PAGE 1
FORM 10-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 27, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-896
-----
ALLEGHENY AND WESTERN RAILWAY COMPANY
--------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 52-0790328
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 Water Street, Jacksonville, FL. 32202
- --------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (904) 359-3100
------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------------------- --------------------------
First Mortgage 4% Bonds due October 1, 1998 The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. (X)
State the aggregate market value of the voting stock held by nonaffiliates of
the registrant. The aggregate market value of the voting stock at March 24,
1997, was $1,109,248, excluding the voting stock held by affiliates of the
registrant.
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PAGE 2
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date. The registrant has 32,000
shares of common stock, par value $100, outstanding at March 24, 1997.
The following listed document has been incorporated herein by reference:
Form 10-K filed by CSX Transportation, Inc., on March 19, 1997 - Item 8 of
Part II.
PART I
Item 1. Business.
and
Item 2. Properties.
Allegheny and Western Railway Company (the "company") is a railroad
incorporated in the Commonwealth of Pennsylvania on January 22, 1898. It owns
a line of railroad 62 miles long which lies between Punxsutawney and Butler
Junction, Pennsylvania. Pursuant to leases dated October 1, 1898, and January
15, 1900, between the company and Buffalo, Rochester and Pittsburgh Railway
Company ("BR&P") the company leased its railroad to BR&P for the duration of
the company's corporate existence, at an annual rental equal to 4% on its
bonded debt and 6% on its common stock ($100 par value). The principal and
interest on the company's bonds are guaranteed by BR&P.
Under an agreement dated December 15, 1931, as amended, CSX
Transportation, Inc. ("CSXT"), as successor by merger to the Baltimore and
Ohio Railroad Company, operated the properties of BR&P, and incident thereto
also operated the properties of the company in the name and for the account of
CSXT without separation or segregation of the results of such operations.
Under such agreement CSXT agreed to pay all leased line rentals but did not
assume or guarantee payment of the principal on the bonds. In addition to the
rental paid by CSXT for the payment of the company's dividends and bond
interest, CSXT paid all the expenses of the company, including all taxes
assessed against it.
On July 18, 1988, CSXT, BR&P and Buffalo & Pittsburgh Railroad, Inc.
("B&P") entered into certain agreements collectively referred to as the
"Purchase and Sale Agreement" and closed in escrow. The B&P took possession
and control of operations of the line of railroad of BR&P on July 19, 1988.
The purchase and sale agreement provided that BR&P and CSXT shall assign,
transfer, and convey to B&P all their obligations and duties arising under the
lease agreements. On October 7, 1991, CSXT, BR&P and B&P executed an
Assignment and Assumption Agreement which concluded the escrow and B&P assumed
all of the terms and conditions of the Purchase and Sale Agreement with the
exception that CSXT would retain its right, title and interest in the 16,159
shares of common stock of the company, being all the stock of the company
owned by CSXT at that time. As of March 24, 1997, CSXT owned 16,210 shares of
common stock of the company, or 50.66%.
Since the interest and dividends on the company's bonds and common
stock are paid from moneys obtained from the lessee, reference is made to
CSXT's Form 10-K for the year ended December 27, 1996, a copy of which is
available from Patricia J. Aftoora, Vice President and Corporate Secretary of
CSXT, S/C J-160, 500 Water Street, Jacksonville, FL 32202.
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Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Registrant's Common Stock and Related Security Holder
Matters.
There is no market in which the common stock of the company is
traded. As of March 24, 1997, there were approximately 166 stockholders of
$100 par value capital stock. The terms of the lease agreement referred to in
Items 1 and 2, Business and Properties, provide a full and unconditional
guarantee of dividends on the company's capital stock at an annual dividend
rate of $6.00 per common share.
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Item 6. Selected Financial Data.
and
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Five year selected data:
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
Rental income $ 328,730 $ 328,730 $ 328,730 $ 326,290 $ 326,290
Interest on funded
debt 78,600 78,600 78,600 75,920 75,920
Federal income taxes 58,130 58,130 58,130 58,130 58,130
---------- ---------- ---------- ---------- ----------
Earnings for the
year $ 192,000 $ 192,000 $ 192,000 $ 192,240 $ 192,240
========== ========== ========== ========== ==========
Weighted average
number of common
shares (a) 32,000 32,000 32,000 32,040 32,040
========== ========== ========== ========== ==========
Earnings per
common share (a) $ 6.00 $ 6.00 $ 6.00 $ 6.00 $ 6.00
========== ========== ========== ========== ==========
Dividends per
common share (a) $ 6.00 $ 6.00 $ 6.00 $ 6.00 $ 6.00
========== ========== ========== ========== ==========
Total assets $6,834,324 $6,834,324 $6,834,324 $6,834,324 $6,834,324
========== ========== ========== ========== ==========
Long term debt $1,965,000 $1,965,000 $1,965,000 $1,965,000 $1,965,000
========== ========== ========== ========== ==========
(a) Calculations include shares held directly by CSXT.
Item 8. Financial Statements and Supplementary Data.
Due to the nature of CSXT's obligations under the lease agreement
referred to in Items 1 and 2, Business and Properties, financial statements
and notes thereto in response to this item are not included herein. In lieu
thereof, the financial statements and notes included in the Form 10-K filed on
behalf of CSXT on March 19, 1997, are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on the Accounting and
Financial Disclosures.
None.
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PART III
Item 10. Directors and Executive Officers of the Registrant:
The following sets forth certain information relating to the
company's directors and executive officers as of March 19, 1997. Directors
are elected annually and serve until the next annual meeting of stockholders
or until their successors are elected. Officers are elected annually at the
annual meeting of the Board and hold office until the next annual meeting of
the Board or until their successors are elected. There are no arrangements or
understandings between any director or executive officer and any other person
pursuant to which the director or officer was selected. There are no family
relationships among these officers and directors.
Name, Age, Present
Position with the Business Experience during last 5 Years,
Company Company Directorships in Public Corporations
- ------------------ --------------------------------------------
GERALD L. NICHOLS, 61 President of the company since 1995 and
President and Director Senior Vice President of the company prior
thereto. Mr. Nichols has served in various
executive capacities for certain CSXT affiliates
during the past five years and is currently
Executive Vice President and Chief Operating
Officer of CSXT.
P. MICHAEL GIFTOS, 50 Senior Vice President of the company since
Senior Vice President 1990. During the past five years, Mr. Giftos
has served as an executive officer of certain
CSXT affiliates and is currently Senior Vice
President-Law and General Counsel of CSXT.
CARL N. TAYLOR, 57 Senior Vice President of the company since
Senior Vice President since 1995. Mr. Taylor has been an officer of
certain CSXT affiliates during the past five
years and is currently Senior Vice President-
Transportation and Mechanical, and Chief
Transportation Officer of CSXT.
MICHAEL J. WARD, 46 Executive Vice President of the company since
Executive Vice President June 6, 1996. During the past five years,
and Director Mr. Ward has served as an officer of certain
CSXT affiliates and is currently Executive Vice
President-Finance and Chief Financial Officer
of CSXT.
PATRICIA J. AFTOORA, 57 Vice President of the company since 1990 and
Vice President, Corporate Secretary of the company prior
Corporate Secretary thereto. Mrs. Aftoora has served as an officer
and Director of certain CSXT affiliates during the past five
years and is currently Vice President and
Corporate Secretary of CSXT.
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Name, Age, Present
Position with the Business Experience during last 5 Years,
Company Company Directorships in Public Corporations
- ------------------ -------------------------------------------
C.J.O. WODEHOUSE, JR., 49 Vice President and Controller of the company
Vice President and since 1995. Mr. Wodehouse has served as an
Controller officer of CSX Corporation ("CSX") and
certain of its affiliates during the past
five years and is currently Vice President
and Controller of CSXT.
M. MAURICE LAZENBY, III, 53 Assistant Vice President and Treasurer of
Assistant Vice President the company since 1995. Mr. Lazenby has
and Treasurer served as an officer of certain CSXT
affiliates during the past five years and
is currently Assistant Vice President and
Treasurer of CSXT.
