow during 1997 will be significantly affected by the net earnings reported
by Conrail and the average interest rate and timing of interest payments on
the related debt.
THE ABOVE ESTIMATES AND FORECASTS ARE BASED UPON NUMEROUS ESTIMATES AND
ASSUMPTIONS ABOUT COMPLEX ECONOMIC AND OPERATING FACTORS WITH RESPECT TO
14
<PAGE>
INDUSTRY PERFORMANCE, GENERAL BUSINESS AND ECONOMIC CONDITIONS AND OTHER
MATTERS THAT CANNOT BE PREDICTED ACCURATELY AND THAT ARE SUBJECT TO
CONTINGENCIES OVER WHICH THE COMPANY HAS NO CONTROL. SUCH FORWARD LOOKING
STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT
FACTORS THAT COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF
THE COMPANY TO DIFFER MATERIALLY FROM ANY FUTURE RESULTS, PERFORMANCE OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING STATEMENTS. CERTAIN
OF THOSE RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY INCLUDE: (A) FUTURE ECONOMIC CONDITIONS IN
THE MARKETS IN WHICH THE COMPANY AND CONRAIL OPERATE; (B) FINANCIAL MARKET
CONDITIONS; (C) INFLATION RATES; (D) CHANGING COMPETITION; (E) CHANGES IN THE
REGULATORY CLIMATE IN THE UNITED STATES RAILROAD INDUSTRY; (F) THE ABILITY TO
ELIMINATE DUPLICATIVE ADMINISTRATIVE FUNCTIONS; AND (G) ADVERSE CHANGES IN
APPLICABLE LAWS, REGULATIONS OR RULES GOVERNING ENVIRONMENTAL, TAX OR
ACCOUNTING MATTERS. THESE FORWARD LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE
OF THIS PROSPECTUS. THE COMPANY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO
DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD LOOKING STATEMENT
CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE COMPANY'S EXPECTATIONS WITH
REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH
ANY SUCH STATEMENT IS BASED.
USE OF PROCEEDS
The Company will not receive any proceeds from the Exchange Offers. On May
6, 1997, the Company issued $350,000,000 principal amount of Old 2002
Debentures, $300,000,000 principal amount of Old 2004 Debentures, $450,000,000
principal amount of Old 2007 Debentures, $400,000,000 principal amount of Old
2017 Debentures, $500,000,000 principal amount of Old 7.95% 2027 Debentures,
$100,000,000 principal amount of Old 6.95% 2027 Debentures and $250,000,000
principal amount of Old 7.25% 2027 Debentures, and on May 8, 1996 the Company
issued $150,000,000 principal amount of Old 2032 Debentures (together, the
"Offering"). The Old Debentures were sold by the Company to Salomon Brothers
Inc, Credit Suisse First Boston Corporation, Chase Securities Inc., Goldman,
Sachs & Co., Morgan Stanley & Co. Incorporated and NationsBanc Capital
Markets, Inc. (the "Initial Purchasers") and were in turn sold by the Initial
Purchasers to a limited number of qualified institutional buyers and
accredited investors pursuant to Rule 144A and Regulation D, respectively,
under the Securities Act and exemptions from applicable state securities laws,
and the Offering was not subject to the registration requirements of the
Securities Act and applicable state securities laws. The net proceeds from the
sale of the Old Debentures sold in the Offering primarily were used to fund a
portion of the Company's obligations under the CSX/NSC Agreement, including
the purchase of Conrail Shares pursuant to the Joint Tender Offer and the
merger. The balance of the net proceeds were used for general corporate
purposes, including, without limitation, repayment of borrowings, working
capital and capital expenditures. See "The Company--Joint CSX/NSC Acquisition
of Conrail."
15
<PAGE>
CAPITALIZATION
The following table sets forth (i) the unaudited historical consolidated
capitalization of the Company as of March 28, 1997, (ii) the adjustment to
give effect to the issuance of the Old Debentures on May 6 and May 8, 1997,
and (iii) the pro forma consolidated capitalization after such adjustment. For
additional information as to the capitalization of the Company, see "Selected
Historical Financial Data for the Company" contained herein and Management's
Discussion and Analysis of Results of Operations and Financial Condition and
the consolidated financial statements of the Company and the related notes
thereto in the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 28, 1997 and its Annual Report on Form 10-K for the fiscal year
ended December 27, 1996 incorporated herein by reference.
<TABLE>
<CAPTION>
AS OF MARCH 28, 1997
-------------------------------
HISTORICAL ADJUSTMENT PRO FORMA
---------- ---------- ---------
(DOLLARS IN MILLIONS,
EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C>
LONG-TERM DEBT
Commercial paper (1)......................... $2,300 $ (300) $ 2,000
Notes payable................................ 483 483
Debentures................................... 649 2,500 3,149
Equipment obligations........................ 709 709
Mortgage bonds............................... 76 76
Other obligations, including capital leases.. 169 169
Current maturities of long-term debt......... (143) (143)
------ ------ -------
Total long-term debt....................... 4,243 2,200 6,443
SHAREHOLDERS' EQUITY
Common stock, $1 par value (300,000,000
shares authorized, 217,662,928 shares issued
and outstanding)............................ 218 218
Other capital................................ 1,470 1,470
Retained earnings............................ 3,546 3,546
Minimum pension liability.................... (107) (107)
------ -------
Total shareholders' equity................. 5,127 5,127
------ ------ -------
Total capitalization....................... $9,370 $2,200 $11,570
====== ====== =======
TOTAL LONG-TERM DEBT TO TOTAL CAPITALIZATION... 45% 56%
====== =======
</TABLE>
- --------
(1) Commercial paper borrowings of $2.3 billion, including approximately $2.0
billion incurred to acquire a 19.9% investment in Conrail, were classified
as long-term debt at March 28, 1997 based on the Company's ability and
intent to maintain this debt outstanding for more than one year.
Approximately $2.2 billion of the proceeds from the issuance of the Old
Debentures was used to fund the Company's obligation under the Joint
Tender Offer and the merger, and the remaining $300 million was used to
reduce long-term commercial paper borrowings.
16
<PAGE>
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
AND SELECTED FINANCIAL RATIO
The Company's consolidated ratio of earnings to fixed charges and ratio of
total long-term debt to total capitalization for each of the fiscal periods
indicated are as follows:
<TABLE>
<CAPTION>
FOR THE FISCAL
QUARTERS ENDED FOR THE FISCAL YEARS ENDED
----------------- --------------------------------------------
MAR. 28, MAR. 29, DEC. 27, DEC. 29, DEC. 30, DEC. 31, DEC. 31,
1997 1996 1996 1995 (B) 1994 1993 (C) 1992 (D)
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges (a)...... 2.8x 3.1x 4.0x 3.2x 3.1x 2.3x 1.0x
Total long-term debt to
total capitalization... 45% 34% 46% 34% 41% 50% 52%
</TABLE>
- --------
(a) For purposes of computing the ratio of earnings to fixed charges, earnings
represent earnings (loss) before income taxes plus interest expense on
indebtedness, amortization of debt discount, the interest portion of fixed
rent expense, undistributed earnings of unconsolidated subsidiaries and
minority interest expense. Fixed charges include interest on indebtedness
(whether expensed or capitalized), amortization of debt discount and the
interest portion of fixed rent expense.
(b) Operating income includes a charge of $257 million to recognize the
estimated costs of initiatives to revise, restructure and consolidate
specific operations and administrative functions at the Company's rail and
container-shipping units. Excluding the impact of the charge, the ratio of
earnings to fixed charges would have been 3.7x.
(c) Operating income includes a charge of $93 million to recognize the
estimated costs of restructuring certain operations and functions at the
Company's container-shipping unit. Excluding the impact of the charge, the
ratio of earnings to fixed charges would have been 2.5x.
(d) Operating income includes a charge of $699 million to recognize the
estimated costs of buying out certain trip-based compensation elements
paid to train crews at the Company's rail unit. Excluding the impact of
the charge, the ratio of earnings to fixed charges would have been 2.5x.
17
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA FOR THE COMPANY
The selected financial data presented below for the fiscal quarters ended
March 28, 1997 and March 29, 1996 and the fiscal years ended December 27,
1996, December 29, 1995, December 30, 1994, December 31, 1993 and December 31,
1992 and as of the end of each such fiscal period is derived from the
consolidated financial statements of the Company and should be read in
conjunction with the information and consolidated financial statements and
related notes and Management's Discussion and Analysis of Results of
Operations and Financial Condition in the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended March 28, 1997 and its Annual Report on Form
10-K for the fiscal year ended December 27, 1996, incorporated herein by
reference. The consolidated financial statements for the fiscal years ended
December 27, 1996, December 29, 1995, December 30, 1994, December 31, 1993 and
December 31, 1992 have been audited by Ernst & Young LLP, independent
auditors. The consolidated financial statements for the fiscal quarters ended
March 28, 1997 and March 29, 1996 are unaudited but, in the opinion of
management, include all adjustments necessary for a fair presentation.
<TABLE>
<CAPTION>
AS OF OR FOR THE
FISCAL QUARTERS ENDED AS OF OR FOR THE FISCAL YEARS ENDED
---------------------- --------------------------------------------
MAR. 28, MAR. 29, DEC. 27, DEC. 29, DEC. 30, DEC. 31, DEC. 31,
1997 1996 1996 1995 1994 1993 1992
---------- ---------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Operating revenue..... $ 2,567 $ 2,514 $10,536 $10,304 $ 9,409 $ 8,766 $ 8,549
Operating income...... 324 296 1,522 1,126 1,182 881 214
Net earnings.......... 151 146 855 618 652 359 20
PER SHARE DATA
Net earnings per
common share......... $ 0.70 $ 0.69 $ 4.00 $ 2.94 $ 3.12 $ 1.73 $ 0.10
Book value............ 23.56 20.69 23.04 20.15 17.81 15.27 14.37
Cash dividends per
common share......... 0.26 0.26 1.04 .092 0.88 0.79 0.76
BALANCE SHEET DATA
Total assets.......... $ 16,888 $ 14,366 $16,965 $14,282 $13,724 $13,420 $13,049
Total debt, including
current maturities... 4,673 3,077 4,767 2,856 3,131 3,443 3,459
Stockholders' equity.. 5,127 4,374 4,995 4,242 3,731 3,180 2,975
</TABLE>
- --------
FISCAL QUARTER ENDED:
Mar. 28, 1997-- The Company incurred net costs before income taxes of $24
million with respect to its investment in Conrail common stock.
These net costs, principally interest on debt issued to acquire
the investment less dividends received on the stock, reduced
net earnings by $16 million, seven cents per share.
FISCAL YEARS ENDED:
Dec. 29, 1995-- Operating income includes a charge of $257 million to recognize
the estimated costs of initiatives to revise, restructure and
consolidate specific operations and administrative functions at
its rail and container-shipping units. The restructuring charge
reduced net earnings by $160 million, 76 cents per share. The
Company also recognized a net investment gain of $77 million,
$51 million after tax, 24 cents per share, on the issuance of
an equity interest in a Sea-Land terminal and related
operations in Asia and the write-down of various investments.
Dec. 30, 1994-- Net earnings includes an accelerated pretax gain of $69
million, $42 million after tax, 20 cents per share on the
satisfaction by the state of Florida of its remaining unfunded
obligation issued in 1988 to consummate the purchase of 80
miles of track and right of way.
18
<PAGE>
Dec. 31, 1993-- Operating income includes a charge of $93 million to recognize
the estimated costs of restructuring certain operations and
functions at the Company's container-shipping unit. The
restructuring charge reduced net earnings by $61 million, 30
cents per share. Net earnings also includes charges of $56
million, 26 cents per share, relating to the revision of the
Company's estimated annual effective tax rate to reflect the
change in the federal statutory income tax rate from 34% to
35%.
Dec. 31, 1992-- Operating income includes a charge of $699 million to recognize
the estimated costs of buying out certain trip-based
compensation elements paid to train crews. The charge reduced
net earnings by $450 million, $2.19 per share.
RESTATEMENT:
Beginning with the quarter ended June 28, 1996, the Company changed its
earnings presentation to exclude non-transportation activities from operating
revenue and expense. These activities, principally real estate and resort
operations, are now included in other income. Amounts for periods prior to
June 28, 1996 have been restated to conform to the revised presentation.
All per share data for periods prior to December 21, 1995 have been adjusted
for the two- for-one common stock split distributed to shareholders on that
date.
19
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA FOR CONRAIL
The selected financial data presented below for the quarters ended March 31,
1997 and 1996 and the years ended December 31, 1996, 1995, 1994 and 1993 are
derived from the consolidated financial statements of Conrail and its
subsidiaries and should be read in conjunction with the information and
consolidated statements and related notes and Management's Discussion and
Analysis of Results of Operations and Financial Condition contained in
Conrail's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997
and its Annual Report on Form 10-K for the year ended December 31, 1996.
Reports on Form 10-K for years prior to 1993 were filed by Consolidated Rail
Corporation, Conrail's only significant subsidiary and primary asset for those
time periods, and 1992 historical data presented herein are with respect to
such corporation.
<TABLE>
<CAPTION>
AS OF OR FOR THE QUARTERS
ENDED MARCH 31, AS OF OR FOR THE YEARS ENDED DECEMBER 31,
------------------------- --------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------------ ------------ -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Revenues.............. $ 906 $ 889 $ 3,714 $ 3,686 $ 3,733 $ 3,453 $ 3,345
Operating income...... 116 69 601 456 606 591 534
Income before
cumulative effect of
changes in accounting
principles........... 61 31 342 264 324 234 282
Net income............ 61 31 342 264 324 160 282
PER SHARE DATA
Income per common
share before the
cumulative effect of
changes in accounting
principles:
Primary............. $ 0.74 $ 0.36 $ 4.25 $ 3.19 $ 3.90 $ 2.74 $ 3.28
Fully diluted....... 0.70 0.35 3.89 2.94 3.56 2.51 2.99
Net income
Primary............. $ 0.74 $ 0.36 $ 4.25 $ 3.19 $ 3.90 $ 1.82 $ 3.28
Fully diluted....... 0.70 0.35 3.89 2.94 3.56 1.70 2.99
Book Value............ 38.32 35.42 37.91 35.66 36.69 34.57 34.16
Cash dividends per
common share......... 0.475 0.425 1.80 1.60 1.40 1.20 1.00
BALANCE SHEET DATA
Total assets.......... $ 8,470 $ 8,432 $ 8,402 $ 8,424 $ 8,322 $ 7,948 $ 7,315
Total debt, including
current maturities... 2,036 2,157 2,105 2,181 2,182 2,184 1,911
Shareholders' equity.. 3,152 2,944 3,107 2,977 2,925 2,784 2,748
RATIO OF EARNINGS TO
FIXED CHARGES.......... 2.5x 1.8x 3.2x 2.5x 3.2x 3.0x 3.3x
</TABLE>
QUARTER ENDED MARCH 31,
1997-- Operating income includes merger-related costs of $22 million. These
costs reduced net income by $14 million and earnings per share ("EPS")
17 cents on a primary basis and 16 cents on a fully diluted basis.
YEARS ENDED DECEMBER 31,
1996-- Operating income includes a charge of $135 million for voluntary
separation programs, which reduced net income by $83 million and EPS
$1.07 on a primary basis and 95 cents on a fully diluted basis.
Operating income also includes merger-related costs of $16 million,
which reduced net income by $10 million and EPS by 13 cents on a primary
basis and 11 cents on a fully-diluted basis.
1995-- Operating income includes an asset disposition charge of $285 million
for rail lines and other assets written down to estimated net realizable
value, which reduced net income by $176 million and EPS $2.24 on a
primary basis and $1.98 on a fully diluted basis. Net income also
includes a one-time $21 million benefit related to a decrease in a state
income tax rate which increased EPS 27 cents on a primary basis and 23
cents on a fully diluted basis.
20
<PAGE>
1994-- Included in operating income is a charge of $84 million ($51 million
after tax benefits) for a voluntary early retirement program and
related costs. This reduced EPS 64 cents on a primary basis and 57
cents on a fully diluted basis.
1993-- Net income includes charges of $74 million as a result of the adoption
of required changes in accounting for income taxes and postretirement
benefits other than pensions which reduced EPS 92 cents on a primary
basis and 81 cents on a fully diluted basis; $50 million ($80 million
before tax benefit of $30 million) for the disposition of a subsidiary
which decreased EPS 62 cents on a primary basis and 55 cents on a
fully diluted basis; and $34 million for the increase in the federal
corporate income tax rate which decreased EPS 42 cents on a primary
basis and 37 cents on a fully diluted basis.
21
<PAGE>
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
On May 23, 1997, the Joint Tender Offer for the Conrail Shares expired. As a
result of the contribution by the Company and NSC of Conrail shares owned by
them before the Joint Tender Offer as well as the contribution of funds to
complete the Joint Tender Offer and the merger, they have, respectively, a 42
percent and a 58 percent economic interest in the Acquisition Entity which now
owns all of the Conrail shares. Such shares are being held in a voting trust
pending STB approval. The Company and NSC also each may exercise a 50 percent
voting interest in the Acquisition Entity and each has the right to appoint
half of that entity's directors and a full-time Co-Chief Executive Officer.
Under the CSX/NSC Agreement, subject to STB approval, the Company will operate
routes and assets (or rights thereto) that generated approximately 42 percent
of Conrail's 1995 revenues.
The Unaudited Pro Forma Financial Statements included herein present a
Condensed Consolidated Statement of Financial Position for the Company as of
March 28, 1997, and Condensed Consolidated Statements of Earnings for the
fiscal quarter ended March 28, 1997, and the fiscal year ended December 27,
1996. The pro forma financial statements reflect (i) the completion by the
Company and NSC of their Joint Tender Offer for the Conrail Shares and the
merger at $115 per share through the Acquisition Entity; and (ii) the related
borrowings by the Company, including the Debentures.
These events are reflected in the Pro Forma Condensed Consolidated Statement
of Financial Position as if they had occurred on March 28, 1997, and in the
Pro Forma Condensed Consolidated Statements of Earnings as if they had
occurred at the beginning of the period presented. The financial information
for Conrail was based upon its historical financial statements for the quarter
ended March 31, 1997, and for the year ended December 31, 1996, as reported in
its Form 10-Q and Form 10-K, respectively. Conrail's 1996 results included a
special charge of $135 million (pre-tax) for voluntary separation programs.
The Company is using the equity method of accounting for its interest in
Conrail following consummation of the Joint Tender Offer and the merger and
continuing as long as the Conrail shares are held in the voting trust--a
period that will extend at least until the effective date of the STB's
decision approving the transactions contemplated by the CSX/NSC Agreement (if
such approval is obtained). In accordance with Accounting Principles Board
("APB") Opinion No. 18, "The Equity Method of Accounting for Investments in
Common Stock," the excess of the Company's purchase price over the underlying
net assets acquired ("Excess") is being amortized. Based on a preliminary
analysis of the fair value of the underlying net assets of Conrail, the
Company believes a significant portion of the Excess will be allocated to
long-lived assets other than goodwill. Further information as to the values of
assets and liabilities, as well as specific allocations to the Company or NSC,
may affect these preliminary estimates.
The method of accounting for the investment in Conrail subsequent to
dissolution of the voting trust will depend on the final terms of the
ownership arrangement between the Company and NSC approved by the STB.
Additionally, the ultimate terms of leases, operating partnerships and other
arrangements will affect the accounting. It is also expected that some of the
assets and operations of Conrail will remain subject to joint control by the
Company and NSC and, thus, will continue to be accounted for using the equity
method of accounting even after STB approval.
The unaudited pro forma financial statements do not reflect synergies and,
accordingly, do not account for any potential increases in operating income,
any estimated cost savings, any adjustments to conform accounting practices or
any capital expenditures to be realized or made by either the Company or
Conrail to achieve such improvements. THE UNAUDITED PRO FORMA FINANCIAL
STATEMENTS ARE PREPARED FOR ILLUSTRATIVE PURPOSES ONLY AND ARE NOT NECESSARILY
INDICATIVE OF THE FINANCIAL POSITION OR RESULTS OF OPERATIONS THAT MIGHT HAVE
OCCURRED HAD THE APPLICABLE TRANSACTIONS ACTUALLY TAKEN PLACE ON THE DATE
INDICATED, OR OF FUTURE RESULTS OF OPERATIONS OR FINANCIAL POSITION OF THE
STANDALONE OR COMBINED ENTITIES.
The unaudited pro forma financial statements are based on the historical
consolidated financial statements of the Company and Conrail and should be
read in conjunction with such historical financial statements and the notes
thereto.
22
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF MARCH 28, 1997
UNAUDITED
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
PRO FORMA
CSX WITH
CSX PRO FORMA CONRAIL
HISTORICAL ADJUSTMENTS INVESTMENT
---------- ----------- ----------
<S> <C> <C> <C>
ASSETS
Current assets........................... $ 1,941 $ 1,941
Properties--net.......................... 11,924 11,924
Investment in Conrail.................... 1,955 $2,251/(1)/ 4,206
Other long-term assets................... 1,068 50/(1)/ 1,118
------- ------ -------
Total assets........................... $16,888 $2,301 $19,189
======= ====== =======
LIABILITIES
Current liabilities...................... $ 2,571 $ 101/(1)/ $ 2,672
Long-term debt........................... 4,243 2,200/(1)/ 6,443
Deferred income taxes.................... 2,743 2,743
Other long-term liabilities.............. 2,204 2,204
------- ------ -------
Total liabilities...................... 11,761 2,301 14,062
------- ------ -------
SHAREHOLDERS' EQUITY
Common stock............................. 218 218
Other capital............................ 1,470 1,470
Retained earnings........................ 3,546 3,546
Minimum pension liability................ (107) (107)
------- ------ -------
Total shareholders' equity............. 5,127 -- 5,127
------- ------ -------
Total liabilities & shareholders' equi-
ty.................................... $16,888 $2,301 $19,189
======= ====== =======
</TABLE>
See accompanying Notes to Unaudited Pro Forma Financial Statements.
23
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FISCAL QUARTER ENDED MARCH 28, 1997
UNAUDITED
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
CSX WITH
CSX PRO FORMA CONRAIL
HISTORICAL ADJUSTMENTS INVESTMENT (5)
---------- ----------- --------------
<S> <C> <C> <C>
Operating revenue................... $ 2,567 $ 2,567
Operating expense................... 2,243 2,243
-------- --------
Operating income.................... 324 324
Other income (expense).............. (7) $ 1 /(3)/ (6)
Interest expense.................... 84 46 /(2)/ 130
-------- ------ --------
Earnings before income taxes........ 233 (45) 188
Income tax expense.................. 82 (16)/(4)/ 66
-------- ------ --------
Net earnings........................ $ 151 $ (29) $ 122
======== ====== ========
Earnings per share.................. $ 0.70 $(0.14) $ 0.56
Average common shares outstanding
(thousands)........................ 217,227 217,227
</TABLE>
See accompanying Notes to Unaudited Pro Forma Financial Statements.
24
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FISCAL YEAR ENDED DECEMBER 27, 1996
UNAUDITED
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
CSX WITH
CSX PRO FORMA CONRAIL
HISTORICAL ADJUSTMENTS INVESTMENT (5)
---------- ----------- --------------
<S> <C> <C> <C>
Operating revenue................... $10,536 $10,536
Operating expense................... 9,014 9,014
------- -------
Operating income ................... 1,522 1,522
Other income........................ 43 $ 70 /(3)/ 113
Interest expense.................... 249 285 /(2)/ 534
------- ------ -------
Earnings before income taxes........ 1,316 (215) 1,101
Income tax expense.................. 461 (96)/(4)/ 365
------- ------ -------
Net earnings........................ $ 855 $ (119) $ 736
======= ====== =======
Earnings per share.................. $4.00 $(0.55) $3.45
Average common shares outstanding
(thousands)........................ 213,633 213,633
</TABLE>
See accompanying Notes to Unaudited Pro Forma Financial Statements.
25
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
NOTE 1. PRELIMINARY CALCULATION OF PURCHASE PRICE
Pursuant to the CSX/NSC Agreement, CSX has invested approximately $4.156
billion (including $1.955 billion expended in November 1996, and excluding
transaction costs) to acquire, through its ownership interest in Conrail,
various Conrail routes and assets or rights thereto. The acquisition was
financed with a combination of debentures and commercial paper. The purchase
price has been preliminarily calculated as follows:
<TABLE>
<S> <C>
Estimated Conrail shares outstanding at May 23, 1997 (000's)...... 86,475
Less: Shares acquired pursuant to CSX's first tender offer (a).... (17,775)
Shares acquired pursuant to NSC's first tender offer............ (8,200)
--------
Shares acquired pursuant to Joint Tender Offer and merger....... 60,500
Joint Tender Offer and merger price per share..................... $ 115
--------
Cost of shares acquired pursuant to Joint Tender Offer and merg-
er............................................................. $ 6,958
Plus: Cost of shares acquired pursuant to CSX's first tender offer
(a).............................................................. 1,955
Cost of shares acquired pursuant to NSC's first tender offer.... 943
Unexercised Conrail stock options............................... 39
--------
Joint purchase price........................................... 9,895
CSX's allocation.................................................. 42%
--------
Joint purchase price payable by CSX............................. 4,156
Estimated transaction fees payable by CSX......................... 50
--------
Purchase price payable by CSX, including transaction fees......... 4,206
Less: Cost of shares held at March 28, 1997....................... (1,955)
--------
Pro forma adjustment to Conrail investment........................ 2,251
Pro forma adjustment for debt issuance costs...................... 50
--------
Pro forma adjustment to debt...................................... 2,301
Less: Current portion of commercial paper......................... (101)
--------
Pro forma adjustment to long-term debt............................ $ 2,200
========
</TABLE>
- --------
(a) Exclusive of 85,000 shares previously sold by CSX at an average price of
$98.983 per share.
NOTE 2. DEBT
Long-term debt has been increased by $2.2 billion and short-term debt has
been increased by $0.1 billion to reflect the net additional borrowing
subsequent to March 28, 1997 to finance the Company's purchase price
(including transaction fees and debt issuance costs) in excess of the $1.955
billion previously paid. This net additional borrowing is inclusive of the
proceeds of the $2.5 billion of Debentures, reduced by net repayments of
commercial paper previously outstanding. As a consequence of the Company's
first tender offer and its share of the subsequent Joint Tender Offer and
merger, short-term and long-term debt of $4.256 billion is outstanding, as
follows:
<TABLE>
<CAPTION>
WEIGHTED-
AVERAGE INTEREST
PRINCIPAL RATE FOR PRO FORMA
AMOUNT ADJUSTMENT
--------- ------------------
<S> <C> <C>
Debentures...................................... $2,500 7.55% (fixed)
Commercial paper................................ 1,756 5.70% (variable)
------
Total debt incurred by CSX...................... $4,256 6.79%
======
</TABLE>
Pro forma interest expense has been increased as a result of the additional
debt incurred, as noted below. Debt placement fees, debt discount and related
costs are being amortized on the interest method and, together
26
<PAGE>
with annual commitment fees, approximate $7 million in the first year after
consummation of the Joint Tender Offer. Inclusive of these costs, the
effective interest rate is approximately 6.95%. If interest rates assumed were
to change by one-eighth of one percent, the pro forma interest expense on
variable rate debt associated with the transaction would vary by $2 million
annually.
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED FISCAL YEAR ENDED
MAR. 28, 1997 DEC. 27, 1996
-------------------- -----------------
<S> <C> <C>
Effective interest on $4.256 billion
of debt............................ $ 74 $296
Less: interest already recognized in
historical financial statements*... (28) (11)
---- ----
Pro forma adjustment................ $ 46 $285
==== ====
</TABLE>
- --------
* Resulting from long-term debt incurred to finance the first tender offer.
NOTE 3. OTHER INCOME
The equity method of accounting will be applied to the Company's investment
in Conrail throughout the period the investment is held in the voting trust.
In accordance with APB Opinion No. 18, "The Equity Method of Accounting for
Investments in Common Stock," other income includes 42% of Conrail's
historical net income, adjusted for amortization, net of tax, of the
difference between the Company's investment in Conrail and 42% of Conrail's
underlying equity in net assets. The difference is primarily attributable to
the estimated fair value of property and equipment, net of the related
deferred taxes, and includes approximately $757 million in goodwill. This
allocation is based on preliminary estimates of fair values of all Conrail
assets and liabilities and is likely to change after the Definitive
Documentation is finalized and regulatory approvals are obtained. To the
extent that specific assets and liabilities are allocated to Conrail entities
over which the Company will have a controlling financial interest, the
allocation will be redesignated to follow the method in which the investment
is accounted for subsequent to the approval by the STB. The preliminary
estimates are also likely to change as additional information concerning fair
values and remaining useful lives becomes available. An appraisal of the
assets is currently underway. The Company intends to amortize any goodwill
resulting from the purchase over a period of 40 years. Adjustments to property
and equipment are depreciated over their estimated remaining useful lives,
which range from 2 to 102 years.
PRELIMINARY ALLOCATION OF PURCHASE PRICE
<TABLE>
<S> <C>
Net assets of Conrail at March 31, 1997......................... $ 3,152
CSX's economic interest......................................... X 42%
--------
CSX's share of Conrail net assets............................... 1,324
Estimated fair value adjustments, principally property and
equipment...................................................... 3,480
Deferred taxes on estimated fair value adjustments and transac-
tion fees...................................................... (1,305)
Estimated goodwill.............................................. 757
--------
Purchase price payable by CSX (including transaction costs)... $ 4,256
========
</TABLE>
DETAIL OF PRO FORMA ADJUSTMENT
<TABLE>
<CAPTION>
FISCAL QUARTER FISCAL YEAR
ENDED ENDED
MAR. 28, 1997 DEC. 27, 1996
-------------- -------------
<S> <C> <C>
Conrail net income.......................... $ 61 $342
CSX's economic interest..................... X 42% X 42%
----- -----
Equity earnings from investment in
Conrail.................................. 26 144
Depreciation................................ (19) (77)
Amortization of goodwill (40-year life)..... (5) (19)
Tax benefit on depreciation................. 7 30
----- -----
Net impact on other income.................. 9 78
Less: dividend amounts previously recognized
(cost method).............................. (8) (8)
----- -----
Pro forma adjustment to Other Income (Ex-
pense)................................... $ 1 $ 70
===== =====
</TABLE>
27
<PAGE>
NOTE 4. INCOME TAX EXPENSE
Income tax expense includes the tax benefit on the additional interest
expense (see Note 2) as well as the tax effect on equity income:
<TABLE>
<CAPTION>
FISCAL QUARTER FISCAL YEAR
ENDED ENDED
MAR. 28, 1997 DEC. 27, 1996
-------------- -------------
<S> <C> <C>
Tax benefit on acquisition debt interest ex-
pense....................................... $(26) $(104)
Tax expense on dividends received............ 1 5
---- -----
Net tax benefit.............................. (25) (99)
Less tax benefit previously recognized....... (9) (3)
---- -----
Pro forma adjustment to income tax ex-
pense..................................... $(16) $ (96)
==== =====
</TABLE>
NOTE 5. UNUSUAL EVENTS
As described in Note 3, pro forma amounts reflected in the Pro Forma
Condensed Consolidated Statements of Earnings were calculated and presented in
accordance with the equity method of accounting. If the effects of 42% of
Conrail's after-tax merger-related costs of $14 million had been excluded for
the fiscal quarter ended March 28, 1997, pro forma net earnings and pro forma
earnings per share would have been $128 million and 59 cents, respectively. If
the effects of 42% of Conrail's one-time after-tax charge of $83 million
related to voluntary separation programs and after-tax merger-related costs of
$10 million had been excluded for the fiscal year ended December 27, 1996, pro
forma net earnings and pro forma earnings per share would have been $775
million and $3.63, respectively.
