SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
July 19, 1994
KANSAS CITY SOUTHERN INDUSTRIES. INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-4717 44-0663509
(State or other juris- (Commission file (IRS Employer
diction of incorporation) number) Identification number)
114 West 11th Street, Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Reqistrant's telephone number, including area code:
(816) 556-0303
N/A
(Former name or former address if changed since last report)
<PAGE>
Item 5. Other Events.
On July 18, 1994, Kansas City Southern Industries, Inc. ("Registrant") entered
into a letter of intent with Illinois Central Corporation ("IC") for the
merger of the Registrant with and into IC. The merger would be preceded by a
spin-off of the Registrant's non-transportation operations.
Additionally, on July 19, 1994, the Registrant announced that its wholly-owned
subsidiary DST Systems, Inc. and Kemper Financial Services, Inc. had entered
into a letter of intent for the acquisition of their jointly owned affiliate,
Investors Fiduciary Trust Company by State Street Boston Corporation.
Additional details of these proposed transactions are more fully described in
the attached exhibits submitted pursuant to item 7.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
Exhibit No. Document
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation
or Succession
2.1 Letter of Intent, dated July 18, 1994, between
Kansas City Southern Industries, Inc. and
Illinois Central Corporation
(99) Additional Exhibits
99.1 Press Release, dated July 19, 1994
99.2 Press Release, dated July 19, 1994
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Kansas City Southern Industries, Inc.
Date: July 29, 1994 By: /s/ Joseph D. Monello
Joseph D. Monello
Vice President & Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit No. Document Page No.
2.1 Letter of Intent dated July 18, 1994, 3
between Kansas City Southern Industries,
Inc. and Illinois Central Corporation
99.1 Press Release, dated July 19, 1994 7
99.2 Press Release, dated July 19, 1994 10
July 18, 1994
Kansas City Southern Industries, Inc.
114 West 11th Street
Kansas City, Missouri 64105
LETTER OF INTENT
Gentlemen:
This letter of intent ("Letter of Intent") confirms the understanding between
Kansas City Southern Industries, Inc. ("KCSI") and Illinois Central
Corporation ("Illinois Central") with regard to the proposed acquisition by
Illinois Central of KCSI, except for businesses, assets and operations that
are not within the businesses, operations, and assets of the Transportation
Services Division ("Transportation Services Division") of KCSI and certain
other non-transportation assets of KCSI. The proposed acquisition is referred
to herein as the "Transaction".
The terms of the understanding are as follows:
1. The structure of the Transaction will consist of the merger of KCSI
with and into Illinois Central (the "Merger") immediately following the
distribution in the form of a spin-off dividend to the common shareholders of
KCSI of all of KCSI's equity interest in the businesses constituting the
financial services and information processing operations and certain non-
transportation assets of KCSI (including KCSI's interests in the Mulberry
Western Property, the 10 Central Garage investment and the non-transportation
assets of Southern Leasing Corporation). Immediately prior to consummation
of the Merger, Illinois Central shall deliver the shares of the Illinois
Central Railroad to a trustee to be held pursuant to the terms of a voting
trust agreement, thereby enabling Illinois Central to acquire direct ownership
and control of Kansas City Southern Railway Company ("KCSR").
2. The aggregate consideration for the Transaction shall consist of (a)
.4883 of a share of common stock of Illinois Central, par value $.001 per
share ("Illinois Central Common Stock"), for each currently outstanding share
of common stock of KCSI, $.01 par value per share ("KCSI Common Stock"), (b)
an amount of cash equal to the aggregate par value of the outstanding shares
of preferred stock of KCSI, $25 dollar par value, and (c) the assumption of up
to $929 million of indebtedness of the Transportation Services Division
(including approximately $140 million of indebtedness that could be incurred
by KCSI for the purposes set forth in the letters dated June 24, 1994 and June
29, 1994 from Illinois Central to the Board of Directors of KCSI (the "Bid
Letters"). Illinois Central and KCSI shall in good faith consider the
advisability of a purchase price adjustment based upon changes in the net
worth of the Transportation Services Division or similar changes. Standard
representations and warranties with respect to KCSI and KCSR shall survive the
Merger and the entity to be spun-off by KCSI as contemplated by paragraph 1
shall remain liable for such representations and warranties, the exact nature
and extent of such representations and warranties to be negotiated as
contemplated by paragraph 3.