There have been no events under any bankruptcy act, no criminal
proceedings, orders, judgments, decrees or injunctions material to the
evaluation of the ability and integrity of any director or executive officer
during the past five years.
Item 11. Executive Compensation
All directors and officers of the company are also officers and
employees of CSXT, and serve without compensation from the company.
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Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 24, 1997, 50.66% of the voting securities of the company
(16,210 shares of $100 par value capital stock) were beneficially held by
CSXT, who, in turn, is beneficially owned by CSX Corporation (CSX), Richmond,
VA, through ownership of 100% of CSXT's outstanding voting securities.
As of March 24, 1997, all directors and officers of the company as a
group (7 persons) beneficially owned 1,253,920 shares of $1 par value common
stock of CSX, (including 422,077 shares exercisable under option within 60
days), representing less than 1% of the outstanding shares. The number of CSX
shares owned by each director as of March 24, 1997, is set forth below:
Number of
Number of shares of CSX
shares of CSX exercisable within
beneficially owned 60 days under stock
Name as of March 24, 1997 (1)(2) option plans
---- --------------------------- -------------------
P. J. Aftoora 29,637 42,417
G. L. Nichols 217,076 110,000
M. J. Ward 145,705 70,400
(1) Includes shares pledged to secure loans under the CSX Stock
Purchase and Loan Plan, which shares were acquired under that
plan.
(2) Includes shares held in trust under certain deferred compensation
plans.
Item 13. Certain Relationships and Related Transactions.
None.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.
(a) 1. Financial Statements.
Refer to response to Item 8 on page 4.
2. Financial Statement Schedules
Refer to response to Item 8 on page 4.
3. Exhibits
(3.1) Articles of Incorporation incorporated herein by
reference to Registrant's Form 12 Application for
Registration, filed on May 13, 1935.
(3.2) By-laws of the company restated as of May 10, 1996.
(10.1) Indenture dated October 1, 1898, between the
Registrant and Buffalo, Rochester and Pittsburgh
Railway Company.
(10.2) Contract dated January 15, 1900, supplementing the
original Indenture of October 1, 1898.
(10.3) Agreement dated December 15, 1931, between CSX
Transportation, Inc. (successor by merger to The
Baltimore and Ohio Railroad Company) and Buffalo,
Rochester and Pittsburgh Railway Company.
(10.4) Agreement dated January 1, 1940, modifying the
Agreement dated December 15, 1931.
(10.5) Agreement dated December 29, 1943, amending and
modifying the Agreements of December 15, 1931, and
January 1, 1940.
(23) Consent of Independent Auditors (See page I-1).
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the
year ended December 27, 1996.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on the 27th day
of March, 1997.
ALLEGHENY AND WESTERN RAILWAY COMPANY
/s/ JAMES L. ROSS
--------------------------------------
James L. Ross
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/Gerald L. Nichols President and Director
- ------------------------ (Principal Executive Officer)
Gerald L. Nichols*
/s/Michael J. Ward Executive Vice President and Director
- ------------------------ (Principal Finance Officer)
Michael J. Ward*
/s/Patricia J. Aftoora Vice President, Corporate Secretary
- ------------------------ and Director
Patricia J. Aftoora*
/s/ Patricia J. Aftoora
- ------------------------
Patricia J. Aftoora March 27, 1997
*(Attorney-in-Fact)
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Exhibit 3.2
ALLEGHENY AND WESTERN RAILWAY COMPANY
-----------
BY-LAWS
(as Restated May 10, 1996)
-----------
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1.The annual meeting of stockholders for the
election of directors and the transaction of such other business
as may properly come before the meeting, shall be held on the
fourth Thursday in May in each year either within or without the
Commonwealth of Pennsylvania.
Section 2.Special meetings of the stockholders may be
called by the Board of Directors; and it shall be the duty of the
Board of Directors to call a special meeting of the stockholders
as soon as practicable whenever requested in writing by
stockholders of record holding at least one-fifth of all the
outstanding shares of the capital stock of the corporation.
Section 3.The place, date and hour of each meeting of the
stockholders and, in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be stated in
the written notice of the meeting, unless all of the stockholders
have agreed on such place, date and hour and have waived such
notice.
Section 4.The holders of a majority of the shares of the
outstanding capital stock entitled by the Articles of
Incorporation or by law to vote at such meeting, represented in
person or by proxy, shall constitute a quorum at all meetings of
the stockholders for the transaction of business.
Section 5.Every stockholder entitled by the Articles of
Incorporation or by law to vote, shall have the right at every
stockholders' meeting to one vote for each share of stock
standing in his name on the books of the corporation.
Section 6.The vote of a majority of the shares
outstanding shall decide any question before a meeting of
stockholders, except was otherwise required by law.
Section 7.Any action which may be taken at a meeting of
the stockholders may be taken without a meeting, if a consent or
consents in writing, setting forth the action so taken, shall be
signed by all of the stockholders who would be entitled to vote
at a meeting for such purpose and shall be filed with the
Secretary.
ARTICLE II
BOARD OF DIRECTORS
Section 1.The Board of Directors shall consist of three
members, at least a majority of whom shall be citizens of the
United States, and shall be elected for a term of one year and
shall hold office until their successors are elected and
qualified. Directors need not be stockholders in the
corporation.
A majority of the Board of Directors shall constitute a
quorum.
Section 2.The stockholders at any meeting, by a vote of
the holders of a majority of all the shares of capital stock at
the time outstanding and having voting power, may remove any
director and fill any vacancy. Vacancies arising among the
directors, including a vacancy resulting from an increase by the
board of directors in the number of directors, so long as the
increase so created is not more than two, may be filled by the
remaining directors, though less than a quorum of the board,
unless sooner filled by the stockholders. Vacancies filled by
the directors may be subject to such rules, regulations and
criteria as the board may from time to time prescribe.
Section 3.The business of the corporation shall be
managed by its Board of Directors which may exercise all such
powers of the corporation and do all such lawful acts and things
as are not by statute or by the Articles of Incorporation or by
these By-Laws directed or required to be exercised and done by
the stockholders.
MEETINGS OF THE BOARD
Section 4.There shall be a meeting of the Board of
Directors for organization as soon as practicable after the
election of the members thereof.
Meetings of the Board of Directors may be called at any
time and place by the Secretary or Assistant Secretary, by the
direction of the President, or at the request of any two members
of the Board. Any meeting of the Board of Directors may be held
without notice if the Directors not present at such meeting waive
notice thereof, which waiver may be given at any time either
before or after the meeting; and any meeting may be adjourned by
the Directors present to any other time or place.
Section 5.Any action which may be taken at a meeting of
the Board may be taken without a meeting, if a consent or
consents in writing setting forth the action so taken shall be
signed by all of the Directors and shall be filed with the
Secretary.
Section 6.Any action required to be taken at a meeting of
the Board may be taken by means of a conference telephone or
similar communications equipment whereby all persons par
ticipating in the meeting can hear each other, and participation
by such means shall constitute presence in person at such
meeting. When such meeting is conducted, a written record shall
be made of the action taken at such meeting.
ARTICLE III
OFFICERS
Section 1.At the first meeting of the Board of Directors
held after the annual meeting of the stockholders, the Board of
Directors shall elect officers of the corporation as follows: a
President, a Secretary, and a Treasurer, and may elect one or
more Vice-Presidents, any of whom may be designated as an
Executive Vice-President, a Senior Vice-President or a Vice-
President with a functional title. Any two or more offices may
be held by the same person, except the offices of President and
Secretary.
Section 2.The Board of Directors, or the President, with
the approval of the
Board, may appoint such additional subordinate officers as they
may deem necessary for the efficient conduct of the affairs of
the corporation.
Section 3.The officers of the corporation shall hold
office until their successors are chosen and qualify in their
stead, but the President shall have the power to suspend any
officer at any time.