NOTE 6. SUMMARIZED CONSOLIDATED CONRAIL FINANCIAL DATA
Because of the numerous agreements that must be negotiated and completed,
and because STB approval must be obtained, it is not possible to present some
or most of the Company's investment in Conrail based on separate assets,
liabilities and operations. However, the Company has a 42% economic interest
in the entity formed to acquire Conrail Shares. It is expected that in some
form, yet to be finally determined, the Company will have a primary operating
interest in the routes and facilities, as described more fully in "The
Company--Joint CSX/NSC Acquisition of Conrail". The following historical
Conrail financial data, as of and for the quarter ended March 31, 1997 and the
year ended December 31, 1996, respectively, is presented to facilitate an
understanding of the Company's ultimate economic interest in Conrail:
CONRAIL INC.
SUMMARIZED CONSOLIDATED STATEMENT OF INCOME
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
QUARTER ENDED YEAR ENDED
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
Revenues.................................... $906 $3,714
Operating expenses.......................... 790 3,113*
---- ------
Income from operations.................... 116 601
Interest expense............................ (45) (182)
Other income--net........................... 27 112
---- ------
Income before income taxes.................. 98 531
Income taxes.............................. 37 189
---- ------
Net income................................ $ 61 $ 342
==== ======
</TABLE>
- --------
*Operating expenses include a $135 million charge for voluntary separation
programs, $83 million after tax.
28
<PAGE>
CONRAIL INC.
SUMMARIZED CONSOLIDATED BALANCE SHEET
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
AS OF AS OF
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
<S> <C> <C>
ASSETS
Current assets.......................... $1,162 $1,117
Property and equipment.................. 6,599 6,590
Other assets............................ 709 695
------ ------
Total assets.......................... $8,470 $8,402
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities..................... $1,078 $1,092
Long-term debt.......................... 1,889 1,876
Other long-term liabilities............. 2,351 2,327
------ ------
Total liabilities..................... 5,318 5,295
Stockholders' equity.................... 3,152 3,107
------ ------
Total liabilities and stockholders'
equity............................... $8,470 $8,402
====== ======
</TABLE>
29
<PAGE>
THE EXCHANGE OFFERS
The Old Debentures were sold by the Company on May 6, 1997 (except for the
Old 2032 Debentures which were sold on May 8, 1997) to the Initial Purchasers,
who in turn sold the Old Debentures to a limited number of qualified
institutional buyers and accredited investors pursuant to Rule 144A and
Regulation D, respectively, under the Securities Act. In connection with the
sale of the Old Debentures, the Company and the Initial Purchasers entered
into a registration rights agreement dated as of May 6, 1997 (the
"Registration Rights Agreement"), which requires the Company to file with the
Commission a registration statement under the Securities Act with respect to
the New Debentures of the Company, which are identical in all material
respects to the Old Debentures, and to use its best efforts to cause such
registration statement to become effective under the Securities Act. The
Company is further obligated, upon the effectiveness of that registration
statement, to offer the holders of the Old Debentures the opportunity to
exchange their Old Debentures for a like principal amount of New Debentures,
which will be issued without a restrictive legend and may be reoffered and
resold by the holder without restrictions or limitations under the Securities
Act. In the event certain circumstances occur which would result in either the
New Debentures not becoming freely tradeable or certain holders of the Old
Debentures not being eligible to participate in the Exchange Offer, then the
Company is required to file a Shelf Registration Statement and use its best
efforts to cause the Old Debentures to be registered under the Securities Act.
A copy of the Registration Rights Agreement has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part. The Exchange
Offers are being made pursuant to the Registration Rights Agreement to satisfy
the Company's obligations thereunder. The term "Holder" with respect to the
Exchange Offers means any person in whose name Old Debentures are registered
on the security registrar's books or any other person who has obtained a
properly completed assignment from the registered holder or any participant in
the DTC system whose name appears on a security position listing as the holder
of such Old Debentures and who desires to deliver such Old Debentures by book-
entry transfer at DTC. See "Description of the New Debentures--Registration
Rights Agreement."
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offers), the Company will accept for exchange Old Debentures which
are properly tendered on or prior to the Expiration Date and not withdrawn as
permitted below. As used herein, the term "Expiration Date" means 5:00 p.m.,
New York City time, on , 1997; provided, however, that if the Company, in
its sole discretion, has extended the period of time during which any or all
of the Exchange Offers are open, the term "Expiration Date" means the latest
time and date to which the applicable Exchange Offer is extended.
As of the date of this Prospectus, $350,000,000 aggregate principal amount
of the Old 2002 Debentures, $300,000,000 aggregate principal amount of the Old
2004 Debentures, $450,000,000 aggregate principal amount of the Old 2007
Debentures, $400,000,000 aggregate principal amount of the Old 2017
Debentures, $500,000,000 aggregate principal amount of the Old 7.95% 2027
Debentures, $100,000,000 aggregate principal amount of the Old 6.95% 2027
Debentures, $250,000,000 aggregate principal amount of the Old 7.25% 2027
Debentures, and $150,000,000 aggregate principal amount of the Old 2032
Debentures, are outstanding. This Prospectus, together with the Letter of
Transmittal, is first being sent on or about , 1997 to all Holders of Old
Debentures known to the Company. The Company's obligation to accept Old
Debentures for exchange pursuant to the Exchange Offers is subject to certain
customary conditions as set forth under "--Certain Conditions to the Exchange
Offers" below.
The Company expressly reserves the right, at any time or from time to time,
to extend the period of time during which any or all of the Exchange Offers
are open, and thereby delay acceptance for exchange of any Old Debentures, by
giving oral or written notice of such extension to the Holders thereof as
described below. During any such extension, all Old Debentures previously
tendered will remain subject to the Exchange Offers and may be accepted for
exchange by the Company. Any Old Debentures not accepted for exchange for any
reason will be returned without expense to the tendering Holder thereof as
promptly as practicable after the expiration or termination of the Exchange
Offers.
30
<PAGE>
Old Debentures tendered in the Exchange Offers must be in denominations of
principal amount of $1,000 or any integral multiple thereof.
The Company expressly reserves the right to amend or terminate any or all of
the Exchange Offers, and not to accept for exchange any Old Debentures not
theretofore accepted for exchange, upon the occurrence of any of the
conditions of the Exchange Offers specified below under "--Certain Conditions
to the Exchange Offers." The Company will give oral or written notice of any
extension, amendment, non-acceptance or termination to the Holders of the Old
Debentures as promptly as practicable, such notice in the case of any
extension to be issued by means of a press release or other public
announcement no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date.
PROCEDURES FOR TENDERING OLD DEBENTURES
Only a Holder of Old Debentures may tender such Old Debentures in the
Exchange Offers. The tender to the Company of Old Debentures by a Holder
thereof as set forth below and the acceptance thereof by the Company will
constitute a binding agreement between the tendering Holder and the Company
upon the terms and subject to the conditions set forth in this Prospectus and
in the accompanying Letter of Transmittal. A Holder who wishes to tender Old
Debentures for exchange pursuant to any or all of the Exchange Offers must
transmit a properly completed and duly executed Letter of Transmittal,
including all other documents required by such Letter of Transmittal, to The
Chase Manhattan Bank (the "Exchange Agent") at the address set forth below
under "--Exchange Agent" or (in the case of a book-entry transfer) an Agent's
Message in lieu of the Letter of Transmittal on or prior to the Expiration
Date. In addition, either (i) certificates for such Old Debentures must be
received by the Exchange Agent along with the Letter of Transmittal, (ii) a
timely confirmation of a book-entry transfer (a "Book-Entry Confirmation") of
such Old Debentures, if such procedure is available, into the Exchange Agent's
account at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedure for book-entry transfer described below, must be
received by the Exchange Agent prior to the Expiration Date, or (iii) the
Holder must comply with the guaranteed delivery procedures described below
(see "--Guaranteed Delivery Procedures").
THE METHOD OF DELIVERY OF OLD DEBENTURES, LETTERS OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF
THE HOLDERS. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE
AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE TIMELY DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION
DATE. NO LETTERS OF TRANSMITTAL OR CERTIFICATES FOR OLD DEBENTURES SHOULD BE
SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES OF OTHER NOMINEES TO EFFECT THE ABOVE
TRANSACTIONS FOR SUCH HOLDERS.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to and received by the Exchange Agent and forming a part of
a Book-Entry Confirmation, which states that DTC has received an express
acknowledgment from the tendering participant, which acknowledgment states
that such participant has received and agrees to be bound by the Letter of
Transmittal and that the Company may enforce the Letter of Transmittal against
such participant.
Any beneficial owner whose Old Debentures are registered in the name of a
broker, dealer, commercial bank, trust company, or other nominee and who
wishes to tender should contact the registered Holder promptly and instruct
such registered Holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own behalf, such owner must,
prior to completing and executing the Letter of Transmittal and delivering
such owner's Old Debentures, either make appropriate arrangements to register
ownership of the Old Debentures in such beneficial owner's name or obtain a
properly completed bond power from the registered Holder. The transfer of
registered ownership may take considerable time.
31
<PAGE>
Signatures on a Letter of Transmittal or a notice of withdrawal described
below (see "--Withdrawal Rights"), as the case may be, must be guaranteed (see
"--Guaranteed Delivery Procedures") unless the Old Debentures surrendered for
exchange pursuant thereto are tendered (i) by a registered Holder of the Old
Debentures who has not completed the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal
or (ii) for the account of an Eligible Institution (as defined below). In the
event that signatures on a Letter of Transmittal or a notice of withdrawal, as
the case may be, are required to be guaranteed, such guarantees must be by a
financial institution (including most banks, savings and loan associations and
brokerage houses) that is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Program or the Stock
Exchanges Medallion Program (collectively, "Eligible Institutions"). If Old
Debentures are registered in the name of a person other than a signer of the
Letter of Transmittal, the Old Debentures surrendered for exchange must be
endorsed by or be accompanied by a written instrument or instruments of
transfer or exchange, in satisfactory form as determined by the Company in its
sole discretion, duly executed by the registered Holder exactly as the name or
names of the registered Holder or Holders appear on the Old Debentures with
the signature thereon guaranteed by an Eligible Institution.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Debentures tendered for exchange will be
determined by the Company in its sole discretion, which determination shall be
final and binding. The Company reserves the absolute right to reject any and
all tenders of any particular Old Debentures not properly tendered or not to
accept any particular Old Debentures which acceptance might, in the judgment
of the Company or its counsel, be unlawful. The Company also reserves the
absolute right to waive any defects or irregularities or conditions of the
Exchange Offers as to any particular Old Debentures either before or after the
Expiration Date (including the right to waive the ineligibility of any Holder
who seeks to tender Old Debentures in the Exchange Offers). The interpretation
of the terms and conditions of the Exchange Offers as to any particular Old
Debentures either before or after the Expiration Date (including the Letter of
Transmittal and the instructions thereto) by the Company shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Debentures for exchange must be cured within
such reasonable period of time as the Company shall determine. None of the
Company, the Exchange Agent or any other person shall be under any duty to
give notification of any defect or irregularity with respect to any tender of
Old Debentures for exchange, nor shall any of them incur any liability for
failure to give such notification.
If the Letter of Transmittal or any Old Debentures or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such person should so indicate when signing and, unless waived by
the Company, proper evidence satisfactory to the Company of their authority to
so act must be submitted with the Letter of Transmittal.
By tendering, each Holder will represent to the Company that, among other
things, the New Debentures acquired pursuant to the Exchange Offers are being
obtained in the ordinary course of business of the person receiving such New
Debentures, whether or not such person is the Holder, and that neither the
Holder nor such other person has any arrangement or understanding with any
person to participate in the distribution of the New Debentures. If any Holder
or any such other person is an "affiliate," as defined under Rule 405 of the
Securities Act, of the Company or is engaged in or intends to engage in, or
has an arrangement or understanding with any person to participate in, a
distribution of such New Debentures to be acquired pursuant to the Exchange
Offers, such Holder or any such other person (i) may not rely on the
applicable interpretation of the staff of the Commission and (ii) must comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with any resale transaction. Each broker-dealer that
receives New Debentures for its own account in exchange for Old Debentures,
where such Old Debentures were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Debentures. See "Plan of Distribution."
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
32
<PAGE>
ACCEPTANCE OF OLD DEBENTURES FOR EXCHANGE; DELIVERY OF NEW DEBENTURES
Upon satisfaction or waiver of all of the conditions to the Exchange Offers,
the Company will accept on, or promptly after, the Expiration Date, all Old
Debentures properly tendered and will issue the New Debentures promptly after
acceptance of the Old Debentures. See "--Certain Conditions to the Exchange
Offers" below. For purposes of the Exchange Offers, the Company will be deemed
to have accepted properly tendered Old Debentures for exchange when, as and if
the Company has given oral (promptly confirmed in writing) or written notice
thereof to the Exchange Agent.
For each Old Debenture accepted for exchange, the Holder of such Old
Debenture will receive as set forth below under "Description of the New
Debentures--Book-Entry, Delivery and Form" a New Debenture having a principal
amount equal to that of the surrendered Old Debenture. Accordingly, registered
Holders of New Debentures on the relevant record date for the first interest
payment date following the consummation of the Exchange Offers will receive
interest accruing from the most recent date to which interest has been paid on
the Old Debentures or, if no interest has been paid, from May 1, 1997. Old
Debentures accepted for exchange will cease to accrue interest from and after
the date of consummation of the Exchange Offers. Holders whose Old Debentures
are accepted for exchange will not receive any payment in respect of accrued
interest on such Old Debentures otherwise payable on any interest payment date
the record date for which occurs on or after consummation of the Exchange
Offers. In the event that (i) by November 2, 1997 (or November 4, 1997 with
respect to the Old 2032 Debentures), neither the Exchange Offer Registration
Statement is declared effective nor (if the Exchange Offers are not permitted
as described above) the Shelf Registration Statement is filed with the
Commission, or (ii) by December 2, 1997 (or December 4, 1997 with respect to
the Old 2032 Debentures), one or more of the Exchange Offers with respect to
any series of Debentures is not consummated or the Shelf Registration
Statement is not declared effective with respect thereto (each such event
referred to in clauses (i) or (ii), a "Registration Default"), interest will
accrue on the applicable Old Debentures (in addition to stated interest on
such Old Debentures) from and including the next day following each such
Registration Default. In each case such additional interest (the "Special
Interest") will be payable in cash semiannually in arrears each May 1 and
November 1, at a rate per annum equal to 0.25% of the principal amount of such
Old Debentures for each such Registration Default. The aggregate amount of
Special Interest payable pursuant to the above provisions will in no event
exceed 0.25% per annum of the principal amount of such Old Debentures. Upon
(a) the effectiveness of the Exchange Offer Registration Statement or the
filing of the Shelf Registration Statement after the date set forth in clause
(i) above or (b) the consummation of the Exchange Offer for such Old
Debentures or the effectiveness of a Shelf Registration Statement, as the case
may be, after the date set forth in clause (ii) above, the Special Interest
payable on such Old Debentures as a result of the applicable Registration
Default will cease to accrue.
In all cases, issuance of New Debentures for Old Debentures that are
accepted for exchange pursuant to the Exchange Offers will be made only after
timely receipt by the Exchange Agent of certificates for such Old Debentures
or a timely Book-Entry Confirmation of such Old Debentures into the Exchange
Agent's account at the Book-Entry Transfer Facility, a properly completed and
duly executed Letter of Transmittal or an Agent's Message in lieu thereof and
all other required documents. If any tendered Old Debentures are not accepted
for any reason set forth in the terms and conditions of the Exchange Offers or
if Old Debentures are submitted for a greater principal amount than the Holder
desires to exchange, such unaccepted or non-exchanged Old Debentures will be
returned without expense to the tendering Holder thereof (or, in the cases of
Old Debentures tendered by book-entry transfer into the Exchange Agent's
account at the Book-Entry Transfer Facility pursuant to the book-entry
procedures described below, such non-exchanged Old Debentures will be credited
to an account maintained with such Book-Entry Transfer Facility) as promptly
as practicable after the expiration or termination of the Exchange Offers.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Old Debentures at the Book-Entry Transfer Facility for purposes of the
Exchange Offers within two business days after the date of this
33
<PAGE>
Prospectus unless the Exchange Agent already has established an account with
the Book-Entry Transfer Facility suitable for the Exchange Offers, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Old Debentures by causing
the Book-Entry Transfer Facility to transfer such Old Debentures into the
Exchange Agent's account at the Book-Entry Transfer Facility in accordance
with such Book-Entry Transfer Facility's procedures for transfer. However,
although delivery of Old Debentures may be effected through book-entry
transfer at the Book-Entry Transfer Facility, the Letter of Transmittal or a
facsimile thereof, with any required signature guarantees or an Agent's
Message in lieu thereof and any other required documents, must, in any case,
be transmitted to and received by the Exchange Agent at the address set forth
below under "--Exchange Agent" on or prior to the Expiration Date or the
guaranteed procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered Holder of the Old Debentures desires to tender such Old
Debentures and time will not permit such Holder's Old Debentures or other
required documents to reach the Exchange Agent before the Expiration Date, or
the procedure for book-entry transfer cannot be completed on a timely basis, a
tender may be effected if (i) the tender is made through an Eligible
Institution, (ii) on or prior to 5:00 p.m., New York City time, on the
Expiration Date, the Exchange Agent receives from such Eligible Institution a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Company (by telegram, telex,
facsimile transmission, mail or hand delivery), setting forth the name and
address of the Holder of Old Debentures and the amount of Old Debentures
tendered, stating that the tender is being made thereby and guaranteeing that
within three New York Stock Exchange ("NYSE") trading days after the date of
execution of the Notice of Guaranteed Delivery, the certificates for all
physically tendered Old Debentures, in proper form for transfer, or a Book-
Entry Confirmation, as the case may be, together with a properly completed and
duly executed Letter of Transmittal (or facsimile thereof or Agent's Message
in lieu thereof) with any required signature guarantees and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent, and (iii) the certificates for
all physically tendered Old Debentures, in proper form for transfer, or a
Book-Entry Confirmation, as the case may be, together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof or
Agent's Message in lieu thereof) with any required signature guarantees, and
any other documents required by the Letter of Transmittal are deposited by the
Eligible Institution within three NYSE trading days after the date of
execution of the Notice of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Old Debentures may be withdrawn at any time prior to 5:00 p.m.,
New York City time, on the Expiration Date. For a withdrawal to be effective,
a written notice or facsimile transmission notice of withdrawal must be
received by the Exchange Agent at the address set forth below under "--
Exchange Agent." Any such notice of withdrawal must specify the name of the
person having tendered the Old Debentures to be withdrawn, identify the Old
Debentures to be withdrawn (including the principal amount of such Old
Debentures), and (where certificates for Old Debentures have been transmitted)
specify the name in which such Old Debentures are registered, if different
from that of the withdrawing Holder. If certificates for Old Debentures have
been delivered or otherwise identified to the Exchange Agent, then, prior to
the release of such certificates the withdrawing Holder must also submit the
serial numbers of the particular certificates to be withdrawn and a signed
notice of withdrawal with signatures guaranteed by an Eligible Institution
unless such Holder is an Eligible Institution in which case such guarantee
will not be required. If Old Debentures have been tendered pursuant to the
procedure for book-entry transfer described above, any notice of withdrawal
must specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Old Debentures and otherwise comply
with the procedures of such facility. All questions as to the validity, form
and eligibility (including time of receipt) of such notices will be determined
by the Company, whose determination will be final and binding on all parties.
Any Old Debentures so withdrawn will be deemed not to have been validly
tendered for exchange for purposes of the Exchange Offers. Any Old Debentures
which have been
34
<PAGE>
tendered for exchange but which are not exchanged for any reason will be
returned to the Holder thereof without cost to such Holder (or, in the case of
Old Debentures tendered by book-entry transfer into the Exchange Agent's
account at the Book-Entry Transfer Facility pursuant to the book-entry
transfer procedures described above, such Old Debentures will be credited to
an account maintained with such Book-Entry Transfer Facility for the Old
Debentures) as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offers. Properly withdrawn Old Debentures may be
retendered by following one of the procedures described under "--Procedures
for Tendering Old Debentures" above at any time on or prior to the Expiration
Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFERS
Notwithstanding any other provisions of the Exchange Offers, and subject to
its obligations pursuant to the Registration Rights Agreement, the Company
shall not be required to accept for exchange, or to issue New Debentures in
exchange for, any Old Debentures and may terminate or amend any or all of the
Exchange Offers, if at any time before the acceptance of such New Debentures
for exchange, any of the following events shall occur:
(i) any injunction, order or decree shall have been issued by any court
or any governmental agency that would prohibit, prevent or otherwise
materially impair the ability of the Company to proceed with any of the
respective Exchange Offers; or
(ii) the Exchange Offers will violate any applicable law or any
applicable interpretation of the staff of the Commission.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company in whole or in part at any time and from time to time
upon advice of outside counsel. The failure by the Company at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and such right shall be deemed an ongoing right which may be asserted at
any time and from time to time.
In addition, the Company will not accept for exchange any Old Debentures
tendered and no New Debentures will be issued in exchange for any such Old
Debentures, if at such time any stop order is threatened by the Commission or
in effect with respect to the Registration Statement of which this Prospectus
is a part or the qualification of the Indenture with respect to the New
Debentures under the Trust Indenture Act of 1939, as amended.
The Exchange Offer is not conditioned on any minimum principal amount of Old
Debentures being tendered for exchange.
EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as the Exchange Agent for the
Exchange Offers. All executed Letters of Transmittal should be directed to the
Exchange Agent at the address set forth below. Questions and requests for
assistance, requests for additional copies of this Prospectus or of the Letter
of Transmittal and requests for Notices of Guaranteed Delivery should be
directed to the Exchange Agent addressed as follows:
The Chase Manhattan Bank, Exchange Agent
By Mail, Overnight Courier or Hand Delivery:
450 West 33rd Street
15th Floor
New York, New York 10001-2697
Attention: Ronald J. Halleran
By Facsimile:
212-946-8158
212-946-8159
Confirm by Telephone:
212-946-3068
35
<PAGE>
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF TRANSMITTAL.
FEES AND EXPENSES
The Company will not make any payment to brokers, dealers or others
soliciting acceptances of the Exchange Offers.
The expenses to be incurred in connection with the Exchange Offers will be
paid by the Company. Such expenses include registration fees, fees and
expenses of the Exchange Agent and Trustee, accounting and legal fees and
printing costs, among others.
TRANSFER TAXES
Holders who tender their Old Debentures for exchanges will not be obligated
to pay any transfer taxes in connection therewith, except that Holders who
instruct the Company to register New Debentures in the name of, or request
that Old Debentures not tendered or not accepted in the Exchange Offers be
returned to, a person other than the registered tendering Holder will be
responsible for the payment of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD DEBENTURES
Holders of Old Debentures who do not exchange their Old Debentures for New
Debentures pursuant to the Exchange Offers will continue to be subject to the
provisions in the Old Debentures regarding transfer and exchange of the Old
Debentures and the restrictions on transfer of such Old Debentures as set
forth in the legend thereon as a consequence of the issuance of the Old
Debentures pursuant to exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state
securities laws. In general, the Old Debentures may not be offered or sold,
unless registered under the Securities Act and applicable state securities
laws. The Company does not currently anticipate that it will register under
the Securities Act Old Debentures not tendered. See "Description of the New
Debentures--Registration Rights Agreement."
Based on interpretations by the staff of the Commission, as set forth in no-
action letters issued to third parties, the Company believes that New
Debentures issued pursuant to the Exchange Offers in exchange for Old
Debentures may be offered for resale, resold or otherwise transferred by
Holders thereof (other than any such Holder which is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that such New Debentures are acquired in the ordinary
course of such Holders' business and such Holders, other than broker-dealers,
have no arrangement or understanding with any person to participate in the
distribution of such New Debentures. However, the Commission has not
considered the Exchange Offers in the context of a no-action letter and there
can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offers as in such other
circumstances. Each Holder, other than a broker-dealer, must acknowledge that
it is not engaged in, and does not intend to engage in, a distribution of such
New Debentures and has no arrangement or understanding to participate in a
distribution of New Debentures. If any Holder is an affiliate of the Company
or is engaged in or intends to engage in or has any arrangement or
understanding with respect to the distribution of the New Debentures to be
acquired pursuant to the Exchange Offers, such Holder (i) may not rely on the
applicable interpretations of the staff of the Commission and (ii) must comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with any resale transaction. Each broker-dealer that
receives New Debentures for its own account in exchange for Old Debentures
pursuant to the Exchange Offers must acknowledge that such Old Debentures were
acquired by such broker-dealer as a result of market-making activities or
other trading activities and that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Debentures. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed
36
<PAGE>
to admit that it is an "underwriter" within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may
be used by a broker-dealer in connection with resales of New Debentures
received in exchange for Old Debentures where such Old Debentures were
acquired by such broker-dealer as a result of market-making activities or
other trading activities. The Company has agreed that for a period of 180 days
after the Expiration Date, it will make this Prospectus available to any
broker-dealer for use in connection with any such laws of certain
jurisdictions, if applicable, where the New Debentures may not be offered or
sold unless they have been registered or qualified for sale in such
jurisdictions or any exemption from registration or qualification is available
and is complied with. The Company has agreed, pursuant to the Registration
Rights Agreement, subject to certain limitations specified therein, to
register or qualify the New Debentures for offer or sale under the securities
laws of such jurisdictions as any Holder reasonably requests in writing.
Unless a Holder so requests, the Company does not currently intend to register
or qualify the sale of the New Debentures in any such jurisdictions.
37
<PAGE>
DESCRIPTION OF NEW DEBENTURES
GENERAL
The Old Debentures were issued under the Indenture and the New Debentures
also will be issued under the Indenture. Each series of Old Debentures and the
corresponding series of New Debentures will be treated as a single series of
securities under the Indenture. The following summary of certain provisions of
the Indenture does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the
Indenture, including the definitions of certain terms therein and those terms
made a part thereof by the Trust Indenture Act of 1939, as amended. A copy of
the Indenture is available from the Company upon request. Whenever defined
terms of the Indenture not otherwise defined herein are referred to, such
defined terms are incorporated herein by reference. The term "Debentures"
means the New Debentures and the Old Debentures treated as a single class.
The Indenture does not limit the aggregate principal amount of securities
that can be issued thereunder. Securities may be issued in one or more series
as may be authorized from time to time by the Company. Ten series of
securities, including the Debentures, are currently outstanding under the
Indenture.
Payments of interest on the Debentures may be made at the option of the
Company by check mailed to the registered holders thereof or, at the option of
a holder, by wire transfer to an account maintained by the payee with a bank
located in the United States designated by such holder.
The Debentures may be transferred or exchanged at an office or agency to be
maintained by the Company, subject to the limitations provided in the
Indenture, without the payment of any service charge, other than any tax or
governmental charge payable in connection therewith. Each series of Debentures
is issuable in denominations of $1,000 and multiples thereof.
All moneys deposited with the Trustee or any Paying Agent, or held by the
Company, in trust for the payment of principal of or interest on any
Debentures and remaining unclaimed at the end of two years after such
principal or interest shall have become due and payable will be repaid to the
Company, and the holders of such Debentures will thereafter look only to the
Company for payment thereof.
CERTAIN TERMS OF THE 2002 DEBENTURES
The 2002 Debentures will be limited to $350 million aggregate principal
amount and will mature on May 1, 2002. The 2002 Debentures will bear interest
at the rate of 7.05% per annum from May 1, 1997, payable semiannually in
arrears on May 1 and November 1 of each year, commencing November 1, 1997, to
the persons in whose names the 2002 Debentures are registered at the close of
business on the preceding April 15 or October 15, each a record date, as the
case may be. If an Interest Payment Date would otherwise be a day that is not
a Business Day, such Interest Payment Date shall not be postponed; provided,
however, that any payment required to be made on such date that is not a
Business Day need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall accrue as a result of such delayed
payment. Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months. The 2002 Debentures will not be subject to any
sinking fund.
CERTAIN TERMS OF THE 2004 DEBENTURES
The 2004 Debentures will be limited to $300 million aggregate principal
amount and will mature on May 1, 2004. The 2004 Debentures will bear interest
at the rate of 7.25% per annum from May 1, 1997, payable semiannually in
arrears on May 1 and November 1 of each year, commencing November 1, 1997, to
the persons in whose names the 2004 Debentures are registered at the close of
business on the preceding April 15 or October 15, each a record date, as the
case may be. If an Interest Payment Date would otherwise be a day that is not
a Business Day, such Interest Payment Date shall not be postponed; provided,
however, that any payment required to be made on such date that is not a
Business Day need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall
38
<PAGE>
accrue as a result of such delayed payment. Interest will be computed on the
basis of a 360-day year consisting of twelve 30-day months. The 2004
Debentures will not be subject to any sinking fund.
CERTAIN TERMS OF THE 2007 DEBENTURES
The 2007 Debentures will be limited to $450 million aggregate principal
amount and will mature on May 1, 2007. The 2007 Debentures will bear interest
at the rate of 7.45% per annum from May 1, 1997, payable semiannually in
arrears on May 1 and November 1 of each year, commencing November 1, 1997, to
the persons in whose names the 2007 Debentures are registered at the close of
business on the preceding April 15 or October 15, each a record date, as the
case may be. If an Interest Payment Date would otherwise be a day that is not
a Business Day, such Interest Payment Date shall not be postponed; provided,
however, that any payment required to be made on such date that is not a
Business Day need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall accrue as a result of such delayed
payment. Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months. The 2007 Debentures will not be subject to any
sinking fund.
