As filed with the Securities and Exchange Commission on June 20, 1996
Registration No. ______________
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________________________________
CONRAIL INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2728514
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2001 Market Street
Philadelphia, Pennsylvania 19101
(Address of Principal Executive Offices)
CONRAIL
AMENDED AND RESTATED 1991
LONG-TERM INCENTIVE PLAN
(Full title of the plan)
Bruce B. Wilson
Senior Vice President-Law
Conrail Inc.
2001 Market Street
Philadelphia, Pennsylvania 19101
(Name and address of agent for service)
(215) 209-4041
(Telephone number, including area code, of agent for service)
_________________________________________________________________
(continued on next page)
<PAGE>
CALCULATION OF REGISTRATION FEE
=========================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share(1) Price (1) Fee (1)
- ------------- ------------ ------------ ------------ ------------
Common Stock, 3,450,613(2) $67.75 $233,779,031 $80,614(2)
par value
$1.00 per
share(3)
_________________________________________________________________________
Phantom Stock(4) 3,450,613 0 0 0
=========================================================================
(1) The amounts are based on the average of the high and low
sale prices of a share of Conrail Inc. Common Stock on the New York
Stock Exchange on June 17, 1996 (as reported in the consolidated
reporting system), and are used solely for the purpose of
determining the registration fee pursuant to Rule 457.
(2) In addition to the 3,450,613 shares to be registered
hereunder, 2,425,978 additional shares are currently the subject of
an effective Registration Statement on Form S-8 (Reg. No. 33-44140)
and are being carried forward hereunder pursuant to Rule 429. Under
the prior referenced registration statement, fees in the amount of
$27,624 were paid with respect to such shares (computed at the fair
market value of $36.4375 per share, as adjusted to reflect a
subsequent two-for-one stock split effected as a dividend in 1992).
Pursuant to General Instruction E of Form S-8, the filing fee
calculated pursuant to Rule 457 is with respect to 3,450,613 shares
registered for the first time hereunder.
(3) Pursuant to Rule 457(h). Includes Common Share Purchase
Rights which, prior to the occurrence of certain events, will not be
exerciseable or evidenced separately from the Common Stock.
(4) Phantom Shares may be settled in shares of Common Stock on
a share for share basis upon lapse of the applicable deferral period
without payment of additional consideration.
_________________________________________________________________
PURSUANT TO RULE 429 OF THE SECURITIES ACT OF 1933,
AS AMENDED, THE PROSPECTUS WHICH SHALL BE USED IN
CONNECTION WITH THIS REGISTRATION STATEMENT ALSO
RELATES TO THE SHARES OF COMMON STOCK REGISTERED
FOR ISSUANCE AND SALE PURSUANT TO THE CONRAIL INC.
REGISTRATION STATEMENT ON FORM S-8 (33-44140).
_________________________________________________________________
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of certain information by reference.
Except as modified by the information furnished herewith,
the information in the Registration Statement filed by Conrail
Inc. with the Securities and Exchange Commission (File No. 33-44140)
pursuant to the Securities Act of 1933, as amended, is
incorporated by reference into this Registration Statement.
Item 4. Description of Securities.
Phantom Stock is a class of securities not registered under
Section 12 of the Exchange Act. The Committee may determine in
accordance with the terms of awards of Phantom Stock made
pursuant to the Amended and Restated 1991 Long Term Incentive
Plan (the "Plan") that Phantom Stock will be settled by the
Registrant on a one for one basis with the Registrant's Common
Stock. Phantom Stock has no voting or dividend rights prior to
being settled in Common Stock. However, the Registrant may elect
to award to participants in the Plan ("Participants") additional
compensation in the same amounts as holders of an equal number of
shares of the Registrant's Common Stock receive as dividends, and
such additional compensation may be in the form of additional
Phantom Stock.
3
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Unless otherwise indicated in the applicable Prospectus
Supplement, the validity of the Common Stock offered hereby will
be passed upon for the Registrant by Bruce B. Wilson, Senior Vice
President - Law, 2001 Market Street - C-17A, Philadelphia, PA
19103. Mr. Wilson is the owner of shares of Conrail Inc. Common
and ESOP Stock.
With respect to the unaudited consolidated financial
information of Conrail Inc. for the three-month periods ended
March 31, 1996 and 1995, incorporated by reference in this
Registration Statement, Price Waterhouse LLP reported that they
have applied limited procedures in accordance with professional
standards for a review of such information. However, their
separate report dated April 17, 1996 incorporated by reference
herein, states that they did not audit and they do not express an
opinion on that unaudited consolidated financial information.
Price Waterhouse LLP has not carried out any significant or
additional audit tests beyond those which would have been
necessary if their report had not been included. Accordingly,
the degree of reliance on their report on such information should
be restricted in light of the limited nature of the review
procedures applied. Price Waterhouse LLP is not subject to the
liability provisions of section 11 of the Securities Act of 1933
for their report on the unaudited consolidated financial
information because that report is not a "report" or a "part" of
the registration statement prepared or certified by Price
Waterhouse LLP within the meaning of sections 7 and 11 of the
Act.
4
<PAGE>
Item 6. Indemnification of Directors and Officers.