Section 4.The powers, duties, and responsibilities of
officers and employees of the corporation not prescribed in these
By-Laws shall be defined in rules and regulations, which may be
adopted and from time to time added to, modified, or repealed by
the President, with the approval of the Board of Directors.
THE PRESIDENT
Section 5.The President shall have general charge,
control and supervision of all the business and operations of the
corporation and shall see that all orders and resolutions of the
Board are carried into effect.
The Board of Directors shall designate an appropriate
person the duty of acting for the President in his absence or
inability to act.
THE VICE-PRESIDENTS
Section 6.The duties, powers, and responsibilities of the
Vice-Presidents shall be fixed by the President with the approval
of the Board of Directors. The Board of Directors shall from
time to time assign to any Vice-President the duty of acting for
the President in case of his absence or inability to act, or in
such case to perform such duties as from time to time may be as
signed to him.
THE SECRETARY
Section 7.The Secretary shall attend all meetings of the
stockholders and the Board of Directors, and record their
proceedings, unless a temporary Secretary be appointed. He shall
give due notice of any meetings of the stockholders and
directors. He shall keep a register of all certificates of stock
that are issued. He shall be custodian of the seal of the
corporation and of all records, contracts, leases, and other
papers and documents of the corporation, unless otherwise
directed by the Board of Directors; and he shall perform such
additional duties as may be assigned to him by the Board of
Directors or by the President.
THE TREASURER
Section 8.The Treasurer shall receive, keep, and disburse
all monies belonging or coming to the corporation, shall keep
regular, true, and full accounts of all receipts and disburse
ments and make detailed reports of the same to the Board of
Directors whenever required. He shall also perform such
additional duties in connection with the administration of the
financial affairs of the corporation as the Board of Directors or
the President or the Vice-President in charge of finance shall
assign to him.
ARTICLE IV
DEPOSITARIES
The money of the corporation shall be kept in such bank
or banks as the Board of Directors shall from time to time direct
or approve. All checks and other instruments for the disburse
ment of funds shall be executed manually or by facsimile by such
officers or agents of the corporation as may be authorized by the
Board of Directors.
ARTICLE V
SHARES OF STOCK AND THEIR TRANSFER
Section 1.Certificates for shares of stock which have
been fully paid shall be issued on demand to any person entitled
thereto, under the corporate seal, and signed by the President or
a Vice-President and by the Secretary or an Assistant Secretary.
Transfers of stock shall be made only on the books of the
corporation in person or proxy upon surrender to the corporation
of a certificate representing shares duly endorsed or accompanied
by proper evidence of succession, assignment, or authority to
transfer.
ARTICLE VI
SEAL
Section 1.The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the
words "Corporate Seal, Pennsylvania." Said seal may be used by
causing it, or a facsimile thereof, to be impressed or affixed or
in any manner reproduced.
Section 2.All bonds, deeds, and other instruments
requiring the corporate seal of the corporation shall be signed
by the President or a Vice-President, or by such other officer or
person as the Board of Directors may from time to time designate
for the purpose, and the seal of the corporation shall be affixed
thereto and attested by the Secretary or an Assistant Secretary.
ARTICLE VII
FISCAL YEAR
The fiscal year of the corporation shall begin
immediately after midnight on the last Friday of December, and
shall end at midnight on the last Friday of December of each
calendar year.
ARTICLE VIII
AMENDMENTS
These By-Laws may be altered, amended, or repealed and
new By-Laws adopted at any meeting of the Board of Directors, by
a majority vote of the whole Board, or at any meeting of the
stockholders.
Exhibit 10.1
THIS INDENTURE, made the first day of October 1898, between
the ALLEGHENY AND WESTERN RAILWAY COMPANY, first party, and the
BUFFALO, ROCHESTER, & PITTSBURGH RAILWAY COMPANY, second party,
witnesseth:
WHEREAS, first party owns and operates a certain railroad
known as the Allegheny & Western Railway, running from a point at
or near Clayville, Jefferson County, to a point connecting with
the Pittsburgh & Western Railway and the Pittsburgh, Bessemer &
Lake Erie Railroad in Butler Township, Butler County, all in the
State of Pennsylvania, a distance of about sixty-two miles; and
WHEREAS, the said Allegheny and Western Railway and said
Buffalo, Rochester & Pittsburgh Railway united constitute a
continuous line of railroad; and it is for the common benefit of
said parties that the railroad of the first party should be
leased to and operated by second party;
NOW, THEREFORE, first party, in consideration of the rents,
covenants, and agreements hereinafter mentioned, has granted,
demised and leased, and by these presents doth grant, demise and
lease unto second party, all and singular, the railroad of the
first party known as the Allegheny & Western Railway and which
extends from a point near Clayville, Jefferson County, to a point
connecting with the Pittsburgh and Western Railway and the
Pittsburgh, Bessemer & Lake Erie Railroad in Butler Township,
Butler County, all in the State of Pennsylvania, and being a
distance of about sixty-two miles; together with the equipment of
said railroad, and all sidings connected therewith; also all
lands, real estate, right of way, railroads, tracks, bridges,
culverts, fences, depots, tanks, turntables, shops, buildings,
structures, cars, rolling stock, fixtures, locomotives, engines
and all other property and rights, of every kind and character
real, personal and mixed whatsoever and wheresoever situate,
appertaining to said railroad, and to which first party is wholly
or in part or in any manner entitled.
Also, all and singular, the rights, powers and privileges
which have been or may be granted to or conferred upon, or which
may be used or exercised by first party, to have and to hold,
use, enjoy, possess and exercise all and singular, the property,
things, rights, powers and privileges hereby leased and demised,
with the hereditaments and appurtenances thereunto belonging or
in any wise appertaining unto second party, its successors, and
assigns, from the 1st day of October, 1899, for and during the
full term of the corporate existence of said first party, and
during the full term of any and all renewals of the charter of
the first party; second party, its successors and assigns,
yielding and paying therefor unto first party, its successors and
assigns yearly and every year during the said term hereby
granted, the yearly rent hereinafter specified, at the time and
in the manner hereinafter specified, and keeping and performing
all and singular the covenants and agreements hereinafter set
forth, to be by second party kept and performed.
ARTICLE 1. The annual rent hereby reserved shall be paid
in gold coin of the United States of America, or present standard
of weight and fineness, or its equivalent.
The amount of the annual rent shall be:
1. One hundred and fifty thousand dollars or so much
thereof as shall be equal to the sum of six per cent. on the
capital stock of the Allegheny and Western Railway Company which
shall at any time be outstanding not exceeding twenty-five
thousand shares of stock of the par value of one hundred dollars
a share; which said sum of one hundred and fifty thousand dollars
or less as aforesaid, shall be paid by second party to first
party for the benefit and use of the holders of so much of the
capital stock of first party not exceeding $2,500,000 par value
as shall at any time be outstanding. Said sum shall be paid semi-
annually, to wit: The one-half thereof being $75,000, or less as
aforesaid on the 1st day of January and the other half thereof
being $75,000, or less as aforesaid on the 1st day of July in
each and every year during the continuance of this lease; and
2. The sum of one hundred thousand dollars or so much
thereof as may be necessary to pay the interest at the rate of
four per cent. per annum on the first mortgage bonds of first
party which may be issued and may be outstanding to an amount not
to exceed two million five hundred thousand dollars ($2,500,000),
and which said sum of one hundred thousand dollars ($100,000) or
so much thereof as may be necessary as aforesaid, shall be paid
by assuming and paying to the holders of the first mortgage bonds
of first party to the amount of not to exceed two million five
hundred thousand dollars ($2,500,000), the semi-annual interest
thereon at the rate of four per cent. per annum.
The said rent shall be paid at the office or agency for the
time being of second party in the city of New York, except in any
case first party shall designate in writing a different place in
the city of New York for the payment of any installment, in which
case, payment of such installment shall be made at the place so
designated.
Said payment shall be made free from any tax of any kind,
character or description assessed by the United States or State
of Pennsylvania, or local authority, the collection of which
shall be made or directed to be made by or through the means or
agency of either first or second party. Any such tax shall be
paid by second party as part of the rent hereby reserved.
