-----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, UiCbOjIA/PcMM4VsneifmIvEKQhdSQ0USmktV9YrgwIta+AlDCNLwVesAX20I+Ri yw9NTNq5YI+RKJJNW6JUSg== 0000950123-96-007477.txt : 19961223 0000950123-96-007477.hdr.sgml : 19961223 ACCESSION NUMBER: 0000950123-96-007477 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19961220 SROS: NYSE GROUP MEMBERS: CSX CORP GROUP MEMBERS: GREEN ACQUISITION CORP. 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 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42777 FILM NUMBER: 96683570 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 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: 96683571 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 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 CONRAIL INC./CSX CORP 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-1 TENDER OFFER STATEMENT (AMENDMENT NO. 3) PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND AMENDMENT NO. 13 TO SCHEDULE 13D ------------------------ CONRAIL INC. (NAME OF SUBJECT COMPANY) CSX 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 CSX CORPORATION ONE JAMES CENTER 901 EAST CARY STREET RICHMOND, VIRGINIA 23219-4031 (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 WACHTELL, LIPTON, ROSEN & KATZ 51 WEST 52ND STREET NEW YORK, NEW YORK 10019 TELEPHONE: (212) 403-1000 ------------------------ CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
TRANSACTION VALUATION* AMOUNT OF FILING FEE** - --------------------------------- --------------------------------- $2,017,932,950.00 $403,586.59
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * For purposes of calculating the filing fee only. This calculation assumes the purchase of an aggregate of 18,344,845 Shares of Common Stock, par value $1.00 per share, and Series A ESOP Convertible Junior Preferred Stock, without par value, of Conrail Inc. at $110 net per Share in cash. ** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the aggregate value of cash offered by Green Acquisition Corp. for such number of Shares. ------------------------ [X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount Previously Paid: $403,586.59 Form or Registration No.: Schedule 14D-1 Filing Party: CSX Corporation and Green Acquisition Corp. Date Filed: December 6, 1996
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 This Statement amends and supplements the Tender Offer 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. ("Purchaser"), a Pennsylvania corporation and a wholly owned subsidiary of CSX Corporation, a Virginia corporation ("Parent"), to purchase up to an aggregate of 18,344,845 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 "Offer to Purchase"), and the related Letter of Transmittal (which, together with any amendments or supplements thereto, constitute the "Offer") at a purchase price of $110 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 and the Schedule 14D-1. ITEM 1. SECURITY AND SUBJECT COMPANY. Item 1(c) is hereby amended and supplemented by reference to Section 2 of the Supplement, which Section is incorporated herein by reference. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. Item 3(b) is hereby amended and supplemented by reference to Section 3 of the Supplement, which Section is incorporated herein by reference. ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. Item 5(a) is hereby amended and supplemented by reference to Section 1, Section 4 and Section 5 of the Supplement, which Sections are incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. Item 7 is hereby amended and supplemented by reference to Section 1, Section 4 and Section 5 of the Supplement, which Sections are incorporated herein by reference. ITEM 10. ADDITIONAL INFORMATION. Item 10(b) is hereby amended and supplemented by reference to Section 4 and Section 6 of the Supplement, which Sections are incorporated herein by reference. Item 10(e) is hereby amended and supplemented by reference to Section 6 of the Supplement, which Section is incorporated herein by reference. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (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 Company on December 19, 1996. (b)(1) Credit Agreement, dated November 15, 1996 (incorporated by reference to Exhibit (b)(2) to Parent and Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October 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) Letter from Parent to shareholders of the Company, dated December 19, 1996.
3 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: December 19, 1996 4 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: General Counsel and Secretary Dated: December 19, 1996 5 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, Commercial Banks, Trust Companies and Other Nominees. *(a)(6) Guidelines for Certification of Taxpayer Identification 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 Company 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 Company 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. (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 Company on December 19, 1996. (b)(1) Credit Agreement, dated November 15, 1996 (incorporated by reference to Exhibit (b)(2) to Parent and Purchaser's Tender Offer Statement on Schedule 14D-1, as amended, dated October 16, 1996). *(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 Parent and Purchaser's Tender Offer Statement on Schedule 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 (incorporated 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 (incorporated 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 Statement on Schedule 14D-1, as amended, dated October 16, 1996). *(c)(5) First Amendment to Agreement and Plan of Merger, dated as of November 5, 1996, by and among Parent, Purchaser 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 October 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) Letter from Parent to shareholders of the Company, dated December 19, 1996. (d) Not applicable. (e) Not applicable. (f) Not applicable.
- --------------- * Previously filed. EX-99.A15 2 SUPPLEMENT TO OFFER TO PURCHASE 1 SUPPLEMENT TO THE OFFER TO PURCHASE DATED DECEMBER 6, 1996 CSX CORPORATION, GREEN ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CSX CORPORATION AND CONRAIL INC. HAVE AMENDED THE MERGER AGREEMENT THE SECOND OFFER HAS BEEN EXTENDED. THE SECOND OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 22, 1997, UNLESS THE SECOND OFFER IS FURTHER EXTENDED. Except as otherwise set forth in this Supplement, the terms and conditions previously set forth in the Offer to Purchase, dated December 6, 1996, remain applicable in all respects to the Second Offer, and this Supplement should be read in conjunction with the Offer to Purchase. Unless the context requires otherwise, terms not defined herein have the meanings ascribed to them in the Offer to Purchase. The conditions to the Second Offer have not been changed. The Second Offer is conditioned upon, among other things, the Pennsylvania Control Transaction Law being inapplicable to Conrail Inc. (the "Company"), which will require Company shareholder approval of an amendment to the Company Articles. See Introduction and Section 15 of the Offer to Purchase and Introduction in this Supplement. However, approval by the Surface Transportation Board (the "STB") is no longer a condition to consummation of the Merger. THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE SECOND OFFER AND THE MERGER (AS HEREINAFTER DEFINED), DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY (INCLUDING THE SECOND OFFER AND THE MERGER) ARE IN THE BEST INTERESTS OF THE COMPANY AND RECOMMENDS THAT SHAREHOLDERS OF THE COMPANY WHO DESIRE TO RECEIVE CASH FOR A PORTION OF THEIR SHARES ACCEPT THE SECOND OFFER AND TENDER THEIR SHARES PURSUANT TO THE SECOND OFFER. The Merger Agreement has been amended to (1) increase the securities portion of the per Share consideration to be received in the Merger by adding to the 1.85619 shares of Parent Common Stock to be received $16 in Parent convertible preferred stock, the terms of which will be set prior to the Merger such that such securities would, in the opinion of certain financial advisors, trade at par on a fully distributed basis, and (2) provide that the Merger will occur as soon as practicable following approval by the shareholders of the Company and Parent of the matters related to the Merger and prior to STB approval (as hereinafter defined). The Merger Agreement also has been amended in other respects. See Introduction and Section 4 of this Supplement. IMPORTANT Any shareholder desiring to tender all or any portion of such shareholder's shares of common stock, par value $1.00 per share ("Common Shares"), or shares of Series A ESOP Convertible Junior Preferred Stock, without par value ("ESOP Preferred Shares," and together with the Common Shares, "the Shares"), should either (i) complete and sign the (blue) Letter of Transmittal (or a facsimile hereof) circulated with the Offer to Purchase (as defined herein) or this Supplement in accordance with the instructions set forth in the Letter of Transmittal, have such shareholder's signature thereon guaranteed if required by Instruction 1 to the Letter of Transmittal, mail or deliver such Letter of Transmittal (or such facsimile thereof) and any other required documents to the Depositary (as defined in the Offer in Purchase) and either deliver the certificates for such Shares to the Depositary along with such Letter of Transmittal (or a facsimile thereof) or deliver such Shares pursuant to the procedure for book-entry transfer set forth in Section 3 of the Offer to Purchase prior to the expiration of the Second Offer or (ii) request such shareholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such shareholder. A shareholder having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such shareholder desires to tender such Shares. Any shareholder who desires to tender Shares and whose certificates for such Shares are not immediately available, or who cannot comply with the procedures for book-entry transfer described in the Offer to Purchase on a timely basis, may tender such Shares by following the procedures for guaranteed delivery set forth in Section 3 of the Offer to Purchase. Questions and requests for assistance or for additional copies of this