-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Usg6D9D5NCaqs+jQkFAnhGhKfXYzXeNFWZWzZM/jdoF+q4du0dVcX5xI+ZJXg5qA bi53K7pJ1kXjpCYYdi4xZw== 0000897732-95-000024.txt : 19950928 0000897732-95-000024.hdr.sgml : 19950927 ACCESSION NUMBER: 0000897732-95-000024 CONFORMED SUBMISSION TYPE: 8-B12B/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19950925 SROS: NYSE SROS: PHLX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONRAIL INC CENTRAL INDEX KEY: 0000897732 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 232728514 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-B12B/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12184 FILM NUMBER: 95575924 BUSINESS ADDRESS: STREET 1: TWO COMMERCE SQ STREET 2: P O BOX 41417 CITY: PHILADELPHIA STATE: PA ZIP: 19101-1417 BUSINESS PHONE: 2152094434 MAIL ADDRESS: STREET 1: P.O. BOX 41429 STREET 2: 2001 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19101-1429 0000897732-95-000024.txt : 19950927 0000897732-95-000024.hdr.sgml : 19950927 ACCESSION NUMBER: 0000897732-95-000024 CONFORMED SUBMISSION TYPE: 8-B12B/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19950925 SROS: NYSE SROS: PHLX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONRAIL INC CENTRAL INDEX KEY: 0000897732 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 232728514 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-B12B/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12184 FILM NUMBER: 95575924 BUSINESS ADDRESS: STREET 1: TWO COMMERCE SQ STREET 2: P O BOX 41417 CITY: PHILADELPHIA STATE: PA ZIP: 19101-1417 BUSINESS PHONE: 2152094434 MAIL ADDRESS: STREET 1: P.O. BOX 41429 STREET 2: 2001 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19101-1429 8-B12B/A 1 FORM 8-B/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Registration of Securities of Certain Successor Issuers Filed Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934 Conrail Inc. ------------ (Exact name of registrant as specified in its charter) Pennsylvania 23-2728514 ------------ ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2001 Market Street Philadelphia, Pennsylvania 19101 - --------------------------------------- --------- (Address of principal executive offices) (Zip Code) Securities to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which to be so registered each class is to be registered Common Stock, par value $1.00 New York Stock Exchange - ----------------------------- ----------------------- per share Philadelphia Stock Exchange - --------- --------------------------- Common Stock Purchase Rights Securities to be registered pursuant to Section 12(g) of the Act: NONE ---- (Title of class) 1 This Amendment is filed to amend and restate Item 4 hereof to reflect the terms of Conrail Inc's common stock purchase rights, as amended through September 20, 1995 and to file Exhibits 3.4(i)(h) and 3.4(i)(i) hereto. INFORMATION REQUIRED IN REGISTRATION STATEMENT Item 1. General Information. ------------------- (a) Conrail Inc. was incorporated as a corporation under the laws of the Commonwealth of Pennsylvania on February 12, 1993. (b) The fiscal year of Conrail Inc. ends on April 30. Conrail Inc. will continue the practice of Consolidated Rail Corporation of furnishing audited financial statements to its shareholders for the 12-month period ending December 31 of each year. Item 2. Transaction of Succession. ------------------------- (a) Consolidated Rail Corporation, which had common stock and common stock purchase rights registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended, at the time of succession, is the sole predecessor of Conrail Inc. (b) See "Proposal to Approve the Agreement And Plan of Merger" in the Proxy Statement of Consolidated Rail Corporation, dated April 16, 1993, and Appendix A thereto, "Agreement And Plan of Merger", incorporated herein by reference pursuant to General Instructions A(b) and E to Form 8-B. Item 3. Securities to Be Registered. --------------------------- As of July 1, 1993, the effective date of the succession, there were (1) 250,000,000 shares of common stock authorized, 83,824,701 shares of common stock issued and 4,257,384 shares of common stock issued and held by or for the account of Conrail Inc., and (2) 250,000,000 common stock purchase rights authorized, 79,567,317 common stock purchase rights issued and no common stock purchase rights issued and held by or for the account of Conrail Inc. Item 4. Description of Registrant's Securities to Be Registered. ------------------------------------------------------- The Conrail Inc. common stock is identical to the common stock of Consolidated Rail Corporation, the predecessor of Conrail Inc. For a description of the 2 Consolidated Rail Corporation common stock, see "Description of Capital Stock" in the Prospectus included in Registration Statement No. 33-11995 on Form S-1 filed with the Securities and Exchange Commission by Consolidated Rail Corporation, effective March 26, 1987, and incorporated herein by reference. As of July 1, 1993, the effective date of the succession, the Conrail Inc. common stock purchase rights were identical to the common stock purchase rights of Consolidated Rail Corporation, the predecessor of Conrail Inc. The following is a description of the Conrail Inc. common stock purchase rights, as amended as of September 20, 1995: On July 19, 1989, the Board of Directors of Consolidated Rail Corporation declared a dividend of one common stock purchase right (a "Right") for each share of common stock, par value $1.00 per share (the "Common Shares"), of Consolidated Rail Corporation then outstanding or which would later be issued. The dividend was originally payable on July 31, 1989 (the "Record Date") to the stockholders of record on that date. On September 20, 1995, the Board of Directors of Conrail Inc. declared a dividend of one Right for each share of Series A ESOP Convertible Junior Preferred Stock, without par value, of Conrail Inc. (the "Preferred Shares"; and, collectively, with the Common Shares, the "Applicable Shares") outstanding on October 2, 1995 (the "Preferred Stock Record Date") and amended the terms of the Rights and the Rights Agreement, to provide, among other things, for such Rights. As amended, each Right entitles the registered holder to purchase from Conrail Inc. one Common Share of Conrail Inc. at a price of $205 per share (the "Purchase Price"), subject to adjustment. The Rights will be represented by the Applicable Share certificates (whether such certificates are issued before or after the Record Date (in the case of Common Shares) or the Preferred Stock Record Date (in the case of Preferred Shares)) and will not be exercisable, or transferable apart from the Applicable Shares, until the earlier of (i) the tenth day after public announcement (the date of such announcement being the "Shares Acquisition Date") that a person or group of affiliated or associated persons (other than Conrail Inc., any subsidiary of Conrail Inc. or any employee benefit plan of Conrail Inc. or such subsidiary) (an "Acquiring Person") has acquired, obtained the right to acquire, or otherwise obtained beneficial ownership of 10% or more of the then outstanding shares of Common Shares and (ii) the tenth business day (or such later date as may be determined by action of the Board of Directors prior to such time as any person becomes an Acquiring Person) following the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 10% or more of the then outstanding Company Common Shares (the earlier of such dates being called the "Distribution Date"). Separate certificates for the Rights will be 3 mailed to the holders of record of the Applicable Shares as soon as practicable after the Distribution Date. In the event that (i) Conrail Inc. is the surviving corporation in a merger with an Acquiring Person and Conrail Inc. Common Shares shall remain outstanding, (ii) a person or group of affiliated or associated persons becomes the beneficial owner of 10% or more of the then outstanding Company Common Shares, (iii) an Acquiring Person engages in one or more "self-dealing" transactions as set forth in the Rights Agreement, or (iv) during such time as there is an Acquiring Person, an event occurs which results in such Acquiring Person's ownership interest being increased by more than 1% (e.g., by means of a reverse stock split or recapitalization), then, in each such case, each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the then current exercise price of the Right, that number of Company Common Shares (or, in certain circumstances, cash, property or other securities of Conrail Inc.) having a value equal to two times the exercise price of the Right. The exercise price is the Purchase Price multiplied by the number of Common Shares issuable upon exercise of a Right prior to the events described in this paragraph. Notwithstanding any of the foregoing, following the occurrence of any of the events set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. In the event that, at any time following the Shares Acquisition Date, (i) Conrail Inc. is acquired in a merger or other business combination transaction and Conrail Inc. is not the surviving corporation (other than a merger described in the preceding