When second party shall have paid interest on said bonds to
the persons entitled thereto, second party shall furnish to first
party due evidence thereof, and shall cancel and deliver the paid
coupons.
When second party shall have paid to first party the portion
of said rent to be applied by first party to the payment of
dividends to its stockholders, first party shall furnish second
party due proof that such dividends have been paid to said
stockholders. Should first party fail to appropriate the rent
paid for that purpose to payment of dividends to stockholders,
second party may thereafter pay said rent direct to stockholders.
Second party hereby guarantees to the holder of each share
of stock of first party, and the holder of each bond or interest
coupon of first party, the prompt and due payment of interest and
dividends upon such bonds, coupons and shares of capital stock,
in accordance with the provisions herein made for the payment of
rent by second party to first party, such guaranty shall be
endorsed on each bond and on each share of stock, and signed by
some officer or agent of second party.
ARTICLE 2. It is agreed that upon the due date of bonds
of first party herein referred to, first party will make and
execute other bonds and secure the same by first mortgage, or
will extend the present existing bonds secured by the present
existing mortgage, at such rate of interest and for such period
of time as second party may require, and with the proceeds
thereof pay the bonds so becoming due, and will again and again,
so long as this lease and possession thereunder by second party
may continue, execute other bonds and secure the same by
mortgage, and with the proceeds thereof pay the bonds so becoming
due, or extend existing bonds.
Second party agrees to pay the interest on all such other or
extended bonds in the same manner and at the same place as it has
hereby agreed to pay the interest on said bonds for the sum of
two million five hundred thousand dollars ($2,500,000) to the
owners of such bonds or coupons, so long as this lease or any
renewal thereof shall continue, and as part of the rent reserved
thereby.
It is agreed that upon the falling due of the said bonds and
the payment of the same by the proceeds of the issue and sale of
other bonds, and also in case of the extension of said first-
mentioned bonds, second party shall be entitled to the benefit of
any reduction in the rate of interest, and the rent hereby
reserved shall be diminished in proportion to the reduction of
interest payment secured by such issue of new bonds or by such
extension of old bonds. In case it should be necessary, in order
to sell said new bonds at par, to make them bear interest at a
rate greater than four per cent., second party agrees to pay as
rent a sum sufficient to make up such increased rate of interest,
and such sum is hereby reserved as and made a part of the rent
reserved by this lease.
Second party further agrees to and with first party, that
the second party will pay and discharge all the expenses properly
and necessarily incurred in order to keep up the corporate
existence of first party, including a sum not to exceed five
hundred dollars ($500) per annum for the payment of salaries of
officers of first party. Second party also agrees to pay the
expenses of the transfer of the stock and bonds of first party.
ARTICLE 3. Second party for itself and its successors
and assigns, covenants, promises and agrees to and with first
party, its successors and assigns, that second party, its
successors and assigns shall and will yearly and in each and
every year of and during the term aforesaid, and any extension
of the term aforesaid, well and truly pay and cause to be paid
unto said first party, its successors and assigns, the yearly
rent hereinbefore reserved in the manner and to the persons and
at the time hereinbefore mentioned.
ARTICLE 4. Second party shall and will, at its own
proper cost and expense, and without deduction from the rent
aforesaid, operate and run the said demised railway at all times
during said term, in the same manner as first party, as the owner
thereof, or otherwise, is now or shall or may at any time
hereafter by law, be required to do.
Second party shall and will, at its own proper cost and
expense, and without reduction from the rent aforesaid, and at
all times during the said term, maintain, preserve and keep the
railroad and premises hereby demised, and every part of the same,
in thorough repair, working order and condition, and supplied
with rolling stock and equipment, so that the business of said
demised railway shall be preserved, encouraged and developed, and
that the same shall at all times be done with safety and
expedition, and the public accommodated in respect thereto with
al practicable conveniences and facilities, and that all further
growth of such business, as the same may arise or be reasonably
anticipated, shall be fully provided for and secured.
Second party covenants and agrees that second party shall
and will at second party's own proper cost and expense, and
without deduction from the rent aforesaid, do and cause to be
done to and upon the said demised railroad and premises any and
all repairs, replacing and renewals, and provide such rolling
stock and equipment and other facilities as shall or may be
reasonable required.
ARTICLE 5. Second party further covenants and agrees
that second party will, from time to time, and as often as same
shall become due, pay and discharge without deduction from the
rent aforesaid, any and all taxes, assessments, debts, imposts
and charges whatsoever, which shall or may be levied, assessed or
imposed during the said term by any government or lawful,
authority whatever, upon said demised railroad and premises, or
upon any part thereof, or upon any business or earnings or income
of same, or upon the first party will respect to the said demised
railroad and premises or any part thereof, and any business or
earnings or income of same, or upon the first party for or with
respect to any money which shall be paid and which shall become
payable to said first party as or on account of the rent
hereinbefore reserved.
ARTICLE 6. Second party shall and will at all times
during the continuance of this lease, and of any renewal thereof,
keep an office in the city of Ridgway in the State of
Pennsylvania, which shall be open at all reasonable hours and
times for the transaction of the business of said demised
railroad, and shall reserve in said office, free of charge, rooms
for the use of the President and Secretary and Board of Directors
of first party.
Second party shall at all times during said term, keep at
said office in the city of Ridgway full, true and just accounts
of any and all moneys received, and business done upon said
demised railroad and premises, and of all moneys paid, laid out
and expended and liabilities incurred in connection with the
same. All said or any accounts kept by second party in relation
to the demised railroad, or the business of the same, shall at
all reasonable hours and times during the continuance of this
lease be open for the inspection and examination of the President
of the first party and of such other person or persons as said
first party shall from time to time, or at any time by resolution
of its Board of Directors, appoint to examine the same.
It is further agreed and declared that second party shall at
its own proper cost and expense, from time to time and whenever
necessary for the use of first party, make out and furnish to
first party, any and all reports and statements which first party
is now or may hereafter be required to make or file, under and by
virtue of any law of the State of Pennsylvania, or of the United
States now existing, or which may hereafter be enacted, or under
any other lawful and competent authority.
ARTICLE 7. Second party shall and will, at all times
during the existence of this lease, bear, pay and discharge at
its own proper cost and expense, without deduction from the rent
hereinbefore reserved, any and all expenses costs, damages,
liabilities, claims and demands whatsoever, which shall or may
arise out of the possession, management or operation of the said
demised railroad and premises, or out of the business of the
same, and shall and will at all times during the term aforesaid
hold, save and keep harmless and indemnify first party from and
against any and all expense of operating the said railway and
premises hereby demised, and all damages, liabilities, actions,
suits, claims and damages for injuries to persons or property, or
for causing the death of any person or things through accident,
neglect or default during said term, or for breach of contract or
wrong done or suffered by second party in the refusal to
transport, or negligence in transporting any person or property,
or by the loss, conversion or non-delivery, of any property which
second party shall have agreed or undertaken or be bound to
transport over the said railroad, or which first party as the
owner of the said railroad hereby demised, is or shall be under
any legal obligation by contract, public duty or otherwise to
transport thereon, and of, from and against any and all costs
damages, liabilities, actions or causes of action, suits, claims
and damages whatsoever which shall or may arise out of or in
respect tot he management or business of said demised railroad
and premises, or any part thereof during the continuance of this
lease.
Second party covenants and agrees that it shall and will
defend all suits and claims which shall or may be brought against
first party during the continuance of this lease, in respect to
any matter or thing arising out of the management or operation of
said demised railroad or any party thereof, and indemnify and
save harmless first party from and against all matters and things
whatsoever existing or to arise which might or could be a charge
upon or operate to reduce the rent hereinbefore reserved to be
applicable to the payment of dividends on the stock of first
party, and the payment of interest on the bonds of first party.
