<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
(AMENDMENT NO. 21)
PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
AMENDMENT NO. 31
TO
SCHEDULE 13D
------------------------
CONRAIL INC.
(NAME OF SUBJECT COMPANY)
CSX CORPORATION
GREEN ACQUISITION CORP.
(BIDDERS)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS OF SECURITIES)
208368 10 0
(CUSIP NUMBER OF CLASS OF SECURITIES)
SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK, WITHOUT PAR VALUE
(TITLE OF CLASS OF SECURITIES)
NOT AVAILABLE
(CUSIP NUMBER OF CLASS OF SECURITIES)
MARK G. ARON
CSX CORPORATION
ONE JAMES CENTER
901 EAST CARY STREET
RICHMOND, VIRGINIA 23219-4031
(804) 782-1400
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
WITH A COPY TO:
PAMELA S. SEYMON
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
TELEPHONE: (212) 403-1000
------------------------
CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
- --------------------------------- ---------------------------------
<S> <C>
$8,396,903,710 $1,679,381
</TABLE>
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* For purposes of calculating the filing fee only. This calculation assumes the
purchase of an aggregate of 73,016,554 Shares of Common Stock, par value
$1.00 per share, and Series A ESOP Convertible Junior Preferred Stock,
without par value, of Conrail Inc. at $115 net per Share in cash.
** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent
of the aggregate value of cash offered by Green Acquisition Corp. for such
number of Shares.
------------------------
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Total Amount Previously Paid: $2,014,438.59
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: $403,586.59 Amount Previously Paid: $1,610,852
Form or Registration No.: Schedule 14D-1 Form or Registration No.: 333-19523
Filing Party: CSX Corporation and Green Filing Party: CSX Corporation
Acquisition Corp.
Date Filed: December 6, 1996 Date Filed: January 10, 1997
</TABLE>
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<PAGE> 2
This Statement amends and supplements the Tender Offer Statement on
Schedule 14D-1 filed with the Securities and Exchange Commission (the "SEC") on
December 6, 1996, as previously amended and supplemented (the "Schedule 14D-1"),
by Green Acquisition Corp. ("Purchaser"), a Pennsylvania corporation and a
wholly owned subsidiary of CSX Corporation, a Virginia corporation ("Parent"),
to purchase any and all shares of (i) Common Stock, par value $1.00 per share
(the "Common Shares"), and (ii) Series A ESOP Convertible Junior Preferred
Stock, without par value (together with the Common Shares, the "Shares"), of
Conrail Inc., a Pennsylvania corporation (the "Company"), including, in each
case, the associated common stock purchase rights, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated December 6, 1996, the
Supplement thereto, dated December 19, 1996, and the Second Supplement thereto,
dated March 7, 1997 (the "Second Supplement"), and the related Letters of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer") at a purchase price of $115 per Share, net to the
tendering shareholder in cash. Capitalized terms used and not defined herein
shall have the meanings assigned such terms in the Offer to Purchase and the
Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
Item 1(b) is hereby amended and supplemented by reference to Section 1 of
the Second Supplement which Section is incorporated herein by reference.
Item 1(c) is hereby amended and supplemented by reference to Section 3 of
the Second Supplement, which Section is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
Item 3(b) is hereby amended and supplemented by reference to Section 5 of
the Second Supplement, which Section is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4(a) is hereby amended and supplemented by reference to Section 4 of
the Second Supplement, which Section is incorporated herein by reference.
Item 4(b) is hereby amended and supplemented by reference to Section 4 of
the Second Supplement, which Section is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
Item 5 is hereby amended and supplemented by reference to Section 6 of the
Second Supplement, which Section is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Item 7 is hereby amended and supplemented by reference to Section 5,
Section 6, Section 7 and Section 9 of the Second Supplement, which Sections are
incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
Item 10(a) is hereby amended and supplemented by reference to Section 5 of
the Second Supplement, which Section is incorporated herein by reference.
Item 10(b) is hereby amended and supplemented by reference to Section 9 of
the Second Supplement, which Section is incorporated herein by reference.
Item 10(e) is hereby amended and supplemented by reference to Section 9 of
the Supplement, which Section is incorporated herein by reference.
<PAGE> 3
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(31) Second Supplement to Offer to Purchase, dated March 7, 1997.
(a)(32) Revised Letter of Transmittal.
(a)(33) Revised Notice of Guaranteed Delivery.
(a)(34) Text of Press Release issued by Parent on March 7, 1997.
(a)(35) Form of Summary Advertisement, dated March 10, 1997.
(c)(12) Third Amendment to Agreement and Plan of Merger, dated as of March 7, 1997, by and
among Parent, Purchaser and the Company.
(c)(13) Form of Amended and Restated Voting Trust Agreement.
</TABLE>
<PAGE> 4
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
CSX CORPORATION
By: /s/ MARK G. ARON
------------------------------------
Name: Mark G. Aron
Title: Executive Vice President --
Law and Public Affairs
Dated: March 10, 1997
<PAGE> 5
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
GREEN ACQUISITION CORP.
By: /s/ MARK G. ARON
------------------------------------
Name: Mark G. Aron
Title: General Counsel and Secretary
Dated: March 10, 1997
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO.
- --------
<S> <C>
*(a)(1) Offer to Purchase, dated December 6, 1996.
*(a)(2) Letter of Transmittal.
*(a)(3) Notice of Guaranteed Delivery.
*(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
*(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
*(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9.
*(a)(7) Tender Offer Instructions for Participants of Conrail Inc. Dividend Reinvestment
Plan.
*(a)(8) Text of Press Release issued by Parent and the Company on December 6, 1996.
*(a)(9) Form of Summary Advertisement, dated December 6, 1996.
*(a)(10) Text of Press Release issued by Parent on December 5, 1996.
*(a)(11) Text of Press Release issued by Parent and the Company on December 10, 1996.
*(a)(12) Text of Advertisement published by Parent and the Company on December 10, 1996.
*(a)(13) Text of Press Release issued by Parent on December 11, 1996.
*(a)(14) Text of Advertisement published by Parent and the Company on December 12, 1996.
*(a)(15) Supplement to Offer to Purchase, dated December 19, 1996.
*(a)(16) Revised Letter of Transmittal.
*(a)(17) Revised Notice of Guaranteed Delivery.
*(a)(18) Text of Press Release issued by Parent and the Company on December 19, 1996.
*(a)(19) Letter from Parent to shareholders of the Company, dated December 19, 1996.
*(a)(20) Text of Press Release issued by Parent on December 20, 1996.
*(a)(21) Text of Press Release issued by Parent and the Company on January 9, 1997.
*(a)(22) Text of Press Release issued by Parent and the Company on January 13, 1997.
*(a)(23) Text of Press Release issued by Parent and the Company on January 15, 1997.
*(a)(24) Text of Press Release issued by Parent on January 17, 1997.
*(a)(25) Text of Press Release issued by Parent on January 22, 1997.
(a)(25) Deleted.
*(a)(26) Text of Letter issued by Parent and the Company dated January 22, 1997.
*(a)(27) Text of Advertisement published by Parent and the Company on January 29, 1997.
*(a)(28) Text of Press Release issued by Parent and the Company on January 31, 1997.
*(a)(29) Text of Press Release issued by Parent on February 14, 1997.
*(a)(30) Text of Press Release issued by Parent on March 3, 1997.
(a)(31) Second Supplement to Offer to Purchase, dated March 7, 1997.
(a)(32) Revised Letter of Transmittal.
(a)(33) Revised Notice of Guaranteed Delivery.
(a)(34) Text of Press Release issued by Parent on March 7, 1997.
(a)(35) Form of Summary Advertisement, dated March 10, 1997.
*(b)(1) Credit Agreement, dated November 15, 1996 (incorporated by reference to Exhibit
(b)(2) to Parent and Purchaser's Tender Offer Statement on Schedule 14D-1, as
amended, dated October 16, 1996).
*(c)(1) Agreement and Plan of Merger, dated as of October 14, 1996, by and among Parent,
Purchaser and the Company (incorporated by reference to Exhibit (c)(1) to Parent
and Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated
October 16, 1996).
</TABLE>
- ---------------
* Previously filed.
<PAGE> 7
<TABLE>
<S> <C>
*(c)(2) Company Stock Option Agreement, dated as of October 14, 1996, between Parent and
the Company (incorporated by reference to Exhibit (c)(2) to Parent and
Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October
16, 1996).
*(c)(3) Parent Stock Option Agreement, dated as of October 14, 1996, between Parent and
the Company (incorporated by reference to Exhibit (c)(3) to Parent and
Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October
16, 1996).
*(c)(4) Voting Trust Agreement, dated as of October 15, 1996, by and among Parent,
Purchaser and Deposit Guaranty National Bank (incorporated by reference to
Exhibit (c)(4) to Parent and Purchaser's Tender Offer Statement on Schedule
14D-1, as amended, dated October 16, 1996).
*(c)(5) First Amendment to Agreement and Plan of Merger, dated as of November 5, 1996,
by and among Parent, Purchaser and the Company (incorporated by reference to
Exhibit (c)(7) to Parent and Purchaser's Tender Offer Statement on Schedule
14D-1, as amended, dated October 16, 1996).
*(c)(6) Second Amendment to Agreement and Plan of Merger, dated as of December 18, 1996,
by and among Parent, Purchaser and the Company.
*(c)(7) Form of Amended and Restated Voting Trust Agreement.
(c)(8) Deleted.
*(c)(9) Text of STB Decision No. 5 of STB Finance Docket No. 33220, dated January 8,
1997.
*(c)(10) Unaudited Pro Forma Financial Statements reflecting the Transactions
(incorporated by reference to Parent's registration statement on Form S-4,
registration number 333-19523).
*(c)(11) Text of opinion of Judge Donald VanArtsdalen of the United States District Court
for the Eastern District of Pennsylvania as delivered from the bench on January
9, 1997.
(c)(12) Third Amendment to Agreement and Plan of Merger, dated as of March 7, 1997, by
and among Parent, Purchaser and the Company.
(c)(13) Form of Amended and Restated Voting Trust Agreement.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
SECOND SUPPLEMENT TO THE OFFER TO PURCHASE DATED DECEMBER 6, 1996
GREEN ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CSX CORPORATION
HAS AMENDED ITS OFFER TO PURCHASE FOR CASH
AND IS NOW OFFERING TO PURCHASE ALL SHARES
OF
COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
CONRAIL INC.
AT
$115 NET PER SHARE
THE SECOND OFFER HAS BEEN EXTENDED. THE SECOND OFFER, PRORATION
PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON FRIDAY, APRIL 18, 1997, UNLESS THE SECOND OFFER IS FURTHER
EXTENDED.
The Second Offer is conditioned upon, among other things, prior to the
expiration of the Second Offer there shall have been validly tendered and not
withdrawn such number of shares, which, together with the Common Shares already
owned by CSX Corporation, a Virginia corporation ("Parent"), through the Voting
Trust and certain other parties, constitutes at least a majority of outstanding
Shares on a fully diluted basis (as defined herein) (the "Minimum Condition").
The Second Offer is no longer conditioned upon the Pennsylvania Control
Transaction Law being inapplicable to Conrail Inc. (the "Company"). The Second
Offer is not conditioned on obtaining financing. UNDER THE MERGER AGREEMENT,
GREEN ACQUISITION CORP. HAS THE RIGHT IN ITS DISCRETION TO EXTEND THE SECOND
OFFER, FROM TIME TO TIME, THROUGH 5:00 P.M., NEW YORK CITY TIME, ON JUNE 2,
1997, WHETHER OR NOT THE CONDITIONS TO THE SECOND OFFER HAVE BEEN SATISFIED OR
WAIVED. See Section 15 of the Offer to Purchase and Sections 4, 7 and 8 of this
Second Supplement.
------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE SECOND OFFER (AS
AMENDED HEREBY) AND THE MERGER (AS AMENDED BY THE THIRD AMENDMENT, AS
HEREINAFTER DEFINED), DETERMINED THAT THE MERGER AGREEMENT (AS AMENDED BY THE
THIRD AMENDMENT) AND THE TRANSACTIONS CONTEMPLATED THEREBY (INCLUDING THE SECOND
OFFER AND THE MERGER) ARE IN THE BEST INTERESTS OF THE COMPANY, AND RECOMMENDS
THAT SHAREHOLDERS OF THE COMPANY ACCEPT THE SECOND OFFER AND TENDER THEIR SHARES
PURSUANT TO THE SECOND OFFER.
The Merger Agreement has been amended to provide, among other things, that
(i) the Second Offer be amended to increase the number of Shares sought in the
Second Offer to all Shares and to increase the price to be paid pursuant thereto
to $115 per Share in cash, (ii) the consideration to be paid in the Merger will
be $115 per Share in cash and (iii) Parent will have sole authority to conduct
negotiations and enter into agreements with any other company (including Norfolk
Southern Corporation) relating to the acquisition by such company of any
securities or assets of the Company, or any trackage rights or other concessions
relating to the Company's assets or operations. The Merger Agreement also has
been amended in other respects. See Section 7 of this Second Supplement.
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
shares of common stock, par value $1.00 per share ("Common Shares"), or shares
of Series A ESOP Convertible Junior Preferred Stock, without par value ("ESOP
Preferred Shares," and together with the Common Shares, the "Shares") should
either (i) complete and sign one of the (blue) Letters of Transmittal (or a
facsimile thereof) circulated with the Offer to Purchase (as defined herein),
the First Supplement (as defined herein) or this Second Supplement in accordance
with the instructions in such Letter of Transmittal, have such shareholder's
signature thereon guaranteed if required by Instruction 1 to such Letter of
Transmittal, mail or deliver such Letter of Transmittal (or such facsimile
thereof) and any other required documents to the Depositary (as defined in the
Offer to Purchase) and either deliver the certificates for such Shares to the
Depositary along with such Letter of Transmittal (or a facsimile thereof) or
deliver such Shares pursuant to the procedure for book-entry transfer set forth
in Section 3 of the Offer to Purchase prior to the expiration of the Second
Offer or (ii) request such shareholder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such shareholder. A
shareholder having Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such broker, dealer,
commercial bank, trust company or other nominee if such shareholder desires to
tender such Shares.
Any shareholder who desires to tender Shares and whose certificates for such
Shares are not immediately available, or who cannot comply with the procedures
for book-entry transfer described in the Offer to Purchase on a timely basis,
may tender such Shares by following the procedures for guaranteed delivery set
forth in Section 3 of the Offer to Purchase.
Questions and requests for assistance or for additional copies of this
Second Supplement, the First Supplement, the Offer to Purchase, the Letter of
Transmittal or other tender offer materials may be directed to the Information
Agent or the Dealer Manager (as such terms are defined in the Offer to Purchase)
at their respective addresses and telephone numbers set forth on the back cover
of this Second Supplement.
The Dealer Manager for the Second Offer is:
WASSERSTEIN PERELLA & CO., INC.
March 7, 1997
<PAGE> 2
TO THE HOLDERS OF COMMON STOCK AND SERIES A ESOP CONVERTIBLE
JUNIOR PREFERRED STOCK OF CONRAIL INC.:
INTRODUCTION
The following information amends and supplements (i) the Offer to Purchase,
dated December 6, 1996 (the "Offer to Purchase"), of Green Acquisition Corp.
("Purchaser"), a Pennsylvania corporation and a wholly owned subsidiary of
Parent, and (ii) the Supplement to the Offer to Purchase (the "First
Supplement"), dated December 19, 1996, of Parent and Purchaser. Pursuant to this
Second Supplement, Purchaser is now offering to purchase all Shares of the
Company, at a price of $115 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase, as amended and
supplemented by the First Supplement, this Second Supplement, and in the Letters
of Transmittal circulated with the Offer to Purchase, the First Supplement and
this Second Supplement (which together constitute the "Second Offer").
This Second Supplement should be read in conjunction with the Offer to
Purchase and the First Supplement. Except as otherwise set forth in this Second
Supplement and the revised Letters of Transmittal, the terms and conditions
previously set forth in the Offer to Purchase, the First Supplement and the
Letters of Transmittal mailed with the Offer to Purchase and the First
Supplement remain applicable in all respects to the Second Offer. Unless the
context requires otherwise, terms not defined herein have the meanings ascribed
to them in the Offer to Purchase or the First Supplement.
THIS SECOND SUPPLEMENT IS BEING PROVIDED IN CONNECTION WITH THE THIRD
AMENDMENT, DATED AS OF MARCH 7, 1997 (THE "THIRD AMENDMENT"), TO THE AGREEMENT
AND PLAN OF MERGER, DATED AS OF OCTOBER 14, 1996 (THE "ORIGINAL MERGER
AGREEMENT" AND, AS AMENDED BY THE FIRST AMENDMENT, THE SECOND AMENDMENT AND THE
THIRD AMENDMENT, THE "MERGER AGREEMENT"). THE THIRD AMENDMENT PROVIDES, AMONG
OTHER THINGS, THAT THE SECOND OFFER BE AMENDED TO INCREASE THE NUMBER OF SHARES
SOUGHT IN THE SECOND OFFER TO ALL SHARES AND TO INCREASE THE PRICE TO BE PAID
PURSUANT THERETO TO $115 PER SHARE IN CASH, WITHOUT INTEREST THEREON. IN
ADDITION, UNDER THE THIRD AMENDMENT, IN THE MERGER, EACH SHARE NOT PURCHASED IN
THE SECOND OFFER WILL BE CONVERTED INTO THE RIGHT TO RECEIVE $115 IN CASH,
WITHOUT INTEREST THEREON, AND SUCH SHARES WILL NOT BE CONVERTED INTO THE RIGHT
TO RECEIVE PARENT MERGER SECURITIES. SEE SECTION 7 OF THIS SECOND SUPPLEMENT.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE SECOND OFFER AND THE
MERGER, DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY (INCLUDING THE SECOND OFFER AND THE MERGER) ARE IN THE BEST INTERESTS OF
THE COMPANY AND RECOMMENDS THAT SHAREHOLDERS OF THE COMPANY ACCEPT THE SECOND
OFFER AND TENDER THEIR SHARES PURSUANT TO THE SECOND OFFER.
The Second Offer is conditioned upon the Minimum Condition which requires
that prior to the expiration of the Second Offer there shall have been validly
tendered and not withdrawn such number of Shares which, together with the Common
Shares already owned by Parent through the Voting Trust and with any Common
Shares owned by any third party that may, jointly together with Parent, acquire
an equity ownership interest in any vehicle that may acquire the Company,
constitutes at least a majority of outstanding Shares on a fully diluted basis
(as defined herein). The Company has informed Parent that as of March 3, 1997
there were outstanding 90,791,678 Shares and options or other rights to purchase
Shares. Parent beneficially owns 17,775,124 Shares (excluding 15,955,477 Common
Shares issuable upon exercise of the Company Stock Option, which is currently
exercisable by Parent), all of which Shares were acquired by Purchaser in the
First Offer. In addition, if Parent and Norfolk Southern Corporation ("NSC")
were to reach an agreement relating to the joint acquisition of the Company as
described in this Second Supplement, the 8,200,100 Common Shares beneficially
owned by NSC through its voting trust would be included in the computation
toward satisfaction of the Minimum Condition. For purposes of the Second Offer,
"fully diluted basis" assumes the issuance of all Shares upon the exercise of
all outstanding stock options (other than pursuant to the Company Stock Option),
whether or not such stock options are presently exercisable.
<PAGE> 3
Based on the foregoing and assuming no additional Shares (or options,
warrants or rights exercisable for, or securities convertible into, Shares) have
been or will be issued after March 3, 1997, if Purchaser were to purchase
27,711,506 Shares pursuant to the Offer (or 19,511,406 Shares if Parent and NSC
jointly were to acquire the Company), the Minimum Condition would be satisfied.
The Merger Agreement provides that, without the consent of the Company,
Purchaser will not waive the Minimum Condition.
The Second Offer is no longer conditioned upon Purchaser being satisfied,
in its reasonable judgment, that the Pennsylvania Control Transaction Law is
inapplicable to the Company.
The Second Offer is being made pursuant to the Merger Agreement which
provides that, following the completion (or expiration) of the Second Offer and
the satisfaction or waiver of certain conditions, Purchaser will be merged with
and into the Company (the "Merger"), with the Company as the surviving
corporation (the "Surviving Corporation"), in accordance with the Pennsylvania
Business Corporation Law of 1988, as amended (the "Pennsylvania Law"). As more
fully described in Section 7 of this Second Supplement, in the Merger, each
outstanding Share (other than Shares held in the treasury of the Company or
owned by Parent, Purchaser or any of their respective subsidiaries or
affiliates, or any third party, its subsidiaries or affiliates that may, jointly
together with Parent, acquire an equity ownership interest in any vehicle that
may acquire the Company) will be converted into the right to receive $115 in
cash, without interest. The time at which the Merger is consummated in
accordance with the Merger Agreement is hereinafter referred to as the
"Effective Time."
Lazard Freres and Morgan Stanley, the Company's financial advisors, have
each delivered to the Board of Directors of the Company a written opinion to the
effect that, as of the date of the Third Amendment, the consideration to be
received by the holders of Shares pursuant to the Second Offer and the Merger,
taken together, is fair from a financial point of view to such shareholders. A
copy of such opinions are included in the Company's Supplement to its
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9
Supplement") which is being mailed to shareholders concurrently herewith, and
shareholders are urged to read each such opinion in its entirety for a
description of the assumptions made, matters considered and limitations of the
reviews undertaken by each of Lazard Freres and Morgan Stanley.
The Merger may be approved by the affirmative vote of holders of a majority
of the outstanding Shares. Therefore, if the Minimum Condition is satisfied and
the Second Offer is consummated, Purchaser will own a sufficient number of
Shares to ensure that the Merger is approved.
THE SECOND OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY
MEETING OF COMPANY SHAREHOLDERS. ANY SUCH SOLICITATION WHICH PARENT OR PURCHASER
MIGHT MAKE WOULD BE MADE ONLY PURSUANT TO SEPARATE PROXY MATERIALS IN COMPLIANCE
WITH THE REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED (THE "EXCHANGE ACT").
Under the Third Amendment, Parent has sole authority to conduct
negotiations and enter into agreements with any other company (including NSC)
with respect to the acquisition by any such other company of any of the
Company's securities or assets or any trackage rights or other concessions
relating to the Company's assets or operations. It is Parent's intention to
commence negotiations with NSC promptly in order to reach an agreement that
provides for a roughly equal division of the Company's system between Parent and
NSC, and then together with NSC prepare and file a joint application with the
STB. Parent expects that the division of the Company will be generally
consistent with the basic outline received by Parent and the Company from NSC.
See Sections 5, 6 and 9 of this Second Supplement.
In the Third Amendment, the Company has agreed that it will use reasonable
efforts to cooperate with Parent in connection with the negotiations referred to
in the preceding paragraph and, if necessary or appropriate to facilitate a
transaction, the Company will further amend the Merger Agreement or take any
other action (including taking any Board action that may be required under any
state anti-takeover statute or by amending the Rights Agreement or the Second
Offer to include a co-bidder) so long as such amendment does not adversely
affect the Company in respect of the benefits to be received by its shareholders
or employees under the Merger Agreement or delay or adversely affect the
transactions contemplated by the Merger Agreement. See Section 7 of this Second
Supplement.
2
<PAGE> 4
Procedures for tendering Shares are set forth in Section 3 of the Offer to
Purchase. Tendering shareholders may use the original (blue) Letter of
Transmittal and the original (gray) Notice of Guaranteed Delivery previously
circulated with the Offer to Purchase, the revised (blue) Letter of Transmittal
and revised (gray) Notice of Guaranteed Delivery circulated with the First
Supplement or the revised (blue) Letter of Transmittal and revised (gray) Notice
of Guaranteed Delivery circulated with this Second Supplement. While the
original Letter of Transmittal circulated with the Offer to Purchase refers to
the Offer to Purchase, the revised Letter of Transmittal circulated with the
First Supplement refers to the Offer to Purchase and the First Supplement, and
the Letter of Transmittal circulated with this Second Supplement refers to the
Offer to Purchase, the First Supplement and this Second Supplement, shareholders
using any such document to tender Shares will nevertheless receive $115 per
Share for each Share validly tendered and not withdrawn and accepted for payment
pursuant to the Second Offer, subject to the conditions of the Second Offer, and
no proration will apply. Shareholders who have previously validly tendered and
not withdrawn Shares pursuant to the Second Offer are not required to take any
further action in order to receive, subject to the conditions of the Second
Offer, the increased tender price of $115 per Share, if the Shares are accepted
for payment and paid for by Purchaser pursuant to the Second Offer, except as
may be required by the guaranteed delivery procedures if such procedures were
utilized. See Section 3 of the Offer to Purchase and Section 1 of this Second
Supplement.
THE OFFER TO PURCHASE, THE FIRST SUPPLEMENT, THIS SECOND SUPPLEMENT AND THE
LETTERS OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE SECOND OFFER.
1. Amended Terms of the Second Offer; Expiration Date. The discussion set
forth in Section 1 of the Offer to Purchase, Section 1 of the First Supplement
and the amendments thereto are hereby amended and supplemented as follows:
The Second Offer is being made for all Shares. The price per Share to be
paid pursuant to the Second Offer has been increased from $110 per Share to $115
per Share, net to the seller in cash, without interest thereon. All shareholders
whose Shares are validly tendered and not withdrawn and accepted for payment
pursuant to the Second Offer (including Shares tendered prior to the date of
this Second Supplement) will receive the increased price, and no proration will
apply. The term "Expiration Date" means 5:00 P.M., New York City time, on
Friday, April 18, 1997 unless and until Purchaser, in its sole discretion (but
subject to the terms of the Merger Agreement), shall have extended the period of
time during which the Second Offer is open, in which event the term "Expiration
Date" shall refer to the latest time and date at which the Second Offer, as so
extended by Purchaser, shall expire. The Merger Agreement provides that, in the
event all conditions to Purchaser's obligation to purchase Shares under the
Second Offer at any scheduled expiration thereof are satisfied other than the
Minimum Condition, Purchaser shall, from time to time, extend the Second Offer
until the earlier of December 31, 1997 or such time as the Minimum Condition is
satisfied or waived in accordance with the Merger Agreement. The Merger
Agreement provides that, without the consent of the Company, Purchaser will not
waive the Minimum Condition. The Merger Agreement further provides that
Purchaser in its sole discretion may extend the Second Offer, from time to time,
until June 2, 1997, whether or not the conditions to the Second Offer have been
satisfied or waived.
This Second Supplement, the revised (blue) Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares whose names appear
on the Company's shareholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
2. Certain Federal Income Tax Consequences. The discussion set forth in
Section 5 of the Offer to Purchase, Section 5 of the First Supplement and the
amendments thereto are hereby amended and replaced in their entirety by the
following:
The following discussion is a summary of the material federal income tax
consequences of the Second Offer and the Merger to holders of Shares who hold
Shares as capital assets. The discussion set forth below is
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<PAGE> 5
for general information only and may not apply to certain categories of holders
of Shares subject to special treatment under the Internal Revenue Code of 1986,
as amended (the "Code"), such as foreign holders and holders who acquired such
Shares pursuant to the exercise of employee stock options or otherwise as
compensation. This summary is based upon laws, regulations, rulings and
decisions currently in effect, all of which are subject to change, retroactively
or prospectively, and to possibly differing interpretations. Shareholders are
urged to consult their own tax advisors to determine the specific tax
consequences of the Second Offer and the Merger, including any federal, state,
local or other tax consequences (including any tax return filing or other tax
reporting requirements) of the Second Offer and the Merger.
The receipt of cash for Shares pursuant to the Second Offer or the Merger
will be a taxable transaction for federal income tax purposes and may also be a
taxable transaction under applicable state, local, foreign and other tax laws.
For United States federal income tax purposes, each selling or exchanging
shareholder would generally recognize gain or loss equal to the difference
between the amount of cash received and such shareholder's tax basis for the
sold or exchanged Shares. Such gain or loss will be capital gain or loss
(assuming the Shares are held as a capital asset) and any such capital gain or
loss will be long term capital gain if, as of the date of sale or exchange, the
Shares were held for more than one year or will be short term if, as of such
date, the Shares were held for one year or less. Under present law, long-term
capital gains recognized by an individual shareholder generally will be taxed at
up to a maximum federal marginal tax rate of 28%, and long-term capital gains
recognized by a corporate shareholder will be taxed at up to a maximum federal
marginal tax rate of 35%.