Supplement, the Offer to Purchase, the Letter of Transmittal or other tender offer materials may be directed to the Information Agent or the Dealer Manager (as such terms are defined in the Offer to Purchase) at their respective addresses and telephone numbers set forth on the back cover of this Supplement. The Dealer Manager for the Second Offer is: WASSERSTEIN PERELLA & CO., INC. December 19, 1996 2 TO THE HOLDERS OF COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK OF CONRAIL INC.: INTRODUCTION The following information amends and supplements the Offer to Purchase, dated December 6, 1996 (the "Offer to Purchase"), of Green Acquisition Corp. ("Purchaser"), a Pennsylvania corporation and a wholly owned subsidiary of CSX Corporation, a Virginia corporation ("Parent"). Except as otherwise set forth in this Supplement, the terms and conditions previously set forth in the Offer to Purchase remain applicable in all respects to the Second Offer, and this Supplement should be read in conjunction with the Offer to Purchase. Unless the context requires otherwise, terms not defined herein have the meanings ascribed to them in the Offer to Purchase. THIS SUPPLEMENT IS BEING PROVIDED IN CONNECTION WITH THE SECOND AMENDMENT, DATED AS OF DECEMBER 18, 1996 (THE "SECOND AMENDMENT"), TO THE AGREEMENT AND PLAN OF MERGER, DATED AS OF OCTOBER 14, 1996 (THE "ORIGINAL MERGER AGREEMENT" AND, AS AMENDED BY THE FIRST AMENDMENT AND THE SECOND AMENDMENT, THE "MERGER AGREEMENT"). THE SECOND AMENDMENT PROVIDES, AMONG OTHER THINGS, FOR AN INCREASE IN THE VALUE OF THE SECURITIES TO BE RECEIVED IN THE MERGER AND THAT THE MERGER WILL OCCUR AS SOON AS PRACTICABLE FOLLOWING APPROVAL BY THE SHAREHOLDERS OF THE COMPANY AND PARENT OF THE MATTERS RELATED TO THE MERGER AND PRIOR TO STB APPROVAL. UNDER THE SECOND AMENDMENT, IN THE MERGER, EACH SHARE WILL BE CONVERTED INTO THE RIGHT TO RECEIVE (X) 1.85619 SHARES OF PARENT COMMON STOCK AND $16 IN CONVERTIBLE PREFERRED STOCK OF PARENT, THE TERMS OF WHICH WILL BE SET PRIOR TO THE MERGER SUCH THAT SUCH SECURITIES ("MERGER PREFERRED STOCK," AND, COLLECTIVELY WITH PARENT COMMON STOCK, "PARENT MERGER SECURITIES," AND ON A PER SHARE BASIS, THE "PER SHARE MERGER CONSIDERATION") WOULD, IN THE OPINION OF CERTAIN FINANCIAL ADVISORS, TRADE AT PAR ON A FULLY DISTRIBUTED BASIS OR, IF APPLICABLE, (Y) $110 IN CASH, WITHOUT INTEREST THEREON. IF THE SECOND OFFER IS FULLY SUBSCRIBED AND CONSUMMATED IN ACCORDANCE WITH ITS TERMS, ALL SHAREHOLDERS OF THE COMPANY WILL RECEIVE PARENT MERGER SECURITIES IN THE MERGER AND WILL NOT BE OFFERED THE OPPORTUNITY TO ELECT TO RECEIVE CASH IN THE MERGER. SEE SECTION 13 OF THE OFFER TO PURCHASE AND SECTIONS 4 AND 6 OF THIS SUPPLEMENT. THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE SECOND OFFER AND THE MERGER, DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY (INCLUDING THE SECOND OFFER AND THE MERGER) ARE IN THE BEST INTERESTS OF THE COMPANY AND RECOMMENDS THAT SHAREHOLDERS OF THE COMPANY WHO DESIRE TO RECEIVE CASH FOR A PORTION OF THEIR SHARES ACCEPT THE SECOND OFFER AND TENDER THEIR SHARES PURSUANT TO THE SECOND OFFER. THE CONDITIONS TO THE SECOND OFFER HAVE NOT BEEN CHANGED. THE SECOND OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE PENNSYLVANIA CONTROL TRANSACTION LAW BEING INAPPLICABLE TO THE COMPANY, WHICH WILL REQUIRE COMPANY SHAREHOLDER APPROVAL OF AN AMENDMENT TO THE COMPANY ARTICLES. SEE INTRODUCTION AND SECTION 15 OF THE OFFER TO PURCHASE. HOWEVER, STB APPROVAL IS NO LONGER A CONDITION TO CONSUMMATION OF THE MERGER. The Second Offer is being made pursuant to the Merger Agreement which provides that, subject to the satisfaction or waiver of certain conditions contained therein, in the Merger, each outstanding Share (other than Shares held in the treasury of the Company or owned by Parent, Purchaser or any other wholly owned subsidiary of Parent or the Company) will be converted, at the election of the holder of Shares and subject to certain limitations, into the right to receive (i) $110 in cash, without interest, (ii) the Per Share Merger Consideration or (iii) a combination of such cash and Parent Merger Securities. However, the Merger Agreement contains provisions which will ensure that, regardless of the number of Shares for which holders have elected to receive cash or Parent Merger Securities, as the case may be, the aggregate number of Shares to be converted into Parent Merger Securities pursuant to the Merger shall be equal as nearly as practicable to 60% of all Shares outstanding immediately prior to the Merger on a fully diluted basis (except for Shares issuable or outstanding pursuant to the Company Stock Option), and the aggregate number of Shares to be 3 converted into the right to receive cash pursuant to the Merger, together with the Shares theretofore purchased by Purchaser (other than upon exercise of the Company Stock Option), shall be equal as nearly as practicable to 40% of all such Shares outstanding immediately prior to the Merger. Accordingly, in the case of any particular shareholder, depending on the aggregate number of Shares for which holders have elected to receive cash or Parent Merger Securities, as the case may be, such shareholder may not receive in respect of his or her Shares the amount of cash, Parent Merger Securities or combination thereof that such shareholder requested in his or her election. If the Second Offer is fully subscribed and consummated in accordance with its terms, Parent will have purchased in the First Offer and the Second Offer an aggregate of 40% of the outstanding Shares on a fully diluted basis and, accordingly, all Company shareholders will receive Parent Merger Securities in the Merger and will not have the opportunity to elect to receive cash. See Section 13 of the Offer to Purchase and Section 4 of this Supplement. The time at which the Merger is consummated in accordance with the Merger Agreement is hereinafter referred to as the "Effective Time." The Merger Agreement also provides that the period of time during which each of the Company and Parent has agreed that it will not discuss or agree to any takeover proposal with a third party has been extended to the December 31, 1998 termination date of the Merger Agreement. See Section 4 of this Supplement. As set forth in greater detail in the Offer to Purchase (see Introduction and Sections 15 and 16 of the Offer to Purchase), the Second Offer is conditioned upon the Company Articles being amended to include an "opt out" provision from the Pennsylvania Control Transaction Law. Unless such condition is satisfied, Purchaser effectively is precluded from purchasing Shares pursuant to the Second Offer and consummating the Merger in accordance with the Merger Agreement. The Company has mailed proxy materials for the Pennsylvania Special Meeting that was scheduled to be held on December 23, 1996. In connection with the Second Amendment, the Company has announced that such meeting has been rescheduled to January 17, 1996, and the Company is expected to mail supplemental proxy materials in connection with such rescheduled meeting shortly following the date of this Supplement. The Company has advised Purchaser that the record date for such meeting will remain December 5, 1996. Under the Merger Agreement, the Company has agreed not to convene, adjourn or postpone the Pennsylvania Special Meeting without the prior consent of Parent, which consent will not be unreasonably withheld. Pursuant to the Merger Agreement, either Parent or the Company can require that additional special meetings be held for the purpose of considering the Articles Amendment, and a new record date could be set for any such special meeting (and a new record date would be required if such a special meeting is held after March 5, 1997). See Section 13 of the Offer to Purchase. By a December 17, 1996 decision by the United States District Court for the Eastern District of Pennsylvania, the Court enjoined the Company from postponing the Pennsylvania Special Meeting if the basis for the Company's decision was the Company's failure to receive sufficient proxies to assure approval of the Articles Amendment. See Section 6 of this Supplement. THE SECOND OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR THE PENNSYLVANIA SPECIAL MEETING. ANY SUCH SOLICITATION WILL BE MADE ONLY BY THE COMPANY AND PURSUANT TO PROXY MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER. THE SECOND OFFER ALSO DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY PARENT MERGER SECURITIES. SUCH AN OFFER MAY BE MADE ONLY PURSUANT TO A PROSPECTUS. Procedures for tendering Shares are set forth in Section 3 of the Offer to Purchase. Tendering shareholders may use either the original (blue) Letter of Transmittal and the original (gray) Notice of Guaranteed Delivery previously circulated with the Offer to Purchase or the revised (blue) Letter of Transmittal and revised (gray) Notice of Guaranteed Delivery circulated with this Supplement. Shareholders who have previously validly tendered and not withdrawn Shares pursuant to the Second Offer are not required to take any further action in order to receive, subject to the terms and conditions of the Second Offer, the tender price of $110 per Share, if the Shares are accepted for payment and paid for by Purchaser pursuant to 2 4 the Second Offer, except as may be required by the guaranteed delivery procedure if such procedure was utilized. See Section 3 of the Offer to Purchase and Section 1 of this Supplement. THE OFFER TO PURCHASE, THIS SUPPLEMENT AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE SECOND OFFER. 1. Expiration Date. The discussion set forth in Section 1 of the Offer to Purchase and the amendments thereto are hereby amended and supplemented as follows: The term "Expiration Date" means 5:00 p.m., New York City time, on Wednesday, January 22, 1997 unless and until Purchaser, in its sole discretion (but subject to the terms of the Merger Agreement), shall have extended the period of time during which the Second Offer is open, in which event the term "Expiration Date" shall refer to the latest time and date at which the Second Offer, as so extended by Purchaser, shall expire. This Supplement, the revised (blue) Letter of Transmittal and other relevant materials will be mailed to record holders of Shares whose names appear on the Company's shareholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency's security position listing. Purchaser acknowledges that it cannot, consistent with the requirement that withdrawal rights be extended while the Second Offer is open, terminate the Second Offer, eliminate withdrawal rights, and delay acceptance for payment for Shares until all conditions are satisfied or waived. 