-----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, Tz1LgnDMo/CyGy+VLEvd3Um435CktUsLgXHLDBNkBBgQjfE/P1QQVhxsnetKEFbN dkCQ2UjuQajt/I3ha0k76A== 0000898822-97-000400.txt : 19970513 0000898822-97-000400.hdr.sgml : 19970513 ACCESSION NUMBER: 0000898822-97-000400 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970512 SROS: NYSE SROS: PHLX GROUP MEMBERS: CSX CORP GROUP MEMBERS: GREEN ACQUISITION CORPORATION GROUP MEMBERS: NORFOLK SOUTHERN CORPORATION SUBJECT COMPANY: 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: SC 14D1/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42777 FILM NUMBER: 97599942 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 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CSX CORP CENTRAL INDEX KEY: 0000277948 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 621051971 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: ONE JAMES CNTR STREET 2: 901 E CARY ST CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 8047821400 SC 14D1/A 1 SCHEDULE 14D-1 AMENDMENT NO. 26 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14D-1 TENDER OFFER STATEMENT (AMENDMENT NO. 26) PURSUANT TO SECTION 14(D(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND AMENDMENT NO. 36 TO SCHEDULE 13D* AND AMENDMENT NO. 13 TO SCHEDULE 13D** CONRAIL INC. (NAME OF SUBJECT COMPANY) CSX CORPORATION NORFOLK SOUTHERN CORPORATION GREEN ACQUISITION CORP. (BIDDERS) COMMON STOCK, PAR VALUE $1.00 PER SHARE (TITLE OF CLASS OF SECURITIES) 208368 10 0 (CUSIP NUMBER OF CLASS OF SECURITIES) SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK, WITHOUT PAR VALUE (TITLE OF CLASS OF SECURITIES) NOT AVAILABLE (CUSIP NUMBER OF CLASS OF SECURITIES) MARK G. ARON JAMES C. BISHOP, JR. CSX CORPORATION NORFOLK SOUTHERN CORPORATION ONE JAMES CENTER THREE COMMERCIAL PLACE 901 EAST CARY STREET NORFOLK, VIRGINIA 23510 RICHMOND, VIRGINIA 23219-4031 TELEPHONE: (757) 629-2750 TELEPHONE: (804) 782-1400 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidder) WITH A COPY TO: PAMELA S. SEYMON RANDALL H. DOUD WACHTELL, LIPTON, ROSEN & KATZ SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 51 WEST 52ND STREET 919 THIRD AVENUE NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10022 TELEPHONE: (212) 403-1000 TELEPHONE: (212) 735-3000 _____________________ * of CSX Corporation and Green Acquisition Corp. ** of Norfolk Southern Corporation. This Statement amends and supplements the Tender Of- fer Statement on Schedule 14D-1 filed with the Securities and Exchange Commission (the "SEC") on December 6, 1996, as previously amended and supplemented (the "Schedule 14D-1"), by Green Acquisition Corp., a Pennsylvania corporation ("Purchaser"), CSX Corporation, a Virginia corporation ("Parent" or "CSX"), and Norfolk Southern Corporation, a Virginia corporation ("NSC"), to purchase all shares of (i) Common Stock, par value $1.00 per share (the "Common Shares"), and (ii) Series A ESOP Convertible Junior Preferred Stock, without par value (together with the Common Shares, the "Shares"), of Conrail Inc., a Pennsylvania corporation (the "Company"), including, in each case, the associated common stock purchase rights, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 6, 1996, the Supplement thereto, dated December 19, 1996 (the "First Supplement"), the Second Supplement thereto, dated March 7, 1997 (the "Second Supplement"), the Third Supplement thereto, dated April 10, 1997 (the "Third Supplement") and the related Letters of Transmittal (which, together with any amendments or supplements thereto, constitute the "Second Offer") at a purchase price of $115 per Share, net to the tendering shareholder in cash. Capitalized terms used and not defined herein shall have the meanings assigned such terms in the Offer to Purchase, the Supplement, the Second Supplement, the Third Supplement and the Schedule 14D-1. ITEM 10. ADDITIONAL INFORMATION. (b) By letter dated May 8, 1997, the Honorable Vernon A. Williams, Secretary of the STB, issued an informal opinion, which is not binding on the STB, that the joint voting trust, which CSX and NSC propose to hold all Shares previously acquired and to be acquired by CSX and NSC, will effectively insulate CSX and NSC from the violation of Subtitle IV of Title 49 of the United States Code and the policy of the STB that would result if CSX and/or NSC were to acquire, without authorization, what would otherwise be a controlling interest in carrier subsidiaries of the Company. A copy of such letter has been filed as Exhibit (c)(16), and the foregoing summary description is qualified in its entirety by reference to such exhibit. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (c)(16) Letter from the Honorable Vernon A. Williams, dated May 8, 1997. SIGNATURE After due inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. CSX CORPORATION By: /s/ MARK G. ARON Name: Mark G. Aron Title: Executive Vice President -- Law and Public Affairs Dated: May 9, 1997 SIGNATURE After due inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. NORFOLK SOUTHERN CORPORATION By: /s/ JAMES C. BISHOP, JR. Name: James C. Bishop, Jr. Title: Executive Vice President- Law Dated: May 9, 1997 SIGNATURE After due inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. ATLANTIC ACQUISITION CORPORATION By: /s/ JAMES C. BISHOP, JR. Name: James C. Bishop, Jr. Title: Vice President and General Counsel Dated: May 9, 1997 SIGNATURE After due inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. GREEN ACQUISITION CORP. By: /s/ MARK G. ARON Name: Mark G. Aron Title: Vice President, General Counsel and Secretary Dated: May 9, 1997 EXHIBIT INDEX EXHIBIT NO. *(a)(1) Offer to Purchase, dated December 6, 1996. *(a)(2) Letter of Transmittal. *(a)(3) Notice of Guaranteed Delivery. *(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. *(a)(5) Letter to Clients for use by Brokers, Dealers, Com- mercial Banks, Trust Companies and Other Nominees. *(a)(6) Guidelines for Certification of Taxpayer Identifica- tion Number on Substitute Form W-9. *(a)(7) Tender Offer Instructions for Participants of Conrail Inc. Dividend Reinvestment Plan. *(a)(8) Text of Press Release issued by Parent and the Com- pany on December 6, 1996. *(a)(9) Form of Summary Advertisement, dated December 6, 1996. *(a)(10) Text of Press Release issued by Parent on December 5, 1996. *(a)(11) Text of Press Release issued by Parent and the Com- pany on December 10, 1996. *(a)(12) Text of Advertisement published by Parent and the Company on December 10, 1996. *(a)(13) Text of Press Release issued by Parent on December 11, 1996. *(a)(14) Text of Advertisement published by Parent and the Company on December 12, 1996. _____________________ * Previously filed. *(a)(15) Supplement to Offer to Purchase, dated December 19, 1996. *(a)(16) Revised Letter of Transmittal. *(a)(17) Revised Notice of Guaranteed Delivery. *(a)(18) Text of Press Release issued by Parent and the Com- pany on December 19, 1996. *(a)(19) Letter from Parent to shareholders of the Company, dated December 19, 1996. *(a)(20) Text of Press Release issued by Parent on December 20, 1996. *(a)(21) Text of Press Release issued by Parent and the Com- pany on January 9, 1997. *(a)(22) Text of Press Release issued by Parent and the Com- pany on January 13, 1997. *(a)(23) Text of Press Release issued by Parent and the Com- pany on January 15, 1997. *(a)(24) Text of Press Release issued by Parent on January 17, 1997. (a)(25) Deleted. *(a)(26) Text of Letter issued by Parent and the Company dated January 22, 1997. *(a)(27) Text of Advertisement published by Parent and the Company on January 29, 1997. *(a)(28) Text of Press Release issued by Parent and the Company on January 31, 1997. *(a)(29) Text of Press Release issued by Parent on February 14, 1997. _____________________ * Previously filed. - 2 - *(a)(30) Text of Press Release issued by Parent on March 3, 1997. *(a)(31) Second Supplement to Offer to Purchase, dated March 7, 1997. *(a)(32) Revised Letter of Transmittal. *(a)(33) Revised Notice of Guaranteed