3. Each of Illinois Central and KCSI agrees to use its reasonable best
efforts in good faith and on an exclusive basis to prepare, negotiate and
execute definitive agreements and documents with respect to the Transaction.
Subject to the provisions of paragraph 11, the terms, conditions and
assumptions set forth in this Letter of Intent and the Bid Letters shall
provide the basis upon which Illinois Central and KCSI shall negotiate with
each other as contemplated by this paragraph 3.
4. Except as required by applicable law, all information obtained by
Illinois Central or KCSI or their respective affiliates, directors, officers,
employees, agents and representatives shall be kept confidential to the extent
required by, and in accordance with, the provisions of the confidentiality
agreement, dated March 7, 1994, between the parties.
5. Illinois Central and KCSI shall mutually agree on the form and
content of any public announcement which shall be made concerning this Letter
of Intent or the Transaction and neither Illinois Central nor KCSI shall make
any such public announcement without the consent of the other, which consent
shall not be unreasonably withheld, provided that (a) Illinois Central and
KCSI agree to publicly announce the execution of this Letter of Intent by
releasing the joint press release attached hereto as Annex A and (b) nothing
herein shall prohibit Illinois Central or KCSI from making any public
announcement or other disclosure required by law or the policy of any exchange
on which such party's securities are listed, provided that each party agrees
to use its reasonable efforts to consult with the other before making any such
public announcement or other disclosure.
6. KCSI agrees that during the term of this Letter of Intent neither it
nor any of its subsidiaries nor any of its officers and directors or the
officers and directors of its subsidiaries shall, and it shall direct and use
its best efforts to cause its representatives (including without limitation
any investment banker, attorney or accountant retained by it) not to,
initiate, solicit or waive standstill or similar provisions or encourage,
directly or indirectly (including by way of furnishing non-public
information), or take any action to facilitate any inquiries or the making or
implementation of any proposal or offer with respect to a merger, acquisition,
consolidation or similar transaction involving KCSI, or any purchase of the
assets or equity securities of KCSI (excluding its interest in Investors
Fiduciary Trust Company and Argus Health Systems, Inc.) representing, in the
aggregate, consideration of more than $200 million for all such purchases (any
such proposal or offer being referred to herein as an "Acquisition Proposal")
or engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with or otherwise cooperate
with any person relating to an Acquisition Proposal, provided that the Board
of Directors of KCSI may furnish or cause to be furnished information and may
participate in such discussions and negotiations through its representatives
if the Board of Directors, after consultation with and based upon the advice
of independent counsel (who may be its regularly engaged counsel), determines
in good faith that such action is necessary for its Board of Directors to
comply with its fiduciary duties to the KCSI stockholders under applicable
state law provided, further that the Board shall not take any of the foregoing
actions or the actions set forth in the last sentence of this paragraph 6
until after reasonable notice to and consultation with Illinois Central with
respect to such action and that such Board of Directors shall continue to
consult with Illinois Central after taking such action and, in addition, if
the Board of Directors receives an Acquisition Proposal, then KCSI shall
promptly inform Illinois Central of the material terms of such proposal and
the identity of the person making it and whether the negotiations with respect
to such Acquisition Proposal have commenced or been authorized. KCSI shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. Nothing contained in this paragraph 6 shall
prohibit KCSI from taking and disclosing a position with respect to a tender
offer by a third party pursuant to Rules 14d-9 and 14e-2(a) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and making
such disclosures to its stockholders which, in the reasonable judgment of its
Board of Directors, is required under applicable law.
7. This Letter of Intent may be terminated and the Transaction may be
terminated:
(a) at any time by written agreement of Illinois Central and KCSI;
(b) at the option of either Illinois Central or KCSI on or after ninety
days after the date of this Letter of Intent, if by such date the parties
hereto shall not have executed definitive agreements providing for the Merger
and the other documentation which is necessary to effectuate the parties'
understandings set forth herein; or
(c) at the option of Illinois Central at any time (i) if KCSI shall have
breached the terms of paragraph 6, (ii) if KCSI shall have commenced or
authorized negotiations with respect to any Acquisition Proposal or
recommended an Acquisition Proposal or (iii) upon the acquisition by a person
or entity, or any group (as defined in the Exchange Act) of beneficial
ownership of 15% or more of the KCSI Common Stock whether by tender offer or
exchange offer or otherwise.