2. Price Range of Shares; Dividends. The discussion set forth in Section 6 of the Offer to Purchase and the amendments thereto are hereby amended and supplemented as follows: According to published financial sources, the Company paid its regular quarterly cash dividend of $.475 per Common Share on December 16, 1996. On December 18, 1996, the last full trading day prior to the announcement of the Second Amendment, the closing price per Common Share as reported on the NYSE composite tape was $99. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE COMMON SHARES. 3. Background of the Second Offer Since December 6, 1996; Contacts with the Company. The discussion set forth in Section 11 of the Offer to Purchase and the amendments thereto are hereby amended and supplemented as follows: On December 6, 1996, Parent and Purchaser commenced the Second Offer. On December 10, 1996, Parent and the Company issued the following press release: CSX AND CONRAIL ANNOUNCE JOINT EFFORT TO BRING COMPETITIVE BENEFITS TO CUSTOMERS Richmond, VA and Philadelphia, PA (December 10, 1996) -- CSX Corporation (CSX) [NYSE: CSX] and Conrail Inc. (Conrail) [NYSE: CRR] announced today that they have jointly begun an effort that will bring even more competitive benefits to customers who will be served by their merged railroad. The companies said that a joint CSX-Conrail team would work to assure that so-called two-to-one customers -- customers who are today served by only CSX and Conrail -- will fully participate in the benefits of this pro-competitive merger. The joint team will meet with representatives of other major carriers who have expressed interest in the opportunities afforded by this process. The negotiations are confidential business discussions, and the companies will not comment on them until agreements have been reached. At that time, the agreements will be made available to the public and submitted to the Surface Transportation Board as part of the merger review process. 3 5 CSX Corporation, headquartered in Richmond, VA, is an international transportation company offering a variety of rail, container-shipping, intermodal, trucking, barge and contract logistics management services. CSX's home page can be reached at http://www.CSX.com. Conrail, with corporate headquarters in Philadelphia, PA, operates an 11,000-mile rail freight network in 12 northeastern and midwestern states, the District of Columbia, and the Province of Quebec. Conrail's home page can be reached at http://www.CONRAIL.com. On December 11, 1996, Parent issued the following press release in response to a "pledge letter" by Norfolk Southern to shareholders of the Company: CSX DISMISSES NORFOLK SOUTHERN'S "PLEDGE" LETTER AS ANOTHER "NON-EVENT" Richmond, VA., December 11, 1996 -- CSX Corp. (CSX)(NYSE: CSX) today dismissed Norfolk Southern's "pledge letter" to Conrail shareholders as another "non-event" in which Norfolk Southern again misrepresents its ability to close its hostile tender offer. In a statement, CSX said: "This is more of the same Norfolk Southern smokescreen intended to cloud reality. The facts, however, are clear. Norfolk Southern could not close its hostile tender offer on its previous expiration date of Dec. 16, 1996, nor can it close on its revised expiration date of Jan. 10, 1997, or at any time thereafter until well into the summer of 1997 at the earliest, in accordance with the terms of the Conrail-CSX merger agreement. This has been resoundingly upheld in federal court." CSX Corporation, headquartered in Richmond, VA., is an international transportation company offering a variety of rail, container-shipping, intermodal, trucking, barge and contract logistics management services. CSX's home page can be reached at http://www.CSX.com. Conrail's home page can be reached at http://www.CONRAIL.com. Since the commencement of the Second Offer, Parent and the Company have held discussions and engaged in negotiations relative to the Merger Agreement and the Second Amendment. On December 18, 1996, Parent and the Company entered into the Second Amendment. 4. Merger Agreement; Other Agreements. The discussion set forth in Section 13 of the Offer to Purchase and the amendments thereto are hereby amended and supplemented as set forth below. The following is a summary of certain provisions of the Second Amendment and is qualified in its entirety by the full text of the Second Amendment, a copy of which has been filed with the SEC by Purchaser as an exhibit to the Schedule 14D-1. The Merger. The Merger Agreement provides that, subject to the terms and conditions thereof and in accordance with the Pennsylvania Law, a wholly owned Pennsylvania subsidiary of Purchaser ("Merger Sub") will be merged with and into the Company (the "First Merger"). The Company will be the surviving corporation of the First Merger and shall succeed to and assume all rights and obligations of Merger Sub in accordance with the Pennsylvania Law. As soon as practicable on or after the closing of the First Merger, the parties will file articles of merger or other appropriate documents (such documents, collectively, the "First Articles of Merger") as may be required under the Pennsylvania Law. The First Merger will become effective when the First Articles of Merger are filed or at such subsequent date or time as Parent and the Company specify in the First Articles of Merger (the time the First Merger becomes effective being the "First Effective Time" or, unless otherwise specified, the "Effective Time"). Subject to the terms and conditions of the Merger Agreement and in accordance with the Pennsylvania Law, on the first business day immediately following the First Effective Time, the Company shall be merged with and into Purchaser (the "Second Merger" and, together with the First Merger, the "Merger"). Purchaser will be the surviving corporation (the "Surviving Corporation") of the Second Merger and shall succeed to and assume all rights and obligations of the Company in accordance with the Pennsylvania Law. As soon as practicable on or after the closing of the Second Merger, the parties will file articles of merger or other appropriate documents (such documents, collectively, the "Second Articles of Merger"). The Second Merger 4 6 will become effective when the Second Articles of Merger are filed or at such subsequent date or time as Parent and the Company specify in the Second Articles of Merger (the time the Second Merger becomes effective being the "Second Effective Time"). The Articles of Incorporation and By-laws of the Company, as in effect immediately prior to the First Effective Time and the Second Effective Time, shall be the Articles of Incorporation and By-laws, respectively, of the surviving corporation of each of the First Merger and the Second Merger, respectively. The officers and directors of the Company immediately prior to the First Effective Time and the Second Effective Time will be the officers and directors of the corporation surviving each of the First Merger and the Second Merger, respectively. The Merger shall have the effects set forth in the Pennsylvania Law. Conversion of Shares. The Merger Agreement provides that all shares of common stock, par value $1.00 per share, of Merger Sub issued and outstanding immediately prior to the First Effective Time shall, at the First Effective Time, by virtue of the First Merger and without any action on the part of any person, become such number of duly authorized, validly issued, fully paid and nonassessable Common Shares as, when aggregated with all Common Shares then owned by Parent, Purchaser or its affiliates, represents 80% of the then outstanding capital stock of the Company. Each share of Common Stock, par value $1.00 per share, of Purchaser issued and outstanding immediately prior to the Second Effective Time shall, at the Second Effective Time, by virtue of the Second Merger and without any action on the part of any person, become one duly authorized, validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation. In the First Merger, such percentage of the respective shareholdings of each holder (other than Parent, Purchaser or its affiliates) of Shares which, when added to the Common Shares then held by Parent, Purchaser or its affiliates, represents 80% of the Shares issued and outstanding immediately prior to the Effective Time shall, at the First Effective Time, by virtue of the First Merger and without any action on the part of the holder thereof, be converted into the right to receive (x) such number of duly authorized, validly issued, fully paid and nonassessable shares of Parent Common Stock and such number of shares of Merger Preferred Stock having the other terms determined as described below, or (y) cash, without interest thereon, in the case of each of (x) and (y), as determined pursuant to the Merger Agreement. Each Share (fractional or otherwise) issued and outstanding immediately prior to the Second Effective Time shall, at the Second Effective Time, by virtue of the Second Merger and without any action on the part of the holder thereof, be converted into the right to receive the Per Share Merger Consideration. The Merger Preferred Stock will be convertible preferred stock (or trust convertible preferred stock) of Parent with a liquidation preference of $50 per share; a quarterly yield to be determined such that the securities are expected to trade at par on a fully distributed basis; a maturity, which currently is not fixed, of seven to ten years or perpetual; a conversion premium, which currently is not fixed, of 20% to 25%; and call protection, which currently is not fixed, for 3 to 4 years. The terms of the Merger Preferred Stock that are not fixed as described above (such terms, the "Other Terms") will not be inconsistent with the terms so fixed and will be determined in accordance with the following procedure such that the Merger Preferred Stock to be distributed with respect