CERTAIN TERMS OF THE 2017 DEBENTURES
The 2017 Debentures will be limited to $400 million aggregate principal
amount and will mature on May 1, 2017. The 2017 Debentures will bear interest
at the rate of 7.90% per annum from May 1, 1997, payable semiannually in
arrears on May 1 and November 1 of each year, commencing November 1, 1997, to
the persons in whose names the 2017 Debentures are registered at the close of
business on the preceding April 15 or October 15, each a record date, as the
case may be. If an Interest Payment Date would otherwise be a day that is not
a Business Day, such Interest Payment Date shall not be postponed; provided,
however, that any payment required to be made on such date that is not a
Business Day need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall accrue as a result of such delayed
payment. Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months. The 2017 Debentures will not be subject to any
sinking fund.
CERTAIN TERMS OF THE 7.95% 2027 DEBENTURES
The 7.95% 2027 Debentures will be limited to $500 million aggregate
principal amount and will mature on May 1, 2027. Such Debentures will bear
interest at the rate of 7.95% per annum from May 1, 1997, payable semiannually
in arrears on May 1 and November 1 of each year, commencing November 1, 1997,
to the persons in whose names the 7.95% 2027 Debentures are registered at the
close of business on the preceding April 15 or October 15, each a record date,
as the case may be. If an Interest Payment Date would otherwise be a day that
is not a Business Day, such Interest Payment Date shall not be postponed;
provided, however, that any payment required to be made on such date that is
not a Business Day need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall accrue as a result of such delayed
payment. Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months. The 7.95% 2027 Debentures will not be subject to any
sinking fund.
CERTAIN TERMS OF THE 6.95% 2027 DEBENTURES
The 6.95% 2027 Debentures will be limited to $100 million aggregate
principal amount and will mature on May 1, 2027. Such Debentures will bear
interest at the rate of 6.95% per annum from May 1, 1997, payable semiannually
in arrears on May 1 and November 1 of each year, commencing November 1, 1997,
to the persons in whose names the 6.95% 2027 Debentures are registered at the
close of business on the preceding April 15 or October 15, each a record date,
as the case may be. If an Interest Payment Date would otherwise be a day that
is not a Business Day, such Interest Payment Date shall not be postponed;
provided, however, that any payment required to be made on such date that is
not a Business Day need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall accrue as a result of such delayed
payment. Interest will be computed on the basis of a 360-day
39
<PAGE>
year consisting of twelve 30-day months. The 6.95% 2027 Debentures will not be
subject to any sinking fund, but are subject to repurchase at the option of
the holder. See "--Purchase at Option of Holder."
CERTAIN TERMS OF THE 7.25% 2027 DEBENTURES
The 7.25% 2027 Debentures will be limited to $250 million aggregate
principal amount and will mature on May 1, 2027. Such Debentures will bear
interest at the rate of 7.25% per annum from May 1, 1997, payable semiannually
in arrears on May 1 and November 1 of each year, commencing November 1, 1997,
to the persons in whose names the 7.25% 2027 Debentures are registered at the
close of business on the preceding April 15 or October 15, each a record date,
as the case may be. If an Interest Payment Date would otherwise be a day that
is not a Business Day, such Interest Payment Date shall not be postponed;
provided, however, that any payment required to be made on such date that is
not a Business Day need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall accrue as a result of such delayed
payment. Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months. The 7.25% 2027 Debentures will not be subject to any
sinking fund, but are subject to repurchase at the option of the holder. See
"--Purchase at Option of Holder."
CERTAIN TERMS OF THE 2032 DEBENTURES
The 2032 Debentures will be limited to $150 million aggregate principal
amount and will mature on May 1, 2032. The 2032 Debentures will bear interest
at the rate of 8.30% per annum from May 1, 1997, payable semiannually in
arrears on May 1 and November 1 of each year, commencing November 1, 1997, to
the persons in whose names the 2032 Debentures are registered at the close of
business on the preceding April 15 or October 15, each a record date, as the
case may be. If an Interest Payment Date would otherwise be a day that is not
a Business Day, such Interest Payment Date shall not be postponed; provided,
however, that any payment required to be made on such date that is not a
Business Day need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on such
date, and no additional interest shall accrue as a result of such delayed
payment. Interest will be computed on the basis of a 360-day year consisting
of twelve 30-day months. The 2032 Debentures will not be subject to any
sinking fund, but are subject to redemption at the option of the Company. See
"--Redemption."
REDEMPTION
Other than the 2032 Debentures, none of the other series of Debentures is
subject to redemption prior to maturity.
The 2032 Debentures are not redeemable prior to May 1, 2007. On or after May
1, 2007 and prior to maturity, the Company, at its option, may redeem all or,
from time to time, any part of the 2032 Debentures on at least 30 days' but
not more than 60 days' notice, as provided in the Indenture, at the following
redemption prices (expressed in percentages of the principal amount) during
the 12-month periods beginning May 1:
<TABLE>
<S> <C>
2007............................................................. 104.150%
2008............................................................. 103.735%
2009............................................................. 103.320%
2010............................................................. 102.905%
2011............................................................. 102.490%
2012............................................................. 102.075%
2013............................................................. 101.660%
2014............................................................. 101.245%
2015............................................................. 100.830%
2016............................................................. 100.415%
</TABLE>
and thereafter at 100%, together in each case with accrued interest to the
date fixed for redemption.
40
<PAGE>
PURCHASE AT OPTION OF HOLDER
Each holder of 6.95% 2027 Debentures and each holder of 7.25% 2027
Debentures will have the right to require the Company to repurchase all or a
portion of such series of Debentures owned by such holder (the "Put Option")
on May 1, 2002 and May 1, 2005, respectively (the "Put Option Exercise Date"),
at a purchase price equal to 100% of the principal amount of such Debentures
tendered by such holder plus accrued interest thereon. On and after the Put
Option Exercise Date, interest will cease to accrue on such Debentures or any
portion thereof tendered for repayment. On or before the Put Option Exercise
Date, the Company shall deposit with a paying agent (or the Trustee) money
sufficient to pay the principal of and any accrued interest on such Debentures
to be tendered for repayment.
A holder must provide the Company with notice of such holder's intention to
exercise the Put Option during the period from and including March 1, 2002
through and including April 1, 2002 (with respect to the 6.95% 2027
Debentures) and the period from and including March 1, 2005 through and
including April 1, 2005 (with respect to the 7.25% 2027 Debentures). Such
notice, once given, will be irrevocable unless waived by the Company.
The Company will comply with the provisions of Rule 13e-4, Rule 14e-1 and
any other tender offer rules under the Exchange Act if required and will file
Schedule 13E-4 or any other schedule if required thereunder in connection with
any offer by the Company to purchase the 6.95% 2027 Debentures or the 7.25%
2027 Debentures.
RANKING
The Debentures will be senior securities of the Company and the indebtedness
evidenced thereby will rank pari passu with all other unsubordinated and
unsecured indebtedness of the Company.
CERTAIN COVENANTS AND AGREEMENTS OF THE COMPANY
The Indenture does not limit the amount of indebtedness or lease obligations
that may be incurred by the Company and its subsidiaries. The Indenture does
not contain provisions which would give holders of the Debentures the right to
require the Company to repurchase their Debentures in the event of a decline
in the credit rating of the Company's debt securities resulting from a
takeover, recapitalization or similar restructuring.
Limitation on Liens on Stock or Indebtedness of Principal Subsidiaries
The Indenture provides that, with respect to the Debentures, the Company may
not, nor may it permit any Subsidiary to, create, assume, incur or suffer to
exist any mortgage, pledge, lien, encumbrance, charge or security interest of
any kind upon any stock or indebtedness, whether owned on the date of the
Indenture or thereafter acquired, of any Principal Subsidiary, to secure any
Obligation (other than the Debentures) of the Company, any Subsidiary or any
other Person, without in any such case making effective provision whereby all
of the outstanding Debentures (and other outstanding debt securities issued
from time to time pursuant to the Indenture) shall be directly secured equally
and ratably with such Obligation. This provision does not restrict any other
property of the Company or its Subsidiaries. The Indenture defines
"Obligation" as indebtedness for money borrowed or indebtedness evidenced by a
bond, note, debenture or other evidence of indebtedness; "Principal
Subsidiary" as CSXT, Sea-Land and ACL; and "Subsidiary" as a corporation a
majority of the outstanding voting stock of which is owned, directly or
indirectly, by the Company or one or more Subsidiaries, or by the Company and
one or more Subsidiaries. The Indenture does not prohibit the sale by the
Company or any Subsidiary of any stock or indebtedness of any Subsidiary.
Consolidation, Merger and Sale of Assets
The Indenture provides that the Company may, without the consent of the
holders of any of the outstanding Debentures of a series, consolidate with,
merge into or transfer its assets substantially as an entirety to any
41
<PAGE>
corporation organized under the laws of any domestic or foreign jurisdiction,
provided that (i) the successor corporation assumes the due and punctual
payment of the principal of and interest on all debt securities issued under
the Indenture and the performance of every covenant of the Indenture, (ii)
immediately after giving effect thereto, no Event of Default, and no event
which, after notice or lapse of time, or both, would become an Event of
Default, shall have happened and be continuing, and (iii) certain other
conditions are met.
EVENTS OF DEFAULT AND REMEDIES
An Event of Default with respect to the Debentures of any series is defined
in the Indenture as being a:
(a) default in the payment of any interest upon any Debenture of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(b) default in the payment of the principal of or any premium on any
Debenture of that series at its Maturity; or
(c) default in the performance, or breach, of any covenant or warranty of
the Company in the Indenture (other than a covenant or warranty a default
in the performance of which or the breach of which is elsewhere
specifically dealt with or which has expressly been included in the
Indenture solely for the benefit of series of Debentures other than that
series), and continuance of such default or breach for a period of 90 days
after there has been given written notice of such default to the Company by
the Trustee or to the Company and the Trustee by the holders of at least
25% in principal amount of the outstanding Debentures of that series; or
(d) certain events of bankruptcy, insolvency or reorganization of the
Company.
No Event of Default with respect to any particular series of Debentures
necessarily constitutes an Event of Default with respect to any other series
of Debentures. The Indenture provides that the Trustee thereunder may withhold
notice to the holders of the Debentures of the occurrence of a default with
respect to such Debentures (except a default in payment of principal, premium,
if any, or interest) if the Trustee in good faith determines it is in the
interest of the holders to do so.
The Indenture provides that if an Event of Default with respect to any
Debentures of any series then outstanding issued thereunder shall occur and be
continuing, either the Trustee or the holders of not less than 25% in
aggregate principal amount of such Debentures then outstanding may declare the
principal amount of all such Debentures of that series to be due and payable
immediately, but upon certain conditions such declaration may be rescinded and
annulled by the holders of a majority in aggregate principal amount of such
Debentures then outstanding.
Subject to the provisions of the Trust Indenture Act of 1939, as amended,
requiring each Trustee, during an Event of Default under the relevant
Indenture, to act with the requisite standard of care, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders of any Debentures unless such
holders have offered the Trustee reasonable indemnity. Subject to the
foregoing, holders of a majority in aggregate principal amount of Debentures
of any series then outstanding issued under the Indenture shall have the
right, subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee under the
Indenture with respect to such Debentures. The Indenture requires the annual
filing by the Company with the Trustee of a certificate as to whether or not
the Company is in default under the terms of the Indenture.
BOOK-ENTRY, DELIVERY AND FORM
Except as described below, each series of Debentures sold will be issued in
the form of one or more Global Securities. The Global Securities will be
deposited with, or on behalf of, the Depositary and registered in the name of
the Depositary or its nominee. Except as set forth below, the Global
Securities may be transferred, in whole and not in part, only to the
Depositary or another nominee of the Depositary. Investors may hold their
42
<PAGE>
beneficial interests in the Global Securities directly through the Depositary
if they have an account with the Depositary or indirectly through
organizations which have accounts with the Depositary.
Debentures (i) originally purchased by or transferred to institutional
"accredited investors" who are not QIBS or (ii) except as described below,
purchased by or transferred to Persons outside the United States pursuant to
sales in accordance with Regulation S under the Securities Act (collectively
referred to herein as the "Non-Global Purchasers"), will be in registered form
without interest coupons ("Certificated Debentures"). Upon the transfer to a
QIB of Certificated Debentures initially issued to a Non-Global Purchaser,
such Certificated Debentures will be exchanged for an interest in the Global
Security. For a description of the restrictions on transfer of Certificated
Debentures, see "Notice to Investors."
Debentures originally purchased by persons outside the United States
pursuant to sales in accordance with Regulation S under the Securities Act
will be represented upon issuance by a temporary global Debenture certificate
in fully registered form without interest coupons (the "Temporary
Certificate") which will not be exchangeable for Certificated Debentures until
the expiration of the "40-day restricted period" within the meaning of Rule
903(c)(3) of Regulation S under the Securities Act. The Temporary Certificate
will be registered in the name of, and held by, a temporary certificate holder
until the expiration of such 40-day period, at which time the Temporary
Certificate will be delivered to the Trustee in exchange for Certificated
Debentures registered in the names requested by such temporary certificate
holder. In addition, until the expiration of such 40-day period, transfers of
interests in the Temporary Certificate can only be effected through such
temporary certificate holder in accordance with the requirements set forth in
"Notice to Investors."
The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company and organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code, and "a clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depositary was created to hold securities of institutions that have accounts
with the Depositary ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. The Depositary's participants include securities brokers and
dealers (which may include the Initial Purchasers), banks, trust companies,
clearing corporations and certain other organizations. Access to the
Depositary's book-entry system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, whether directly or indirectly
("indirect participants").
Upon the issuance of the Global Securities, the Depositary or its custodian
will credit, on its book-entry registration and transfer system, the principal
amount of the Debentures represented by such Global Securities to the accounts
of participants. The accounts to be credited shall be designated by the
Initial Purchasers (as defined below) of such series of Debentures. Ownership
of beneficial interests in the Global Securities will be limited to
participants or persons that may hold interests through participants.
Ownership of beneficial interests in the Global Securities will be shown on,
and the transfer of those ownership interests will be effected only through,
records maintained by the Depositary or its nominee (with respect to
participants' interests) and such participants (with respect to the owners of
beneficial interests in the Global Securities other than participants). The
laws of some jurisdictions may require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such limits and
laws may impair the ability to transfer or pledge beneficial interests in the
Global Securities.
So long as the Depositary, or its nominee, is the registered holder and
owner of the Global Securities, the Depositary or such nominee, as the case
may be, will be considered the sole legal owner and holder of the related
Debentures for all purposes of such Debentures and the Indenture. Except as
set forth below, owners of beneficial interests in the Global Securities will
not be entitled to have the Debentures represented by the Global Securities
registered in their names, will not receive or be entitled to receive physical
delivery of certificated Debentures in definitive form and will not be
considered to be the owners or holders of any Debentures under the Global
43
<PAGE>
Securities. The Company understands that under existing industry practice, in
the event an owner of a beneficial interest in the Global Securities desires
to take any action that the Depositary, as the holder of the Global
Securities, is entitled to take, the Depositary would authorize the
participants to take such action, and that the participants would authorize
beneficial owners owning through such participants to take such action or
would otherwise act upon the instructions of beneficial owners owning through
them.
Payment of principal of and interest on Debentures represented by the Global
Securities registered in the name of and held by the Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner and holder of the Global Securities.
The Company expects that the Depositary or its nominee, upon receipt of any
payment of principal of or interest on the Global Securities, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global
Securities as shown on the records of the Depositary or its nominee. The
Company also expects that payments by participants to owners of beneficial
interests in the Global Securities held through such participants will be
governed by standing instructions and customary practices and will be the
responsibility of such participants. The Company will not have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the Global
Securities for any Debentures or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests or for any other
aspect of the relationship between the Depositary and its participants or the
relationship between such participants and the owners of beneficial interests
in the Global Securities owning through such participants.
Unless and until exchanged in whole or in part for certificated Debentures
in definitive form, the Global Securities for each series of Debentures may
not be transferred except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by the Depositary or any nominee to a successor
of the Depositary or a nominee of such successor.
Although the Depositary has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Securities among participants
of the Depositary, it is under no obligation to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. Neither
the Trustee nor the Company will have any responsibility for the performance
by the Depositary or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
The Global Securities representing the Debentures are exchangeable for
definitive Debentures in registered form, of like tenor and of an equal
aggregate principal amount, only if (x) the Depositary notifies the Company
that it is unwilling, unable or ineligible to continue as Depositary for such
Global Securities or if at any time the Depositary ceases to be a clearing
agency registered under the Exchange Act, (y) the Company in its sole
discretion determines that the Global Securities representing the Debentures
shall be exchangeable for definitive Debentures in registered form or (z) any
event shall have happened and be continuing which, after notice or lapse of
time, or both, would become an Event of Default with respect to such
Debentures. In the event that any Global Security representing the Debentures
is exchangeable pursuant to the preceding sentence, it shall be exchangeable
in whole for definitive Debentures in registered form, of like tenor and of an
equal aggregate principal amount, in denominations of $1,000 and integral
multiples thereof. Such definitive Debentures shall be registered in the name
or names of such person or persons as the Depositary shall instruct the
security registrar. It is expected that such instructions may be based upon
directions received by the Depositary from its participants with respect to
ownership of Debentures.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the relevant series of Debentures, as the case may be,
then outstanding and affected by a modification or amendment, to modify or
amend any of the provisions of the Indenture or of such Debentures or the
rights of the holders of such Debentures under the Indenture, provided
44
<PAGE>
that no such modification or amendment shall, without the consent of each
holder of each outstanding Debenture affected thereby:
(i) change the Stated Maturity of the principal of, or any installment of
interest on, any such Debenture or reduce the principal amount thereof or
any premium thereon, or reduce the rate of interest thereon, or change the
coin or currency in which any Debenture or any premium or interest thereon
is payable, or impair the holder's right to institute suit to enforce the
payment of any such Debentures on or after the Stated Maturity,
(ii) reduce the aforesaid percentage in principal amount of such
Debentures, the consent of the holders of which is required for any such
modification or amendment or the consent of whose holders is required for
any waiver (of compliance with certain provisions of the Indenture or
certain defaults thereunder and their consequences) or reduce the
requirements for a quorum or voting at a meeting of holders of such
Debentures,
(iii) change any obligation of the Company to maintain an office or
agency in the places and for the purposes required by the Indenture, or
(iv) modify any of the above provisions.
The Indenture also contains provisions permitting the Company and the
Trustee, without the consent of the holders of such Debentures issued
thereunder, to modify or amend the Indenture in order, among other things:
(a) to add any additional Events of Default or add to the covenants of
the Company for the benefit of the holders of all or any series of
Debentures issued under the Indenture;
(b) to establish the form or terms of Debentures of any series;
(c) to cure any ambiguity, to correct or supplement any provision therein
which may be inconsistent with any other provision therein, or to make any
other provisions with respect to matters or questions arising under the
Indenture which shall not adversely affect the interests of the holders of
any debt securities issued thereunder in any material respect; or
(d) to change or eliminate any of the provisions of the Indenture,
provided that any such change or elimination shall become effective only
when there is no debt security outstanding of any series issued under the
Indenture created prior to the execution of the supplemental indenture
which is entitled to the benefit of such provision.
The holders of at least a majority in aggregate principal amount of
outstanding Debentures of a series may, on behalf of the holders of Debentures
of that series, waive compliance by the Company with certain restrictive
provisions of the Indenture, including the covenant described above under
"Certain Covenants of the Company--Limitation on Liens on Stock or
Indebtedness of Principal Subsidiaries." The holders of not less than a
majority in aggregate principal amount of such outstanding Debentures of any
series may, on behalf of all holders of such series of Debentures, waive any
past default under the Indenture with respect to such Debentures and its
consequences, except a default in the payment of the principal of, premium, if
any, or interest on such Debentures or in respect of a covenant or provision
which cannot be modified or amended without the consent of the holder of each
outstanding Debenture affected.
The Indenture contains provisions for convening meetings of the holders of
the Debentures of any series. A meeting may be called at any time by the
Trustee, and also, upon request, by the Company or the holders of at least 10%
in aggregate principal amount of the outstanding Debentures of any series, in
any such case upon notice given in accordance with the provisions of the
Indenture. Except for any consent which must be given by the holder of each
outstanding Debenture affected thereby, as described above, any resolution
presented at a meeting or adjourned meeting duly reconvened at which a quorum
(as described below) is present may be adopted by the affirmative vote of the
holders of a majority in principal amount of such outstanding Debentures of
that series; provided, however, that any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which may be made, given or taken by the holders of a specified
45
<PAGE>
percentage, which is less than a majority, in principal amount of such
outstanding Debentures may be adopted at a meeting or adjourned meeting duly
reconvened at which a quorum is present by the affirmative vote of the holders
of such specified percentage in principal amount of such outstanding
Debentures. Any resolution passed or decision taken at any meeting of holders
of Debentures of any series duly held in accordance with the Indenture will be
binding on all holders of such Debentures. The quorum required for any meeting
called to adopt a resolution, and at any reconvened meeting, will be persons
holding or representing a majority in principal amount of such outstanding
Debentures, subject to certain exceptions.
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The Indenture shall generally cease to be of any further effect if (a) the
Company has delivered to the Trustee for cancellation all debt securities
issued thereunder or (b) all debt securities issued thereunder not theretofore
delivered to the Trustee for cancellation shall have become due and payable,
or are by their terms to become due and payable within one year or are to be
called for redemption within one year, and the Company shall have deposited
with the Trustee as trust funds the entire amount sufficient to pay and
discharge at Stated Maturity or upon redemption the entire indebtedness on all
debt securities issued thereunder (and if, in either case, the Company has
paid or caused to be paid all other sums payable under the Indenture by the
Company and the Company has delivered an officers' certificate and an opinion
of counsel each stating that the requisite conditions have been complied
with).
In addition, the Company shall have a "legal defeasance option" (pursuant to
which it may terminate, with respect to any series of Debentures, all of its
obligations under such Debentures and the Indenture with respect to such
Debentures) and a "covenant defeasance option" (pursuant to which it may
terminate, with respect to any series of Debentures, its obligations with
respect to such Debentures under certain specified covenants contained in the
Indenture, including its obligations described under "Limitation on Liens on
Stock and Indebtedness of Principal Subsidiaries"). If the Company exercises
its legal defeasance option with respect to any series of Debentures, payment
of such Debentures may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option with respect to any
series of Debentures, payment of such Debentures may not be accelerated
because of an Event of Default related to the specified covenants. The Company
may exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option.
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to any series of Debentures, only if (a) the
Company irrevocably deposits in trust with the Trustee cash and/or U.S.
Government Obligations for the payment of principal, premium, if any, and
interest with respect to such Debentures to maturity or redemption, as the
case may be, and the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent public accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any deposited
money without investment will provide cash at such times and in such amounts
as will be sufficient to pay the principal, premium, if any, and interest when
due with respect to all such Debentures to maturity or redemption, as the case
may be, (b) no Event of Default with respect to the Debentures of such series
shall have occurred and be continuing (i) on the date of such deposit or (ii)
with respect to certain bankruptcy defaults, at any time during the period
ending on the 123rd day after the date of such deposit, (c) such legal
defeasance or covenant defeasance does not result in the trust arising from
such deposit to constitute, unless it is qualified as, a regulated investment
company under the Investment Company Act of 1940, as amended, (d) the legal
defeasance or covenant defeasance shall not result in a breach or violation
of, or constitute a default under, the Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound, (e) the
Company delivers to the Trustee an opinion of counsel that the holders of such
Debentures will not recognize income, gain or loss for United States federal
income tax purposes as a result of such legal defeasance or covenant
defeasance and will be subject to United States federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such legal defeasance or covenant defeasance had not occurred, and (f) the
Company delivers to the Trustee an officers' certificate and an opinion of
counsel, each stating that all
46
<PAGE>
conditions precedent to the defeasance and discharge of such Debentures as
contemplated by the Indenture have been complied with. The opinion of counsel,
with respect to legal defeasance, referred to in clause (e) above, must refer
to and be based upon a ruling of the Internal Revenue Service or a change in
applicable United States federal income tax law occurring after the date of
the Indenture.
The Trustee shall hold in trust cash or U.S. Government Obligations
deposited with it as described above and shall apply the deposited cash and
the proceeds from deposited U.S. Government Obligations to the payment of
principal, premium, if any, and interest with respect to such Debentures.
CONCERNING THE TRUSTEE
The Company has the right to replace the Trustee under certain
circumstances, including (subject to the Company's satisfying certain
conditions) if the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business or assets
to another corporation or banking association.
The Company and certain of its subsidiaries may from time to time maintain
lines of credit, and have other customary banking and commercial
relationships, with the Trustee and its affiliates. The Trustee also acts as
trustee under another indenture pursuant to which the Company issued its 9%
Debentures Due 2006. The Trustee is the Administrative Agent under the Credit
Agreement and is an affiliate of one of the Initial Purchasers, Chase
Securities Inc. In addition, the Trustee and certain of its affiliates may own
Debentures.
REGISTRATION RIGHTS AGREEMENT
The Company entered into the Registration Rights Agreement with the Initial
Purchasers in connection with the sale of the Old Debentures pursuant to which
the Company has agreed, for the benefit of the holders of each series of Old
Debentures, at the Company's cost, to (i) file the Exchange Offer Registration
Statement, of which this Prospectus is a part, within 150 days after the date
of original issuance of such Old Debentures (May 8, 1997 for the Old 2032
Debentures and May 6, 1997 for the other Old Debentures, the "Issue Date")
with the Commission with respect to the Exchange Offers and (ii) use its best
efforts to cause the Exchange Offer Registration Statement to be declared
effective under the Securities Act within 180 days after the Issue Date.
Promptly after the Exchange Offer Registration Statement is declared
effective, the Company will consummate the Exchange Offers. The Company will
keep the Exchange Offers open for not less than 30 days (or longer if required
by applicable law) after the date notice of the Exchange Offers is mailed to
the holders of Old Debentures.
In the event that any changes in law or applicable interpretations of the
staff of the Commission do not permit the Company to effect the Exchange
Offers with respect to any series of Old Debentures, or if for any reason the
Exchange Offer Registration Statement is not declared effective within 180
days following the Issue Date, or upon the request of the Initial Purchasers
under certain circumstances, the Company will, in lieu of effecting the
registration of the applicable New Debentures pursuant to the Exchange Offer
Registration Statement and at its cost, (i) as promptly as practicable, file
with the Commission a Shelf Registration Statement covering resales of the
applicable Old Debentures, (ii) use its best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act by
the 210th day after the Issue Date (or promptly in the event of a request by
the Initial Purchasers) and (iii) keep effective the Shelf Registration
Statement until the earliest of (x) the second anniversary of the Issue Date
(or the first anniversary of the effective date if such Shelf Registration
Statement is filed at the request of the Initial Purchasers), (y) the time
when the Old Debentures registered thereunder can be sold by non-affiliates
pursuant to Rule 144 under the Securities Act without limitation under clauses
(c), (e), (f) and (h) of Rule 144, or (z) such time as all the Old Debentures
registered thereunder have been sold. During any consecutive 365-day period,
the Company will have the ability to suspend the availability of the Shelf
Registration Statement for up to two periods of up to 45 consecutive days, but
no more than an aggregate of 60 days during any 365-day period. The Company
will, in the event of the filing of a Shelf Registration Statement, provide to
each holder of such applicable Old Debentures copies of the prospectus which
is part of the Shelf Registration Statement, notify each such holder when the
Shelf Registration Statement for such Old Debentures has become effective and
take certain other actions as are required to permit unrestricted
47
<PAGE>
resales of such Old Debentures. A holder of such Old Debentures that sells
such Old Debentures pursuant to the Shelf Registration Statement generally
will be required to be named as a selling security holder in the related
prospectus and to deliver a prospectus to the purchaser, will be subject to
certain of the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
Registration Rights Agreement which are applicable to such a holder (including
certain indemnification obligations). In addition, each Holder of such Old
Debentures will be required to deliver information to be used in connection
with the Shelf Registration Statement and to provide comments on the Shelf
Registration Statement within the time periods set forth in the Registration
Rights Agreement in order to have their Old Debentures included in the Shelf
Registration Statement and to benefit from the provisions regarding Special
Interest set forth in the following paragraph. If the Company has consummated
the Exchange Offers, then, subject to certain limited exceptions, the Company
will have no obligation to file or to maintain the effectiveness of a Shelf
Registration Statement with respect to any Old Debentures that are not
tendered in the Exchange Offers.
In the event that (i) by the 150th day following the Issue Date, the
Exchange Offer Registration Statement is not filed with the Commission, (ii)
by the 180th day following the Issue Date, neither the Exchange Offer
Registration Statement is declared effective nor (if the Exchange Offers are
not permitted as described above) the Shelf Registration Statement is filed
with the Commission, or (iii) by the 210th day following the Issue Date, one
or more of the Exchange Offers with respect to any series of Old Debentures is
not consummated or the Shelf Registration Statement is not declared effective
with respect thereto (each such event referred to in clauses (i) through
(iii), a "Registration Default"), interest will accrue on the applicable Old
Debentures (in addition to stated interest on such Old Debentures) from and
including the next day following each such Registration Default. In each case
such additional interest (the "Special Interest") will be payable in cash
semiannually in arrears each May 1 and November 1, at a rate per annum equal
to 0.25% of the principal amount of such Old Debentures for each such
Registration Default. The aggregate amount of Special Interest payable
pursuant to the above provisions will, however, in no event exceed 0.25% per
annum of the principal amount of such Old Debentures. Upon (a) the filing of
the Exchange Offer Registration Statement after the 150-day period described
in clause (i) above, (b) the effectiveness of the Exchange Offer Registration
Statement or the filing of the Shelf Registration Statement after the 180-day
period described in clause (ii) above or (c) the consummation of the Exchange
Offer for such Old Debentures or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 210-day period described in clause
(iii) above, the Special Interest payable on such Old Debentures as a result
of the applicable Registration Default will cease to accrue. For purposes of
the preceding sentence, the curing of a Registration Default by the means
described in clause (b) above shall constitute a cure of the Registration
Defaults described in clauses (i) and (ii) above, and the curing of a
Registration Default by the means described in clause (c) above shall
constitute a cure of the Registration Defaults described in clauses (i), (ii)
and (iii) above.
