-----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, OR4WRolR7N91dX0hubap6RmWDERidXdzRg7UsmOC06FAB7wt/DNtEQbHw9P3XjT1 I+NkEbw6PmBp89uaTjnjyg== 0000897732-96-000015.txt : 19960624 0000897732-96-000015.hdr.sgml : 19960624 ACCESSION NUMBER: 0000897732-96-000015 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19960621 EFFECTIVENESS DATE: 19960710 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: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-06513 FILM NUMBER: 96583789 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 S-8 1 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) 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 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 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 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 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 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 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 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 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 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 (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 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 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 /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 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 EX-4 2 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. "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 - (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 - "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 - 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 - "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 - 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, - 7 - 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 - 8 - 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. - 9 - 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. - 10 - 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 - 11 - 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 - 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. - 13 - (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- - 14 - 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 -------------------- - 15 - (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. - 16 - 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 - (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 - EX-5 3 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 ------------------ EX-15 4 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 EX-23 5 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 EX-23 6 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 -----END PRIVACY-ENHANCED MESSAGE-----