to each Share as described in clause (x) in the preceding paragraph shall have a value on a fully distributed basis, as of the date of the opinions referred to below, as close as possible equal to $16: (1) the Other Terms shall be determined by mutual agreement of two investment banking firms of national reputation, one selected by the Company and one selected by Parent, such that in their respective opinions the Merger Preferred Stock to be issued in respect of each Share will have a value on a fully distributed basis, as of the date of their opinions, equal to $16 per Share; or (2) if such two investment banking firms are unable to agree on the Other Terms or if either such firm is unable to provide the opinion referred to in clause (1) above within four business days following the fifteenth business day prior to the Company Merger Meeting, each such investment banking firm within two business days following such four-business day period shall propose its version of the Other Terms and shall mutually select a third investment banking firm of national reputation, and within four business days thereafter the third firm shall select the proposal of one or the other of the two firms that, in the opinion of the third firm, is the closer of the two proposals to giving, as of the date of its opinion, a 5 7 value on a fully distributed basis for the Merger Preferred Stock to be issued in respect of each Share equal to $16 per Share. The Other Terms of the Merger Preferred Stock will be determined in accordance with the foregoing no later than five business days prior to the date of the Company Merger Meeting. In the First Merger, all Common Shares owned by Parent, Purchaser or its affiliates shall be retained. In the Second Merger, all Common Shares that are owned by the Company as treasury stock and any Common Shares owned by Parent, the Company or any of their respective subsidiaries will, at the Second Effective Time, be canceled and retired and will cease to exist, and, except as otherwise provided in the Merger Agreement, no shares of Parent Common Stock or other consideration shall be delivered or owing in exchange therefor. On and after the First Effective Time and the Second Effective Time, as applicable, holders of Shares will no longer have any rights as shareholders of the Company, except, as applicable, the right to receive the Per Share Merger Consideration with respect to each Share held by them. Boards of Directors; Officers. On the Control Date, the Board of Directors, committees of the Board of Directors, composition of such committees (including chairmen thereof) and officers of Parent and/or the Surviving Corporation will be as set forth in the Second Amendment and summarized under "Board of Directors; Officers" in Section 13 of the Offer to Purchase. Voting Trust. The Merger Agreement provides that (i) simultaneously with the purchase by Parent, Purchaser or their affiliates of Shares pursuant to the First Offer, the Second Offer, the Company Stock Option Agreement or otherwise, such Shares shall be deposited in the Voting Trust in accordance with the terms and conditions of the Voting Trust Agreement and (ii) upon consummation of each of the First Merger and the Second Merger, all outstanding shares of common stock of the surviving corporation of such Merger owned directly or indirectly by Parent, Purchaser or their affiliates will be deposited in the Voting Trust. Prior to the Control Date, the Voting Trust may not be modified or amended without the prior written approval of the Company unless such modification or amendment is not inconsistent with the Merger Agreement or the Option Agreements and is not adverse to the Company or its shareholders; provided that, the Voting Trust may be modified or amended in any manner without the prior written approval of the Company at any time after the earlier of (i) December 31, 1998 and (ii) the date of any STB denial (as hereinafter defined). See Section 6 for a description of the Amended Voting Trust Agreement. Conditions to the Merger. The Second Amendment provides that the STB condition described in clause (d) of the second paragraph and clause (c) of the third paragraph under "Conditions to the Merger" in Section 13 of the Offer to Purchase is no longer applicable. Pre-Control Date Operations of Parent. The Merger Agreement provides that, during the period from the Second Effective Time until the Control Date, Parent shall not, nor shall it permit any of its subsidiaries to (without the consent of the Company): (i) operate its railroad business other than in the ordinary course of business consistent with past practice, provided that (x) the direct or indirect acquisition or disposition of a significant portion of the assets of its railroad business, and (y) a merger, consolidation or other business combination with any other company involved in the railroad business that would have the effect set forth in clause (x) shall not be considered in the ordinary course of business consistent with past practice; or (ii) enter into any new line of business (including by merger, acquisition of assets or securities or otherwise), in a material way, other than those engaged in by Parent as of the date of the Merger Agreement; or (iii) authorize, or commit or agree to take, any of the foregoing actions. No Solicitation. The Second Amendment provides that the "270 days from the date of the Merger Agreement" periods described under "No Solicitation" in Section 13 of the Offer to Purchase has been changed to December 31, 1998. 6 8 Tax-Free Reorganization. The Merger Agreement provides that none of the Company, Parent, Purchaser, or any of their subsidiaries or affiliates has taken any action or is aware of any fact that would jeopardize the qualification of the First Offer, the Second Offer, the First Merger and the Second Merger, if integrated and treated as a single transaction, as a reorganization under Section 368 of the Code. Termination. The Second Amendment provides that the "270 days after the date of the Original Merger Agreement" period under clause (b)(ii) under "Termination" in Section 13 of the Offer to Purchase has been changed to December 31, 1998. Listing. The Second Amendment provides that the Parent Merger Securities issuable to shareholders of the Company pursuant to the Merger Agreement and under the Company Stock Plans will be approved for listing on the NYSE prior to the Closing Date, subject to official notice of issuance. Compensation and Benefits; Stock Options. The Merger Agreement provides that, with respect to all outstanding Company Employee Stock Options granted under Company Stock Plans, which, immediately prior to the First Effective Time, are vested ("Vested Company Employee Stock Options"), the Board of Directors will take such action as may be required to adjust the terms of such Company Employee Stock Options as is necessary to provide that, at the First Effective Time, each Vested Company Employee Stock Option outstanding immediately prior to the First Effective Time shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Vested Company Employee Stock Option, the same number of shares of Parent Common Stock as the holder of such Vested Company Employee Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such Vested Company Employee Stock Option in full immediately prior to the First Effective Time and had the holder received additional shares of Parent Common Stock, in lieu of shares of Merger Preferred Stock, of equivalent value to such Merger Preferred Stock (based, for this purpose, upon an assumed $16 value for the Merger Preferred Stock deliverable in respect of each Common Share and a per share price of Parent Common Stock based upon the average per share closing price of Parent Common Stock reported on the NYSE Composite Tape for the five consecutive trading days preceding the First Effective Time), at a price per share of (x) Parent Common Stock equal to (A) the aggregate exercise price for the Common Shares otherwise purchasable pursuant to such Vested Company Employee Stock Option divided by (B) the aggregate number of shares of Parent Common Stock deemed purchasable pursuant to such Vested Company Employee Stock Option (each, as so adjusted, an "Adjusted Option"); provided, however, that in the case of any option to which Section 421 of the Code applies by reason of its qualification under any of Sections 422 through 424 of the Code ("qualified stock options"), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424 of the Code. With respect to all outstanding Company Employee Stock Options granted under Company Stock Plans which, immediately prior to the First Effective Time, are unvested ("Other Company Options"), the Board of Directors will take such action as may be required to adjust the terms of such Other Company Options to provide that in no event shall Other Company Options become exercisable prior to (x) the date that the STB approval is obtained, in which case such Other Company Options will then be adjusted as provided in clause (a) above, or (y) the date following STB denial on which a disposition of Shares held in the Voting Trust in accordance with paragraph 8 of the Amended Voting Trust Agreement, in which case, such Other Company Options will then be exercisable for Common Shares and such options will be equitably adjusted as necessary to preserve the value of such options in connection with any such disposition. In lieu of any further option grants by the Company on or after the First Effective Time, the Company may grant incentive awards to its employees provided that (i) such awards are granted under arrangements which are in accordance with applicable law and (ii) such awards are of no greater aggregate value on the grant date than the aggregate value of the options which could otherwise have been awarded by the Company pursuant to Section 4.1(a)(ii)(x)(A) of the Merger Agreement. The Company has agreed not to issue Common Shares or rights to acquire Common Shares for any reason following the Merger without the prior consent of Parent. 