WITHHOLDING
Unless a shareholder complies with certain reporting and/or certification
procedures or is an exempt recipient under applicable provisions of the Code and
Treasury Regulations promulgated thereunder, such shareholder may be subject to
withholding tax of 31% with respect to any cash payments received pursuant to
the Second Offer and/or the Merger. Shareholders should consult their brokers or
the Depositary to ensure compliance with such procedures. Foreign shareholders
should consult with their own tax advisors regarding withholding taxes in
general.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT TO
CERTAIN SHAREHOLDERS OF THE PURCHASE PRICE FOR SHARES PURCHASED PURSUANT TO THE
SECOND OFFER, EACH SUCH SHAREHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH
SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH
SHAREHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL. IF BACKUP
WITHHOLDING APPLIES WITH RESPECT TO A SHAREHOLDER, THE DEPOSITARY IS REQUIRED TO
WITHHOLD 31% OF ANY PAYMENTS MADE TO SUCH SHAREHOLDER. SEE INSTRUCTION 9 OF THE
LETTER OF TRANSMITTAL.
3. Price Range of Shares; Dividends. The discussion set forth in Section 6
of the Offer to Purchase, Section 2 of the First Supplement and the amendments
thereto are hereby amended and supplemented as follows:
According to published financial sources, the high and low sales prices per
Common Share on the NYSE composite tape for the fourth quarter of 1996 were
$100 7/8 and $68 1/2, respectively. The high and low sales prices per Common
Share on the NYSE composite tape for the first quarter of 1997 (through March 6,
1997) were $113 and $98 1/2, respectively. On February 28, 1997, the last full
trading day prior to the publication of reports that Parent and the Company were
engaged in discussions relating to amending the terms of the Second Offer upon
the terms set forth in this Second Supplement, the reported closing sale price
per Common Share on the NYSE composite tape was $104 1/2. SHAREHOLDERS ARE URGED
TO OBTAIN A CURRENT MARKET QUOTATION FOR THE COMMON SHARES.
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<PAGE> 6
4. Source and Amount of Funds. The discussion set forth in Section 10 of
the Offer to Purchase and the amendments thereto are hereby amended and
supplemented as follows:
Purchaser estimates that the total amount of funds required to purchase all
outstanding Shares pursuant to the Second Offer and to pay all related costs and
expenses will be approximately $8.5 billion. See "Fees and Expenses" in Section
17 of the Offer to Purchase. In the event that, prior to consummation of the
Second Offer, Parent and NSC reach agreement as to a joint acquisition of the
Company (see "Introduction" and Sections 5 and 6 of this Second Supplement), a
portion of the funds so required may be provided by NSC (in which case, the
Second Offer will be further amended). While Parent believes that it and NSC
will reach an agreement as to a division of the Company, there can be no
assurance that such an agreement will be reached or, if reached, the timing or
terms thereof. The Second Offer is not conditioned on Parent and NSC reaching
any such agreement or on NSC providing any portion of the funds required for
Purchaser to purchase Shares pursuant to the Second Offer and the Merger.
Purchaser plans to obtain the necessary funds through capital contributions
or advances made by Parent. Parent plans to obtain the funds for such capital
contributions or advances from its available cash and working capital, and
either through the issuance of long- or short-term debt securities (including,
without limitation, commercial paper notes) or under the Facility pursuant to an
amendment, as described below, which Parent intends to seek.
In connection with the Third Amendment, Parent intends to seek an amendment
to the Credit Agreement to increase the aggregate principal sum of the Facility
(i) to finance the purchase of all Shares pursuant to the Second Offer, the
Merger, the exercise of the Company Stock Option or otherwise, regardless of
whether Parent and NSC reach agreement, and (ii) following the Merger, to
provide working capital and for other general corporate purposes. While Parent
believes that it will be successful in obtaining such an amendment, there can be
no assurance that it will be successful in achieving such an amendment. The
Second Offer, however, is not conditioned on obtaining such an amendment or
otherwise obtaining financing.
It is anticipated that the indebtedness incurred by Parent in connection
with the transactions contemplated by the Merger Agreement will be repaid from
funds generated internally by Parent and its subsidiaries (including, after the
Merger, if consummated, dividends paid by the Surviving Corporation and its
subsidiaries), through additional borrowings, through application of proceeds of
dispositions or through a combination of two or more such sources. No final
decisions have been made concerning the method Parent will employ to repay such
indebtedness. Such decisions, when made, will be based on Parent's review from
time to time of the advisability of particular actions, as well as on prevailing
interest rates and financial and other economic conditions.
5. Background of the Second Offer Since December 19, 1996; Contacts with
the Company. The discussion set forth in Section 11 of the Offer to Purchase,
Section 3 of the First Supplement and the amendments thereto are hereby amended
and supplemented as follows:
On December 19, 1996, Conrail and CSX issued the following press release
announcing execution of the Second Amendment:
CSX AND CONRAIL INCREASE MERGER CONSIDERATION
BY $16 PER SHARE
VOTING TRUST TO PERMIT EARLY 1997 PAYMENT
OF MERGER CONSIDERATION TO CONRAIL SHAREHOLDERS
CASH PORTION TO REMAIN AT $110 PER CONRAIL SHARE
TENDER OFFER EXTENDED UNTIL JANUARY 22, 1997
SPECIAL CONRAIL SHAREHOLDER MEETING
NOW SCHEDULED FOR JANUARY 17, 1997
PHILADELPHIA, PA AND RICHMOND, VA (DECEMBER 19, 1996) -- Conrail
Inc. (NYSE: CRR) and CSX Corporation (NYSE: CSX) announced today that
they have amended
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<PAGE> 7
their merger agreement to increase the merger consideration by $16 per
Conrail share, or approximately $870 million in the aggregate. Conrail
shareholders will also benefit from the significant value of receiving
the merger consideration earlier than previously contemplated. Conrail
shareholders will now receive in the merger, for 60% of their shares,
an additional $16 per share in CSX convertible preferred stock, the
terms of which will be set prior to the merger so that such securities
would trade at par on a fully distributed basis. This is in addition
to the tax-free 1.85619 shares of CSX common stock to be received in
the merger.
The amended agreement also provides that the merger will occur at
the time of the CSX and Conrail shareholders meetings for approval of
matters related to the merger. These meetings are expected to be held
in the first quarter of 1997. Upon shareholder approval and
consummation of the merger, the Conrail shareholders would receive the
merger consideration of CSX common stock and CSX Convertible Preferred
Stock. All the Conrail Stock acquired by CSX, both in the tender and
in the merger, would be placed in a voting trust pending the outcome
of the Surface Transportation Board's (STB) proceeding.
CSX has already purchased 19.9% of Conrail's common and ESOP
preferred stock, through a tender offer for $110 in cash per Conrail
share. CSX is currently offering to purchase up to an additional
18,344,845 shares of Conrail through a second cash tender offer at
$110 per share.
David M. LeVan, chairman, president and chief executive officer
of Conrail, said "Because of the actions taken by the Conrail board,
our shareholders are receiving extraordinary value in our strategic
merger-of-equals with CSX. The original terms of the merger provided
our shareholders with a price at the high end of what has been paid in
railroad mergers. That price has since been increased by more than
$1.5 billion before taking into account the significant value
associated with receiving the merger consideration in early 1997. In
every respect, this merger holds great potential and clearly offers
the best possible result for Conrail. This amendment to the merger
agreement reaffirms the decision of the Conrail board that is not
willing to agree to the sale of Conrail to Norfolk Southern."
John W. Snow, chairman, president and chief executive officer of
CSX said "The actions taken by the CSX and Conrail boards allow us to
move on to the next stage of the process, the filing of our merger
application with the STB. We are confident that we will present a
strong case and look forward to building the world's leading
transportation and logistics company."
The amended merger agreement provides that the period of time
during which each of Conrail and CSX has agreed that it will not
discuss or agree to any takeover proposal with a third party has been
extended to the termination date under the merger agreement, December
31, 1998. CSX and Conrail also announced that the CSX tender offer has
been extended to 5:00 p.m., Eastern Standard Time, on January 22, 1997
and the special shareholders meeting seeking approval of the opt-out
of the Pennsylvania statute has been postponed to 2:00 p.m., Eastern
Standard Time, on January 17, 1997. CSX has been advised by the
depositary, on a preliminary basis, that fewer than 100,000 shares
have been tendered into the CSX offer as of the close of business on
December 18, 1996.
On December 19, 1996, NSC announced an increase in the price offered in the
Hostile Offer to $115, which increased Hostile Offer was again rejected by the
Conrail Board on December 20, 1996.
On January 2, 1997, Parent and Purchaser, through the Voting Trust, sold
85,000 Common Shares (with proxies to vote such shares at the Pennsylvania
Special Meeting), at an average per share price of $98.983, in order to moot
certain claims by NSC in litigation relative to the Pennsylvania Control
Transaction Law.
On January 9, 1997, the United States District Court for the Eastern
District of Pennsylvania denied the motions of NSC and the
shareholder-plaintiffs for a preliminary injunction to invalidate certain
provisions of the Merger Agreement and to enjoin the Pennsylvania Special
Meeting scheduled for January 17, 1997, including on the basis of their
contentions that the Pennsylvania Control Transaction Law had been triggered by
Parent's purchase of Shares in the First Offer. NSC and the
shareholder-plaintiffs appealed such ruling to
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<PAGE> 8
the United States Court of Appeals for the Third Circuit and moved for an
expedited appeal and an injunction pending appeal, seeking to enjoin the
Pennsylvania Special Meeting scheduled for January 17, 1997.
On January 13, 1997, NSC announced a "pledge" that if Company shareholders
defeated the proposal to approve the Articles Amendment at the January 17
Pennsylvania Special Meeting, NSC would promptly amend the Hostile Offer to
eliminate all of the conditions thereto and to reduce the aggregate number of
Shares sought in the Hostile Offer to approximately 8,200,000 Shares. At such
time, NSC also announced that following completion of the amended Hostile Offer,
it would commence a tender offer for all the remaining Shares at $115 per Share
(the "Second Hostile Offer").
On January 13, 1997, Parent and the Company issued the following joint
press release in response to NSC's January 13 "pledge."
RICHMOND, VA AND PHILADELPHIA, PA (JANUARY 13, 1996) -- CSX
Corporation [NYSE:CSX] and Conrail Inc. [NYSE:CRR] issued the
following statement:
"Today's announcement by Norfolk Southern changes nothing. The
fact is the CSX-Conrail merger is the only transaction where Conrail
shareholders can receive value for 100% of their shares. No
transaction with Norfolk Southern can occur until January 1999, at the
earliest.
"Norfolk Southern has misrepresented the implications of the
Surface Transportation Board's (STB) decision which refused to
invalidate the two-year exclusivity provision. CSX and Conrail believe
that the STB cannot require the consummation of a merger that has not
been approved by the Conrail Board of Directors."
On January 15, 1997, Parent and the Company issued the following joint
press release:
APPEALS COURT REJECTS NORFOLK SOUTHERN'S REQUEST TO
ENJOIN CONRAIL SHAREHOLDER VOTE
RICHMOND, VA AND PHILADELPHIA, PA, JANUARY 15, 1997 -- CSX Corp.
(CSX) (NYSE:CSX) and Conrail Inc. (Conrail) (NYSE:CRR) today announced
that they are pleased with the decision by the United States Court of
Appeals for the Third Circuit rejecting Norfolk Southern's application
for an injunction pending appeal of the January 9 decision by the U.S.
District Court for the Eastern District of Pennsylvania.
CSX and Conrail today issued the following statement:
"We are pleased that the U.S. Court of Appeals has refused to
enjoin the Conrail shareholder meeting set for Friday, January 17.
This is another blow to Norfolk Southern's continuing hostile attempts
to derail the merger of Conrail and CSX. We now look forward to moving
ahead towards the completion of our strategic merger."
The District Court decision rejected Norfolk Southern's motion
for a preliminary injunction to invalidate the exclusivity period
contained in the merger agreement between CSX and Conrail and enjoin
the shareholder vote scheduled for January 17. In its application to
the Third Circuit Court of Appeals, Norfolk Southern sought to enjoin
the Conrail shareholder vote scheduled for January 17 until its appeal
of the District Court decision could be heard.
On January 17, 1997, the Pennsylvania Special Meeting was held, and Parent
issued the following press release:
CSX SAYS APPARENT VOTE WILL NOT ALTER CSX AND
CONRAIL'S ABILITY TO COMPLETE MERGER
RICHMOND, VA -- Jan. 17, 1997 -- CSX Corp. (CSX) (NYSE: CSX) said
that today's apparent vote by Conrail shareholders refusing to opt out
of the Pennsylvania Control Transaction
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<PAGE> 9
statute will not alter its firm commitment to the CSX-Conrail merger
and will not affect the ultimate outcome.
John W. Snow, chairman, president and chief executive officer of
CSX, issued the following statement:
"In light of Norfolk Southern's calculated and massive
disinformation campaign coupled with its last-ditch, conditional 9.9%
tender offer intended to provide Conrail shareholders with over $1
billion in cash as payment for a "no" vote, this apparent outcome is
not surprising. The apparent "no" vote procured by Norfolk Southern
simply postpones the eventual completion of our strategic merger of
equals and delays the ability of Conrail's shareholders to receive the
full consideration that will be provided by the CSX-Conrail
transaction.
"We remain fully and firmly committed to the CSX-Conrail merger
of equals. We are confident we will eventually prevail with Conrail's
shareholders and then present a compelling application for approval of
the merger to the Surface Transportation Board.
"Norfolk Southern has succeeded only in confusing the issue. The
CSX-Conrail merger remains the right merger, of the right companies,
at the right price and, in time, it will be approved.
"There is not now, nor will there be, a viable alternative to the
CSX-Conrail merger. The CSX and Conrail boards both have committed
that neither company will even hold discussions with any other company
regarding a business combination for at least two years, and the
Federal courts and the Surface Transportation Board (STB) both have
upheld that key provision of the CSX-Conrail merger agreement.
"We have no intention of amending or altering our merger
agreement in any way in light of this apparent vote. Those who voted
against the opt-out in the expectation that their vote will force CSX
to raise its price will be disappointed. We believe the CSX
transaction provides the maximum value to all Conrail constituents.
"CSX and Conrail's managements are now preparing a compelling
case demonstrating the unique commercial and public policy benefits of
the merger, which will be presented to the STB in March of 1997. This
case will also demonstrate to investors the clearly realizable
financial synergies, new business opportunities and transportation
efficiencies that will result. At an appropriate time, Conrail will
again hold an opt-out vote and, ultimately, we will proceed with the
successful completion of this merger.
"Our commitment to completing this merger at the stated terms is
unflagging," Snow concluded.
CSX also corrected four other matters raised in Norfolk
Southern's disinformation campaign:
-- Contrary to statements made by Norfolk Southern, both CSX
and Conrail have repeatedly stated they will not meet
with Norfolk Southern until after they have rebuffed all
challenges to the CSX-Conrail merger.
-- Norfolk Southern's claims that the Conrail board can be
replaced in 1997 simply are erroneous. This situation is
not possible. Conrail has a staggered board and Conrail's
shareholder rights plan (poison pill) can be redeemed or
altered only by participation of the current Conrail
board, which is unified in its support of the CSX-Conrail
merger.
-- Any offer from Norfolk Southern must be discounted -- for
at least the length of the two-year exclusivity period.
Conrail's Board has never expressed an interest in
entering into merger negotiations with Norfolk Southern
at the end of the two year exclusivity period.
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<PAGE> 10
-- There are no circumstances under which the STB can force
the Conrail board to accept a merger with Norfolk
Southern without the Conrail Board's approval. The
Conrail Board, unified in its support of the CSX-Conrail
merger, has repeatedly rejected Norfolk Southern's
overtures.
On January 21, 1997, Messrs LeVan and Snow received the following letter
from David R. Goode, Chairman, President and Chief Executive Officer of NSC:
Dear David and John:
The Conrail shareholders' vote last Friday places a
responsibility on us to work out a rail structure in the East that
will be in the long-term interests of all constituencies served by our
companies. I believe that this can be accomplished if we sit down and
try.
I believe that we can achieve balanced competition in the East
with the greatest continuity in existing operations by combining
Norfolk Southern and Conrail and providing to a competitor such as CSX
its own routes into the Northeast/Mid-Atlantic region from the West
and South, so that the result is competing networks of equivalent
scope, scale and market access.
You have a different, but perhaps not irreconcilable, vision of
the 21st century railroad map. Accordingly, we are prepared to enter
into discussions with no preconditions other than recognition of our
pledge to the Conrail shareholders that Norfolk Southern will only
enter into an agreement with Conrail or CSX that gives to Conrail
shareholders an all cash offer of $115 per share.
I look forward to your reply. Your initiative and our
determination are hallmarks of great companies capable of finding a
public interest resolution of their differences.
Sincerely,
David R. Goode
Also on January 21, 1997, it was reported that, in an interview, the
Chairman of the STB indicated that, if Parent and NSC did not negotiate a
settlement, the STB would, under certain circumstances, be prepared to develop a
plan to produce two rail systems of roughly equal competitive strength, and that
the STB would not necessarily view the grant of trackage rights as a sufficient
competitive solution.
On January 22, 1997, Messrs. LeVan and Snow delivered the following letter
to Mr. Goode in response to his letter of January 21, 1997:
Dear David:
Thank you for your letter of January 21, 1997. It certainly is
timely in light of Chairman Morgan's very positive suggestions that we
work together to best serve the public's interest.
We are fully committed to the CSX/Conrail merger. We believe our
merger, together with your participation, will enable us to best serve
the interests of all our constituencies, preserve our merger synergies
and yield a pro-competitive result. We recognize that you have a
different view of our merger, nevertheless, we should, as Chairman
Morgan urges, meet and talk. This can and should be done without any
preconditions that would limit our discussions or otherwise prejudice
our respective positions.
Let us be very clear, no one should interpret from our meeting
that either party has changed its position. Our objective, which we
are sure you share, is to assure that the public's interest in strong,
viable competition is met. We want no winner or loser, other than to
be sure that the public is a winner.
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<PAGE> 11
We sincerely hope with all that is at stake that we can begin
meaningful and candid discussions. We look forward to meeting with you
at your earliest convenience and will be in contact with your office
to arrange a mutually convenient place and time.
Sincerely,
<TABLE>
<S> <C>
John W. Snow David M. LeVan
Chairman, President & CEO Chairman, President & CEO
CSX Corporation Conrail Inc.
</TABLE>
Also on January 22, 1997, Parent and Purchaser extended the Second Offer
until 5:00 p.m., Eastern Standard Time, on February 14, 1997.
On January 22, 1997, NSC amended the Hostile Offer to eliminate all of the
conditions thereto and to reduce the aggregate number of Shares sought in the
Hostile Offer to 8,200,000 Shares (or approximately 9.9% of the outstanding
Shares).
On January 28, 1997, the Company announced that, while its Board of
Directors remains fully committed to the Merger, the Board was not taking a
position with respect to the Hostile Offer for 8,200,000 Shares. The Company
further stated that its Board of Directors believes that shareholders who wish
to receive cash for a portion of their Shares should feel free to tender Shares
into the Hostile Offer; on the other hand, shareholders who desire to continue
to participate in the future growth of the railroad industry and in the
substantial upside potential of the Merger should retain their Shares and not
tender into the Hostile Offer.
On January 31, 1997, the Company, Parent and NSC issued the following joint
press release:
WASHINGTON, DC -- JAN. 31, 1997 -- Conrail Inc. (NYSE: CRR), CSX
Corp. (CSX) (NYSE: CSX) and Norfolk Southern Corp. (NYSE: NSC) today
released the following statement following the initial meeting between
the parties:
"Conrail, CSX and Norfolk Southern have concluded their meeting
and have agreed that no further details on this meeting or timing of
future meetings will be announced."
On January 31, 1997, the Company announced that it had designated December
19, 1997 as the date for its 1997 annual meeting of shareholders should one be
required.
On February 5, 1997, NSC announced that it had accepted for payment
8,200,000 Shares pursuant to the Hostile Offer.
On February 10, 1997, NSC announced that it was nominating a slate of five
directors to serve on the Company's Board of Directors and stated that it would
also seek to remove all but three current members of the Company's Board at the
1997 annual meeting of shareholders.
On February 12, 1997, NSC commenced the Second Hostile Offer at a price of
$115 per Share in cash.
On February 14, 1997, Parent and Purchaser extended the Second Offer until
5:00 p.m., Eastern Standard Time, on March 14, 1997.
On February 24, 1997, Parent and the Company received the following letter
from NSC:
Dear David and John:
As you know, we will soon file an Application at the Surface
Transportation Board (STB) for authority to acquire Conrail and, in
order to achieve balanced competition, make available to another Class
I railroad certain lines and rights. Because of Norfolk Southern's
limited presence in the region, the Application represents a solution
which is effective and relatively easy to implement, and which we
believe will be attractive to shippers, public agencies and the STB.
However, in an effort to respond to political and regulatory
calls for settling our differences, we are prepared to offer an
alternative (the Plan) for comprehensive resolution of the issues
confronting
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<PAGE> 12
the eastern railroads. The Plan offers a different approach which will
require the talents of all three of our organizations to implement.
The enclosed map details the Plan, showing Conrail/CSX and
Conrail/Norfolk Southern operations. Conrail/CSX has a north-south
route and the east-west route over Buffalo (part of old New York
Central). Conrail/Norfolk Southern has a north-south route and the
east-west over Pittsburgh (part of old Pennsylvania).
If you endorse the Plan, promptly after completion of definitive
documentation for the Plan, Norfolk Southern and CSX will offer to
acquire all the common and ESOP stock of Conrail (other than shares
already in the CSX and Norfolk Southern voting trusts) for $115 cash
per share and upon acquisition will deposit such shares in a voting
trust or trusts. Upon completion of the tender offer, the remaining
Conrail shares will be acquired in a merger. To carry out all these
steps, Norfolk Southern and CSX will form a new entity.
As soon as regulatory approval and labor implementing agreements
are effective, Conrail will make available to Norfolk Southern and to
CSX for their respective operation and control the Conrail lines and
rights indicated on the map and all other Conrail operating assets.
Such operation and control will be exclusive except with respect to
trackage rights or joint arrangements or where both CSX and Norfolk
Southern would need joint rights at terminal facilities. At some point
in the future consistent with our respective business objectives, the
necessary steps would be taken to make the new alignments final.
Conrail's corporate headquarters will continue to be
Philadelphia. The assets associated with Norfolk Southern will include
the Pittsburgh service center and the Altoona and Hollidaysburg shop
facilities. The assets associated with CSX will include the
Philadelphia headquarters. Conrail employees in general will remain
with the Conrail/CSX and Conrail/Norfolk Southern operations and
assets, as determined by implementing agreements under the statute.
Similarly, employees affected by coordinations between Conrail and
CSX, and Conrail and Norfolk Southern, will be entitled to protection
to the extent provided by statute. We anticipate that Conrail employee
options and benefits would be handled in a manner analogous to that in
the present Conrail/CSX agreement.
The costs of acquiring all of the Conrail stock will be divided
in proportion to the Conrail gross freight revenues which will accrue
to Conrail/CSX operations and to Conrail/Norfolk Southern operations
under the Plan (the Percentages). The calculation will be based on a
study of Conrail's 1996 gross freight revenues, using standard traffic
study methodology familiar to all the parties. Norfolk Southern's and
CSX's interests in the new entity formed to accomplish the Plan will
be in proportion to their Percentages. Conrail assets and liabilities
not otherwise provided for (and not relating to a Conrail/CSX line or
a Conrail/Norfolk Southern line) will ultimately be discharged or
allocated in accordance with the Percentages. Tax costs, if any,
associated with the Plan will generally be shared in accordance with
the Percentages.
Norfolk Southern is ready to begin immediately drafting
documentation and pursuing the corporate actions and regulatory
approvals necessary to implement the Plan. It is suggested that, with
respect to their individual interests, CSX and Norfolk Southern may
consider jointly engaging an independent party to expedite and mediate
the process of documentation, with instructions to strive for fair,
realizable and administratively simple provisions consistent with the
outline here provided.
The Plan is offered without prejudice to our forthcoming
Application to the STB. We believe that the Application and the
competitive alternative it proposes will provide an appropriate
resolution if we cannot agree on the Plan. Upon completion of
definitive documentation for the Plan, the Norfolk Southern and CSX
applications could be supplemented or converted into a joint
application to accomplish the Plan. The result of either the
Application or the Plan could be an eastern railroad structure in
which the Conrail/CSX and Conrail/Norfolk Southern systems compete at
and between most of the major ports and markets east of the
Mississippi. We believe this
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<PAGE> 13
is a sound basis on which to build an internationally competitive
economy in the region, and that the benefits of this compromise extend
to our companies, employees and customers.
We are willing to consider any alternative suggestions for
accomplishing the same results as the Plan, which in any event is
subject to confirmation of the analysis used to develop it since we do
not possess the information necessary for complete validation of our
estimates. Because this initiative will complicate ongoing
negotiations with other railroads concerning the competitive
alternative Norfolk Southern will offer in its STB Application, we
must ask to hear from you by the close of business Monday, March 3,
concerning your interest in seriously pursuing a solution along these
lines.
Sincerely,
David
On February 25, 1997, the Company announced that its Board of Directors had
unanimously recommended that shareholders not tender their Shares pursuant to
the Second Hostile Offer. Shortly thereafter, Parent and the Company began
discussions toward the Third Amendment.
On March 3, 1997, the Company issued the following press release:
Conrail Board Acts On Stay Bonuses,
Enhanced Severance Packages
In Event Of Acquisition Of Company
PHILADELPHIA, March 3, 1997 -- Conrail (NYSE: CRR) announced
today that its Board of Directors has taken action with respect to
stay bonuses and enhanced severance packages to protect Conrail
employees not covered by collective bargaining agreements in the event
of an acquisition of the Company. The Board was mindful that employees
covered by collective bargaining agreements may qualify for up to six
years' protection under federal law.
While the Board expressed its disappointment that recent events
indicate that all the strategic goals reflected in the Merger
Agreement with CSX may not be attainable, the Board expressed
confidence that the final resolution will be beneficial to all the
Company's constituencies. In light of these developments, the Board
also authorized its management and representatives to negotiate
amendments to the CSX merger agreement that would assure that the
Conrail shareholders receive $115 in cash per share at the earliest
possible date.
On March 3, 1997, Parent issued the following press release:
RICHMOND, Va., March 3, 1997 -- CSX Corporation today confirmed
it has begun negotiations with Conrail Inc. on the matters outlined by
Conrail today.
John W. Snow, chairman, president and chief executive officer of
CSX, said, "We look forward to these negotiations with great
anticipation, fully expecting to resolve these issues and bring forth
a proposal that will serve the best interests of all constituents and
provide a pro-competitive solution in the East."
On March 3, 1997, NSC issued the following press release:
NORFOLK, VA, March 3, 1997 -- The following statement was issued
today by David R. Goode, Chairman, President and Chief Executive
Officer of Norfolk Southern Corporation (NYSE: NSC):
"We are pleased with today's announcement that CSX and Conrail
are negotiating to resolve the issues facing the eastern railroads."
"Norfolk Southern is hopeful that CSX and Conrail will quickly
reach a definitive agreement that would permit CSX and Norfolk
Southern to work out a plan to restructure the rail transportation
system in the East into combined Conrail/Norfolk Southern and
Conrail/CSX systems."
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On March 7, 1997, Parent and the Company entered into the Third Amendment.
6. Purpose of the Second Offer and the Merger; Plans for the Company. The
discussion set forth in Section 12 of the Offer to Purchase and the amendments
thereto are hereby amended and supplemented as follows:
On February 24, 1997, NSC sent a letter to the Company and Parent in which
NSC outlined a proposal (the "NSC Proposal") for a comprehensive settlement of
the issues confronting the eastern railroads. The NSC proposal contemplates a
division of the Company's routes in which Parent would acquire, among other
things, a north-south route between the New York area and Philadelphia and a
route from the New York area through Albany, Buffalo, and Cleveland to St. Louis
(part of the old New York Central line) and NSC would acquire, among other
things, north-south routes from the New York area to Washington, D.C., and to
Hagerstown, Maryland, a route westward from Philadelphia (part of the old
Pennsylvania Railroad line) and a route westward from the New York area to
Buffalo (part of the old Erie-Lackawanna line). For a further description of the
NSC Proposal, including the text of NSC's letter with respect thereto, see
Section 5 of this Second Supplement.
It is Parent's intention to commence negotiations with NSC promptly in
order to reach an agreement that provides for a roughly equal division of the
Company's system between Parent and NSC. Under the Third Amendment, Parent has
sole authority to conduct negotiations and enter into agreements with any other
company (including NSC) with respect to the acquisition by any such other
company of any of the Company's securities or assets or any trackage rights or
other concessions relating to the Company's assets or operations. See Section 7
of this Second Supplement.
If Parent and NSC reach an agreement relating to the division of the
Company's network in a timely manner, then, in accordance with the Third
Amendment (see Section 7 of this Second Supplement), the Merger Agreement may be
further amended, if necessary, to provide for a joint acquisition by Parent and
NSC of the Shares in the Second Offer to be followed by a second-step merger,
upon the terms and subject to the conditions set forth in the Second Offer and
the Merger Agreement. Any such joint acquisition may involve (a) a subsequent
reorganization of the Company's assets in order to permit Parent and NSC each to
enter into one or more operating agreements with the Surviving Corporation
following the Control Date and/or (b) the sale or other transfer of assets of
the Surviving Corporation and/or its subsidiaries following the Control Date.