paragraph), (ii) any person consolidates or merges with Conrail Inc. and all or part of Conrail Inc. Common Shares are converted or exchanged for securities, cash or property of any other Person or (iii) 50% or more of Conrail Inc.'s assets or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided as described above), shall thereafter have the right to receive, upon exercise, common stock of the acquiror having a value equal to two times the exercise price of the Right. At any time prior to the Distribution Date, the Board of Directors of Conrail Inc. may redeem the Rights in whole, but not in part, at a price of $.005 per Right (the "Redemption Price"), subject to adjustment. The redemption of the Rights may be made effective at such time on such basis with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. At any time after the acquisition by a person or group of affiliated or associated persons of beneficial ownership of 10% or more of the outstanding Common 4 Shares and prior to the acquisition by such person or group of 50% or more of the outstanding Common Shares, the Board of Directors of Conrail Inc. may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one Common Share per Right (subject to adjustment). Any of the provisions of the Rights Agreement may be amended without the approval of the holders of Common Shares at any time prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended in order to cure any ambiguity, defect or inconsistency, to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person), or to shorten or lengthen any time period under the Rights Agreement; provided, however, that no amendment to adjust the time period governing redemption shall be made at such time as the Rights are not redeemable. The Rights are not exercisable until the Distribution Date. The Rights will expire on September 20, 2005, unless the expiration date is extended or unless the Rights are earlier redeemed or exchanged by Conrail Inc. The Rights will not have any voting rights or rights to receive dividends. First Chicago Trust Company of New York is the Rights Agent. The Purchase Price payable, and the number of Common Shares or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Common Shares, (ii) upon the grant to holders of the Common Shares of certain rights or warrants to subscribe for or purchase Common Shares at a price, or securities convertible into Common Shares with a conversion price, less than the then current market price of the Common Shares or (iii) upon the distribution to holders of the Common Shares of evidences of indebtedness or assets (excluding regular quarterly cash dividends or dividends payable in Common Shares) or of subscription rights or warrants (other than those referred to above). With certain exceptions, no adjustments in the purchase price will be required until cumulative adjustments require an adjustment of at least 1% in such purchase price. Actions or determinations made by the Board of Directors in the administration of the Rights Agreement require the concurrence of a majority of (and at least two) Continuing Directors. A "Continuing Director" is a director who is not an Acquiring Person (or a representative or nominee thereof), and who either (i) was a member of the Board prior to September 20, 1995 or (ii) subsequently became a director of Conrail Inc. and whose election or nomination for election is approved or recommended by a majority of the then Continuing Directors. 5 The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a person or group that attempts to acquire Conrail Inc. on terms not approved by its Board of Directors. The Rights should not interfere with any stock acquisition or merger or other business combination approved by the Board of Directors because all but not less than all of the Rights may be redeemed by the Board at $.005 per Right at any time before the Distribution Date. A copy of the Rights Agreement, dated as of July 19, 1989, between Consolidated Rail Corporation and First Chicago Trust Company of New York specifying the terms of the Rights, and amendments thereto dated March 21, 1990, February 17, 1993, October 19, 1994 and September 20, 1995, are included as Exhibits 3.4(i)(e), 3.4(i)(f), 3.4(i)(g), 3.4(i)(h) and 3.4(i)(i) hereto and are incorporated herein by reference. The foregoing description of the Rights does not purport to be complete and is qualified in its entirety by reference to such exhibits. Item 5. Financial Statements and Exhibits. --------------------------------- (a) Financial Statements. None (b) Exhibits. 2. Proxy Statement of Consolidated Rail Corporation, dated April 16, 1993, filed pursuant to General Instruction A(b). 3.2 Agreement and Plan of Merger, dated as of February 17, 1993, among Consolidated Rail Corporation, Conrail Inc. and Conrail Subsidiary Corporation, included as Appendix A to the Proxy Statement of Consolidated Rail Corporation, dated April 16, 1993 (included in Exhibit 2 above). 3.3(i) Articles of Incorporation of Conrail Inc., included as Appendix B to the Proxy Statement of Consolidated Rail Corporation, dated April 16, 1993 (included in Exhibit 2 above). 3.3(ii) By-laws of Conrail Inc. 3.4(i)(a) Articles of Incorporation of Conrail Inc. (included in Exhibit 2 above). 3.4(i)(b) By-laws of Conrail Inc. (Exhibit 3.3(ii) above). 6 3.4(i)(c) Form of certificate of common stock, par value $1.00 per share, of Conrail Inc. 3.4(i)(d) Form of certificate of Series A ESOP Convertible Junior Preferred Stock, no par value, of Conrail Inc. 3.4.(i)(e) Rights Agreement dated as of July 19, 1989, between Consolidated Rail Corporation 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 1 to the Consolidated Rail Corporation Form 8-K dated July 31, 1989 and incorporated herein by reference. 3.4(i)(f) Amendment to Rights Agreement dated as of March 21, 1990, filed as Exhibit 4.5 to the Consolidated Rail Corporation Form 8-K dated March 27, 1990 and incorporated herein by reference. 3.4(i)(g) Amendment, Assignment and Assumption Agreement, dated as of February 17, 1993, with respect to the Rights Agreement. 3.4(i)(h) Amendment to Rights Agreement dated as of October 19, 1994. 3.4(i)(i) Amendment to Rights Agreement dated as of September 20, 1995. 3.4(ii)(a) Form of Indenture between Consolidated Rail Corporation and The First National Bank of Chicago, as Trustee, with respect to the issuance of up to $1.25 billion aggregate principal amount of Consolidated Rail Corporation debt securities, filed as Exhibit 4 to the Consolidated Rail Corporation Registration Statement on Form S-3 (Registration No. 33- 34040) and incorporated herein by reference. 3.4(ii)(b) Form of 9 3/4% Notes due 2000 of Consolidated Rail Corporation, filed as Exhibit 4.6 to the Consolidated Rail Corporation Form 8-K dated July 10, 1990 and incorporated herein by reference. 3.4(ii)(c) Form of 9 3/4% Debentures Due 2020 of Consolidated Rail Corporation, filed as Exhibit 4.7 to the Consolidated Rail Corporation Form 8-K dated July 10, 1990 and incorporated herein by reference. 7 3.4(ii)(d) Form of Fixed Rate Note Due More Than Nine Months From Date of Issue, filed as Exhibit 1 to the Consolidated Rail Corporation Form 8-K dated November 27, 1990 and incorporated herein by reference. 3.4(ii)(e) Form of Floating Rate Note Due More Than Nine Months From Date of Issue, filed as Exhibit 2 to the Consolidated Rail Corporation Form 8-K dated November 27, 1990 and incorporated herein by reference. In accordance with Item 601(b)(4)(iii) of Regulation 8-K, copies of instruments of Conrail Inc. and its subsidiaries (including Consolidated Rail Corporation) with respect to the rights of holders of certain long-term debt are not filed herewith, or incorporated by reference, but will be furnished to the Commission upon request. 3.10(i) Second Amended and Restated Northeast Corridor Freight Operating Agreement dated October 1, 1986 between National Railroad Passenger Corporation and Consolidated Rail Corporation, filed as Exhibit 10.1 to the Consolidated Rail Corporation Registration Statement and Form S- 1 (Registration No. 33-11995) and incorporated herein by reference. 3.10(ii) Letter agreements dated September 30, 1982 and July 19, 1986 between Consolidated Rail Corporation and The Penn Central Corporation, filed as Exhibit 10.5 to the Consolidated Rail Corporation Registration Statement on Form S-1 (Registration No. 33-11995) and incorporated herein by reference. 3. 10(iii) Letter agreement dated March 16, 1988 between Consolidated Rail Corporation and Penn Central Corporation relating to hearing loss liquidation, filed as Exhibit 19.1 to the Consolidated Rail Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 1988 and incorporated herein by reference. 3.10(iv) Consolidated Rail Corporation 1992 Annual Performance Achievement Reward Plan, filed as Exhibit 10.6 to the Consolidated Rail Corporation Annual Report on Form 10-K for the year ended December 31, 1991 and incorporated herein by reference. 8 3.10(v) Consolidated Rail Corporation 1993 Annual Performance Achievement Reward Plan. 3.10(vi) Consolidated Rail Corporation 1987 Long-Term Incentive Plan, filed as Exhibit 4.4 to the Consolidated Rail Corporation Registration Statement on Form S-8 (Registration No. 33-19155) and incorporated herein by reference. 