7 9 Interim Operations of the Company and Parent. The paragraph described under (a) under "Interim Operations of the Company and Parent" in Section 13 of the Offer to Purchase has been modified to provide that, following the First Effective Time, subject to applicable legal restrictions and financial covenants contained in instruments relating to outstanding indebtedness, the surviving corporation of each of the First Merger and the Second Merger shall not decrease the aggregate amount of dividends and other distributions paid in respect of the Company's outstanding capital stock from the level paid immediately prior to the First Effective Time or the Second Effective Time, as applicable. STB Matters. For purposes of the Merger Agreement, STB approval means the issuance by the STB of a decision, which decision shall become effective and which decision shall not have been stayed or enjoined, that (A) constitutes a final agency action approving, exempting or otherwise authorizing the acquisition of control over the Company's railroad operations by Parent and (B) does not (1) change or disapprove of the consideration to be given in the Merger or other material provisions of Article II of the Merger Agreement or (2) unless Parent chooses to assume control despite such conditions, impose on Parent, the Company or any of their respective subsidiaries any other terms or conditions (including, without limitation, labor protective provisions but excluding conditions heretofore imposed by the ICC in New York Dock Railway -- Control -- Brooklyn Eastern District, 360 I.C.C. 60 (1979)), other than those proposed by the applicants, that materially and adversely affect the long-term benefits expected to be received by Parent from the transactions contemplated by this Agreement; the Control Date means the date on which Parent lawfully is permitted to assume control over the Company's railroad operations pursuant to STB approval or exemption; STB denial, for all purposes under the Merger Agreement, means (i) STB approval shall not have been obtained by December 31, 1998 or (ii) the STB shall have, by an order which shall have become final and no longer subject to reconsideration by the STB or review by the courts, either (x) refused to approve the acquisition of control of the Company by Parent or (y) approved such acquisition of control subject to conditions that cause such approval not to constitute STB approval; and following the Second Effective Time, all rights and obligations of the Company under this Agreement shall be exercisable or performed by the Surviving Corporation (as successor to the Company), and any consent or approval of the Company hereunder following the First Effective Time or the Second Effective Time shall mean the consent or approval of the Surviving Corporation's board of directors (or its duly authorized representatives). Continuing Obligations. The Merger Agreement provides that the provisions of Articles IV and V of the Merger Agreement shall be binding through the Control Date, provided that the provisions of Article IV (other than Sections 4.1(a)(xii), Section 4.1(d), the last sentence of Section 4.1(c), Section 4.1(e) and Section 4.3) and Section 5.15 shall not be binding as against Parent and its subsidiaries following the First Effective Time; provided, however, that all obligations of Parent or its affiliates under the Merger Agreement shall terminate upon the earlier of (i) December 31, 1998 and (ii) the date of STB denial. 5. Certain Federal Income Tax Consequences. The discussion set forth in Section 5 of the Offer to Purchase and the amendments thereto are hereby amended and replaced in their entirety by the following: The following discussion is a summary of the material federal income tax consequences of the Offers and the Merger to holders of Shares who hold the Shares as capital assets. The discussion set forth below is for general information only and may not apply to certain categories of holders of Shares subject to special treatment under the Internal Revenue Code of 1986, as amended (the "Code"), such as foreign holders and holders who acquired such Shares pursuant to the exercise of employee stock options or otherwise as compensation. This summary is based upon laws, regulations, rulings and decisions currently in effect, all of which are subject to change, retroactively or prospectively, and to possibly differing interpretations. Tax Consequences of the Offers and the Merger Generally. It is unclear whether the Offers and the Merger should be treated as a single integrated transaction for federal income tax purposes. If the Offers and the Merger are so treated, the Offers and the Merger should, in the aggregate, qualify as a reorganization pursuant to Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code. In such event, generally (i) no gain or loss will be recognized by Parent, Purchaser or the Company pursuant to the Offers and the Merger, (ii) gain or loss will be recognized by a shareholder of the Company who receives solely cash in exchange for Shares pursuant to either Offer and/or the Merger, (iii) no gain or loss will be recognized by a shareholder of the 8 10 Company who does not exchange any Shares pursuant to the Offers and who receives solely Parent Merger Securities that qualify as stock for federal income tax purposes ("Parent Merger Stock") in exchange for Shares pursuant to the Merger, and (iv) a shareholder of the Company who receives a combination of cash and Parent Merger Securities in exchange for such shareholder's Shares, pursuant to either Offer and/or the Merger, will not recognize loss but will recognize gain, if any, to the extent of the lesser of (a) the sum of the cash and fair market value of Parent Merger Securities that do not qualify as stock for federal income tax purposes ("Parent Merger Non Stock Securities") received and (b) the excess of the sum of the fair market value of the Parent Merger Securities and the amount of cash received over a shareholder's tax basis in the Shares exchanged. If so integrated, the federal income tax consequences to a shareholder may be, depending on such shareholder's particular circumstances, less favorable than the federal income tax consequences to such shareholder if the Offers and the Merger are not treated as integrated. If the Offers and the Merger were not treated as a single integrated transaction for federal income tax purposes, the receipt of cash pursuant to either Offer would be on sale or exchange, while the Second Merger should still qualify as a reorganization pursuant to Section 368(a)(1)(A) of the Code, assuming Parent is not required to dispose of the Company or its assets by the STB and, as discussed more fully below, the First Merger may be treated as a sale or exchange or as a reorganization pursuant to Section 368 of the Code. TAX CONSEQUENCES IF THE OFFERS AND THE MERGER ARE TREATED AS A SINGLE INTEGRATED TRANSACTION AND AS A REORGANIZATION Exchange of Shares Solely for Cash. In general, a shareholder of the Company who, pursuant to either Offer and/or the Merger, exchanges all of the Shares actually and constructively owned by such shareholder solely for cash will recognize capital gain or loss equal to the difference between the amount of cash received and such shareholder's adjusted tax basis in the Shares surrendered. The gain or loss will be long-term capital gain or loss if, as of the date of the exchange, the holder thereof has held such Shares for more than one year. Gain or loss will be calculated separately for each identifiable block of Shares surrendered pursuant to either Offer and/or the Merger. Exchange of Shares Solely for Parent Merger Stock. A shareholder of the Company who, pursuant to the Merger, exchanges all of the Shares actually owned by such shareholder solely for Parent Merger Stock (and who did not exchange any Shares for cash in either Offer) will not recognize any gain or loss upon such exchange. Such shareholder may recognize gain or loss, however, to the extent cash is received in lieu of a fractional share of Parent Merger Stock, as discussed below. The aggregate adjusted tax basis of the Parent Merger Stock received in such exchange will be equal to the aggregate adjusted tax basis of the Shares surrendered therefor allocated between the Parent Common Stock and Merger Preferred Stock in proportion to their relative fair market values, and the holding period of Parent Common Stock and Merger Preferred Stock will include the period during which the Shares surrendered in exchange therefor were held. Exchange of Shares for Parent Merger Stock and Cash and/or Parent Merger Non Stock Securities. A shareholder of the Company who, pursuant to either Offer and/or the Merger, exchanges all of the Shares actually owned by such shareholder for a combination of shares of Parent Merger Stock and cash and/or Parent Merger Non-Stock Securities will not recognize any loss on such exchange. Such shareholder will realize gain equal to the excess, if any, of the cash and the aggregate fair market value of Parent Merger Securities received pursuant to either Offer and/or the Merger over such shareholder's adjusted tax basis in the Shares exchanged therefor, but will recognize any realized gain only to the extent of the cash and the fair market value of Parent Merger Non Stock Securities received. Any gain recognized by a shareholder of the Company who receives a combination of Parent Merger Stock and cash and/or Parent Merger Non Stock Securities pursuant to either Offer and/or the Merger will be treated as capital gain unless the receipt of the cash has the effect of the distribution of a dividend for federal income tax purposes, in which case such recognized gain will be treated as ordinary dividend income to the extent of such shareholder's ratable share of the Company's accumulated earnings and profits. For purposes of determining whether the cash and/or Parent Merger Non Stock Securities received pursuant to either Offer and/or the Merger will be treated as a dividend for federal income tax purposes, a 9 11 shareholder of the Company will be treated as if such shareholder first exchanged all of such shareholder's Shares solely for Parent Merger Stock and then Parent immediately redeemed a portion of such Parent Merger Stock in exchange for the cash and/or Parent Merger Non Stock Securities (together, "Nonqualifying Consideration") such shareholder actually received. In general, the determination as to whether the Nonqualifying Consideration received will be treated as received