While Parent believes that it and NSC will reach an agreement providing for the
division of the Company's system, there can be no assurance that any such
agreement will be reached or, if reached, the terms, structure or timing
thereof.
As a result of any agreement between Parent and NSC providing for a
division of the Company's network, the quantifiable benefits expected by Parent
from the Merger based on the realization of cost savings from operating
efficiencies, facility consolidations, overhead rationalization and other
activities, and new traffic volumes earned by enhanced service will vary
depending upon the specifics of such division.
Pursuant to the Third Amendment, Parent has stated its intention that,
following the Control Date, the Company's Juniata locomotive shops at Altoona,
Pennsylvania, Sam Ray car shops at Hollidaysburg, Pennsylvania, Pittsburgh
service center and a major operating presence in Philadelphia (including
headquarters of the Surviving Corporation) will be maintained.
In addition, under the Third Amendment, following the Effective Time,
Parent and the Company will establish a transition team for the Company and will
offer to include in its leadership the current Chief Executive Officers of the
Company (or such other senior Company executive as may be acceptable to Parent)
and of Parent's railroad operations. The transition team will not control the
day-to-day railroad operations of the Company (which shall be under the control
of the Company's Board of Directors and officers) or its subsidiaries prior to
the Control Date, but will restrict its operation to planning for actions and
operations to be undertaken from and after the Control Date. See Section 7 of
this Second Supplement. Among other things, the Company and Parent, in
connection with the transition team, will cooperate to ensure the orderly
operation of the Company during the STB approval process and to ensure an
orderly transition thereafter.
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7. Merger Agreement; Other Agreements. The discussion set forth in Section
13 of the Offer to Purchase, Section 4 of the First Supplement and the
amendments thereto are hereby amended and supplemented as set forth below. The
following summary of certain provisions of the Merger Agreement, as amended by
the Third Amendment, is qualified in its entirety by the full text of the Merger
Agreement and the amendments thereto, copies of which have been filed with the
SEC by Parent and Purchaser as exhibits to the Schedule 14D-1.
The Second Offer. The Third Amendment provides that the Second Offer be
amended so that the number of Shares sought is all Shares tendered and the price
offered is $115 per Share, subject to the conditions set forth herein. Under the
Third Amendment, (i) the condition relating to the Pennsylvania Control
Transaction Law has been eliminated and (ii) the condition relating to pending
governmental actions or proceedings has been eliminated and the condition
relating to injunctions has been revised. Without the written consent of the
Company, Purchaser may not decrease the Second Offer price, decrease the
aggregate number of Shares sought in the Second Offer, change the form of
consideration to be paid pursuant to the Second Offer, modify any of the
conditions to the Second Offer, impose conditions to the Second Offer in
addition to those set forth herein, except as provided hereafter, extend the
Second Offer, or amend any other term or condition of the Second Offer in any
manner which is adverse to the holders of Shares, it being agreed in the Merger
Agreement that a waiver by Purchaser of any condition in its discretion is not
deemed to be adverse to the holders of Shares; provided, however, that Purchaser
may not waive the Minimum Condition without the consent of the Company;
provided, further, that, if on any scheduled expiration date of the Second Offer
(as it may be extended in accordance with the terms of the Merger Agreement),
all conditions to the Second Offer shall not have been satisfied or waived, the
Second Offer may be extended from time to time without the consent of the
Company for such period of time as is reasonably expected to be necessary to
satisfy the unsatisfied conditions. Parent and Purchaser have agreed that, in
the event that all conditions to the Second Offer at any scheduled expiration
date are satisfied other than the Minimum Condition, Purchaser will, from time
to time, extend the Second Offer until the earlier of December 31, 1997 and such
time as such condition is satisfied or waived in accordance herewith; provided,
however, that, notwithstanding anything to the contrary contained in the Merger
Agreement, without the consent of the Company (and whether or not any or all
conditions to the Second Offer have been satisfied or waived), Purchaser in its
discretion may, from time to time, extend the Second Offer through 5:00 p.m.,
New York City Time, on June 2, 1997. In addition, the Second Offer price may be
increased (other than solely in order to extend the Second Offer) and the Second
Offer may be extended to the extent required by law in connection with such
increase, in each case without the consent of the Company.
The Merger. The Merger Agreement provides that, subject to the terms and
conditions thereof and in accordance with the Pennsylvania Law, at the Effective
Time, Purchaser will be merged with and into the Company, and the Company will
be the surviving corporation of the Merger and will succeed to and assume all
rights and obligations of Purchaser in accordance with the Pennsylvania Law.
Pursuant to the Merger, the Articles of Incorporation and By-Laws of Purchaser
will be the Articles of Incorporation and By-Laws of the Surviving Corporation
until thereafter amended (except that the Articles of Incorporation of the
Surviving Corporation will provide that the Surviving Corporation will be named
"Conrail Inc.").
Conversion of Shares. The Merger Agreement provides that, at the Effective
Time, each issued and outstanding Share (other than Shares to be canceled) will
be converted into the right to receive $115 per Share (the "Per Share Merger
Consideration"); and Shares owned by the Company as treasury stock and Shares
owned by Parent, the Company or any of their respective subsidiaries, or
affiliates or any third party, its subsidiaries or affiliates that may, jointly
together with Parent, acquire an equity ownership interest in any vehicle that
may acquire the Company will be canceled and retired. Pursuant to the Merger
Agreement, each of the issued and outstanding shares of common stock of
Purchaser will be converted at the Effective Time into a fully paid and
nonassessable share of common stock of the Surviving Corporation. References to
the Parent Merger Securities and the Merger Preferred Stock have been deleted
from the Merger Agreement.
Promptly after the Effective Time, Purchaser will cause the person
authorized to act as paying agent (the "Exchange Agent") to mail to each holder
of record of a certificate formerly representing Shares (i) a letter
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of transmittal (which will specify that delivery will be effected, and risk of
loss and title to the certificates will pass, only upon proper delivery of the
certificates to the Exchange Agent and will be in such customary form and have
such other provisions as Purchaser may reasonably specify) and (ii) instructions
to effect the surrender of the certificates in exchange for the Per Share Merger
Consideration. As promptly as practicable following the Effective Time,
Purchaser will deliver, in trust (the "Exchange Trust"), to the Exchange Agent,
for the benefit of holders of Shares, an amount in cash equal to the Per Share
Merger Consideration multiplied by the number of Common Shares to be converted
into the right to receive the Per Share Merger Consideration. Upon surrender of
a certificate for cancelation to the Exchange Agent together with a letter of
transmittal, duly executed, and such other customary documents as may be
required pursuant to such instructions, the holder of such certificate will be
paid by check in exchange therefor the amount of cash which such holder has the
right to receive under the Merger Agreement and the certificate so surrendered
will forthwith be canceled. In no event will the holder of any such surrendered
certificate be entitled to receive interest on any cash to be received in the
Merger. Until surrendered as contemplated by the Merger Agreement, each
certificate will be deemed at any time after the Effective Time to evidence only
the right to receive upon such surrender the Per Share Merger Consideration
applicable to the Shares evidenced by such certificate.
Voting Trust. The Third Amendment provides that the terms of the Voting
Trust governing the voting of or transfer or disposition of Shares may not be
amended prior to the consummation of the Second Offer without the Company's
consent.
Board of Directors; Officers. The directors and officers of the Company at
the Effective Time will be the initial directors and officers of the Surviving
Corporation and, following the Control Date, the Board of Directors of Parent
will be expanded to include three outside directors from the current Board of
Directors of the Company to be approved by Parent. The Third Amendment provides
that, following the Effective Time, Purchaser and the Company will establish a
transition team for the Company and will offer to include in the leadership of
such transition team the current Chief Executive Officer of the Company (or
another senior executive, as may be acceptable to Parent) and the current Chief
Executive Officer of Purchaser's railroad operations to ensure the orderly
operation of the Company during the STB approval process and to ensure an
orderly transition thereafter. In addition, the provisions of the Merger
Agreement relating to the change of Parent's Articles of Incorporation, the
LeVan Employment Agreement and the headquarters location of Parent's operations
following the Control Date have been deleted. The Third Amendment provides that
it is Purchaser's intention that, following the Control Date: the Company's
Juniata locomotive shops at Altoona, Pennsylvania; the Company's Sam Ray car
shops at Hollidaysburg, Pennsylvania; the Company's Pittsburgh service center;
and a major operating presence in Philadelphia (including headquarters of the
Surviving Corporation) will be maintained.
Interim Operations of the Company. Except as otherwise set forth in the
Merger Agreement, from the date of the Merger Agreement to the Control Date, the
Company will, and will cause its subsidiaries to, carry on their businesses in
the ordinary course consistent with past practice and in compliance in all
material respects with all applicable laws and regulations and, to the extent
consistent therewith, will use all reasonable efforts to preserve intact their
current business organizations, use reasonable efforts to keep available the
services of their current officers and other key employees as a group and
preserve their relationships with those persons having business dealings with
them to the end that their goodwill and ongoing businesses will be unimpaired at
the Control Date. In the Merger Agreement, the Company has agreed to certain
restrictions on its conduct during the period from the date of the Merger
Agreement to the Control Date. Such restrictions include, without limitation,
(a) limitations on (i) the payment of dividends, (ii) issuance or sales of stock
or rights to acquire stock, (iii) sales, leases or encumbrances of assets, (iv)
acquisitions and capital expenditures, (v) discharging or settling material
claims, (vi) entering into, amending or terminating contracts, (vii) adopting or
amending benefit plans or agreements, (viii) increasing compensation of
directors, officers or key employees and (b) adopting any amendment to the
Company's or any subsidiaries' articles of incorporation or by-laws.
The provisions of the Merger Agreement applying operating covenants such as
the foregoing to Parent and regarding coordination with respect to the payment
of dividends have been deleted.
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Pursuant to the Merger Agreement, except as required by law, the Company
has agreed that it will not, and will not permit any of its subsidiaries to,
voluntarily take any action that would, or that could reasonably be expected to,
result in (1) any of the representations and warranties of it set forth in the
Merger Agreement or the Company Stock Option Agreement that are qualified as to
materiality becoming untrue, (2) any of such representations and warranties that
are not so qualified becoming untrue in any material respect, (3) any of the
conditions to the consummation of the transactions contemplated by the Merger
Agreement not being satisfied or (4) any material impairment or delay of STB
approval. Pursuant to the Third Amendment, Parent has agreed that, except as
required by law, Parent will not, and will not permit any of its subsidiaries
to, voluntarily take any action that would, or that could reasonably be expected
to, result in (x) any of the representations and warranties of Parent set forth
in the Merger Agreement or the Company Stock Option Agreement that are qualified
as to materiality becoming untrue, (y) any of such representations and
warranties that are not so qualified becoming untrue in any material respect or
(z) any of the conditions to the consummation of the Second Offer or the Merger
not being satisfied, in any of the foregoing cases (x), (y) or (z), such as
would give rise to a right to terminate the Merger Agreement. See "Termination"
below. Without limiting the foregoing, Parent has agreed not to, and to not
permit any of its subsidiaries to, take any action that could reasonably be
expected to impair, or delay in any material respect, the consummation of the
Second Offer and the Merger.
No Solicitation. Under the Third Amendment, (i) the obligations described
under "No Solicitation" in Section 13 of the Offer to Purchase are no longer
applicable to Parent, (ii) the time period described in the proviso to the first
sentence of the first paragraph under "No Solicitation" in Section 13 of the
Offer to Purchase has been changed to any time prior to the consummation of the
Second Offer and after December 31, 1997 and (iii) the time period described in
the second sentence of the second paragraph under "No Solicitation" has been
changed to any time prior to the consummation of the Second Offer and after
December 31, 1997 and the determination of the Company's Board of Directors
required under such sentence has been changed to a determination by the
Company's Board of Directors that, due to the existence of a Superior Proposal,
there is not a substantial probability that the Minimum Condition will be
satisfied.
Third Party Discussions. Notwithstanding anything to the contrary
contained in the Merger Agreement, during the term of the Merger Agreement,
Parent will have sole authority to (and, without the consent of Parent, the
Company will not, directly or indirectly through another person) conduct and
participate in any conversations, discussions or negotiations, and enter into
any agreement, arrangement or understanding, with any other company engaged in
the operation of railroads (including NSC) or any other person with respect to
the acquisition by any such other company (including NSC) or person of any
securities or assets of the Company and its subsidiaries or Parent and its
subsidiaries, or any trackage rights or other concessions relating to the assets
or operations of the Company and its subsidiaries or Parent and its
subsidiaries, except to the extent the Company is expressly permitted to take
any such action without the consent of Parent pursuant to the provisions
described in "Interim Operations of the Company" above. Parent has agreed to use
reasonable efforts to keep the Company apprised of the status of any such
conversations, discussions or negotiations, and the Company has agreed to use
reasonable efforts to cooperate and assist with Parent's efforts relating to
such conversations, discussions or negotiations. In the event that, as a result
of any such conversations, discussions or negotiations, it becomes necessary or
appropriate to amend the Merger Agreement or to take any other action to
facilitate a transaction (including by amending the Company Rights Agreement or
taking any Board action that may be required under any state anti-takeover
statute or by amending the Second Offer to include a co-bidder), and Parent
proposes to do so, the Company will enter into an appropriate amendment to the
Merger Agreement or will take such further action, provided that any such
amendment will not change the form or amount of the Per Share Merger
Consideration or the Second Offer Price, modify certain provisions of the Merger
Agreement relating to employee benefits or otherwise adversely affect the
Company (in respect of the benefits to be received by its shareholders or
employees under the Merger Agreement) or delay or adversely affect the
transactions contemplated by the Merger Agreement and provided further that any
such amendment will be in accordance with all applicable law.
Shareholders' Meetings. To the extent required by applicable law, the
Company will, as soon as practicable following the consummation (or expiration)
of the Second Offer, file with the SEC preliminary
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proxy materials and use reasonable efforts to clear such materials and
thereafter duly call, give notice of, convene and hold on a date mutually agreed
to by Parent and the Company a meeting of its shareholders for the purpose of
obtaining the Company Merger Shareholder Approval. The Company will, through its
Board of Directors, recommend to its shareholders the approval and adoption of
the Second Offer and the matters to be considered at the Company Merger
Shareholders Meeting, except to the extent that the Board of Directors of the
Company will have withdrawn or modified its approval or recommendation of the
Second Offer or the matters to be considered at the Company Merger Shareholders
Meeting or terminated the Merger Agreement in accordance with the provisions
described under "No Solicitation" above. Subject to the terms of the Voting
Trust Agreement, Purchaser has agreed to cause all Shares acquired by it or its
wholly owned subsidiaries pursuant to the First Offer, the Second Offer or
otherwise to be voted in favor of approval and adoption of the matters to be
considered at the Company Merger Shareholders Meeting. Notwithstanding the
foregoing, in the event that Purchaser acquires at least 80% of the outstanding
shares of each class of the Company's capital stock, Parent and the Company
together will, subject to the conditions to the Merger, take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of the Company's
shareholders, in accordance with the Pennsylvania Law.
Tax-Free Reorganization. The provisions described under "Tax-Free
Reorganization" in Section 13 of the Offer to Purchase have been deleted.
Rights Agreements. The provisions relating to Parent's Rights Agreement
described in the second paragraph under "Rights Agreements" in Section 13 of the
Offer to Purchase have been deleted.
Certain Fees and Expenses. The provisions described in the second
paragraph under "Certain Fees and Expenses" in Section 13 of the Offer to
Purchase with respect to the Company's right to receive a termination fee under
certain circumstances have been deleted.
Reasonable Efforts; Regulatory Approvals. At Parent's request, the Company
will, and will cause each of its subsidiaries to, take all such actions as are
reasonably necessary or appropriate to (i) cooperate with Parent to prepare and
present to the STB or before any other federal, state or local body as soon as
practicable all filings and other presentations in connection with seeking any
approval, exemption or other authorization necessary to consummate the
transactions contemplated by the Merger Agreement and the Company Stock Option
Agreement, (ii) cooperate with Parent in the prosecution of such filings and the
making of such other presentations with diligence and take no action in
connection therewith without Parent's consent (including meetings with public
officials and making public statements), (iii) at Parent's request, diligently
join with Parent in opposing any objections to, appeals from or petitions to
reconsider or reopen any such approval by persons not party to the Merger
Agreement, (iv) take all actions reasonably requested by Parent to implement the
transactions that are the subject of the STB proceeding, including the entry
into appropriate labor implementing agreements to be effective following the
Control Date, (v) take all such further action as reasonably may be requested by
Parent to obtain the STB approval or any related approvals, including, subject
to the other provisions of the Merger Agreement, by providing access to the
Company's properties, financial records and traffic data, and (vi) take no
action inconsistent with the foregoing. The actions to be taken will include the
joinder by the Company, to the extent requested by Parent, in an application to
exercise control over the Company and its subsidiaries and such other matters as
Parent will include therein.
Compensation and Benefits; Stock Options. Immediately prior to the
Effective Time, each Company Employee Stock Option, whether or not then
exercisable, will be canceled and the holder thereof will be entitled to receive
at the Effective Time or as soon as practicable thereafter (or, if later, the
date six months and one day following the grant of such Company Employee Stock
Option) from the Company, an amount in cash equal to the product of (i) the
number of Common Shares previously subject to such Company Employee Stock Option
and (ii) the excess, if any, of the Per Share Merger Consideration over the
exercise price per Common Share previously subject to such option. At Parent's
request, the Company will request that the trustee of the ESOP enter into a
pledge agreement with respect to the unallocated stock held in the ESOP suspense
account and, thereafter, the Company will use its reasonable efforts to enter
into such a pledge agreement as promptly as practicable and to cause the ESOP
debt to be repaid.
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Executive Agreements. Following the Control Date, Mr. LeVan will no longer
be employed by the Company or the Surviving Corporation. Parent and the Company
have agreed that Parent will pay Mr. LeVan, on the Control Date, in lieu of any
stay bonus and severance or termination benefits, a lump sum equal to the
economic value of the LeVan Employment Agreement (as reasonably determined by
the parties in good faith). Company executives (other than Mr. LeVan) will be
paid the value of their "change of control" contracts in accordance with the
terms thereof if their employment with the Surviving Corporation is terminated
under certain specified circumstances after the consummation of the Second Offer
or if they remain employed by the Surviving Corporation until May 31, 1998.
Effects of Merger on Employee Benefit and Stock Plans. Parent has agreed
to cause the Surviving Corporation to honor all obligations under employment
agreements and employee benefit plans, programs and policies and arrangements of
the Company in accordance with the terms of the Merger Agreement and, after the
Control Date, to provide benefits to those employees of the Company transferred
to Parent or another entity on a basis no less favorable in the aggregate than
those provided to similarly situated employees of such entity. The Surviving
Corporation will provide severance or supplemental retirement benefits to
non-union employees (other than executive level employees) who are terminated
within three years following the Control Date equal to between six months and 24
months of salary (depending upon an employee's service). Medical coverage will
also be continued for these employees for specified periods. The Surviving
Corporation will also establish a stay bonus program that provides a lump sum
cash payment to non-union employees who remain employed until the Control Date
with additional payments made to those employees who remain employed for up to
six months thereafter.
Conditions to the Merger. The respective obligations of the Company, on
the one hand, and Parent and Purchaser, on the other, to effect the Merger are
subject to the satisfaction or waiver on or prior to the Closing Date (as
defined in the Merger Agreement) of the following conditions: (a) the Company
Shareholder Merger Approval, if required, shall have been obtained; and (b) no
judgment, order, decree, statute, law, ordinance, rule, regulation, temporary
restraining order, preliminary or permanent injunction or other order enacted,
entered, promulgated, enforced or issued by any court of competent jurisdiction
or other Governmental Entity or other legal restraint or prohibition
(collectively, "Restraints") preventing the consummation of the Merger may be in
effect, provided that the party asserting this condition shall have used
reasonable efforts to prevent the entry of any such Restraints and to appeal as
promptly as possible any such Restraints that may be entered, and there shall
not be any Restraint enacted, entered, enforced or promulgated that is
reasonably likely to result in a material adverse effect on the Company and
Parent on a combined basis.
The obligation of Parent to effect the Merger is further subject to
satisfaction or waiver of the following conditions: (a) the Company shall not
have breached or failed to observe or perform in any material respect any of its
covenants or agreements under the Merger Agreement to be performed by it at or
prior to the Closing Date (as defined in the Merger Agreement), and the
representations and warranties of the Company in the Merger Agreement shall be
true and accurate both when made and at and as of the Closing Date, as if made
at and as of such time (except to the extent expressly made as of an earlier
date, in which case as of such date), except where the failure of such
representations and warranties to be so true and correct (without giving effect
to any limitation as to "materiality" or "material adverse effect" set forth
therein), does not have, and is not likely to have, individually or in the
aggregate, a material adverse effect on the Company (provided, however, that
this condition shall be inapplicable in the event that, following consummation
of the Second Offer, Parent shall have caused the removal and replacement of a
majority of the members of the Company's Board of Directors); (b) at any time
after the date of the Merger Agreement there will not have occurred any material
adverse change relating to the Company; and (c) all actions by or in respect of
or filings with any Governmental Entity required to permit the consummation of
the Merger (other than approval of the STB) will have been obtained, excluding
any consent, approval, clearance or confirmation the failure to obtain which
would not have a material adverse effect on Parent, the Company or, after the
Effective Time, the Surviving Corporation.
The obligation of the Company to effect the Merger is further subject to
satisfaction or waiver of the condition that Parent shall not have breached or
failed to observe or perform in any material respect any of its covenants or
agreements under the Merger Agreement to be performed by it at or prior to the
Closing Date,
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and certain of the representations and warranties of Parent in the Merger
Agreement shall be true and accurate both when made and at and as of the Closing
Date, as if made at and as of such time (except to the extent expressly made as
of an earlier date, in which case as of such date), except where the failure of
such representations and warranties to be so true and correct (without giving
effect to any limitation as to "materiality" or "material adverse effect" set
forth therein), does not have, and is not likely to have, individually or in the
aggregate, a material adverse effect on Parent's ability to consummate the
transactions contemplated by the Merger Agreement. Neither Parent nor the
Company is permitted under the Merger Agreement to rely on the failure of any
condition described in this paragraph or the two immediately preceding
paragraphs, as the case may be, to be satisfied if such failure was caused by
such party's failure to use reasonable efforts to consummate the Merger and the
other transactions contemplated by the Merger Agreement, as required by and
subject to the provisions of the Merger Agreement described above under
"Reasonable Efforts; Regulatory Approval."
Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether before or after the Company Merger Shareholder
Approval: (a) by mutual written consent of Parent and the Company; or (b) by
either Parent or the Company: (i) if the Merger is not consummated by December
31, 1998, provided, however, that the right to terminate the Merger Agreement
pursuant to clause (i) will not be available to (x) the Company if Purchaser
consummates the Second Offer prior to such date or (y) any party whose failure
to perform any of its obligations under the Merger Agreement results in the
failure of the Merger to be consummated by such time; (ii) if any Governmental
Entity shall have issued a Restraint or taken any other action permanently
enjoining, restraining or otherwise prohibiting the consummation of the Merger
or any of the other transactions contemplated by the Merger Agreement and such
Restraint or other action will have become final and nonappealable, provided,
however, that the party seeking to terminate the Merger Agreement pursuant to
clause (ii) shall have used all reasonable efforts to prevent the entry of and
to remove such Restraint or other action; (c) by Parent, if the Company shall
have breached or failed to perform in any material respect any of its
representations, warranties, covenants or other agreements contained in the
Merger Agreement, which breach or failure to perform (A) would give rise to the
failure of the condition to the Merger relating to the performance of
obligations and the truth of representations and warranties, and (B) cannot be
or has not been cured within 30 days after the giving of written notice to the
Company of such breach (a "Company Material Breach") (provided that Parent is
not then in Parent Material Breach of any covenant or other agreement contained
in the Merger Agreement and provided that, if such breach is curable through the
exercise of the Company's best efforts, the Merger Agreement may not be
terminated pursuant to clause (c) for so long as the Company is so using its
best efforts to cure such breach); (d) by Parent, if (i) the Board of Directors
of the Company (or, if applicable, any committee thereof) shall have withdrawn
or modified in a manner adverse to Parent its approval or recommendation of the
Second Offer or the Merger or the matters to be considered at the Company Merger
Shareholders Meeting or failed to reconfirm its recommendation within 15
business days after a written request to do so, or approved or recommended any
Takeover Proposal in respect of the Company or (ii) the Board of Directors of
the Company or any committee thereof have resolved to take any of the foregoing
actions; (e) by Purchaser, if the Company or any of its officers, directors,
employees, representatives or agents take any of the actions that would be
proscribed by the provisions described under "No Solicitation" but for the
exceptions therein allowing certain actions to be taken pursuant to the proviso
in the first sentence of the first paragraph thereof or the second sentence of
the second paragraph thereof; (f) by the Company, prior to consummation of the
Second Offer, if Parent shall have breached or failed to perform in any material
respect certain of its representations and warranties or any of its covenants or
other agreements contained in the Merger Agreement, which breach or failure to
perform (A) would give rise to the failure of the condition relating to
performance of obligations and the truth of representations and warranties and
(B) cannot be or has not been cured within 30 days after the giving of written
notice to Purchaser of such breach (a "Parent Material Breach") (provided that
the Company is not then in Company Material Breach of any representation,
warranty, covenant or other agreement contained in the Merger Agreement and
provided that, if such breach is curable through the exercise of Parent's best
efforts, the Merger Agreement may not be terminated pursuant to clause (f) for
so long as Parent is so using its best efforts to cure such breach); (g) by the
Company in accordance with the provisions described under "No Solicitation,"
provided that it has complied with all provisions therein contained, including
the notice
19
<PAGE> 21
provisions therein, and that it complies with applicable requirements described
under "Certain Fees and Expenses"; and (h) following June 2, 1997, by the
Company, if Purchaser shall have failed to consummate the Second Offer unless
such failure is due to the non-occurrence of a condition to the Second Offer.
Amendments. Prior to the Effective Time, the Merger Agreement may not be
amended without the approval of a majority of Continuing Directors (as defined
in the Company Rights Agreement) present on the Company Board of Directors
(provided that at such time there are a minimum of two such Continuing Directors
then present on the Company Board of Directors).
OPTION AGREEMENTS
The Parent Stock Option Agreement has been canceled in connection with the
Third Amendment.
EMPLOYMENT AGREEMENTS
The LeVan Employment Agreement has been canceled in connection with the
Third Amendment. See also "Executive Agreements" above.
VOTING TRUST AGREEMENT
For a description of the Voting Trust Agreement as amended in connection
with the Third Amendment, see Section 9 of this Second Supplement.
8. Conditions of the Second Offer. The discussion set forth in Section 15
of the Offer to Purchase and the amendments thereto are hereby amended and
supplemented as follows:
The condition set forth in clause (i) of Section 15 of the Offer to
Purchase relating to the Pennsylvania Control Transaction Law is deleted and
replaced with the following:
(i) there shall not have been validly tendered and not withdrawn such a
number of Shares which, together with the Common Shares already owned by Parent
through the Voting Trust and with any Common Shares already owned by any third
party, its subsidiaries or affiliates that may, jointly together with Parent,
acquire an equity ownership interest in any vehicle that may acquire the
Company, constitute at least a majority of the Shares outstanding on a fully
diluted basis (other than upon exercise of the Company Stock Option)
The conditions set forth in subsections (2)(a) and (2)(b) of Section 15 of
the Offer to Purchase are deleted and replaced with the following:
(a) there shall be any action taken, or any statute, rule, regulation,
injunction, order or decree enacted, enforced, promulgated, issued or deemed
applicable to the transactions contemplated by the Second Offer, the Merger or
the Merger Agreement, by or before any court, government or governmental
authority or agency, domestic or foreign, that, directly or indirectly, results
in (x) making illegal or otherwise directly or indirectly restraining or
prohibiting the making of the Second Offer, the acceptance for payment of or
payment for some of or all the Shares by Parent or Purchaser or the consummation
by Parent or Purchaser of the Merger or the Second Offer or (y) except for the
requirements of the Voting Trust Agreement and other than any STB action which
does not result in the effects described in the foregoing (x), imposing material
limitations on the ability of Parent, Purchaser or any of their subsidiaries or
affiliates effectively to exercise full rights of ownership of the Common
Shares, including, without limitation, the right to vote any Common Shares
acquired or owned by Parent, Purchaser or any of their subsidiaries; or
9. Certain Legal Matters; Regulatory Approvals. The discussion set forth
in Section 16 of the Offer to Purchase, Section 6 of the First Supplement and
the amendments thereto are hereby amended and supplemented as follows:
STB Matters; Acquisition of Control. STB approval or exemption of the
Merger is not a condition to the Merger. However, the acquisition of control
over the Company by Parent and Purchaser requires STB approval or exemption. As
noted in Section 16 of the Offer to Purchase, on October 18, 1996, Parent and
the Company filed with the STB a Notice of Intent to File Railroad Control
Application, which indicated that the parties intended to file on or before
March 1, 1997 the STB Application seeking STB approval of the acquisition of
control by Parent and its affiliates of the Company and its affiliates. Under
the STB's
20
<PAGE> 22
regulations, the control application must be filed no sooner than three months
and no later than six months from the date of filing the Notice of Intent.