3.10(vii) Consolidated Rail Corporation 1991 Long-Term Incentive Plan, filed as Exhibit 4.8 to the Consolidated Rail Corporation Registration Statement on Form S-8 (Registration No. 33-44140) and incorporated herein by reference. 3.10(viii) Retirement Plan for Non-employee Directors as amended February 21,1990, filed as Exhibit 10.10 to the Consolidated Rail Corporation Annual Report on Form 10-K for the year ended December 31, 1989 and incorporated herein by reference. 3.10(ix) Employment Agreement between James A. Hagen and Consolidated Rail Corporation, dated as of April 3, 1989, filed as Exhibit 10.11 to the Consolidated Rail Corporation Annual Report on Form 10-K for the year ended December 31, 1989 and incorporated herein by reference. 3.10(x) Agreement for Supplemental Employee Retirement Plan between James A. Hagen and Consolidated Rail Corporation, dated as of January 17, 1990, filed as Exhibit 10. 12 to the Consolidated Rail Corporation Annual Report on Form 10-K for the year ended December 31, 1989 and incorporated herein by reference. 3.10(xi) Form of Continuation Agreement between Consolidated Rail Corporation and each of its officers other than James A. Hagen, dated as of January 15, 1990, filed as Exhibit 10. 14 to the Consolidated Rail Corporation Annual Report on Form 10-K for the year ended December 31, 1989 and incorporated herein by reference. 3.21 Subsidiaries list. 9 SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. CONRAIL INC. (Registrant) Date: September 25, 1995 By: /s/ Bruce B. Wilson ------------------- Bruce B. Wilson Senior Vice President-Law EXHIBIT INDEX Exhibit No. 3.4(i)(h) Amendment to Rights Agreement dated as of October 19, 1994. 3.4(i)(i) Amendment to Rights Agreement dated as of September 20, 1995. EX-3 2 EXHIBIT 3.4(i)(h) AMENDMENT TO RIGHTS AGREEMENT AMENDMENT, dated as of October 19, 1994, to the Rights Agreement, dated as of July 19, 1989, as amended March 21, 1990 (the "Rights Agreement"), between Consolidated Rail Corporation, a Pennsylvania corporation, and First Chicago Trust Company of New York, as Rights Agent (the "Rights Agent"), which Rights Agreement was assigned by Consolidated Rail Corporation, as of July 1, 1993, to Conrail Inc., a Pennsylvania corporation (the "Company"). The Company and the Rights Agent have heretofore executed and entered into the Rights Agreement. Pursuant to Section 27 of the Rights Agreement, the Company and the Rights Agent may from time to time supplement or amend the Rights Agreement in accordance with the provisions of Section 27 thereof. All acts and things necessary to make this Amendment a valid agreement, enforceable according to its terms, have been done and performed, and the execution and delivery of this Amendment by the Company and the Rights Agent have been in all respects duly authorized by the Company and the Rights Agent. In consideration of the foregoing and the mutual agreements set forth herein, the parties have hereto agreed as follows: 1. Section 7(b) of the Rights Agreement is hereby amended to read in its entirety as follows: The Purchase Price for each Common Share pursuant to the exercise of a Right shall be $105, shall be subject to adjustment from time to time after October 19, 1994 as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. 2. Section 24(a) of the Rights Agreement is hereby modified and amended by deleting the second sentence thereof. 3. This Amendment to the Rights Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania applicable to contracts to be made and performed entirely within such Commonwealth. 4. This Amendment to the Rights Agreement may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall 2 together constitute one and the same instrument. Terms not defined herein shall, unless the context otherwise requires, have the meanings assigned to such terms in the Rights Agreement. 5. In all respects not inconsistent with the terms and provisions of this Amendment to the Rights Agreement, the Rights Agreement is hereby ratified, adopted, approved and confirmed. In executing and delivering this Amendment, the Rights Agent shall be entitled to all the privileges and immunities afforded to the Rights Agent under the terms and conditions of the Rights Agreement. 6. If any term, provision, covenant or restriction of this Amendment to the Rights Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment to the Rights Agreement, and of the Rights Agreement, shall remain in full force and effect and shall in no way be affected, impaired or invalidated. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and attested, all as of the date and year first above written. Attest: CONRAIL INC. By: /s/ Cheryl A. Cook By: /s/ Timothy T. O'Toole ------------------------ ------------------------------------ Attest: FIRST CHICAGO TRUST COMPANY OF NEW YORK By: /s/ Joanne Goustiola By: /s/ Ralph Persico ----------------------- ------------------------------------ EX-3 3 EXHIBIT 3.4(i)(i) AMENDMENT TO RIGHTS AGREEMENT ----------------------------- Amendment, dated as of September 20, 1995, to the Rights Agreement (as amended, the "Rights Agreement"), dated as of July 19, 1989, between Consolidated Rail Corporation, a Pennsylvania corporation, and First Chicago Trust Company of New York, as rights agent (the "Rights Agent"), as amended by (i) Amendment to Rights Agreement, dated as of March 21, 1990; (ii) Amendment, Assignment and Assumption Agreement, dated as of February 17, 1993, among Consolidated Rail Corporation, as assignor, Conrail Inc., a Pennsylvania corporation (the "Company"), as assignee, and the Rights Agent; and (iii) Amendment to Rights Agreement, dated as of October 19, 1994. Pursuant to Section 27 of the Rights Agreement, the Company and the Rights Agent may from time to time supplement or amend the Rights Agreement in accordance with such Section 27 of the Rights Agreement. All acts and things necessary to make this Amendment a valid agreement, enforceable according to its terms, have been done and performed, and the execution and delivery of this Amendment by the Company and the Rights Agent have been in all respects duly authorized by the Company and the Rights Agent. In consideration of the foregoing and the mutual agreement set forth herein, the parties hereto have agreed as follows: 1. Preamble of the Rights Agreement is hereby amended by (a) inserting the phrase "and each Preferred Share (as hereinafter defined) outstanding at the close of business on October 2, 1995 (the `Preferred Stock Record Date')" immediately after the words "(the `Record Date')", (b) by inserting the phrase "and each Preferred Share" immediately after the words "with respect to each Common Share" and (c) by deleting the phrase "between the Record Date and" and substituting therefor the phrase "between (a) the Record Date (in the case of Common Shares) and the Preferred Stock Record Date (in the case of Preferred Shares) and (b)". 2. Section 1(a) of the Rights Agreement is hereby amended by inserting, immediately after the phrase "or any entity holding" in the first sentence thereof, the following ", or which has the right to acquire,". 3. Section 1 of the Rights Agreement is hereby amended by adding, at the end of such Section, the following: 1 In addition, for purposes of this Agreement, the following terms have the meanings indicated: (1) "Adjustment Shares" shall have the meaning set forth in Section 11(a)(ii); (2) "Applicable Shares" shall mean the Company's Common Shares and the Preferred Shares; (3) "Continuing Director" shall mean a member of the Board of Directors of the Company who is not an Acquiring Person or an Affiliate or Associate of an Acquiring Person or a representative or nominee of an Acquiring Person or of any such Affiliate or Associate, and who either (i) was a member of the Board of Directors of the Company prior to September 20, 1995 or (ii) subsequently became a director of the Company and whose election or nomination for election is approved or recommended by a vote of a majority of the Board of Directors of the Company, which majority includes a majority of the Continuing Directors then on the Board of Directors. (4) "Current Value" shall have the meaning set forth in Section 11(b)(iii) hereof; (5) "Expiration Date" shall mean the earlier of (i) the Final Expiration Date, and (ii) the time at which the Rights are redeemed as provided in Section 23 hereof; (6) "Preferred Shares" shall mean the shares of Series A ESOP Convertible Junior Preferred Stock, without par value, of the Company; (7) "Principal Party" shall have the meaning set forth in Section 13(a) hereof; (8) "Purchase Price" shall have the meaning set forth in Section 7 hereof; (9) "Redemption Price" shall have the meaning set forth in Section 23 hereof; (10) "Section 11(a)(ii) Event" shall have the meaning set forth in Section 11(a)(ii); 2 (11) "Section 11(a)(iii) Trigger Date" shall have the meaning set forth in Section 11(a)(iii); (12) "Section 13 Event" shall have the meaning set forth in Section 13 hereof; (13) "Spread" shall have the meaning set forth in Section 11(a)(iii) hereof. 