(d) at the option of KCSI if, following a proposal or offer representing
an Acquisition Proposal, the Board of Directors, after consultation with and
based upon the advice of independent counsel (who may be its regularly engaged
counsel), determines in good faith that such action is necessary for the Board
of Directors to comply with its fiduciary duties to the KCSI stockholders
under applicable state law.
(e) at the option of Illinois Central if, following any proposal or offer
with respect to a merger, acquisition, consolidation or similar transaction
involving, or any purchase of, more than 15% of the assets or equity
securities of Illinois Central, the Board of Directors after consultation with
and based upon the advice of independent counsel (who may be its regularly
engaged counsel), determines in good faith that such action is necessary for
the Board of Directors to comply with its fiduciary duties to the Illinois
Central stockholders under applicable state law.
8. Whether or not the parties enter into definitive agreements with
respect to the Transaction, the parties hereto shall be responsible for all of
their own expenses incurred by them with respect to the investigation and
negotiation of this Letter of Intent and the Transaction. KCSI represents
that it has taken all action necessary so that the provisions of Section 203
of the Delaware General Corporation Law will not apply to this Letter of
Intent or the Transaction.
9. Notwithstanding any other provisions of this Letter of Intent, KCSI
agrees that if this Letter of Intent shall be terminated by (a) either
Illinois Central or KCSI pursuant to paragraph 7(b) and within one year after
the date of such termination a Business Combination (as defined below) shall
have been consummated or KCSI shall have entered into a definitive agreement
providing for a Business Combination, (b) by Illinois Central pursuant to
paragraph 7(c) or (c) by KCSI pursuant to paragraph 7(d), upon such
termination, or in the case of (a) upon the consummation of such Business
Combination or execution of such definitive agreement, KCSI shall pay to
Illinois Central a termination fee of $25,000,000. For purposes of this
paragraph 9, the term "Business Combination" shall mean (x) a merger,
consolidation, share exchange, business combination or similar transaction
involving KCSI or the KCSR, (y) a sale, lease, exchange, transfer or other
disposition of 15% or more of the assets of KCSI and its subsidiaries taken as
a whole, in a single transaction or series of transactions (other than a spin-
off dividend to the common stockholders of KCSI of all of KCSI's equity
interest in the businesses constituting the financial services and information
processing operations), or (z) the acquisition by a person (excluding the KCSI
Employee Stock Ownership Plan) or entity or any group (as defined in the
Exchange Act) of beneficial ownership of 15% or more of the KCSI Common Stock
whether by tender offer or exchange offer or otherwise; provided that a
Business Combination shall not include any transaction or series of
transactions in which the consideration amounts to less than $200 million or
any disposition by KCSI of its interest in Investors Fiduciary Trust Company
or Argus Health Systems, Inc. Any payments required to be made pursuant to
this paragraph 9 shall be made as promptly as practicable but not later than
five business days after the event giving rise to a termination fee. The
termination fee provisions as contemplated by the marked-up merger agreement
delivered by Illinois Central with the June 24, 1994 Bid Letter shall in
substance be incorporated in any definitive agreement between Illinois Central
and KCSI providing for the Merger, including a termination fee of $50,000,000.
In no event shall the amount payable under this paragraph 9 exceed $25,000,000
or be payable if Illinois Central terminates this Letter of Intent pursuant to
paragraph 7(e).
10. This Letter of Intent and the agreements governing the Transaction
shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to conflicts of laws principles thereof.