ARTICLE 8. In case second party, its successors or
assigns shall at any time or times hereafter, during the
continuance of this lease, fail or omit to pay the rent
hereinbefore mentioned or provided to be paid by second party, or
any part thereof, when the same shall become payable as
hereinbefore specified; or in case second party, its successors
or assigns shall fail or omit to keep and perform the covenants
and agreements herein contained, or any of them, and shall
continue in default in respect to the performance of such
covenants or agreements for the period of ninety days, then in
either or every such case, it shall be lawful for first party,
its successors or assigns, at its or their own option, to enter
into or upon the railroad and premises hereinbefore demised, and
any or every part thereof, and remove all persons therefrom, and
from thenceforth said demised railroad and premises, with the
equipment and appurtenances thereof, and all additions and
improvements which shall have been made to the same, to have,
hold, possess and enjoy as of the first or former estate of first
party in said demised premises; and upon such entry for non-
payment of rent or breach or non-performance of any covenant or
agreement herein contained to be by second party observed or
performed, all the estate, right, title, interest, property,
possession, claim and demand whatsoever of second party, its
successors or assigns, in or to the said demised railroad and
premises or any part thereof, shall cease, determine and become
void, anything hereinbefore contained to the contrary
notwithstanding.
In case of such re-entry as aforesaid, the rent provided by
these presents and the several installments thereof shall be
apportioned from the times of the last preceding payment of such
installment up to the time of such re-entry, and such portion
thereof as would have been payable in respect to the intervening
time, if the whole period in respect to which such installment
were payable had elapsed, shall be deemed to be due and payable,
and the same shall be paid by second party to first party; and it
is further declared and agreed that such re-entry shall not waive
or prejudice any claim or right of first party to or for damages
against second party on account of non-payment of rent, or non-
performance or breach of the terms of this lease, and all such
claims and rights are hereby expressly preserved to first party.
ARTICLE 9. Second party hereby covenants, promises and
agrees to and with first party, that at the termination of this
lease, and at the end of the term hereby granted, second party
shall re-deliver and surrender to first party, its successors or
assigns, the said demised railroad and premises in as good order
and condition as the same shall be delivered to second party
under this lease, and with such additions betterments and
improvements as shall have been made thereto; and also all the
rolling stock, equipment and other property delivered under this
lease in as good order and condition as reasonable use and wear
thereof, proper repairs and replacements thereof being made from
time to time, will permit, or rolling stock, equipment and other
similar property equal in value thereto; and also all additional
rolling stock or equipment which shall be acquired or provided
for use upon said railroad and premises, or any part thereof.
ARTICLE 10. First party agrees with second party that
first party shall and will, whenever thereto requested by second
party, its successors or assigns, execute and deliver to second
party, its successors or assigns at the proper cost and expense
of second party, its successors or assigns at the proper cost and
expense of second party, its successors or assigns, any and all
such other and further instruments and assurances in the law for
the better demising and leasing of the said railroad and premises
as second party, its successors and assigns, upon and subject to
all and singular the rents, covenants, agreements and conditions
hereinbefore reserved and mentioned as by second party, its
successors or assigns, or by its or their counsel learned in the
law shall be reasonably advised, devised or required; and second
party likewise covenants and agrees to execute and deliver to
first party all such further instruments as may be necessary for
the more effectually assuring to first party, its successors or
assigns the payment of the rent hereinbefore reserved and the
performances of the promises and agreements hereinbefore set
forth on behalf of second party as by first party, its successors
or assigns, or by its or their counsel learned in the law shall
be reasonably advised, devised and required.
ARTICLE 11. It is further mutually agreed that first
party shall not, after the execution and delivery of this lease,
make, execute or issue, or cause or permit to be made, executed
or issued, any bond or obligation of any kind or character
whatsoever, nor in any way increase its stock unless with the
consent of second party, and all bonds, obligations and
certificates of stock, for whatever purpose issued, which shall
be made or executed by first party after the execution and
delivery of this lease, shall before the same are issued, be
countersigned by the president; treasurer or secretary of second
party, and first party shall not, after the execution and
delivery of this lease make any bargain or contract, or enter
into any engagements, or do any act or thing whereby the rights
or interests of second party under this lease can be in any wise
impaired or prejudiced. First party shall and will, from time to
time, and at all times during the continuance of this lease, do
and perform at the expense of second party, all such lawful acts
and things as may be requested by second party in order to
preserve its corporate and other rights, and in order to enable
second party to enjoy, use and exercise the property, franchises
and rights demised hereby as fully, to all intents and purposes
as first party might enjoy, use and exercise the same as if this
lease had not been made.
Second party shall have the right, at its own expense, to
use the name of first party in all cases when it is advised by
counsel that it is proper so to do in connection with any matter
or thing arising under this lease, or with the property demised
or in the transaction of the business herein contemplated, or
exercise of the rights herein granted.
It is further agreed that if at any time during the term of
this lease or any extension thereof, a second or double track
should in the judgment of the second party be needed for the
better transaction of the business over said railroad second
party may construct such second or double track and thereupon
with the assent of two-thirds in amount of the stockholders of
first party may call upon first party to issue further and
additional stock equal in amount to the cost of construction of
such second or double track and to deliver the same to second
party.
That thereupon first party will so issue such stock to
second party, and upon such delivery all the foregoing provisions
of this lease shall apply to such further and additional stock in
the same manner as to the stock theretofore issued hereunder,
provided that second party shall have the option to guaranty
dividends at a less rate than six per cent. per annum thereon and
provided further that no such further and additional stock shall
be sold at a rate less than par net over and above any
commission.
It is agreed that if this lease is terminated prior to the
expiration of the term thereof, for any reason other than default
in payment as hereinbefore specified, and the property and
premises are thereupon restored to first party, there shall be an
equitable adjustment of the rights of the parties so that second
party shall not suffer any actual loss or injury in respect of
this lease.
It is mutually agreed that all and singular the covenants
and agreements hereinbefore contained shall inure to the benefit
of, and be binding upon, the successors and assigns of said first
and second parties.
IN WITNESS WHEREOF said first and second parties have caused
these presents to be signed by their respective Presidents and
their respective corporate seals to be hereunto attached, and
attested by their respective Secretaries, the day and year first
above written.
ALLEGHENY AND WESTERN RAILWAY COMPANY
(SEAL) By (signed) C. H. McCauley
Attest: President.
(signed) Jno. G. Whitmore
Secretary.
BUFFALO, ROCHESTER & PITTSBURGH RAILWAY
COMPANY
(SEAL) By (signed) A. G. Yates
Attest: President.
(signed) J. H. Hocart
Secretary.
Notarial acknowledgments.
Exhibit 10.2
ALLEGHENY AND WESTERN
RAILWAY COMPANY
AND
BUFFALO, ROCHESTER & PITTSBURGH
RAILWAY COMPANY
--------------
CONTRACT DATED
15TH JANUARY, 1900
WHEREAS, the ALLEGHENY & WESTERN RAILWAY COMPANY and the
BUFFALO, ROCHESTER& PITTSBURGH RAILWAY COMPANY by Indenture,
bearing date the 1st day of October, 1898, entered into a certain
contract wherein and whereby said Allegheny & Western railway
Company granted, demised and leased to said Buffalo, Rochester &
Pittsburgh Railway all and singular the railway of said Allegheny
& Western Railway Company, known as the Allegheny & Western
Railway, and which extends from a point at or near Clayville,
Jefferson Co., to a point connecting with the Pittsburgh &
Western Railway and the Pittsburgh, Bessemer & Lake Erie Railroad
in Butler Township, Butler County, all in the state of
Pennsylvania, a distance of about sixty-two miles, and also
certain appurtenances to said railway, and also certain rights in
said Indenture more particularly described:
AND WHEREAS, since the date of said Indenture, the Allegheny
and Western Railway Company, with the consent and at the request
of the Buffalo, Rochester & Pittsburgh Railway Company, has
expended and contracted to expend upon the construction and
equipment of its railway a sum exceeding by four hundred thousand
dollars the proceeds of two million dollars ($2,000,000) first
mortgage bonds of the Allegheny & Western Railway Company, and
twenty-five thousand shares, of the par value of one hundred
dollars a share of the capital stock of the Allegheny and Western
Railway Company;
NOW THEREFORE, it is mutually agreed:
1. The Allegheny & Western Railway Company shall forthwith
increase its capital stock to and by the amount of ten thousand
shares of one hundred dollars each, and certificates shall
forthwith be issued and delivered by the Allegheny &Western
Railway Company, with the consent of the Buffalo, Rochester &
Pittsburgh Railway Company, to subscribers for said shares at or
over par to an amount sufficient to pay the sums already expended
or which, with the consent of the Buffalo, Rochester & Pittsburgh
railway company, shall hereafter be expended upon the
construction and equipment of the Allegheny & Western Railway.