Parent and the Company have not filed the STB Application. In addition, also as
noted in Section 16 of the Offer to Purchase, on November 6, 1996, NSC filed a
Notice of Intent to File Railroad Control Application indicating that NSC
planned to file with the STB a control application with respect to the Company
on or before May 1, 1997. On February 21, 1997, NSC filed a preliminary
environmental report that is required under the STB's schedule to be filed at
least thirty days prior to the filing of the control application.
On January 30, 1997, the STB issued a procedural schedule in the
Parent/Company docket that requires that the STB issue its final decision within
365 days of the filing of the Parent/Company application. Also on January 30,
1997, the STB issued an identical procedural schedule in the NSC docket. The STB
indicated in both procedural schedules that the first application to be filed
seeking control of the Company would be deemed to be the primary application and
that any application from any other party would be considered a responsive or
inconsistent application to that primary application. The STB would thus
effectively consolidate the two applications.
Parent intends to commence negotiations with NSC promptly to effect a
consensual division of the Company on a basis generally consistent with the NSC
Proposal. See Section 5 of the Second Supplement. While Parent believes that it
will reach agreement with NSC, there can be no assurance that such a division
can be successfully negotiated.
If Parent successfully negotiates a division of the Company with NSC, it is
contemplated that Parent and NSC would file a joint application with the STB for
control of the Company and for such other matters involved in such division as
might be required to be approved by the STB. Parent and NSC may file a new
Notice of Intent to File Railroad Control Application or may request a waiver of
that requirement in light of the separate filing of such notices by Parent and
NSC. In addition, Parent and NSC may request that the STB establish an expedited
procedural schedule to consider Parent and NSC's joint application in light of
the fact that the STB will not be required to consider two competing
applications for control of the Company. The STB approval process described in
"STB Matters; Acquisition of Control," "Conditions" and "Judicial
Review -- Stay" in Section 16 of the Offer to Purchase, as amended by Section 6
of the First Supplement, would be applicable to any application to be filed by
Parent and NSC seeking STB approval of acquisition of control over, or a
division of, the Company.
STB Matters; The Voting Trust. The parties to the Voting Trust Agreement,
with the Company's consent, propose to amend the Voting Trust Agreement (the
"Amended Voting Trust Agreement") to reflect the Third Amendment. The amendments
would, among other things, delete certain provisions requiring the Company's
prior approval with respect to the amendment of provisions relating to the
voting and disposition of the Trust Stock and the provision naming the Company
as an express third party beneficiary of the Voting Trust Agreement following
consummation of the Second Offer.
Amendment of the Voting Trust Agreement requires approval by the STB or an
opinion of counsel that STB approval of such amendment is not required and that
the amendment is consistent with the STB's regulations regarding voting trusts.
Parent intends to obtain such an opinion of counsel and to seek informal
assurance from the STB that use of the Voting Trust pursuant to the Amended
Voting Trust Agreement would effectively insulate Parent and its affiliates from
a violation of the governing statute and STB policy that would result from an
unauthorized acquisition by Parent of a sufficient interest in the Company to
result in control of the Company. While Parent believes that the Amended Voting
Trust Agreement is consistent with the STB's regulations regarding voting
trusts, there can be no assurance that the STB will provide the requested
assurance.
It is possible that the U.S. Department of Justice or railroad competitors
of Parent and the Company, or others, may argue that Parent and Purchaser should
not be permitted to use the voting trust mechanism to acquire Shares and
effectuate the Merger prior to final STB approval of the acquisition of control
of the Company. Parent and Purchaser believe it is unlikely that such arguments
would prevail, but there can be no assurance in this regard.
21
<PAGE> 23
Under the terms of the Amended Voting Trust Agreement, the Voting Trustee
is required to vote the Trust Stock in favor of the Merger, in favor of any
proposal necessary or desirable to effectuate Parent and Purchaser's acquisition
of the Company pursuant to the Merger Agreement, and, if there shall be with
respect to the Board of Directors an "Election Contest" as defined in the proxy
rules of the SEC, in which one slate of nominees shall support the effectuation
of the Merger and another slate oppose it, to vote in favor of the slate
supporting the effectuation of the Merger. In addition, for so long as the
Merger Agreement is in effect, subject to certain exceptions, the Voting Trustee
shall vote against any other proposed merger, business combination or similar
transaction involving the Company, but not Parent or one of its affiliates. On
certain other matters, the Voting Trustee is to vote the Trust Stock in the same
proportion as all other Shares are voted with respect to such matters, except
that, subject to certain exceptions, from and after the effectiveness of the
Merger, the Voting Trustee is to vote the Trust Stock in accordance with the
instructions of a majority of the persons who are then directors of the Company
and who are currently the directors of the Company and/or nominees of the
current directors of the Company. If there are no directors of the Company
qualified to give such instructions or such instructions are not given, the
Voting Trustee is to vote the Trust Stock in its sole discretion, having due
regard for the holders of the trust certificates (representing ownership
interests in the Trust Stock) solely as investors in the stock of the Company
and without reference to such holders' interests in other railroads than the
subsidiaries of the Company.
The Voting Trustee has agreed to take all actions reasonably requested by
Parent with respect to any proposed sale or disposition of the Trust Stock by
Parent or Purchaser, including, without limitation, in connection with the
exercise of registration rights under the Merger Agreement. Upon (i) approval or
exemption by the STB of the acquisition of control of the Company by Parent or
its affiliates or (ii) if the law is amended, delivery to the Voting Trustee of
an opinion of independent legal counsel that no STB or other governmental
approval is required, the Voting Trustee shall either transfer the Trust Stock
to Parent, Purchaser or the holder(s) of trust certificates or, if shareholder
approval of the Merger has not previously been obtained, vote the Trust Stock in
favor of the Merger.
In the event that (i) STB approval is not obtained by December 31, 1998 or
(ii) there shall have been an STB denial, Parent has agreed to use its best
efforts to sell the Trust Stock within two years after such date or STB denial,
or such extension of that period as the STB shall approve. Disposition of the
Trust Stock pursuant to the Amended Voting Trust Agreement shall be subject to
any jurisdiction of the STB to oversee Parent's divestiture of the Trust Stock.
The Voting Trustee shall continue to perform its duties under the Voting Trust
Agreement and, should Parent be unsuccessful in its effort to sell the Trust
Stock during the two-year period, the Voting Trustee shall as soon as
practicable sell the Trust Stock for cash to eligible purchasers in such manner
and for such prices as the Voting Trustee in its discretion shall deem
reasonable after consultation with Parent. (An "eligible purchaser" thereunder
shall be a person or entity that is not affiliated with Parent and which has all
necessary regulatory authority, if any, to purchase the Trust Stock.) The
Amended Voting Trust Agreement further provides that Parent will cooperate with
the Voting Trustee in effecting such disposition and that the Voting Trustee
will act in accordance with any direction made by Parent as to any specific
terms or method of disposition, to the extent not inconsistent with the terms of
the Voting Trust Agreement and the requirements of the terms of any STB or court
order. The proceeds of any such sale will be distributed to Parent or, on a pro
rata basis, to the holder(s) of trust certificates as then known to the Voting
Trustee.
Pursuant to the Merger Agreement, subject to applicable law and the rules,
regulations and practices of the STB, the Amended Voting Trust Agreement may be
modified or amended, or other voting trusts may be employed with respect to
Shares, at any time by Parent in its sole discretion, except that the terms of
the Amended Voting Trust Agreement governing the voting of or transfer or
disposition of the Shares may not be amended prior to the consummation of the
Second Offer without the Company's consent.
Norfolk Southern Litigation and Shareholder Litigation. On January 2,
1997, CSX sold 85,000 shares of Conrail Common Stock (including the proxy to
vote such Shares at the Pennsylvania Special Meeting) at an average per Share
price of $98.983, in order to moot certain claims of the Plantiffs in the
purported shareholder derivative actions.
On January 2, 1997, Plaintiffs in the Pennsylvania Litigation filed a
Motion for Preliminary Injunction and a Motion for Partial Summary Judgment in
the District Court. In their Motion for Partial Summary
22
<PAGE> 24
Judgment, Plaintiffs requested an order stating that consummation of the First
Offer caused a "Control Transaction" with respect to the Company to occur under
the Pennsylvania Control Transaction Law which created joint and several
liability among the members of the Control Transaction Group to pay at least
$110 cash per Share to each demanding Company shareholder. In their Motion for
Preliminary Injunction, Plaintiffs requested that the District Court enjoin the
Defendants, and all persons acting in concert with them, from seeking to enforce
or requiring compliance with, the "No Negotiation Provision," as extended, and
to enjoin Defendants from convening the Pennsylvania Special Meeting until ten
business days after the Company shareholders receive notice of the District
Court's ruling on Plaintiffs' Motions for Preliminary Injunction and Partial
Summary Judgment. On January 8, 1997, Plaintiffs filed a Supplemental Motion for
Preliminary Injunction requesting that Defendants be enjoined from convening the
Pennsylvania Special Meeting until ten business days after the Company
shareholders receive notice of the District Court's final judgment on the
Pennsylvania Control Transaction Law issue.
On January 9, 1997, after a hearing, the District Court denied Plaintiffs'
Motion for Preliminary Injunction, Plaintiffs' Supplemental Motion for a
Preliminary Injunction and Plaintiffs' Motion for Partial Summary Judgment.
After the ruling, Plaintiffs asked the District Court for an injunction pending
appeal, which was denied. Plaintiffs later that day filed a notice of appeal
with the District Court.
On January 10, 1997, Plaintiffs filed a motion for expedited appeal or, in
the alternative, an injunction pending appeal with the Third Circuit. On the
same date, the Third Circuit set a briefing schedule to consider Plaintiffs'
motion for an injunction pending appeal but declined to expedite a final
decision on the appeal. On January 15, 1997, after hearing oral arguments, the
Third Circuit denied Plaintiffs' motion for an injunction pending appeal.
On February 6, 1997, NSC filed an amended complaint alleging substantially
the same claims referred to above in the description of NSC's prior complaints
and motions for preliminary injunction. As of the date hereof, Defendants have
not been required to file an answer with respect to the amended complaint.
On February 25, the Third Circuit heard argument on Plaintiffs' appeals
from the District Court's orders of November 19, 1996 and January 9, 1997,
denying relief to Plaintiffs. No decision has as yet been rendered by the Third
Circuit on these appeals.
On February 18, 1997, a separate purported shareholder class action was
filed against the Company and Mr. LeVan entitled Berkowitz v. Conrail Inc., C.A.
No. 97-1214. The Berkowitz action was filed in the United States District Court
for the Eastern District of Pennsylvania and alleges violations by the
Defendants of the disclosure provisions of the Exchange Act, principally that
Defendants failed to disclose alleged discussions and attempts to negotiate by
NSC prior to October 14, 1996. As relief, the complaint seeks damages in an
unspecified amount on behalf of persons who sold shares of Company stock during
the period October 15, 1996 through October 22, 1996. As of the date hereof,
Defendants have not filed an answer with respect to this complaint.
GREEN ACQUISITION CORP.
March 7, 1997
23
<PAGE> 25
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for the Shares
and any other required documents should be sent by each shareholder of the
Company or such shareholder's broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Second Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
By Hand: By Mail: By Overnight Carrier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Trust Window c/o Citicorp Data c/o Citicorp Data
111 Wall Street, 5th Floor Distribution, Inc. Distribution, Inc.
New York, New York 10043 P.O. Box 7072 404 Sette Drive
Paramus, New Jersey 07653 Paramus, New Jersey 07652
</TABLE>
Facsimile for Eligible Institutions: (201) 262-3240
To confirm fax only: (800) 422-2077
Any questions or requests for assistance or additional copies of the Offer
to Purchase, the First Supplement, this Second Supplement, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be directed to the
Information Agent or the Dealer Manager at their respective telephone numbers
and locations listed below. You may also contact your broker, dealer, commercial
bank or trust company or other nominee for assistance concerning the Second
Offer.
The Information Agent for the Second Offer is:
mackenzie logo
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL FREE (800) 322-2885
The Dealer Manager for the Second Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, New York 10019
Call Collect:
(212) 969-2700
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF
COMMON STOCK AND SERIES A ESOP
CONVERTIBLE JUNIOR PREFERRED STOCK
(including, in each case, the associated Common Stock Purchase Rights)
OF
CONRAIL INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED DECEMBER 6, 1996,
THE SUPPLEMENT THERETO
DATED DECEMBER 19, 1996,
AND THE SECOND SUPPLEMENT THERETO
DATED MARCH 7, 1997,
BY
GREEN ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CSX CORPORATION
THE SECOND OFFER HAS BEEN EXTENDED. THE SECOND OFFER, PRORATION PERIOD AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, APRIL
18, 1997, UNLESS THE SECOND OFFER IS FURTHER EXTENDED.
The Depositary for the Second Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
By Hand: By Mail: By Overnight Carrier:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Trust Window c/o Citicorp Data Distribution, c/o Citicorp Data Distribution,
111 Wall Street, 5th Floor Inc. Inc.
New York, New York 10043 P.O. Box 7072 404 Sette Drive
Paramus, New Jersey 07653 Paramus, New Jersey 07652
</TABLE>
Facsimile for Eligible Institutions: (201) 262-3240
To confirm fax only: (800) 422-2077
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OR TELEX TRANSMISSION
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST
SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by shareholders of Conrail
Inc. either if certificates ("Share Certificates") evidencing shares of common
stock, par value $1.00 per share (the "Common Shares"), or shares of Series A
ESOP Convertible Junior Preferred Stock, without par value (the "ESOP Preferred
Shares" and, together with the Common Shares, the "Shares"), are to be forwarded
herewith or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company (each, a "Book-Entry Transfer Facility" and
collectively, the "Book-Entry Transfer Facilities") pursuant to the book-entry
transfer procedures described in "Procedures for Tendering Shares" of the Offer
to Purchase (as defined below). Delivery of documents to a Book-Entry Transfer
Facility in accordance with such Book-Entry Transfer Facility's procedures does
not constitute delivery to the Depositary.
This revised Letter of Transmittal circulated with the Second Supplement,
the Letter of Transmittal circulated with the First Supplement (as defined
below) or the Letter of Transmittal circulated with the Offer to Purchase is to
be completed by shareholders either if certificates evidencing Shares (as
defined below) are to be forwarded herewith or if delivery of Shares is to be
made by book-entry transfer to the Depositary's account at The Depository Trust
Company or the Philadelphia Depository Trust Company (each a "Book-Entry
Transfer Facility" and collectively, the "Book-Entry Transfer Facilities")
pursuant to the book-entry transfer procedures described in Section 3 of the
Offer to Purchase (as defined below). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITORY.
<PAGE> 2
Holders of Shares will be required to tender one Right (as defined below)
for each Share tendered to effect a valid tender of such Share. Until the
Distribution Date (as defined in the Offer to Purchase) occurs, the Rights are
represented by and transferred with the Shares. Accordingly, if the Distribution
Date does not occur prior to the Expiration Date (as defined in the Second
Supplement), a tender of Shares will constitute a tender of the associated
Rights. If a Distribution Date has occurred, certificates representing a number
of Rights equal to the number of Shares being tendered must be delivered to the
Depositary in order for such Shares to be validly tendered. If a Distribution
Date has occurred, a tender of Shares without Rights constitutes an agreement by
the tendering shareholder to deliver certificates representing a number of
Rights equal to the number of Shares tendered pursuant to the Second Offer (as
defined below) to the Depositary within three New York Stock Exchange, Inc.
trading days after the date such certificates are distributed. Purchaser (as
defined below) reserves the right to require that it receive such certificates
prior to accepting Shares for payment. Payment for Shares tendered and purchased
pursuant to the Second Offer will be made only after timely receipt by the
Depositary of, among other things, such certificates, if such certificates have
been distributed to holders of Shares. Purchaser will not pay any additional
consideration for the Rights tendered pursuant to the Second Offer.
Shareholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other documents required hereby
to the Depositary prior to the Expiration Date or who cannot complete the
procedures for delivery by book-entry transfer on a timely basis and who wish to
tender their Shares must do so pursuant to the guaranteed delivery procedure
described in "Procedures for Tendering Shares" of the Offer to Purchase. See
Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Check Box of Applicable Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number ____________ Transaction Code Number
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):
Window Ticket No. (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer
Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number ____________ Transaction Code Number
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK)
<S> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SHARE CERTIFICATE(S) TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
<CAPTION>
TOTAL NUMBER OF SHARES NUMBER OF SHARES
CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) TENDERED**
<S> <C> <C>
TOTAL SHARES
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares being delivered to the
Depositary are being tendered. See Instruction 4.
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
<PAGE> 4
Ladies and Gentlemen:
The undersigned hereby tenders to Green Acquisition Corp., a Pennsylvania
corporation ("Purchaser") and a wholly owned subsidiary of CSX Corporation, a
Virginia corporation, the above-described shares of common stock, par value
$1.00 per share (the "Common Shares"), or shares of Series A ESOP Convertible
Junior Preferred Stock, without par value (the "ESOP Preferred Shares" and,
together with the Common Shares, the "Shares"), of Conrail Inc., a Pennsylvania
corporation (the "Company"), including, in each case, the associated common
stock purchase rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of July 19, 1989, between the Company and First Chicago Trust Company
of New York, as Rights Agent (as amended, the "Rights Agreement"), pursuant to
Purchaser's offer to purchase all Shares, including, in each case, the
associated Rights, at a price of $115 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated December 6, 1996 (the "Offer to Purchase"), as amended and supplemented by
the Supplement thereto, dated December 19, 1996 (the "First Supplement"), and
the Second Supplement thereto, dated March 7, 1997 (the "Second Supplement"),
receipt of which is hereby acknowledged, and in the related Letters of
Transmittal (which, as amended from time to time, together constitute the
"Second Offer"). All references herein to Common Shares, ESOP Preferred Shares
or Shares includes the associated Rights.
The undersigned understands that Purchaser reserves the right to transfer
or assign, in whole at any time, or in part from time to time, to one or more of
its affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Second Offer, but any such transfer or assignment will not
relieve Purchaser of its obligations under the Second Offer and will in no way
prejudice the rights of tendering shareholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Second Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Second Offer (including,
if the Second Offer is further extended or amended, the terms and conditions of
any such extension or amendment), the undersigned hereby sells, assigns and
transfers to, or upon the order of, Purchaser all right, title and interest in
and to all the Shares that are being tendered hereby (and any and all non-cash
dividends, distributions, rights, other Shares or other securities issued or
issuable in respect of such Shares or declared, paid or distributed in respect
of such Shares on or after December 6, 1996 (collectively, "Distributions")),
and irrevocably appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares and all
Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
certificates for such Shares (individually, a "Share Certificate") and all
Distributions, or transfer ownership of such Shares and all Distributions on the
account books maintained by a Book-Entry Transfer Facility, together, in either
case, with all accompanying evidence of transfer and authenticity to, or upon
the order of Purchaser, (ii) present such Shares and all Distributions for
transfer on the books of the Company and (iii) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares and all
Distributions, all in accordance with the terms of the Second Offer.
If, on or after December 6, 1996, the Company should declare or pay any
cash or stock dividend, other than regular quarterly cash dividends, or make any
distribution with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer to the name of Purchaser
or its nominee or transferee on the Company's stock transfer records of the
Shares accepted for payment pursuant to the Second Offer, then, subject to the
provisions of Section 14 of the Offer to Purchase, (i) the purchase price per
Share payable by Purchaser pursuant to the Second Offer will be reduced by the
amount of any such cash dividend or cash distribution and (ii) any such non-cash
dividend, distribution or right to be received by the tendering shareholder will
be received and held by such tendering shareholder for the account of Purchaser
and will be required to be promptly remitted and transferred by each such
tendering shareholder to the Depositary for the account of Purchaser,
accompanied by appropriate documentation of transfer. Pending such remittance,
Purchaser will be entitled to all rights and privileges as owner of any such
non-cash dividend, distribution or right and may withhold the entire purchase
price or deduct from the purchase price the amount of value thereof, as
determined by Purchaser in its sole discretion.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints John W. Snow, Mark G. Aron and Alan A. Rudnick as proxies of the
undersigned, each with full power of substitution, to the full extent of the
undersigned's rights with respect to the Shares tendered by the undersigned and
accepted for payment by Purchaser (and any and all Distributions). All such
proxies shall be considered coupled with an interest in the tendered Shares.
This appointment will be effective if, when, and only to the extent that,
Purchaser accepts such Shares for payment pursuant to the Second Offer. Upon
such acceptance for payment, all prior proxies given by the undersigned with
respect to such Shares, Distributions and other securities will, without further
action, be revoked, and no subsequent proxies may be given. The individuals
named above as proxies will, with respect to the Shares, Distributions and other
securities for which the appointment is effective, be empowered (subject to the
terms of the Voting Trust Agreement (as defined in the Offer to Purchase) or the
Amended Voting Trust Agreement (as defined in the Second Supplement), if
applicable, so long as it shall be in effect with respect to the Shares) to
exercise all voting and other rights of the undersigned as they in their sole
discretion may deem proper at any annual, special, adjourned or postponed
meeting of the Company's shareholders, by written consent or otherwise, and
Purchaser reserves the right to require that, in order for Shares, Distributions
or other securities to be deemed validly tendered, immediately upon Purchaser's
acceptance for payment of such Share, Purchaser must be able to exercise full
voting rights with respect to such Shares.
<PAGE> 5
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, that the undersigned own(s) the Shares
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that such
tender of Shares complies with Rule 14e-4 under the Exchange Act, and that when
such Shares are accepted for payment by Purchaser, Purchaser will acquire good,
marketable and unencumbered title thereto and to all Distributions, free and
clear of all liens, restrictions, charges and encumbrances, and that none of
such Shares and Distributions will be subject to any adverse claim. The
undersigned, upon request, shall execute and deliver all additional documents
deemed by the Depositary or Purchaser to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of Purchaser all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price, the amount or value of such
Distribution as determined by Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, the First Supplement or the Second
Supplement, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in "Procedures for Tendering Shares" of the Offer to
Purchase and in the Instructions hereto will constitute the undersigned's
acceptance of the terms and conditions of the Second Offer. Purchaser's
acceptance for payment of Shares tendered pursuant to the Second Offer will
constitute a binding agreement between the undersigned and Purchaser upon the
terms and subject to the conditions of the Second Offer. The undersigned
recognizes that under certain circumstances set forth in the Offer to Purchase,
the First Supplement or the Second Supplement, Purchaser may not be required to
accept for payment any of the Shares tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions," please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. Unless otherwise indicated herein in the box entitled
"Special Payment Instructions," please credit any Shares tendered hereby and
delivered by book-entry transfer, but which are not purchased, by crediting the
account at the Book-Entry Transfer Facility designated above. The undersigned
recognizes that Purchaser has no obligation, pursuant to the Special Payment
Instructions, to transfer any Shares from the name of the registered holder(s)
thereof if Purchaser does not accept for payment any of the Shares tendered
hereby.
<PAGE> 6
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7 OF
THIS LETTER OF TRANSMITTAL)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
issued in the name of someone other than the undersigned, or if Shares delivered
by book-entry transfer which are not purchased are to be returned by credit to
an account maintained at a Book-Entry Transfer Facility other than that
designated above.
Issue check and/or certificates to:
Name
(PLEASE PRINT)
Address
- ------------------------------------------------------
(ZIP CODE)
- ------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
[ ] Credit unpurchased Shares delivered by book-entry transfer to the Book-Entry
Transfer Facility account set forth below:
Check appropriate box:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
- ------------------------------------------------------
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7
OF THIS LETTER OF TRANSMITTAL)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
sent to someone other than the undersigned, or to the undersigned at an address
other than that shown above.
Mail check and/or certificates to:
Name
(PLEASE PRINT)
Address
- ------------------------------------------------------
(ZIP CODE)
<PAGE> 7
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Date , 1997
(Must be signed by registered holder(s) exactly as name(s) appear(s) on common
or preferred stock certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, please provide the following
information. See Instruction 5 of this Letter of Transmittal.)
Name(s)
------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title)
-----------------------------------------------------------
Address
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
-------------------------------------------------
Tax Identification or Social Security No.
--------------------------------------
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5 OF THIS LETTER OF TRANSMITTAL)
Authorized Signature
-----------------------------------------------------------
Name
----------------------------------------------------------------------------
(PLEASE PRINT)
Title
---------------------------------------------------------------------------
Name of Firm
-------------------------------------------------------------------
Address
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
-------------------------------------------------
Date , 1997
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is a
bank, broker, dealer, credit union, savings association, or other entity that is
a member in good standing of the Securities Transfer Agent's Medallion Program
(each, an "Eligible Institution"). No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the reverse
hereof, or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5. If a Share Certificate is registered in the name
of a person other than the signer of this Letter of Transmittal, or if payment
is to be made, or a Share Certificate not accepted for payment or not tendered
is to be returned, to a person other than the registered holder(s), then the
Share Certificate must be endorsed or accompanied by appropriate stock powers,
in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on the Share Certificate, with the signature(s) on such Share
Certificate or stock powers guaranteed as described above. See Instruction 5.
2. Delivery of Letter of Transmittal and Share Certificates. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if Shares are to be delivered by book-entry transfer pursuant to the
procedures set forth in "Procedures for Tendering Shares" of the Offer to
Purchase. Share Certificates evidencing all tendered Shares, or confirmation of
a book-entry transfer of such Shares, if such procedure is available, into the
Depositary's account at one of the Book-Entry Transfer Facilities pursuant to
the procedures set forth in "Procedures for Tendering Shares" of the Offer to
Purchase, together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees (or,
in the case of a book-entry transfer, an Agent's Message, as defined below) and
any other documents required by this Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth on the reverse hereof prior to
the Expiration Date (as defined in "Amended Terms of the Second Offer;
Expiration Date" of the Second Supplement). If Share Certificates are forwarded
to the Depositary in multiple deliveries, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery. Stockholders whose
Share Certificates are not immediately available, who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis may tender their Shares pursuant to the guaranteed
delivery procedure described in "Procedures for Tendering Shares" of the Offer
to Purchase. Pursuant to such procedure: (i) such tender must be made by or
through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by Purchaser
herewith, must be received by the Depositary prior to the Expiration Date; and
(iii) in the case of a guarantee of Shares, the Share Certificates, in proper
form for transfer, or a confirmation of a book-entry transfer of such Shares, if
such procedure is available, into the Depositary's account at one of the
Book-Entry Transfer Facilities, together with a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three New York Stock
Exchange, Inc. trading days after the date of execution of the Notice of
Guaranteed Delivery, all as described in "Procedures for Tendering Shares" of
the Offer to Purchase. The term "Agent's Message" means a message, transmitted
by a Book-Entry Transfer Facility to, and received by the Depositary and forming
a part of a Book-Entry Confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares, that such participant has
received and agrees to be bound by the terms of this Letter of Transmittal and
that the Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering stockholders waive any right to receive
any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. Partial Tenders. (Not applicable to stockholders who tender by
book-entry transfer.) If fewer than all the Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares which are to be tendered in the box entitled "Number of
Shares Tendered." In such cases, new Share Certificate(s) evidencing the
remainder of the Shares that were evidenced by the Share Certificates delivered
to the Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions," as soon as practicable after the expiration or termination of the
Second Offer. All Shares evidenced by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
<PAGE> 9
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal. If any of the Shares tendered
hereby are registered in the names of different holders, it will be necessary to
complete, sign and submit as many separate Letters of Transmittal as there are
different registrations of such certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate(s) or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Second Offer. If,
however, payment of the purchase price of any Shares purchased is to be made to,
or Share Certificate(s) evidencing Shares not tendered or not purchased are to
be issued in the name of, a person other than the registered holder(s), the
amount of any stock transfer taxes (whether imposed on the registered holder(s),
such other person or otherwise) payable on account of the transfer to such other
person will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to Purchaser of the payment of such taxes, or exemption
therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATE(S) EVIDENCING THE
SHARES TENDERED HEREBY.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal, but at an address other than that shown in the box
entitled "Description of Shares Tendered," the appropriate boxes on this Letter
of Transmittal must be completed. Shares tendered hereby by book-entry transfer
may request that Shares not purchased be credited to such account maintained at
a Book-Entry Transfer Facility as such stockholder may designate in the box
entitled "Special Payment Instructions" on the reverse hereof. If no such
instructions are given, all such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated on the
reverse hereof as the account from which such Shares were delivered.