Sections 1741 and 1742 of the Pennsylvania Business
Corporation Law, as amended, provide that a business corporation
shall have power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending
or completed action or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he
is or was a representative of the corporation, or is or was
serving at the request of the corporation as a representative of
another entity, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him in connection with the action or
proceeding, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal
proceeding, had no reasonable cause to believe his conduct was
unlawful. In the case of actions by or in the right of the
corporation, Section 1742 provides that a corporation may
indemnify any such persons only against expenses (including
attorneys' fees) actually and reasonably incurred in connection
with the defense or settlement of such action and only if such
person acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the
corporation, provided that no such indemnification is permitted
in respect of any claim, issue or matter as to which the person
has been adjudged to be liable to the corporation unless and
only to the extent that the appropriate court determines upon
application that, despite the adjudication of liability but in
view of all the circumstances of the case, the person is fairly
and reasonably entitled to an indemnity for the expenses that
such court deems proper.
5
<PAGE>
Section 1743 of the Pennsylvania Business Corporation Law
mandates that to the extent a representative of a business
corporation has been successful on the merits or otherwise in
defense of any action or proceeding (including one on behalf of
the corporation), or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Section 1745 of the Pennsylvania Business Corporation Law
provides that expenses (including attorneys' fees) incurred in
defending any action or proceeding as discussed above may be paid
by a business corporation in advance of the final disposition of
the action or proceeding upon receipt of an undertaking by or on
behalf of the representative to repay the amount if it is
ultimately determined that he is not entitled to be indemnified
by the corporation.
Section 1746(a) of the Pennsylvania Business Corporation Law
permits a business corporation to create a fund, which may, but
need not be, under the control of a trustee, or otherwise secure
or insure in any manner its indemnification obligations.
Section 1746(a) of the Pennsylvania Business Corporation Law
provides that the indemnification and advancement of expenses
provided for by the statutory provisions discussed above shall
not be deemed exclusive of any other rights to which a person
seeking the indemnification or advancement of expenses may be
entitled under any bylaw, agreement, vote of shareholders or
disinterested directors or otherwise, both as to actions in his
official capacity and as to actions in another capacity while
holding that office. However, indemnification pursuant to
Section 1746(a) shall not be made in any case where the act or
failure to act giving rise to the claim for indemnification is
determined by a court to have constituted a willful misconduct or
6
<PAGE>
recklessness. A Pennsylvania corporation's articles of
incorporation may not provide for indemnification in the case of
willful misconduct or recklessness.
Under Section 1747 of the Pennsylvania Business Corporation
Law, a corporation may maintain insurance on behalf of any of the
persons referred to above against any liability asserted against
such person and incurred in or arising out of the capacities
referred to above, whether or not the corporation would have the
power to indemnify him against that liability under the
Pennsylvania Business Corporation Law.
Section 11.7 of the Registrant's Bylaws mandates the
indemnification by the Registrant of any officer or director, and
authorizes the Board of Directors to direct the Registrant to
indemnify any employee or agent other than an officer of the
Registrant, with respect to any threatened, pending or completed
action, suit or proceeding (including actions by or in the right
of the Registrant to procure a judgment in its favor) arising out
of, or in connection with, any actual or alleged act or omission
or the status of such person in his capacity as a director,
officer, employee or agent of the Registrant or in such capacity
for another enterprise if requested to serve in such capacity by
the Registrant, against expenses (including attorney's fees),
judgments, fines, and amounts paid in settlement actually and
reasonably incurred, unless the person's actions or failure to
act that gave rise to the claim for indemnification is determined
by a court to have constituted willful misconduct or
recklessness. Expenses incurred by any director or officer in
defending any civil or criminal action shall be, and such
expenses incurred by any employee or agent other than an officer
may upon approval of the Board of Directors be, paid by the
Registrant in advance of the final disposition of such action,
suit or proceeding, upon receipt of an undertaking by such person
7
<PAGE>
to repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the Registrant.
Section 11.6 of the Registrant's Bylaws provides that no
director of the Registrant shall be personally liable for
monetary damages for any action taken or any failure to take
action unless such director has breached or failed to perform the
duties of his office under the Pennsylvania Business Corporation
Law and the breach or failure to perform constitutes selfdealing,
willful misconduct or recklessness, or unless such liability is
imposed pursuant to a criminal statute or for the payment of
taxes.
Sections 11.6 and 11.7 of the Registrant's Bylaws do not
apply to any actions filed prior to their adoption by the
Registrant's shareholders on July 29, 1987, nor to any breach or
failure of performance occurring prior to July 29, 1987.
Section 11.8 of the Registrant's Bylaws mandates the
indemnification of directors and officers of the Registrant and
persons serving in such capacity for another company at the
request of the Registrant, if such person has been successful on
the merits or otherwise or upon a determination in the specific
case that such indemnification is proper because the person has
met the standard of conduct set forth in the 1988 Pennsylvania
Business Corporation Law. Section 11.8 applies to any breach or
failure of performance, regardless of its date of occurrence.
The Registrant maintains directors' and officers' liability
insurance for expenses for which indemnification is permitted by
the Pennsylvania Business Corporation law.
Item 7. Exemption from Registration Claimed.
Not applicable.
8
<PAGE>
Item 8. Exhibits.