4. The Rights Agreement is hereby amended by deleting the words "Common Share(s)" each time such words appear in Sections 2, 12, 15, 16, 18, 21, 23 and 29 of the Rights Agreement and substituting therefor the words "Applicable Share(s)". 5. Section 3 of the Rights Agreement is hereby amended: (a) by deleting the words "Common Share(s)" and substituting therefor the words "Applicable Share(s)" each time such words appear in the following places in Section 3: clause (x) and clause (y) of the first sentence of Section 3(a); the second sentence of Section 3(a); and Section 3(c); (b) by inserting the phrase "the close of business on" at the beginning of each of clause (i) and clause (ii) of the first sentence of Section 3(a); (c) by deleting the phrase "after the date of commencement by any Person" where it appears in Section 3(a) and substituting therefor the phrase "after the date that a tender or exchange offer by any Person"; (d) by deleting the phrase "of, or of the first public announcement of the intention of any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan) to commence, a tender or exchange offer the consummation of which would result in any Person becoming" where it appears in Section 3(a) and substituting therefor the phrase "is first published or sent or given within the meaning of Rule 14d- 4(a) promulgated under the Exchange Act or any successor Rule, if upon consummation thereof, such Person would be"; (e) by inserting in clause (ii) of the first sentence Section 3(a), immediately after the words "such time as any Person becomes an Acquiring Person" and before the closing of the parentheses, the phrase ", provided that no such action may be taken by the Board of Directors to determine a later date unless, at the time of such action, there are then in office not less 3 than two Continuing Directors and such action is approved by a majority of the Continuing Directors then in office"; (f) by inserting at the end of the penultimate sentence of Section 3(a), the phrase ", subject to adjustment as provided herein"; (g) by deleting Section 3(b) and substituting therefor the following: (b) The Company sent a copy of a Summary of Rights to Purchase Common Shares (the "Summary of Rights") in substantially the form initially attached hereto as Exhibit B to each record holder of Common Shares as of the close of business on the Record Date, by first-class, postage prepaid mail, at the address of such holder shown on the records of the Company. The Summary of Rights has been revised as set forth in Exhibit B to reflect the Agreement, as amended, as of September 20, 1995. With respect to certificates for Applicable Shares outstanding prior to the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof. Until the Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the surrender for transfer of any certificate evidencing Applicable Shares, with or without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of the Rights associated with the Applicable Shares evidenced by such certificate. (h) by deleting the phrase "after the Record Date but" the first time such phrase appears in Section 3(c) and substituting therefor "after September 20, 1995 but" and by deleting the phrase "after the Record Date but" the second time such phrase appears in Section 3(c) and substituting therefor "after the Record Date (in the case of Common Shares) and the Preferred Stock Record Date (in the case of Preferred Shares) but"; (i) by deleting the last sentence of the legend described in Section 3(c) and substituting therefor the following sentence: As set forth in the Rights Agreement, Rights issued to, or Beneficially Owned by, an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement) or any subsequent holder of such Rights may, under certain circumstances, become null and void. 4 ; and (j) by inserting, in Section 3(c), immediately after the phrase "With respect to such certificates containing the foregoing legend" the phrase "or any similar legend required at any time pursuant to this Agreement" and by inserting, at the end of Section 3(c) the following sentence: "In the event that any Preferred Shares are converted to Common Shares after the close of business on the Preferred Stock Record Date but prior to the Distribution Date, any Rights associated with such Preferred Shares shall be deemed cancelled and retired and, in accordance with the terms of this Agreement, the Common Shares into which such Preferred Shares are converted shall represent the Rights associated with such Common Shares." 6. (a) Section 7(a) of the Rights Agreement is hereby amended by (i) deleting the words "July 19, 1999" and substituting therefor the words "September 20, 2005" and (ii) inserting, immediately after the phrase "together with payment of the Purchase Price for each Common Share" the phrase "(or, if substituted for Common Shares pursuant to Section 11(a)(iii), other securities, cash or assets, as the case may be)". (b) Section 7(b) of the Rights Agreement is hereby amended to read in its entirety as follows: (b) The Purchase Price for each Common Share pursuant to the exercise of a Right shall be $205, shall be subject to adjustment from time to time, as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. (c) Section 7(e) of the Rights Agreement is hereby amended to read in its entirety as follows: (e) The Company covenants and agrees that it will, at all times after the Distribution Date, cause to be reserved and kept available out of its authorized and unissued Common Shares or any Common Shares held in its treasury, the number of Common Shares that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with this Section 7 or, to the extent that there are insufficient Common Shares available, make adequate provision to fulfill its obligations pursuant to Section 11(a)(iii) of this Agreement. 7. Section 11(a)(ii) of the Rights Agreement is hereby amended to read in its entirety as follows: 5 (ii) In the event: (A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Company's Common Shares shall remain outstanding and unchanged, (2) shall, in one transaction or a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for the Company's Common Shares, for other equity securities of the Company or any such Subsidiary, or for securities exercisable for or convertible into shares of equity securities of the Company or any of its Subsidiaries (whether Company Common Shares or otherwise) or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of such equity securities or securities exercisable for or convertible into such equity securities (other than pursuant to a pro rata distribution to all holders of the Company's Common Shares), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity, assets (including securities) on terms and conditions less favorable to the Company or such Subsidiary or plan than those that could have been obtained in arm's- length negotiations with an unaffiliated third party, other than pursuant to a transaction set forth in Section 13(a) hereof, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the Company or any of the Company's Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity (other than transactions, if any, consistent with those engaged in, as of the date hereof, by the Company and such Acquiring Person or such Associate or Affiliate), assets (including securities) having an aggregate fair market value of more than $5,000,000, other than pursuant to a transaction set forth in Section 13(a) hereof, (5) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the 6 Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity, any material trademark or material service mark, other than pursuant to a transaction set forth in Section 13(a) hereof, (6) shall receive, or any designee, agent or representative of such Acquiring Person or any Affiliate or Associate of such Acquiring Person shall receive, any compensation from the Company or any of its Subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (7) shall receive the benefit, directly or indirectly (except proportionately as a holder of the Company's Common Shares or as required by law or governmental regulation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity; or (B) any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity) shall become an Acquiring Person, unless the event causing such Person to become an Acquiring Person is a transaction set forth in Section 13(a) hereof; or (C) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply (whether or not with or into or otherwise involving an Acquiring Person), which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person; then, ---- immediately upon the date of the occurrence of an event described in Section 11(a)(ii)(A)-(C) hereof (a "Section 11(a)(ii) Event"), proper provision shall be 7 made so that each holder of a Right (except as provided below in Section 11(a) (ii)(D) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price multiplied by the number of Common Shares for which a Right is then exercisable, in accordance with the terms of this Agreement, in lieu of the number of the Common Shares for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, such number of Common Shares (such Common Shares being the "Adjustment Shares") as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of Common Shares