Delivery. *(a)(34) Text of Press Release issued by Parent on March 7, 1997. *(a)(35) Form of Summary Advertisement, dated March 10, 1997. *(a)(36) Letter from Parent to employees of the Company, published on March 12, 1997. *(a)(37) Text of Press Release issued by Parent and NSC on April 8, 1997. *(a)(38) Third Supplement to Offer to Purchase, dated April 10, 1997. *(a)(39) Revised Letter of Transmittal circulated with the Third Supplement. *(a)(40) Revised Notice of Guaranteed Delivery circulated with the Third Supplement. *(b)(1) Credit Agreement, dated November 15, 1996 (incorpo- rated by reference to Exhibit (b)(2) to Parent and Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October 16, 1996). *(b)(2) Credit Agreement, dated as of February 10, 1997, by and among NSC, Morgan Guaranty Trust Company of New York, as administrative agent, Merrill Lynch Capital Corporation, as documentation agent, and the banks from time to time parties thereto (incorporated by reference to NSC's and Atlantic Acquisition Corporation's Tender Offer Statement on Schedule 14D-1, dated February 12, 1997). _____________________ * Previously filed. - 3 - *(b)(3) Commitment Letter, dated April 22, 1997, among Morgan Guaranty Trust Company of New York, J.P. Morgan Securities Inc., Merrill Lynch Capital Corporation, Merrill Lynch & Co. and Norfolk Southern Corporation. *(c)(1) Agreement and Plan of Merger, dated as of October 14, 1996, by and among Parent, Purchaser and the Company (incorporated by reference to Exhibit (c)(1) to Par- ent and Purchaser's Tender Offer Statement on Sched- ule 14D-1, as amended, dated October 16, 1996). *(c)(2) Company Stock Option Agreement, dated as of October 14, 1996, between Parent and the Company (incorpo- rated by reference to Exhibit (c)(2) to Parent and Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October 16, 1996). *(c)(3) Parent Stock Option Agreement, dated as of October 14, 1996, between Parent and the Company (incorpo- rated by reference to Exhibit (c)(3) to Parent and Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October 16, 1996). *(c)(4) Voting Trust Agreement, dated as of October 15, 1996, by and among Parent, Purchaser and Deposit Guaranty National Bank (incorporated by reference to Exhibit (c)(4) to Parent and Purchaser's Tender Offer State- ment on Schedule 14D-1, as amended, dated October 16, 1996). *(c)(5) First Amendment to Agreement and Plan of Merger, dat- ed as of November 5, 1996, by and among Parent, Pur- chaser and the Company (incorporated by reference to Exhibit (c)(7) to Parent and Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated Octo- ber 16, 1996). *(c)(6) Second Amendment to Agreement and Plan of Merger, dated as of December 18, 1996, by and among Parent, Purchaser and the Company. *(c)(7) Form of Amended and Restated Voting Trust Agreement. (c)(8) Deleted. _____________________ * Previously filed. - 4 - *(c)(9) Text of STB Decision No. 5 of STB Finance Docket No. 33220, dated January 8, 1997. (c)(10) Deleted. *(c)(11) Text of opinion of Judge Donald VanArtsdalen of the United States District Court for the Eastern District of Pennsylvania as delivered from the bench on Janu- ary 9, 1997. *(c)(12) Third Amendment to Agreement and Plan of Merger, dated as of March 7, 1997, by and among Parent, Purchaser and the Company. *(c)(13) Form of Amended and Restated Voting Trust Agreement. *(c)(14) Letter Agreement between CSX and NSC, dated April 8, 1997. *(c)(15) Fourth Amendment to Agreement and Plan of Merger, dated as of April 8, 1997, by and among CSX, Purchaser and the Company. (c)(16) Letter from the Honorable Vernon A. Williams, dated May 8, 1997. (d) Not applicable. (e) Not applicable. (f) Not applicable. _____________________ * Previously filed. - 5 - EX-99 2 EXHIBIT (C)(16) Surface Transportation Board Washington, D.C 20423-0001 Office of the Secretary May 8, 1997 Richard A. Allen, Esq. Zuckert, Scoutt & Rasenberger, L.L.P. 888 Seventeenth St., N.W. Washington, D.C. 20006-3939 Re: STB Finance Docket