4.1 Amended and Restated Bylaws of the Registrant, filed as
Exhibit 3.1 to the Registrant's Report on Form 10-Q for
the period ended September 30, 1995, and incorporated
herein by reference.
4.2 Form of Certificate of Common Stock, par value $1.00
per share, of the Registrant, filed as Exhibit
3.4(i)(c) to the Registrant's Form 8-B dated July 13,
1993, and incorporated herein by reference.
4.3 Form of Certificate of Series A ESOP Convertible Junior
Preferred Stock, no par value, of the Registrant filed
as Exhibit 3.4(i)(d) to the Registrant's Form 8-B dated
July 13, 1993, and incorporated herein by reference.
4.4 Amended Rights Agreement, dated as of October 19, 1994,
between Conrail Inc. and First Chicago Trust Company of
New York, together with Form of Right Certificate and
Summary of Rights to Purchase Common Shares as exhibits
thereto, filed as Exhibit 4.1 to the Registrant's Form
10-Q dated November 10, 1994, and incorporated herein
by reference.
4.5 Amendment to Rights Agreement of the Registrant dated
as of September 20, 1995, filed as Exhibit 3.4(i)(i) to
the Registrant's Form 8-B/A dated as of September 25,
1995, and incorporated herein by reference.
4.6 Amended and Restated 1991 Long-Term Incentive Plan.
5 Opinion as to legality of Bruce B. Wilson.
15.1 Letter of Price Waterhouse LLP as to unaudited interim
financial information.
9
<PAGE>
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Bruce B. Wilson (included in Exhibit 5).
24 Each of the officers and directors has signed this
Registration Statement and signed a power of attorney
contained on page 13 with respect to amendments to
this Registration Statement.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent posteffective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
10
<PAGE>
more than 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) to include any material information with
respect to the plan of distribution not previously disclosed in
this Registration Statement or any material change to such
information in this Registration Statement; provided, however,
-----------------
that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to
the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
11
<PAGE>
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Philadelphia, Commonwealth of Pennsylvania, on
June 19, 1996.
CONRAIL INC.
Registrant
By: /s/ David M. LeVan
-------------------------
David M. LeVan
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed on June 19, 1996 by
the following persons in the capacities indicated. Each person
whose signature appears below constitutes and appoints Timothy T.
O'Toole and Bruce B. Wilson his or her lawful attorneys-in-fact and
agents, each acting alone, with full powers of substitution and
resubstitution, for him or her and in his or her name, place and
stead, and in the case of David M. LeVan, on behalf of the
Registrant, in any and all amendments to this Registration
Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents, each acting alone, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, thereby
13
<PAGE>
ratifying and confirming all that said attorneys-in-fact and
agents, each acting along, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
/s/ David M. LeVan
- ----------------------------------------------
David M. LeVan
Chairman, President, Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Timothy T. O'Toole
- ---------------------------------------
Timothy T. O'Toole
Senior Vice President - Finance
(Principal Financial Officer)
/s/ Donald W. Mattson
- ---------------------------------------
Donald W. Mattson
Vice President - Controller
(Principal Accounting Officer)
/s/ H. Furlong Baldwin
- ---------------------------------------
H. Furlong Baldwin
Director
/s/ Claude S. Brinegar
- ---------------------------------------
Claude S. Brinegar
Director
- ---------------------------------------
Daniel B. Burke
Director
/s/ Kathleen Foley Feldstein
- ---------------------------------------
Kathleen Foley Feldstein
Director
/s/ Roger S. Hillas
- ---------------------------------------
Roger S. Hillas
Director
/s/ E. Bradley Jones
- ---------------------------------------
E. Bradley Jones
Director
14
<PAGE>
/s/ David B. Lewis
- ---------------------------------------
David B. Lewis
Director
- ---------------------------------------
John C. Marous
Director
/s/ Raymond T. Schuler
- ---------------------------------------
Raymond T. Schuler
Director
/s/ David H. Swanson
- ---------------------------------------
David H. Swanson
Director
15
<PAGE>
EXHIBIT INDEX
Exhibit No.
- ----------
4.6 Conrail Amended and Restated 1991 Long Term Incentive Plan
5 Opinion as to legality of Bruce B. Wilson
15.1 Letter of Price Waterhouse LLP as to unaudited
interim financial information
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Bruce B. Wilson (included in Exhibit 5).
24 Each of the officers and directors has signed this
Registration Statement and signed a power of attorney
contained on page 13 with respect to amendments to this
Registration Statement.
Exhibits 4.1, 4.2, 4.3, 4.4 and 4.5 are incorporated herein by
reference.
16
<PAGE>
Exhibit 4.6
- -----------
CONRAIL INC.
1991 LONG-TERM INCENTIVE PLAN
AMENDED AND RESTATED AS OF MAY 15, 1996
---------------------------------------
Section 1: GENERAL PROVISIONS
1.1 Purposes
--------
The purposes of the 1991 Long-Term Incentive Plan, as
amended and restated, (the "Plan") of Conrail Inc. (the
"Company") are to promote the interests of the Company and
its stockholders by (i) motivating employees, salaried
executives and other key employees of the Company and its
Subsidiaries, by means of performance-related incentives, to
achieve long-range performance goals; (ii) attracting and
retaining salaried executives and other key employees of
outstanding ability; (iii) strengthening the Company's
capability to develop, maintain and direct a competent man-
agement team; (iv) providing incentive compensation opportu-
nities which are competitive with those of other major cor-
porations; (v) aligning the interests of employees with the
interests of the Company's stockholders; and (vi) enabling
such employees to participate in the long-term growth and
financial success of the Company.