2. All and singular the provisions of said Indenture of
the 1st of October, 1898, with respect to the payment and
guarantee of dividends at the rate of six per cent. on the stock
of the Allegheny & Western Railway company therein mentioned, and
all other provisions thereof, shall apply to and be considered as
including and referring to and covering the ten thousand shares
herein provided for and such an amount of said ten thousand
shares as shall at any time be outstanding, the same as if the
said Indenture had described and stated thirty-five thousand
shares of capital stock instead of twenty-five thousand shares of
capital stock; and the rent reserved and promised to be paid in
and by said Indenture shall from and after the date hereof be and
become the sum of two hundred and ten thousand dollars ($210,000)
for and on account of the payment of dividends on capital stock
or so much thereof as shall be equal to the sum of six per cent.
on the capital stock of the Allegheny & Western Railway Company
which shall be at any time outstanding, the same as if the said
Indenture had stated that the rent reserved was first the sum of
two hundred and ten thousand dollars ($210,000) for the payment
of dividends at the rate of six percent. per annum on three
million five hundred thousand dollars of capital stock of the
Allegheny & Western Railway Company or on so much thereof as
shall at any time be outstanding.
Said Indenture is hereby amended as of the date hereof so as
to describe the capital stock of the Allegheny & Western Railway
Company as being in amount three million five hundred thousand
dollars, or so much thereof as shall at any time be outstanding,
instead of two million five hundred thousand dollars, and in all
other respects is hereby ratified and confirmed.
WITNESS the seals of the respective corporations
above named and the hands of the Presidents thereof
this fifteenth day of January, one thousand nine
hundred:
ALLEGHENY AND WESTERN RAILWAY COMPANY,
By (signed) C.H. McCauley
President.
[SEAL.]
Attest:
(signed) Jno. G. Whitmore
Secretary.
BUFFALO, ROCHESTER & PITTSBURGH RAILWAY COMPANY
By (signed) A. G. Yates
President.
[SEAL.]
Attest:
(signed) J. H. Hocart
Secretary.
STATE OF PENNSYLVANIA )
- SS.:
County of Elk )
Be it remembered that on the 17th day of January, 1900,
before me a Notary Public personally came John G. Whitmore, who
being duly sworn according to law, doth depose and say that he
was personally present and did see the common or corporate seal
of the above-named Allegheny & Western Railway Company affixed to
the foregoing indenture. That the seal so affixed is the common
or corporate seal of the said Allegheny and Western Railway
Company, and was so affixed by the authority of the said
corporation as the act and deed thereof. That the above-named C.
H. McCauley is the President of the said Corporation and did sign
the said Indenture as such in presence of this deponent. That
this deponent is the Secretary of said corporation, and that the
name of this deponent above signed in attestation of the due
execution of the said indenture is of this deponent's own proper
handwriting.
Sworn to and subscribed
before me
(signed) H. L. Moore
Notary Public
STATE OF NEW YORK )
- SS.:
County of New York )
Be it remembered that on the 19th day of January 1900,
before me H. L. Brayward personally came John H. Hocart, who
being duly sworn according to law doth depose and say that he was
personally present and did see the common or corporate seal of
the above-named Buffalo Rochester & Pittsburgh Railway Company,
affixed to the foregoing Indenture. That the seal so affixed is
the common or corporate seal of the said Buffalo, Rochester &
Pittsburgh Railway Company, and was so affixed by the authority
of the said Corporation as the act and deed thereof. That the
above-named Arthur G. Yates is the President of the said
Corporation, and did sign the said Indenture as such in the
presence of this deponent. That this deponent is the Secretary
of said Corporation, and that the name of this deponent above
signed in attestation of the due execution of the said Indenture
is of this deponent's own proper handwriting.
Sworn to and subscribed
before me this
19th day of January, 1900
(signed) H. L. Brayward
Notary Public
Exhibit 10.3
THIS AGREEMENT Made this 15th day of December, 1931,
between THE BALTIMORE AND OHIO RAILROAD COMPANY, hereinafter
called "BALTIMORE COMPANY", and the BUFFALO, ROCHESTER AND
PITTSBURGH RAILWAY COMPANY, hereinafter called the "ROCHESTER
COMPANY".
WHEREAS the Rochester Company operates a railroad
connecting with the railroad system of the Baltimore Company at
Butler, Pennsylvania, and extending northwardly to Ashford, New
York, at which point it separates into two lines, one extending
to Buffalo and the other to Rochester, New York, with certain
branches, the principal branches being to Clearfield,
Pennsylvania, and Vintondale, Pennsylvania, the greater part of
said railroad being owned by the Rochester Company and held under
perpetual lease, and a part thereof being operated under trackage
agreements, and also operates into Pittsburgh, Pennsylvania, and
New Castle, Pennsylvania, under trackage agreements with the
Baltimore Company; and
WHEREAS the Baltimore company, at the time of the
signing hereof, is the owner of more than 99-l/2 per cent. of the
entire capital stock of the Rochester Company, and the operation
by the Baltimore Company of the railroad and appurtenances and
property of the Rochester Company in conjunction with other lines
of railroad owned and operated by the Baltimore Company will
afford continuous routes for the transportation of passengers and
freight and will result in more efficient service to the public
and savings in operating and accounting expense; and
WHEREAS the Interstate Commerce Commission in its
report and order dated November 19, 1931, Finance Docket 8947,
found that the acquisition by the Baltimore Company of control of
the lines of the Rochester Company under an operating agreement,
and upon the terms proposed, would be in the public interest:
NOW, THEREFORE, the parties hereto have agreed as
follows:
Operation under the several agreements between the
Baltimore Company and certain of its subsidiary companies and the
Allegheny and Western Railway Company, and the Rochester Company
as Lessee, all dated January 1, 1918, covering the use of the
Baltimore company's tracks between Butler Junction and New
Castle, Pennsylvania, and between Ribold Junction and Pittsburgh,
Pennsylvania, and the use of certain tracks in New Castle
Junction Yard, and the handling of carload business to and from
industries at Pittsburgh, and trackage to and the use of the
Smithfield station facilities at Pittsburgh, is hereby suspended
during the continuance of operation under this agreement.
The Baltimore Company will, in conformity with State
and Federal laws, operate all of the lines of railroad, property
and appurtenances of the Rochester company, including the lines
of railroad and railroad properties of all lines owned and leased
by it and/over which it has trackage rights, in the same manner
and to the full extent that the Rochester Company now operates or
has the right to operate over such lines of railroad, together
with all appurtenances thereof, including all lands, terminals,
stations, machine shops and machinery, round-houses and other
buildings owned by or leased to the Rochester Company, whether
used by it at the date of this agreement or otherwise, and also
all tools, machinery and other personal property and all engines,
passenger, freight and work equipment.
The Baltimore Company during the term of this agreement
shall have the benefit of and assume obligation with respect to
all lines of railroad, leases, trackage agreements, switching
agreements and agreements for handling traffic, as well as a
agreements with telegraph and telephone companies and other
agreements pertaining to the operation of said lines of railroad
and property in so far as such agreements may be sub-let or
assigned or the right to enjoy the benefits thereof granted to
the Baltimore Company.