8. Requests for Assistance or Additional Copies. Requests for assistance
may be directed to the Information Agent or Dealer Manager at their respective
addresses or telephone numbers set forth below. Additional copies of the Offer
to Purchase, the First Supplement, the Second Supplement, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
obtained from the Information Agent or the Dealer Manager or from brokers,
dealers, commercial banks or trust companies.
9. Substitute Form W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such shareholder is not subject to backup withholding of federal income tax. If
a tendering shareholder has been notified by the Internal Revenue Service that
such shareholder is subject to backup withholding, such shareholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
shareholder has since been notified by the Internal Revenue Service that such
shareholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering shareholder to
31% federal income tax withholding on the payment of the purchase price of all
Shares purchased from such shareholder. If the tendering shareholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such shareholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the purchase price to such stockholder until a TIN is provided to
the Depositary.
10. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the shareholder should
promptly notify the Depositary. The shareholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed.
<PAGE> 10
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, WITH ANY REQUIRED SIGNATURE GUARANTEES, OR AN
AGENT'S MESSAGE (TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY
EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR
TO THE EXPIRATION DATE (AS DEFINED IN THE SECOND SUPPLEMENT).
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is such shareholder's social security
number. If the Depositary is not provided with the correct TIN, the shareholder
may be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such shareholder with respect to Shares and
Rights purchased pursuant to the Second Offer may be subject to backup
withholding of 31%.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such statements
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies with respect to a shareholder, the Depositary
is required to withhold 31% of any payments made to such shareholder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Second Offer, the shareholder
is required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that
(i) such shareholder has not been notified by the Internal Revenue Service that
such shareholder is subject to backup withholding as a result of a failure to
report all interest or dividends or (ii) the Internal Revenue Service has
notified such shareholder that such shareholder is no longer subject to backup
withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the shareholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% of all payments of the purchase price to such
stockholder until a TIN is provided to the Depositary.
<PAGE> 11
- --------------------------------------------------------------------------------
PAYER'S NAME: CITIBANK, N.A., AS DEPOSITARY
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
PART I -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR
BOX AT RIGHT AND CERTIFY BY SIGNING AND / /
DATING BELOW.
Employer Identification Number
(If awaiting TIN write "Applied For")
--------------------------------------------------------------------------------------------
PART II -- For Payees Exempt From Backup Withholding, see the enclosed Guidelines and complete
as instructed therein. CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or a Taxpayer
Identification Number has not been issued to me and either (a) I have mailed or delivered
an application to receive a Taxpayer Identification Number to the appropriate Internal
Revenue Service ("IRS") or Social Security Administration office or (b) I intend to mail or
deliver an application in the near future. I understand that if I do not provide a Taxpayer
Identification Number within sixty (60) days, 31% of all reportable payments made to me
thereafter will be withheld until I provide a number), and
(2) I am not subject to backup withholding either because I have not been notified by the IRS
that I am subject to backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to backup withholding.
--------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the
IRS that you are subject to backup withholding because of underreporting interest or dividends
on your tax return. However, if after being notified by the IRS that you were subject to backup
withholding you received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out item (2).
(Also see instructions in the enclosed Guidelines.)
-------------------------------------------- DATE ________________, 1997
SIGNATURE
</TABLE>
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE SECOND OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
Questions and requests for assistance or additional copies
of the Offer to Purchase, the First Supplement, the Second
Supplement, the Letter of Transmittal and
other tender offer materials may be directed to the
Information Agent or the Dealer Manager as set forth below:
The Information Agent for the Second Offer is:
mackenzie logo
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL FREE (800) 322-2885
The Dealer Manager for the Second Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, New York 10019
Call Collect:
(212) 969-2700
SUBSTITUTE
FORM W-9
DEPARTMENT OF
THE TREASURY
INTERNAL
REVENUE SERVICE
PAYER'S REQUEST
FOR TAXPAYER
IDENTIFICATION
NUMBER (TIN)
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF SHARES OF
COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(including, in each case, the associated Common Stock Purchase Rights)
OF
CONRAIL INC.
TO
GREEN ACQUISITION CORP.
a wholly owned subsidiary of
CSX CORPORATION
(Not to be Used for Signature Guarantees)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Second Offer (as defined below) if (i)
certificates ("Share Certificates") evidencing shares of common stock, par value
$1.00 per share (the "Common Shares"), or shares of Series A ESOP Convertible
Junior Preferred Stock, without par value (the "ESOP Preferred Shares" and,
together with the Common Shares, the "Shares"), of Conrail Inc., a Pennsylvania
corporation (the "Company"), including the associated common stock purchase
rights (the "Rights") issued pursuant to the Rights Agreement, dated July 19,
1989, between the Company and First Chicago Trust Company of New York, as Rights
Agent, are not immediately available, (ii) time will not permit all required
documents to reach Citibank, N.A., as Depositary (the "Depositary"), prior to
the Expiration Date (as defined in "Amended Terms of the Second Offer;
Expiration Date" of the Second Supplement (as defined below)) or (iii) the
procedures for book-entry transfer cannot be completed on a timely basis. All
references herein to the Common Shares, ESOP Preferred Shares or Shares include
the associated Rights. This Notice of Guaranteed Delivery may be delivered by
hand or transmitted by telegram, facsimile transmission or mail to the
Depositary. See "Procedures for Tendering Shares" of the Offer to Purchase.
The Depositary for the Second Offer is:
CITIBANK, N.A.
<TABLE>
<CAPTION>
By Hand: By Mail: By Overnight Carrier:
<S> <C> <C>
Citibank, N.A. Citibank, N.A. Citibank, N.A.
Corporate Trust Window c/o Citicorp Data Distribution, c/o Citicorp Data Distribution,
111 Wall Street, 5th Floor Inc. Inc.
New York, New York 10043 P.O. Box 7072 404 Sette Drive
Paramus, New Jersey 07653 Paramus, New Jersey 07652
Facsimile for Eligible Institutions: (201) 262-3240
To confirm fax only: (800) 422-2077
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Green Acquisition Corp., a Pennsylvania
corporation and a wholly owned subsidiary of CSX Corporation, a Virginia
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated December 6, 1996 (the "Offer to Purchase"), as amended and
supplemented by the Supplement thereto, dated December 19, 1996, and the Second
Supplement thereto, dated March 7, 1997 ("Second Supplement"), and the related
Letters of Transmittal (which, as amended from time to time, collectively
constitute the "Second Offer"), receipt of each of which is hereby acknowledged,
the number of Shares specified below pursuant to the guaranteed delivery
procedures described in "Procedures for Tendering Shares" of the Offer to
Purchase.
<TABLE>
<S> <C>
Number of Shares: Name(s) of Record Holder(s):
- ------------------------------------------------ ------------------------------------------------
Certificate Nos. (if available):
- ------------------------------------------------ ------------------------------------------------
PLEASE PRINT
Check ONE box if Shares will be tendered by
book-entry transfer: Address(es):
----------------------------------
[ ] The Depository Trust Company
------------------------------------------------
[ ] Philadelphia Depository Trust Company ZIP CODE
Area Code and Tel. No.:
Account Number:
------------------------ ------------------------------------------------
Dated: , 1997
---
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States, hereby (a) represents that the tender of Shares effected hereby complies
with Rule 14e-4 of the Securities Exchange Act of 1934, as amended, and (b)
guarantees delivery to the Depositary, at one of its addresses set forth above,
of certificates evidencing the Shares tendered hereby in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's accounts at The Depository Trust Company or the Philadelphia
Depository Trust Company, in each case with delivery of a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees, or an Agent's Message (as defined in "Acceptance for
Payment and Payment for Shares" of the Offer to Purchase), and any other
documents required by the Letter of Transmittal, (a) in the case of Shares,
within three New York Stock Exchange, Inc. trading days after the date of
execution of this Notice of Guaranteed Delivery, or (b) in the case of Rights, a
period ending the latter of (i) three New York Stock Exchange, Inc. trading days
after the date of execution of this Notice of Guaranteed Delivery or (ii) three
business days after the date Right Certificates are distributed to stockholders.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in financial loss to such Eligible Institution.
<TABLE>
<S> <C>
- ------------------------------------------------ ------------------------------------------------
NAME OF FIRM AUTHORIZED SIGNATURE
- ------------------------------------------------ ------------------------------------------------
ADDRESS TITLE
Name:
- ------------------------------------------------ ------------------------------------------
ZIP CODE PLEASE PRINT
Area Code and Tel. No.: Date: , 1997
------------------------- --
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
[CSX CORPORATION LETTERHEAD]
CONTACTS:
CSX Corporation Kekst and Company
Thomas E. Hoppin Richard Wolff
(804) 782-1450 (212) 593-2655
FOR IMMEDIATE RELEASE
CSX AND CONRAIL SUCCESSFULLY AMEND MERGER AGREEMENT
SHAREHOLDERS TO RECEIVE $115 PER SHARE IN CASH
FOR REMAINING STOCK BY JUNE 2, 1997;
FAR-REACHING RETENTION PACKAGE FOR SUPERVISORY
AND MANAGEMENT EMPLOYEES INCLUDED
RICHMOND, VA., MARCH 7, 1997 - CSX Corp. (NYSE: CSX) today announced it
has successfully negotiated an amendment to its merger agreement with Conrail
Inc. (NYSE: CRR), providing for an increase in the price to be paid for the
remaining outstanding shares of Conrail to $115 per share, all in cash.
Under the amended agreement, CSX is amending its outstanding tender
offer to increase the price and number of shares sought. The tender offer,
which is not subject to any financing condition and is no longer subject to a
Conrail shareholder opt-out vote of certain Pennsylvania statutory provisions,
is subject to a minimum condition. The tender offer will be followed by a
merger in which all Conrail shares not purchased in the tender offer will be
converted into $115 per share in cash. The new expiration date for the tender
offer is 5:00 p.m., New York City time, on April 18, 1997. However, under the
revised merger agreement, CSX in its discretion may extend the tender offer for
any reason through June 2, 1997.
The amended agreement also provides a far-reaching retention and
severance package for Conrail's supervisory and management employees and allows
CSX to enter into negotiations with Norfolk Southern (NYSE: NSC) on a division
of Conrail.
John W. Snow, chairman, president and chief executive officer of CSX,
said, "When we initiated our merger with Conrail, we recognized that some
concessions would have to be made to Norfolk Southern to ensure that our
transaction would result in
(more)
<PAGE> 2
-2-
competitive rail systems in the East. Calls from shippers, influential public
officials, and other railroads for a pro-competitive division of Conrail only
heightened the need for a negotiated settlement.
"We regret that we were not able to proceed with our merger as
originally intended, but the amendment we have agreed to today will protect the
interests of the shareholders, customers and employees of both Conrail and CSX.
It will, I believe, result in two strong, competitive railroads in the East.
Just as important, it will help to ensure that the regulatory reforms of the
1980s will be preserved for many generations to come," Snow said.
"We will now focus on negotiating an agreement, including a joint
purchase of the Conrail shares, with Norfolk Southern, a determined and fair
competitor," Snow said. "We will make every effort to see that the result is a
roughly equal division of Conrail and the emergence of two exceptional rail
systems in the East. In achieving that, I am confident that together we will
produce the winning, pro-competitive application to the Surface Transportation
Board (STB) to which we at CSX always have been committed.
"The people of Conrail, the board of directors, the employees, and most
certainly senior management," Snow added, "deserve much credit for what they
have accomplished. From the dark days of the collapse of the Northeastern
railroads now more than 20 years ago, they have created a strong, successful
railroad that is widely acclaimed for the tremendous strides it has made in
becoming an industry leader.
"Now, with ourselves and with Norfolk Southern, they are about to begin
writing a new chapter of railroading in the region. I have no doubt that
together we will build an even greater railroad system in the East and two even
stronger railroad companies. We welcome the Conrail employees who will join the
CSX family," he said.
Prior to the amendment of the merger agreement, CSX had offered $110
per share in cash for 40 percent of the outstanding shares of Conrail, and a
tax-free exchange at a ratio of 1.85619 CSX common shares and an additional $16
per share in CSX convertible preferred stock for the remaining 60 percent of
Conrail's outstanding shares. As of the close of business on March 6, 1997,
564,577 Conrail shares had been tendered and not withdrawn in the CSX tender
offer.
CSX, headquartered in Richmond, Va., is an international transportation
company offering a variety of rail, container-shipping, intermodal, trucking,
barge and contract logistics management services. CSX's internet address is
http://www.csx.com.
###
<PAGE> 1
Exhibit (a)(35)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Second Offer is made solely by the Offer to Purchase,
dated December 6, 1996, the Supplement thereto, dated December 19, 1996, the
Second Supplement thereto, dated March 7, 1997, and the related Letters of
Transmittal and is being made to all holders of Shares. The Second Offer is not
being made to (nor will tenders be accepted from or on behalf of) holders of
Shares in any jurisdiction in which the making of the Second Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. In those jurisdictions where securities, blue sky or other laws
require the Second Offer to be made by a licensed broker or dealer, the Second
Offer shall be deemed to be made on behalf of Green Acquisition Corp. by
Wasserstein Perella & Co., Inc. or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
GREEN ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CSX CORPORATION
HAS AMENDED ITS OFFER TO PURCHASE FOR CASH
AND IS NOW OFFERING TO PURCHASE
ALL SHARES OF COMMON STOCK
AND
SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF CONRAIL INC.
AT
$115 NET PER SHARE
Green Acquisition Corp. ("Purchaser"), a Pennsylvania corporation and a
wholly owned subsidiary of CSX Corporation, a Virginian corporation
("Parent"), hereby offers to purchase all shares of (i) common stock, par value
$1.00 per share (the "Common Shares"), and (ii) Series A ESOP Convertible
Junior Preferred Stock, without par value (the "ESOP Preferred Shares" and,
together with the Common Shares, the "Shares"), of Conrail Inc., a Pennsylvania
corporation (the "Company"), including, in each case, the associated Common
Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of July 19, 1989, between the Company and First Chicago Trust Company
of New York, as Rights Agent (as amended, the "Rights Agreement"), at a price
of $115 per Share, net to the seller in cash, without interest thereon (the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated December 6, 1996 (the "Offer to Purchase"), the
Supplement thereto, dated December 19, 1996 (the "First Supplement"), the
Second Supplement thereto, dated March 7, 1997 (the "Second Supplement"), and
in the related Letters of Transmittal (which, as amended from time to time,
collectively constitute the "Second Offer"). Unless the context otherwise
requires, all references to Common Shares, ESOP Preferred Shares or Shares
shall include the associated Rights, and all references to the Rights shall
include the benefits that may enure to holders of the Rights pursuant to the
Rights Agreement, including the right to receive any payment due upon
redemption of the Rights.
------------------------------------------------------------------------
THE SECOND OFFER HAS BEEN EXTENDED. THE SECOND OFFER, PRORATION PERIOD
AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
FRIDAY, APRIL 18, 1997, UNLESS THE SECOND OFFER IS FURTHER EXTENDED.
------------------------------------------------------------------------
THE SECOND OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, PRIOR TO THE
EXPIRATION OF THE SECOND OFFER THERE SHALL HAVE BEEN VALIDLY TENDERED AND NOT
WITHDRAWN SUCH NUMBER OF SHARES WHICH, TOGETHER WITH THE COMMON SHARES ALREADY
OWNED BY PARENT THROUGH THE VOTING TRUST AND BY CERTAIN OTHER PARTIES,
CONSTITUTES AT LEAST A MAJORITY OF OUTSTANDING SHARES ON A FULLY DILUTED BASIS
(AS DEFINED IN THE OFFER TO PURCHASE). THE SECOND OFFER IS NO LONGER
CONDITIONED UPON THE PENNSYLVANIA CONTROL TRANSACTION LAW BEING INAPPLICABLE
TO THE COMPANY. UNDER THE MERGER AGREEMENT, PURCHASER HAS THE RIGHT IN ITS
DISCRETION TO EXTEND THE SECOND OFFER, FROM TIME TO TIME, THROUGH 5:00 P.M.,
NEW YORK CITY TIME, ON JUNE 2, 1997, WHETHER OR NOT THE CONDITIONS TO THE
SECOND OFFER HAVE BEEN SATISFIED OR WAIVED. THE SECOND OFFER IS NOT CONDITIONED
ON OBTAINING FINANCING. SEE SECTION 15 OF THE OFFER TO PURCHASE AND SECTIONS 4,
7 AND 8 OF THE SECOND SUPPLEMENT.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE SECOND OFFER (AS
AMENDED) AND THE MERGER (AS AMENDED), DETERMINED THAT THE MERGER AGREEMENT (AS
AMENDED) AND THE TRANSACTIONS CONTEMPLATED THEREBY (INCLUDING THE SECOND OFFER
AND THE MERGER) ARE IN THE BEST INTERESTS OF THE COMPANY AND RECOMMENDS THAT
SHAREHOLDERS OF THE COMPANY ACCEPT THE SECOND OFFER AND TENDER THEIR SHARES
PURSUANT TO THE SECOND OFFER.
The Second Offer is being made pursuant to the Agreement and Plan of
Merger, dated as of October 14, 1996 (as amended by the First Amendment (as
defined in the Offer to Purchase), the Second Amendment (as defined in the
First Supplement) and the Third Amendment (as defined in the Third Supplement),
the "Merger Agreement"). The Merger Agreement provides, among other things,
that, following the completion (or expiration) of the Second Offer and the
satisfaction or waiver of certain conditions, Purchaser will be merged with and
into the Company (the "Merger"), with the Company as the surviving corporation.
In the Merger, each outstanding Share (other than Shares held in the treasury
of the Company or owned by Parent, Purchaser or any of their respective
subsidiaries or affiliates, or any third party, its subsidiaries or affiliates
that may, jointly together with Parent, acquire an equity ownership interest in
any vehicle that may acquire the Company) will be converted into the right to
receive $115 in cash, without interest. See Section 13 of the Offer to
Purchase, Section 4 of the First Supplement and Section 7 of the Second
Supplement.
Purchaser expressly reserves the right, in its sole judgment and subject to
the terms of the Merger Agreement, at any time and from time to time and
regardless of whether any of the events set forth in Section 15 of the Offer to
Purchase, as supplemented by the First and Second Supplements, shall have
occurred or shall have been determined by Purchaser to have occurred, (i) to
extend the period of time during which the Second Offer is open and thereby
delay acceptance for payment of, and the payment for, any Shares, by giving
oral or written notice of such extension to the Depositary (as defined in the
Offer to Purchase) and (ii) to amend the Second Offer in any respect by giving
oral or written notice of such amendment to the Depositary. Any such extension
or amendment will be followed as promptly as practicable by a public
announcement thereof, such announcement in the case of an extension, to be
issued not later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date (as defined in the Offer to
Purchase). During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Second Offer, subject to the right of a
tendering shareholder to withdraw such shareholder's Shares.
For purposes of the Second Offer, Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not properly
withdrawn if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such Shares for payment pursuant to the
Second Offer. In all cases, upon the terms and subject to the conditions of the
Second Offer, payment for Shares purchased pursuant to the Second Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for the purpose of receiving payment from Purchaser and
transmitting payment to validly tendering shareholders. Under no circumstances
will interest on the purchase price for Shares be paid by Purchaser by reason
of any delay in making such payment. In all cases, payment for Shares purchased
pursuant to the Second Offer will be made only after timely receipt by the
Depositary of (a) certificates for such Shares ("Certificates") or a book-entry
confirmation of the book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company or the Philadelphia Depository Trust
Company (collectively, the "Book-Entry Transfer Facilities"), pursuant to the
procedures set forth in Section 3 of the Offer to Purchase, (b) the Letters of
Transmittal (or facsimile thereof) properly completed and duly executed with
any required signature guarantees, or an Agent's Message (as defined in the
Offer to Purchase) in connection with a book-entry transfer, and (c) any other
documents required by the Letters of Transmittal.
If, for any reason whatsoever, acceptance for payment of any Shares
tendered pursuant to the Second Offer is delayed, or if Purchaser is unable to
accept for payment or pay for Shares tendered pursuant to the Second Offer,
then, without prejudice to Purchaser's rights set forth in the Offer to
Purchase, the Depositary may, nevertheless, on behalf of Purchaser, retain
tendered Shares and such Shares may not be withdrawn except to the extent that
the tendering shareholder is entitled to and duly exercises withdrawal rights
as described in Section 4 of the Offer to Purchase. Any such delay will be
followed by an extension of the Second Offer to the extent required by law.
If any tendered Shares are not accepted for payment for any reason
pursuant to the terms and conditions of the Second Offer, or if Share
Certificates are submitted evidencing more Shares than are tendered, Share
Certificates evidencing unpurchased Shares will be returned, without expense to
the tendering shareholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility
pursuant to the procedures set forth in Section 3 of the Offer to Purchase,
such Shares will be credited to an account maintained at such Book-Entry
Transfer Facility), as promptly as practicable following the expiration or
termination of the Second Offer.
Except as otherwise provided in Section 4 of the Offer to Purchase,
tenders of Shares made pursuant to the Second Offer are irrevocable. Shares
tendered pursuant to the Second Offer may be withdrawn at any time prior to
5:00 p.m., New York City time, on Friday, April 18, 1997 (or if Purchaser shall
have extended the period of time for which the Second Offer is open, at the
latest time and date at which the Second Offer, as so extended by Purchaser,
shall expire). In order for a withdrawal to be effective, a written,
telegraphic or facsimile transmission notice of withdrawal must be timely
received by the Depositary at one of its addresses set forth on the back cover
of the Offer to Purchase. Any notice of withdrawal must specify the name of the
person who tendered the Shares to be withdrawn, the number of Shares to be
withdrawn, and, if Certificates for Shares have been tendered, the name of the
registered holder of the Shares as set forth in the tendered Certificate, if
different from that of the person who tendered such Shares. If Certificates for
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then prior to the physical release of such Certificates, the
serial numbers shown on such Certificates evidencing the Shares to be
withdrawn must be submitted to the Depositary and the signature on the notice
of withdrawal must be guaranteed by a firm which is a bank, broker, dealer,
credit union, savings association or other entity that is a member in good
standing of the Securities Transfer Agent's Medallion Program (an "Eligible
Institution"), unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry transfer set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at
the appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures. Withdrawal of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will be deemed not to be validly tendered for purposes
of the Second Offer. Withdrawn Shares may, however, be retendered by repeating
one of the procedures set forth in Section 3 of the Offer to Purchase at any
time before the Expiration Date. Purchaser, in its sole judgment, will
determine all questions as to the form and validity (including time of receipt)
of notices of withdrawal, and such determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Purchaser with the Company's shareholder list
and security position listings for the purpose of disseminating the Second
Offer to holders of Shares. The Second Supplement, the related Letters of
Transmittal and other relevant materials will be mailed to record holders of
Shares and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the shareholder list, or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE, THE FIRST SUPPLEMENT AND THE SECOND SUPPLEMENT
AND THE RELATED LETTERS OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH
SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE SECOND
OFFER.
Questions and requests for assistance or for additional copies of the
Offer to Purchase, the First Supplement, the Second Supplement, the Letters of
Transmittal or other tender offer materials may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
as set forth below, and copies will be furnished promptly at Purchaser's
expense. No fees or commissions will be paid to brokers, dealers or other
persons (other than the Information Agent and the Dealer Manager) for
soliciting tenders of Shares pursuant to the Second Offer.
The Information Agent for the Second Offer is:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Second Offer is:
[WASSERSTEIN PERELLA & CO., INC. LOGO]
31 West 52nd Street
New York, New York 10019
(212) 969-2700 (Call Collect)
March 10, 1997
<PAGE> 1
THIRD AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CONRAIL INC.,
A PENNSYLVANIA CORPORATION,
GREEN ACQUISITION CORP.,
A PENNSYLVANIA CORPORATION,
AND
CSX CORPORATION,
A VIRGINIA CORPORATION,
DATED AS OF MARCH 7, 1997.
<PAGE> 2
THIRD AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of
March 7, 1997 (this "Third Amendment"), by and among CONRAIL INC., a
Pennsylvania corporation ("Green"), GREEN ACQUISITION CORP., a Pennsylvania
corporation and a wholly owned subsidiary of White ("Tender Sub"), and CSX
CORPORATION, a Virginia corporation ("White").
WITNESSETH:
WHEREAS, Green, Tender Sub and White have entered into an
Agreement and Plan of Merger, dated as of October 14, 1996 (the "October 14
Merger Agreement");
WHEREAS, Green, Tender Sub and White have entered into a First
Amendment to the October 14 Merger Agreement, dated as of November 5, 1996 (the
"First Amendment"), pursuant to which White, Green and Tender Sub have made
certain amendments to the October 14 Merger Agreement;
WHEREAS, pursuant to the October 14 Merger Agreement as
amended by the First Amendment, Tender Sub has commenced an offer (the "Second
Offer") to purchase up to an aggregate of 18,344,845 shares of Green Common
Stock and Green ESOP Preferred Stock;
WHEREAS, Green, Tender Sub and White have entered into a
Second Amendment to the October 14 Merger Agreement, dated as of December 18,
1996 (the "Second Amendment", and the October 14 Merger Agreement, as amended by
the First Amendment and the Second Amendment, the "Merger Agreement"), pursuant
to which White, Green and Tender Sub have made certain further amendments to the
October 14 Merger Agreement;
WHEREAS, in consideration of Green's willingness to enter into
this Third Amendment, White and Tender Sub are willing to make the amendments to
the Merger Agreement set forth herein, including increasing the price to be paid
pursuant to the Second Offer to $115 in cash and increasing the number of shares
sought to be purchased pursuant to such offer to all shares of Green Common
Stock and Green ESOP Preferred Stock and increasing the price paid in the Merger
to $115 in cash for each remaining share of Green Common Stock and Green ESOP
Preferred Stock;
WHEREAS, in consideration of White's and Tender Sub's
willingness to enter into this Third Amendment, Green is willing to make the
amendments to the Merger Agreement set forth herein;
-1-
<PAGE> 3
WHEREAS, the Board of Directors of Green has approved, and
deems it advisable and in the best interests of Green to enter into, this Third
Amendment;
WHEREAS, the respective Boards of Directors of Tender Sub and
White have approved, and deem it advisable and in the best interests of their
respective shareholders to enter into, this Third Amendment; and
WHEREAS, except as amended by this Third Amendment, the Merger
Agreement shall remain in full force and effect;
WHEREAS, capitalized terms used herein and not defined herein
shall have the respective meanings given in the Merger Agreement;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Third Amendment, the
parties, intending to be legally bound, agree as follows:
ARTICLE I
SECTION 1. The following is hereby added to the end of Section
1.1 of the Merger Agreement:
(g) As promptly as practicable after the public announcement
of the execution of the Third Amendment, dated as of March 7, 1997, to
this Agreement (the "Third Amendment"), Tender Sub shall amend the
Second Offer (as so amended, the "Amended Second Offer") so that the
number of shares sought therein is increased to all shares tendered
thereunder and so that the price offered therein is $115 per share of
Green Common Stock and Green ESOP Preferred Stock, net to the seller in
cash (such price, or such higher price per share as may be paid in the
Amended Second Offer, being referred to herein as the "Amended Second
Offer Price"), subject to the conditions set forth in Section 15 of the
offer to purchase, dated December 6, 1996, as previously amended (such
offer to purchase, as so amended, together with all amendments and
supplements thereto, the "Offer to Purchase"), relating to the Second
Offer, other than (i) the condition set forth in clause (1) thereof
relating to the Pennsylvania Control Transaction Law, which shall be
deleted and replaced in its entirety with clause (1) as
-2-
<PAGE> 4
set forth on Exhibit A hereto, and (ii) the conditions set forth in
subsections (2)(a) and (2)(b) thereof, which shall be deleted and
replaced with subsection (a) as set forth on Exhibit A hereto. Subject
to the second sentence below, Tender Sub shall, on the terms and
subject to the prior satisfaction or waiver of the conditions of the
Amended Second Offer, accept for payment and pay for shares of Green
Common Stock and Green ESOP Preferred Stock tendered as soon as
practicable after the later of the satisfaction of the conditions to
the Amended Second Offer and the expiration of the Amended Second
Offer; provided that immediately upon the acceptance for payment of and
payment for shares of Green ESOP Preferred Stock pursuant to the
Amended Second Offer, such shares shall be automatically converted on a
one-for-one basis into shares of Green Common Stock in accordance with
the terms of the Green Articles. The Amended Second Offer shall be made
by means of a second supplement (the "Second Supplement") to the Offer
to Purchase containing the terms set forth herein. Without the written
consent of Green, Tender Sub shall not decrease the Amended Second
Offer Price, decrease the aggregate number of shares of Green Common
Stock and Green ESOP Preferred Stock sought, change the form of
consideration to be paid pursuant to the Amended Second Offer, modify
any of the conditions to the Amended Second Offer, impose conditions to
the Amended Second Offer in addition to those described above, except
as provided in the last two provisos below, extend the Amended Second
Offer, or amend any other term or condition of the Amended Second Offer
in any manner which is adverse to the holders of shares of Green Common
Stock, it being agreed that a waiver by Tender Sub of any condition in
its discretion shall not be deemed to be adverse to the holders of
Green Common Stock; provided, however, that Tender Sub shall not waive
the condition (the "Minimum Condition") to be set forth in clause (1)
of the Offer to Purchase as described above without the consent of
Green; provided further that, if on any scheduled expiration date of
the Amended Second Offer (as it may be extended in accordance with the
terms hereof), all conditions to the Amended Second Offer shall not
have been satisfied or waived, the Amended Second Offer may be extended
from time to time without the consent of Green for such period of time
as is reasonably expected to be necessary to satisfy the unsatisfied
conditions. White and Tender Sub agree that, in the event that all
conditions to
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the Amended Second Offer at any scheduled expiration date thereof are
satisfied other than the Minimum Condition, Tender Sub shall, from time
to time, extend the Amended Second Offer until the earlier of December
31, 1997 and such time as such condition is satisfied or waived in
accordance herewith; provided, however, that, notwithstanding anything
to the contrary contained in this Agreement, without the consent of
Green (and whether or not any or all conditions to the Amended Second
Offer shall have been satisfied or waived), Tender Sub in its
discretion may, from time to time, extend the Amended Second Offer
through 5:00 p.m., New York City Time, on June 2, 1997. In addition,
the Amended Second Offer Price may be increased (other than solely in
order to extend the Amended Second Offer) and the Amended Second Offer
may be extended to the extent required by law in connection with such
increase, in each case without the consent of Green. It is agreed that
the conditions to the Amended Second Offer are for the benefit of White
and Tender Sub and may be asserted by White or Tender Sub regardless of
the circumstances giving rise to any such condition (including any
action or inaction by White or Tender Sub not inconsistent with the
terms hereof) or may be waived by White or Tender Sub, in whole or in
part at any time and from time to time, in its sole discretion.