In the event that a Shelf Registration Statement is declared effective
pursuant to the paragraph preceding the immediately preceding paragraph, if
the Company fails to keep such Registration Statement continuously effective
for the period required by the Registration Rights Agreement (except as
specifically permitted therein), then from such time as the Shelf Registration
Statement is no longer effective until the earlier of (i) the date that the
Shelf Registration Statement is again deemed effective and (ii) the date that
is the earliest of (x) the second anniversary of the Issue Date (or until the
first anniversary of the effective date if the Shelf Registration Statement is
filed at the request of the Initial Purchasers), (y) the time when the Old
Debentures registered thereunder can be sold by non-affiliates pursuant to
Rule 144 under the Securities Act without any limitation under clauses (c),
(e), (f) and (h) of Rule 144, or (z) the date as of which all such Old
Debentures are sold pursuant to the Shelf Registration Statement, Special
Interest shall accrue at a rate per annum equal to 0.25% of the principal
amount of the Old Debentures and shall be payable in cash semiannually in
arrears each May 1 and November 1.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which is available upon request to the Company.
48
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION
IN THE EXCHANGE OFFERS
An exchange of the Old Debentures for the New Debentures pursuant to the
Exchange Offers will not constitute a taxable event for federal income tax
purposes. As a result, holders who exchange their Old Debentures for New
Debentures should not recognize any income, gain or loss for federal income
tax purposes with respect to such exchange. An exchanging holder will have the
same adjusted basis and holding period in the New Debentures as it had in the
Old Debentures immediately before the exchange.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES TO THEM OF EXCHANGING OLD DEBENTURES FOR NEW DEBENTURES IN THE
EXCHANGE OFFERS, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL,
OR FOREIGN TAX LAWS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Debentures for its own account pursuant
to the Exchange Offers must acknowledge that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale
of such New Debentures. This Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales
of New Debentures received in exchange for Old Debentures where such Old
Debentures were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, starting
on the Expiration Date and ending on the close of business 180 days after the
Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sale of New Debentures by
broker-dealers. New Debentures received by broker-dealers for their own
account pursuant to the Exchange Offers may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Debentures or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such New
Debentures. Any broker-dealer that resells New Debentures that were received
by it for its own account pursuant to the Exchange Offers and any broker or
dealer that participates in a distribution of such New Debentures may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit of any such resale of New Debentures and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation
under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus meeting the
requirements of the Securities Act, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such
documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offers (including the expenses of one
counsel for the holders of the Old Debentures) other than commissions or
concessions of any brokers or dealers and will indemnify the holders of the
Old Debentures (including any broker dealers) against certain liabilities,
including liabilities under the Securities Act.
VALIDITY OF DEBENTURES
The validity of the New Debentures offered hereby will be passed upon for
the Company by McGuire, Woods, Battle & Boothe, L.L.P., Richmond, Virginia.
Robert L. Burrus, Jr., a partner of McGuire, Woods, Battle & Boothe, L.L.P.,
is a director of the Company and owns 4,449 shares of the Company's common
stock.
49
<PAGE>
EXPERTS
The consolidated financial statements of the Company, incorporated by
reference in this Prospectus and elsewhere in the Registration Statement, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated by reference in this
Prospectus and in the Registration Statement in reliance upon such report
given upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Conrail as of December 31, 1996 and
1995, and for each of the years in the three-year period ended December 31,
1996 have been incorporated by reference in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm
as experts in auditing and accounting.
With respect to the unaudited consolidated financial information of Conrail
for the quarters ended March 31, 1997 and 1996, incorporated by reference in
this Prospectus, Price Waterhouse LLP reported that they have applied limited
procedures in accordance with professional standards for a review of such
information. However, their separate report dated April 16, 1997 incorporated
by reference herein, states that they did not audit and they do not express an
opinion on that unaudited consolidated financial information. Price Waterhouse
LLP has not carried out any significant or additional audit tests beyond those
which would have been necessary if their report had not been included.
Accordingly, the degree of reliance on their report on such information should
be restricted in light of the limited nature of the review procedures applied.
Price Waterhouse LLP is not subject to the liability provisions of Section 11
of the Securities Act for their report on the unaudited consolidated financial
information because that report is not a "report" or a "part" of the
registration statement prepared or certified by Price Waterhouse LLP within
the meaning of Sections 7 and 11 of the Securities Act.
50
<PAGE>
(MAP)
MAP DOES NOT DISTINGUISH IN ALL CASES BETWEEN TRACKAGE RIGHTS AND OWNERSHIP,
NOR DOES IT INDICATE THE GRANT OF TRACKAGE RIGHTS BY CSX OR NSC TO THE OTHER
OVER THE ROUTES ALLOCATED ABOVE.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE HEREBY
EXCEPT AS CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICA-
TION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH OR INCORPORATED
BY REFERENCE HEREIN OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 2
Summary.................................................................. 4
Risk Factors............................................................. 10
The Company.............................................................. 11
Use of Proceeds.......................................................... 15
Capitalization........................................................... 16
Consolidated Ratio of Earnings to Fixed Charges and Selected Financial
Ratio................................................................... 17
Selected Historical Financial Data for the Company....................... 18
Selected Historical Financial Data for Conrail........................... 20
Unaudited Pro Forma Financial Statements................................. 22
Notes to Unaudited Pro Forma Financial Statements........................ 26
The Exchange Offers...................................................... 30
Description of New Debentures............................................ 38
Certain Federal Income Tax Consequences of Participation in the Exchange
Offers.................................................................. 49
Plan of Distribution..................................................... 49
Validity of Debentures................................................... 49
Experts.................................................................. 50
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$2,500,000,000
CSX CORPORATION
$350,000,000
7.05% DEBENTURES DUE 2002
$300,000,000
7.25% DEBENTURES DUE 2004
$450,000,000
7.45% DEBENTURES DUE 2007
$400,000,000
7.90% DEBENTURES DUE 2017
$500,000,000
7.95% DEBENTURES DUE 2027
$100,000,000
6.95% DEBENTURES DUE 2027
$250,000,000
7.25% DEBENTURES DUE 2027
$150,000,000
8.30% DEBENTURES DUE 2032
[LOGO OF CSX CORPORATION APPEARS HERE]
PRELIMINARY PROSPECTUS
DATED , 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 10 of the Virginia Stock Corporation Act allows, in general, for
indemnification, in certain circumstances, by a corporation of any person
threatened with or made a party to any action, suit or proceeding by reason of
the fact that he or she is, or was, a director, officer, employee or agent of
such corporation. Indemnification is also authorized with respect to a
criminal action or proceeding where the person had no reasonable cause to
believe that his or her conduct was unlawful. Article 9 of the Virginia Stock
Corporation Act provides limitations on damages payable by officers and
directors, except in cases of willful misconduct or knowing violation of
criminal law or any federal or state securities law.
Article VII of the Company's Amended and Restated Articles of Incorporation
provides for mandatory indemnification of any director or officer of the
Company who is, was or is threatened to be made a party to any proceeding
(including any proceeding by or on behalf of the Company) by reason of the
fact that he or she is or was a director or officer of the Company against all
liabilities and reasonable expenses incurred in the proceeding, except such
liabilities and expenses as are incurred because of such director's or
officer's willful misconduct or knowing violation of the criminal law.
The Company's Amended and Restated Articles of Incorporation also provide
that in every instance permitted under Virginia corporate law in effect from
time to time, the liability of a director of officer of the Company to the
Company or its shareholders arising out of a single transaction, occurrence or
course of conduct shall be limited to one dollar.
The Company maintains a standard policy of officers' and directors'
liability insurance.
Reference is made to the Purchase Agreement included herein as an exhibit to
the Registration Statement for provisions regarding indemnification of the
Company's officers, directors and controlling persons against certain
liabilities.
ITEM 21. EXHIBITS
EXHIBIT
<TABLE>
<C> <S>
4.1 Indenture, dated August 1, 1990, between the Company and The Chase Manhattan Bank,
as Trustee (incorporated herein by reference to the Company's Form SE, dated
September 7, 1990, filed with the Commission)
4.2 First Supplemental Indenture, dated as of June 15, 1991, between the Company and The
Chase Manhattan Bank, as Trustee (incorporated herein by reference to Exhibit 4(c)
to the Company's Form SE, dated May 28, 1992, filed with the Commission)
4.3 Second Supplemental Indenture, dated as of May 6, 1997, between the Company and The
Chase Manhattan Bank, as Trustee (a)
4.4 Purchase Agreement, dated as of May 6, 1997, between the Company and Salomon
Brothers Inc, individually and as representative of the Initial Purchasers (a)
4.5 Registration Rights Agreement, dated May 6, 1997, between the Company and Salomon
Brothers Inc, individually and as representative of the Initial Purchasers (a)
4.6 Form of New 7.05% Debenture Due 2002 (b)
4.7 Form of New 7.25% Debenture Due 2004 (b)
4.8 Form of New 7.45% Debenture Due 2007 (b)
4.9 Form of New 7.90% Debenture Due 2017 (b)
4.10 Form of New 7.95% Debenture Due 2027 (b)
4.11 Form of New 6.95% Debenture Due 2027 (b)
</TABLE>
II-1
<PAGE>
EXHIBIT
<TABLE>
<C> <S>
4.12 Form of New 7.25% Debenture Due 2027 (b)
4.13 Form of New 8.30% Debenture Due 2032 (b)
5.1 Opinion of McGuire, Woods, Battle & Boothe, L.L.P., regarding validity of New
Debentures being registered (b)
12.1 Statement regarding the computation of the ratio of earnings to fixed charges (a)
15.1 Awareness Letter of Price Waterhouse LLP, Independent Accountants (a)
23.1 Consent of Ernst & Young LLP, Independent Auditors (a)
23.2 Consent of Price Waterhouse LLP, Independent Accountants (a)
23.3 Consent of McGuire, Woods, Battle & Boothe, L.L.P. contained in the opinion filed as
Exhibit 5.1 hereto
24.1 Powers of Attorney of certain directors and officers of the Company (a)
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as trustee
under the Indenture (a)
99.1 Form of Letter of Transmittal (b)
99.2 Form of Exchange Agent Agreement between the Company and The Chase Manhattan Bank,
as Exchange Agent (b)
</TABLE>
- --------
(a) Filed herewith.
(b) To be filed by amendment.
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to reflect in the prospectus any acts or events arising after the effective
date of this Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this Registration
Statement (notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) under the Securities Act of 1933 if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement); (iii) to
include any material information with respect to the plan of distribution
not previously disclosed in this Registration Statement or any material
change to such information in this Registration Statement; provided,
however, that subparagraphs (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by those
subparagraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby further undertakes that, for the purpose
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-2
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant, pursuant to the provisions described under Item 15 or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first-class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through
the date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the Registration Statement when it became effective.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF RICHMOND, COMMONWEALTH
OF VIRGINIA, ON THE 4TH DAY OF JUNE, 1997.
CSX Corporation
/s/ James L. Ross
By __________________________________
JAMES L. ROSS
VICE PRESIDENT AND CONTROLLER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED
ON THE 4TH DAY OF JUNE, 1997.
SIGNATURE TITLE
/s/ John W. Snow* Chairman, President, Chief Executive
- ------------------------------------- Officer and Director (Principal
JOHN W. SNOW Executive Officer)
/s/ Paul R. Goodwin* Executive Vice President--Finance and
- ------------------------------------- Chief Financial Officer (Principal
PAUL R. GOODWIN Financial Officer)
/s/ James L. Ross* Vice President and Controller
- ------------------------------------- (Principal Accounting Officer)
JAMES L. ROSS
/s/ Elizabeth E. Bailey* Director
- -------------------------------------
ELIZABETH E. BAILEY
/s/ Robert L. Burrus, Jr.* Director
- -------------------------------------
ROBERT L. BURRUS, JR.
/s/ Bruce C. Gottwald* Director
- -------------------------------------
BRUCE C. GOTTWALD
/s/ John R. Hall* Director
- -------------------------------------
JOHN R. HALL
/s/ Robert D. Kunisch* Director
- -------------------------------------
ROBERT D. KUNISCH
/s/ Hugh L. McColl, Jr.* Director
- -------------------------------------
HUGH L. MCCOLL, JR.
II-4
<PAGE>
SIGNATURE TITLE
--------- -----
/s/ James W. McGlothlin* Director
- -------------------------------------
JAMES W. MCGLOTHLIN
/s/ Southwood J. Morcott* Director
- -------------------------------------
SOUTHWOOD J. MORCOTT
/s/ Charles E. Rice* Director
- -------------------------------------
CHARLES E. RICE
/s/ William C. Richardson* Director
- -------------------------------------
WILLIAM C. RICHARDSON
/s/ Frank S. Royal* Director
- -------------------------------------
FRANK S. ROYAL
*By: /s/ Alan A. Rudnick
---------------------------------
ALAN A. RUDNICK
ATTORNEY-IN-FACT
II-5
<PAGE>
EXHIBITS
<TABLE>
<C> <S>
4.1 Indenture, dated August 1, 1990, between the Company and The Chase
Manhattan Bank, as Trustee (incorporated herein by reference to the
Company's Form SE, dated September 7, 1990, filed with the Commission)
4.2 First Supplemental Indenture, dated as of June 15, 1991, between the
Company and The Chase Manhattan Bank, as Trustee (incorporated herein by
reference to Exhibit 4(c) to the Company's Form SE, dated May 28, 1992,
filed with the Commission)
4.3 Second Supplemental Indenture, dated as of May 6, 1997, between the
Company and The Chase Manhattan Bank, as Trustee (a)
4.4 Purchase Agreement, dated as of May 6, 1997, between the Company and
Salomon Brothers Inc, individually and as representative of the Initial
Purchasers (a)
4.5 Registration Rights Agreement, dated May 6, 1997, between the Company
and Salomon Brothers Inc, individually and as representative of the
Initial Purchasers (a)
4.6 Form of New 7.05% Debenture Due 2002 (b)
4.7 Form of New 7.25% Debenture Due 2004 (b)
4.8 Form of New 7.45% Debenture Due 2007 (b)
4.9 Form of New 7.90% Debenture Due 2017 (b)
4.10 Form of New 7.95% Debenture Due 2027 (b)
4.11 Form of New 6.95% Debenture Due 2027 (b)
4.12 Form of New 7.25% Debenture Due 2027 (b)
4.13 Form of New 8.30% Debenture Due 2032 (b)
5.1 Opinion of McGuire, Woods, Battle & Boothe, L.L.P., regarding validity
of New Debentures being registered (b)
12.1 Statement regarding the computation of the ratio of earnings to fixed
charges (a)
15.1 Awareness Letter of Price Waterhouse LLP, Independent Accountants (a)
23.1 Consent of Ernst & Young LLP, Independent Auditors (a)
23.2 Consent of Price Waterhouse LLP, Independent Accountants (a)
23.3 Consent of McGuire, Woods, Battle & Boothe, L.L.P. contained in the
opinion filed as Exhibit 5.1 hereto
24.1 Powers of Attorney of certain directors and officers of the Company (a)
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act as
trustee under the Indenture (a)
99.1 Form of Letter of Transmittal (b)
99.2 Form of Exchange Agent Agreement between the Company and The Chase
Manhattan Bank, as Exchange Agent (b)
</TABLE>
- --------
(a) Filed herewith.
(b) To be filed by amendment.
<PAGE>
EXHIBIT 4.3
EXECUTION COPY
CSX CORPORATION
AND
THE CHASE MANHATTAN BANK,
Trustee
-------------------------------
SECOND SUPPLEMENTAL
INDENTURE
Dated as of May 6, 1997
-------------------------------
Senior Securities
SECOND SUPPLEMENTAL INDENTURE, dated as of May 6, 1997 between CSX
Corporation, a Virginia corporation (the "Company"), and The Chase Manhattan
Bank, a New York banking corporation, Trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a certain indenture, dated as of August 1, 1990 and supplemented by the
First Supplemental Indenture, dated as of June 15, 1991 (herein called the
"Indenture"), pursuant to which one or more series of unsecured debentures,
securities or other evidences of indebtedness of the Company (herein called the
"Securities") may be issued from time to time;
WHEREAS, Section 901 of the Indenture provides that the Company, when
authorized by a Board Resolution, and the Trustee may at any time and from time
to time enter into an indenture supplemental to the Indenture for the purpose,
among other things, of (i) changing or eliminating any of the provisions of the
Indenture, provided that such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit of
such provision, (ii) establishing the form or terms of Securities of any series
and any related coupons as permitted by Sections 201 and 301, (iii) making any
other provisions with respect to matters or questions arising under the
Indenture, provided that such action shall not adversely affect the interests of
the Holders of Securities of any series or any related
<PAGE>
2
coupons in any material respect or (iii) to establish the form of Securities of
any series and any related coupons pursuant to Sections 201 and 301;
WHEREAS, the Company, pursuant to the foregoing authority, proposes in
and by this Second Supplemental Indenture to amend the Indenture in certain
respects with respect to the following Securities: $350,000,000 of its 7.05%
Debentures Due 2002 (the "2002 Debentures"), $300,000,000 of its 7.25%
Debentures Due 2004 (the "2004 Debentures"), $450,000,000 of its 7.45%
Debentures Due 2007 (the "2007 Debentures"), $400,000,000 of its 7.90%
Debentures Due 2017 (the "2017 Debentures"), $500,000,000 of its 7.95%
Debentures Due 2027 (the "7.95% 2027 Debentures"), $100,000,000 of its 6.95%
Debentures Due 2027 (the "6.95% 2027 Debentures"), $250,000,000 of its 7.25%
Debentures Due 2027 (the "7.25% 2027 Debentures") and $150,000,000 of its 8.30%
Debentures Due 2032 (the "2032 Debentures" and, collectively with the 2002
Debentures, the 2004 Debentures, the 2007 Debentures, the 2017 Debentures, the
7.95% 2027 Debentures, the 6.95% 2027 Debentures and the 7.25% 2027 Debentures,
the "May 1997 Securities" or the "Initial Securities"); and
WHEREAS, all things necessary to make this Second Supplemental
Indenture a valid agreement of the Company and the Trustee and a valid amendment
of and supplement to the Indenture have been done.
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the May 1997 Securities, as
follows:
ARTICLE ONE
Solely with respect to the May 1997 Securities, and not with respect
to any other Securities previously established, the Indenture is hereby amended
and supplemented as specified below.
Section 1.1 Definitions. Section 101 of the Indenture is hereby
-----------
amended and supplemented by adding the following definitions:
"Agent Member" has the meaning provided in Section 312.
"Depositary" means The Depository Trust Company, its nominees and
successors.
<PAGE>
3
"Exchange Offer" means the offer by the Company to the Holders of the
Initial Securities to exchange all of the Initial Securities for Exchange
Securities, as provided in the Registration Rights Agreement.
"Exchange Securities" refers to any Security containing terms
substantially identical to the Initial Securities (except that (i) such Exchange
Securities shall not contain terms with respect to transfer restrictions and
shall be registered under the Securities Act, and (ii) certain provisions
relating to an increase in the stated rate of interest thereon shall be
eliminated) that are issued and exchanged for the Initial Securities in
accordance with the Exchange Offer, as provided in the Registration Rights
Agreement and this Indenture.
"Initial Purchasers" means Salomon Brothers Inc, Credit Suisse First
Boston Corporation, Chase Securities Inc., Goldman, Sachs & Co., Morgan Stanley
& Co. Incorporated and NationsBanc Capital Markets, Inc.
"Initial Securities" has the meaning stated in the recitals to this
Indenture.
"Issue Date" means, with respect to a Securitiy, the date on which the
Trustee authenticated such Security.
"Offshore Securities Exchange Date" has the meaning provided in
Section 201.
"Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.
"Permanent Offshore Physical Securities" has the meaning provided in
Section 201.
"Physical Securities" has the meaning provided in Section 201.
"Principal Subsidiary" means CSX Transportation, Inc. ("CSXT"), Sea-
Land Service, Inc. ("Sea-Land") and American Commercial Lines, Inc. ("ACL").
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of May 6, 1997 among the Company and the Initial Purchasers
and certain permitted assigns specified therein.
"Registration Statement" means the Registration Statement as defined
and described in the Registration Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
<PAGE>
4
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to such Security.
"Restricted Period" has the meaning provided in Regulation S.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933.
"Temporary Offshore Global Securities" has the meaning provided in
Section 201.
"U.S. Global Securities" has the meaning provided in Section 201.
"U.S. Physical Securities" has the meaning provided in Section 201.
Section 1.2 Forms Generally. Section 201 of the Indenture is amended
---------------
by adding the following four paragraphs to that Section:
Initial Securities offered and sold in reliance on Rule 144A may be
issued in the form of one or more permanent global securities
substantially in the form set forth in Annex I hereto (the "U.S.
Global Securities") deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the
U.S. Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Security Registrar, as
custodian for the Depositary or the Trustee, as hereinafter provided.
Initial Securities offered and sold in reliance on Regulation S shall
be issued initially in the form of temporary global Securities in
registered form substantially in the form set forth in Annex I hereto
(the "Temporary Offshore Global Securities"). The Temporary Offshore
Global Securities will be registered in the name of, and held by, a
temporary certificate holder designated by the Initial Purchasers
until the later of the completion of the distribution of the Initial
Securities and the termination of the Restricted Period with respect
to the offer and sale of the Initial Securities (the "Offshore
Securities Exchange Date"). At any time following the Offshore
Securities Exchange Date, upon receipt by the Trustee and the Company
of a certificate substantially in the form set forth in Section 205,
the Company shall execute, and the Trustee shall execute and deliver,
one or more permanent certificated Securities substantially in the
form set forth in Annex I hereto (the "Permanent
<PAGE>
5
Offshore Physical Securities") in exchange for the Temporary Offshore
Global Securities of like tenor and amount.
Initial Securities offered and sold other than as described in the
preceding two paragraphs shall be issued in the form of permanent
certificated Securities in Registered form in substantially the same
form set forth in Annex I hereto (the "U.S. Physical Securities"). The
Temporary Offshore Global Securities, Permanent Offshore Physical
Securities and U.S. Physical Securities are sometimes collectively
herein referred to as the "Physical Securities".
Section 1.3 Restrictive Legends. The Indenture is amended and
-------------------
supplemented by adding the following Section 204 to read as follows:
Section 204. Restrictive Legends.
-------------------
Unless and until (i) an Initial Security is sold under an effective
Registration Statement or (ii) an Initial Security is exchanged for an Exchange
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, each such U.S. Global Security,
Temporary Offshore Global Security and U.S. Physical Security shall bear the
following legend (the "Private Placement Legend") on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
<PAGE>
6
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3)
OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR
SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUSTEE
AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND
(ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE
TRUSTEE A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A
TO THE OFFERING MEMORANDUM DATED MAY 1, 1997. SUCH HOLDER FURTHER AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH HEREON RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
Each U.S. Global Security, whether or not an Initial Security, shall
also bear the following legend on the face thereof:
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE
<PAGE>
7
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT
IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 313 OF THE INDENTURE.
Section 1.4 Form of Certificate to Delivered upon Termination of
----------------------------------------------------
Restricted Period. The Indenture is amended and supplemented by adding the
- -----------------
following Section 205 to read as follows:
<PAGE>
8
Section 205. Form of Certificate to Be Delivered in Connection with
------------------------------------------------------
Transfers Pursuant to Regulation S upon Termination of Restricted Period.
- ------------------------------------------------------------------------
The following certificate, to be dated on or after expiration of the
Restricted Period, shall be delivered by a Holder in connection with transfers
pursuant to Regulation S.
THE CHASE MANHATTAN BANK
Global Trust Services
450 West 33rd Street, 15th Floor
New York, NY 10001
Re: CSX Corporation (the "Company")
___% Securities due May 1, 20__ (the "Securities")
--------------------------------------------------
Ladies and Gentlemen:
This letter relates to U.S. $_________ principal amount of Securities
represented by a temporary global security certificate (the "Temporary
Certificate") which bears a legend outlining restrictions upon transfer of such
Temporary Certificate. Pursuant to Section 201 of the Indenture dated as of
August 1, 1990, as supplemented and amended by the First Supplemental Indenture
dated as of June 15, 1991 and the Second Supplemental Indenture dated as of May
6, 1997 relating to the Securities (the "Indenture"), we hereby certify that we
are (or we will hold such Securities on behalf of) a person outside the United
States to whom the Securities could be transferred in accordance with Rule 904
of Regulation S promulgated under the U.S. Securities Act of 1933, as amended.
Accordingly, you are hereby requested to exchange the Temporary Certificate for
an unlegended certificate representing an identical principal amount of
Securities, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
----------------------------------
Authorized Signature
<PAGE>
9
Section 1.5 Form of Security. The Security Form attached as Exhibit A
----------------
to the Indenture is amended to read in its entirety as set forth in Annex I to
this Second Supplemental Indenture.
Section 1.6 Book-Entry Provisions for U.S. Global Security. The
----------------------------------------------
Indenture is amended and supplemented by adding the following Section 312 to
read as follows:
Section 312. Book-Entry Provisions for U.S. Global Security.
----------------------------------------------
(a) The U.S. Global Security initially shall (i) be registered in the
name of the Depositary for such global Security or the nominee of such
Depositary, (ii) be delivered to the Trustee as custodian for such Depositary
and (iii) bear legends as set forth in Section 204.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any U.S. Global Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under the U.S. Global Security, and the Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such U.S. Global Security for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or shall
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of the U.S. Global Security shall be limited to
transfers of such U.S. Global Security in whole, but not in part, to the
Depositary, its successors or their respective nominees. Interests of beneficial
owners in the U.S. Global Security may be transferred in accordance with the
rules and procedures of the Depositary and the provisions of Section 313. U.S.
Physical Securities shall be transferred to all beneficial owners in exchange
for their beneficial interests in the U.S. Global Security if (i) the Depositary
notifies the Company that it is unwilling, unable or ineligible to continue as
Depositary for the U.S. Global Security or if at any time the Depositary ceases
to be a clearing agency registered under the Exchange Act, (ii) the Company in
its sole discretion determines that the U.S. Global Security shall be
exchangeable for U.S. Physical Securities, or (iii) any event shall have
happened and be continuing which, after notice or lapse of time, or both, would
become an Event of Default with respect to such Securities.
(c) In connection with any transfer of a portion of the beneficial
interest in the U.S. Global Security pursuant to subsection (b) of this Section
to beneficial owners who are required to hold U.S. Physical Securities, the
Security Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the U.S. Global Security in an amount equal
to the principal amount of the beneficial interest in the U.S. Global Security
to
<PAGE>
10
be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Physical Securities of like tenor and
amount.
(d) In connection with the transfer of the entire U.S. Global
Security to beneficial owners pursuant to subsection (b) of this Section, the
U.S. Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the U.S. Global Security, an equal aggregate
principal amount of U.S. Physical Securities of authorized denominations.
(e) Any U.S. Physical Security delivered in exchange for an interest
in the U.S. Global Security pursuant to subsection (c) or subsection (d) of this
Section shall, except as otherwise provided by paragraph (a)(i)(x) and paragraph
(f) of Section 313, bear the applicable legend regarding transfer restrictions
applicable to the U.S. Physical Security set forth in Section 204.
(f) The registered holder of the U.S. Global Security may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.
Section 1.7 Special Transfer Provisions. The Indenture is amended
---------------------------
and supplemented by adding the following Section 313 to read as follows:
Section 313. Special Transfer Provisions.
---------------------------
Unless and until (i) an Initial Security is sold under an effective
Registration Statement, or (ii) an Initial Security is exchanged for an Exchange
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, the following provisions shall
apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
-------------------------------------------------------
following provisions shall apply with respect to the registration of any
proposed transfer of an Initial Security to any institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) which is not a QIB (excluding Non-U.S. Persons):
(i) The Security Registrar shall register the transfer of any
Initial Security, whether or not such Initial Security bears the
Private Placement Legend, if (x) the requested transfer is at
least two years after the original issue date of the Initial
Security or (y) the proposed transferee has delivered to the
Security Registrar a certificate substantially in the form set
forth in Section 314.
<PAGE>
11
interest in the U.S. Global Security, upon receipt by the Security Registrar of
(x) the documents, if any, required by paragraph (i) and (y) instructions given
in accordance with the Depositary's and the Security Registrar's procedures
therefor, the Security Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the U.S. Global Security in an amount
equal to the principal amount of the beneficial interest in the U.S. Global
Security to be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Physical Securities of like tenor and
amount.
(b) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of an Initial Security to a
QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of U.S. Physical
Securities, Temporary Offshore Global Securities or Permanent
Offshore Physical Securities, the Security Registrar shall
register the transfer if such transfer is being made by a
proposed transferor who has checked the box provided for on the
form of Initial Security stating, or has otherwise advised the
Company and the Security Registrar in writing, that the sale has
been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the
form of Initial Security stating, or has otherwise advised the
Company and the Security Registrar in writing, that it is
purchasing the Initial Security for its own account or an
account with respect to which it exercises sole investment
discretion and that it, or the person on whose behalf it is
acting with respect to any such account, is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, and the Initial
Security to be transferred consists of U.S. Physical Securities,
Temporary Offshore Global Securities or Permanent Offshore
Physical Securities, upon receipt by the Security Registrar of
instructions given in accordance with the Depositary's and the
Security Registrar's procedures therefor, the Security Registrar
shall reflect on its books and records the date and an increase
in the principal amount of the U.S. Global Security in an amount
equal to the principal amount of the U.S. Physical Securities,
Temporary Offshore Global Securities or Permanent
<PAGE>
12
Offshore Physical Securities, as the case may be, to be
transferred, and the Trustee shall cancel the Physical Security
so transferred.
(c) Transfers by Non-U.S. Persons Prior to Expiration of the
--------------------------------------------------------
Restricted Period. The following provisions shall apply with respect to
- -----------------
registration of any proposed transfer of an Initial Security by a Non-U.S.
Person prior to expiration of the Restricted Period:
(i) The Security Registrar shall register the transfer of any
Initial Security (x) if the proposed transferee is a Non-U.S.
Person and the proposed transferor has delivered to the Security
Registrar a certificate substantially in the form set forth in
Section 315 or (y) if the proposed transferee is a QIB and the
proposed transferor has checked the box provided for on the form
of Initial Security stating, or has otherwise advised the
Company and the Security Registrar in writing, that the sale has
been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the
form of Initial Security stating, or has otherwise advised the
Company and the Security Registrar in writing, that it is
purchasing the Initial Security for its own account or an
account with respect to which it exercises sole investment
discretion and that it, or the person on whose behalf it is
acting with respect to any such account, is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A. Unless clause
(ii) below is applicable, the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Temporary
Offshore Global Securities of like tenor and amount.
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Security Registrar of instructions given in accordance with
the Depositary's and the Security Registrar's procedures
therefor, the Security Registrar shall reflect on its books and
records the date and an increase in the principal amount of the
U.S. Global Security in an amount equal to the principal amount
of the Temporary Offshore Global Security to be transferred, and
the Security Registrar shall cancel the Temporary Offshore
Global Securities so transferred.