pursuant to a sale or exchange (generating capital gain) or a dividend distribution (generating ordinary income) depends upon whether and to what extent there is a reduction in the shareholder's deemed percentage stock ownership of Parent. A shareholder of the Company who exchanges such shareholder's Shares for a combination of Parent Common Stock and Nonqualifying Consideration will recognize capital gain rather than dividend income if the deemed redemption by Parent (described in the preceding paragraph) is "not essentially equivalent to a dividend" or is "substantially disproportionate" with respect to such shareholder. Whether the deemed exchange and subsequent redemption transaction are "not essentially equivalent to a dividend" with respect to a Company shareholder will depend upon such shareholder's particular circumstances. In order to reach such conclusion, it must be determined that the transaction results in a "meaningful reduction" in such Company shareholder's deemed percentage stock ownership of Parent. In determining whether a reduction in a Company shareholder's deemed percentage stock ownership has occurred, (i) the percentage of the outstanding stock of Parent that such Company shareholder is deemed actually and constructively to have owned immediately before the deemed redemption by Parent should be compared to (ii) the percentage of the outstanding stock of Parent actually and constructively owned by such shareholder immediately after the deemed redemption by Parent. The relevant constructive ownership rules treat shareholders as owning stock held indirectly (through partnerships, estates, trusts and corporations) and, under certain circumstances, treat persons as owning stock owned by their partners, beneficiaries and shareholders. Shareholders will also be treated as owning stock that could be acquired by virtue of the exercise of any option to acquire stock, and individual shareholders are treated as owning any stock owned by their family. A Company shareholder will comply with the "substantially disproportionate" rule if the percentage described in (ii) above is less than 80% of the percentage described in (i) above. Even if a Company shareholder does not qualify under such test, the Internal Revenue Service has ruled that a minority shareholder in a publicly held corporation whose relative stock interest is minimal and who exercises no control with respect to corporate affairs is considered to have a "meaningful reduction" if such shareholder has a reduction in such shareholder's percentage stock ownership. In most circumstances, therefore, gain recognized by a shareholder of the Company who exchanges such shareholder's Shares for a combination of Parent Merger Stock and Nonqualifying Consideration will be capital gain, which will constitute long-term capital gain if the holding period for such Shares was greater than one year as of the date of the exchange. The aggregate tax basis of Parent Merger Stock received by a Company shareholder who, pursuant to either Offer and/or the Merger, exchanges such shareholder's Shares for a combination of Parent Merger Stock and Nonqualifying Consideration will be the same as the aggregate tax basis of the Shares surrendered therefor, decreased by the Value of the Nonqualifying Consideration received and increased by the amount of gain recognized, if any (including any portion of such gain that is treated as a dividend), allocated between the different Classes of Parent Stock as described above. The holding period of Parent Merger Stock will include the holding period of the Shares surrendered therefor. Cash Received in Lieu of a Fractional Interest of Parent Common Stock. Cash received in lieu of a fractional share of Parent Common Stock will generally (subject to the discussion above) be treated as received in redemption of such fractional interest and gain or loss will be recognized, measured by the difference between the amount of cash received and the portion of the basis of the Shares allocable to such fractional interest. Such gain or loss will constitute capital gain or loss, and will generally be long-term capital gain or loss if the holding period for such Shares was greater than one year as of the date of the exchange. 10 12 TAX CONSEQUENCES IF THE OFFERS AND THE MERGER ARE TREATED AS SEPARATE TRANSACTIONS If the Offers and the Merger were treated as separate transactions for federal income tax purposes, the receipt of cash pursuant to either Offer and the receipt of Parent Merger Securities pursuant to the First Merger would be a taxable transaction, while the Second Merger should still qualify as a reorganization pursuant to Section 368(a)(1)(A) of the Code. Accordingly, a shareholder of the Company who receives Nonqualifying Consideration and/or Parent Merger Stock pursuant to either Offer or the First Merger would recognize gain or loss equal to the difference between the amount of Nonqualifying Consideration and Parent Merger Stock received and the shareholder's adjusted tax basis in the Shares surrendered, calculated separately with respect to each block of Shares exchanged. The gain or loss would be long-term capital gain or loss if, as of the date of the exchange, such shareholder had held such stock for more than one year. A shareholder of the Company who receives cash and/or Parent Merger Securities pursuant to the Second Merger would be subject to the federal income tax rules concerning reorganizations discussed above under "Tax Consequences if the Offers and the Merger are Treated as a Single Integrated Transaction and as a Reorganization" (but without regard to the cash received, and Shares exchanged, in either Offer). Additionally, it is possible that the First Merger would be integrated with the Second Merger and treated as a single transaction, in which case a shareholder of the Company who receives Parent Common Stock and/or cash and/or Parent Merger Securities pursuant to the First Merger and the Second Merger would be subject to the federal income tax rules concerning reorganizations (as described in the preceding sentence) without regard to the cash received in either Offer. TAX CONSEQUENCES IF THE MERGER IS NOT TREATED AS A REORGANIZATION In the event that Parent is required to dispose of the Company or its assets by the STB, certain "continuity of business enterprise" requirements that are a condition to reorganization treatment may not be met. In this event, a shareholder would recognize gain or loss equal to the fair market value of the Parent Merger Securities and cash received over the shareholder's tax basis in the Shares exchanged, calculated separately as to each block of Shares exchanged. The character of such gain or loss would be determined as described above. WITHHOLDING Unless a shareholder complies with certain reporting and/or certification procedures or is an exempt recipient under applicable provisions of the Code and Treasury Regulations promulgated thereunder, such shareholder may be subject to withholding tax of 31% with respect to any cash payments received pursuant to either Offer and/or the Merger. Shareholders should consult their brokers or the Depositary to ensure compliance with such procedures. Foreign shareholders should consult with their own tax advisors regarding withholding taxes in general. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT TO CERTAIN SHAREHOLDERS OF THE PURCHASE PRICE FOR SHARES PURCHASED PURSUANT TO THE SECOND OFFER, EACH SUCH SHAREHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH SHAREHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL. IF BACKUP WITHHOLDING APPLIES WITH RESPECT TO A SHAREHOLDER, THE DEPOSITARY IS REQUIRED TO WITHHOLD 31% OF ANY PAYMENTS MADE TO SUCH SHAREHOLDER. SEE INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL. THE ABOVE DISCUSSION MAY NOT APPLY TO CERTAIN CATEGORIES OF SHAREHOLDERS SUBJECT TO SPECIAL TREATMENT UNDER THE CODE, SUCH AS FOREIGN SHAREHOLDERS AND SHAREHOLDERS WHOSE SHARES WERE ACQUIRED PURSUANT TO THE EXERCISE OF AN EMPLOYEE STOCK OPTION OR OTHERWISE AS COMPENSATION. SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE OFFERS AND THE MERGER, INCLUDING ANY 11 13 FEDERAL, STATE, LOCAL OR OTHER TAX CONSEQUENCES (INCLUDING ANY TAX RETURN FILING OR OTHER TAX REPORTING REQUIREMENTS) OF THE OFFERS AND THE MERGER. 6. Certain Legal Matters; Regulatory Approvals. The discussion set forth in Section 13 of the Offer to Purchase and the amendments thereto are hereby amended and supplemented as follows: STB Matters; Acquisition of Control. STB approval or exemption of the Merger is not a condition to the Merger. However, the acquisition of control over the Company by Parent and Purchaser requires STB approval or exemption. The STB approval process described in "STB Matters; Acquisition of Control," "Conditions" and "Judicial Review -- Stay" in Section 16 of the Offer to Purchase is applicable to the application to be filed by Parent and the Company seeking STB approval of Parent's acquisition of control over the Company, except that references to approval and consummation of the Merger should be understood to refer to approval of Parent's acquisition of control of the Company. In order to ensure that Parent and its affiliates do not acquire and directly or indirectly exercise control over the Company and its affiliates prior to obtaining necessary STB approvals or exemption, Purchaser intends, simultaneously with the acquisition of Shares pursuant to the Second Offer, the Company Stock Option Agreement, the First Merger or otherwise, to deposit the Shares so acquired in the Voting Trust, and upon consummation of the Second Merger, to deposit in the Voting Trust all outstanding shares of common stock and any other voting stock of the surviving corporation in such merger owned by Parent and its affiliates. STB Matters; The Voting Trust. The parties to the Voting Trust Agreement, with the Company's consent, propose to amend the Voting Trust Agreement (the "Amended Voting Trust Agreement") to reflect the proposed consummation of the Merger prior to STB approval or exemption of the acquisition of control of the Company by Parent. Amendment of the Voting Trust Agreement requires approval of the STB or an opinion of counsel that STB approval of such amendment is not required and that the amendment is