1.2 Definitions
-----------
"Award" -- means a Stock Option grant, a Right, a
Restricted Stock grant, a Phantom Stock award and/or a
Performance Share award under the Plan.
"Board of Directors" -- means the board of directors of
the Company.
<PAGE>
"Change of Control" -- means any of the following
events or occurrences:
(i) The stockholders of the Company approve a
transaction or transactions (however denominated or
effectuated) with another corporation or other Person
("Combination"), and immediately after such transaction(s)
less than eighty percent (80%) of the combined voting power
of the then-outstanding securities of such corporation or
Person will be held in the aggregate by the holders of
securities entitled, immediately prior to such Combination,
to vote generally in the election of directors of the
Company ("Voting Stock");
(ii) A report is filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), pursuant to
the Exchange Act, disclosing that any Person has become the
beneficial owner of 20 or more percent of the voting power
of Voting Stock;
(iii) The stockholders of the Company approve the
sale of all or substantially all of its assets to any other
corporation or other Person, and less than eighty percent
(80%) of the combined voting power of the then-outstanding
securities of such corporation or Person immediately after
such transaction will be held in the aggregate by the
holders of Voting Stock immediately prior to such sale;
(iv) At any time, Continuing Directors (as herein
defined) shall not constitute a majority of the members of
the Board ("Continuing Director" means (i) each individual
who has been a director of the Company for at least twenty-
four (24) consecutive months before such time and (ii) each
individual who was nominated or elected to be a director of
the Company by at least two-thirds of the Continuing
Directors at the time of such nomination or election);
(v) The stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company; or
- 2 -
<PAGE>
(vi) The Committee determines by a majority vote that
the occurrence, or the threat or imminence of the
occurrence, of another event or situation will have import
or effects similar to the foregoing such that such event or
situation should be considered a Change of Control
hereunder.
Notwithstanding the provisions of the foregoing
subparagraphs (i)-(vi), a Change of Control for purposes of
this Plan shall not be deemed to have occurred solely
because (a) the Company, (b) an entity of which the Company
is the direct or indirect Beneficial Owner (as herein
defined) of 50 or more percent of the voting securities or
(c) any Company-sponsored employee stock ownership plan or
any other employee benefit plan of the Company either files
or becomes obligated to file a report or a proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form 8-K
or Schedule 14A (or any successor schedule, form or report
or item therein) under the Exchange Act, disclosing
beneficial ownership by it of shares of Voting Stock,
whether in excess of 20 percent or otherwise, or because the
Company reports that a change in control of the Company has
or may have occurred or will or may occur in the future by
reason of such beneficial ownership.
"Code" -- means the Internal Revenue Code of 1986, as
amended.
"Committee" -- means the Compensation Committee of the
Board of Directors.
"Common Stock" -- means the $1.00 par value Common
Stock of the Company.
"Corporation" -- means the Company and/or its Subsidiaries.
- 3 -
<PAGE>
"Disinterested Person" -- has the meaning set forth in
Rule 16b-3(d)(3) promulgated by the Securities and Exchange
Commission under the Exchange Act, as in effect on May 15,
1996.
"Employee" -- means any salaried employee of the Corpo-
ration.
"Exchange Act" -- means the Securities Exchange Act of
1934, as amended.
"Fair Market Value" -- means the average of the high
and low prices of the Common Stock on the date on which it
is to be valued hereunder, as reported for New York Stock
Exchange Composite Transactions.
"Incentive Stock Options" -- mean Stock Options which
constitute "incentive stock options" under Section 422 (or
any successor section) of the Code.
"Non-Qualified Stock Options" -- mean Stock Options
which do not constitute Incentive Stock Options.
"Participant" -- means an Employee who is selected by
the Committee to receive an Award under the Plan.
"Performance Cycle" or "Cycle" -- means the period of
years selected by the Committee during which the performance
of the Company, the Corporation, or the Participant is mea-
- 4 -
<PAGE>
sured for the purpose of determining the extent to which an
Award subject to Performance Goals has been earned.
"Performance Goals" -- means the objectives for the
Company, the Corporation, or the Participant that may be
established by the Committee for a Performance Cycle, with
respect to Performance-based awards contingently awarded
under the Plan. The Performance Goals for a Performance
Cycle shall be based on one or more of the following
criteria, as determined by the Committee with respect to a
Performance Cycle:
1. net income 8. cash flow
2. earnings per share 9. return on assets
3. debt reduction 10. shareholder return
4. safety 11. revenue
5. on-time performance 12. customer satisfaction
6. return on investment 13. return on equity
7. operating ratio 14. operating income
"Performance Share" -- means a phantom share equivalent
to one share of Common Stock contingently awarded under
Section 5 of the Plan and subject to one or more Performance
Criteria.