(h) White and Tender Sub shall file with the SEC as soon as
practicable on or after the date the Amended Second Offer is made, an
amendment to the Tender Offer Statement on Schedule 14D-1 relating to
the Second Offer with respect to the Amended Second Offer (together
with all amendments and supplements thereto and including the exhibits
thereto, the "Amended Second Schedule 14D-1"), which shall include, as
exhibits, the Second Supplement and a form of letter of transmittal and
any summary advertisement (such Tender Offer Statement on Schedule
14D-1 as so amended and such documents, collectively, together with any
amendments and supplements thereto, the "Amended Second Offer
Documents"). Each of White and Tender Sub shall take all steps
necessary to cause the Amended Second Offer Documents to be filed with
the SEC and to be disseminated to Green's shareholders, in each case as
and to the extent required by applicable federal securities laws. Each
of White and Tender Sub, on the one hand, and Green, on the other hand,
shall promptly correct any information provided by it for use in the
Amended Second Offer
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<PAGE> 6
Documents if and to the extent that it shall have become false and
misleading in any material respect, and White and Tender Sub shall take
all steps necessary to cause the Amended Second Offer Documents as so
corrected to be filed with the SEC and to be disseminated to Green's
shareholders, in each case as and to the extent required by applicable
federal securities laws. Green and its counsel shall be given the
opportunity to review the Amended Second Offer Documents before they
are filed with the SEC. In addition, White and Tender Sub shall provide
Green and its counsel in writing any comments White, Tender Sub or
their counsel may receive from time to time from the SEC or its staff
with respect to the Amended Second Offer Documents promptly after the
receipt of such comments. White and Tender Sub shall cooperate with
Green in responding to any comments received from the SEC with respect
to the Amended Second Offer and amending the Amended Second Offer in
response to any such comments.
SECTION 2. Section 1.1(d) of the Merger Agreement is hereby
deleted in its entirety and replaced with the following: "(d) [Intentionally
deleted]".
SECTION 3. The following is hereby added to the end of Section
1.2 of the Merger Agreement:
(j) Green hereby approves of and consents to the Amended
Second Offer and represents that its Board of Directors, at a meeting
duly called and held, has by the vote of all directors present (i)
determined that this Agreement, as amended by the Third Amendment, and
the transactions contemplated hereby (including the Amended Second
Offer and the Merger) are in the best interests of Green, (ii) approved
this Agreement, as amended by the Third Amendment, and the transactions
contemplated hereby (including the Amended Second Offer and the
Merger), such determination and approval constituting approval thereof
by the Board of Directors for all purposes of the Pennsylvania Law, and
(iii) resolved to recommend that the shareholders of Green accept the
Amended Second Offer and tender their shares of Green Common Stock or
Green ESOP Preferred Stock thereunder to Tender Sub and that all
shareholders of Green approve and adopt this Agreement, as amended by
the Third Amendment, and the transactions contemplated hereby;
provided, however, that prior to the purchase by Tender Sub of shares
of Green Common Stock and Green
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<PAGE> 7
ESOP Preferred Stock pursuant to the Amended Second Offer, Green may
modify, withdraw or change such recommendation, but only to the extent
that Green complies with Section 4.2 hereof. Green hereby consents to
the inclusion in the Amended Second Offer Documents of the
recommendations of Green's Board of Directors described in this
Section.
(k) Concurrently with the making of the Amended Second Offer,
Green shall file with the SEC an amendment to the
Solicitation/Recommendation Statement on Schedule 14D-9, dated December
6, 1996, as previously amended, relating to the Second Offer, with
respect to the Amended Second Offer (such Solicitation/Recommendation
Statement on Schedule 14D-9 as so amended, together with all amendments
and supplements thereto and including the exhibits thereto, the
"Amended Second Schedule 14D-9"), which amendment shall contain the
recommendation referred to in clauses (i), (ii) and (iii) of Section
1.2(j) hereof; provided, however, that Green may modify, withdraw or
change such recommendation, but only to the extent that Green complies
with Section 4.2 hereof. Green shall take all steps necessary to cause
the Amended Second Schedule 14D-9 to be filed with the SEC and to be
disseminated to Green's shareholders, in each case as and to the extent
required by applicable federal securities laws. Each of Green, on the
one hand, and White and Tender Sub, on the other hand, shall promptly
correct any information provided by it for use in the Amended Second
Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect, and Green shall take all steps
necessary to cause the Amended Second Schedule 14D-9 as so corrected to
be filed with the SEC and to be disseminated to Green's shareholders,
in each case as and to the extent required by applicable federal
securities laws. White and its counsel shall be given the opportunity
to review the Amended Second Schedule 14D-9 before it is filed with the
SEC. In addition, Green shall provide White, Tender Sub and their
counsel in writing any comments Green or its counsel may receive from
time to time from the SEC or its staff with respect to the Amended
Second Schedule 14D-9 promptly after the receipt of such comments.
Green shall cooperate with White and Tender Sub in responding to any
comments received from the SEC with respect to the Amended Second
Schedule 14D-9 and amending the Amended Second Schedule 14D-9 in
response to any such comments.
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<PAGE> 8
(l) Green has received the written opinions of each of the
Green Advisors, each dated as of the date of the Third Amendment, to
the effect that, as of such date, the consideration to be received by
Green shareholders (other than Tender Sub and its affiliates) pursuant
to this Agreement, is fair from a financial point of view to such
holders (the "Fourth Green Fairness Opinions"). Green has
delivered to White a copy of the Fourth Green Fairness Opinions.
SECTION 4. Section 1.3, Section 1.4, Section 1.5, Section 1.6,
Section 1.7, Section 1.8 and Section 1.9 of the Merger Agreement are hereby
deleted and replaced in their entirety with the following:
SECTION 1.3. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the
Pennsylvania Business Corporation Law of 1988, as amended (the
"Pennsylvania Law"), Tender Sub shall be merged with and into Green at
the Effective Time (the "Merger"). Green shall be the surviving
corporation (the "Surviving Corporation") of the Merger and shall
succeed to and assume all rights and obligations of Tender Sub in
accordance with the Pennsylvania Law.
SECTION 1.4. Closing. The closing of the Merger (the
"Closing") shall take place at 10:00 a.m. on a date to be specified by
the parties (the "Closing Date"), which (subject to satisfaction or
waiver of the conditions set forth in Article VI) shall be no later
than the second business day after satisfaction or waiver of the
conditions set forth in Section 6.1, unless another time or date is
agreed to by the parties hereto. The Closing shall be held at such
location in the City of New York as is agreed to by the parties hereto.
SECTION 1.5. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the
parties shall file articles of merger or other appropriate documents
(such documents, collectively, the "Articles of Merger") executed in
accordance with the relevant provisions of the Pennsylvania Law and
shall make all other filings or recordings as may be required under the
Pennsylvania Law. The Merger shall become effective at such time as the
Articles of Merger are duly filed with the Pennsylvania Department of
State, or at such subsequent date or time as White, Tender Sub
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<PAGE> 9
and Green shall agree and shall be specified in the Articles of Merger
(the time the Merger becomes effective being hereinafter referred to as
the "Effective Time").
SECTION 1.6. Effects of the Merger. The Merger shall have the
effects set forth in Chapter 19 of the Pennsylvania Law.
SECTION 1.7. Articles of Incorporation and By-laws; Directors
and Officers.
(a) The articles of incorporation and by-laws of Tender Sub,
as in effect immediately prior to the Effective Time, shall be the
articles of incorporation and by-laws, respectively, of the Surviving
Corporation until thereafter changed or amended as provided therein or
by applicable law, provided that the articles of incorporation of the
Surviving Corporation shall provide that the Surviving Corporation
shall be named "Conrail Inc."
(b) The directors and officers of Green at the Effective Time
shall, from and after the Effective Time, be the initial directors and
officers, respectively, of the Surviving Corporation, until their
successors shall have been duly elected or appointed or qualified or
until their earlier death, resignation or removal in accordance with
the Surviving Corporation's articles of incorporation and by-laws.
SECTION 1.8. Certain Matters. The arrangements set forth in
Attachment A to the Green Disclosure Schedule delivered in connection
with the Third Amendment or on Exhibit B hereto shall be applicable
hereto as if set forth herein.
SECTION 1.9. Voting Trust. The parties agree that,
simultaneously with the purchase by White, Tender Sub or their
affiliates of shares of Green Common Stock and Green ESOP Preferred
Stock pursuant to the Amended Second Offer, the Green Stock Option
Agreement or otherwise, such shares of Green Common Stock (including
pursuant to the automatic conversion of Green ESOP Preferred Stock)
shall be deposited in a voting trust (the "Voting Trust") in accordance
with the terms and conditions of a voting trust agreement substantially
in the form attached hereto as Exhibit E (the "Voting Trust
Agreement"). Subject to applicable law and to the rules, regulations
and practices of the Surface Transportation Board, the Voting
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<PAGE> 10
Trust may be modified or amended, and other voting trusts may be
employed with respect to Green Common Stock, at any time by White in
its sole discretion (provided that the terms of the Voting Trust
governing the voting of or transfer or disposition of Green Common
Stock shall not be amended prior to the consummation of the Amended
Second Offer without Green's consent).
SECTION 5. Section 2.1 of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
SECTION 2.1 Conversion of Shares.
(a) Each share of Common Stock, par value $1.00 per share, of
Tender Sub issued and outstanding immediately prior to the Effective
Time shall, at the Effective Time, by virtue of the Merger and without
any action on the part of any person, become one duly authorized,
validly issued, fully paid and nonassessable share of common stock of
the Surviving Corporation.
(b) Each share of Green Common Stock, including those issuable
upon conversion of the shares of Green ESOP Preferred Stock (which
conversion shall occur automatically pursuant to the terms of the Green
Articles prior to the Effective Time so that, immediately prior to the
Effective Time, no shares of Green ESOP Preferred Stock shall be issued
and outstanding), issued and outstanding immediately prior to the
Effective Time (other than shares of Green Common Stock to be canceled
pursuant to Section 2.1(c) hereof) shall, at the Effective Time, by
virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive $115 in cash (the "Per
Share Merger Consideration").
(c) All shares of Green Common Stock that are owned by Green
as treasury stock and any shares of Green Common Stock owned by White,
Green or any of their respective subsidiaries or affiliates (or any
third party, its subsidiaries or affiliates that may, jointly together
with White, acquire an equity ownership interest in any vehicle that
may acquire Green) shall, at the Effective Time, be canceled and
retired and shall cease to exist, and no consideration shall be
delivered or owing in exchange therefor.
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(d) On and after the Effective Time, holders of certificates
("Certificates") which immediately prior to the Effective Time
represented issued and outstanding shares of Green Common Stock shall
cease to have any rights as shareholders of Green, except the right to
receive the consideration set forth in this Article II with respect to
each share held by them.
SECTION 6. Section 2.2, Section 2.3 and Section 2.5 of the
Merger Agreement are hereby deleted and replaced in their entirety with the
following: "[Intentionally deleted]".
SECTION 7. Section 2.4 of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
SECTION 2.4. Payment Procedures. Promptly after the Effective
Time, White shall cause the person authorized to act as paying agent
under this Agreement (the "Exchange Agent") to mail to each holder of
record of a Certificate (i) a letter of transmittal (the "Letter of
Transmittal") (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to the Exchange Agent and shall be in such
customary form and have such other provisions as White may reasonably
specify) and (ii) instructions to effect the surrender of the
Certificates in exchange for the Per Share Merger Consideration. As
promptly as practicable following the Effective Time, White shall
deliver, in trust (the "Exchange Trust"), to the Exchange Agent, for
the benefit of Green shareholders, an amount in cash equal to the Per
Share Merger Consideration multiplied by the number of shares of Green
Common Stock to be converted into the right to receive the Per Share
Merger Consideration. Upon surrender of a Certificate for cancellation
to the Exchange Agent together with a Letter of Transmittal, duly
executed, and such other customary documents as may be required
pursuant to such instructions, the holder of such Certificate shall be
paid by check in exchange therefor the amount of cash which such holder
has the right to receive in accordance with Section 2.1(b), and the
Certificate so surrendered shall forthwith be canceled. In no event
shall the holder of any such surrendered Certificates be entitled to
receive interest on any cash to be received in the Merger. If such
check is to be issued in the name of a person other than the person in
whose name the Certificates surrendered for exchange therefor
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<PAGE> 12
are registered, it shall be a condition of payment that the person
requesting such payment shall pay to the Exchange Agent any transfer or
other taxes required by reason of issuance of such check to a person
other than the registered holder of the Certificates surrendered, or
shall establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not applicable. In the event of a transfer of
ownership of shares of Green Common Stock or Green ESOP Preferred Stock
which is not registered in the transfer records of Green, cash may be
issued and paid in accordance with this Article II to a transferee if
the Certificate evidencing such shares of Green Common Stock or Green
ESOP Preferred Stock is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer and by
evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section, each Certificate shall be
deemed at any time after the Effective Time to evidence only the right
to receive upon such surrender the Per Share Merger Consideration
applicable to the shares of stock evidenced by such Certificate.
SECTION 8. The words "and/or certificates representing White
Common Stock and White Merger Securities" are hereby deleted from Section 2.6 of
the Merger Agreement.
SECTION 9. Section 2.8 of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
SECTION 2.8. No Further Ownership Rights. All cash paid upon
the surrender for exchange of Certificates in accordance with the terms
of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares theretofore
represented by such Certificates, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may
have been declared or made by Green on such shares of Green Common
Stock or Green ESOP Preferred Stock which remain unpaid at the
Effective Time.
SECTION 10. The words "the Per Share Cash Consideration or
shares of White Common Stock and White Merger Securities, any cash, dividends or
distributions with respect to White Common Stock and White Merger Securities"
are hereby deleted from the final sentence of Section 2.9 of the Merger
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<PAGE> 13
Agreement and replaced with the words "any consideration due hereunder".
SECTION 11. The words "shares of White Common Stock or White
Merger Securities (or dividends or distributions with respect thereto) or" are
hereby deleted from the first sentence of Section 2.10 of the Merger Agreement.
The words ", shares of White Common Stock or White Merger Securities or any cash
dividends or distributions" are hereby deleted from the parenthetical in the
second sentence of Section 2.10 of the Merger Agreement. The words "any such Per
Share Cash Consideration or shares of White Common Stock or White Merger
Securities or cash, dividends or distributions" are hereby deleted from the
clause following the parenthetical in the second sentence of Section 2.10 of the
Merger Agreement and replaced with the words "any Per Share Merger
Consideration".
SECTION 12. The words "or shares of White Common Stock and
White Merger Securities and, if applicable, any cash, dividends and
distributions on shares of White Common Stock and White Merger Securities" are
hereby deleted in their entirety from Section 2.11 of the Merger Agreement.
SECTION 13. Section 3.1(d)(3) and Section 3.1(d)(4) of the
Merger Agreement are hereby deleted and replaced in their entirety with the
following:
(3) the filing with the SEC of (A) the Green Proxy Statement (as
defined in Section 5.1), if required, (B) the Schedule 14D-9 and (C)
such reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange
Act, as may be required in connection with this Agreement, the Green
Stock Option Agreement and the transactions contemplated by this
Agreement and the Green Stock Option Agreement; (4) the filing of the
Articles of Merger as provided in Section 1.3 and appropriate documents
with the relevant authorities of other states in which Green is
qualified to do business and such filings with Governmental Entities to
satisfy the applicable requirements of state securities or "blue sky"
laws;
SECTION 14. Section 3.1(f) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
(f) Information Supplied. None of the Schedule 14D-9 or the
Green Proxy Statement, if required, nor any of the information supplied
or to be supplied by Green for inclusion or incorporation by reference
in
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<PAGE> 14
the Offer Documents or the Green Proxy Statement will, at the date such
documents are first published, sent or delivered to shareholders and,
in the case of the Green Proxy Statement, at the time of the Green
Merger Shareholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein,
in light of the circumstances under which they are made, not
misleading. The Schedule 14D-9 and the Green Proxy Statement, if
required, will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, no representation or
warranty is made by Green with respect to statements made or
incorporated by reference therein based on information supplied by
White for inclusion or incorporation by reference in any of the
foregoing documents.
SECTION 15. The words "and except for the transactions
provided for or permitted by this Agreement" are hereby added to the second
sentence of Section 3.1(i) of the Merger Agreement immediately after the words
"Except for rail labor agreements negotiated in the ordinary course" and to
Section 3.1(j)(iii) of the Merger Agreement immediately after the words
"accelerated as a result of the transactions contemplated hereunder."
SECTION 16. The words "and White Merger Securities" are hereby
deleted in their entirety from Section 3.2(d) of the Merger Agreement.
SECTION 17. Section 3.2(d)(3) and Section 3.2(d)(4) of the
Merger Agreement are hereby deleted and replaced in their entirety with the
following:
(3) the filing with the SEC of (A) the Schedule 14D-1 and (B) such
reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act,
as may be required in connection with this Agreement, the Green Stock
Option Agreement and the transactions contemplated by this Agreement
and the Green Stock Option Agreement; (4) the filing of the Articles of
Merger as provided in Section 1.3 and appropriate documents with the
relevant authorities of other states in
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<PAGE> 15
which Green is qualified to do business and such filings with
Governmental Entities to satisfy the applicable requirements of state
securities or "blue sky" laws;
SECTION 18. Section 3.2(f) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
(f) Information Supplied. None of the Offer Documents nor any
of the information to be supplied by White for inclusion or
incorporation by reference in the Green Proxy Statement, if required,
will, at the date such documents are first published, sent or delivered
to shareholders and, in the case of the Green Proxy Statement, at the
time of the Green Merger Shareholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading. The Schedule 14D-1 and the Green Proxy Statement,
if required, will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, no representation or
warranty is made by White with respect to statements made or
incorporated by reference therein based on information supplied by
Green for inclusion or incorporation by reference in any of the
foregoing documents.
SECTION 19. Section 3.1(k) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
(k) Voting Requirements. The affirmative vote of the holders
of a majority of the votes cast by all outstanding shares of Green
Common Stock and Green ESOP Preferred Stock, voting as a single class,
at the Green Merger Shareholders Meeting (the "Green Merger Shareholder
Approval") to adopt and approve this Agreement and the transactions
contemplated hereby, are the only votes of the holders of any class or
series of Green capital stock or indebtedness necessary to approve and
adopt this Agreement, the Green Stock Option Agreement and the
transactions contemplated by this Agreement (including the Amended
Second Offer and the Merger) and the Green Stock Option Agreement.
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<PAGE> 16
SECTION 20. The words "Subject to receipt of the Green
Pennsylvania Shareholder Approval, in the case of Subchapter E (Control
Transactions) of Chapter 25 of the Pennsylvania Law, and assuming that White,
together with its affiliates, does not have voting power with respect to 20% or
more of the votes that all Green shareholders would be entitled to cast in an
election of directors prior to the date of filing of the Amended Green Articles"
in Section 3.1(l) of the Merger Agreement are hereby deleted and replaced in
their entirety by the words "Other than with respect to Subchapter E (Control
Transactions) of Chapter 25 of the Pennsylvania Law".
SECTION 21. Section 3.1(o) of the Merger Agreement is hereby
deleted in its entirety.
SECTION 22. Section 3.2(k) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following: "[Intentionally
deleted]".
SECTION 23. Section 3.2(o) of the Merger Agreement is hereby
deleted in its entirety.
SECTION 24. Section 4.1 (other than Section 4.1.(e)) and
Section 4.2 of the Merger Agreement shall be inapplicable to White and shall
apply to Green through the Control Date.
SECTION 25. Section 4.1(a) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
SECTION 4.1 Conduct of Business. (a) Conduct of Business.
Except as contemplated by this Agreement or as set forth in Section 4.1
of or Attachment A to the Green Disclosure Schedule delivered in
connection with the Third Amendment, during the period from the date of
this Agreement to the Control Date, Green shall, and shall cause it
subsidiaries to, carry on their businesses in the ordinary course
consistent with past practice and in compliance in all material
respects with all applicable laws and regulations and, to the extent
consistent therewith, shall use all reasonable efforts to preserve
intact their current business organizations, use reasonable efforts to
keep available the services of their current officers and other key
employees as a group and preserve their relationships with those
persons having business dealings with them to the end that their
goodwill and ongoing businesses shall be unimpaired at the Control
Date. Except as contemplated by this Agreement or as set forth in
Section
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<PAGE> 17
4.1 of or Attachment A to the Green Disclosure Schedule delivered in
connection with the Third Amendment, without limiting the generality of
the foregoing, during the period from the date of this Agreement to the
Control Date, Green shall not, and shall not permit any of its
subsidiaries to (without the consent of White):
(i) prior to the Effective Time, other than dividends and
distributions (including liquidating distributions) by a direct or
indirect wholly owned subsidiary of Green, to its parent, or by a
subsidiary that is partially owned by Green or any of its subsidiaries,
provided that Green or any such subsidiary receives or is to receive
its proportionate share thereof, and other than the regular quarterly
dividends of $.475 per share with respect to Green Common Stock,
regular quarterly dividends of $.54125 per share with respect to Green
ESOP Preferred Stock in accordance with its terms, (x) declare, set
aside or pay any dividends on, or make any other distributions in
respect of, any of its capital stock, (y) split, combine or reclassify
any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for
shares of its capital stock, or (z) except in connection with the
funding of employee benefit plans, purchase, redeem, retire or
otherwise acquire any shares of its capital stock or the capital stock
of any of its Significant Subsidiaries or any other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities, and provided further that, following the Effective Time,
subject to applicable legal restrictions and financial covenants
contained in instruments relating to outstanding indebtedness, the
Surviving Corporation shall not decrease the aggregate amount of
dividends and other distributions paid in respect of Green's
outstanding capital stock from the level paid immediately prior to the
Merger;
(ii) issue, deliver, sell, pledge or otherwise encumber any shares
of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any
such shares, voting securities or convertible securities (other than,
prior to the Effective Time, (w) in accordance with the terms of the
Green Rights Agreement, (x) the issuance of Green Common Stock (A) upon
the exercise of Green Employee Stock Options and listed in the Green
Disclosure Schedule outstanding on the date of this Agreement and in
accordance with their present terms or (B) pursuant to a
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<PAGE> 18
grant existing as of the date hereof or otherwise permitted under this
Section under any Employee Benefit Plan, (y) the issuance of Green
Common Stock upon conversion of Green ESOP Preferred Stock in
accordance with its terms and (z) the issuance of Green Common Stock
pursuant to the Green Stock Option Agreement);
(iii) adopt, propose or agree to any amendment to its (or any
subsidiary's) articles of incorporation, bylaws or other comparable
organizational documents;
(iv) sell, lease, license, mortgage or otherwise encumber or subject
to any Lien or otherwise dispose of any of its properties or assets,
other than in transactions in the ordinary course of business
consistent with past practice not involving rail lines, yards and other
fixed railroad operating property;
(v) make or agree to make any acquisition (other than of inventory
in the ordinary course of business) or capital expenditure, except for
agreements and commitments made through March 1, 1997 in conformity
with this Agreement;
(vi) except for elections identical to those made in past tax
returns, make any tax election;
(vii) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (whether absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge, settlement or satisfaction of claims, liabilities or
obligations (A) in the ordinary course of business consistent with past
practice or in accordance with their terms, (B) of liabilities
reflected or reserved against in, or contemplated by, the most recent
consolidated financial statements (or the notes thereto) of Green
included in the Green Filed SEC Documents or (C) incurred since the
date of such financial statements in the ordinary course of business
consistent with past practice and with this Agreement;
(viii) except in the ordinary course of business, enter into any
contract or agreement, or modify, amend or terminate any contract or
agreement to which Green or any of its subsidiaries is a party
significant to such contract or agreement, or waive, release or assign
any rights or claims under any contract or agreement significant to
such contract or agreement,
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provided that in making, entering into, modifying and amending and terminating
its contracts in the ordinary course of business, Green shall act entirely in
its own interest as an independent enterprise, and no action in making, entering
into, modifying or amending any such contract shall bind Green or any successor
in interest after the Control Date (without limiting the foregoing, the
inclusion of a mutual right of each party to terminate any contract by 30 days'
notice to be given within 90 days after the Control Date shall satisfy this last
provision;
(ix) make any change to its accounting methods, principles or
practices, except as may be required by generally accepted accounting
principles;
(x) except as required by law and except for changes to any rail
labor agreement which are not in the aggregate significant to such
agreement, enter into, adopt or amend in any material respect or
terminate any Green Benefit Plan or any other agreement, plan or policy
involving Green or any of its subsidiaries, and one or more of their
directors, officers or employees, or materially change any actuarial or
other assumption used to calculate funding obligations with respect to
any pension plan, or change the manner in which contributions to any
pension plan are made or the basis on which such contributions are
determined, provided that in no event shall Green take any action
hereunder that would have an effect during the period of time following
the Control Date;
(xi) except as provided by the terms of any contract made prior to
March 1, 1997 the existence of which does not constitute a violation of
this Agreement or as provided in Exhibit B hereto, increase the
compensation of any director, executive officer or other key employee
or pay any benefit or amount not required by a plan or arrangement as
in effect on the date of this Agreement to any such person;
(xii) enter into any agreement containing any provision or covenant
(x) limiting in any respect the ability to compete with any person
which would bind Green or any successor or (y) granting any concessions
or rights to any railroad or other person with respect to the use of
Green's rail lines, yards or other fixed railroad property (whether
through divestiture of lines, the grant of trackage rights or
otherwise); or
(xiii) authorize, or commit or agree to take, any of the foregoing
actions.
SECTION 26. Section 4.1(b) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
"[Intentionally deleted]".
SECTION 27. Section 4.1(e) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
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(e) Other Actions; Advice of Changes. Except as required by
law, White shall not, and shall not permit any of its subsidiaries to,
voluntarily take any action that would, or that could reasonably be
expected to, result in (x) any of the representations and warranties of
White set forth in this Agreement or the Green Stock Option Agreement
that are qualified as to materiality becoming untrue, (y) any of such
representations and warranties that are not so qualified becoming
untrue in any material respect or (z) any of the conditions to the
consummation of the Amended Second Offer or the Merger not being
satisfied, in any of the foregoing cases (x), (y) or (z), such as would
give rise to a right to terminate this Agreement pursuant to Section
7.1. Without limiting the foregoing, White shall not, and shall not
permit any of its subsidiaries to, take any action that could
reasonably be expected to impair, or delay in any material respect, the
consummation of the Amended Second Offer and the Merger. White shall
promptly advise Green orally and in writing of (i) any representation
or warranty made by it contained in this Agreement that is qualified as
to materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect, (ii) the failure by it to comply in
any material respect with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it
under this Agreement and (iii) any change or event having, or which,
insofar as can reasonably be foreseen, would reasonably be expected to
have a material adverse effect on the truth of its representations and
warranties or the ability of the conditions to the consummation of the
Amended Second Offer and the Merger to be satisfied, in any of the
foregoing cases (i), (ii) or (iii), such as would give rise to a right
to terminate this Agreement pursuant to Section 7.1; provided, however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties (or remedies with respect
thereto) or the conditions to the obligations of the parties under this
Agreement or the Green Stock Option Agreement.