11. It is understood that this Letter of Intent merely constitutes a
statement of the mutual intentions of Illinois Central and KCSI with respect
to the Transaction, does not contain all matters upon which agreement must be
reached in order for the Transaction to be consummated and therefore does not
constitute a binding commitment, nor an offer by either party to enter into a
binding commitment, with respect to the Transaction itself. A binding
commitment with respect to the Transaction shall result only from the
execution of definitive agreements and related documents, subject to the
conditions expressed therein. Notwithstanding the two preceding sentences of
this paragraph 11, the provisions of paragraphs 3 through 10 are agreed to be
fully binding on each of Illinois Central and KCSI upon the execution of this
Letter of Intent, and the provisions of paragraphs 4, 5, 8, 9 and 10 shall
survive the termination of this Letter of Intent unless and until they are
superseded by the definitive agreements for the Transaction. This Letter of
Intent may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same instrument.
If the foregoing correctly sets forth your understanding with respect to the
Transaction, please indicate by executing a copy of this Letter of Intent as
provided below and returning the same to the undersigned.
ILLINOIS CENTRAL CORPORATION
By: /s/ G.H. Lamphere
Chairman of the Board
By:
President and Chief Executive Officer
Accepted and agreed to
this 18th day of July, 1994
KANSAS CITY SOUTHERN INDUSTRIES, INC.
By: /s/ Landon H. Rowland
President and Chief Executive Officer
NEWS RELEASE - JULY 19, 1994
KANSAS CITY SOUTHERN INDUSTRIES, INC. ANNOUNCES
ILLINOIS CENTRAL AGREES IN PRINCIPLE TO ACQUIRE KANSAS CITY SOUTHERN RAILWAY
Illinois Central Corporation (NYSE: IC) and Kansas City Southern Industries,
Inc. (NYSE: KSU) jointly announced today that they have signed a letter of
intent providing for the acquisition by Illinois Central Corporation of the
Kansas City Southern Railway and certain related assets. The Kansas City
Southern Railway is a subsidiary of Kansas City Southern Industries.
The acquisition will be accomplished by a merger of Illinois Central
Corporation and Kansas City Southern Industries, Inc. immediately following
the spin-off by Kansas City Southern Industries to its shareholders of the
stock of a subsidiary holding its financial services businesses, which consist
principally of DST Systems, Inc. and the Janus Capital Corporation. The
acquisition, which is subject to receipt of a favorable Internal Revenue
Service ruling, the negotiation of definitive documentation and a shareholder
vote of both companies, is expected to be completed in the first half of 1995.
Illinois Central Corporation will account for this transaction as a purchase.
Since the definitive agreements remain to be negotiated, there can be no
assurance that a transaction will ultimately be consummated.
Kansas City Southern Industries' shareholders will receive, on a tax-free
basis, a distribution of approximately 21.2 million shares of Illinois Central
Corporation common stock and stock of a company which will hold shares of
Kansas City Southern Industries' non-rail operations. In addition, the letter
of intent anticipates that Illinois Central Corporation will assume
approximately $929 million of Kansas City Southern Industries' indebtedness
and provide $6 million to purchase its preferred stock.
The combination of the Illinois Central Railroad and the Kansas City Southern
Railway will, under the common control of Illinois Central Corporation, create
an important rail network which will serve 14 midwestern and southern states
and link the geographical markets of Chicago, New Orleans, Memphis, Kansas
City, Port Arthur, Dallas and Birmingham. The combined railroads will have
revenues in excess of $1 billion and a greatly expanded geographic reach.
Currently, the two railroads serve primarily different geographic markets with
no meaningful overlap in route systems. Kansas City Southern Railway provides
north/south service between Kansas City and Beaumont/Port Arthur/Lake Charles,
while the Illinois Central Railroad serves the Chicago to New Orleans
corridor. The proposed transaction will create more competitive alternatives
for the two railroads' customers. Kansas City Southern Railway's customers
will gain improved access to the northeast, and Illinois Central Railroad's
customers will enjoy improved access to the west, southwest and southeast.
The combination will enhance the corridors of service linking Chicago with
Dallas and the southeast, enabling the railroads to expand their service to
the growing intermodal markets. The railroads will have a balanced commodity
base with coal, chemicals, lumber/paper and grain, in addition to intermodal.
To complete the acquisition, the Illinois Central Railroad will be placed in
trust pending Interstate Commerce Commission approval of the common control of
the two railroads. The companies are confident that this transaction will be
approved by the Interstate Commerce Commission and expect the approval process
to be completed within a year from submission of an application.