for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product by 50% of the then current per share market price (determined pursuant to Section 11(d) hereof) of the Company's Common Shares on the date of such first occurrence. (D) Notwithstanding anything in this Agreement to the contrary, from and after the time any Person shall become an Acquiring Person, any Rights beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) which becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) which becomes a transferee prior to or concurrently with the Acquiring Person becoming such and which receives such Rights pursuant to either (1) a transfer (whether or not for consideration) from the Acquiring Person (or any such Associate or Affiliate) to holders of equity interests in such Acquiring Person (or any such Associate or Affiliate) or to any Person with whom the Acquiring Person (or such Associate or Affiliate) has any continuing agreement, arrangement or understanding regarding the transferred Rights, the Company's Common Shares or the Company or (2) a transfer which a majority of the Continuing Directors has determined to be part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 11(a)(ii), shall be null and void without any further action, and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to Section 3 that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right Certificate shall be 8 issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be cancelled. The Company shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of Rights or any other Person as a result of its failure to make any determination under this Section 11(a)(ii) with respect to an Acquiring Person or its Affiliates, Associates or transferees. 8. Section 11(a)(iii) of the Rights Agreement is hereby amended to read in its entirety as follows: (iii) In the event that the number of Common Shares which are authorized by the Company's Articles of Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company, by the vote of a majority of the Continuing Directors, shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right pursuant to Section 11(a) hereof (the "Current Value") over (2) the Purchase Price (such excess being the "Spread"), and (B) with respect to each Right, make adequate provision to substitute, to the extent that there are insufficient Common Shares available, for such Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock (such other shares being "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by a majority of the Continuing Directors, after receiving advice from a nationally recognized investment banking firm; provided, however, that if the Company ------------------ shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty days following the later of (x) the Distribution Date and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(iii) Trigger Date"), then 9 the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, its Common Shares (to the extent available) and then, if necessary, cash, which Common Shares and/or cash shall have an aggregate value equal to the Spread. To the extent that the Company determines that some action need be taken pursuant to the first sentence of this Section 11(a)(iii), the Company shall provide, subject to Section 11(a)(ii)(D) hereof, that such action shall apply uniformly to all outstanding Rights. For purposes of this Section 11(a)(iii), the value of a Common Share of the Company shall be the "current per share market price" (as defined in Section 11(d) hereof) of the Company's Common Shares on the Section 11(a)(iii) Trigger Date and the value of any common stock equivalent shall be deemed to have the same value as the Company's Common Shares on such date. 9. Section 11(d) of the Rights Agreement is hereby amended by deleting, in the last sentence of such Section, the phrase "the Board of Directors of the Company" and substituting therefor the phrase "a majority of the Continuing Directors". 10. Section 11 of the Rights Agreement is hereby amended by adding the following new paragraphs (n), (o), (p) and (q) thereto: (n) The Company shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a wholly owned Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), (ii) merge with or into any other Person (other than a wholly owned Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a series of transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its wholly owned Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), if (x) at the time of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger or sale, the Person which constitutes, or would constitute, the "Principal Party" for purposes of Section 13(a) hereof shall have distributed or otherwise 10 transferred to its shareholders or other persons holding an equity interest in such Person Rights previously owned by such Person or any of its Affiliates and Associates; provided, however, this Section 11(n) ------------------ shall not affect the ability of any wholly owned Subsidiary of the Company to consolidate with, merge with or into, or sell or transfer assets or earning power to, any other wholly owned Subsidiary of the Company. (o) After the Distribution Date, the Company shall not, except as permitted by Section 23 or Section 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights. (p) Upon each adjustment that occurs prior to the Distribution Date to the Conversion Ratio (as defined in Section 5(A) of Exhibit A to the Articles of Incorporation of the Company) of the Preferred Shares, additional Rights (or fractions thereof) shall be issued in respect of each outstanding Preferred Share or such Rights (or fractions thereof) associated with each outstanding Preferred Share shall be cancelled so that, after giving effect to such issuance of additional Rights (or fractions thereof) or cancellation of outstanding Rights (or fractions thereof), as the case may be, the number of Rights associated with each outstanding Preferred Share shall be equal to the aggregate number of Rights that would be associated with the aggregate number of Common Shares into which such Preferred Share is then convertible in accordance with Section 5(A) of Exhibit A to the Articles of Incorporation of the Company, if such Preferred Share was converted into Common Shares at the Conversion Ratio in effect immediately after such adjustment of the Conversion Ratio. Each adjustment made pursuant to this Section 11(p) shall be effected contemporaneously with the corresponding adjustment to the Conversion Ratio of the Preferred Shares. (q) Upon each adjustment that occurs prior to the Distribution Date to the number of Rights associated with each outstanding Common Share, such adjustment shall be made whenever necessary pursuant to this Section 11(q) to ensure that the number of Rights associated with each outstanding Preferred Share shall be equal to the aggregate number of Rights that would be associated with the aggregate number of Common Shares into which such Preferred Share is then convertible in accordance with 11 Section 5(A) of Exhibit A to the Articles of Incorporation of the Company, if such Preferred Share was converted. 11. Section 13 of the Rights Agreement is hereby amended to read in its entirety as follows: Section 13. Consolidation, Merger --------------------- or Sale or Transfer of Assets or Earning ---------------------------------------- Power. (a) In the event that, ----- following the Shares Acquisition Date, directly or indirectly, either (x) the Company shall consolidate with, or merge with and into, any other Person (other than a wholly owned Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), and the Company shall not be the continuing or surviving corporation of such consolidation or merger, (y) any Person (other than a wholly owned Subsidiary of the Company in a transaction which complies with Section 11(o) hereof) shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation or merger, all or part of the outstanding Company Common Shares shall be converted into or exchanged for stock or other securities of any other Person or cash or any other property, or (z) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer) to any Person or Persons (other than the Company or any of its wholly owned Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), in one or more transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) (any such event being a "Section 13 Event"), then, and in each such case, proper provision shall be made so that: (i) each holder of a Right, except as provided in Section 11(a)(ii)(D) hereof, shall thereafter have the right to receive, upon the exercise thereof at a price equal to the then current Purchase Price multiplied by the number of Common Shares for which a Right is then exercisable, in accordance with the terms of this Agreement, such number of validly authorized and issued, fully paid and non-assessable Common Shares of the Principal Party (as such term is hereinafter defined), which shares shall not be subject to any liens, encumbrances, rights of first refusal, transfer restrictions or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of the Company's Common Shares for which a Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event 