<PAGE>
13
(d) Transfers by Non-U.S. Persons on or After Expiration of the
-----------------------------------------------------------
Restricted Period. The following provisions shall apply with respect to any
- -----------------
transfer of an Initial Security by a Non-U.S. Person on or after expiration of
the Restricted Period:
(i) (x) If the Initial Security to be transferred is a Permanent
Offshore Physical Security, the Security Registrar shall
register such transfer, (y) if the Initial Security to be
transferred is a Temporary Offshore Global Security, upon
receipt of a certificate substantially in the form set forth in
Section 315 from the proposed transferor, the Security Registrar
shall register such transfer and (z) in the case of either
clause (x) or (y), unless clause (ii) below is applicable, the
Company shall execute, and the Trustee shall authenticate and
deliver, one or more Permanent Offshore Physical Securities of
like tenor and amount.
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Security Registrar of instructions given in accordance with
the Depositary's and the Security Registrar's procedures
therefor, the Security Registrar shall reflect on its books and
records the date and an increase in the principal amount of the
U.S. Global Security in an amount equal to the principal amount
of the Temporary Offshore Global Security or of the Permanent
Offshore Physical Security to be transferred, and the Trustee
shall cancel the Global Security so transferred.
(e) Transfers to Non-U.S. Persons on or After Expiration of the
-----------------------------------------------------------
Restricted Period. The following provisions shall apply with respect to any
- -----------------
transfer of an Initial Security to a Non-U.S. Person:
(i) Prior to expiration of the Restricted Period, the Security
Registrar shall register any proposed transfer of an Initial
Security to a Non-U.S. Person upon receipt of a certificate
substantially in the form set forth in Section 315 from the
proposed transferor and the Company shall execute, and the
Trustee shall authenticate and make available for delivery, one
or more Temporary Offshore Physical Securities.
(ii) On and after expiration of the Restricted Period, the Security
Registrar shall register any proposed transfer to any Non-U.S.
Person (w) if the Initial Security to be transferred is a
Permanent Offshore Physical Security, (x) if the Initial
Security to be transferred is a Temporary Offshore Global
Security, upon receipt of a certificate substantially in the
form set forth in Section 315 from the proposed transferor, (y)
if the Initial Security to be transferred is a U.S. Physical
Security or an interest in the U.S. Global Security, upon
receipt of a certificate
<PAGE>
14
substantially in the form set forth in Section 315 from the
proposed transferor and (z) in the case of either clause (w),
(x) or (y), the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Permanent Offshore
Physical Securities of like tenor and amount.
(iii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by
the Security Registrar of (x) the document, if any, required by
paragraph (i), and (y) instructions in accordance with the
Depositary's and the Security Registrar's procedures therefor,
the Security Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the U.S.
Global Security in an amount equal to the principal amount of
the beneficial interest in the U.S. Global Security to be
transferred and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Permanent Offshore
Physical Securities of like tenor and amount.
(f) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Securities not bearing the Private Placement Legend, the Security
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Security Registrar shall deliver only Securities
that bear the Private Placement Legend unless either (i) the circumstances
contemplated by the fifth paragraph of Section 201 (with respect to Permanent
Offshore Physical Securities) or paragraph (a)(i)(x), (d)(i) or (e)(ii) of this
Section 313 exist or (ii) there is delivered to the Security Registrar an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(g) General. By its acceptance of any Security bearing the Private
-------
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 312 or this Section
313. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Security Registrar.
<PAGE>
15
Section 1.8 Form of Certificate to Be Delivered in Connection with
------------------------------------------------------
Transfers to Non-QIB Institutional Accredited Investors. The Indenture is
- -------------------------------------------------------
amended and supplemented by adding the following Section 314 to read as follows:
Section 314. Form of Certificate to Be Delivered in Connection with
------------------------------------------------------
Transfers to Non-QIB Institutional Accredited Investors.
- -------------------------------------------------------
[date]
THE CHASE MANHATTAN BANK
Global Trust Services
450 West 33rd Street, 15th Floor
New York, NY 10001
Re: CSX Corporation (the "Company")
___% Securities due May 1, 20__ (the "Securities")
--------------------------------------------------
Ladies and Gentlemen:
1. We understand that the _____% Securities due May 1, ____, (the
"Offered Securities") of CSX Corporation (the "Company") have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state securities laws, and may not be offered or sold except as permitted
in the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing the Offered Securities that, if,
prior to the date which is two years after the later of the date of original
issue of the Offered Securities and the last date on which the Company or any
affiliate of the Company was the owner of such Offered Securities (the "Resale
Restriction Termination Date"), we decide to offer, sell or otherwise transfer
any such Offered Securities, such offer, sale or transfer will be made only (a)
to the Company, (b) pursuant to an effective registration statement under the
Securities Act, (c) so long as the Offered Securities are eligible for resale
pursuant to Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) to an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act that is acquiring Offered
Securities for its own account or for the account of such an institutional
accredited investor for investment purposes and not with a view to, or for offer
or sale in connection with, any distribution thereof in violation of the
Securities Act, (e) pursuant to offers and sales to non-U.S. persons that occur
outside the United States within the meaning of Regulation S under the
Securities Act or (f) pursuant to another available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirements of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state securities laws.
The foregoing restrictions on resale will
<PAGE>
16
not apply subsequent to the Resale Restriction Termination Date. If any resale
or other transfer of the Offered Securities is proposed to be made pursuant to
clause (d) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in the form
of this letter to the Trustee, which shall provide as applicable, among other
things, that the transferee is an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities
Act that is acquiring such Offered Securities for investment purposes and not
for distribution in violation of the Securities Act. We acknowledge on our
behalf and on behalf of any investor account for which we are purchasing Offered
Securities that the Company and the Trustee reserve the right prior to any
offer, sale or other transfer pursuant to clause (d), (e) or (f) prior to the
Resale Restriction Termination Date of the Offered Securities to require the
delivery of any opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee. We understand that the
certificates for any Offered Security that we receive will bear a legend
substantially to the effect of the foregoing.
2. We are an institutional "accredited investor" within the meaning
of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act
purchasing for our own account or for the account of such an institutional
"accredited investor," and we are acquiring the Offered Securities for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Offered Securities, and
we and any account for which we are acting are each able to bear the economic
risks of our or its investment.
3. We are acquiring the Offered Securities purchased by us for our
own account (or for one or more accounts as to each of which we exercise sole
investment discretion and have authority to make, and do make, the statements
contained in this letter) and not with a view to any distribution of the Offered
Securities, subject, nevertheless, to the understanding that the disposition of
our property will at all times be and remain within our control.
4. We acknowledge that (a) none of the Company, or the Initial
Purchasers (as defined in the Offering Memorandum dated May 1, 1997 relating to
the Offered Securities (the "Final Memorandum")) nor any person acting on behalf
of the Company or the Initial Purchasers has made any representation to us with
respect to the Company or the offer or sale of any Offered Securities and (b)
any information we desire concerning the Company and the Offered Securities or
any other matter relevant to our decision to purchase the Offered Securities
(including a copy of the Final Memorandum) is or has been made available to us.
5. We acknowledge that the Company, the Trustee, Initial Purchasers
and others will rely upon the truth and accuracy of the foregoing
acknowledgements, representations,
<PAGE>
17
warranties and agreements and agree that if any of the acknowledgements,
representations, warranties and agreements made by us herein with respect to our
purchase of the Offered Securities are no longer accurate, we shall promptly
notify the Initial Purchasers.
Very truly yours,
---------------------------
(Name of Purchaser)
By:
------------------------
Date:
----------------------
Upon transfer, the Offered Securities would be registered in the name
of the new beneficial owner as follows:
Name:
--------------------------------------------------------------------
Address:
-----------------------------------------------------------------
Taxpayer ID Number:
------------------------------------------------------
Section 1.9 Form of Certificate to Delivered in Connection with Transfers
-------------------------------------------------------------
Pursuant to Regulation S. The Indenture is amended and supplemented by adding
- ------------------------
the following Section 315 to read as follows:
Section 315. Form of Certificate to Be Delivered in Connection with
------------------------------------------------------
Transfers Pursuant to Regulation S.
- -----------------------------------
[date]
THE CHASE MANHATTAN BANK
Global Trust Services
450 West 33rd Street, 15th Floor
New York, NY 10001
Re: CSX Corporation (the "Company")
___% Securities due May 1, 20__ (the "Securities")
--------------------------------------------------
Ladies and Gentlemen:
<PAGE>
18
In connection with our proposed sale of U.S.$__________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended, and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us, any affiliate of
ours, or any Person acting on our or their behalf, in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------------
Authorized Signature
Section 1.10 Covenants. Section 1005 of the Indenture is hereby
---------
amended and supplemented to read as follows:
Section 1005. Limitation on Liens on Stock of the Principal
---------------------------------------------
Subsidiaries.
- ------------
The Company will not, nor will it permit any Subsidiary to, create,
assume, incur or suffer to exist any Lien upon any stock or indebtedness,
whether owned on the date of this Indenture or hereafter acquired, of any
Principal Subsidiary, to secure any Obligation (other than the Securities) of
the Company, any Subsidiary or any other Person, without in any such case making
effective provision whereby all of the Outstanding Securities shall be directly
secured equally and ratably with such Obligation.
<PAGE>
19
Section 1.11 Redemption of Securities. Section 1102 of the Indenture
------------------------
is hereby amended and supplemented to read as follows:
Section 1102. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In the case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company, notify the Trustee of such Redemption Date
and of the principal amount of Securities of such series to be redeemed.
Section 1.12 Repayment at the Option of Holders. The Indenture is
----------------------------------
amended and supplemented by adding the following Article Fifteen:
ARTICLE FIFTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1501. Applicability of Article. Repayment of Securities of
------------------------
any series before their Stated Maturity at the option of Holders thereof shall
be made in accordance with the terms of such Securities and (except as otherwise
specified by the terms of such series established pursuant to Section 301) in
accordance with this Article.
Section 1502. Repayment of Securities. Securities of any series
-----------------------
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereon accrued to the Repayment Date specified in or pursuant to the terms of
such Securities. The Company covenants that on or before the Repayment Date it
will deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money sufficient to pay the principal (or, if so
provided by the terms of the Securities of any series, a percentage of the
principal) of, and (except if the Repayment Date shall be an Interest Payment
Date) accrued interest on, all the Securities or portions thereof, as the case
may be, to be repaid on such date.
Section 1503. Exercise of Option. Securities of any series subject to
------------------
repayment at the option of the Holders thereof will contain an "Option of Holder
to Elect Purchase" form on such Securities. In order for any Security to be
repaid at the option of the Holder, the Trustee must receive at the Place to
Payment therefor specified in the terms of such Security (or at such other place
or places of which the Company shall from time to time notify the Holders of
such Securities) not earlier than 60 days nor later than 30 days prior to the
Repayment Date (1) the Security so providing for such repayment together with
the "Option of Holder to Elect Purchase" form duly completed by the Holder (or
by the Holder's
<PAGE>
20
attorney duly authorized in writing) or (2) a telegram, facsimile transmission
or a letter from a member of a national securities exchange, or the National
Association of Securities Dealers, Inc. ("NASD"), or a commercial bank or trust
company in the United States setting forth the name of the Holder of Security,
the principal amount of the Security, the amount of the Security to be repaid,
the certificate number or a description of the tenor and terms of the Security,
a statement that the option to elect repayment is being exercised thereby and a
guarantee that the Security to be repaid, together with the duly completed form
entitled "Option of Holder to Elect Purchase", will be received by the Trustee
not later than the fifth Business Day after the date of such telegram, facsimile
transmission or letter; provided, however, that such telegram, facsimile
transmission or letter shall only be effective if such Security and form duly
completed are received by the Trustee by such fifth Business Day. If less than
the entire principal amount of such Security is to be repaid in accordance with
the terms of such Security, the principal amount of such Security to be repaid,
in increments of the minimum denomination for Securities of such series, and the
denomination or denominations of the Security or Securities to be issued to the
Holder for the portion of the principal amount of such Security surrendered that
is not to be repaid, must be specified. The principal amount of any Security
providing for repayment at the option of the Holder thereof may not be repaid in
part if, following such repayment, the unpaid principal amount of such Security
would be less than the minimum authorized denomination of Securities of the
series of which such Security to be repaid is a part. Except as otherwise may
be provided by the terms of any Security providing for repayment at the option
of the Holder thereof, exercise of the repayment option by the Holder shall be
irrevocable unless waived by the Company.
Section 1504. When Securities Presented for Repayment Become Due and
------------------------------------------------------
Payable. If the Securities of any series providing for repayment at the option
- -------
of the Holders thereof shall have been surrendered as provided in this Article
and as provided by or pursuant to the terms of such Securities, such Securities
or the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities so to be repaid shall cease to bear interest. Upon surrender of any
such Security for repayment in accordance with such provisions, the principal
amount of such Security so to be repaid shall be paid by the Company, together
with accrued interest, if any, to the Repayment Date; provided that,
installments of interest, if any, whose Stated Maturity is on or prior to the
Repayment Date shall be payable (but without interest thereon, unless the
Company shall default in the payment thereof) to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any,
<PAGE>
21
thereon accrued to such Repayment Date) shall, until paid, bear interest from
the Repayment Date at the rate of interest set forth in such Security.
Section 1505. Securities Repaid in Part. Upon surrender of any
-------------------------
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
Section 1506. Compliance with Exchange Act. In connection with any
----------------------------
Repayment of Securities pursuant to this Article, the Company will comply with
the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under
the Securities Exchange Act of 1934, if required, and will file Schedule 13E-4
or any other schedule, if required.
ARTICLE TWO
Section 2.1 Incorporation of Indenture. All the provisions of this
--------------------------
Second Supplemental Indenture shall be deemed to be incorporated in, and made a
part of, the Indenture; and the Indenture, as supplemented by this Second
Supplemental Indenture, shall be read, taken and construed as one and the same
instrument and shall be binding upon all the Holders of Securities.
Section 2.2 Counterparts. This Second Supplemental Indenture may be
------------
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and same instrument.
Section 2.3 Successors and Assigns. All covenants and agreements in
----------------------
this Second Supplemental Indenture by the Company and the Trustee shall bind
their respective successors and assigns, whether so expressed or not.
Section 2.4 Separability Clause. In case any provision in this Second
-------------------
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 2.5 Benefits of Second Supplemental Indenture. Nothing in
-----------------------------------------
this Second Supplemental Indenture, express or implied, shall give any person,
other than the parties hereto and their successors hereunder and the Holders of
the May 1997 Securities, any benefit or any legal or equitable right, remedy or
claim under this Second Supplemental Indenture. This Second Supplemental
Indenture applies only to the May 1997 Securities.
<PAGE>
22
Except as expressly supplemented or amended as set forth in this Second
Supplemental Indenture, the Indenture is hereby ratified and confirmed, and all
the terms, provisions and conditions thereof shall be and continue in full force
and effect. The Trustee accepts the trusts created by the Indenture, as amended
and supplemented by this Second Supplemental Indenture, and agrees to perform
the same upon the terms and conditions in the Indenture as amended and
supplemented by this Second Supplemental Indenture.
Section 2.6. Defined Terms. All terms used in this Second
-------------
Supplemental Indenture which are defined in the Indenture and not otherwise
defined herein shall have the meanings assigned to them in the Indenture.
<PAGE>
23
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
CSX CORPORATION
[Seal] By: /s/ David D. Owen
----------------------------------------
Name: David D. Owen
Title: Managing Director--Corporate Finance
Attest:
/s/ Alan A. Rudnick
- --------------------------------
Corporate Secretary
THE CHASE MANHATTAN BANK, as Trustee
By: /s/ Ronald J. Halleran
-------------------------------
Name: Ronald J. Halleran
Title: Second Vice President
Brendan P. Gilligan
Notary Public, State of New York
No. 01G15073591
State of New York Qualified in New York County
County of _________________ss.: Commission Expires, February 24, 1999
On the 6th day of May, 1997, before me personally came David D. Owen
to me known, who, being by me duly sworn, did depose and say that he is Managing
Director--Corporate Finance of CSX Corporation, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
(Notarial Seal) /s/ Brendan P. Gilligan
-----------------------
<PAGE>
ANNEX I
-------
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY)
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-
U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUSTEE AND THE COMPANY PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT THE TRANSFEROR
DELIVER TO THE TRUSTEE A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF
ANNEX A TO THE OFFERING MEMORANDUM DATED MAY 1, 1997. SUCH HOLDER FURTHER
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY
<PAGE>
2
WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH HEREON RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
SECURITY TO THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION",
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION
S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 313 OF THE
INDENTURE.
<PAGE>
3
=======================
CSX CORPORATION
=======================
$______________________
_____ % DEBENTURE DUE 20__
No. [CUSIP][CINS][____________]
[ISIN] [____________]
This security (the "Security") is one of a duly authorized issue of
securities (herein called the "Securities") of CSX Corporation, a Virginia
corporation (hereinafter called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), issued and to be
issued in one or more series under an indenture, unlimited as to aggregate
principal amount, dated as of August 1, 1990 between the Company and The Chase
Manhattan Bank, Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture (as hereinafter defined)), as supplemented
by a First Supplemental Indenture dated as of June 15, 1991 and a Second
Supplemental Indenture dated as of May 6, 1997, to which indenture and all
indentures supplemental thereto (the indenture, as supplemented being herein
called the "Indenture") reference is hereby made for a statement of the
respective rights thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, which series has been issued in an aggregate initial principal
amount of $_____________ ([DOLLARS]). This Security represents an aggregate
initial principal amount of $________________ ([DOLLARS]) (as adjusted from time
to time in accordance with the terms and provisions hereof and as set forth on
Exhibit A hereto, the "Principal Amount") of the Securities of such series, with
the Interest Payment Dates, date of original issuance, and date of Maturity
specified herein and bearing interest on said Principal Amount at the interest
rate specified herein.
The Company, for value received, hereby promises to pay to
_______________ or its registered assigns, the principal sum of $____________
([DOLLARS]) on May 1, 20__, and to pay interest (computed on the basis of a 360-
day year of twelve 30-day months) thereon from the Issue Date or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, or, if the date of this Security is an Interest Payment Date to which
interest has been paid or duly provided for, then from the date hereof,
semiannually in arrears on May 1 and November 1 in each year,
<PAGE>
4
commencing November 1, 1997, and at Maturity at the rate of ___% per annum,
until the principal hereof is paid or duly made available for payment. The
Company shall pay interest on overdue principal and premium, if any, and (to the
extent lawful) interest on overdue installments of interest at the rate per
annum borne by the Security. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the April 15 or October 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Except as otherwise provided in the Indenture, any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date and may be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date to be fixed by the
Trustee for the payment of such Defaulted Interest, notice whereof shall be
given to the Holder of this Security not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Security of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in such Indenture. Notwithstanding
the foregoing, interest payable on this Security at Maturity will be payable to
the person to whom principal is payable.
[Additional Interest (the "Special Interest") shall become payable in
respect of the Security as follows, if any of the following events occur with
respect to such Security (each such event in clauses (i) through (iv) below, a
"Registration Default"):
(i) if a registration statement for an exchange offer (the "Exchange
Offer") under the Securities Act with respect to the Securities (an "Exchange
Offer Registration Statement") is not filed with the Commission on or prior to
150 days after the Issue Date;
(ii) if neither the Exchange Offer Registration Statement is declared
effective nor (if the Exchange Offer is not permitted for the reasons described
in the Registration Rights Agreement dated as of May 6, 1997 among the Company
and the Initial Purchasers (the "Registration Rights Agreement")) a shelf
registration statement under the Securities Act with respect to the Securities
(the "Shelf Registration Statement") is filed with the Commission on or prior to
180 Days after the Issue Date;
(iii) if one or more of the Exchange Offers is not consummated with
respect to the Securities of this series or the Shelf Registration Statement is
declared effective on or prior to 210 days after the Issue Date; or
(iv) if, after 210 days after the Issue Date, and after the Shelf
Registration Statement is declared effective, the Company fails to keep the
Shelf Registration Statement effective (except as permitted by the proviso to
Section 3(b) of the Registration Rights
<PAGE>
5
Agreement) then from such time as the Shelf Registration Statement is no longer
effective until the earlier of (i) the date that the Shelf Registration
Statement is again deemed effective and (ii) the date that is the earliest of
(x) the second anniversary of the Issue Date (or until the first anniversary of
the effective date of the Shelf Registration Statement if the Shelf Registration
Statement is filed at the request of the Initial Purchaser), (y) the time when
the Security registered under the Shelf Registration Statement can be sold by
non-Affiliates pursuant to Rule 144 under the Act without any limitations under
clauses (c), (e), (f) and (h) of Rule 144, or (z) the date as of which all of
such Securities are sold pursuant to the Shelf Registration Statement.
The holder of this Security is entitled to the benefits of the
Registration Rights Agreement.
Special Interest shall accrue on the Security, over and above the
interest rate set forth in the Indenture applicable to such Security following
the occurrence of each Registration Default set forth in clauses (i), (ii),
(iii) and (iv) above from and including the next day following each such
Registration Default, in each case at a rate equal to 0.25% per annum of the
principal amount of such Security, provided, however, that the aggregate amount
of Special Interest payable will in no event exceed 0.25% per annum of the
principal amount of the Security. The Special Interest attributable to each
Registration Default shall cease to accrue from the date such Registration
Default is cured. Upon (a) the filing of the Exchange Offer Registration
Statement after the period described in clause (i) above, (b) the effectiveness
of the Exchange Offer Registration Statement or the filing of the Shelf
Registration Statement after the period described in clause (ii) above or (c)
the consummation of the Exchange Offer for such Security or the effectiveness of
a Shelf Registration Statement, as the case may be, after the period described
in clause (iii) above, Special Interest payable on such Security as a result of
the applicable Registration Default will cease to accrue. For purposes of the
preceding sentence, the curing of a Registration Default by the means described
in clause (b) above shall constitute a cure of the Registration Defaults
described in clauses (i) and (ii) above, and the curing of a Registration
Default by the means described in clause (c) above shall constitute a cure of
the Registration Defaults described in clauses (i), (ii) and (iii) above.
Any amounts of Special Interest due pursuant to the foregoing
paragraphs will be payable in cash on May 1 and November 1 of each year to the
holders of record on the preceding April 15 and October 15, respectively.]*
This Security is exchangeable in whole or from time to time in part
for definitive Registered Securities of this series only as provided in this
paragraph. If (x) the U.S. Depository with respect to the Securities of this
series (the "U.S. Depository") notifies
- -----------------------
* Only for a Security not registered under the Securities Act.
<PAGE>
6
the Company that it is unwilling, unable or ineligible to continue as U.S.
Depository for this Security or if at any time the U.S. Depository ceases to be
a clearing agency registered under the Securities Exchange Act of 1934, as
amended, (y) the Company in its sole discretion determines that this Security
shall be exchangeable for definitive Registered Securities and executes and
delivers to the Trustee a Company Order providing that this Security shall be so
exchangeable or (z) there shall have happened and be continuing an Event of
Default or any event which, after notice or lapse of time, or both, would become
an Event of Default with respect to the Securities of the series of which this
Security is a part, this Security or any portion hereof shall, in the case of
clause (x) above, be exchanged for definitive Registered Securities of this
series, and in the case of clauses (y) and (z) above, be exchangeable for
definitive Registered Securities of this series, provided that the definitive
Security so issued in exchange for this Security shall be in authorized
denominations and be of like tenor and of an equal aggregate principal amount as
the portion of the Security to be exchanged, and provided further that, in the
case of clauses (y) and (z) above, definitive Registered Securities of this
series will be issued in exchange for this Security, or any portion hereof, only
if such definitive Registered Securities were requested by written notice to the
Security Registrar by or on behalf of a Person who is a beneficial owner of an
interest herein given through the Holder hereof. Any definitive Registered
Security of this series issued in exchange for this Security, or any portion
hereof, shall be registered in the name or names of such Person or Persons as
the Holder hereof shall instruct the Security Registrar. Except as provided
above, owners of beneficial interests in this Security will not be entitled to
receive physical delivery of Security in definitive form and will not be
considered the Holders thereof for any purpose under the Indenture.
Any exchange of this Security or portion hereof for one or more
definitive Registered Securities of this series will be made at the New York
office of the Security Registrar. Upon exchange of any portion of this Security
for one or more definitive Registered Securities of this series, the Trustee
shall endorse Exhibit A of this Security to reflect the reduction of its
Principal Amount by an amount equal to the aggregate principal amount of the
definitive Registered Securities of this series so issued in exchange, whereupon
the Principal Amount hereof shall be reduced for all purposes by the amount so
exchanged and noted. Except as otherwise provided herein or in the Indenture,
until exchanged in full for one or more definitive Registered Securities of this
series, this Security shall in all respects be subject to and entitled to the
same benefits and conditions under the Indenture as a duly authenticated and
delivered definitive Registered Security of this series.
The principal and any interest in respect of any portion of this
Security payable in respect of an Interest Payment Date or at the Stated
Maturity thereof, in each case occurring prior to the exchange of such portion
for a definitive Registered Security or Securities of this series, will be paid,
as provided herein, to the Holder hereof which will undertake in such
circumstances to credit any such principal and interest received by it in
respect of this Security to the respective accounts of the Persons who are the
beneficial owners of such interests on such Interest Payment Date or at Stated
Maturity. If a definitive
<PAGE>
7
Registered Security or Registered Securities of this series are issued in
exchange for any portion of this Security after the close of business at the
office or agency where such exchange occurs on (i) any Regular Record Date and
before the opening of business at such office or agency on the relevant Interest
Payment Date, or (ii) any Special Record Date and before the opening of business
at such office or agency on the related proposed date for payment of Defaulted
Interest, then interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of such Registered Security, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Holder hereof, and the Holder hereof will undertake in such circumstances to
credit such interest to the account or accounts of the Persons who were the
beneficial owners of such portion of this Security on such Regular Record Date
or Special Record Date, as the case may be.
Payment of the principal of and any such interest on this Security
will be made at the offices of The Chase Manhattan Bank, as Paying Agent, in the
Borough of Manhattan, The City of New York, or at such other office or agency of
the Company as may be designated by it for such purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts by check mailed to the registered Holders thereof;
provided, however, that at the option of the Holder, payment of interest may be
- -------- -------
made by wire transfer of immediately funds to an account of the Person entitled
hereto as such account shall be provided to the Security Registrar and shall
appear in the Security Register.
[The Company may be required to repurchase the Securities of this
series, in whole or in part (the "Put Option"), on May 1, 20__, (the "Put Option
Exercise Date") at a purchase price equal to 100% of the principal amount
tendered by the Holder, plus accrued interest, if any, to the Put Option
Exercise Date. On or before the Put Option Exercise Date, the Company shall
deposit with the Trustee money sufficient to pay the principal of and any
interest accrued on the such Securities to be tendered for repayment. On and
after the Put Option Exercise Date, interest will cease to accrue on such
Securities or any portion thereof tendered for repayment.
In the event of repurchase of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
A holder must provide the Company with notice of its intention to
exercise the Put Option during the period from and including March 1, 20__
through and including April 1, 20__. Such notice, once given, will be
irrevocable unless waived by the Company.]
[The Securities of this series are subject to redemption on or after
May 1, 2007, in whole or in part, at the election of the Company, at the
following Redemption
<PAGE>
8
Prices (expressed as percentages of the principal amount): if redeemed during
the 12-month period beginning May 1 of the years indicated,
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
---- -----------------
<S> <C>
2007 104.150%
2008 103.735
2009 103.320
2010 102.905
2011 102.490
2012 102.075
2013 101.660
2014 101.245
2015 100.830
2016 100.415
2017 and thereafter 100.000
</TABLE>
in each case with accrued interest to the Redemption Date; provided, however,
that installments of interest on this Security whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holder of this Security, or
one or more Predecessor Securities, of record at the close of business on the
relevant Regular Record Dates referred to on the face hereof all as provided in
the Indenture. Notice of redemption will be given by mail to Holders of
Securities, not less than 30 nor more than 60 days prior to the date fixed for
redemption, all as provided in the Indenture. In the event of redemption of
this Security in part only, a new Security or Securities of this series and of
like tenor for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.]
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series
(including this Security and the interests represented hereby) may be declared
due and payable in the manner and with the effect provided in the Indenture.
Upon payment (i) of the amount of principal so declared due and payable and (ii)
of interest on any overdue principal and overdue interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Company's obligations in respect of the payment of the principal of and any
interest on the Securities of this series (including this Security and the
interests represented hereby) shall terminate.
The Indenture contains provisions for defeasance at any time of (a)
the entire indebtedness of the Company on this Security and (b) certain
restrictive covenants and the related defaults and Events of Default, upon
compliance with certain conditions set forth therein, which provisions shall
apply to this Security.
<PAGE>
9
The provisions of Article Fourteen of the Indenture apply to
Securities of this series.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding on behalf of the Holders of all Securities of such series
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and the Persons
who are beneficial owners of interests represented hereby, and of any Security
issued in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Securities of this series, the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of this series shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of the Outstanding Securities of this series a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days; provided, however, that such limitations do not apply
to a suit instituted by the Holder hereof for the enforcement of payment of the
principal of (and premium, if any) or interest on this Security on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional to pay the principal of (and premium, if any) and
interest on this Security at the time, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein and herein set forth, the transfer of Registered Securities of the
series of which this Security is a part may be registered on the Security
Register of the Company, upon surrender of such Securities for registration of
transfer at the office of the Security Registrar, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder thereof or his
attorney duly authorized in
<PAGE>
10
writing, and thereupon one or two more new Securities of this Series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
No service charge shall be made for any such registration of transfer
or exchange of Securities as provided above, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series of which this Security is a part are
issuable only in registered form without coupons, in denominations of $1,000.00
and any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, the Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.
The Securities of this series shall be dated the date of their
authentication.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
or on behalf of The Chase Manhattan Bank, the Trustee under the Indenture, or
its successor thereunder, by the manual signature of one of its authorized
officers, this Security shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
<PAGE>
11
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: May __, 1997
CSX CORPORATION
[Seal] By:
---------------------------------------------
Name: David D. Owen
Title: Managing Director--Corporate Finance
Attest:
- -----------------------------------
Corporate Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of a series issued under the Indenture
described herein.