"Phantom Stock" -- means an award pursuant to Section 6
of the Plan of a contingent right to receive a share of
Common Stock at a time subsequent to such award.
- 5 -
<PAGE>
"Restricted Period" -- means the period of years
selected by the Committee during which a grant of Restricted
Stock or Phantom Stock, as the case maybe, is forfeitable to
the Company.
"Restricted Stock" -- means shares of Common Stock con-
tingently granted to a Participant under Section 4 of the
Plan.
"Right" -- means a stock appreciation right granted to
a Participant under Section 3 of the Plan.
"Stock Option" or "Option" -- means an Incentive Stock
Option and/or a Non-Qualified Stock Option granted under
Section 2 of the Plan.
"Subsidiary" -- means any corporation in which the
Company possesses directly or indirectly more than fifty
percent (50%) of the total combined voting power of all
classes of its stock.
1.3 Administration
--------------
The Plan shall be administered by the Committee, which
shall at all times consist of three or more members, each of
whom is a Disinterested Person. The Committee shall have
sole and complete authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the
operation of the Plan as it shall from time to time deem
advisable, and to interpret the terms and provisions of the
Plan. The Committee's decisions are binding upon all
parties. No member of the Committee shall be liable for any
action or determination made in good faith with respect to
the Plan.
- 6 -
<PAGE>
1.4 Eligibility
-----------
(a) All Employees of the Company and its Subsidiaries,
as determined at the discretion of the Committee, are
eligible to be Participants in the Plan.
(b) Each Award, and the terms and conditions of such
Award, shall be confirmed in writing by the Company. The
Committee may require Participants to execute agreements
with respect to such Awards.
1.5 Shares Reserved
---------------
(a) As of the Effective Date, there shall be reserved
for issuance pursuant to the Plan a total of 4,000,000
shares of Common Stock. In the event that (i) a Stock
Option expires, is cancelled, or is terminated unexercised
as to any shares covered thereby, or (ii) shares or
equivalents on which no dividends or dividend equivalents
have been paid (other than shares of Restricted Stock) are
forfeited for any reason under the Plan, such shares shall
thereafter be available for issuance pursuant to the Plan
and shall be considered as part of the 4,000,000 shares of
Common Stock authorized for issuance pursuant to the Plan.
Shares of Common Stock covered by a Stock Option which is
surrendered upon exercise of a Stock Appreciation Right,
shares of Phantom Stock or Performance Shares on which
dividends, or the equivalent thereof, have been paid, shall
thereafter be unavailable for issuance pursuant to the Plan.
In the event that an Award is purchased pursuant to Section
1.10(c)(ii) hereof, the shares covered by the Award shall
not thereafter be available for issuance pursuant to the
Plan.
(b) In the event of any change in the outstanding
shares of Common Stock by reason of any stock dividend or
split, recapitalization, merger, consolidation, spin-off,
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<PAGE>
combination or exchange of shares or other corporate change,
or any distributions to holders of Common Stock other than
normal cash dividends, the Committee shall make such substi-
tution or adjustment, if any, as it deems to be equitable,
as to the number of shares of Common Stock or other securi-
ties issued or reserved for issuance pursuant to the Plan,
the number of outstanding Stock Options and the option price
thereof, the number of Rights, and the number of outstanding
Performance Shares, the number of outstanding shares of
Phantom Stock and shares of Restricted Stock. Also, in
instances where another corporation or other business entity
is being acquired by the Company, and the Company has
assumed outstanding employee option grants and/or the obli-
gation to make future or potential grants under a prior
existing plan of the acquired entity, similar adjustments
are permitted at the discretion of the Committee.
1.6 Tax Withholding
---------------
The Corporation shall have the right to deduct from all
amounts paid in cash (whether under this Plan or otherwise)
any taxes required by law to be withheld therefrom. In the
case of payments of Awards in the form of Common Stock, at
the Committee's discretion the Participant may be required
to pay to the Corporation the amount of any taxes required
to be withheld with respect to such Common Stock, or, in
lieu thereof, the Corporation shall have the right to retain
the number of shares of Common Stock whose Fair Market Value
equals the amount required to be withheld.
1.7 Nontransferability
------------------
No right or interest of any Participant in any Award
shall be subject to any lien, obligation or liability of the
Participant, and no Award shall be assignable or transfer-
able, except by will, the laws of descent and distribution.
Notwithstanding the foregoing, a Participant may designate a
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<PAGE>
beneficiary with respect to the Awards granted to such
Participant. An Award shall be exercisable during the
Participant's life only by such Participant or the guardian
or legal representative of such Participant. After the
Participant's death, an Award shall be exercisable by the
beneficiary designated by the Participant, the executor or
executrix of the Participant's estate or the person or
persons to whom rights under the Award shall pass by will or
the laws of descent and distribution in accordance with the
provisions of the Award and Plan.
1.8 No Right to Employment
----------------------
No person shall have any claim or right to be granted
an Award, and the grant of an Award shall not be construed
as giving a Participant the right to be retained in the
employ of the Corporation. Further, the Corporation
expressly reserves the right at any time to dismiss a Par-
ticipant free from any liability, or any claim under the
Plan, except as provided herein or in the terms of a Stock
Option, Restricted Stock, Phantom Stock or Performance
Share, which the Committee in its discretion may decide to
provide to Participants.