12 has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of such Company's Common Shares for which a Right would be exercisable hereunder but for the occurrence of such Section 11(a)(ii) Event by the Purchase Price which would be in effect hereunder but for such first occurrence) and (2) dividing that product by 50% of the current per share market price (determined pursuant to Section 11(d) hereof) of the Common Shares of such Principal Party on the date of consummation of such Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event; (iv) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of Common Shares) in connection with the consummation of any such transaction as may be necessary to ensure that the provisions of this Agreement shall thereafter be applicable to its Common Shares thereafter deliverable upon the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no further effect following the first occurrence of any Section 13 Event. (b) "Principal Party" shall mean: (i) in the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a), (A) the Person that is the issuer of any securities into which the Company's Common Shares are converted in such merger or consolidation, or, if there is more than one such issuer, the issuer of Common Shares that have the highest aggregate current market price (determined based on the "current per share market price" of such Common Shares as defined in Section 11(d) hereof) and (B) if no securities are so issued, the Person that is the other party to such merger or consolidation, or, if there is more than one such Person, the Person the Common Shares of which have the highest aggregate current market price (determined based on the "current per share market price" of such Common Shares as defined in Section 11(d) hereof); and (ii) in the case of any transaction described in clause (z) of the first sentence of Section 13(a), the Person that is 13 the party receiving the largest portion of the assets or earning power transferred pursuant to such transaction or transactions , or, if each Person that is a party to such transaction or transactions receives the same portion of the assets or earning power transferred pursuant to such transaction or transactions or if the Person receiving the largest portion of the assets or earning power cannot be determined, whichever Person the Common Shares of which have the highest aggregate current market price (determined based on the "current per share market price" of such Common Shares as defined in Section 11(d) hereof); provided, however, that in any ----------------- such case, (1) if the Common Shares of such Person are not at such time and have not been continuously over the preceding twelve-month period registered under Section 12 of the Exchange Act ("Registered Common Shares"), or such Person is not a corporation, and such Person is a direct or indirect Subsidiary of another Person that has Registered Common Shares outstanding, "Principal Party" shall refer to such other Person; (2) if the Common Shares of such Person are not Registered Common Shares or such Person is not a corporation, and such Person is a direct or indirect Subsidiary of another Person but is not a direct or indirect Subsidiary of another Person which has Registered Common Shares outstanding, "Principal Party"shall refer to the ultimate parent entity of such first- mentioned Person; (3) if the Common Shares of such Person are not Registered Common Shares or such Person is not a corporation, and such Person is directly or indirectly controlled by more than one Person, and one or more of such other Persons has Registered Common Shares outstanding, "Principal Party" shall refer to whichever of such other Persons is the issuer of the Registered Common Shares having the highest aggregate current market price (determined based on the "current per share market price" of such Registered Common Shares as defined in Section 11(d) hereof); and (4) if the Common Shares of such Person are not Registered Common Shares or such Person is not a corporation, and such Person is directly or indirectly controlled by more than one Person, and none of such other Persons have Registered Common Shares outstanding, "Principal Party" shall refer to whichever ultimate parent entity is the corporation having the greatest shareholders equity or, if no such ultimate parent entity is a corporation, shall refer to whichever ultimate parent entity is the entity having the greatest net assets. (c) The Company shall not consummate any such consolidation, merger, sale or transfer unless the Principal Party 14 shall have a sufficient number of authorized Common Shares which have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13, and unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further providing that the Principal Party will: (i) (A) file on an appropriate form, as soon as practicable following the execution of such agreement, a registration statement under the Securities Act with respect to the Common Shares that may be acquired upon exercise of the Rights, (B) cause such registration statement to remain effective (and to include a prospectus complying with the requirements of the Securities Act) until the Expiration Date, and (C) as soon as practicable following the execution of such agreement, take such action as may be required to ensure that any acquisition of such Common Shares upon the exercise of the Rights complies with any applicable state security or "blue sky" laws; and (ii) deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all respects with the requirements for registration on Form 10 under the Exchange Act. (d) In case the Principal Party which is to be a party to a transaction referred to in this Section 13 has a provision in any of its authorized securities or in its Certificate of Incorporation or By-laws or other instrument governing its corporate affairs, which provision would have the effect of (i) causing such Principal Party to issue, in connection with, or as a consequence of, the consummation of a transaction referred to in this Section 13, Common Shares of such Principal Party at less than the then current per share market price (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Shares of such Principal Party at less than such then current per share market price (other than to holders of Rights pursuant to this Section 13) or (ii) providing for any special payment, tax or similar provisions in connection with the issuance of the Common Shares of such Principal Party pursuant to the provisions of this Section 13; then, in such event, the Company shall not consummate any such transaction unless prior thereto the 15 Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing that the provision in question of such Principal Party shall have been cancelled, waived or amended, or that the authorized securities shall be redeemed, so that the applicable provision will have no effect in connection with, or as a consequence of, the consummation of the proposed transaction. (e) The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13(a). 12. Section 14(a) of the Rights Agreement is hereby amended (a) by adding the following at the end of the first sentence thereof ", except to the extent that an adjustment is made in accordance with Section 11(p) or 11(q) hereof pursuant to which fractions of Rights are required to be issued in respect of Rights associated with Preferred Shares" and (b) by deleting the second sentence thereof and replacing such sentence with the following: If at the Distribution Date certificates for outstanding Applicable Shares do not evidence a whole number of Rights, that portion of the Rights evidenced by each such certificate that is less than a whole number of Rights shall be cancelled at the Distribution Date and in lieu of such cancelled portion there shall be paid an amount in cash equal to the same fraction of the current market value of a whole Right. 13. Section 23(a) of the Rights Agreement is hereby amended to read in its entirety as follows: (a) The Company may, at its option, upon resolution by the Board of Directors of the Company, at any time prior to the earlier of (i) the Distribution Date or (ii) the Final Expiration Date, redeem all but not less than all of the then outstanding Rights at a redemption price of $.01 per Right, as such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being the "Redemption Price"), and the Company may, at its option, pay the Redemption Price either in the Company's Common Shares (based on the "current per share market price", as defined in Section 11(d) hereof, of the Common Shares at the time of redemption) or cash; provided that, notwithstanding 16 anything to the contrary contained in this Section 23(a), the Company may not take any action pursuant to this Section 23(a) unless (x) at the time of the action of the Board of Directors of the Company approving such redemption and the form of payment of the Redemption Price, there are then in office not less than two Continuing Directors and (y) such action is approved by a majority of the Continuing Directors then in office. The redemption of the Rights by the Board of Directors may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. 