No. 33388, CSX Corporation and CSX Transportation, Inc., Norfolk Southern Corporation and Norfolk Southern Railway Company--Control and Operating Leases/Agreements--Conrail Inc. and Consolidated Rail Corporation Dear Mr. Allen: SUMMARY. By letter dated April 24, 1997, you submitted, on behalf of Norfolk Southern Corporation (NSC),1 CSX Corporation (CSXC),2 and Green Acquisition Corporation (Acquisition), and pursuant to 49 CFR 1013.3(a), an Amended and Restated Voting Trust Agreement (hereinafter referred to as Joint-VTA-1) that NSC, CSXC, and Acquisition propose to enter into with an institutional trustee, Deposit Guaranty National Bank (Deposit Guaranty or Trustee), and a limited liability company to be formed shortly (LLC). NSC and CSXC intend that the Trustee will hold, in the voting trust (hereinafter referred to as the Joint Voting Trust) to be established pursuant to Joint-VTA-1, all common shares of Conrail Inc. (CRI).3 (1) acquired previously, and separately, by NSC and CSXC and currently held in the separate voting trusts referenced below; or (2) hereafter acquired by NSC and CSXC pursuant to the Third Supplement (the Third Supplement, dated April 10, 1997) to the Second Offer to Purchase (the Second Offer, 1 NSC is the parent holding company of Norfolk Southern Railway Company (NSR). NSC and NSR are referred to collectively as NS. 2 CSXC is the parent holding Company of CSX Transportation, Inc. (CSXT). CSXC and CSXT are referred to collectively as CSX. 3 CRI is the parent holding company of Consolidated Rail Corporation (CRC). CRI and CRC are referred to collectively as Conrail. Richard A. Allen STB Finance Docket No. 33388 May 7, 1997 Page 2 dated December 6, 1996).4 NSC and CSXC intend that the Joint Voting Trust to be established pursuant to Joint-VTA-1 will be a single consolidated voting trust ultimately superseding and replacing the previously established separate voting trusts. In my opinion, the Joint Voting Trust to be established under Joint- VTA-1 will effectively insulate NSC and CSXC, and their respective affiliates, from the violation of Subtitle IV of Title 49 of the United States Code (Subtitle IV of Title 49) and the policy of the Surface Transportation Board (the Board) that would result if NSC and/or CSXC were to acquire, without authorization, what would otherwise be a controlling interest in CRI's carrier subsidiaries. BACKGROUND: THE CSX-VTA'S. By letter dated October 23, 1996, Mr. Dennis G. Lyons submitted, on behalf of CSXC and Acquisition (which was then a wholly owned subsidiary of CSXC), a voting trust agreement (hereinafter referred to as CSX-VTA-1) proposed to be entered into by and between CSXC, Acquisition, and a trustee, for use in connection with the acquisition, by CSXC and Acquisition, of a controlling interest in CRI. On November 1, 1996, Mr. Lyons submitted a revised VTA (hereinafter referred to as CSX-VTA-2), which provided that Deposit Guaranty was to be the trustee in place of the previously designated trustee. By letter dated November 1, 1996, I advised that, in my opinion, the voting trust to be established under CSX-VTA-2 would effectively insulate CSXC and its affiliates from the violation of Subtitle IV of Title 49 and the policy of the Board that would result if CSXC were to acquire, without authorization, what would otherwise be a controlling interest in CRI's carrier subsidiaries. On November 26, 1996, CSXC, acting through Acquisition, bought and paid for approximately 19.9% of the common stock of CRI. This stock was deposited in a voting trust (hereinafter referred to as the CSX Voting Trust) pursuant to a voting trust agreement in the form of CSX-VTA-2. By letter dated December 27, 1996, Mr. Lyons submitted, again on behalf of CSXC and Acquisition, another revised VTA (hereinafter referred to as CSX-VTA-3) proposed to be entered into by and between CSXC, Acquisition, and Deposit Guaranty. By letter dated January 8, 1997, I advised that, in my opinion, the voting trust to be established under CSX-VTA-3 