THE CHASE MANHATTAN BANK, as Trustee
By:
--------------------------------------------
Authorized Officer
<PAGE>
12
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- ----------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
----------------------------------------------------------------------
attorney to transfer said Note on
- ----------------------------------------------
the books of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL SECURITIES OTHER THAN EXCHANGE SECURITIES,
OFFSHORE GLOBAL SECURITIES AND
OFFSHORE PHYSICAL SECURITIES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of an effective Registration Statement
or (ii) the end of the period referred to in Rule 144(k) under the Securities
Act, the undersigned confirms that without utilizing any general solicitation or
general advertising that:
[Check One]
---------
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule 144A
thereunder.
or
--
[ ] (b) this Note is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of transfer
set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or the Security
Registrar shall not be obligated to register this Note in the name of any Person
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 313 of the Indenture
shall have been satisfied.
Date:
---------------- ----------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
<PAGE>
13
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
--------------------- -----------------------------------------
NOTICE: To be executed by an executive
officer
<PAGE>
14
[OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have all or a portion of this Security purchased by the
Company pursuant to Article Fifteen of the Indenture, state the amount (in
principal amount): $________________.
Date:
-----------------
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears elsewhere on this Security)
Signature Guarantee: ]
----------------------------
<PAGE>
EXHIBIT A
---------
Schedule of Exchanges
---------------------
<PAGE>
EXHIBIT 4.4
EXECUTION COPY
================================================================================
CSX CORPORATION
$2,500,000,000
$350,000,000 7.05% Debentures Due 2002
$300,000,000 7.25% Debentures Due 2004
$450,000,000 7.45% Debentures Due 2007
$400,000,000 7.90% Debentures Due 2017
$500,000,000 7.95% Debentures Due 2027
$100,000,000 6.95% Debentures Due 2027
$250,000,000 7.25% Debentures Due 2027
$150,000,000 8.30% Debentures Due 2032
PURCHASE AGREEMENT
Dated: May 1, 1997
================================================================================
<PAGE>
CSX CORPORATION
$2,500,000,000
$350,000,000 7.05% Debentures Due 2002
$300,000,000 7.25% Debentures Due 2004
$450,000,000 7.45% Debentures Due 2007
$400,000,000 7.90% Debentures Due 2017
$500,000,000 7.95% Debentures Due 2027
$100,000,000 6.95% Debentures Due 2027
$250,000,000 7.25% Debentures Due 2027
$150,000,000 8.30% Debentures Due 2032
PURCHASE AGREEMENT
May 1, 1997
Salomon Brothers Inc
As Representative of the Initial Purchasers
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
CSX CORPORATION, a Virginia corporation (the "Company"), proposes to
issue and sell to the parties named in Schedule I hereto (the "Initial
Purchasers"), for whom you are acting as representative (the "Representative"),
$350,000,000 principal amount of its 7.05% Debentures due 2002 (the "2002
Debentures"), $300,000,000 principal amount of its 7.25% Debentures due 2004
(the "2004 Debentures"), $450,000,000 principal amount of its 7.45% Debentures
due 2007 (the "2007 Debentures"), $400,000,000 principal amount of its 7.90%
Debentures due 2017 (the "2017 Debentures"), $500,000,000 principal amount of
its 7.95% Debentures due 2027 (the "7.95% 2027 Debentures"), $100,000,000
principal amount of its 6.95% Debentures due 2027 (the "6.95% 2027 Debentures"),
$250,000,000 principal amount of its 7.25% Debentures due 2027 (the "7.25% 2027
Debentures") and $150,000,000 principal amount of its 8.30% Debentures due 2032
(the "2032 Debentures" and, collectively with the 2002 Debentures, the 2004
Debentures, the 2007 Debentures, the 2017 Debentures, the 7.95% 2027 Debentures,
the 6.95% 2027 Debentures and the 7.25% 2027 Debentures, the "Securities"). The
Securities are to be issued under an indenture (the "Indenture") dated as of
August 1, 1990 between the Company and The Chase Manhattan Bank, as trustee, as
supplemented and amended by the First Supplemental Indenture dated as of June
15, 1991 and the Second Supplemental Indenture to be dated as of the First
Closing Date (as defined below).
1
<PAGE>
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
that the Initial Purchasers will offer and sell the Securities purchased by them
hereunder in accordance with Section 4 hereof as soon as you deem advisable.
Holders of the Securities will be entitled to the benefits of the
Registration Rights Agreement (the "Registration Rights Agreement"), to be dated
the First Closing Date (as defined below), in each case among the Company and
the Initial Purchasers. The Registration Rights Agreement will be as described
in the Preliminary Offering Memorandum (as defined below), with such changed,
other or additional terms reasonably acceptable to the Company and the Initial
Purchasers.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated April 22, 1997 (including any
and all exhibits thereto and any information incorporated by reference therein,
the "Preliminary Memorandum") and a final offering memorandum, dated May 1, 1997
(including any and all exhibits thereto and any information incorporated by
reference therein, the "Final Memorandum"). Each of the Preliminary Memorandum
and the Final Memorandum sets forth certain information concerning the Company
and the Securities. The Company hereby confirms that it has authorized the use
of the Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the Securities by
the Initial Purchasers. Unless stated to the contrary, all references herein to
the Final Memorandum are to the Final Memorandum at the Execution Time (as
defined below) and are not meant to include any amendment or supplement, or any
information incorporated by reference therein, subsequent to the Execution Time,
and any reference to the terms "amend," "amendment" or "supplement" with respect
to the Final Memorandum shall be deemed to refer to and include any information
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), subsequent to the Execution Time which is incorporated by reference
therein.
1. Representations and Warranties. The Company represents and
------------------------------
warrants to, and agrees with, each Initial Purchaser as set forth below in this
Section 1. Any reference to persons acting on behalf of the Company, or on
behalf of any of the Company's Affiliates (as defined below), does not include
any of the Initial Purchasers, with respect to whom the Company makes no
representation.
(a) The Final Memorandum, at the date hereof, does not, and at the
First Closing Date and the Second Closing Date will not (and any amendment
or supplement thereto, at the date thereof and at the First Closing Date
and the Second Closing Date, will not), contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that
-------- -------
2
<PAGE>
the Company makes no representation or warranty as to the information
contained in or omitted from the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Initial
Purchasers through the Representative specifically for inclusion therein.
All documents incorporated by reference in the Final Memorandum which were
filed under the Exchange Act on or before the Execution Time complied, and
all such documents which are filed under the Exchange Act after the
Execution Time and on or before the applicable Closing Date will comply, in
all material respects with the applicable requirements of the Exchange Act
and the rules thereunder.
(b) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation
of the price of the Securities (other than any stabilization done by the
Initial Purchasers, as to which the Company makes no representation).
(c) Neither the Company, nor any of its Affiliates (as defined in
Rule 501(b) of Regulation D under the Securities Act ("Regulation D")), nor
any person acting on its or their behalf has, directly or indirectly, made
offers or sales of any security, or solicited offers to buy any security,
which are or could be integrated with the sale of the Securities in a
manner that would require the registration of the Securities under the
Securities Act.
(d) Neither the Company, nor any person acting on its behalf, has
engaged in any form of general solicitation or general advertising (within
the meaning of Rule 502(c) of Regulation D) in connection with any offer or
sale of the Securities in the United States.
(e) Assuming the accuracy of the representations and warranties and
compliance with the agreements made by the Initial Purchasers herein, it is
not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers under, or in connection with the
initial resale of such Securities by the Initial Purchasers in the manner
contemplated by, this Agreement to register the Securities under the Act or
to qualify the Indenture under the Trust Indenture Act of 1939, as amended.
(f) No securities of the Company are of the same class (within the
meaning of Rule 144A under the Securities Act) as the Securities and listed
on a national securities exchange registered under Section 6 of the
Exchange Act, or quoted in a U.S. automated inter-dealer quotation system.
(g) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has engaged in any directed selling efforts
with respect to the
3
<PAGE>
Securities, and each of them has complied with the offering restrictions
requirement of Regulation S ("Regulation S") under the Securities Act.
Terms used in this paragraph have the meanings given to them by Rule 902(b)
of Regulation S.
(h) The Company is subject to the reporting requirements of Section
13 or Section 15(d) of the Exchange Act.
(i) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), without taking account of any exemption arising out of the number of
holders of the Company's securities.
(j) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Agreement).
(k) The information, if any, provided by the Company pursuant to
Section 5(h) hereof will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
2. Purchase and Sale. Subject to the terms and conditions and in
-----------------
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price
equal to the percentage of principal amount as set forth on Schedule I hereto,
the principal amount of 2002 Debentures, 2004 Debentures, 2007 Debentures, 2017
Debentures, 7.95% 2027 Debentures, 6.95% 2027 Debentures, 7.25% 2027 Debentures
and 2032 Debentures, plus, in each case accrued interest, if any, from May 6,
1997 (except with respect to the 2032 Debentures, on which interest will accrue,
if at all, from May 8, 1997), set forth opposite such Initial Purchaser's name
in Schedule II hereto.
3. Delivery and Payment. Delivery of and payment for (i) the 2002
--------------------
Debentures, the 2004 Debentures, the 2007 Debentures, the 2017 Debentures, the
7.95% 2027 Debentures, the 6.95% 2027 Debentures and the 7.25% 2027 Debentures
shall be made at 10:00 AM, New York City time, on May 6, 1997, or such later
date (not later than May 13, 1997) as the Representative shall designate and
(ii) the 2032 Debentures shall be made at 10:00 A.M., New York City time on May
8, 1997, or such later date (not later than May 15, 1997) as the Representative
shall designate, in each case which date and time may be postponed by agreement
between the Representative and the Company or as provided in Section 9 hereof
(such date and time of delivery and payment for the 2002 Debentures, the 2004
Debenture, the 2007 Debentures, the 2017 Debentures, the 7.95% 2027 Debentures,
the 6.95% 2027 Debentures and the 7.25% 2027 Debentures being herein called the
"First Closing Date" and such date and time of delivery and payment for the 2032
Debentures being herein called the Second Closing Date and, together with the
First Closing Date, the
4
<PAGE>
"Closing Dates"). Delivery of the Securities shall be made to the
Representative for the respective accounts of the Initial Purchasers against
payment by the Initial Purchasers through the Representative of the purchase
price thereof to or upon the order of the Company by wire transfer of Federal
funds or other immediately available funds or in such other manner of payment as
may be agreed by the Company and the Representative.
Delivery of any Securities to be issued in definitive certificated
form shall be made on the applicable Closing Date at such location, and in such
names and denominations, as the Representative shall designate at least two
business days in advance of the applicable Closing Date. Each Company agrees to
have the Securities available for inspection, checking and packaging by the
Representative in New York, New York, not later than 1:00 PM on the business day
prior to the applicable Closing Date. Each closing for the purchase and sale of
the Securities shall occur at the office of Shearman & Sterling, 599 Lexington
Avenue, New York, New York ("Counsel for the Initial Purchasers") or such other
place as the parties hereto shall agree.
4. Offering of Securities. Each Initial Purchaser, severally and
----------------------
not jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act) and
that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A, (ii) to other
institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D) who provide to it and to the Company a letter
in the form of Annex A to the Final Memorandum or (iii) in accordance with
the restrictions set forth in Exhibit A hereto.
(b) Neither it, nor any person acting on its behalf, has engaged, or
will engage in any form of general solicitation or general advertising
(within the meaning of Rule 502(c) of Regulation D) in connection with any
offer or sale of Securities in the United States, except as contemplated by
the Registration Rights Agreement.
(c) Each Initial Purchaser shall deliver to each purchaser of
Securities therefrom, in connection with its original distribution of the
Securities, a copy of the Final Memorandum, as amended and supplemented at
the date of such purchase, except with respect to sales of Securities made
to non-U.S. persons in reliance on Regulation S.
5
<PAGE>
5. Agreements. The Company agrees with each Initial Purchaser that:
----------
(a) The Company will furnish to each Initial Purchaser and to Counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (c) below, as many copies of the Final Memorandum and any
amendments and supplements thereto as it may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(b) The Company will not amend or supplement the Final Memorandum
(other than by filing documents under the Exchange Act which are
incorporated by reference therein), without having previously advised and
furnished to the Representative a copy of such amendment or supplement to
which the Representative, on advice from counsel, has not reasonably
objected; provided, however, that, prior to the completion of the
-------- -------
distribution of the Securities by the Initial Purchasers (as determined by
the Representative), the Company will not file any document under the
Exchange Act which is incorporated by reference in the Final Memorandum
unless, prior to such proposed filing, the Company has furnished the
Representative with a copy of such document. The Company will promptly
advise the Representative when any document filed under the Exchange Act
which is incorporated by reference in the Final Memorandum shall have been
filed with the Securities and Exchange Commission (the "Commission").
(c) If at any time prior to the earlier of (i) completion of the sale
of the Securities by the Initial Purchasers (as determined by the
Representative), (ii) the effectiveness of the Exchange Offer Registration
(as defined in the Registration Rights Agreement), provided that the
--------
Initial Purchasers are eligible to participate in the Exchange Offer
thereunder and as a result thereof are eligible to sell the Securities
exchanged in connection therewith without restriction, (iii) the
effectiveness of the Shelf Registration Statement (as defined in the
Registration Rights Agreement) as contemplated by the Registration Rights
Agreement or (iv) six months from the date hereof, any event occurs as a
result of which the Final Memorandum, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it should
be necessary to amend or supplement the Final Memorandum (including any
document incorporated by reference therein which was filed under the
Exchange Act) to comply with the Exchange Act or the rules thereunder or
other applicable law, the Company will promptly notify the Representative
of the same and, subject to the requirements of paragraph (b) of this
Section 5, will prepare and provide to the Representative pursuant to
paragraph (a) of this Section 5 an amendment or supplement which will
correct such statement or omission or effect such compliance and, in the
event that such an amendment or supplement is required to be filed under
the Exchange Act and is to be incorporated by reference in the Final
Memorandum, will file such amendment or supplement with the Commission. The
Representative will promptly
6
<PAGE>
advise the Company, in writing, of the completion of the initial
distribution of the Securities.
(d) The Company will cooperate with the Initial Purchasers and their
counsel in arranging for the qualification of the Securities for sale by
the Initial Purchasers under the laws of such jurisdictions as the Initial
Purchasers may designate and will maintain such qualifications in effect so
long as required for the sale of the Securities; provided, however, that in
-------- -------
connection therewith, the Company shall not be required to qualify as a
foreign corporation or to execute a general consent to service of process
in any jurisdiction or subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not then so subject. The
Company will promptly advise the Representative of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(e) The Company will not, and will not permit any of its Affiliates
to, resell any Securities that have been acquired by any of them.
(f) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, which are or
could be integrated with the sale of the Securities in a manner that would
require the registration of the Securities under the Securities Act.
(g) Neither the Company, nor any person acting on its behalf, will
engage in any form of general solicitation or general advertising (within
the meaning of Rule 502(c) of Regulation D) in connection with any offer or
sale of the Securities in the United States, except as contemplated by the
Registration Rights Agreement.
(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Company
will, during any period in which it is not subject to Section 13 or 15(d)
of the Exchange Act, provide to each holder of such restricted securities
and to each prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4) under
the Securities Act.
(i) The Company shall, during any period in the two years after the
Closing Date in which the Company is subject to the reporting requirements
of Section 13 or Section 15(d) of the Exchange Act, timely file all Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K, and any other reports, statements, documents, registrations,
filings or submissions required to be filed by the Company with the
Commission pursuant to the Exchange Act.
7
<PAGE>
(j) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf will engage in any directed selling efforts
with respect to the Securities, and each of them will comply with the
offering restrictions requirement of Regulation S. Terms used in this
paragraph have the meanings given to them by Rule 902(b) of Regulation S.
(k) The Company will cooperate with the Representative and use its
reasonable best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(l) If requested by the Initial Purchasers, the Company shall use its
reasonable best efforts to cause Securities sold in reliance on Rule 144A
to be eligible for the PORTAL trading system of the National Association of
Securities Dealers, Inc.
(m) Until such time as any Security is registered under the
Securities Act pursuant to the Registration Rights Agreement and
transferred pursuant to such registration, the Company shall include a
legend on the Securities to the effect as set forth under "Notice to
Investors" in the Final Memorandum.
6. Conditions to the Obligations of the Initial Purchasers. The
-------------------------------------------------------
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the date and time that this Agreement is executed
and delivered by the parties hereto (the "Execution Time"), and, with respect to
the 2002 Debentures, the 2004 Debentures, the 2007 Debentures, the 2017
Debentures, the 7.95% 2027 Debentures, the 6.95% 2027 Debentures and the 7.25%
2027 Debentures, the First Closing Date and, with respect to the 2032
Debentures, the Second Closing Date, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Company shall have furnished to the Initial Purchasers the
opinion of the General Counsel, or an Assistant General Counsel, of the
Company, dated the applicable Closing Date, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the Commonwealth of
Virginia, with corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Final
Memorandum; and the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in
which it owns or leases substantial properties or in which the conduct
of its business requires such qualification except where the failure
to so qualify or be in good standing would not have a
8
<PAGE>
material adverse effect on the Company and its subsidiaries,
considered as one enterprise;
(ii) Each significant subsidiary as defined in Rule 405 of
Regulation C of the Securities Act (each a "Significant Subsidiary")
of the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Final Memorandum; and, to the best of such counsel's knowledge, is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, considered as one enterprise; all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued, is fully paid and nonassessable, and,
except for directors' qualifying shares, if any, is owned by the
Company free and clear of any mortgage, pledge, lien, encumbrance,
claim or equity;
(iii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated herein, except such as
may be required under state securities laws; and
(iv) The execution, delivery and performance of the Indenture,
this Agreement, the Registration Rights Agreement and the issuance and
sale of the Securities and compliance with the terms and provisions
thereof will not result in a material breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, rule, regulation or order of any governmental agency or body
or any court having jurisdiction over the Company or any Significant
Subsidiary or any of their properties or, to the best of such
counsel's knowledge, any agreement or instrument to which the Company
or any of its Significant Subsidiaries is a party or by which the
Company or any Significant Subsidiary is bound or to which any of the
properties of the Company or any Significant Subsidiary is subject, or
the charter or by-laws of the Company or any Significant Subsidiary,
and the Company has full power and authority to authorize, issue and
sell the Securities as contemplated by this Agreement.
In addition, such counsel shall state that he or she has participated
in conferences with officers and other representatives of the Company,
representatives of Ernst & Young, independent auditors for the Company, and
the Representative, at which the contents of the Final Memorandum and any
amendment thereof or supplement thereto and related matters were discussed
and although such counsel has
9
<PAGE>
not undertaken to investigate or verify independently, and does not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum or any amendment thereof or
supplement thereto, no facts have come to the attention of such counsel
which would lead such counsel to believe that at the Execution Time the
Final Memorandum (other than the historical, proforma, projected or other
financial statements, information and data and statistical information and
data included or incorporated by reference therein, in each case as to
which no opinion need be given) contained any untrue statement of a
material fact or omitted to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or that the Final Memorandum (other than the
historical, proforma, projected or other financial statements, information
and data and statistical information and data included or incorporated by
reference therein, in each case as to which no opinion need be given) at
the applicable Closing Date includes any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Except as otherwise set forth herein, all references
in this Section 6(a) to the Final Memorandum shall be deemed to include any
amendment or supplement thereto at the applicable Closing Date.
(b) The Company shall have furnished to the Initial Purchasers the
opinion of McGuire, Woods, Battle & Boothe, L.L.P., counsel for the
Company, dated the applicable Closing Date, to the effect that:
(i) The Indenture has been duly authorized, executed and
delivered by the Company; the Securities have been duly authorized,
executed, issued and delivered by the Company; the Indenture and the
Securities, when authenticated in the manner provided in the
Indenture, constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles (in rendering such opinion, such counsel may assume that
the Indenture has been duly authorized, executed and delivered, and
the Securities have been duly authenticated, by the Trustee); and the
Securities conform to the description thereof contained in the Final
Memorandum;
(ii) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and
legally binding obligation of the Company enforceable against the
Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (in rendering such
opinion, such counsel may assume due authorization, execution
10
<PAGE>
and delivery by parties thereto other than the Company), provided,
however, that no opinion is rendered as to the enforceability against
the Company of any rights to indemnification or contribution included
therein; and the Registration Rights Agreement conforms to the
description thereof contained in the Final Memorandum;
(iii) This Agreement has been duly authorized, executed and
delivered by the Company;
(iv) Assuming the accuracy of the representations and warranties
and compliance with the agreements made by the Company and the Initial
Purchasers herein, it is not necessary in connection with the offer,
sale and delivery of the Securities to the Initial Purchasers under,
or in connection with the initial resale of such Securities by the
Initial Purchasers in the manner contemplated by, this Agreement to
register the Securities under the Securities Act or to qualify the
Indenture, as amended, under the Trust Indenture Act of 1939, as
amended;
(vi) The Company is not an "investment company" within the
meaning of the Investment Company Act without taking account of any
exemption arising out of the number of holders of the Company's
securities;
(vii) The statements in the Final Memorandum under the captions
"Description of Debentures" and "Exchange Offers; Registration
Rights", insofar as they purport to summarize certain provisions of
the Securities and the Registration Rights Agreement, are accurate
summaries of such provisions; and
(viii) The information contained in the Final Memorandum under the
caption "Certain Federal Income Tax Considerations for Non-U.S.
Holders", to the extent that it constitutes matters of law or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects.
In addition, subject to such counsel's customary qualifications about
the scope of its obligations in connection with its participation in the
preparation of documents, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Company, representatives of Ernst & Young, independent auditors for the
Company, the Representative, and Counsel for the Initial Purchasers at
which the contents of the Final Memorandum and any amendment thereof or
supplement thereto and related matters were discussed and although such
counsel have not undertaken to investigate or verify independently, and do
not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Final Memorandum or any amendment thereof
or supplement thereto, and did not participate in the preparation of the
documents incorporated by reference in the Final
11
<PAGE>
Memorandum, no facts have come to the attention of such counsel which would
lead such counsel to believe that at the Execution Time the Final
Memorandum (other than the historical, proforma, projected or other
financial statements, information and data and statistical information and
data included or incorporated by reference therein, in each case as to
which no opinion need be given) contained any untrue statement of a
material fact or omitted to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or that the Final Memorandum at the applicable
Closing Date (other than the historical, proforma, projected or other
financial statements, information and data and statistical information and
data included or incorporated by reference therein, in each case as to
which no opinion need be given) includes any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, McGuire, Woods, Battle & Boothe, L.L.P. may
rely (A) as to matters governed by New York law upon the opinion of Counsel
for the Initial Purchasers, referred to below and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. Except as otherwise set forth
herein, all references in this Section 6(b) to the Final Memorandum shall
be deemed to include any amendment or supplement thereto at the applicable
Closing Date.
(c) The Representative shall have received from Counsel for the
Initial Purchasers such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Securities, the Final Memorandum
(as amended or supplemented at the applicable Closing Date) and other
related matters as they may require, and the Company shall have furnished
to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters. In rendering such
opinion, Counsel for the Initial Purchasers may rely as to the
incorporation of the Company on the opinion of the General Counsel or
Assistant General Counsel of the Company and as to all other matters
governed by Virginia law upon the opinion of McGuire, Woods, Battle &
Boothe, L.L.P., referred to above.
(d) The Company shall have furnished to the Representative a
certificate of the Company, signed by the Chairman of the Board or the
President or an Executive Vice President or the Managing Director-Corporate
Finance and another person who is the principal financial or accounting
officer of the Company, dated the applicable Closing Date, to the effect
that the signers of such certificate have examined the Final Memorandum,
any amendment or supplement to the Final Memorandum and this Agreement and
that, to the best of their knowledge after reasonable investigation:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the
12
<PAGE>
applicable Closing Date with the same effect as if made on and as of
such Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date; and
(ii) since the date of the most recent financial statements
incorporated by reference in the Final Memorandum, there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its subsidiaries,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto) or as
described in such certificate.
(e) (A) At the Execution Time, Ernst & Young, LLP shall have
furnished to the Representative a letter, dated as of the Execution Time,
in form and substance satisfactory to the Representative, confirming that
they are independent accountants within the meaning of the Securities Act
and the applicable rules and regulations thereunder and containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Final Memorandum and (B)
at the applicable Closing Date, Ernst & Young, LLP shall have furnished to
the Representative a letter dated such date, to the effect that they
reaffirm the statements made in the letter furnished pursuant to clause
(A), except that the specified date referred to shall be a date not more
than three business days prior to the applicable Closing Date.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, there shall not have
been (i) any change or decrease specified in the letter or letters referred
to in paragraph (e) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the business or
properties of the Company and its subsidiaries the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the reasonable
judgment of the Representative, so material and adverse as to make it
impractical or inadvisable to market the Securities as contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereof or
thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or any notice given of
any intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
13
<PAGE>
Prior to the applicable Closing Date, the Company shall furnish to the
Representative such conformed copies of such opinions, certificates, letters and
documents as the Representative may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representative and Counsel for the Initial Purchasers, this
Agreement and all obligations of the Initial Purchasers hereunder with respect
to the 2002 Debentures, the 2004 Debentures, the 2007 Debentures, the 2017
Debentures, the 7.95% 2027 Debentures, the 6.95% 2027 Debenture, the 7.25% 2027
Debentures, and/or the 2032 Debentures, as the case may be, may be canceled at,
or at any time prior to, the applicable Closing Date by the Representative.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telefax confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of Counsel for the Initial Purchasers, at 599 Lexington
Avenue, New York, New York, on the applicable Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided
-------------------------
for herein is not consummated because of cancellation by the Representative
pursuant to Section 6 hereof, because of any termination pursuant to Section 10
hereof or because of any refusal, inability or failure on the part of the
Company to perform any material agreement herein or comply with any material
provision hereof other than by reason of a default by any of the Initial
Purchasers in payment for the Securities on the applicable Closing Date, the
Company will reimburse the Initial Purchasers severally upon demand for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of Counsel for the Initial Purchasers) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Memorandum, the Final Memorandum, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by them in
14
<PAGE>
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
-------- -------
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Initial Purchasers
through the Representative specifically for inclusion therein. The foregoing
indemnity with respect to any untrue statement contained in or any omission from
the Preliminary Memorandum shall not inure to the benefit of any Initial
Purchaser (or the directors, officers, employees or agents of each Initial
Purchaser or any person who controls such Initial Purchaser within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act) from whom
the person asserting any such loss, claim, damage or liability purchased any of
the Securities that are the subject thereof if such person was not sent or given
a copy of the Final Memorandum (or any amendment or supplement thereto) at or
prior to the written confirmation of the sale of such Securities to such person
and the untrue statement contained in or the omission from such Preliminary
Memorandum was corrected in the Final Memorandum (or any amendment or supplement
thereto), unless such failure resulted from noncompliance by the Company with
its obligations hereunder to furnish the Initial Purchasers with copies of the
Final Memorandum. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Initial Purchaser severally agrees to indemnify and hold
harmless the Company, its directors, its officers, and each person who controls
the Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Initial Purchaser, but only with respect to claims and
actions based upon written information relating to such Initial Purchaser
furnished to the Company by or on behalf of such Initial Purchaser through the
Representative specifically for inclusion in the Preliminary Memorandum or the
Final Memorandum (or in any amendment or supplement thereto). This indemnity
agreement will be in addition to any liability which any Initial Purchaser may
otherwise have. The Company acknowledges that the statements set forth in the
first two sentences of the last paragraph of the cover page, and the first and
second sentences of the second paragraph, the second sentence of the third
paragraph and the first three sentences of the last paragraph under the heading
"Plan of Distribution" in the Preliminary Memorandum and the Final Memorandum
constitute the only information furnished in writing by or on behalf of the
Initial Purchasers for inclusion in the Preliminary Memorandum or the Final
Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above
15
<PAGE>
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), however, the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel only if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded upon advice of counsel that there may be legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding. An indemnifying party
shall not be liable under this Section 8 to any indemnified party regarding any
settlement or compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise, or consent is consented to by such
indemnifying party, which consent shall not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company and by
the Initial
16
<PAGE>
Purchasers from the offering of the Securities; provided, however, that in no
-------- -------
case shall any Initial Purchaser (except as may be provided in any agreement
among the Initial Purchasers relating to the offering of the Securities) be
responsible for any amount in excess of the purchase discount or commission
applicable to the Securities purchased by such Initial Purchaser hereunder, in
each case as set forth on the cover page of the Final Memorandum. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and the Initial Purchasers shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and of the Initial Purchasers in connection
with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses), and benefits received by the Initial Purchasers shall be
deemed to be equal to the total purchase discounts and commissions received by
the Initial Purchasers from the Company in connection with the purchase of the
Securities hereunder, in each case as set forth on the cover page of the Final
Memorandum. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or the Initial Purchasers, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Initial Purchasers agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchasers' obligations to contribute as provided in this
Section 8(d) are several in proportion to their respective purchase obligations
and not joint. For purposes of this Section 8, each person who controls an
Initial Purchaser within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act and each director, officer, employee and agent
of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act and
each officer and director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
-------------------------------
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
--------
however, that in the event that the aggregate principal amount of Securities
- -------
which the defaulting Initial Purchaser or Initial Purchasers
17
<PAGE>
agreed but failed to purchase shall exceed 10% of the aggregate principal amount
of Securities set forth in Schedule I hereto, the remaining Initial Purchasers
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such non-defaulting Initial Purchasers
do not purchase all the Securities within 36 hours of such default, this
Agreement will terminate without liability to any non-defaulting Initial
Purchaser or the Company except as otherwise provided in Section 11. In the
event of a default by any Initial Purchaser as set forth in this Section 9, the
applicable Closing Date shall be postponed for such period, not exceeding seven
days, as the Representative shall determine in order that the required changes
in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company or to any non-
defaulting Initial Purchaser for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representative, by notice given to the Company
prior to delivery of and payment for the applicable Securities, if prior to such
time (i) there shall have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Company or its subsidiaries which, in the judgment of the Representative,
materially impairs the investment quality of the Securities, (ii) any
downgrading in the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive implications
of a possible upgrading, and no implication of a possible downgrading, of such
rating), (iii) trading in any of the Company's securities shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
materially limited or minimum prices shall have been established on such
exchange, (iv) a banking moratorium shall have been declared either by federal
or New York State authorities or (v) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the reasonable judgment of the Representative,
impracticable or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Final Memorandum (exclusive of any amendment
or supplement thereof or thereto).