At the closing of the transaction, E. Hunter Harrison, currently the Illinois
Central Railroad's President and Chief Executive Officer, will become
President and Chief Executive Officer of the Kansas City Southern Railway, and
Gerald Mohan will become President and Chief Executive Officer of the Illinois
Central Railroad with John McPherson, as Chief Operating Officer. Mr. Mohan
currently is Senior Vice President-Marketing of the Illinois Central Railroad
and has been affiliated with the company for more than 34 years. Mr.
McPherson is currently Senior Vice President-Operations of the Illinois
Central Railroad. Gilbert H. Lamphere will retain his position as Chairman of
the Illinois Central Corporation, which will be the parent company of both
railroads upon completion of the acquisition. Illinois Central expects that
Kansas City Southern Railway's employees and key management will continue to
be involved in the operation of that railroad.
Mr. Lamphere said, "This transaction presents a unique opportunity to create
additional value for the Illinois Central and Kansas City Southern
shareholders. We believe that by combining a disciplined focus on efficient
and low cost operations, a broadened and balanced commodity base and greatly
expanded service area, we will have substantial revenue growth and increased
profitability."
Mr. Harrison added, "This is an important addition to our twin objectives of
continued revenue growth and generating attractive returns on invested
capital. The acquisition of the Kansas City Southern Railway extends the
geographic reach of both railroads, enhancing our position with our customers
as the most efficient and effective means of transportation." Harrison added
the following specific points supporting the rationale:
- - - Kansas City Southern Railway has achieved annual compound growth in
carloadings during the last five years of approximately 6% (excluding
intermodal), a trend we believe we can continue to build upon given
Kansas City Southern Railway's strong industrial base.
- - - The initiation of a disciplined scheduled service will dramatically
improve our service offerings and permit future revenue opportunities.
- - - The configuration of our railroads will permit more direct routings of
customer traffic providing increased revenue opportunities.
- - - The Kansas City Southern Railway has spent almost $350 million in
capital expenditures in the last three years. This well-maintained
plant will permit future capital expenditures to be reduced.
- - - Cost improvements can be achieved in a variety of areas, including
elimination of duplicative administrative functions, consolidation of
locomotive fleets, more efficient use of yards and other operating
efficiencies, all designed to ensure that the railroads will remain
among the most profitable in the U.S.
Landon H. Rowland, President and Chief Executive Officer of Kansas City
Southern Industries, Inc., commented, "The combination of the two railroads is
a tremendous opportunity for Kansas City Southern Industries' shareholders,
employees and customers. By adopting the best of both railroads, we can offer
greater financial strength for our shareholders, better service for our
customers and the improved opportunities for our employees that come with
growth. At the same time excellent growth opportunities for our financial
services operations will be greatly enhanced. Both our transaction processing
and asset management businesses have excellent market positions with exciting
prospects for improved revenue and earnings. Our plans are to pursue these
opportunities vigorously."
Illinois Central is being advised by The Bridgeford Group and Simpson Thacher
& Bartlett. Kansas City Southern Industries' advisors are CS First Boston
Corporation; Watson, Ess, Marshall & Enggas and Proskauer Rose Goetz &
Mendelsohn.
Illinois Central Corporation is a holding company whose principal subsidiary,
Illinois Central Railroad, operates 2,700-mile freight railroad in six states
between Chicago and the Gulf of Mexico.
Kansas City Southern Industries, Inc. is a holding company, one of whose
principal subsidiaries, The Kansas City Southern Railway, operates a 2,700-
mile main line freight railroad in 11 states, principally between Kansas City
and Port Arthur, Texas, and between Dallas and Birmingham, Alabama and serves
principal ports in the Gulf of Mexico.
NEWS RELEASE - JULY 19, 1994
KANSAS CITY SOUTHERN INDUSTRIES, INC. ANNOUNCES RESULTS OF
STRATEGIC STUDY, SALE OF IFTC, AND RELATED TRANSACTIONS
Kansas City Southern Industries, Inc. announced that its subsidiary, DST
Systems, Inc. ("DST"), and Kemper Financial Services, Inc. ("KFS") today have
signed a letter of intent for the acquisition of Investors Fiduciary Trust
Company ("IFTC") by State Street Boston Corporation ("State Street").
