UNITED STATES
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): August 27, 1997
NORTH CAROLINA RAILROAD COMPANY
(Exact name of registrant as specified in its charter)
North Carolina
(State or other jurisdiction of incorporation)
0-15768 56-6003280
(Commission File Number) (IRS Employer Identification No.)
3200 Atlantic Avenue
Suite 110
Raleigh, North Carolina 27604
(Address of principal executive offices) (Zip Code)
(919) 954-7601
(Registrant's telephone number, including area code)
This document contains 7 pages.
<PAGE>
Table of Contents
Item 5. Other Events . . . . . . . . . . . . . . . . . . . 3
Item 7. Financial Statements and Exhibits . . . . . . . . 4
Signatures . . . . . . . . . . . . . . . . . . . . . . . . 4
2
<PAGE>
Item 5. Other Events
On April 7, 1997, the Registrant, the State of North
Carolina and the Beaufort & Morehead Railroad Company (a North
Carolina corporation whose stock is wholly owned by the State of
North Carolina)("State") executed a Letter of Intent to reach a
definitive agreement for a plan of merger, whereby the State
would acquire the shares of the Registrant held by shareholders
other than the State, (the "non-State shares") at a cash price of
$66.00 per share.
On August 27, 1997, the General Assembly of North Carolina
approved legislation authorizing a $61 million reserve fund
which, in addition to other funds of the State, is authorized for
an investment to fund the acquisition of the non-State shares
consistent with the Letter of Intent. No definitive agreement
has been reached between the Registrant and the State; however,
the Registrant and the State are currently negotiating the terms
of a definitive agreement. If a definitive agreement is reached,
the Registrant expects to call a shareholder meeting to vote on
the agreement in late 1997 or early 1998.
Under the terms of the Letter of Intent, any definitive
agreement will be subject to all other corporate and governmental
approvals, including approval by the shareholders of the
Registrant, to the State securing necessary financing, and to
other conditions. The Letter of Intent also provides that either
the State or the Registrant may terminate any definitive
agreement if closing does not occur on or before May 5, 1998.
The foregoing forward-looking statements contained herein
are subject to certain risks and uncertainties which could cause
actual results to differ significantly. There can be no
assurance that a definitive agreement can be reached, and if
reached, that it will include a share price or any other terms
that are attractive to the shareholders of the Registrant. In
addition, there can be no assurance that any approvals required
within the State government or the Registrant could be obtained
to authorize closing on any agreement that may be reached. The
Registrant does not know what effect, if any, an acquisition of
the shares by the State, if consummated, will have on the
Registrant's relationship with Norfolk Southern, pending
litigation between Norfolk Southern and the Registrant, or the
Registrant's ability to continue to qualify as a Real Estate
Investment Trust.
3
<PAGE>
Item 7. Financial Statements and Exhibits
c. Exhibits
Index to Exhibits
Exhibit Item
------- ---------------------------------------
99.1 Excerpt from Senate Bill 352, Section
32.30, General Assembly of North
Carolina.
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.
Date: August 29, 1997 By: \s\ R. Samuel Hunt, III
--------------- ------------------------
R. Samuel Hunt, III
President
4
<PAGE>
Exhibit 99.1
General Assembly of North Carolina
Excerpt from Senate Bill 352
NORTH CAROLINA RAILROAD ACQUISITION
Section 32.30. (a) In order to help promote trade, industry,
and transportation within the State of North Carolina and to
advance the economic interests of the State and its citizens, the
General Assembly finds it advantageous for the State to acquire
the outstanding shares of the North Carolina Railroad Company not
held by the State.
(b) The sum of sixty-one million dollars ($61,000,000) of
the unreserved General Fund balance as of June 30, 1997, is
placed in a Railroad Reserve Account.
(c) Notwithstanding G.S. 147-69.1, if a majority of the
outstanding shares held by shareholders other than the State are
represented in person or by proxy at a North Carolina Railroad
Company shareholder meeting where a plan for merger between the
Beaufort and Morehead Railroad Company and the North Carolina
Railroad Company is approved, then the State Treasurer shall
invest on a one-time basis up to sixty-one million dollars
($61,000,000) from the reserve account created in subsection (b)
of this section in obligations of the Beaufort and Morehead
Railroad Company or any successor company. This investment shall
be an interest-bearing demand note and shall be in a form
prescribed by the State Treasurer. The loan is not subject to
repayment of principal or interest prior to action of the 1999
Session of the General Assembly. The Director of the Budget
shall recommend to the 1999 Session of the General Assembly, by
February 1, 1999, a plan for the repayment of the loan.