1.9 Construction of the Plan
------------------------
The validity, construction, interpretation, administra-
tion and effect of the Plan and of its rules and regula-
tions, and rights relating to the Plan, shall be determined
in accordance with the laws of Pennsylvania. It is intended
that the Plan comply with Rule 16b-3 under the Exchange Act,
as in effect on May 15, 1996, as may be amended from time to
time, and so far as possible, the Plan shall be construed,
interpreted, and administered in a manner consistent with
this intent.
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<PAGE>
1.10 Amendment
---------
(a) Subject to the Exchange Act and the rules and
regulations thereunder as in effect on May 15, 1996, as may
be amended from time to time, the Board of Directors may
amend, suspend or terminate the Plan or any portion thereof
at any time, provided that no amendment, suspension or
termination shall alter or impair any right theretofore
awarded or granted to any Participant, without the consent
of such Participant.
(b) With the consent of the Participant affected
thereby, the Committee may amend, cancel, or modify any out-
standing Award, including without limitation, to change the
date or dates as of which (i) a Stock Option or right
becomes exercisable or is forfeited if not exercised, (ii)
the restrictions on shares of Restricted Stock are removed,
(iii) a share of Phantom Stock is settled in cash or Common
Stock or (iv) a Performance Share is deemed earned.
(c) Notwithstanding the foregoing, the Committee may
amend or modify any outstanding Award in connection with a
Change of Control to (i) provide for the acceleration of any
time periods relating to the exercise or realization of such
Awards so that such Awards may be exercised or realized in
full on or before a date fixed by the Board of Directors,
(ii) provide for the purchase of such Awards, upon the
Participant's request, for an amount of cash equal to the
amount which could have been attained upon the exercise or
realization of such Awards had such Awards been currently
exercisable or payable, (iii) make such adjustment to the
Awards then outstanding as the Board of Directors deems
appropriate to reflect such transaction or change, or (iv)
cause the Awards then outstanding to be assumed, or new
rights substituted therefor, by the surviving corporation in
such change.
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<PAGE>
1.11 Effective Date
--------------
The amended and restated Plan shall be effective on May
15, 1996 ("Effective Date") if approved by shareholders at
the meeting of shareholders of the Company on such date, and
will terminate on May 15, 2006. No Award may be granted
after the termination of the Plan, but all Awards granted
prior to termination may be exercised in accordance with
their terms.
1.12 General Provisions
------------------
(a) Absence on leave approved pursuant to the duly
adopted policies of the Corporation shall not be considered
an interruption or termination of employment or service of
any Employee for purposes of the Plan.
(b) The obligation of the Company to issue, transfer
or deliver Common Stock under the Plan shall be subject to
(i) the effectiveness of a registration statement under the
Securities Act of 1933, as amended, with respect to such
issue, transfer or delivery, if deemed necessary or appro-
priate by counsel for the Company, (ii) the condition that
the shares of Common Stock reserved for issuance, if any,
shall have been listed (or authorized for listing upon
official notice of issuance) upon each stock exchange on
which outstanding shares of the same class may then be
listed and (iii) all other applicable laws, regulations,
rules and orders which shall then be in effect.
(c) The Plan, insofar as it provides for cash pay-
ments, shall be unfunded, and the Corporation shall not be
required to segregate any assets which may at any time be
awarded under the Plan. Any liability of the Corporation to
any person with respect to any Award under the Plan shall
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<PAGE>
be based solely upon any contractual obligations which may
be created by or pursuant to the Plan. No such obligation
of the Corporation shall be deemed to be secured by any
pledge of, or other encumbrance on, any property of the
Corporation.
1.13 Maximum Award
-------------
The maximum number of shares to a Participant pursuant
to Awards under this Plan during any calendar year will be
150,000.
1.14 Performance-Based Awards
------------------------
The Committee may make any Award a Performance-Based
Award through the application of the Performance Goals and
the Performance Cycle.
Section 2: STOCK OPTIONS
2.1 Authority of Committee
----------------------
Subject to the provisions of the Plan, the Committee
shall have sole and complete authority to determine the
Employees to whom Stock Options shall be granted, the number
of shares to be covered by each Stock Option and the condi-
tions and limitations, if any, in addition to those set
forth in Section 2.3 hereof, applicable to the exercise of
the Stock Option. The Committee shall have the authority to
make a grant of Stock Options contingent upon the occurrence
of an event, including the exercise of a Stock Option by a
Participant by tender of shares of Common Stock pursuant to
Section 2.3(c) hereof, in which event the Committee may
grant a new Stock Option to such Participant to purchase
that number of shares of Common Stock which equal the number
of shares of Common Stock tendered by such Participant. The
Committee shall have the authority to grant Incentive Stock
- 12 -
<PAGE>
Options, or to grant Non-Qualified Stock Options, or to
grant both types of Stock Options, except that Incentive
Stock Options can only be granted to Employees.
In the case of Incentive Stock Options, the maximum
aggregate Fair Market Value (at the date of grant) of the
shares which any Participant may first exercise during any
calendar year, under this Plan or any other plan of the
Company or a corporation which (at the date of grant) is a
parent of the Company or a Subsidiary, shall not exceed
$100,000 or such larger employee grant maximum as shall be
in effect under Section 422 of the Code at the time of
grant, plus such unused limit carryover as is permitted
under Section 422 of the Code.