consistent with the STB's regulations regarding voting trusts. Parent intends to obtain such an opinion of counsel and to seek informal assurance from the STB that use of the Voting Trust pursuant to the Amended Voting Trust Agreement would effectively insulate Parent and its affiliates from a violation of the governing statute and STB policy that would result from an unauthorized acquisition by Parent of a sufficient interest in the Company to result in control of the Company. While Parent believes that the Amended Voting Trust Agreement is consistent with the STB's regulations regarding voting trusts, there can be no assurance that the STB will provide the requested assurance. It is possible that the U.S. Department of Justice or railroad competitors of Parent and the Company, or others, may argue that Parent and Purchaser should not be permitted to use the voting trust mechanism to acquire Shares and effectuate the Merger prior to final STB approval of the acquisition of control of the Company. Parent and Purchaser believe it is unlikely that such arguments would prevail, but there can be no assurance in this regard. Under the terms of the Amended Voting Trust Agreement, the Voting Trustee is required to vote all Shares deposited in the Voting Trust (the "Trust Stock") in favor of the Merger, in favor of any proposal necessary or desirable to effectuate Parent's combination with the Company pursuant to the Merger Agreement, and, if there shall be with respect to the Board of Directors an "Election Contest" as defined in the proxy rules of the SEC, in which one slate of nominees shall support the effectuation of the Merger and another slate oppose it, to vote in favor of the slate supporting the effectuation of the Merger. In addition, for so long as the Merger Agreement is in effect, subject to certain exceptions, the Voting Trustee shall vote against any other proposed merger, business combination or similar transaction involving the Company, but not Parent or one of its affiliates. On certain other matters, the Voting Trustee is to vote the Trust Stock in the same proportion as all other Shares are voted with respect to such matters, except that, subject to certain exceptions, from and after the effectiveness of the First Merger, the Voting Trustee is to vote the Trust Stock in accordance with the instructions of a majority of the persons who are then directors of the Company and who are currently the directors of the Company and/or nominees of the current directors of the Company. If there are no directors of the Company qualified to give such instructions or such instructions are not given, the Voting Trustee is to vote the Trust Stock in its sole discretion, having due regard for the Parent solely as an investor in the stock of the Company. 12 14 The Voting Trustee has agreed to take all actions reasonably requested by Parent with respect to any proposed sale or disposition of the Trust Stock by Parent or Purchaser, including, without limitation, in connection with the exercise of registration rights under the Merger Agreement. Upon (i) approval or exemption by the STB of the acquisition of control of the Company by Parent or its affiliates or (ii) if the law is amended, delivery to the Voting Trustee of an opinion of independent legal counsel that no STB or other governmental approval is required, and, in the event that shareholder approval of the First Merger shall not have previously been obtained, with the prior written consent of the Company, the Voting Trustee shall either transfer the Trust Stock to Parent or Purchaser or, if shareholder approval of the First Merger or Second Merger has not previously been obtained, vote the Trust Stock in favor of the First Merger or the Second Merger. In the event that (i) STB approval is not obtained by December 31, 1998 or (ii) there shall have been an STB denial, Parent has agreed to use its best efforts to sell the Trust Stock in one or more broadly distributed public offerings subject to all necessary regulatory approvals or otherwise dispose of it within two years or such extension of that period as the STB shall approve. The Amended Voting Trust Agreement provides that the Company's prior written approval is required for dispositions of Trust Stock only in the event any disposition of the Trust Stock is made prior to the earlier of December 31, 1998 or the date of an STB denial. Disposition of the Trust Stock pursuant to the Amended Voting Trust Agreement shall be subject to any jurisdiction of the STB to oversee Parent's divestiture of the Trust Stock. The Voting Trustee shall continue to perform its duties under the Voting Trust Agreement and, should Parent be unsuccessful in its effort to sell the Trust Stock during the two-year period, the Voting Trustee shall as soon as practicable sell the Trust Stock for cash to eligible purchasers in such manner and for such prices as the Voting Trustee in its discretion shall deem reasonable after consultation with Parent. (An "eligible purchaser" thereunder shall be a person or entity that is not affiliated with Parent and which has all necessary regulatory authority, if any, to purchase the Trust Stock.) The Amended Voting Trust Agreement further provides that Parent will cooperate with the Voting Trustee in effecting such disposition and that the Voting Trustee will act in accordance with any direction made by Parent as to any specific terms or method of disposition, to the extent not inconsistent with the terms of the Voting Trust Agreement and the requirements of the terms of any STB or court order. The proceeds of any such sale will be distributed to Parent. Pursuant to the Merger Agreement, prior to the Control Date, the Amended Voting Trust Agreement may not be modified or amended without the prior written approval of the Company, unless such modification or amendment is not inconsistent with the Merger Agreement and is not adverse to the Company or its shareholders, except that the Amended Voting Trust Agreement may be amended or modified in any manner without the prior written approval of the Company at any time after the earlier of December 31, 1998 or the date of an STB denial. The Amended Voting Trust Agreement provides that the Company is an express third-party beneficiary of the Amended Voting Trust Agreement, but that this status shall exist only through the earlier of December 31, 1998, if STB approval has not by then been obtained, or the date of an STB denial. Norfolk Southern and Shareholder Litigation. On December 13, 1996, NSC amended its complaint to assert the claims (a) that any postponement by the Company of the Pennsylvania Special Meeting scheduled for December 23, 1996 (assuming such postponement was caused by the Company having failed to receive the requisite number of votes for approval) would be a breach of the fiduciary duties of the directors of the Company, and (b) that Parent has, in effect, acquired more than 20% of the shares of the Company (within the meaning of the Pennsylvania Control Transaction Law) by virtue of the allegation that shares owned by Parent should be aggregated with shares owned by directors of the Company, and employee benefit plan shares as to which directors of the Company allegedly have the power to direct the vote, and, accordingly, that Parent is obligated to pay "fair value" in cash, to be determined pursuant to the Pennsylvania Control Transaction Law, to all shareholders of the Company other than Parent. 13 15 On December 9, 1996, plaintiffs in the purported shareholder derivative and class actions amended their complaint against Parent, the Company and directors of the Company. The amendment adds the following additional claims to the shareholder plaintiffs' complaint: (i) that the existing share ownership of Parent and the directors of the Company as individuals should be aggregated for purposes of determinations under the Pennsylvania Control Transaction Law because Parent and the individual directors of the Company are allegedly "acting in concert" for purposes of the statute, and accordingly the requirement in the Pennsylvania Control Transaction Law requiring persons who have 20% or more of the voting power of a Pennsylvania corporation to offer to purchase for cash the remaining shares (for "fair value") has allegedly been triggered; and (ii) that it is a breach of the fiduciary duties of the directors of the Company to have agreed to postpone the Pennsylvania Special Meeting in the event that insufficient votes are received to assure approval of the Articles Amendment providing for the Company to opt out of the Pennsylvania Control Transaction Law. As relief, the shareholder plaintiffs seek a declaration that Parent and the directors of the Company are obligated to make the "fair value" payments required by the Pennsylvania Control Transaction Law and that the Pennsylvania Special Meeting may not be postponed and that no second vote upon the Articles Amendment may be held. On December 17, 1996, the Court preliminarily enjoined the Company from failing to convene, and/or from postponing, and/or from adjourning the Pennsylvania Special Meeting scheduled for December 23, 1996 if the basis for the Company's decision was the Company's failure to receive sufficient proxies to assure approval of the Articles Amendment. 14 16 Facsimile copies of the Letter of Transmittal, properly completed and duly signed, will be accepted. The Letter of Transmittal, certificates for the Shares and any other required documents should be sent by each shareholder of the Company or his broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below: The Depositary for the Second Offer is: CITIBANK, N.A. By Hand: By Mail: By Overnight Carrier: Citibank, N.A. Citibank, N.A. Citibank, N.A. Corporate Trust Window c/o Citicorp Data c/o Citicorp Data 111 Wall Street, 5th Floor Distribution, Inc. Distribution, Inc. New York, New York 10043 P.O. Box 7072 404 Sette Drive Paramus, New Jersey 07653 Paramus, New Jersey 07652