would effectively insulate CSXC and its affiliates from the violation of Subtitle IV of Title 49 4 The Second Offer, dated December 6, 1996, was made by CSXC. The Third Supplement, dated April 10, 1997, includes NSC as a co-bidder. Richard A. Allen STB Finance Docket No. 33388 May 7, 1997 Page 3 and the policy of the Board that would result if CSXC were to acquire, without authorization, what would otherwise be a controlling interest in CRI's carrier subsidiaries.5 BACKGROUND: THE NS-VTA'S. By letter dated October 25, 1996, you submitted, on behalf of NSC and Atlantic Acquisition Corporation (Acquiror), a voting trust agreement (hereinafter referred to as NS-VTA- 1) proposed to be entered into by and between NSC, Acquiror, and a Bank (to be named as trustee) for use in connection with the acquisition, by NSC and Acquiror, of a controlling interest in CRI. By letter dated November 1, 1996 (addressed to your colleague, Mr. James A. Calderwood), I advised that, in my opinion, the voting trust to be established under NS-VTA-1 would effectively insulate NSC and its affiliates from the violation of Subtitle IV of Title 49 and the policy of the Board that would result if NSC were to acquire, without authorization, what would otherwise be a controlling interest in CRI's carrier subsidiaries. By letter dated November 6, 1996, you submitted, again on behalf of NSC and Acquiror, an alternative version of NS-VTA-1 (hereinafter referred to as NS-VTA-2). By letter dated November 18, 1996, I advised that, in my opinion, the voting trust to be established under NS-VTA-2 would effectively insulate NSC and its affiliates from the violation of Subtitle IV of Title 49 and the policy of the Board that would result if NSC were to acquire, without authorization, what would otherwise be a controlling interest in CRI's carrier subsidiaries. By letter dated January 31, 1997 (as supplemented by an errata letter dated February 3, 1997), you submitted, again on behalf of NSC and Acquiror: NS-VTA-3, which was another alternative version of NS-VTA-1; and NS-VTA-4, which was an entirely new voting trust agreement. By letter dated February 14, 1997, I advised that, in my opinion, the voting trusts to be established under NS-VTA-3 and NS-VTA-4 would effectively insulate NSC and its affiliates from the violation of Subtitle IV of Title 49 and the policy of the Board that would result if NSC were to acquire, without authorization, what would otherwise be a controlling interest in CRI's carrier subsidiaries.6 5 The letters and other submissions respecting the CSX-VTA's were docketed in STB Finance Docket No. 33220. 6 The letters and other submissions respecting the NS-VTA's were docketed in STB Finance Docket No. 33286. Richard A. Allen STB Finance Docket No. 33388 May 7, 1997 Page 4 On February 18, 1997, NSC, acting through Acquiror, bought and paid for approximately 9.9% of the common stock of CRI. This stock was deposited in a voting trust (hereinafter referred to as the NS Voting Trust) pursuant to a voting trust agreement substantially in the form of NS-VTA-3. THE JOINT CONRAIL ACQUISITION TRANSACTION. Joint-VTA-1 reflects the fact that whereas NSC and CSXC formerly planned to pursue two separate CRI acquisition transactions, they now plan to pursue one joint CRI acquisition transaction. Under the Third Supplement to the Second Offer, CSXC and NSC, acting in concert through Acquisition, are now offering to purchase all outstanding common shares of CRI for $115 per share in cash. Unless further extended, the Second Offer will expire on May 23, 1997. NSC and CSXC have agreed that, upon consummation of the Second Offer (as supplemented by the Third Supplement), they will establish a single consolidated voting trust to hold: (i) the CRI shares previously acquired by NSC and CSXC and now held in the separate voting trusts; and (ii) the remaining CRI shares to be acquired in the Second Offer (as supplemented by the Third Supplement). This single consolidated voting trust will be an amended and