14. Section 24(a) of the Rights Agreement is hereby amended to read in its entirety as follows: (a) (i) The Company may, at its option, at any time after any person becomes an Acquiring Person, upon resolution by the Board of Directors of the Company, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii)(D) hereof) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the "Section 24(a)(i) Exchange Ratio"). Notwithstanding the foregoing, the Company may not effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Shares for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding. (ii) The Company may, at its option, at any time after any person becomes an Acquiring Person, upon resolution by the Board of Directors of the Company, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to Section 11(a)(ii)(D) hereof) for Common Shares at an exchange ratio specified in the following sentence, as appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof. Subject to such adjustment, each Right may be exchanged for that number of Common Shares obtained by dividing the Adjustment Spread (as defined below) by the then current per share market price (determined pursuant to Section 11(d) 17 hereof) of the Common Shares on the earlier of (i) the date on which any Person becomes an Acquiring Person and (ii) the date on which a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity) is first published or sent or given within the meaning of Rule 14d-4(a) promulgated under the Exchange Act or any successor rule, if upon consummation thereof such Person would be the Beneficial Owner of 10% or more of the Company Common Shares then outstanding (such exchange ratio being the "Section 24(a)(ii) Exchange Ratio"). The "Adjustment Spread" shall equal (x) the aggregate market price on the date of such event of the number of Adjustment Shares determined pursuant to Section 11(a)(ii), minus (y) the Purchase Price. (iii) Notwithstanding anything contained in this Section 24(a) to the contrary, the Company may not exchange any Rights pursuant to this Section 24(a) unless (x) at the time of the action of the Board of Directors of the Company approving exchange, there are then in office not less than two Continuing Directors and (y) such exchange is approved by a majority of the Continuing Directors then in office. 15. Section 24(b) of the Rights Agreement is hereby amended by deleting the phrase "Exchange Ratio" in the first sentence thereof and substituting therefore the phrase "Section 24(a)(i) Exchange Ratio or Section 24(a)(ii) Exchange Ratio, as the case may be". 16. Section 24(c) of the Rights Agreement is hereby amended to read in its entirety as follows: (a) In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall make adequate provision to substitute, to the extent that there are insufficient Common Shares available (1) cash, (2) other equity securities of the Company, (3) debt securities of the Company, (4) other assets, or (5) any combination of the foregoing, having an aggregate value per Right equal to (x) in the case of an exchange pursuant to Section 24(a)(i), the then current per share market price (determined pursuant to Section 11(d) hereof) of the Common Shares multiplied by the Exchange Ratio and (y) in the case of an exchange pursuant to Section 24(a)(ii), the Adjustment Spread, where such aggregate 18 value has been determined by a majority of the Continuing Directors, after receiving advice from a nationally recognized investment banking firm. To the extent that the Company determines that any such substitution must be made, the Company shall provide, subject to section 11(a)(ii)(D) hereof, that such substitution shall apply uniformly to all outstanding Rights. 17. Section 27 of the Rights Agreement is hereby amended to read in its entirety as follows: Section 27. Supplements and Amendments -------------------------------------- Prior to the Distribution Date and subject to the penultimate sentence of this Section 27, the Company and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement without the approval of any holders of certificates representing the Applicable Shares. From and after the Distribution Date and subject to the penultimate sentence of this Section 27, the Company and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to change or supplement the provisions hereunder in any manner which the Company may deem necessary or desirable and which shall not adversely affect the interests of the holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided, however, that this Agreement ------------------ may not be supplemented or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when the Rights may be redeemed at such time as the Rights are not then redeemable, or (B) any other time period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon the delivery of a certificate from an appropriate officer of the Company or, so long as any Person is an Acquiring Person hereunder, from a majority of the Continuing Directors which states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment. Notwithstanding anything contained in this Agreement to the contrary, supplements or amendments shall be made only if (x) at the time of the action of the Board of Directors of the Company approving such supplement or amendment there are then in office not less 19 than two Continuing Directors and (y) such supplement or amendment is approved by a majority of the Continuing Directors then in office. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of the Applicable Shares. 18. The Rights Agreement is hereby amended by adding new Sections 34 and 35 thereto to read in their entirety as follows: Section 34. Restatements of this Agreement. ------------------------------ In connection with any amendment or supplement made to this Rights Agreement in accordance with Section 27 hereof or at any time or from time to time as the Company determines to be appropriate, the Company may restate this Rights Agreement to reflect in such restatements the full terms of this Rights Agreement as amended and supplemented to the date thereof. Any such restatement shall be made at such time or times as the Company's President or any Vice President may determine to be appropriate. Section 35. Determinations and ------------------- Actions by the Board of Directors, etc. --------------------------------------- (a) For all purposes of this Agreement, any calculation of the number of Company Common Shares outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Company Common Shares of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act Regulations as in effect on the date hereof. Except as otherwise specifically provided herein and subject to paragraph (b) of this Section, the Board of Directors of the Company shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board of Directors or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power (i) to interpret the provisions of this Agreement, and (ii) to make all determinations deemed necessary or advisable for the administration of this Agreement. All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board of Directors of the Company or by a majority of the Continuing Directors in good faith shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties, and 20 (y) not subject the Board of Directors of the Company or any member thereof to any liability to the holders of the Rights. (b) Notwithstanding anything to the contrary contained in this Agreement, the concurrence of a majority of the Continuing Directors then in office shall be required to give effect to any action, calculation, interpretation or determination made by the Board of Directors of the Company or the Continuing Directors in the administration of this Agreement and the exercise of the rights or powers granted to the Board of Directors of the Company, to the Continuing Directors or to the Company pursuant to this Agreement and no effect shall be given to any such action, calculation, interpretation, determination or exercise of rights or powers unless at least two Continuing Directors are then in office. 19. The Rights Agreement is hereby amended by deleting in its entirety the form of "Summary of Rights to Purchase Common Shares" set forth in Exhibit B to the Rights Agreement and substituting therefor the text set forth in Annex A to this Amendment. 20. This Amendment to the Rights Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania applicable to contracts to be made and performed entirely within such Commonwealth. 21. This Amendment to the Rights Agreement may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute one and the same instrument. Terms not defined herein shall, unless the context otherwise requires, have the meanings assigned to such terms in the Rights Agreement. 22. In all respects not inconsistent with the terms and provisions of this Amendment to the Rights Agreement, the Rights Agreement is hereby ratified, adopted, approved and confirmed. In executing and delivering this Amendment, the Rights Agent shall be entitled to all the privileges and immunities afforded to the Rights Agent under the terms and conditions of the Rights Agreement. 