2.2 Option Price
------------
The Committee shall establish the option price at the
time each Stock Option is granted, which price shall not be
less than one hundred percent (100%) of the Fair Market
Value of the Common Stock on the date of grant. The option
price shall be subject to adjustment in accordance with the
provisions of Section 1.5(b) hereof.
2.3 Exercise of Options
-------------------
(a) Each Stock Option by its terms shall require the
Participant to remain in the continuous employ of the
Corporation for at least six months from the date of grant
of the Stock Option before any part of the Stock Option
shall be exercisable. Stock Options may not be exercisable
later than ten years after their date of grant.
(b) The Committee may determine the terms and
conditions pursuant to which any Stock Option shall become
exercisable and shall expire.
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<PAGE>
(c) The option price of each share as to which an
Option is exercised shall be paid in full at the time of
such exercise. The Committee may determine whether such
payment shall be made in cash, by tender of shares of Common
Stock owned by the Participant valued at Fair Market Value
as of the date of exercise, or by a combination of cash and
shares of Common Stock.
Section 3: STOCK APPRECIATION RIGHTS
3.1 Terms and Conditions
--------------------
The Committee may, in its discretion, grant Rights to
the holders of Options under this Plan, but only if such
holders are subject to Section 16(b) of the Exchange Act.
Rights shall be subject to the following terms and condi-
tions:
(a) Each Right shall relate to a specific Stock Option
granted under this Plan (the "related Option") and may be
granted at the same time the related Option is granted or at
any time thereafter prior to the last day on which the
related Option may be exercised. Such Rights shall be sub-
ject to such additional terms and conditions as the
Committee may specify.
(b) A Right shall entitle the Participant, upon sur-
render of an exercisable related Option, or an exercisable
portion thereof, to receive from the Company an amount equal
to the Fair Market Value on the surrender date of the shares
that the Participant would have been entitled to purchase on
that date pursuant to the related Option or portion thereof
surrendered, less the amount that the Participant would have
been required to pay to purchase such shares under the
related Option. The amount shall be paid at the sole dis-
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<PAGE>
cretion of the Committee to the Participant in cash, Common
Stock, or a combination of cash and Common Stock. No frac-
tional shares shall be issued as a result of exercising a
Right. A Participant wishing to exercise a Right shall give
written notice of such exercise to the Company, and the date
the Company receives such notice shall be the day on which
the related Option or portion thereof shall be deemed
surrendered.
Section 4: RESTRICTED STOCK GRANTS
4.1 Authority of the Committee
--------------------------
(a) Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to
determine the Employees to whom shares of Restricted Stock
shall be granted, the number of shares of Restricted Stock
to be granted to each Participant, the duration of the
Restricted Period during which, and the conditions under
which, the Restricted Stock may be forfeited to the Company,
and the terms and conditions of the Award in addition to
those contained in Section 4.2.
(b) Anything in Section 4.1(a) to the contrary
notwithstanding, in the event a Participant elects, in
accordance with the terms of a profit incentive plan
maintained by the Corporation, to receive Common Stock in
lieu of all or a portion of the cash to which such
Participant would otherwise be entitled pursuant to such
profit incentive plan, the Committee shall grant, in one or
more Awards, to such Participant such number of shares of
Restricted Stock at such times and with such durations of
Restricted Periods as shall be set forth in the profit
incentive plan pursuant to which such Participant has made
such election.
4.2 Terms and Conditions
--------------------
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<PAGE>
(a) Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered,
except as herein provided, during the Restricted Period.
The Participant shall receive his or her award in shares of
Restricted Stock, which shall be registered in the name of
the Participant, together with a stock power endorsed in
blank, by the Company. At the expiration of the Restricted
Period, all restrictions shall lapse and the Participant or
his or her legal representative shall have full and complete
discretion with respect to such shares, except that the
Committee shall have authority to retain up to fifty percent
(50%) of the shares of Restricted Stock as to which
restrictions have lapsed and, in lieu thereof, to pay the
Participant the Fair Market Value of the retained shares in
cash.
(b) Except as provided in subsection (a) hereof, the
Participant shall have all the rights of a holder of Common
Stock, including but not limited to the rights to receive
dividends and to vote during the Restricted Period.
Section 5: PERFORMANCE SHARES
5.1 Authority of Committee
----------------------
The Committee shall have sole and complete authority to
determine the Employees who shall receive Performance Shares
and the number of such shares for each such Employee for
each Performance Cycle, and to determine the duration of
each Performance Cycle. There may be more than one
Performance Cycle in existence at any one time, and the
duration of Performance Cycles may differ from each other.
At the discretion of the Committee, each award of
Performance Shares may be confirmed by a Performance Share
agreement executed by the Company and the Participant.
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<PAGE>
5.2 Performance Goals
-----------------
The Committee shall establish Performance Goals for
each Cycle on the basis of such criteria and to accomplish
such objectives as the Committee may from time to time
select. During any Cycle, the Committee may adjust the
Performance Goals for such Cycle as it deems equitable in
recognition of unusual or non-recurring events affecting the
Corporation or Participant or changes in applicable tax laws
or accounting principles.