SECTION 28. The first proviso to Section 4.2(a) of the Merger
Agreement is hereby deleted and replaced in its entirety with the following:
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provided, however, that if, at any time prior to the consummation of
the Amended Second Offer and after December 31, 1997, the Board of
Directors of Green determines in good faith, based on the advice of
outside counsel, that it is necessary to do so to avoid a breach of its
fiduciary duties to Green under applicable law, Green may, upon prior
notice to White, in response to a Takeover Proposal which was not
solicited by it and which did not otherwise result from a breach of
this Section 4.2(a), and subject to Green's compliance with Section
4.2(c),(A) furnish information with respect to it and its subsidiaries
to any person pursuant to a customary confidentiality agreement (as
determined by Green after consultation with its outside counsel), the
benefits of the terms of which, if more favorable to the other party to
such confidentiality agreement than those in place with White, shall be
extended to White, and (B) participate in negotiations regarding
such Takeover Proposal.
SECTION 29. The first sentence of Section 4.2(b) of the Merger
Agreement is hereby amended by deleting the words "Green Shareholders Meetings"
and replacing them in their entirety with the words "Green Merger Shareholders
Meeting"; and the second sentence of Section 4.2(b) of the Merger Agreement is
hereby deleted and replaced in its entirety with the following:
Notwithstanding the foregoing, in the event that, at any time
prior to the consummation of the Amended Second Offer and following
December 31, 1997, there exists a Superior Proposal with respect to
Green and Green's Board of Directors determines that, due to the
existence of such Superior Proposal, there is not a substantial
probability that the Minimum Condition will be satisfied, the Board of
Directors of Green may (subject to this and the following sentences)
withdraw or modify its approval or recommendation of the Amended Second
Offer, the Merger or the adoption and approval of the matters to be
considered at the Green Merger Shareholders Meeting, the Board of
Directors of Green may (subject to this and the following sentences)
approve or recommend such Superior Proposal or terminate this Agreement
(and concurrently with such termination, if it so chooses, cause Green
to enter into any Acquisition Agreement with respect to such Superior
Proposal), but only at a time that is after the fifth business day
following White's receipt of written notice advising White that
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the Board of Directors of Green has received a Superior Proposal,
specifying the material terms and conditions of such Superior
Proposal and identifying the person making such Superior Proposal.
SECTION 30. Section 4.3 of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
SECTION 4.3. Third Party Discussions, etc. Notwithstanding
anything to the contrary contained herein, during the term of this
Agreement, White shall have sole authority to (and, without the consent
of White, Green shall not, directly or indirectly through another
person) conduct and participate in any conversations, discussions or
negotiations, and enter into any agreement, arrangement or
understanding, with any other company engaged in the operation of
railroads (including Norfolk Southern Corporation) or any other person
with respect to the acquisition by any such other company (including
Norfolk Southern Corporation) or person of any securities or assets of
Green and its subsidiaries or White and its subsidiaries, or any
trackage rights or other concessions relating to the assets or
operations of Green and its subsidiaries or White and its subsidiaries,
except to the extent Green is expressly permitted to take any such
action without the consent of White pursuant to Section 4.1(a) or as
set forth in Section 4.1 of the Green Disclosure Schedule. White shall
use reasonable efforts to keep Green apprised of the status of any
such conversations, discussions or negotiations, and Green shall use
reasonable efforts to cooperate and assist with White's efforts
relating to such conversations, discussions or negotiations (including,
subject to the other provisions hereof, by providing access and
information). In the event that, as a result of any such conversations,
discussions or negotiations, it becomes necessary or appropriate to
amend this Agreement or to take any other action to facilitate a
transaction (including by taking any Board action that may be required
under any state anti-takeover statute or by amending the Green Rights
Agreement or, subject to the other provisions hereof, by amending the
Amended Second Offer to include a co-bidder thereunder), and White
proposes to do so, Green will enter into an appropriate amendment to
this Agreement or shall take such further action, provided that any
such amendment shall not change the form or amount of the Per Share
Merger Consideration or the Amended Second Offer Price, modify Exhibit
B or otherwise adversely affect Green
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(in respect of the benefits to be received by its shareholders or
employees under this Agreement) or delay or adversely affect the
transactions contemplated hereby and provided further that any such
amendment shall be in accordance with all applicable law including
subtitle IV of title 49, U.S. Code and the rules and regulations of
the STB thereunder.
SECTION 31. Section 5.1 of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
SECTION 5.1. Shareholders Meeting. To the extent required by
applicable law, Green shall, as soon as practicable following the
consummation (or expiration) of the Amended Second Offer, file with the
SEC preliminary proxy materials and use reasonable efforts to clear
such materials (the "Green Proxy Statement") and thereafter duly call,
give notice of, convene and hold on a date mutually agreed to by White
and Green a meeting of its shareholders (the "Green Merger Shareholders
Meeting") for the purpose of obtaining the Green Merger Shareholder
Approval. Without limiting the generality of the foregoing, but subject
to Section 4.2(b), Green agrees that its obligations pursuant to the
first sentence of this Section shall not be affected by the
commencement, public proposal, public disclosure or communication to
Green of any Takeover Proposal in respect of Green. Green shall,
through its Board of Directors, recommend to its shareholders the
approval and adoption of the Amended Second Offer and the matters to be
considered at the Green Merger Shareholders Meeting, except to the
extent that the Board of Directors of Green shall have withdrawn or
modified its approval or recommendation of the Amended Second Offer or
the matters to be considered at the Green Merger Shareholders Meeting
or terminated this Agreement in accordance with Section 4.2(b). Subject
to the terms of the Voting Trust Agreement, White shall cause all
shares of Green Common Stock and Green ESOP Preferred Stock acquired by
it or its wholly owned subsidiaries pursuant to the Amended Second
Offer (which shall be deposited in the Voting Trust) or otherwise to be
voted in favor of approval and adoption of the matters to be considered
at the Green Merger Shareholders Meeting. Notwithstanding the
foregoing, in the event that Tender Sub shall acquire at least 80% of
the outstanding shares of each class of Green capital stock, White and
Green together shall, subject to Article VI, take all necessary and
appropriate action
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to cause the Merger to become effective as soon as practicable after
such acquisition, without a meeting of the Green shareholders, in
accordance with the Pennsylvania Law.
SECTION 32. Section 5.2, Section 5.3, Section 5.7, Section
5.9(c), Section 5.11, Section 5.12, Section 5.15 and Section 5.16 of the Merger
Agreement are hereby deleted and replaced in their entirety with the following:
"[Intentionally deleted]".
SECTION 33. Section 5.4 of the Merger Agreement is hereby
amended to delete the requirement that White provide the access and information
required thereunder to Green, provided that White shall remain subject to its
obligations to keep certain information confidential under the Confidentiality
Agreement and provided further that the Confidentiality Agreement is hereby
amended to permit White, in connection with Section 4.3 of this Agreement, to
provide to third parties information provided to White thereunder provided such
third parties are bound by obligations to keep such information confidential
substantially similar to those contained in the Confidentiality Agreement.
SECTION 34. Section 5.5(b) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
(b) In furtherance of the foregoing, at White's request, Green
shall, and shall cause each of its subsidiaries to, take all such
actions as are reasonably necessary or appropriate to (i) cooperate
with White to prepare and present to the STB or before any other
federal, state or local body as soon as practicable all filings and
other presentations in connection with seeking any approval, exemption
or other authorization necessary to consummate the transactions
contemplated by this Agreement and the Green Stock Option Agreement,
(ii) cooperate with White in the prosecution of such filings and the
making of such other presentations with diligence and take no action in
connection therewith without White's consent (including meetings with
public officials and making public statements), (iii) at White's
request, diligently join with White in opposing any objections to,
appeals from or petitions to reconsider or reopen any such approval
by persons not party to this Agreement, (iv) take all actions
reasonably requested by White to implement the transactions that are
the subject of the STB proceeding, including the entry into
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appropriate labor implementing agreements to be effective following
the Control Date, (v) take all such further action as reasonably may
be requested by White to obtain the STB approval or any related
approvals, including, subject to the other provisions hereof, by
providing access to Green's properties, financial records and traffic
data, and (vi) take no action inconsistent with the foregoing. The
actions to be taken shall include the joinder by Green, to the extent
requested by White, in an application to exercise control over Green
and its subsidiaries and such other matters as White shall include
therein. In addition, without limiting the generality of the
foregoing, Green shall make available to White the services of any
experts retained by Green and any work product of such experts in
connection with the preparation and presentation of any filings in
connection with seeking the STB approval or any related approvals.
Green shall take no regulatory or legal action in respect of any
disposition of property or assets without White's consent. White
shall use reasonable efforts to keep Green apprised of the status of
the STB proceedings.
SECTION 35. Section 5.6 of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
SECTION 5.6. Certain Employee Stock Matters. (a) Immediately
prior to the Effective Time, each Green Employee Stock Option, whether
or not then exercisable, shall be canceled by Green, and each holder of
a canceled Green Employee Stock Option shall be entitled to receive at
the Effective Time or as soon as practicable thereafter (or, if later,
the date six months and one day following the grant of such Green
Employee Stock Option) from Green, in consideration for the
cancellation of such Green Employee Stock Option, an amount in cash
equal to the product of (i) the number of shares of Green Common
Stock previously subject to such Green Employee Stock Option and (ii)
the excess, if any, of the Per Share Merger Consideration over the
exercise price per share of Green Common Stock previously subject to
such Green Employee Stock Option.
(b) At White's request, Green shall request that the trustee
of Green's employee stock ownership plan enter into a pledge agreement
pursuant to Section 6.4 of that certain stock purchase agreement, by
and between Green's predecessor and such trustee's
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predecessor, and, thereafter, Green shall use its reasonable efforts to
enter into such a pledge agreement as promptly as practicable.
SECTION 36. Section 5.8(c) of the Merger Agreement is hereby
amended to (i) insert the words "(or shall cause the Surviving Corporation to
provide)" following the words "White shall provide" and (ii) insert the words
"or the Surviving Corporation, as the case may be," following the word "White"
in both provisos therein.
SECTION 37. The following is added as Section 5.8(e) of the
Merger Agreement:
(e) White shall cause the Surviving Corporation to satisfy all
its obligations under this Section 5.8.
SECTION 38. Section 5.9(b) of the Merger Agreement is hereby
amended by deleting the references to Section 7.1(h) and Section 7.1(e) therein
and substituting therefor references to Section 7.1(g) and references to Section
7.1(d), respectively.
SECTION 39. Section 5.13 of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
SECTION 5.13. Shareholder Litigation. Green shall afford White
the reasonable opportunity to participate in the prosecution or defense
of any shareholder or other litigation brought by or against Green
and/or its directors relating to the Merger Agreement, the Green Stock
Option Agreement or the transactions contemplated hereby or thereby. In
furtherance of the foregoing: until the Effective Time, Green shall
take no action in respect of any such litigation without White's
consent, which shall not be unreasonably withheld, and shall at White's
request join in any stay or similar adjournment of any such
proceedings; and, following the Effective Time, White shall have the
right to control any such action or related proceeding (other than the
defense of Green directors, as to which White shall not have the right
to control, but as to which the other covenants contained herein shall
govern), with Green's cooperation.
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SECTION 40. Section 6.1(a) of the Merger Agreement is hereby
amended by deleting the words "Each of" and substituting therefor the words "If
required," and deleting the words "and the White Shareholder Approval"
therefrom.
SECTION 41. Section 6.1(b), Section 6.1(d), the paragraph
entitled "Additional Condition to Second Merger" at the end of Section 6.1,
Section 6.2(c) and Section 6.3(b) of the Merger Agreement are hereby deleted and
replaced in their entirety with the following: "[Intentionally deleted"].
SECTION 42. Section 6.2(a) of the Merger Agreement is hereby
amended by adding the following immediately prior to the end thereof:
(provided, however, that this condition shall be inapplicable in the
event that, following consummation of the Amended Second Offer, White
shall have caused the removal and replacement of a majority of the
members of the Green Board of Directors)
SECTION 43. Section 6.3(a) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
(a) Compliance. White shall not have breached or failed to
observe or perform in any material respect any of its covenants or
agreements hereunder to be performed by it at or prior to the Closing
Date, and the representations and warranties of White set forth in
Section 3.2(a) and Section 3.2(d) shall be true and accurate both when
made and at and as of the Closing Date, as if made at and as of such
time (except to the extent expressly made as of an earlier date, in
which case as of such date), except where the breach or failure to
observe or perform such covenants and agreements, or the failure of
such representations and warranties to be so true and correct (without
giving effect to any limitation as to "materiality" or "material
adverse effect" set forth therein), does not have, and is not likely to
have, individually or in the aggregate, a material adverse effect on
White's ability to consummate the transactions contemplated hereby.
SECTION 44. Section 7.1 of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
SECTION 7.1. Termination. This Agreement may be terminated at
any time prior to the Effective
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Time, whether before or after the Green Merger Shareholder Approval,
only as provided below:
(a) by mutual written consent of White and Green;
(b) by either White or Green:
(i) if the Merger shall not have been consummated by
December 31, 1998; provided, however, that the right to terminate this
Agreement pursuant to this Section 7.1(b)(i) shall not be available to
(x) Green if Tender Sub consummates the Amended Second Offer prior to
such date or (y) any party whose failure to perform any of its
obligations under this Agreement results in the failure of the Merger
to be consummated by such time;
(ii) if any Governmental Entity shall have issued a Restraint
or taken any other action permanently enjoining, restraining or
otherwise prohibiting the consummation of the Merger or any of the
other transactions contemplated by this Agreement and such Restraint or
other action shall have become final and nonappealable; provided,
however, that the party seeking to terminate this Agreement pursuant to
this clause (ii) shall have used all reasonable efforts to prevent the
entry of and to remove such Restraint or other action;
(c) by White, if Green shall have breached or failed
to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement,
which breach or failure to perform (A) would give rise to the failure
of the condition set forth in Section 6.2(a), and (B) cannot be or has
not been cured within 30 days after the giving of written notice to
Green of such breach (a "Green Material Breach") (provided that White
is not then in White Material Breach of any covenant or other agreement
contained in this Agreement and provided that, if such breach is
curable through the exercise of Green's best efforts, this Agreement
may not be terminated hereunder for so long as Green is so using its
best efforts to cure such breach);
(d) by White, if (i) the Board of Directors of Green
(or, if applicable, any committee thereof) shall have withdrawn or
modified in a manner adverse to White its approval or recommendation of
the Offer or the Merger or the matters to be considered at the Green
Merger Shareholders Meeting or failed to reconfirm its recommendation
within 15 business days after a written request to do so,
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or approved or recommended any Takeover Proposal in respect of Green or
(ii) the Board of Directors of Green or any committee thereof shall
have resolved to take any of the foregoing actions;
(e) by White, if Green or any of its officers,
directors, employees, representatives or agents shall take any of the
actions that would be proscribed by Section 4.2 but for the exceptions
therein allowing certain actions to be taken pursuant to the proviso in
the first sentence of Section 4.2(a) or the second sentence of Section
4.2(b);
(f) by Green, prior to consummation of the Amended
Second Offer, if White shall have breached or failed to perform in any
material respect paragraphs (a) or (d) of Section 3.2 of its
representations and warranties or any of its covenants or other
agreements contained in this Agreement, which breach or failure to
perform (A) would give rise to the failure of the condition set forth
in Section 6.3(a) and (B) cannot be or has not been cured within 30
days after the giving of written notice to White of such breach (a
"White Material Breach") (provided that Green is not then in Green
Material Breach of any representation, warranty, covenant or other
agreement contained in this Agreement and provided that, if such breach
is curable through the exercise of White's best efforts, this Agreement
may not be terminated hereunder for so long as White is so using its
best efforts to cure such breach);
(g) by Green in accordance with Section 4.2(b);
provided that it has complied with all provisions contained in Section
4.2, including the notice provisions therein, and that it complies with
applicable requirements of Section 5.9;
(h) following June 2, 1997, by Green, if Tender Sub
shall have failed to consummate the Amended Second Offer unless such
failure is due to the non-occurrence of a condition to the Amended
Second Offer (in addition to any other remedies Green may have as a
result of such failure to consummate).
SECTION 45. Section 7.3 of the Merger Agreement is hereby
amended by deleting (a) the words "any of the Green Shareholder Approvals or the
White Shareholder Approval" and substituting therefor the words "the Green
Merger Shareholder Approval" and (b) the words "or White" from the proviso to
the first sentence; and by adding the following sentence to the end thereof:
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Prior to the Effective Time, this Agreement may not be amended without
the approval of a majority of Continuing Directors (as defined in the
Green Rights Agreement) present on the Green Board of Directors
(provided that at such time there are a minimum of two such Continuing
Directors then present on the Green Board of Directors).
SECTION 46. The last sentence of Section 8.1 of the Merger
Agreement is hereby deleted in its entirety.
SECTION 47. Section 8.3(j) of the Merger Agreement is hereby
deleted in its entirety; and Section 8.3(b) of the Merger Agreement is hereby
deleted and replaced in its entirety with the following:
(b) "material adverse change" or "material adverse effect"
means, when used in connection with Green or White, any change, effect,
event or occurrence that is materially adverse to the business,
financial condition or results of operations of such party and its
subsidiaries taken as a whole or materially impairs the ability of such
person to consummate the transactions contemplated hereby (including
the Offer and the Merger) and by the Option Agreements other than any
change, effect, event or occurrence (x) relating to the United States
economy in general or to the transportation industry in general, and
not specifically relating to Green or White or their respective
subsidiaries, or (y) arising from this Agreement or the transactions
contemplated hereby or from the restrictions of Section 4.1 or any
conversations, discussions or negotiations, agreements or arrangements
under Section 4.3 hereof or any public announcement of any of the
foregoing;
SECTION 48. Section 8.6 of the Merger Agreement is hereby
amended by adding the following immediately prior to the end thereof: "(other
than Attachment A to the Green Disclosure Schedule delivered in connection with
the Third Amendment, to the extent expressly provided therein)".
SECTION 49. The White Stock Option Agreement is hereby
canceled and rescinded in its entirety, and all references to such agreement in
the Merger Agreement are hereby abandoned.
SECTION 50. The term "Offer" as used in the Merger Agreement
shall be deemed to include the Amended Second Offer; the term "Offer Price" as
used in the Merger
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Agreement shall be deemed to include the Amended Second Offer Price; the term
"Merger Agreement" or "this Agreement" as used in the Merger Agreement shall be
deemed to refer to the Merger Agreement as amended by the Third Amendment
(provided that the terms "date hereof" or "date of this Agreement" as used in
the Merger Agreement shall mean October 14, 1996); the term "Schedule 14D-1" as
used in the Merger Agreement shall be deemed to include the Amended Second
Schedule 14D-1; the term "Offer Documents" as used in the Merger Agreement shall
be deemed to include the Amended Second Offer Documents; the term "Schedule
14D-9" as used in the Merger Agreement shall be deemed to include the Amended
Second Schedule 14D-9; the term "Green Fairness Opinions" as used in the Merger
Agreement shall be deemed to include the Fourth Green Fairness Opinions; and the
term "Form S-4" shall be deemed to include the Green Proxy Statement.
SECTION 51. All references in the Merger Agreement to either
the "First Effective Time" or the "Second Effective Time" shall be deemed to
refer to the "Effective Time"; all reference in the Merger Agreement to either
the "First Merger" or the "Second Merger" shall be deemed to refer to the
"Merger"; all references in the Merger Agreement to the "Per Share Cash
Consideration" shall be deemed to refer to the "Per Share Merger Consideration";
and all references in the Merger Agreement to the "Green Shareholders Meetings"
shall be deemed to refer to the "Green Merger Shareholders Meeting".
SECTION 52. Exhibit B, Exhibit C, Exhibit F, Exhibit G and
Exhibit H are hereby deleted in their entirety as exhibits to the Merger
Agreement and replaced with the following: "[Intentionally deleted]".
SECTION 53. Exhibit A and Exhibit E to the Merger Agreement
are hereby deleted and replaced in their entirety with Exhibit B and Exhibit E
hereto, respectively.
ARTICLE II
GENERAL
SECTION 1. Merger Agreement. Except as amended hereby, the
provisions of the Merger Agreement shall remain in full force and effect.
SECTION 2. Counterparts. This Third Amendment may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
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SECTION 3. Entire Agreement; No Third-Party Beneficiaries.
Other than the Merger Agreement (and subject to Section 8.6 thereof), this Third
Amendment (a) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter of this Third Amendment and (b) is not intended to
confer upon any person other than the parties hereto any rights or remedies.
SECTION 4. GOVERNING LAW. THIS THIRD AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICT OF LAWS THEREOF; PROVIDED, HOWEVER, THAT THE LAWS OF THE
RESPECTIVE STATES OF INCORPORATION OF EACH OF THE PARTIES HERETO SHALL GOVERN
THE RELATIVE RIGHTS, OBLIGATIONS, POWERS, DUTIES AND OTHER INTERNAL AFFAIRS OF
SUCH PARTY AND ITS BOARD OF DIRECTORS.
SECTION 5. Assignment. Neither this Third Amendment nor any of
the rights, interests or obligations under this Third Amendment shall be
assigned, in whole or in part, by operation of law or otherwise by either of the
parties hereto without the prior written consent of the other party. Any
assignment in violation of the preceding sentence shall be void. Subject to the
preceding sentence, this Third Amendment will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors
and assigns.
SECTION 6. ENFORCEMENT. THE PARTIES AGREE THAT IRREPARABLE
DAMAGE WOULD OCCUR AND THAT THE PARTIES WOULD NOT HAVE ANY ADEQUATE REMEDY AT
LAW IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS THIRD AMENDMENT WERE NOT
PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED. IT
IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR
INJUNCTIONS TO PREVENT BREACHES OF THIS THIRD AMENDMENT AND TO ENFORCE
SPECIFICALLY THE TERMS AND PROVISIONS OF THIS THIRD AMENDMENT IN ANY FEDERAL
COURT LOCATED IN THE STATE OF NEW YORK OR IN NEW YORK STATE COURT, THIS BEING IN
ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. IN
ADDITION, EACH OF THE PARTIES HERETO (A) CONSENTS TO SUBMIT ITSELF TO THE
PERSONAL JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE STATE OF NEW YORK OR
ANY NEW YORK STATE COURT IN THE EVENT ANY DISPUTE ARISES OUT OF THIS THIRD
AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS THIRD AMENDMENT, (B)
AGREES THAT IT WILL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY
MOTION OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT AND (C) AGREES THAT IT
WILL NOT BRING ANY ACTION RELATING TO THIS THIRD AMENDMENT OR ANY
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OF THE TRANSACTIONS CONTEMPLATED BY THIS THIRD AMENDMENT IN ANY COURT OTHER THAN
A FEDERAL COURT SITTING IN THE STATE OF NEW YORK OR A NEW YORK STATE COURT.
SECTION 7. Headings. The headings contained in this Third
Amendment are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Third Amendment.
SECTION 8. Severability. If any term or other provision of
this Third Amendment is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this Third
Amendment shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this Third
Amendment so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.
-32-
<PAGE> 34
IN WITNESS WHEREOF, Conrail Inc., Green Acquisition Corp. and
CSX Corporation have caused this Third Amendment to be signed by their
respective officers thereunto duly authorized, all as of the date first written
above.
CONRAIL INC.
by
Name:
Title:
GREEN ACQUISITION CORP.
by
Name:
Title:
CSX CORPORATION
by
Name:
Title:
-33-
<PAGE> 35
EXHIBIT A
NEW CONDITION (1)
(1) there shall not have been validly tendered and not
withdrawn such a number of Shares which, together with the Common Shares already
owned by Parent through the Voting Trust and with any Common Shares already
owned by any third party, its subsidiaries or affiliates that may, jointly
together with Parent, acquire an equity ownership interest in any vehicle that
may acquire the Company, constitute at least a majority of the Shares
outstanding on a fully diluted basis (other than upon exercise of the Company
Stock Option).
NEW CONDITION (a)
(a) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree enacted, enforced, promulgated, issued
or deemed applicable to the transactions contemplated by the Second Offer, the
Merger or the Merger Agreement, by or before any court, government or
governmental authority or agency, domestic or foreign, that, directly or
indirectly, results in (x) making illegal or otherwise directly or indirectly
restraining or prohibiting the making of the Second Offer, the acceptance for
payment of or payment for some of or all the Shares by Parent or Purchaser or
the consummation by Parent or Purchaser of the Merger or the Second Offer or (y)
except for the requirements of the Voting Trust Agreement and other than any STB
action which does not result in the effects described in the foregoing (x),
imposing material limitations on the ability of Parent, Purchaser or any of
their subsidiaries or affiliates effectively to exercise full rights of
ownership of the Common Shares, including, without limitation, the right to vote
any Common Shares acquired or owned by Parent, Purchaser or any of their
subsidiaries; or
A-1
<PAGE> 36
EXHIBIT B
CERTAIN MATTERS
Pennsylvania
It is White's intention that, following the Control Date: Green's
Juniata locomotive shops at Altoona, Pennsylvania; Green's Sam Ray car shops at
Hollidaysburg, Pennsylvania; Green's Pittsburgh service center; and a major
operating presence in Philadelphia (including headquarters of the Surviving
Corporation) shall be maintained.
Board of Directors of White
Following the Control Date, the Board of Directors of White shall be
expanded to include three outside directors from the current Board of Directors
of Green who shall be approved by White.
Transition Team
Following the Effective Time, White and Green shall establish a
transition team for Green and shall offer to include in the leadership of such
transition team the current Chief Executive Officer of Green (or such other
senior Green executive as may be acceptable to White) and the current Chief
Executive Officer of White's railroad operations, provided that such transition
team shall not control the day-to-day railroad operations of Green or its
subsidiaries prior to the Control Date, but shall restrict its operation to
planning for actions and operations to be undertaken from and after the Control
Date. Among other things, Green and White, in connection with the transition
team, shall cooperate to ensure the orderly operation of Green during the STB
approval process under the control of Green's directors and officers and to
ensure an orderly transition thereafter.
B-1
<PAGE> 1
AMENDED AND RESTATED VOTING TRUST AGREEMENT
THIS AMENDED AND RESTATED VOTING TRUST AGREEMENT, dated as of March 7,
1997, by and among CSX Corporation, a Virginia corporation ("Parent"), Green
Acquisition Corp., a Pennsylvania corporation and a wholly-owned subsidiary of
Parent ("Acquiror"), and Deposit Guaranty National Bank, a national banking
association (the "Trustee"),
W I T N E S S E T H:
WHEREAS, Parent, Acquiror and Conrail Inc., a Pennsylvania corporation
(the "Company"; which term shall instead refer, from and after the effectiveness
of the Merger, to the corporation resulting from the Merger), have entered into
an Agreement and Plan of Merger, dated as of October 14, 1996 (as it has been
and may be amended from time to time, the "Merger Agreement"; capitalized terms
used but not defined herein shall have the meanings set forth therein), pursuant
to which (i) Acquiror was to commence and did commence the Offer and Second
Offer (collectively, the "Tender Offer") for shares of Common Stock of the
Company (all such shares accepted for payment pursuant to the Tender Offer or
otherwise received, acquired or purchased by or on behalf of Parent or Acquiror,
including pursuant to the Option Agreement, the "Acquired Shares"), and (ii) a
subsidiary of Acquiror will merge into the Company pursuant to the Merger.