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
18
<PAGE>
12. Fees, Expenses. The Company covenants and agrees with the
--------------
Representative that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants in
connection with the issue of the Securities and all other expenses in connection
with the preparation and printing of the Preliminary Memorandum and Final
Memorandum and any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Initial Purchasers; (ii) the cost of
printing or other production of all documents relating to the offering,
purchase, sale and delivery of the Securities as provided in Section 4(a); (iii)
all expenses in connection with the qualification of the Securities for offering
and sale under state securities laws, including the fees and disbursements of
Counsel for the Initial Purchasers in connection with such qualification and in
connection with any Blue Sky surveys; (iv) any fees charged by securities rating
services for rating the Securities; (v) the cost of preparing the Securities;
(vi) the fees and expenses of the Trustee and any agent of the Trustee and the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; (vii) any cost incurred in connection with the
designation of the Securities for trading in PORTAL (viii) any fees charged by
DTC; and (ix) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section 12, including through payment or reimbursement of any roadshow expenses
incurred by or on behalf of the Company. It is understood, however, that except
as provided in Sections 7 and 12 hereof, the Initial Purchasers will pay all of
their own costs and expenses, including the fees, disbursements and expenses of
their counsel and any marketing expenses connected with any offers they may
make.
13. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representative, will be mailed,
delivered or telefaxed and confirmed to them, care of Salomon Brothers Inc, at
Seven World Trade Center, New York, New York, 10048, facsimile (212) 783-2274;
or, if sent to the Company, will be mailed, delivered or telefaxed and confirmed
to it at One James Center, 901 East Cary Street, Richmond, Virginia 23219,
attention: David D. Owen, Managing Director-Corporate Finance, telefax number
(804) 783-1346.
14. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(h) hereof, no other person will have
any right or obligation hereunder.
15. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York.
16. Business Day. For purposes of this Agreement, "business day"
------------
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
19
<PAGE>
17. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
18. Headings. The section headings are for convenience only and
--------
shall not affect the construction hereof.
20
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement between
the Company and the Initial Purchasers.
Very truly yours,
CSX CORPORATION
By /s/ David D. Owen
------------------------------------------
Name: David D. Owen
Title: Managing Director-Corporate Finance
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
By /s/ James J. Ryan
-------------------------------
Name: James J. Ryan
Title: Managing Director
For themselves and the other
Initial Purchasers named in
Schedule I to the foregoing Agreement
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Security Purchase Price/*/
-------- -----------------
<S> <C> <C>
2002 Debentures.......................... 99.335
2004 Debentures.......................... 99.355
2007 Debentures.......................... 99.199
2017 Debentures.......................... 99.067
7.95% 2027 Debentures.......................... 98.607
6.95% 2027 Debentures/1/....................... 99.335
7.25% 2027 Debentures/2/....................... 99.126
2032 Debentures/3/....................... 99.125
</TABLE>
________________
/*/ Expressed as a percentage of principal amount
/1/ Puttable on May 1, 2002
/2/ Puttable on May 1, 2005
/3/ Non-callable until May 1, 2007. Callable thereafter at the redemption
prices set forth below, together with accrued interest, if any, to the date
of purchase if redeemed during the 12-month period beginning May 1 of the
years indicated below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2007 104.150%
2008 103.735%
2009 103.320%
2010 102.905%
2011 102.490%
2012 102.075%
2013 101.660%
2014 101.245%
2015 100.830%
2016 100.415%
2017 and thereafter 100.000%
</TABLE>
i
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
Principal Amount of
2002 Debentures
Initial Purchasers to be Purchased
------------------ ---------------
<S> <C>
Salomon Brothers Inc.......................... $81,668,000
Credit Suisse First Boston Corporation........ 81,666,000
Chase Securities Inc.......................... 81,666,000
Goldman, Sachs & Co........................... 35,000,000
Morgan Stanley & Co. Incorporated............. 35,000,000
NationsBanc Capital Markets, Inc.............. 35,000,000
-----------
Total........................... $350,000,000
============
</TABLE>
<TABLE>
<CAPTION>
Principal Amount of
2004 Debentures
Initial Purchasers to be Purchased
------------------ ---------------
<S> <C>
Salomon Brothers Inc.......................... $70,000,000
Credit Suisse First Boston Corporation........ 70,000,000
Chase Securities Inc.......................... 70,000,000
Goldman, Sachs & Co........................... 30,000,000
Morgan Stanley & Co. Incorporated............. 30,000,000
NationsBanc Capital Markets, Inc.............. 30,000,000
-----------
Total........................... $300,000,000
============
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
2007 Debentures
Initial Purchasers to be Purchased
------------------ ---------------
<S> <C>
Salomon Brothers Inc.......................... $105,000,000
Credit Suisse First Boston Corporation........ 105,000,000
Chase Securities Inc.......................... 105,000,000
Goldman, Sachs & Co........................... 45,000,000
Morgan Stanley & Co. Incorporated............. 45,000,000
NationsBanc Capital Markets, Inc.............. 45,000,000
---------
Total........................... $450,000,000
============
</TABLE>
<TABLE>
<CAPTION>
Principal Amount of
2017 Debentures
Initial Purchasers to be Purchased
------------------ ---------------
<S> <C>
Salomon Brothers Inc.......................... $93,334,000
Credit Suisse First Boston Corporation........ 93,333,000
Chase Securities Inc.......................... 93,333,000
Goldman, Sachs & Co........................... 40,000,000
Morgan Stanley & Co. Incorporated............. 40,000,000
NationsBanc Capital Markets, Inc.............. 40,000,000
---------
Total........................... $400,000,000
============
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
7.95% 2027
Debentures
Initial Purchasers to be Purchased
------------------ ---------------
<S> <C>
Salomon Brothers Inc.......................... $116,668,000
Credit Suisse First Boston Corporation........ 116,666,000
Chase Securities Inc.......................... 116,666,000
Goldman, Sachs & Co........................... 50,000,000
Morgan Stanley & Co. Incorporated............. 50,000,000
NationsBanc Capital Markets, Inc.............. 50,000,000
-----------
Total........................... $500,000,000
============
</TABLE>
<TABLE>
<CAPTION>
Principal Amount of
6.95% 2027
Debentures
Initial Purchasers to be Purchased
------------------ ---------------
<S> <C>
Salomon Brothers Inc.......................... $23,334,000
Credit Suisse First Boston Corporation........ 23,333,000
Chase Securities Inc.......................... 23,333,000
Goldman, Sachs & Co........................... 10,000,000
Morgan Stanley & Co. Incorporated............. 10,000,000
NationsBanc Capital Markets, Inc.............. 10,000,000
----------
Total........................... $100,000,000
============
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
7.25% 2027
Debentures
Initial Purchasers to be Purchased
------------------ ---------------
<S> <C>
Salomon Brothers Inc.......................... $58,334,000
Credit Suisse First Boston Corporation........ 58,333,000
Chase Securities Inc.......................... 58,333,000
Goldman, Sachs & Co........................... 25,000,000
Morgan Stanley & Co. Incorporated............. 25,000,000
NationsBanc Capital Markets, Inc.............. 25,000,000
----------
Total........................... $250,000,000
============
</TABLE>
<TABLE>
<CAPTION>
Principal Amount of
2032 Debentures
Initial Purchasers to be Purchased
------------------ ---------------
<S> <C>
Salomon Brothers Inc.......................... $35,000,000
Credit Suisse First Boston Corporation........ 35,000,000
Chase Securities Inc.......................... 35,000,000
Goldman, Sachs & Co........................... 15,000,000
Stanley & Co. Incorporated.................... 15,000,000
NationsBanc Capital Markets, Inc.............. 15,000,000
----------
Total........................... $150,000,000
============
</TABLE>
v
<PAGE>
EXHIBIT A
Selling Restrictions for Offers and
-----------------------------------
Sales Outside the United States
-------------------------------
(1) (a) The Securities have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. Each Initial Purchaser
represents and agrees that, except as otherwise permitted by Section 4(a)(i) or
(ii) of the Agreement to which this is an exhibit, it has offered and sold the
Securities, and will offer and sell the Securities, (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the applicable Closing Date, only in accordance
with Rule 903 of Regulation S under the Securities Act. Accordingly, each
Initial Purchaser represents and agrees that neither it, nor any of its
affiliates nor any person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities, and that
it and they have complied and will comply with the offering restrictions
requirement of Regulation S. Each Initial Purchaser agrees that, at or prior to
the confirmation of sale of Securities (other than a sale of Securities pursuant
to Section 4(a)(i) or (ii) of the Agreement to which this is an exhibit), it
shall have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities from it during
the restricted period a confirmation or notice substantially to the following
effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and the applicable Closing Date, except in either case in
accordance with Regulation S or Rule 144A under the Securities Act.
Terms used above have the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except with its affiliates
or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it has not
offered or sold, and prior to the expiration of the period six months from the
applicable Closing Date herein will not offer or sell any Securities to persons
in the United Kingdom except to those
A-1
<PAGE>
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for purpose of their
business or otherwise in circumstances that have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995, (ii) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 of the
United Kingdom with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (iii) it has only issued
or passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Securities to a person who is
of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom the
document may otherwise lawfully be issued or passed on.
A-2
<PAGE>
EXHIBIT 4.5
EXECUTION COPY
================================================================================
CSX CORPORATION
$2,500,000,000
$350,000,000 7.05% Debentures due 2002
$300,000,000 7.25% Debentures due 2004
$450,000,000 7.45% Debentures due 2007
$400,000,000 7.90% Debentures due 2017
$500,000,000 7.95% Debentures due 2027
$100,000,000 6.95% Debentures due 2027
$250,000,000 7.25% Debentures due 2027
$150,000,000 8.30% Debentures due 2032
REGISTRATION RIGHTS AGREEMENT
Dated: May 6, 1997
================================================================================
<PAGE>
CSX CORPORATION
$2,500,000,000
$350,000,000 7.05% DEBENTURES DUE 2002
$300,000,000 7.25% DEBENTURES DUE 2004
$450,000,000 7.45% DEBENTURES DUE 2007
$400,000,000 7.90% DEBENTURES DUE 2017
$500,000,000 7.95% DEBENTURES DUE 2027
$100,000,000 6.95% DEBENTURES DUE 2027
$250,000,000 7.25% DEBENTURES DUE 2027
$150,000,000 8.30% DEBENTURES DUE 2032
REGISTRATION RIGHTS AGREEMENT
New York, New York
May 6, 1997
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
CSX Corporation, a Virginia corporation (the "Company"), proposes to
issue and sell to certain purchasers (the "Purchasers"), upon the terms set
forth in a purchase agreement of even date herewith (the "Purchase Agreement"),
its 7.05% Debentures due 2002 (the "2002 Debentures"), its 7.25% Debentures due
2004 (the "2004 Debentures"), its 7.45% Debentures due 2007 (the "2007
Debentures"), its 7.90% Debentures due 2017 (the "2017 Debentures"), its 6.95%
Debentures due 2027 (the "6.95% 2027 Debentures"), its 7.95% Debentures due 2027
(the "7.95% 2027 Debentures"), its 7.25% Debentures due 2027 (the "7.25% 2027
Debentures") and its 8.30% Debentures due 2032 (the "2032 Debentures" and,
together with the 2002 Debentures, the 2004 Debentures, the 2007 Debentures, the
2017 Debentures, the 7.95% 2027 Debentures, the 6.95% 2027 Debentures and the
7.25% 2027 Debentures, the "Securities") (the "Initial Placement"). As an
inducement to the Purchasers to enter into the Purchase Agreement and in
satisfaction of a
<PAGE>
2
condition to the obligations of the Initial Purchasers thereunder, the Company
agrees with you, (i) for your benefit and the benefit of the other Purchasers
and (ii) for the benefit of the holders from time to time of the Securities
(including you and the other Purchasers) (each of the foregoing a "Holder" and
together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition
-----------
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
---
regulations of the Commission promulgated thereunder, each as the same may be
amended from time to time.
"Affiliate" of any specified person means any other person which,
---------
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day other than a Saturday, a Sunday, or a day
------------
on which banking institutions in New York are authorized or required by law or
executive order to close.
"Closing Date" means May 6, 1997 with respect to the 2002 Debentures,
------------
the 2004 Debentures, the 2007 Debentures, the 2017 Debentures, the 7.95% 2027
Debentures, the 6.95% 2027 Debentures and the 7.25% 2027 Debentures, and May 8,
1997 with respect to the 2032 Debentures.
"Commission" means the Securities and Exchange Commission.
----------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the Commission promulgated thereunder, each as
the same may be amended from time to time.
"Exchange Offer Registration Period" means the 180-day period
----------------------------------
following the consummation of the Registered Exchange Offers, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement
-------------------------------------
of the Company on an appropriate form under the Act with respect to the
Registered Exchange
<PAGE>
3
Offers, all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Exchange Securities" means, with respect to the 2002 Debentures, the
-------------------
2002 Exchange Debentures, with respect to the 2004 Debentures, the 2004 Exchange
Debentures, with respect to the 2007 Debentures, the 2007 Exchange Debentures,
with respect to the 2017 Debentures, the 2017 Exchange Debentures, with respect
to the 7.95% 2027 Debentures, the 7.95% 2027 Exchange Debentures, with respect
to the 6.95% 2027 Debentures, the 6.95% 2027 Exchange Debentures, with respect
to the 7.25% 2027 Debentures, the 7.25% 2027 Exchange Debentures and with
respect to the 2032 Debentures, the 2032 Exchange Debentures.
"Exchange Securities Indenture" means the indenture, if any, between
-----------------------------
the Company and the Exchange Securities Trustee, identical in all material
respects with the Indenture (except that the interest rate step-up provisions
and the transfer restrictions will be modified or eliminated, as appropriate).
"Exchanging Dealer" means any Holder (which may include any Purchaser)
-----------------
which is a broker-dealer, electing to exchange Securities acquired for its own
account as a result of market-making activities or other trading activities for
Exchange Securities.
"Final Memorandum" has the meaning set forth in the Purchase
----------------
Agreement.
"Holder" has the meaning set forth in the preamble hereto or means any
------
holder of Exchange Securities, as the case may be.
"Indenture" means an indenture dated as of August 1, 1990 between the
---------
Company and The Chase Manhattan Bank, as trustee, as supplemented by the First
Supplemental Indenture dated as of June 15, 1991 and the Second Supplemental
Indenture dated as of May 6, 1997, as the same may be amended from time to time
in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
-----------------
"Majority Holders" means the Holders of a majority of the aggregate
----------------
principal amount of Securities or Exchange Securities registered under a
Registration Statement.
"Managing Underwriters" means the investment banker or investment
---------------------
bankers and manager or managers that shall administer an underwritten offering.
<PAGE>
4
"Prospectus" means the prospectus included in any Registration
----------
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or the Exchange Securities, covered by
such Registration Statement, and all amendments and supplements to the
Prospectus, including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Purchaser" has the meaning set forth in the preamble hereto.
---------
"Purchase Agreement" has the meaning set forth in the preamble hereto.
------------------
"Registered Exchange Offers" means the proposed offers to Holders to
--------------------------
issue and deliver to such Holders a like principal amount of (i) 2002 Exchange
Debentures, in exchange for 2002 Debentures, (ii) 2004 Exchange Debentures, in
exchange for 2004 Debentures, (iii) 2007 Exchange Debentures, in exchange for
2007 Debentures, (iv) 2017 Exchange Debentures, in exchange for 2017 Debentures,
(v) 7.95% 2027 Exchange Debentures, in exchange for 7.95% 2027 Debentures, (vi)
6.95% 2027 Exchange Debentures, in exchange for 6.95% 2027 Debentures, (vii)
7.25% 2027 Exchange Debentures, in exchange for 7.25% 2027 Debentures and (viii)
2032 Exchange Debentures, in exchange for 2032 Debentures.
"Registration Statement" means any Exchange Offer Registration
----------------------
Statement or Shelf Registration Statement of the Company that covers any of the
Securities or the Exchange Securities pursuant to the provisions of this
Agreement and amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Securities" has the meaning set forth in the preamble hereto.
----------
"Shelf Registration" means a registration effected pursuant to Section
------------------
3 hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b)
-------------------------
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
----------------------------
of the Company pursuant to the provisions of Section 3 hereof which covers some
or all of the Securities or Exchange Securities, as applicable, on an
appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, and all amendments and supplements to such
registration statement, including post-effective
<PAGE>
5
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Trustee" means the trustee with respect to the Securities under the
-------
Indenture.
"2002 Debentures" has the meaning set forth in the preamble hereto.
---------------
"2002 Exchange Debentures" means the debentures of the Company which
------------------------
are identical in all material respects to the 2002 Debentures (except that the
2002 Exchange Debentures will not contain terms with respect to transfer
restrictions or interest rate step-up provisions) to be issued under the
Registered Exchange Offers in exchange for the 2002 Debentures.
"2004 Debentures" has the meaning set forth in the preamble hereto.
---------------
"2004 Exchange Debentures" means the debentures of the Company which
------------------------
are identical in all material respects to the 2004 Debentures (except that the
2004 Exchange Debentures will not contain terms with respect to transfer
restrictions or interest rate step-up provisions) to be issued under the
Registered Exchange Offers in exchange for the 2004 Debentures.
"2007 Debentures" has the meaning set forth in the preamble hereto.
---------------
"2007 Exchange Debentures" means the debentures of the Company which
------------------------
are identical in all material respects to the 2007 Debentures (except that the
2007 Exchange Debentures will not contain terms with respect to transfer
restrictions or interest rate step-up provisions) to be issued under the
Registered Exchange Offers in exchange for the 2007 Debentures.
"2017 Debentures" has the meaning set forth in the preamble hereto.
---------------
"2017 Exchange Debentures" means the debentures of the Company which
------------------------
are identical in all material respects to the 2017 Debentures (except that the
2017 Exchange Debentures will not contain terms with respect to transfer
restrictions or interest rate step-up provisions) to be issued under the
Registered Exchange Offers in exchange for the 2017 Debentures.
"7.25% 2027 Debentures" has the meaning set forth in the preamble
---------------
hereto.
"7.25% 2027 Exchange Debentures" means the debentures of the Company
------------------------
which are identical in all material respects to the 7.25% 2027 Debentures
(except that the 7.25% 2027 Exchange Debentures will not contain terms with
respect to transfer restrictions
<PAGE>
6
or interest rate step-up provisions) to be issued under the Registered Exchange
Offers in exchange for the 7.25% 2027 Debentures.
"7.95% 2027 Debentures" has the meaning set forth in the preamble
---------------------
hereto.
"7.95% 2027 Exchange Debentures" means the debentures of the Company
------------------------------
which are identical in all material respects to the 7.95% 2027 Debentures
(except that the 7.95% 2027 Exchange Debentures will not contain terms with
respect to transfer restrictions or interest rate step-up provisions) to be
issued under the Registered Exchange Offers in exchange for the 7.95% 2027
Debentures.
"6.95% 2027 Debentures" has the meaning set forth in the preamble
---------------------
hereto.
"6.95% 2027 Exchange Debentures" means the debentures of the Company
------------------------------
which are identical in all material respects to the 6.95% 2027 Debentures
(except that the 6.95% 2027 Exchange Debentures will not contain terms with
respect to transfer restrictions or interest rate step-up provisions) to be
issued under the Registered Exchange Offers in exchange for the 6.95% 2027
Debentures.
"2032 Debentures" has the meaning set forth in the preamble hereto.
---------------
"2032 Exchange Debentures" means the debentures of the Company which
------------------------
are identical in all material respects to the 2032 Debentures (except that the
2032 Exchange Debentures will not contain terms with respect to transfer
restrictions or interest rate step-up provisions) to be issued under the
Registered Exchange Offers in exchange for the 2032 Debentures.
"underwriter" means any underwriter of Securities in connection with
-----------
an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offers; Resales of Exchange Securities by
-------------------------------------------------------------
Exchanging Dealers; Private Exchange. (a) The Company shall prepare and, not
- ------------------------------------
later than 150 days following the Closing Date, shall file with the Commission
the Exchange Offer Registration Statement. The Company shall use its best
efforts to cause the Exchange Offer Registration Statement to become effective
under the Act within 180 days of the Closing Date.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange Offers,
it being the objective of such Registered Exchange Offers to enable each Holder
electing to exchange Securities for Exchange Securities (assuming that such
Holder is not an Affiliate of the Company within the meaning of the Act,
acquires the Exchange Securities in the ordinary
<PAGE>
7
course of such Holder's business and at the time of the commencement of the
Exchange Offers, has no arrangements with any person to participate in the
distribution (within the meaning of the Act) of the Exchange Securities) to
transfer such Exchange Securities from and after their receipt without any
limitations or restrictions under the Act and without material restrictions
under the securities laws of a substantial proportion of the several states of
the United States.
(c) In connection with the Registered Exchange Offers, the Company
shall:
(i) mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than 30
days (or longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered
Exchange Offers with an address in the Borough of Manhattan, The City of New
York; and
(iv) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of each Registered
Exchange Offer, the Company shall:
(i) accept for exchange all Securities tendered and not validly
withdrawn pursuant to such Registered Exchange Offer;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Securities so accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver to each
Holder of tendered Securities a principal amount of Exchange Securities
equal in principal amount to the Securities of such Holder so accepted for
exchange.
(e) The Purchasers and the Company acknowledge that, pursuant to
interpretations by the Commission's staff of Section 5 of the Act, and in the
absence of an applicable exemption therefrom, each Exchanging Dealer is required
to deliver a Prospectus in connection with a sale of any Exchange Securities
received by such Exchanging Dealer pursuant to the Registered Exchange Offers in
exchange for Securities acquired for its own account as a result of market-
making activities or other trading activities. Accordingly, the Company shall:
<PAGE>
8
(i) include the information set forth in Annex A hereto on the cover
of the Exchange Offer Registration Statement, in Annex B hereto in the
forepart of the Exchange Offer Registration Statement in a section setting
forth details of the Registered Exchange Offers, and in Annex C hereto in
the underwriting or plan of distribution section of the Prospectus forming
a part of the Exchange Offer Registration Statement, and include the
information set forth in Annex D hereto in the Letter of Transmittal
delivered pursuant to the Registered Exchange Offers; and
(ii) use its best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act during the Exchange Offer
Registration Period for delivery of the Prospectus forming a part thereof
by Exchanging Dealers in connection with sales of Exchange Securities
received pursuant to the Registered Exchange Offers, as contemplated by
Section 4(h) below.
3. Shelf Registration. If (i) because of any change in law or
------------------
applicable interpretations thereof by the Commission's staff, the Company
determines upon advice of its outside counsel that it is not permitted to effect
the Registered Exchange Offer as contemplated by Section 2 hereof, or (ii) for
any other reason the Exchange Offer Registration Statement is not declared
effective within 180 days following the Closing Date, or (iii) for any other
reason the Registered Exchange Offers are not consummated within 210 days
following the Closing Date, or (iv) any Purchaser so requests with respect to
Securities not eligible to be exchanged for Exchange Securities in a Registered
Exchange Offer and held by it following consummation of the Registered Exchange
Offers, or (v) in the reasonable opinion of Shearman & Sterling, pursuant to any
applicable laws or applicable interpretations thereof any Holder at the time of
the Registered Exchange Offers (including any Purchaser) is not eligible to
participate in the Registered Exchange Offers or (vi) any Holder that
participates in a Registered Exchange Offer (other than an Exchanging Dealer),
does not receive freely tradeable thereafter Exchange Securities in exchange for
tendered Securities, the following provisions shall apply:
(a) The Company shall at its own cost, as promptly as practicable,
file with the Commission, and thereafter shall use its best efforts to
cause to be declared effective under the Act within 210 days after the
Closing Date (or promptly in the event of a request by a Purchaser), a
Shelf Registration Statement relating to the offer and sale of the
Securities or the Exchange Securities, as applicable, by the applicable
Holders from time to time in accordance with the methods of distribution
elected by such Holders and set forth in such Shelf Registration Statement;
provided that, with respect to Exchange Securities received by a Purchaser
--------
in exchange for Securities constituting any portion of an unsold allotment,
the Company may, if permitted by current interpretations by the
Commission's staff, file a post-effective amendment to the Exchange Offer
Registration Statement containing the information required by Regulation S-
K Items 507 and/or 508, as applicable, in satisfaction of its obligations
<PAGE>
9
under this paragraph (a) with respect thereto, and any such Exchange Offer
Registration Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf Registration
Statement.
(b) The Company shall keep the Shelf Registration Statement
continuously effective until the earliest of (i) the second anniversary of
the Closing Date (or the first anniversary of the effective date of the
Shelf Registration Statement if such Shelf Registration Statement is filed
at the request of any Purchaser), (ii) the time when the Securities
registered under the Shelf Registration Statement can be sold by non-
affiliates pursuant to Rule 144 under the Act without any limitation under
clauses (c), (e) (f) and (h) of Rule 144 or (iii) such time when all the
Securities covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement (in any such case, such period
being called the "Shelf Registration Period"); provided, however, that the
-------- -------
Company will have the ability to suspend the availability of the Shelf
Registration Statement during any consecutive 365-day period for up to two
periods of up to 45 consecutive days each, but no more than an aggregate of
60 days during any 365-day period (a "Suspension"), provided that the
--------
Company notifies the holder of the Securities covered thereby of any such
Suspension.
4. Registration Procedures. In connection with any Shelf
-----------------------
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Purchasers, prior to the filing
thereof with the Commission, a copy of any Shelf Registration Statement and
any Exchange Offer Registration Statement, and each amendment thereof and
each amendment or supplement, if any, to the Prospectus included therein,
and shall use its best efforts to reflect in each such document, when so
filed with the Commission, such comments as you reasonably may propose.
(b) The Company shall ensure that (i) any Registration Statement and
any amendment thereto and any Prospectus forming part thereof and any
amendment or supplement thereto complies in all material respects with the
Act and the rules and regulations thereunder, (ii) any Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any Prospectus forming part of any
Registration Statement, and any amendment or supplement to such Prospectus,
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading.
<PAGE>
10
(c) (1) The Company shall advise you and, in the case of a Shelf
Registration Statement, the Holders of Securities covered thereby, and, if
requested by you or any such Holder, confirm such advice in writing:
(i) when a Registration Statement and any amendment thereto has
been filed with the Commission and when the Registration Statement or any
post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company shall advise you and, in the case of a Shelf Registration
Statement, the Holders of Securities covered thereby, and, in the case of an
Exchange Offer Registration Statement, any Exchanging Dealer which has provided
in writing to the Company a telephone or facsimile number and address for
notices, and, if requested by you or any such Holder or Exchanging Dealer,
confirm such advice in writing of the inability to use the Shelf Registration
Statement for resales of the Securities or the Exchange Securities as a result
of:
(i) the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose;
(ii) the receipt by the Company of any notification with respect
to the suspension of the qualification of the securities included therein
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose;
(iii) a Suspension; and
(iv) the happening of any event that requires the making of any
changes in the Registration Statement or the Prospectus so that, as of such
date, the statements therein are not misleading and do not omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which advice
shall be accompanied by an instruction to suspend the use of the Prospectus
until the requisite changes have been made).
<PAGE>
11
(d) The Company shall use its best efforts to prevent the issuance and
if issued to obtain the withdrawal of any order suspending the effectiveness of
any Registration Statement at the earliest possible time.
(e) The Company shall furnish to each Holder of Securities included
within the coverage of any Shelf Registration Statement, without charge, at
least one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if the
Holder so requests in writing, all exhibits (including those incorporated by
reference).
(f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of Securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request; and the Company consents to the use of the Prospectus or any amendment
or supplement thereto by each of the selling Holders of Securities in connection
with the offering and sale of the Securities covered by the Prospectus or any
amendment or supplement thereto.
(g) The Company shall furnish to each Exchanging Dealer that so
requests, without charge, at least one copy of the Exchange Offer Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, any documents incorporated by reference therein, and,
if the Exchanging Dealer so requests in writing, all exhibits (including those
incorporated by reference).
(h) The Company shall, during the Exchange Offer Registration Period,
promptly deliver to each Exchanging Dealer, without charge, as many copies of
the Prospectus included in such Exchange Offer Registration Statement and any
amendment or supplement thereto as such Exchanging Dealer may reasonably request
for delivery by such Exchanging Dealer in connection with a sale of Exchange
Securities received by it pursuant to the Registered Exchange Offers; and the
Company consents to the use of the Prospectus or any amendment or supplement
thereto by any such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offers or any other offering of
Securities pursuant to any Registration Statement, the Company shall use its
reasonable best efforts to register or qualify or cooperate with the Holders of
Securities included therein and their respective counsel in connection with the
registration or qualification of such Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such Holders reasonably
request in writing and do any and all other acts or things necessary or
advisable to enable the
<PAGE>
12
offer and sale in such jurisdictions of the securities covered by such
Registration Statement; provided, however, that the Company will not be required
-------- -------
to qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process or to taxation in any such jurisdiction where it is not then so subject.
(j) Unless the applicable securities shall be in book-entry only form,
the Company shall cooperate with the Holders of Securities or Exchange
Securities to facilitate the timely preparation and delivery within the times
required by normal way of settlement of certificates representing securities to
be sold pursuant to any Registration Statement free of any restrictive legends
and in such authorized denominations and registered in such names as Holders may
request prior to sales of securities pursuant to such Registration Statement.
(k) Upon the occurrence of any event contemplated by paragraphs
(c)(1)(ii) or (c)(2)(iv) above, the Company shall promptly prepare a post-
effective amendment to any Registration Statement or an amendment or supplement
to the related Prospectus or file any other required document so that, as
thereafter delivered to purchasers of the securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(l) Not later than the effective date of any Shelf Registration
Statement hereunder, the Company shall provide a CUSIP number for the Securities
or Exchange Securities, as the case may be, registered under such Registration
Statement, and provide the applicable trustee with printed certificates for such
Securities or Exchange Securities, in a form eligible for deposit with The
Depository Trust Company.
(m) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Act.
(n) The Company shall cause the Indenture or the Exchange Securities
Indenture, as the case may be, to be qualified under the Trust Indenture Act in
a timely manner.
(o) The Company may require each Holder of Securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Company such
<PAGE>
13
information regarding such Holder and the distribution of such Securities as the
Company may from time to time reasonably require for inclusion in such
Registration Statement.
(p) The Company shall, if requested by the Managing Underwriters or
the Holders of Securities covered by such Shelf Registration Statement
incorporate in a Prospectus supplement or post-effective amendment to a Shelf
Registration Statement, such information with respect to such Managing
Underwriters and Holders as such Managing Underwriters and Majority Holders
reasonably agree should be included therein and shall make all required filings
of such Prospectus supplement or post-effective amendment as soon as practically
possible after written notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the Company shall
enter into such agreements (including underwriting agreements) and take all
other appropriate actions in order to expedite or facilitate the registration or
the disposition of the Securities or the Exchange Securities, as the case may
be, and in connection therewith, if an underwriting agreement is entered into,
cause the same to contain indemnification provisions and procedures no less
favorable than those set forth in Section 6 (or such other provisions and
procedures acceptable to the Majority Holders and the Managing Underwriters, if
any) with respect to all parties to be indemnified pursuant to Section 6.