5.3 Payment of Performance Shares
-----------------------------
The Committee shall determine the number of Performance
Shares, up to one hundred and fifty percent (150%) of the
number contingently awarded to each Participant for the
Cycle, which have been earned on the basis of the Corpora-
tion's or the Participant's performance in relation to the
established Performance Goals, with payment in cash (at Fair
Market Value) and shares of Common Stock, in such propor-
tions as the Committee shall determine. Participants may
defer receipt of payment for earned Performance Shares under
terms established by the Committee, if provision is made for
such deferrals by the Committee.
Section 6: PHANTOM STOCK
6.1 Authority of the Committee
--------------------------
(a) Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to
determine the Employees who shall receive awards of Phantom
Stock, the number of shares to be awarded to each
Participant, the duration of any deferral periods or other
conditions that may pertain to any Phantom Stock award and
the conditions under which the Phantom Stock award may be
forfeited.
- 17 -
<PAGE>
(b) Anything in Section 6.1(a) to the contrary
notwithstanding, in the event a Participant elects, in
accordance with the terms of a profit incentive plan
maintained by the Corporation, to receive Common Stock in
lieu of all or a portion of the cash to which such
Participant would otherwise be entitled pursuant to such
profit incentive plan, the Committee shall grant, in one or
more Awards, to such Participant such number of shares of
Phantom Stock at such times and subject to such Restricted
Periods as shall be set forth in the profit incentive plan
pursuant to which such Participant has made such election.
6.2 Terms and Conditions
--------------------
(a) Shares of Phantom Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered. The
Participant shall receive his or her award in shares of
Phantom Stock, for which a book entry shall be made in the
name of the Participant during the Restricted Period. At
the conclusion of the Restricted Period, Common Stock or
cash, or a combination of both shall be issued to the
Participant.
(b) The Company may elect to pay the equivalent of
dividends on the shares of a Participant's Phantom Stock
during the Restricted Period, if any, or may permit such
payments to accrue in the form of additional shares of
Phantom Stock.
(c) Shares of Phantom Stock will not have voting
rights.
- 18 -
<PAGE>
EXHIBIT 5
June 20, 1996
Conrail Inc.
The Board of Directors
2001 Market Street
Philadelphia, Pennsylvania
Gentlemen and Dr. Feldstein:
I am Senior Vice-President - Law of Conrail Inc. ("the
Company") and, in that capacity, have acted as counsel for the
Company in connection with the preparation and filing of a
registration statement on Form S-8 (the "Registration Statement")
under the Securities Act of 1933, as amended, with the Securities
and Exchange Commission, pursuant to which approximately
5,880,000 shares of the Company's Common Stock (the "Common
Shares") and Phantom Shares are being registered for issuance in
connection with the Company's Amended and Restated 1991 Long Term
Incentive Plan (the "Plan").
I have reviewed the Plan, Board resolutions and the Articles
of Incorporation and Bylaws of the Company. I have examined the
originals, or copies certified or otherwise identified to my
satisfaction, of corporate records of the Company, statutes and
other instruments and documents as deemed necessary as the basis
for the opinion expressed herein.
The Board of Directors has reserved authorized but unissued
shares of the Company's Common Stock for issuance in connection
with the Plan and has authorized the issuance of the Common
Shares and Phantom Shares pursuant to the Plan.
Based upon the foregoing, I am of the opinion that (1) the
Plan, as approved by the Company's shareholders, authorizes the
issuance of Common Stock and Phantom Stock thereunder and (2) the
Common Stock, when issued pursuant to the terms of the Plan,
including those shares of Common Stock issued in settlement of
shares of Phantom Stock, will be duly authorized, validly issued,
fully paid and non-assessable.
Very truly yours,
/s/ Bruce B. Wilson
------------------
<PAGE>
EXHIBIT 15.1
June 20, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We are aware that Conrail Inc. has incorporated by reference
our report dated April 17, 1996 (issued pursuant to the
provisions of Statement on Auditing Standards No. 71) in its
Registration Statement on Form S-8 to be filed on or about June
20, 1996.
We are also aware of our responsibilities under the
Securities Act of 1933 and that pursuant to Rule 436(c) our
report dated April 17, 1996 shall not be considered part of a
registration statement prepared by or certified by us within the
meaning of Sections 7 and 11 of the Securities Act of 1933.
Very truly yours,
Price Waterhouse LLP
Thirty South Seventeenth Street
Philadelphia, PA 19103
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated January
22, 1996, except as to paragraphs five and six of Note 12, which
are as of February 21, 1996, appearing on page 37 of Conrail
Inc.'s Annual Report on Form 10-K for the year ended December 31,
1995.
Price Waterhouse LLP
Thirty South Seventeenth Street
Philadelphia, Pennsylvania 19103
June 20, 1996
<PAGE>
EXHIBIT 23.2
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
registration statement on Form S-8 of our report dated
January 24, 1994, on our audit of the consolidated financial
statements and financial statement schedule of Conrail,Inc.
and subsidiaries for the year ended December 31, 1993, which
is included in the Annual Report on Form 10-K for the year
ended December 31, 1995.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103-2962
June 20, 1996
<PAGE>