<PAGE> 2
-2-
WHEREAS, Parent, Acquiror and the Trustee have entered into a Voting
Trust Agreement, dated as of October 15, 1996 (the "Original Voting Trust
Agreement");
WHEREAS, Parent, Acquiror and the Company entered into a First
Amendment to the Merger Agreement dated November 5, 1996, a Second Amendment
thereto dated December 18, 1996, and a Third Amendment thereto dated March 7,
1997;
WHEREAS, Parent, Acquiror and the Company have entered into a Stock
Option Agreement, dated as of October 14, 1996 (as it may be amended from time
to time, the "Option Agreement") providing Parent and Acquiror the option to
purchase 15,955,477 shares of common stock of the Company;
WHEREAS, the parties intend that, prior to the authorization and
approval of the Surface Transportation Board (the "STB"), neither Parent nor
Acquiror nor any of their affiliates shall control the Company and the Company
shall not have as a director any officer, director, nominee or representative of
the Parent, the Acquiror or any of their affiliates;
WHEREAS, Parent and Acquiror wish (and are obligated pursuant to the
Merger Agreement and the Option Agreement), simultaneously with the acceptance
for payment of Acquired Shares pursuant to the Tender Offer, the Option
Agreement, the Merger, or otherwise to deposit such Shares of Common Stock in an
independent, irrevocable voting trust, pursuant to the rules of the STB, in
order to avoid any
<PAGE> 3
-3-
allegation or assertion that the Parent or the Acquiror is controlling or has
the power to control the Company prior to the receipt of any required STB
approval or exemption;
WHEREAS, Parent, Acquiror and the Trustee wish to amend the Original
Voting Trust Agreement to reflect certain changes made in the Merger Agreement
by the Second and Third Amendments thereto, and the Company has consented to
such amendment, and Parent, Acquiror and the Trustee wish to restate the Voting
Trust Agreement as so amended;
WHEREAS, the holder of all outstanding Trust Certificates has assented
to such amendment of the Original Voting Trust Agreement, and all requirements
for the amendment of the Original Voting Trust Agreement contained therein have
been satisfied;
WHEREAS, neither the Trustee nor any of its affiliates has any officers
or board members in common or any direct or indirect business arrangements or
dealings (as described in Paragraph 9 hereof) with the Parent or the Acquiror or
any of their affiliates; and
WHEREAS, the Trustee is willing to continue to act as voting trustee
pursuant to the terms of this Trust Agreement and the rules of the STB,
NOW THEREFORE, the parties hereto agree as follows:
1. Creation of Trust -- The Parent and the Acquiror hereby appoint
Deposit Guaranty National Bank as Trustee hereunder, and Deposit Guaranty
National Bank hereby accepts said appointment and agrees to act as Trustee under
this Trust Agreement as provided herein.
2. Trust Is Irrevocable -- This Trust Agreement and the nomination of
the Trustee during the term of the trust shall be irrevocable by the Parent and
the
<PAGE> 4
-4-
Acquiror and their affiliates and shall terminate only in accordance with,
and to the extent of, the provisions of Paragraphs 8 and 14 hereof.
3. Deposit of Trust Stock -- The Parent and the Acquiror agree that,
prior to acceptance of Acquired Shares purchased pursuant to the Tender Offer,
the Acquiror will direct the depositary for the Tender Offer to transfer to the
Trustee any such Acquired Shares purchased pursuant to the Tender Offer. The
Parent and the Acquiror also agree that simultaneously with receipt, acquisition
or purchase of any additional shares of Common Stock by either of them, directly
or indirectly, or by any of their affiliates, including, without limitation,
upon any exercise of the option provided for in the Option Agreement, they will
transfer to the Trustee the certificate or certificates for such shares. The
Parent and the Acquiror also agree that simultaneously with the receipt by them
or by any of their affiliates of any shares of common stock or other voting
stock of the Company upon the effectiveness of the Merger, they will transfer to
the Trustee the certificate or certificates for such shares. All such
certificates shall be duly endorsed or accompanied by proper instruments duly
executed for transfer thereof to the Trustee or otherwise validly and properly
transferred, and shall be exchanged for one or more Voting Trust Certificates
substantially in the form attached hereto as Exhibit A (the "Trust
Certificates"), with the blanks therein appropriately filled in. Voting Trust
Certificates executed in the form attached to the Original Voting Trust
Agreement as Exhibit A shall continue to be valid and obligatory and shall, from
and after the execution and delivery of this instrument, be deemed in every
respect to be Trust Certificates executed and delivered under this instrument.
All shares of Common Stock all other shares of common stock
<PAGE> 5
-5-
or other voting securities at any time delivered to the Trustee hereunder are
called the "Trust Stock." The Trustee shall present to the Company all
certificates representing Trust Stock for surrender and cancellation and for the
issuance and delivery to the Trustee of new certificates registered in the name
of the Trustee or its nominee.
4. Powers of Trustee -- The Trustee shall be present, in person or
represented by proxy, at all annual and special meetings of shareholders of the
Company so that all Trust Stock may be counted for the purposes of determining
the presence of a quorum at such meetings. Parent and Acquiror agree, and the
Trustee acknowledges, that the Trustee shall not participate in or interfere
with the management of the Company and shall take no other actions with respect
to the Company except in accordance with the terms hereof. The Trustee shall
exercise all voting rights in respect of the Trust Stock to approve and effect
the Merger, and in favor of any proposal or action necessary or desirable to
effect, or consistent with the effectuation of, the Parent and Acquiror's
acquisition of the Company, pursuant to the Merger Agreement, and without
limiting the generality of the foregoing, if there shall be with respect to the
Board of Directors of the Company an "Election Contest" as defined in the Proxy
Rules of the Securities and Exchange Commission ("SEC"), in which one slate of
nominees shall support the effectuation of the Merger and another slate oppose
it, then the Trustee shall vote in favor of the slate supporting the
effectuation of the Merger. In addition, for so long as the Merger Agreement is
in effect, the Trustee shall exercise all voting rights in respect of the Trust
Stock, to cause any other proposed merger, business combination or similar
transaction (including, without limitation, any consolidation, sale or purchase
of assets, reorganization, recapitalization, liquidation or winding up of or by
the Company) involving the Company, but not
<PAGE> 6
-6-
involving the Parent or one of its subsidiaries or affiliates (otherwise than in
connection with a disposition pursuant to Paragraph 8), not to be effected. In
addition, the Trustee shall exercise all voting rights in respect of the Trust
Stock in favor of any proposal or action necessary or desirable to dispose of
Trust Stock in accordance with Paragraph 8 hereof. Except as provided in the
three immediately preceding sentences, the Trustee shall vote all shares of
Trust Stock with respect to all matters, including without limitation the
election or removal of directors, voted on by the shareholders of the Company
(whether at a regular or special meeting or pursuant to a unanimous written
consent) in the same proportion as all shares of Common Stock (other than Trust
Stock) are voted with respect to such matters; provided that, except as provided
in the three immediately preceding sentences, from and after the effectiveness
of the Merger, the Trustee shall vote all shares of Trust Stock in accordance
with the instructions of a majority of the persons who are currently the
directors of the Company and their nominees as successors and who shall then be
directors of the Company, except that the Trustee shall not vote the Trust Stock
in favor of taking or doing any act which violates the Merger Agreement or which
if taken or done prior to the consummation of the Merger would have been a
violation of the Merger Agreement; and except further that if there shall be no
such persons qualified to give such instructions hereunder, or if a majority of
such persons refuse or fail to give such instructions, then the Trustee shall
vote the Trust Stock in its sole discretion, having due regard for the interests
of the holders of Trust Certificates as investors in the stock of the Company,
determined without reference to such holders' interests in other railroads than
the subsidiaries of the Company. In exercising its voting rights in accordance
with this Paragraph 4, the
<PAGE> 7
-7-
Trustee shall take such actions at all annual, special or other meetings of
stockholders of the Company or in connection with any and all consents of
shareholders in lieu of a meeting.
5. Further Provisions Concerning Voting of Trust Stock -- The Trustee
shall be entitled and it shall be its duty to exercise any and all voting rights
in respect of the Trust Stock either in person or by proxy, as herein provided
(including without limitation Paragraphs 4 and 8(b) hereof), unless otherwise
directed by the STB or a court of competent jurisdiction. Subject to Paragraph
4, the Trustee shall not exercise the voting powers of the Trust Stock in any
way so as to create any dependence or intercorporate relationship between (i)
any or all of the Parent, the Acquiror and their affiliates, on the one hand,
and (ii) the Company or its affiliates, on the other hand. The term "affiliate"
or "affiliates" wherever used in this Trust Agreement shall have the meaning
specified in Section 11323(c) of Title 49 of the United States Code, as amended.
The Trustee shall not, without the prior approval of the STB, vote the Trust
Stock to elect any officer, director, nominee or representative of the Parent,
the Acquiror or their affiliates as an officer or director of the Company or of
any affiliate of the Company. The Trustee shall be kept informed respecting the
business operations of the Company by means of the financial statements and
other public disclosure documents periodically filed by the Company and
affiliates of the Company with the SEC and the STB, and by means of information
respecting the Company contained in such statements and other documents filed by
the Parent with the SEC and the STB, copies of which shall be promptly furnished
to the Trustee by the Company or the Parent, as the case may be, and the Trustee
shall be fully protected in relying upon such information. Notwithstanding the
foregoing provisions of this Paragraph 5 or any other
<PAGE> 8
-8-
provision of this Agreement, however, the registered holder of any Trust
Certificate may at any time with the prior written approval of the Company --
but only with the prior written approval of the STB -- instruct the Trustee in
writing to vote the Trust Stock represented by such Trust Certificate in any
manner, in which case the Trustee shall vote such shares in accordance with such
instructions.
6. Transfer of Trust Certificates -- The Trust Certificates shall be
transferable on the books of the Trustee by the registered holder upon the
surrender thereof properly assigned, in accordance with rules from time to time
established for that purpose by the Trustee. Until the consummation of the
Amended Second Offer, any transferee shall be subject to the obligations of the
transferor hereunder. Until so transferred, the Trustee may treat the registered
holder as owner for all purposes. Each transferee of a Trust Certificate issued
hereunder shall, by his acceptance thereof, assent to and become a party to this
Trust Agreement, and shall assume all attendant rights and obligations. Any such
transfer in violation of this Paragraph 6 shall be null and void.
7. Dividends and Distributions -- Pending the termination of this Trust
as hereinafter provided, the Trustee shall, immediately following the receipt of
each cash dividend or cash distribution as may be declared and paid upon the
Trust Stock, pay the same over to or as directed by the Acquiror or to or as
directed by the holder of the Trust Certificates hereunder as then appearing on
the books of the Trustee. The Trustee shall receive and hold dividends and
distributions other than cash upon the same terms and conditions as the Trust
Stock and shall issue Trust Certificates representing any new or additional
<PAGE> 9
-9-
securities that may be paid as dividends or otherwise distributed upon the Trust
Stock to the registered holders of Trust Certificates in proportion to their
respective interests.
8. Disposition of Trust Stock; Termination of Trust -- (a) This Trust is
accepted by the Trustee subject to the right hereby reserved in the Parent at
any time to direct the sale or other disposition of the whole or any part of the
Trust Stock, but only as permitted by subparagraph (e) below, whether or not an
event described in subparagraph (b) below has occurred. The Trustee shall take
all actions reasonably requested by the Parent (including, without limitation,
exercising all voting rights in respect of Trust Stock) in favor of any proposal
or action necessary or desirable to effect, or consistent with the effectuation
of or with respect to any proposed sale or other disposition of the whole or any
part of the Trust Stock by the Acquiror or Parent that is otherwise permitted
pursuant to this Paragraph 8, including, without limitation, in connection with
the exercise by Parent of its registration rights under the Merger Agreement.
The Trustee shall be entitled to rely on a certification from the Parent, signed
by its President or one of its Vice Presidents and under its corporate seal,
that a disposition of the whole or any part of the Trust Stock is being made in
accordance with the requirements of subparagraph (e) below. In the event of a
permitted sale of Trust Stock by the Acquiror, the Trustee shall, to the extent
the consideration therefor is payable to or controllable by the Trustee,
promptly pay, or cause to be paid, upon the order of the Acquiror the net
proceeds of such sale to the registered holders of the Trust Certificates in
proportion to their respective interests. It is the intention of this Paragraph
that no violation of 49 U.S.C. Section 11323 will result from a termination of
this Trust.
<PAGE> 10
-10-
(b) In the event the STB Approval shall have been granted, then
immediately upon the direction of the Parent and the delivery of a certified
copy of such order of the STB or other governmental authority with respect
thereof, or, in the event that Subtitle IV of Title 49 of the United States
Code, or other controlling law, is amended to allow the Acquiror, the Parent or
their affiliates to acquire control of the Company without obtaining STB or
other governmental approval, upon delivery of an opinion of independent counsel
selected by the Trustee that no order of the STB or other governmental authority
is required, and, in the event that the Amended Second Offer shall not have
previously been consummated, with the prior consent of the Company, the Trustee
shall either (x) transfer to or upon the order of the Acquiror, the Parent or
the holder or holders of Trust Certificates hereunder as then appearing on the
records of the Trustee, its right, title and interest in and to all of the Trust
Stock then held by it (or such portion as is represented by the Trust
Certificates in the case of such an order by such holders) in accordance with
the terms, conditions and agreements of this Trust Agreement and not theretofore
transferred by it as provided in subparagraph (a) hereof, or (y) if shareholder
approval has not previously been obtained for the Merger, vote the Trust Stock
in favor of the Merger, and upon any such transfer of all of the Trust Stock, or
any such merger following such STB approval or law amendment permitting control
without governmental approval, this Trust shall cease and come to an end.
(c) In the event that (i) the STB Approval shall not have been obtained
by December 31, 1998, or (ii) there shall have been an STB Denial, Parent shall
use its best efforts to sell the Trust Stock during a period of two years after
such date or STB Denial, or such extension of that period as the STB shall
approve.
<PAGE> 11
-11-
Any such disposition shall be subject to the requirements of subparagraph (e)
below, and to any jurisdiction of the STB to oversee Parent's divestiture of
Trust Stock. At all times, the Trustee shall continue to perform its duties
under this Trust Agreement and, should Parent be unsuccessful in its efforts to
sell or distribute the Trust Stock during the period referred to, the Trustee
shall then as soon as practicable, and subject to the requirements of
subparagraph (e) below, sell the Trust Stock for cash to eligible purchasers in
such manner and for such price as the Trustee in its discretion shall deem
reasonable after consultation with Parent. (An "eligible purchaser" hereunder
shall be a person or entity that is not affiliated with Parent and which has all
necessary regulatory authority, if any, to purchase the Trust Stock.) Parent
agrees to cooperate with the Trustee in effecting such disposition and the
Trustee agrees to act in accordance with any direction made by Parent as to any
specific terms or method of disposition, to the extent not inconsistent with any
of the terms of this Trust Agreement, including subparagraph (e) below, and with
the requirements of the terms of any STB or court order. The proceeds of the
sale shall be distributed to or upon the order of Parent or, on a pro rata
basis, to the holder or holders of the Trust Certificates hereunder as then
known to the Trustee. The Trustee may, in its reasonable discretion, require the
surrender to it of the Trust Certificates hereunder before paying to the holder
his share of the proceeds. Upon disposition of all the Trust Stock pursuant to
this paragraph 8(c), this Trust shall cease and come to an end.
(d) Unless sooner terminated pursuant to any other provision herein
contained, this Trust Agreement shall terminate on December 31, 2016, and may be
extended by the parties hereto, so long as no violation of 49 U.S.C. Section
11323 will result from such termination or extension. All Trust Stock and any
other property held by the Trustee hereunder upon such termination shall be
distributed
<PAGE> 12
-12-
to or upon the order of the Acquiror. The Trustee may, in its reasonable
discretion, require the surrender to it of the Trust Certificates hereunder
before the release or transfer of the stock interests evidenced thereby.
(e) No disposition of Trust Stock under this paragraph 8 or otherwise
hereunder shall be made except pursuant to one or more broadly distributed
public offerings and subject to all necessary regulatory approvals, if any.
Notwithstanding the foregoing, Trust Stock may be distributed as otherwise
directed by Parent (but, if prior to the earliest of (i) the consummation of the
Amended Second Offer; (ii) December 31, 1998, if STB Approval shall not have by
then been granted; or (iii) the occurrence of an STB Denial, only with the prior
written consent of the Company) subject to any order of the STB pursuant to any
of its jurisdiction, in which case the Trustee shall be entitled to rely on a
certificate of Parent (in circumstance under which the consent of the Company is
required under the preceding parenthetical expression, acknowledged by the
Company) that any person or entity to whom the Trust Stock is disposed is not an
affiliate of the Parent and has all necessary regulatory authority, if any is
necessary, to purchase such Trust Stock. The Trustee shall promptly inform the
STB of any transfer or disposition of Trust Stock pursuant to this Paragraph 8.
Upon the transfer of all of the Trust Stock pursuant to this Paragraph 8, this
Trust shall cease and come to an end.
(f) Except as expressly provided in this Paragraph 8, the Trustee shall
not dispose of, or in any way encumber, the Trust Stock, and any transfer, sale
or encumbrance in violation of the foregoing shall be null and void.
9. Independence of the Trustee -- Neither the Trustee nor any affiliate
of the Trustee may have (i) any officers, or members of their respective boards
of directors, in common with the Acquiror, the Parent, or any affiliate of
either, or
<PAGE> 13
-13-
(ii) any direct or indirect business arrangements or dealings, financial or
otherwise, with the Acquiror, the Parent or any affiliate of either, other than
dealings pertaining to the establishment and carrying out of this voting trust.
Mere investment in the stock or securities of the Acquiror or the Parent or any
affiliate of either by the Trustee, short of obtaining a controlling interest,
will not be considered a proscribed business arrangement or dealing, but in no
event shall any such investment by the Trustee in voting securities of the
Acquiror, the Parent or their affiliates exceed five percent of their
outstanding voting securities and in no event shall the Trustee hold a
proportion of such voting securities so substantial as to permit the Trustee in
any way to control or direct the affairs of the Acquiror, the Parent or their
affiliates. Neither the Acquiror, the Parent nor their affiliates shall purchase
the stock or securities of the Trustee or any affiliate of the Trustee.
10. Compensation of the Trustee -- The Trustee shall be entitled to
receive reasonable and customary compensation for all services rendered by it as
Trustee under the terms hereof and said compensation to the Trustee, together
with all counsel fees, taxes, or other expenses reasonably incurred hereunder,
shall be promptly paid by the Acquiror or the Parent.
11. Trustee May Act Through Agents -- The Trustee may at any time or
from time to time appoint an agent or agents and may delegate to such agent or
agents the performance of any administrative duty of the Trustee.
12. Concerning the Responsibilities and Indemnification of the Trustee
- -- The Trustee shall not be liable for any mistakes of fact or law or any error
of judgment, or for any act or omission, except as a result of the Trustee's
willful misconduct or gross negligence. The Trustee shall not be answerable for
the default or misconduct of any agent or attorney appointed by it in pursuance
<PAGE> 14
-14-
hereof if such agent or attorney has been selected with reasonable care. The
duties and responsibilities of the Trustee shall be limited to those expressly
set forth in this Trust Agreement. The Trustee shall not be responsible for the
sufficiency or the accuracy of the form, execution, validity or genuineness of
the Trust Stock, or of any documents relating thereto, or for any lack of
endorsement thereon, or for any description therein, nor shall the Trustee be
responsible or liable in any respect on account of the identity, authority or
rights of the persons executing or delivering or purporting to execute or
deliver any such Trust Stock or document or endorsement or this Trust Agreement,
except for the execution and delivery of this Trust Agreement by this Trustee.
The Acquiror and the Parent agree that they will at all times protect, indemnify
and save harmless the Trustee, its directors, officers, employees and agents
from any loss, cost or expense of any kind or character whatsoever in connection
with this Trust except those, if any, growing out of the gross negligence or
willful misconduct of the Trustee, and will at all times themselves undertake,
assume full responsibility for, and pay all costs and expense of any suit or
litigation of any character, including any proceedings before the STB, with
respect to the Trust Stock of this Trust Agreement, and if the Trustee shall be
made a party thereto, the Acquiror or the Parent will pay all costs and
expenses, including reasonable counsel fees, to which the Trustee may be subject
by reason thereof; provided, however, that the Acquiror and the Parent shall not
be responsible for the cost and expense of any suit that the Trustee shall
settle without first obtaining the Parent's written consent. The Trustee may
consult with counsel and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or omitted or
suffered by the Trustee hereunder in good faith and in accordance with such
opinion.
<PAGE> 15
-15-
13. Trustee to Give Account to Holders -- To the extent requested to do
so by the Acquiror or any registered holder of a Trust Certificate, the Trustee
shall furnish to the party making such request full information with respect to
(i) all property theretofore delivered to it as Trustee, (ii) all property then
held by it as Trustee, and (iii) all actions theretofore taken by it as Trustee.
14. Resignation, Succession, Disqualification of Trustee -- The
Trustee, or any trustee hereafter appointed, may at any time resign by giving
forty-five days' written notice of resignation to the Parent and the STB. The
Parent shall at least fifteen days prior to the effective date of such notice
appoint a successor trustee which shall (i) satisfy the requirements of
Paragraph 9 hereof and (ii) be a corporation organized and doing business under
the laws of the United States or of any State thereof and authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authority. If no successor trustee shall have been appointed and shall
have accepted appointment at least fifteen days prior to the effective date of
such notice of resignation, the resigning Trustee may petition any competent
authority or court of competent jurisdiction for the appointment of a successor
trustee. Upon written assumption by the successor trustee of the Trustee's
powers and duties hereunder, a copy of the instrument of assumption shall be
delivered by the Trustee to the Parent and the STB and all registered holders of
Trust Certificates shall be notified of its assumption, whereupon the Trustee
shall be discharged of the powers and duties of the Trustee hereunder and the
successor trustee shall become vested with such powers and duties. In the event
of any material violation by the Trustee of the terms and conditions of this
Trust Agreement, the Trustee shall become disqualified from acting as trustee
hereunder as soon as a
<PAGE> 16
-16-
successor trustee shall have been selected in the manner provided by this
paragraph.
15. Amendment -- Subject to the requirements of Section 1.9 of the
Merger Agreement, this Trust Agreement may from time to time be modified or
amended by agreement executed by the Trustee, the Acquiror (if executed prior to
the Merger), the Parent and all registered holders of the Trust Certificates (i)
pursuant to an order of the STB, (ii) with the prior approval of the STB, (iii)
in order to comply with any order of the STB or (iv) upon receipt of an opinion
of counsel satisfactory to the Trustee and the holders of Trust Certificates
that an order of the STB approving such modification or amendment is not
required and that the amendment is consistent with the STB's regulations
regarding voting trusts. Any modification or amendment of this Trust Agreement
effected after the Merger may be executed by agreement executed by the Trustee,
the Parent and all registered holders of the Trust Certificates, subject to
clauses (i), (ii), (iii) or (iv), as may be the case, of the preceding sentence.
16. Governing Law; Powers of the STB -- The provisions of this Trust
Agreement and the rights and obligations of the parties hereunder shall be
governed by the laws of the Commonwealth of Pennsylvania, except that to the
extent any provision hereof may be found inconsistent with subtitle IV, title
49, United States Code or regulations promulgated thereunder, such statute and
regulations shall control and such provision hereof shall be given effect only
to the extent permitted by such statute and regulations. In the event that the
STB shall, at any time hereafter by final order, find that compliance with law
requires any other or different action by the Trustee than is provided herein,
the Trustee shall act in accordance with such final order instead of the
provisions of this Trust Agreement.
<PAGE> 17
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17. Counterparts -- This Trust Agreement is executed in four
counterparts, each of which shall constitute an original, and one of which shall
be held by each of the Parent and the Acquiror and the other two shall be held
by the Trustee, one of which shall be subject to inspection by holders of Trust
Certificates on reasonable notice during business hours.
18. Filing With the STB -- A copy of this Agreement and any amendments
or modifications thereto shall be filed with the STB by the Acquiror.
19. Successors and Assigns -- This Trust Agreement shall be binding
upon the successors and assigns to the parties hereto, including without
limitation successors to the Acquiror and the Parent by merger, consolidation or
otherwise. The parties agree that the Company shall be an express third party
beneficiary of this Trust Agreement through and including the earliest of (i)
the consummation of the Amended Second Offer; (ii) December 31, 1998, if STB
Approval shall not have been granted; or (iii) the occurrence of an STB Denial,
but that thereafter the Company shall not be any such third-party beneficiary.
Except as otherwise expressly set forth herein, any consent or approval required
from the Company hereunder shall mean the prior written consent or approval by a
duly adopted resolution of the Company's board of directors, or by its duly
authorized officer or other representative, and shall be granted or withheld in
the sole discretion of such board, officer or representative.
20. Succession of Functions -- The term "STB" includes any successor
agency or governmental department that is authorized to carry out the
responsibilities now carried out by the STB with respect to the consideration of
the consistency with the public interest of rail mergers and combinations, the
regulation of voting trusts in respect of the acquisition of securities of rail
carriers
<PAGE> 18
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or companies controlling them, and the exemption of approved rail mergers and
combinations from the antitrust laws.
21. Notices -- Any notice which any party hereto may give to the other
hereunder shall be in writing and shall be given by hand delivery, or by first
class registered mail, or by overnight courier service, or by facsimile
transmission confirmed by one of the aforesaid methods, sent,
If to Purchaser or Acquiror, to:
CSX Corporation
One James Center
901 East Cary Street
Richmond, Virginia 23219
Attention: General Counsel
If to the Trustee, to:
Deposit Guaranty National Bank
One Deposit Guaranty Plaza,
8th Floor
Jackson, Mississippi 39201
Attention: Corporate Trust Department
With a required copy to:
Deposit Guaranty National Bank
c/o Commercial National Bank In Shreveport
333 Texas Street
Shreveport, LA 71101
Attention: Corporate Trust Department
And if to the holders of Trust Certificates, to them at their addresses as shown
on the records maintained by the Trustee.
22. Remedies -- Each of the parties hereto acknowledges and agrees that
in the event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (a) will waive,
<PAGE> 19
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in any action for specific performance, the defense of adequacy of a remedy at
law and (b) shall be entitled, in addition to any other remedy to which they may
be entitled at law or in equity, to an order compelling specific performance of
this Agreement in any action instituted in any state or federal court sitting in
Philadelphia, Pennsylvania. Each party hereto consents to personal jurisdiction
in any such action brought in any state or federal court sitting in
Philadelphia, Pennsylvania.
IN WITNESS WHEREOF, CSX Corporation and Green Acquisition Corp. have
caused this Amended and Restated Trust Agreement to be executed by their
authorized officers and their corporate seals to be affixed, attested by their
Secretaries or Assistant Secretaries, and Deposit Guaranty National Bank has
caused this Amended and Restated Trust Agreement to be executed by its
authorized officer or agent and its corporate seal to be affixed, attested to by
its Secretary or one of its Assistant Secretaries or other authorized agent, all
as of the day and year first above written.
Attest: CSX CORPORATION
By
- --------------------------- ------------------------------
Secretary
Attest: GREEN ACQUISITION CORP.
By
- --------------------------- ------------------------------
Secretary
Attest: DEPOSIT GUARANTY NATIONAL BANK
<PAGE> 20
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By
- --------------------------- ------------------------------
<PAGE> 21
No._______________ EXHIBIT A
____________Shares
VOTING TRUST CERTIFICATE
FOR
COMMON STOCK
of
CONRAIL INC.
INCORPORATED UNDER THE LAWS OF
THE STATE OF PENNSYLVANIA
THIS IS TO CERTIFY that _____________________ will be entitled, on the
surrender of this Certificate, to receive on the termination of the Voting
Trust Agreement hereinafter referred to, or otherwise as provided in Paragraph
8 of said Voting Trust Agreement, a certificate or certificates for __________
shares of the Common Stock, $1.00 par value, of Conrail Inc., a Pennsylvania
corporation (the "Company"). This Certificate is issued pursuant to, and the
rights of the holder hereof are subject to and limited by, the terms of an
Amended and Restated Voting Trust Agreement, dated as of March 7, 1997,
executed by CSX Corporation, a Virginia corporation, Green Acquisition Corp.,
a Pennsylvania corporation, and Deposit Guaranty National Bank, as Trustee (as
it may be amended from time to time, the "Voting Trust Agreement"), a copy of
which Voting Trust Agreement is on file in the office of said Trustee at One
Deposit Guaranty Plaza, 8th Floor, Jackson, Mississippi 39201 and open to
inspection of any stockholder of the Company and the holder hereof. The Voting
Trust Agreement, unless earlier terminated (or extended) pursuant to the terms
thereof, will terminate on December 31, 2016, so long as no violation of 49
U.S.C. Section 11323 will result from such termination.
<PAGE> 22
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The holder of this Certificate shall be entitled to the benefits of
said Voting Trust Agreement, including the right to receive payment equal to the
cash dividends, if any, paid by the Company with respect to the number of shares
represented by this Certificate.
This Certificate shall be transferable only on the books of the
undersigned Trustee or any successor, to be kept by it, on surrender hereof by
the registered holder in person or by attorney duly authorized in accordance
with the provisions of said Voting Trust Agreement, and until so transferred,
the Trustee may treat the registered holder as the owner of this Voting Trust
Certificate for all purposes whatsoever, unaffected by any notice to the
contrary.
By accepting this Certificate, the holder hereof assents to all the
provisions of, and becomes a party to, said Voting Trust Agreement.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
signed by its officer duly authorized.
Dated: DEPOSIT GUARANTY
NATIONAL BANK
By
-------------------------------
Authorized Officer
<PAGE> 23
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[FORM OF BACK OF VOTING TRUST CERTIFICATE]
FOR VALUE RECEIVED ____________________________ hereby sells, assigns,
and transfers unto __________________________ the within Voting Trust
Certificate and all rights and interests represented thereby, and does hereby
irrevocably constitute and appoint _________________________ Attorney to
transfer said Voting Trust Certificate on the books of the within mentioned
Trustee, with full power of substitution in the premises.
______________________________
Dated:
In the Presence of:
____________________________________