23. If any terms, provision, covenant or restriction of this Amendment to the Rights Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment to the Rights Agreement, and of the Rights Agreement, shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 21 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the Rights Agreement to be duly executed and attested, all as of the date and year first above written. Attest: CONRAIL INC. By /s/ James D. McGeehan By: /s/ Timothy T. O'Toole --------------------- ---------------------- Assistant Secretary Vice President and Treasurer Attest: FIRST CHICAGO TRUST COMPANY OF NEW YORK By: /s/ J. Cohen By: /s/ Ralph Persico -------------------------------- ---------------------------- Title: Assistant Vice-President Title: Customer Officer 22 ANNEX A to AMENDMENT TO RIGHTS AGREEMENT Exhibit B --------- AMENDED SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES On July 19, 1989, the Board of Directors of Consolidated Rail Corporation declared a dividend of one common share purchase right (a "Right") for each share of common stock, par value $1.00 per share (the "Common Shares"), of Consolidated Rail Corporation or would later be issued. The dividend was originally payable on July 31, 1989 (the "Record Date") to the stockholders of record on that date. The description and terms of the Rights are set forth in a Rights Agreement (as amended, the "Rights Agreement") between Conrail Inc. (the "Company"), as assignee of Consolidated Rail Corporation, and First Chicago Trust Company of New York, as Rights Agent (the "Rights Agent"), as amended on March 21, 1990, February 17, 1993, October 19, 1994 and September 20, 1995. On September 20, 1995, the Board of Directors declared a dividend of one Right for each share of Series A ESOP Convertible Junior Preferred Stock, without par value, of the Company (the "Preferred Shares"; and, collectively, with the Common Shares, the "Applicable Shares") outstanding on October 2, 1995 (the "Preferred Stock Record Date") and amended the terms of the Rights and the Rights Agreement, to provide, among other things, for such Rights. As amended, each Right entitles the registered holder to purchase from the Company one Common Share of the Company at a price of $205 per share (the "Purchase Price"), subject to adjustment. Until the earlier to occur of (i) 10 days following a public announcement (the date of such announcement being the "Shares Acquisition Date") that a person or group of affiliated or associated persons (other than the Company, any subsidiary of the Company or any employee benefit plan of the Company or such subsidiary) (an "Acquiring Person") has acquired, obtained the right to acquire, or otherwise obtained beneficial ownership of 10% or more of the then outstanding shares of Common Shares and (ii) 10 business days (or such later date as may be determined by action of the Board of Directors prior to such time as any person becomes an Acquiring Person) following the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 10% or more of the then outstanding Company Common Shares (the earlier of such dates being called the "Distribution Date"), the Rights will be evidenced by the Applicable Share certificates, with or without a copy of this Summary of Rights being attached thereto, and not by separate Right Certificates. The Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with the Applicable Shares. Until the Distribution Date (or earlier redemption or expiration of the Rights), new Applicable Share certificates issued after the Record Date (in the case of Common Shares) and the Preferred Stock Record Date (in the case of Preferred Shares), upon transfer or new issuance of Applicable Shares will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer of any certificates for Applicable Shares even without such notation or a copy of this Summary of Rights being attached thereto, will also constitute the transfer of the Rights associated with the Applicable Shares represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights ("Right Certificates") will be mailed to holders of record of the Applicable Shares as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the Rights. The Rights are not exercisable until the Distribution Date. The Rights will expire on September 20, 2005 (the "Final Expiration Date"), unless the Final Expiration Date is extended or unless the Rights are earlier redeemed or exchanged by the Company, in each case, as described below. In the event that (i) the Company is the surviving corporation in a merger with an Acquiring Person and the Company Common Shares shall remain outstanding, (ii) a person or group of affiliated or associated persons becomes the beneficial owner of 10% or more of the then outstanding Company Common Shares, (iii) an Acquiring Person engages in one or more "self-dealing" transactions as set forth in the Rights Agreement, or (iv) during such time as there is an Acquiring Person, an event occurs which results in such Acquiring Person's ownership interest being increased by more than 1% (e.g., by means of a reverse stock split or recapitalization), then, in each such case, each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the then current exercise price of the Right, that number of Company Common Shares (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise price of the Right. The exercise price is the Purchase Price multiplied by the number of Common Shares issuable upon exercise of a Right prior to the events described in this paragraph. Notwithstanding any of the foregoing, following the occurrence of any of the events set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. In the event that, at any time following the Shares Acquisition Date, (i) the Company is acquired in a merger or other business combination transaction and the Company is not the surviving corporation (other than a merger described in the preceding paragraph), (ii) any person consolidates or merges with the Company and all or part of the Company Common Shares are converted or exchanged for securities, cash or property of any other Person or (iii) 50% or more of the Company's assets or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided as described above) shall thereafter have the right to receive, upon exercise, common stock of the acquiror having a value equal to two times the exercise price of the Right. The Purchase Price payable, and the number of Common Shares or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Common Shares, (ii) upon the grant to holders of the Common Shares of certain rights or warrants to subscribe for or purchase Common Shares at a price, or securities convertible into Common Shares with a conversion price, less than the then current market price of the Common Shares or (iii) upon the distribution to holders of the Common Shares of evidences of indebtedness or assets (excluding regular quarterly cash dividends or dividends payable in Common Shares) or of subscription rights or warrants (other than those referred to above). With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional Common Shares will be issued and in lieu thereof, an adjustment in cash will be made based on the market price of the Common Shares on the last trading day prior to the date of exercise. At any time after the acquisition by a person or group of affiliated or associated persons of beneficial ownership of 10% or more of the outstanding Common Shares and prior to the acquisition by such person or group of 50% or more of the outstanding Common Shares, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one Common Share per Right (subject to adjustment). At any time prior to the Distribution Date, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $.005 per Right (the "Redemption Price"), subject to adjustment. The redemption of the Rights may be made effective at such time on such basis with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. Any of the provisions of the Rights Agreement may be amended without the approval of the holders of Company Common Shares at any time prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended in order to cure any ambiguity, defect or inconsistency, to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person), or to shorten or lengthen any time period under the Rights Agreement; provided, however, that no amendment to -------- ------- adjust the time period governing redemption shall be made at such time as the Rights are not redeemable. Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. Actions or determinations made by the Board of Directors in the administration of the Rights Agreement require the concurrence of a majority of (and at least two) Continuing Directors. A "Continuing Director" is a director who is not an Acquiring Person (or a representative or nominee thereof), and who either (i) was a member of the Board prior to September 20, 1995 or (ii) subsequently became a director of the Company and whose election or nomination for election is approved or recommended by a majority of the then Continuing Directors. A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-B dated July 15, 1993, as amended. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is hereby incorporated herein by reference. -----END PRIVACY-ENHANCED MESSAGE-----