State Street will exchange its stock with an approximate market value of $225
million for IFTC and the other assets of IFTC's holding company. The
transaction is subject to execution of a definitive agreement and certain
regulatory actions and approvals.
State Street is a world leader in providing custodial and record keeping
services to the financial services industry.
"We are extremely pleased with the transaction and look forward to working
with State Street to continue to serve our clients with the quality services
we are known for," said Jerry Lavin, president of IFTC.
Marshall N. Carter, Chairman an Chief Executive Officer of State Street, said,
"The acquisition of IFTC will strengthen State Street's leadership position in
servicing financial assets worldwide. We plan to operate IFTC as an
independent trust company based in Kansas City with the current management
team."
IFTC, located in Kansas City, Missouri, is a Missouri trust company that is
owned equally by KFS and DST. The Company provides portfolio accounting,
custody and transfer agency services to the mutual fund industry. IFTC
currently has approximately $130 billion in assets under custody.
Kemper Financial Services, Inc. is one of the nation's largest money managers.
Together with its affiliates, KFS has approximately $67 billion in assets
under management.
DST provides data processing, shareholder accounting, computer software
development, and other services to mutual funds, banks, insurance companies
and the health care industry.
New Holding Company for Financial Services and Other Services
KCSI also announced plans to form a new subsidiary holding company for its
non-rail businesses, consisting primarily of investment management (Janus
Capital Corporation and Berger Associates, Inc.) and data processing and
support services for mutual funds, banks, brokerages, insurance companies and
pharmaceutical claims (DST and Argus Health Systems). In connection with the
proposed acquisition of KCSI's rail operations by Illinois Central Corporation
also announced today, the new subsidiary will be "spun-off" to the
stockholders of KCSI.
Landon H. Rowland, KCSI's President and Chief Executive Officer said:
"These transactions will give effect to KCSI's plan to structure its
operations so as to realize opportunities for increasing shareholder value.
Our recent strategic evaluation will be now largely completed. We believe the
combination of KCS Railway and Illinois Central will create a strategically
powerful transportation company with combined prospects greater than those of
the individual railroads. At the same time, excellent growth opportunities
for our remaining financial services operations will be significantly
enhanced. Both our transaction processing and asset management businesses
have excellent market positions with exciting prospects for improved revenues
and earnings. Our plans are to pursue these opportunities vigorously."
The new subsidiary holding company is expected to further expand and develop
the businesses of Janus and DST, and to conclude KCSI's previously announced
acquisition of Berger. (On July 15, 1994, the Berger 100 Fund, Berger 101
Fund and Berger Small Company Growth Fund announced that their Directors and
Trustees have approved KCSI acquiring control of BAI, the investment advisor
to the Berger Funds.)
Assets managed by Janus and Berger total approximately $25 billion, comprised
primarily of no-load equity mutual funds. These companies will be operated
separately targeting growth in their traditional direct markets as well as in
the expanding deferred compensation market, and pursuing other distribution
channels, with an emphasis on insurance products.
DST will continue to expand the services it offers to the mutual fund industry
domestically and to pursue the development of international opportunities.
Through its strategic partnership with an equity ownership in The Continuum
Company, DST plans to participate in the trend of providing data processing to
insurance companies. Argus (a 50% owned joint venture) represents DST's
presence in the health care field.
Thomas A. McDonnell, Executive Vice President of KCSI, commented that, "This
new holding company structure provides a vehicle for us to pursue more
effectively the many exciting opportunities in financial services, insurance
and health care."
"The IFTC transaction also represents an attractive opportunity to expand our
existing partnership operations with State Street."
KCSI to Redeem Certain Common Stock Rights
The Board of Directors of KCSI also authorized redemption of the common stock
"Rights" issued pursuant to its Rights Plan in 1986. The Board action
terminates the exercisability of such Rights and will result in a payment of
one and one-quarter cents ($0.0125) per share to common stockholders of record
on August 26, 1994, payable September 20, 1994.