The Baltimore Company shall during the term of this
agreement receive for its own use and benefit all revenues and
receipts from said operations, and shall pay all expenses and
charges incident to said operations, including depreciation on
way, structures, equipment and other property of the Rochester
Company and its leased lines accrued or accruing on or after the
date of this agreement; it being understood between the parties
hereto that said revenues and receipts and said expenses and
charges shall include equipment rents, joint facility rents, and
all other items of whatever character (except taxes for which
provision is made hereinafter) as are includible in Net Railway
Operating Income as that term is now or may hereafter be defined
by the Interstate Commerce Commission, and as to all such items
the Baltimore Company shall not be required to keep separate
accounts or make separate reports or account therefor to the
Rochester Company except as may be required by law.
The Baltimore Company shall also receive all other
income of every kind whatsoever derived from the property of the
Rochester Company not used for railroad purposes, including all
dividends from the stock of other corporations and all interest
on bonds or moneys owned by the Rochester Company, and the
Baltimore Company will pay all expenses and charges payable by
the Rochester Company in respect of such property, and as to all
such items the Baltimore Company shall not be required to keep
separate accounts or make separate report or account therefor to
the Rochester Company except as may be required by law.
The Baltimore Company shall at its own expense maintain
said lines of railroad in as good operating condition as said
railroad lines are at the date hereof, and when and as necessary
for safe and efficient operation shall replace and renew all
tracks, bridges and other structures, facilities and
appurtenances, and the Baltimore Company shall pay so much of the
cost thereof as under the then prevailing accounting
classifications of the Interstate Commerce Commission is
chargeable to expenses or against income.
The Baltimore Company will at its own expense maintain
all equipment of the Rochester Company ad of its leased lines in
the same condition in which like equipment is maintained by
railroads of the first class, and shall on or before the
termination of this agreement restore or account to the Rochester
company for the record value of any/equipment retired or
destroyed, less depreciation accrued by the Rochester Company on
said equipment up to the effective date hereof.
The Baltimore Company will, at the termination of this
agreement, account for all cash and the value of materials and
supplies and other assets belonging to and taken over from the
Rochester Company, and shall charge to said account any and all
unliquidated amounts then found to be due by the Rochester
Company to the Baltimore Company.
The Baltimore Company will, during the term of this
agreement, assume and carry out all unfulfilled and continuing
contracts of the Rochester Company pertaining to the operation of
said lines of railroad and other property, the use of which is
hereby granted, and will, at its own cost and expense, maintain
and defend all pending or future actions or suits for or against
the Rochester Company with respect to said contacts.
The Baltimore Company will, as additional consideration
for the use of the property hereby granted, pay to the Rochester
company a sum or sums sufficient to pay the following charges as
and when such charges become due and payable:
All costs of maintaining the corporate existence of the
Rochester Company including any taxes in respect thereof;
All taxes payable in respect to all property the use of
which is hereby granted including income and other taxes assessed
against the Rochester Company on amounts paid to it or for its
account for the use of the property covered hereby;
All rental for leased lines and other property,
interest on all bonds and equipment obligations, and all other
interest bearing obligations of the Rochester Company outstanding
at any time during this agreement, except bonds or other interest
bearing obligations owned by the Baltimore Company at the time
interest payments are due, and, as to the interest on such
obligations, so owned, the Baltimore Company will give to the
Rochester Company a proper acquittance;
Amounts equal to an annual dividend at the rate of
$4.00 per share on all common stock and $6.00 per share on all
preferred stock of the Rochester Company outstanding, except on
such stock as may be owned by the Baltimore Company.
During the term of this agreement and to the extent the
Rochester Company may not have available funds or other means of
financing its capital requirements, the Baltimore Company will
advance as a loan to the Rochester Company all necessary funds
for authorized additions, betterments, extensions and
improvements to the property, the use of which is hereby granted,
and to the extent such additions, betterments, extensions and
improvements are chargeable to capital or investment account
under the then effective accounting regulations of the Interstate
Commerce Commission. The Baltimore Company will likewise, under
the same circumstances, advance as a loan funds sufficient to pay
the principal of maturing obligations of the Rochester Company.
For all such loans or advances the Rochester Company shall give
to the Baltimore Company its mortgage bonds secured by the best
available lien upon its property or such other obligations as may
be acceptable to the Baltimore Company, which bonds or other
obligations will be taken by the Baltimore Company at their then
market value.
Instead of paying direct to the Rochester Company any
sum or sums herein provided, the Baltimore Company may, if it so
elects, pay all or any said sums directly to the payee thereof at
the time such sums are due and payable.
The obligation of the Baltimore Company to pay any of
the sums herein provided for is exclusively for the benefit of
the Rochester Company, and the Baltimore Company shall not be
required to pay any such sums so long as in good faith the
Baltimore Company or the Rochester Company contest liability
therefor.
This agreement shall become effective as and from the
First day of January, 1932, and shall continue until terminated
by sixty days' notice in writing given by either party hereto.
IN WITNESS WHEREOF the parties hereto have caused this
agreement to be executed in duplicate originals the day and year
first above written.
THE BALTIMORE AND OHIO RAILROAD
COMPANY
By: /s/ Daniel Willard
------------------
President.
Attest:
/s/ G. R. May
--------------
Secretary.
BUFFALO, ROCHESTER AND PITTSBURGH
RAILWAY COMPANY
By: /s/ W. T. Noonan
----------------
President.
Attest:
/s/ U. V. Clark
---------------
Secretary.
Exhibit 10.4
THE BALTIMORE AND OHIO RAILROAD COMPANY
AND
BUFFALO, ROCHESTER AND PITTSBURGH
RAILWAY COMPANY
--------------
Agreement
--------------
DATED JANUARY 1, 1940
--------------
Modifying the Operating Agreement dated December 15, 1931
AGREEMENT, dated January 1, 1940, between THE BALTIMORE AND
OHIO RAILROAD COMPANY (hereinafter called the Baltimore Company)
and the BUFFALO, ROCHESTER AND PITTSBURGH RAILWAY COMPANY
(hereinafter called the Rochester Company).
WHEREAS the Baltimore Company is operating the railroads and
other property of the Rochester Company, pursuant to an Agreement
between said Companies, dated December 15, 1931, which is
hereinafter called the Operating Agreement; and
WHEREAS there has been submitted to the security holders of
the Baltimore Company and the Rochester Company a Plan for
Modification of Interest Charges and Maturities, dated August 15,
1938 (hereinafter called the Plan), providing, among other
things, for the modification of the Operating Agreement as
therein and herein set out; and
WHEREAS on July 28, 1939 the Baltimore Company and the
Rochester Company, for the purpose of carrying out the Plan,
filed in the District Court of the United States for the District
of Maryland their petitions under Chapter XV of the Bankruptcy
Act of the United States; and
WHEREAS by a decree entered November 8, 1939 in said
proceedings the Court sitting in said proceedings, acting under
said Chapter XV, confirmed the Plan, approved the form of this
Agreement and authorized and directed the Baltimore Company and
the Rochester Company to execute an agreement modifying the
Operating Agreement substantially in the form of this Agreement;
and
WHEREAS the Interstate Commerce Commission, by order entered
October 20, 1939, in Finance Docket No. 8947 has authorized the
modification of the Operating Agreement as herein set out,
NOW, THEREFORE, in consideration of the premises and other
good and valuable considerations, the Baltimore Company and the
Rochester Company have executed this Agreement and hereby agree
as follows:
ARTICLE FIRST: The thirteenth paragraph of the Operating
Agreement providing as follows:
"All rentals for leased lines and other
property, interest on all bonds and equipment obligations
and all other interest bearing obligations of the
Rochester Company outstanding at any time during this
agreement, except bonds or other interest bearing
obligations owned by the Baltimore Company at the time
interest payments are due, and, as to the interest on such
obligations, so owned, the Baltimore Company will give to
the Rochester Company a proper acquittance;"
is hereby modified so as to read as follows:
"All rentals for leased lines and other
property, all interest on all bonds (including interest on
the Consolidated Mortgage Bonds of the Rochester Company
to and including, but not after, May 1, 1957 and interest
on the First Mortgage Bonds of Lincoln Park and Charlotte
Railroad Company to and including, but not after, January
1, 1949) and equipment obligations, and all other interest
bearing obligations of the Rochester Company outstanding
at any time during this agreement, except interest on any
of said bonds or other interest bearing obligations owned
by the Baltimore Company at the time interest payments are
due, as to which interest on such obligations, so owned,
the Baltimore Company (so long as it is not in default on
obligations as security for which said bonds or other
interest obligations may be pledged) will give the
Rochester Company a proper acquittance; provided, however,
that (a) no interest on Consolidated Mortgage Bonds of the
Rochester Company shall be required to be paid except as
and when such interest id due and payable under a
Supplemental Indenture, dated January 1, 1940,
supplementing and modifying the Consolidated Mortgage of
the Rochester Company, and (b) there shall be no
obligation or liability of the Baltimore Company in
respect of the principal of any of said bonds or other
interest bearing obligations;"
ARTICLE SECOND: The fifteenth paragraph of the Operating
Agreement is hereby modified by eliminating the following
sentence:
"The Baltimore Company will likewise, under the same
circumstances, advance as a loan funds sufficient to pay
the principal of maturing obligations of the Rochester
Company."