(d) Section 54 of Chapter 82 of the Laws of 1848-1849, as
added by Chapter 1046 of the 1951 Session Laws, reads as
rewritten:
"No stock owned by the State of North Carolina in the North
Carolina Railroad Company shall be sold or transferred except
with the prior consent of the General Assembly, except as part of
a transaction or series of transactions relating to a plan of
merger or consolidation of that company with another company, and
where the State will be the owner of all of the voting stock in
the merged or consolidated corporation."
(e) In accordance with subsection (d) of this section, the
State Treasurer, as part of the plan of merger and consolidation,
shall transfer the stock owned by the State of North Carolina in
the North Carolina Railroad Company to the Beaufort and Morehead
Railroad Company.
(f) G.S. 136-16.6(c) reads as rewritten:
"(c) There is annually appropriated to the Department of
Transportation for railroad purposes including capital
contributions to the Beaufort and Morehead Railroad Company or
any successor company, one hundred percent (100%) of the funds
5
<PAGE>
credited to the Highway Fund pursuant to subsection (a) of this
section."
(g) Subsection (f) of this section also applies to funds
previously appropriated under G.S. 136-16.6(c).
(h) No monies appropriated for highway construction or
maintenance from the Highway Fund, the Highway Trust Fund, or
transferred to the Highway Fund under G.S. 136-176(c), may be
used by the State of North Carolina or any of its political
subdivisions to acquire stock in the North Carolina Railroad
Company or make a capital contribution or loan to either that
company or the Beaufort and Morehead Railroad Company.
(i) Investments by the State in the Beaufort and Morehead
Railroad Company or any successor company shall be recorded in
the General Fund, and such evidence of ownership shall be held by
the State Treasurer.
(j) Effective July 1, 1999, G.S. 147-12(7) is repealed.
(k) Effective July 1, 1999, G.S. 124-6 reads as rewritten:
"Section 124-6. Appointment of proxies, director of railroad
companies, etc.
(a) The Governor shall appoint on behalf of the State all
such officers or agents as, by an act, incorporating a company
for the purpose of internal improvement, are allowed to represent
the stock or other interests which the State may have in such
company; and such person or persons shall cast the vote to which
the State may be entitled in all the meetings of the stockholders
of such company under the direction of said Governor; and the
said Governor may, if in his opinion the public interest
requires, remove or suspend such persons, officers, agents,
proxies, or directors in his discretion.
(b) Notwithstanding subsection (a) of this section, for any
railroad company organized as a corporation in which the State is
the owner of all the voting stock and which has trackage in more
than two counties, five of the members of the Board of Directors
shall be appointed by the Governor, two of the members of the
Board of Directors shall be appointed by the General Assembly
upon the recommendation of the Speaker of the House of
Representatives in accordance with G.S. 120-121, and two of the
members of the Board of Directors shall be appointed by the
General Assembly upon the recommendation of the President Pro
Tempore of the Senate in accordance with G.S. 120-121. Of the
Governor's five appointments, three shall be either an investment
banker, a person with railroad management experience, a person on
an economic development commission whose region contains track of
the company, or an attorney with corporate experience. The
remaining two shall be at-large members. The Speaker of the
House of Representatives shall recommend two at-large members.
The President Pro Tempore of the Senate shall recommend two at-large
members. The Board of Directors shall consist of nine
members. Of the initial members appointed by the Governor, three
shall be appointed for terms of four years and two shall be
appointed for terms of two years. Of the initial members
recommended to the General Assembly by the Speaker of the House
6
<PAGE>
of Representatives, one shall be appointed for a term of four
years and one shall be appointed for a term of two years. Of the
initial members recommended to the General Assembly by the
President Pro Tempore of the Senate, one shall be appointed for a
term of four years and one shall be appointed for a term of two
years. Thereafter all Board members shall serve four-year terms.
The Board shall elect the chairman from among its membership."
(l) Any railroad company covered by G.S. 124-6(b) shall
present to the Joint Legislative Transportation Oversight
Committee, by November 20, 1998, a business plan for the railroad
including, but not limited to:
(1) A mission statement with goals and objectives;
(2) Areas and types of services to be provided;
(3) Pro forma financial statements that cover a five-year
period beginning January 1, 1999; and
(4) Alternative forms of organization
(m) Upon ownership of all voting stock in the North Carolina
Railroad Company by the State of North Carolina, and upon the
request of the Board of Directors of the North Railroad Company,
the Public Officers and Employees Liability Insurance Commission
shall effect and place coverage for the officers, directors, and
employees of the North Carolina Railroad under G.S. 58-32-15.
The North Carolina Railroad Company shall pay the premiums for
this insurance at rates established by the Commission, and shall
make any other payments required by G.S. 143-300.6. Coverage of
the officers, directors, and employees of the North Carolina
Railroad Company under this subsection shall not be construed as
defining the North Carolina Railroad Company as a public body or
as defining its officers, directors, or employees as public
officials or employees for any other purpose.
7