restated version of the CSX Voting Trust (i.e., the voting trust established pursuant to CSX-VTA-2), which is currently holding the 19.9% of the common stock of CRI acquired by Acquisition for CSXC on November 26, 1996. NSC and CSXC intend to form a new limited liability company (LLC), to which CSXC will contribute both 100% of the stock of Acquisition and also a specified amount of cash, and to which NSC will contribute both 100% of its interest in the approximately 9.9% of the common stock of CRI now held in the NS Voting Trust and also a specified amount of cash. NSC and CSXC will have equal voting control of LLC, but it is contemplated that NSC will own 58% of the equity of LLC and that CSXC will own 42% of the equity of LLC. The cash contributed by NSC and CSXC to LLC will be transferred to Acquisition to pay for the remaining CRI shares that Acquisition will acquire pursuant to the Second Offer (as supplemented by the Third Supplement). Upon consummation of the Second Offer (as supplemented by the Third Supplement), Acquiror will cause the trustee of the NS Voting Trust to transfer to the Trustee of the Joint Voting Trust to be established pursuant to Joint-VTA-1 the approximately 9.9% of the common stock of CRI now held in the NS Voting Trust. Once this stock has been transferred, the NS Voting Trust will be terminated. THE JOINT VOTING TRUST: MY OPINION. In my opinion, the Joint Voting Trust to be established under Joint-VTA-1 will effectively insulate NSC and CSXC, and their respective affiliates, from the violation of Subtitle IV of Title 49 and the policy of the Board that would Richard A. Allen STB Finance Docket No. 33388 May 7, 1997 Page 5 result if NSC and/or CSXC were to acquire, without authorization, what would otherwise be a controlling interest in CRI's carrier subsidiaries. By and large, the language of Joint-VTA-1 mirrors the language of the prior VTA's submitted by NSC and CSXC (respecting such matters as the irrevocability of the voting trust, the independence of the Trustee, the ban on direct or indirect business arrangements or dealings between the Trustee and either NSC or CSXC, etc.), and, like the language in the prior VTA's, effectively insulates NSC and CSXC from premature control of CRI. The key issue concerns the control of CRI prior to such time (if ever) as the Board approves, and NSC and CSXC consummate, control of CRI. Joint-VTA-1 provides, in general, that, prior to the merger of an Acquisition subsidiary into CRI (at which time CRI shall become a wholly owned subsidiary of Acquisition), the Trustee shall vote the Trust Stock with respect to all matters in the same proportion as all shares of CRI Common Stock other than Trust Stock are voted with respect to such matters. This provision is acceptable because, during the time it is effective, it will leave control of CRI in the hands of CRI shareholders other than NSC and CSXC. Joint-VTA-1 further provides, in general, that, after the merger of an Acquisition subsidiary into CRI, the Trustee shall vote the Trust Stock "in accordance with the instructions of a majority of the persons who are currently the directors of [CRI] and their nominees as successors and who shall then be directors of [CRI]." This provision is acceptable because, during the time it is effective, it will leave control of CRI in the hands of its current directors and/or successors nominated by the current directors. Joint-VTA-1 further provides "that if there shall be no such persons qualified to give such instructions hereunder, or if a majority of such persons refuse or fail to give such instructions, then the Trustee shall vote the Trust Stock in its sole discretion, having due regard for the interests of the holders of Trust Certificates as investors in the stock of [CRI], determined without reference to such holders' interests in railroads other than the subsidiaries of [CRI]." This provision is acceptable because, during the time it is effective, it will leave control of CRI in the hands of an