ARTICLE THIRD: The last paragraph of the Operating
Agreement, reading as follows:
"This agreement shall become effective as and from the
first day of January, 1932, and shall continue until
terminated by sixty days' notice in writing given by
either party hereto."
is hereby amended by inserting immediately before the period at
the end thereof the following:
"; provided, however, that (so long as any Consolidated
Mortgage Bonds of the Rochester Company or any First
Mortgage Bonds of Lincoln Park and Charlotte Railroad
Company are outstanding) the Baltimore Company shall not
have the right to terminate this Operating Agreement prior
to May 1, 1957."
IN WITNESS WHEREOF the parties hereto have caused this
agreement to be executed in duplicate originals the day and year
first above written.
THE BALTIMORE AND OHIO RAILROAD COMPANY,
by /s/ George M. Shriver
---------------------
Senior Vice-President.
[CORPORATE SEAL]
Attest:
/s/ G. M. May
---------------
Secretary.
BUFFALO, ROCHESTER AND PITTSBURGH
RAILWAY COMPANY,
by /s/ Golder Shumate
------------------
Vice-President.
[CORPORATE SEAL]
Attest:
/s/ W. R. Bixler
----------------
Assistant Secretary.
Exhibit 10.5
AGREEMENT made this 29th day of December, 1943,
between The Baltimore and Ohio Railroad Company
(hereinafter called the Baltimore Company) and
Buffalo, Rochester and Pittsburgh Railway Company
(hereinafter called the Rochester Company.
WHEREAS the Baltimore Company is operating the
railroads and other property of the Rochester Company, pursuant
to an Agreement between said Companies, dated December 15, 1931,
as amended January 1, 1940, which said agreement as so amended is
hereinafter called the Operating Agreement; and
WHEREAS the Interstate Commerce Commission, pursuant to
section 20 of the Interstate Commerce Act, has entered an order
requiring that, effective as of January 1, 1943, depreciation
accounting be established in respect of certain fixed property of
railroad companies, and in view of such order of the Commission
the parties hereto desire to amend the Operating Agreement in the
manner hereinafter set forth, which amendment shall be effective
as of the effective date of the aforesaid order, namely, January
1, 1943;
NOW, THEREFORE, in consideration of the premises and
the mutual undertakings of the parties hereto, the Operating
Agreement is hereby amended as follows:
"including depreciation on way,
structures, equipment and other property
of the Rochester Company and its leased
lines accrued or accruing on and after
the date of this agreement;
is hereby modified so as to read as follows:
"including depreciation on equipment of
the Rochester Company, and on way,
structures, equipment and other property
of the Rochester Company's leased lines
accrued or accruing on and after the
date of this agreement;"
ARTICLE SECOND: The sixth paragraph of the Operating
Agreement providing as follows:
"The Baltimore Company shall at its own
expense maintain said lines of railroad
in as good operating condition as said
railroad lines are at the date hereof,
and when and as necessary for safe and
efficient operation shall replace and
renew all tracks, bridges and other
structures, facilities and
appurtenances, and the Baltimore Company
shall pay so much of the cost thereof as
under the then prevailing accounting
classifications of the Interstate
Commerce Commission is chargeable to
expenses or against income."
is hereby modified so as to ready as follows:
"The Baltimore Company shall at its own
expense maintain said lines of railroad
in as good operating condition, except
for depreciation, as said railroad lines
are at the date hereof. When and as
necessary for safe and efficient
operation, the Baltimore Company shall
replace and renew all tracks, bridges
and other structures, facilities and
appurtenances, and the Baltimore Company
shall pay so much of the cost thereof as
under the then prevailing accounting
classifications of the Interstate
Commerce Commission is chargeable to
expenses or against income. In the
event of the retirement or abandonment
of any such property, with the approval
of any public authority having
jurisdiction, in cases where such
approval is necessary, and with the
consent of the Rochester Company, the
Baltimore Company will pay to the
Rochester Company an amount equal to the
cost or estimated cost of the property
retired or abandoned, less amortization
or depreciation, if any, theretofore
required or allowed to be taken by the
Bureau of Internal Revenue with respect
to such property. Any property retired
or abandoned and for which the Rochester
Company shall have been compensated, as
in this paragraph provided, shall belong
to the Baltimore Company."
ARTICLE THIRD: The eighth paragraph of the Operating Agreement
is hereby modified by inserting in the third line after the words
"other assets" the words "(not theretofore accounted for)" so as
to make said paragraph read as follows:
"The Baltimore Company will, at the
termination of this agreement, account
for all cash and the value of materials
and supplies and other assets (not
theretofore accounted for) belonging to
and taken over from the Rochester
Company, and shall charge to said
account any and all unliquidated amounts
then found to be due by the Rochester
Company to the Baltimore Company."
ARTICLE FOURTH: The Operating Agreement is hereby modified
further by the insertion after the fourteenth paragraph thereof
providing as follows:
"Amounts equal to an annual dividend at
the rate of $4.00 per share on all
common stock and $6.00 per share on all
preferred stock of the Rochester Company
outstanding, except on such stock as may
be owned by the Baltimore Company."
of a new or additional paragraph reading as follows:
"Monthly from January 1, 1943, an amount
equal to the charges or deductions which
may be allowed the Rochester Company by
the Bureau of Internal Revenue pursuant
to the Internal Revenue Code for
amortization or depreciation with
respect to any property (other than
equipment for which express provision is
hereinbefore made) covered by this
agreement, which amount may in the first
instance be estimated, but shall be
adjusted when actual allowances are
ascertained. Any payment in this
agreement provided to be made by either
of the parties hereto to the other, may,
at the election of the Baltimore
Company, be made in whole or in part in
cash, or be offset against an equal
amount of indebtedness of the other
party to such party."
The modifications of the Operating Agreement
hereinabove set forth shall become effective as and from the
first day of January 1943, and shall continue until the
termination of the Operating Agreement in the manner provided in
the last paragraph thereof.
THE BALTIMORE AND OHIO RAILROAD COMPANY,
By: /s/J. J. Ekin
Attest: -------------
Vice President.
/s/ G. F. May
-------------
Secretary
BUFFALO, ROCHESTER AND PITTSBURGH RAILWAY
COMPANY,
By: /s/R. L. Snodgrass
------------------
Attest: Vice President.
/s/ G. F. May
-------------
Secretary.
PAGE 1
EXHIBIT 23
Consent of Ernst & Young LLP, Independent Auditors
--------------------------------------------------
We consent to the incorporation by reference in this Annual Report
(Form 10-K) of Allegheny and Western Railway Company of our report dated
January 31, 1997, with respect to the consolidated financial statements of CSX
Transportation, Inc. included in its Annual Report (Form 10-K) for the year
ended December 27, 1996, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
---------------------
Ernst & Young LLP
Richmond, Virginia
March 24, 1997
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