(r) If a Shelf Registration Statement is filed pursuant to Section 3,
the Company shall make reasonably available for inspection by any selling Holder
of such Securities being sold, any underwriter participating in any such
disposition of Securities, if any, and any attorney, accountant or other agent
retained by any such selling Holder or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable business
- -----------
hours, all financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries (collectively, the "Records") as
-------
shall be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and employees of
the Company and its subsidiaries to supply all relevant information in each case
reasonably requested by any such Inspector in connection with such Registration
Statement; provided, however, that the foregoing inspection and information
gathering shall be coordinated on behalf of the Holders by the Initial
Purchasers and on behalf of the other parties by one counsel designated by the
Initial Purchasers. Records which the Company determines, in good faith, to be
confidential and any records which the Company notifies the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i) the disclosure
of such Records is necessary to avoid or correct a material misstatement or
omission in such Registration Statement,
<PAGE>
14
(ii) the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or is necessary in connection
with any action, suit or proceeding or (iii) the information in such
Records has been made generally available to the public. Each selling
Holder of such Securities will be required as a condition to the receipt of
such information to agree in writing that information obtained by it as a
result of such inspections shall be deemed confidential and shall not be
used by it as the basis for any market transactions in the securities of
the Company unless and until such is made generally available to the
public. Each selling Holder of such Securities will be required to further
agree in writing that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company at its expense to undertake appropriate
action to prevent disclosure of the Records deemed confidential; (iii) make
such representations and warranties to the Holders of securities registered
thereunder and the underwriters, if any, in form, substance and scope as
are customarily made by issuers to underwriters in primary underwritten
offerings and covering matters including, but not limited to, those set
forth in the Purchase Agreement; (iv) obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters,
if any) addressed to each selling Holder and the underwriters, if any,
covering such matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters (it being agreed that the
matters to be covered by such opinion may be subject to customary
qualifications and exceptions); (v) obtain "cold comfort" letters and
updates thereof from the independent certified public accountants of the
Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by
the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each
selling Holder of Securities registered thereunder and the underwriters, if
any, in customary form and covering matters of the type customarily covered
in "cold comfort" letters in connection with primary underwritten
offerings; and (vi) deliver such documents and certificates as may be
reasonably requested by the Majority Holders and the Managing Underwriters,
if any, including those to evidence compliance with Section 4(k) and with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company. The foregoing actions set forth in
clauses (iii), (iv), (v) and (vi) of this Section 4(r) shall be performed
at (A) the effectiveness of such Registration Statement and each post-
effective amendment thereto and (B) each closing under any underwriting or
similar agreement as and to the extent required thereunder.
5. Registration Expenses. The Company shall bear all expenses
---------------------
incurred in connection with the performance of its obligations under Sections 2,
3 and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the
<PAGE>
15
reasonable fees and disbursements of one firm or counsel, reasonably
satisfactory to the Company, designated by the Majority Holders to act as
counsel for the Holders in connection therewith, and, in the case of any
Exchange Offer Registration Statement, will reimburse the Purchasers for the
reasonable fees and disbursements of one counsel, reasonably satisfactory to the
Company, acting in connection therewith.
6. Indemnification and Contribution. (a) In connection with any
--------------------------------
Registration Statement, the Company agrees to indemnify and hold harmless each
Holder of Securities or Exchange Securities, as the case may be, covered thereby
(including each Purchaser and, with respect to any Prospectus delivery as
contemplated in Section 4(h) hereof, each Exchanging Dealer), the directors,
officers, employees and agents of each such Holder and each person who controls
any such Holder within the meaning of either Section 15 of the Act or Section 20
of the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment thereof, or in
any preliminary Prospectus or Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
-------- -------
that the Company will not be liable in any case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any such Holder specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
The Company also agrees to indemnify or contribute to Losses of, as
provided in Section 6(d), any underwriters of Securities or Exchange Securities
registered under a Shelf Registration Statement, their officers and directors
and each person who controls such underwriters on substantially the same basis
as that of the indemnification of the Purchaser and the selling Holders provided
in this Section 6(a) and shall, if requested by any Holder, enter into an
underwriting agreement reflecting such agreement, as provided in Section 4(q)
hereof.
(b) Each Holder of Securities or Exchange Securities covered by a
Registration Statement (including each Purchaser and, with respect to any
Prospectus delivery as contemplated in Section 4(h) hereof, each Exchanging
Dealer) severally agrees to
<PAGE>
16
indemnify and hold harmless (i) the Company, (ii) each of its directors, (iii)
each of its officers who signs such Registration Statement and (iv) each person
who controls the Company within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to each such Holder, but only with reference to claims and
actions based upon written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure to so notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above or paragraph (d) below unless and to
the extent it did not otherwise learn of such action and such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party's choice at the indemnifying party's expense
to represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
-------- -------
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), however, the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel (and local counsel) only if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants in,
or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
upon advice of counsel that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement,
<PAGE>
17
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
An indemnifying party shall not be liable under this Section 6 to any
indemnified party regarding any settlement or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise, or consent
is consented to by such indemnifying party, which consent shall not be
unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Registration Statement which resulted in such Losses; provided, however, that in
-------- -------
no case shall any Purchaser or any subsequent Holder of any Security or Exchange
Security be responsible, in the aggregate, for any amount in excess of the
purchase discount or commission applicable to such Security, or in the case of
an Exchange Security, applicable to the Security which was exchangeable into
such Exchange Security, as set forth on the cover page of the Final Memorandum,
nor shall any underwriter be responsible for any amount in excess of the
underwriting discount or commission applicable to the securities purchased by
such underwriter under the Registration Statement which resulted in such Losses.
If the allocation provided by the immediately preceding sentence is unavailable
for any reason, the indemnifying party and the indemnified party shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the sum of (x) the total net proceeds from the Initial
Placement (before deducting expenses) as set forth on the cover page of the
Final Memorandum and (y) the total amount of additional interest which the
Company was not required to pay as a result of registering the securities
covered by the Registration Statement which resulted in such Losses. Benefits
received by the Purchasers shall be deemed to be equal to the total purchase
discounts and commissions as set forth on the cover page of the Final
Memorandum, and benefits received by any other Holders shall be deemed to be
equal to the value of the net proceeds received by such Holder from the sale of
Securities or Exchange Securities, as applicable, registered under the Act.
Benefits received by any underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement
<PAGE>
18
which resulted in such Losses. Relative fault shall be determined by reference
to whether any alleged untrue statement or omission relates to information
provided by the indemnifying party, on the one hand, or by the indemnified
party, on the other hand, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The parties agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 6,
each person who controls a Holder within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act and each director, officer, employee and
agent of such Holder shall have the same rights to contribution as such Holder,
and each person who controls the Company within the meaning of either the Act or
the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
(e) The provisions of this Section 6 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, the
Company or any of the officers, directors or controlling persons referred to in
this Section 6, and will survive the sale by a Holder of securities covered by a
Registration Statement.
7. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not, as of the date
--------------------------
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to the Securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Holders of at least a majority of the then outstanding aggregate
principal amount of Securities (or, after the consummation of any Exchange Offer
in accordance with Section 2 hereof, of Exchange Securities); provided that,
--------
with respect to any matter that directly or indirectly affects the rights of any
Purchaser hereunder, the Company shall obtain the written consent of each such
Purchaser against which such amendment, qualification, supplement, waiver or
consent is to be effective. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
Securities are being sold pursuant to a Registration
<PAGE>
19
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by the Majority Holders, determined on the basis of
securities being sold rather than registered under such Registration Statement.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 7(c), which
address initially is, with respect to each Holder, the address of such Holder
maintained by the Registrar under the Indenture, with a copy in like manner to
Salomon Brothers Inc;
(2) if to you, initially at the address set forth in the Purchase
Agreement; and
(3) if to the Company, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
The Purchasers or the Company by notice to the other may designate
additional or different addresses or telex or telecopy numbers for subsequent
notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders of Securities and/or Exchange Securities.
The Company hereby agrees to extend the benefits of this Agreement to any Holder
of Securities and/or Exchange Securities and any such Holder may specifically
enforce the provisions of this Agreement as if an original party hereto.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
<PAGE>
20
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
-----------------------------------
approval of Holders of a specified percentage of principal amount of Securities
or Exchange Securities is required hereunder, Securities or Exchange Securities,
as applicable, held by the Company or its Affiliates (other than subsequent
Holders of Securities or Exchange Securities if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Securities or
Exchange Securities) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
CSX CORPORATION
By: /s/ David D. Owen
-------------------------
Name: David D. Owen
Title: Managing Director-
Corporate Finance
Accepted in New York, New York
May 6, 1997
SALOMON BROTHERS INC
By: /s/ Fred Larsen
-------------------------
Name: Fred Larsen
Title: Vice President
<PAGE>
ANNEX A
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Exchange Securities were acquired by such broker-dealer as
a result of market-making activities or other trading activities. The Company
has agreed that, starting on the Expiration Date (as defined in the Exchange
Offer) and ending on the close of business 180 days after the consummation of
the Exchange Offer, it will make this Prospectus available to any broker-dealer
for use in connection with any such resale. See "Plan of Distribution".
<PAGE>
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Securities, where such Securities were acquired by such broker-
dealer as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any sale or
transfer of the Exchange Securities. See "Plan of Distribution."
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
--------------------
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business on the
first anniversary of the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers
for their own account pursuant to the Exchange Offer may be sold from time to
time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Securities. Any broker-dealer that resells Exchange Securities that
were received by it for its own account pursuant to the Exchange Offer and any
broker or dealer that participates in a distribution of such Exchange Securities
may be deemed to be an "underwriter" within the meaning of the Act and any
profit from any such resale of Exchange Securities and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Act.
For a period of 180 days after the consummation of the Exchange Offer,
the Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer (including the expenses of one counsel
for the holders of the Securities) other than commissions or concessions of any
brokers or dealers and will indemnify the holders of the Securities (including
any broker-dealers) against certain liabilities, including liabilities under the
Act.
<PAGE>
C-2
[If applicable, add information required by Regulation S-K Items 507
and/or 508.]
<PAGE>
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE
ADDITIONAL COPIES OF THE PROSPECTUS AND COPIES OF ANY AMENDMENTS
OR SUPPLEMENTS THERETO.
Name:
-----------------------------------------------------
Address:
--------------------------------------------------
--------------------------------------------------
Number of copies:
---
The undersigned represents that it is not an affiliate of the Company, that
any Exchange Securities to be received by it will be acquired in the ordinary
course of business and that at the time of the commencement of the Registered
Exchange Offer it had no arrangement with any person to participate in a
distribution of Exchange Securities.
In addition, if the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Securities. If the undersigned is a broker-dealer that
will receive Exchange Securities for its own account in exchange for Securities,
it represents that the Securities to be exchanged for Exchange Securities were
acquired by it as a result of market-making activities or other trading
activities and acknowledges that it will deliver a prospectus in connection with
any resale of such Exchange Securities; however, by so acknowledging and by
delivering a prospectus, the undersigned will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
<PAGE>
EXHIBIT 12.1
CSX Corporation
Ratio of Earnings to Fixed Charges
(Dollars in millions)
<TABLE>
<CAPTION>
For the Fiscal
Quarters Ended For the Fiscal Years Ended
-------------------- -------------------------------------------------
Mar. 28, Mar. 29, Dec. 27, Dec. 29, Dec. 30, Dec. 31, Dec. 31,
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
Earnings
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings (loss) before income taxes $ 233 $ 224 $1,316 $ 974 $1,006 $ 633 $ (7)
Interest expense 84 60 249 270 281 298 276
Amortization of debt discount --- --- 2 2 3 1 1
Interest portion of fixed rent 48 47 189 184 206 206 216
Undistributed earnings (loss) of unconsolidated
subsidiaries (1) (2) (6) 3 10 7 (2)
Minority interest 10 8 42 32 21 14 15
----- ----- ------ ------ ------ ------ ----
Earnings, as Adjusted $ 374 $ 337 $1,792 $1,465 $1,527 $1,159 $499
===== ===== ====== ====== ====== ====== ====
Fixed Charges
Interest expense $ 84 $ 60 $ 249 $ 270 $ 281 $ 298 $276
Capitalized interest expense 1 1 5 6 9 6 6
Amortization of debt discount --- --- 2 2 3 1 1
Interest portion of fixed rent 48 47 189 184 206 206 216
----- ----- ------ ------ ------ ------ ----
Fixed Charges $ 133 $ 108 $ 445 $ 462 $ 499 $ 511 $499
===== ===== ====== ====== ====== ====== ====
Ratio of Earnings to Fixed Charges 2.8x 3.1x 4.0x 3.2x 3.1x 2.3x 1.0x
===== ===== ====== ====== ====== ====== ====
</TABLE>
<PAGE>
EXHIBIT 15.1
AWARENESS LETTER OF PRICE WATERHOUSE LLP, INDEPENDENT ACCOUNTANTS
June 2, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We are aware that CSX Corporation has incorporated by reference our report
dated April 16, 1997 related to Conrail Inc. (issued pursuant to the provisions
of Statement on Auditing Standards No. 71) in its Registration Statement on
Form S-4 to be filed on June 4, 1997. We are also aware of our responsibilities
under the Securities Act of 1933.
Very truly yours,
/s/ Price Waterhouse LLP
Thirty South Seventeenth Street
Philadelphia, PA 19103
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Selected
Historical Financial Data for the Company" and "Experts" in the Registration
Statement (Form S-4) and related Prospectus of CSX Corporation and
subsidiaries, and to the incorporation by reference therein of our report dated
January 31, 1997 (except for Note 2, as to which the date is March 7, 1997),
with respect to the consolidated financial statements of CSX Corporation and
subsidiaries included in its Annual Report on Form 10-K for the year ended
December 27, 1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Richmond, Virginia
May 30, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF PRICE WATERHOUSE LLP, INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of CSX Corporation
of our report dated January 21, 1997, except as to Note 2, which is as of March
7, 1997, on the consolidated financial statements of Conrail Inc. for the year
ended December 31, 1996, which appears in the Current Report on Form 8-K of CSX
Corporation filed June 4, 1997. We also consent to the references to us under
the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
Philadelphia, PA
June 2, 1997
<PAGE>
EXHIBIT 24.1
POWERS OF ATTORNEY OF CERTAIN DIRECTORS AND OFFICERS OF THE COMPANY
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or
director of CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby
constitutes and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber,
and each of them acting individually, his or her true and lawful attorneys-in-
fact and agents with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign
and file (i) one or more Registration Statements on Form S-3 (or other
appropriate form) for filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), and any other documents in support thereof or supplemental or amendatory
thereto, with respect to the issuance of debentures, notes, and other debt
obligations, preferred stock, common stock, common stock issuable upon exchange
or conversion of such debt obligations or preferred stock which, by their
terms, are exchangeable for or convertible into common stock, warrants or
rights to purchase debt obligations, preferred stock or common stock, and
depositary shares representing fractional interests in preferred stock, which
will generate proceeds of up to $3,000,000,000 (or the equivalent in foreign
denominated currency), of the Corporation, and (ii) a Registration Statement,
and any and all amendments thereto, relating to the offering covered thereby
filed pursuant to Rule 462(b) under the Securities Act, with the Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their substitutes or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 30th day of May, 1997.
/s/ John W. Snow
-----------------------------
John W. Snow
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or
director of CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby
constitutes and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber,
and each of them acting individually, his or her true and lawful attorneys-in-
fact and agents with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign
and file (i) one or more Registration Statements on Form S-3 (or other
appropriate form) for filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), and any other documents in support thereof or supplemental or amendatory
thereto, with respect to the issuance of debentures, notes, and other debt
obligations, preferred stock, common stock, common stock issuable upon exchange
or conversion of such debt obligations or preferred stock which, by their
terms, are exchangeable for or convertible into common stock, warrants or
rights to purchase debt obligations, preferred stock or common stock, and
depositary shares representing fractional interests in preferred stock, which
will generate proceeds of up to $3,000,000,000 (or the equivalent in foreign
denominated currency), of the Corporation, and (ii) a Registration Statement,
and any and all amendments thereto, relating to the offering covered thereby
filed pursuant to Rule 462(b) under the Securities Act, with the Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their substitutes or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 30th day of May, 1997.
/s/ Paul R. Goodwin
-----------------------------
Paul R. Goodwin
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or
director of CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby
constitutes and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber,
and each of them acting individually, his or her true and lawful attorneys-in-
fact and agents with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign
and file (i) one or more Registration Statements on Form S-3 (or other
appropriate form) for filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), and any other documents in support thereof or supplemental or amendatory
thereto, with respect to the issuance of debentures, notes, and other debt
obligations, preferred stock, common stock, common stock issuable upon exchange
or conversion of such debt obligations or preferred stock which, by their
terms, are exchangeable for or convertible into common stock, warrants or
rights to purchase debt obligations, preferred stock or common stock, and
depositary shares representing fractional interests in preferred stock, which
will generate proceeds of up to $3,000,000,000 (or the equivalent in foreign
denominated currency), of the Corporation, and (ii) a Registration Statement,
and any and all amendments thereto, relating to the offering covered thereby
filed pursuant to Rule 462(b) under the Securities Act, with the Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their substitutes or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 30th day of May, 1997.
/s/ James L. Ross
-----------------------------
James L. Ross
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or
director of CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby
constitutes and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber,
and each of them acting individually, his or her true and lawful attorneys-in-
fact and agents with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign
and file (i) one or more Registration Statements on Form S-3 (or other
appropriate form) for filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), and any other documents in support thereof or supplemental or amendatory
thereto, with respect to the issuance of debentures, notes, and other debt
obligations, preferred stock, common stock, common stock issuable upon exchange
or conversion of such debt obligations or preferred stock which, by their
terms, are exchangeable for or convertible into common stock, warrants or
rights to purchase debt obligations, preferred stock or common stock, and
depositary shares representing fractional interests in preferred stock, which
will generate proceeds of up to $3,000,000,000 (or the equivalent in foreign
denominated currency), of the Corporation, and (ii) a Registration Statement,
and any and all amendments thereto, relating to the offering covered thereby
filed pursuant to Rule 462(b) under the Securities Act, with the Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their substitutes or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 30th day of May, 1997.
/s/ Elizabeth E. Bailey
-----------------------------
Elizabeth E. Bailey
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or
director of CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby
constitutes and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber,
and each of them acting individually, his or her true and lawful attorneys-in-
fact and agents with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign
and file (i) one or more Registration Statements on Form S-3 (or other
appropriate form) for filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), and any other documents in support thereof or supplemental or amendatory
thereto, with respect to the issuance of debentures, notes, and other debt
obligations, preferred stock, common stock, common stock issuable upon exchange
or conversion of such debt obligations or preferred stock which, by their
terms, are exchangeable for or convertible into common stock, warrants or
rights to purchase debt obligations, preferred stock or common stock, and
depositary shares representing fractional interests in preferred stock, which
will generate proceeds of up to $3,000,000,000 (or the equivalent in foreign
denominated currency), of the Corporation, and (ii) a Registration Statement,
and any and all amendments thereto, relating to the offering covered thereby
filed pursuant to Rule 462(b) under the Securities Act, with the Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their substitutes or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 2nd day of April, 1997.
/s/ Robert L. Burrus, Jr.
-----------------------------
Robert L. Burrus, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or
director of CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby
constitutes and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber,
and each of them acting individually, his or her true and lawful attorneys-in-
fact and agents with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign
and file (i) one or more Registration Statements on Form S-3 (or other
appropriate form) for filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), and any other documents in support thereof or supplemental or amendatory
thereto, with respect to the issuance of debentures, notes, and other debt
obligations, preferred stock, common stock, common stock issuable upon exchange
or conversion of such debt obligations or preferred stock which, by their
terms, are exchangeable for or convertible into common stock, warrants or
rights to purchase debt obligations, preferred stock or common stock, and
depositary shares representing fractional interests in preferred stock, which
will generate proceeds of up to $3,000,000,000 (or the equivalent in foreign
denominated currency), of the Corporation, and (ii) a Registration Statement,
and any and all amendments thereto, relating to the offering covered thereby
filed pursuant to Rule 462(b) under the Securities Act, with the Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary or desirable to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their substitutes or his substitute, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 1st day of April, 1997.
/s/ Bruce C. Gottwald
-----------------------------
Bruce C. Gottwald
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or director of
CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby constitutes
and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber, and each of
them acting individually, his or her true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign and file
(i) one or more Registration Statements on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), and any other
documents in support thereof or supplemental or amendatory thereto, with respect
to the issuance of debentures, notes, and other debt obligations, preferred
stock, common stock, common stock issuable upon exchange or conversion of such
debt obligations or preferred stock which, by their terms, are exchangeable for
or convertible into common stock, warrants or rights to purchase debt
obligations, preferred stock or common stock, and depositary shares representing
fractional interests in preferred stock, which will generate proceeds of up to
$3,000,000,000 (or the equivalent in foreign denominated currency), of the
Corporation, and (ii) a Registration Statement, and any and all amendments
thereto, relating to the offering covered thereby filed pursuant to Rule 462(b)
under the Securities Act, with the Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, or their substitutes or his substitute, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 30th day of May, 1997.
/s/ John R. Hall
--------------------------------
John R. Hall
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or director of
CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby constitutes
and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber, and each of
them acting individually, his or her true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign and file
(i) one or more Registration Statements on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), and any other
documents in support thereof or supplemental or amendatory thereto, with respect
to the issuance of debentures, notes, and other debt obligations, preferred
stock, common stock, common stock issuable upon exchange or conversion of such
debt obligations or preferred stock which, by their terms, are exchangeable for
or convertible into common stock, warrants or rights to purchase debt
obligations, preferred stock or common stock, and depositary shares representing
fractional interests in preferred stock, which will generate proceeds of up to
$3,000,000,000 (or the equivalent in foreign denominated currency), of the
Corporation, and (ii) a Registration Statement, and any and all amendments
thereto, relating to the offering covered thereby filed pursuant to Rule 462(b)
under the Securities Act, with the Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, or their substitutes or his substitute, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 31st day of March, 1997.
/s/ Robert D. Kunisch
- ---------------------------------
Robert D. Kunisch
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or director of
CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby constitutes
and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber, and each of
them acting individually, his or her true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign and file
(i) one or more Registration Statements on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), and any other
documents in support thereof or supplemental or amendatory thereto, with respect
to the issuance of debentures, notes, and other debt obligations, preferred
stock, common stock, common stock issuable upon exchange or conversion of such
debt obligations or preferred stock which, by their terms, are exchangeable for
or convertible into common stock, warrants or rights to purchase debt
obligations, preferred stock or common stock, and depositary shares representing
fractional interests in preferred stock, which will generate proceeds of up to
$3,000,000,000 (or the equivalent in foreign denominated currency), of the
Corporation, and (ii) a Registration Statement, and any and all amendments
thereto, relating to the offering covered thereby filed pursuant to Rule 462(b)
under the Securities Act, with the Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, or their substitutes or his substitute, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 31st day of March, 1997.
/s/ Hugh L. McColl, Jr.
- ---------------------------------
Hugh L. McColl, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or director of
CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby constitutes
and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber, and each of
them acting individually, his or her true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign and file
(i) one or more Registration Statements on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), and any other
documents in support thereof or supplemental or amendatory thereto, with respect
to the issuance of debentures, notes, and other debt obligations, preferred
stock, common stock, common stock issuable upon exchange or conversion of such
debt obligations or preferred stock which, by their terms, are exchangeable for
or convertible into common stock, warrants or rights to purchase debt
obligations, preferred stock or common stock, and depositary shares representing
fractional interests in preferred stock, which will generate proceeds of up to
$3,000,000,000 (or the equivalent in foreign denominated currency), of the
Corporation, and (ii) a Registration Statement, and any and all amendments
thereto, relating to the offering covered thereby filed pursuant to Rule 462(b)
under the Securities Act, with the Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, or their substitutes or his substitute, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 31st day of March, 1997.
/s/ James W. McGlothlin
- ---------------------------------
James W. McGlothlin
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or director of
CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby constitutes
and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber, and each of
them acting individually, his or her true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign and file
(i) one or more Registration Statements on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), and any other
documents in support thereof or supplemental or amendatory thereto, with respect
to the issuance of debentures, notes, and other debt obligations, preferred
stock, common stock, common stock issuable upon exchange or conversion of such
debt obligations or preferred stock which, by their terms, are exchangeable for
or convertible into common stock, warrants or rights to purchase debt
obligations, preferred stock or common stock, and depositary shares representing
fractional interests in preferred stock, which will generate proceeds of up to
$3,000,000,000 (or the equivalent in foreign denominated currency), of the
Corporation, and (ii) a Registration Statement, and any and all amendments
thereto, relating to the offering covered thereby filed pursuant to Rule 462(b)
under the Securities Act, with the Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, or their substitutes or his substitute, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 31st day of March, 1997.
/s/ Southwood J. Morcott
- ---------------------------------
Southwood J. Morcott
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or director of
CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby constitutes
and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber, and each of
them acting individually, his or her true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign and file
(i) one or more Registration Statements on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), and any other
documents in support thereof or supplemental or amendatory thereto, with respect
to the issuance of debentures, notes, and other debt obligations, preferred
stock, common stock, common stock issuable upon exchange or conversion of such
debt obligations or preferred stock which, by their terms, are exchangeable for
or convertible into common stock, warrants or rights to purchase debt
obligations, preferred stock or common stock, and depositary shares representing
fractional interests in preferred stock, which will generate proceeds of up to
$3,000,000,000 (or the equivalent in foreign denominated currency), of the
Corporation, and (ii) a Registration Statement, and any and all amendments
thereto, relating to the offering covered thereby filed pursuant to Rule 462(b)
under the Securities Act, with the Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, or their substitutes or his substitute, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 31st day of March, 1997.
/s/ Charles E. Rice
- ---------------------------------
Charles E. Rice
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or director of
CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby constitutes
and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber, and each of
them acting individually, his or her true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign and file
(i) one or more Registration Statements on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), and any other
documents in support thereof or supplemental or amendatory thereto, with respect
to the issuance of debentures, notes, and other debt obligations, preferred
stock, common stock, common stock issuable upon exchange or conversion of such
debt obligations or preferred stock which, by their terms, are exchangeable for
or convertible into common stock, warrants or rights to purchase debt
obligations, preferred stock or common stock, and depositary shares representing
fractional interests in preferred stock, which will generate proceeds of up to
$3,000,000,000 (or the equivalent in foreign denominated currency), of the
Corporation, and (ii) a Registration Statement, and any and all amendments
thereto, relating to the offering covered thereby filed pursuant to Rule 462(b)
under the Securities Act, with the Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, or their substitutes or his substitute, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 28th day of March, 1997.
/s/ William C. Richardson
- ---------------------------------
William C. Richardson
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer or director of
CSX CORPORATION, a Virginia corporation (the "Corporation"), hereby constitutes
and appoints Alan A. Rudnick, Peter J. Shudtz and Gregory R. Weber, and each of
them acting individually, his or her true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign and file
(i) one or more Registration Statements on Form S-3 (or other appropriate form)
for filing with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), and any other
documents in support thereof or supplemental or amendatory thereto, with respect
to the issuance of debentures, notes, and other debt obligations, preferred
stock, common stock, common stock issuable upon exchange or conversion of such
debt obligations or preferred stock which, by their terms, are exchangeable for
or convertible into common stock, warrants or rights to purchase debt
obligations, preferred stock or common stock, and depositary shares representing
fractional interests in preferred stock, which will generate proceeds of up to
$3,000,000,000 (or the equivalent in foreign denominated currency), of the
Corporation, and (ii) a Registration Statement, and any and all amendments
thereto, relating to the offering covered thereby filed pursuant to Rule 462(b)
under the Securities Act, with the Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or any of them, or their substitutes or his substitute, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 1st day of April, 1997.
/s/ Frank S. Royal
- ---------------------------------
Frank S. Royal
<PAGE>
EXHIBIT 25.1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)_______
-------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
-------------------------------------
CSX CORPORATION
(Exact name of obligor as specified in its charter)
Virginia 62-1051971
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
One James Center
Richmond, Virginia 23219
(Address of principal executive offices) (Zip Code)
-------------------------------------
Debt Securities
(Title of the indenture securities)
- --------------------------------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 19th day of May, 1997.
THE CHASE MANHATTAN BANK
By /s/ R. J. Halleran
------------------------------------
R. J. Halleran
Second Vice President
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1996, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
ASSETS Dollar Amounts
in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin.................................... $ 11,509
Interest-bearing balances............................ 8,457
Securities:..............................................
Held to maturity securities.............................. 3,128
Available for sale securities............................ 40,534
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold................................... 9,222
Securities purchased under agreements to resell...... 422
Loans and lease financing receivables:
Loans and leases, net of unearned income $133,935
Less: Allowance for loan and lease losses 2,789
Less: Allocated transfer risk reserve.... 16
--------
Loans and leases, net of unearned income,
allowance, and reserve............................... 131,130
Trading Assets........................................... 49,876
Premises and fixed assets (including capitalized
leases).............................................. 2,877
Other real estate owned.................................. 290
Investments in unconsolidated subsidiaries and
associated companies................................. 124
Customer's liability to this bank on acceptances
outstanding.......................................... 2,313
Intangible assets........................................ 1,316
Other assets............................................. 11,231
TOTAL ASSETS............................................. $272,429
=========
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits
In domestic offices................................. $87,006
Noninterest-bearing.........................$35,783
Interest-bearing............................ 51,223
------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's........................................... 73,206
Noninterest-bearing.........................$ 4,347
Interest-bearing.............................68,859
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased............................. 14,980
Securities sold under agreements to repurchase...... 10,125
Demand notes issued to the U.S. Treasury............... 1,867
Trading liabilities.................................... 34,783
Other Borrowed money:
With a remaining maturity of one year or less....... 14,639
With a remaining maturity of more than one year..... 425
Mortgage indebtedness and obligations under capitalized
leases.............................................. 40
Bank's liability on acceptances executed and outstanding 2,267
Subordinated notes and debentures...................... 5,471
Other liabilities...................................... 11,343
TOTAL LIABILITIES...................................... 256,152
-------
Limited-Life Preferred stock and related surplus....... 550
EQUITY CAPITAL
Common stock........................................... 1,251
Surplus................................................ 10,243
Undivided profits and capital reserves................. 4,526
Net unrealized holding gains (Losses)
on available-for-sale securities....................... (309)
Cumulative foreign currency translation adjustments.... 16
TOTAL EQUITY CAPITAL................................... 15,727
-------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL............................ $272,429
==========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
-5-