independent Trustee. DIVESTITURE. I think it appropriate to reiterate and emphasize what I said in my prior letters concerning the divestiture of the CRI stock that will be necessary in the event that either: (a) the CRI control transaction does not receive regulatory authorization; or (b) the CRI control transaction does receive regulatory authorization, but NSC and CSXC choose not to exercise that authorization. If the CRI control transaction ultimately collapses, the Board will have the Richard A. Allen STB Finance Docket No. 33388 May 7, 1997 Page 6 authority to approve both a plan of divestiture and the sale (or other disposition) of the CRI stock, whenever such divestiture and disposition take place, and whether or not the person acquiring the CRI stock requires 49 U.S.C. 11323 authority to consummate such acquisition. See Santa Fe Southern Pacific Corp.--Control--SPT Co., 2 I.C.C.2d 709, 834 (1986) (the jurisdiction of the Interstate Commerce Commission "to oversee the orderly divestiture" of the Trust Stock is "inherently within [its] authority to approve consolidations and acquisitions of control."). INFORMAL STAFF OPINION NOT BINDING ON BOARD. My opinion respecting the Joint Voting Trust to be established under Joint-VTA-1 is an informal staff opinion that is not binding on the Board. See 49 CFR 1013.3(a). MERITS NOT CONSIDERED. In arriving at my opinion respecting the Joint Voting Trust to be established under Joint-VTA-1, I have given no consideration whatsoever to the merits of the 49 U.S.C. 11323-25 control application that NSC and CSXC have indicated they intend to file on or about June 10, 1997. Thus, my opinion should not be interpreted by any person as an indication that I think the Board will or will not approve any such application. ANCILLARY MATTER. By letter dated April 25, 1997, Mr. Michael F. McBride, representing American Electric Power Service Corporation, Atlantic City Electric Company, Delmarva Power & Light Company, Indianapolis Power & Light Company, and The Ohio Valley Coal Company, has asked that, in arriving at my opinion respecting the Joint Voting Trust to be established under Joint-VTA-1, I consider certain pleadings (hereinafter referred to as the ACE-1 and CURE-1 pleadings) that were filed in STB Finance Docket No. 33388 on or about April 18, 1997. See Decision No. 4, slip op. at 1-2 (reference to the ACE-1 and CURE-1 pleadings). See also Decision No. 4, slip op. at 2-3 (discussion of the issues raised in the ACE-1 and CURE-1 pleadings). For the reasons below, in arriving at the opinion expressed in this letter, I have given no consideration to the ACE-1 and CURE-1 pleadings. My opinion is limited to the question whether the Joint Voting Trust to be established under Joint-VTA-1 will effectively insulate NSC and CSXC, and their affiliates, from the violation of Subtitle IV of Title 49 and the policy of the Board that would result if NSC and/or CSXC were to acquire, without authorization, what would otherwise be a controlling interest in CRI's other subsidiaries. The ACE-1, and CURE-1 pleadings are not directed to this question; rather, these pleadings (particularly the ACE-1 pleading) are directed to the question whether the price NSC and CSXC have agreed to pay for the CRI shares still outstanding is too high. This is a matter that the Board has addressed. See Decision No. 4, slip op. at 3 (any arguments respecting the reasonableness of the purchase price Richard A. Allen STB Finance Docket No. 33388 May 7, 1997 Page 7 will be addressed by the Board in its review of the merits of the 49 U.S.C. 11323-25 control application). PUBLIC DOCKET. A copy of this letter will be placed in the public docket in STB Finance Docket No. 33388. Sincerely, /s/ Vernon A. Williams Vernon A. Williams Secretary cc: Dennis G. Lyons Arnold & Porter 555 Twelfth Street, N.W. Washington, D.C. 20004-1202 Michael F. McBride LeBoeuf, Lamb, Greene & MacRae 1875 Connecticut Avenue, N.W. Washington, D.C. 20009-5728 -----END PRIVACY-ENHANCED MESSAGE-----