Facsimile for Eligible Institutions: (201) 262-3240 To confirm fax only: (800) 422-2077 Any questions or requests for assistance or additional copies of this Supplement, the Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Information Agent or the Dealer Manager at their respective telephone numbers and locations listed below. You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Second Offer. The Information Agent for the Second Offer is: [mackenzie logo] 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or CALL TOLL FREE (800) 322-2885 The Dealer Manager for the Second Offer is: WASSERSTEIN PERELLA & CO., INC. 31 West 52nd Street New York, New York 10019 Call Collect: (212) 969-2700 EX-99.A16 3 REVISED LETTER OF TRANSMITTAL 1 LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK (including, in each case, the associated Common Stock Purchase Rights) OF CONRAIL INC. PURSUANT TO THE OFFER TO PURCHASE DATED DECEMBER 6, 1996 AND THE SUPPLEMENT THERETO DATED DECEMBER 19, 1996 BY GREEN ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CSX CORPORATION THE SECOND OFFER HAS BEEN EXTENDED. THE SECOND OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON WEDNESDAY, JANUARY 22, 1997, UNLESS THE SECOND OFFER IS FURTHER EXTENDED. The Depositary for the Second Offer is: CITIBANK, N.A. By Hand: By Mail: By Overnight Carrier: Citibank, N.A. Citibank, N.A. Citibank, N.A. Corporate Trust Window c/o Citicorp Data Distribution, Inc. c/o Citicorp Data Distribution, Inc. 111 Wall Street, 5th Floor P.O. Box 7072 404 Sette Drive New York, New York 10043 Paramus, New Jersey 07653 Paramus, New Jersey 07652
Facsimile for Eligible Institutions: (201) 262-3240 To confirm fax only: (800) 422-2077 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OR TELEX TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 PROVIDED BELOW. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by shareholders of Conrail Inc. either if certificates ("Share Certificates") evidencing shares of common stock, par value $1.00 per share (the "Common Shares"), or shares of Series A ESOP Convertible Junior Preferred Stock, without par value (the "ESOP Preferred Shares" and, together with the Common Shares, the "Shares"), are to be forwarded herewith or if delivery of Shares is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company or the Philadelphia Depository Trust Company (each, a "Book-Entry Transfer Facility" and collectively, the "Book-Entry Transfer Facilities") pursuant to the book-entry transfer procedure described in "Procedures for Tendering Shares" of the Offer to Purchase (as defined below). Delivery of documents to a Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures does not constitute delivery to the Depositary. This revised (blue) Letter of Transmittal or the previously circulated (blue) Letter of Transmittal is to be completed by shareholders either if certificates evidencing Shares (as defined below) are to be forwarded herewith or if delivery of Shares is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company or the Philadelphia Depository Trust Company (each a "Book-Entry Transfer Facility" and collectively, the "Book-Entry Transfer Facilities") pursuant to the book-entry transfer procedure described in Section 3 of the Offer to Purchase (as defined below). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITORY. 2 Holders of Shares will be required to tender one Right (as defined below) for each Share tendered to effect a valid tender of such Share. Until the Distribution Date (as defined in the Offer to Purchase) occurs, the Rights are represented by and transferred with the Shares. Accordingly, if the Distribution Date does not occur prior to the Expiration Date (as defined in the Supplement), a tender of Shares will constitute a tender of the associated Rights. If a Distribution Date has occurred, certificates representing a number of Rights equal to the number of Shares being tendered must be delivered to the Depositary in order for such Shares to be validly tendered. If a Distribution Date has occurred, a tender of Shares without Rights constitutes an agreement by the tendering shareholder to deliver certificates representing a number of Rights equal to the number of Shares tendered pursuant to the Second Offer (as defined below) to the Depositary within three New York Stock Exchange, Inc. trading days after the date such certificates are distributed. Purchaser (as defined below) reserves the right to require that it receive such certificates prior to accepting Shares for payment. Payment for Shares tendered and purchased pursuant to the Second Offer will be made only after timely receipt by the Depositary of, among other things, such certificates, if such certificates have been distributed to holders of Shares. Purchaser will not pay any additional consideration for the Rights tendered pursuant to the Second Offer. Shareholders whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other documents required hereby to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis and who wish to tender their Shares must do so pursuant to the guaranteed delivery procedure described in "Procedures for Tendering Shares" of the Offer to Purchase. See Instruction 2. [ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING: Name of Tendering Institution: Check Box of Applicable Book-Entry Transfer Facility: [ ] The Depository Trust Company [ ] Philadelphia Depository Trust Company Account Number ____________ Transaction Code Number __________________ [ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): _________________________________________ Window Ticket No. (if any): ______________________________________________ Date of Execution of Notice of Guaranteed Delivery: ______________________ Name of Institution which Guaranteed Delivery: ___________________________ If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer Facility: [ ] The Depository Trust Company [ ] Philadelphia Depository Trust Company Account Number ____________ Transaction Code Number ___________________ 3
DESCRIPTION OF SHARES TENDERED NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK)
SHARE CERTIFICATE(S) TENDERED (ATTACH ADDITIONAL LIST IF NECESSARY) TOTAL NUMBER OF SHARES NUMBER OF SHARES CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) TENDERED** TOTAL SHARES * Need not be completed by shareholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares being delivered to the Depositary are being tendered. See Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY. 4 Ladies and Gentlemen: The undersigned hereby tenders to Green Acquisition Corp., a Pennsylvania corporation ("Purchaser") and a wholly owned subsidiary of CSX Corporation, a Virginia corporation, the above-described shares of common stock, par value $1.00 per share (the "Common Shares"), or shares of Series A ESOP Convertible Junior Preferred Stock, without par value (the "ESOP Preferred Shares" and, 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 (the "Rights") issued pursuant to the Rights Agreement, dated as of July 19, 1989, between the Company and First Chicago Trust Company of New York, as Rights Agent (as amended, the "Rights Agreement"), pursuant to Purchaser's offer to purchase up to an aggregate of 18,344,845 Shares, including, in each case, the associated Rights, at a price of $110 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 6, 1996 (the "Offer to Purchase"), as amended and supplemented by the Supplement thereto, dated December 19, 1996 (the "Supplement"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, as amended from time to time, together constitute the "Second Offer"). All references herein to Common Shares, ESOP Preferred Shares or Shares includes the associated Rights. The undersigned understands that Purchaser reserves the right to transfer or assign, in whole at any time, or in part from time to time, to one or more of its affiliates, the right to purchase all or any portion of the Shares tendered pursuant to the Second Offer, but any such transfer or assignment will not relieve Purchaser of its obligations under the Second Offer and will in no way prejudice the rights of tendering shareholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Second Offer. Subject to, and effective upon, acceptance for payment of the Shares tendered herewith, in accordance with the terms of the Second Offer (including, if the Second Offer is further extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, Purchaser all right, title and interest in and to all the Shares that are being tendered hereby (and any and all non-cash dividends, distributions, rights, other Shares or other securities issued or issuable in respect of such Shares or declared, paid or distributed in respect of such Shares on or after December 6, 1996 (collectively, "Distributions")), and irrevocably appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares and all Distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver certificates for such Shares (individually, a "Share Certificate") and all Distributions, or transfer ownership of such Shares and all Distributions on the account books maintained by a Book-Entry Transfer Facility, together, in either case, with all accompanying evidence of transfer and authenticity to, or upon the order of Purchaser, (ii) present such Shares and all Distributions for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and all Distributions, all in accordance with the terms of the Second Offer. If, on or after December 6, 1996, the Company should declare or pay any cash or stock dividend, other than regular quarterly cash dividends, or make any distribution with respect to the Shares that is payable or distributable to stockholders of record on a date prior to the transfer to the name of Purchaser or its nominee or transferee on the Company's stock transfer records of the Shares accepted for payment pursuant to the Second Offer, then, subject to the provisions of Section 14 of the Offer to Purchase, (i) the purchase price per Share payable by Purchaser pursuant to the Second Offer will be reduced by the amount of any such cash dividend or cash distribution and (ii) any such non-cash dividend, distribution or right to be received by the tendering shareholder will be received and held by such tendering shareholder for the account of Purchaser and will be required to be promptly remitted and transferred by each such tendering shareholder to the Depositary for the account of Purchaser, accompanied by appropriate documentation of transfer. Pending such remittance, Purchaser will be entitled to all rights and privileges as owner of any such non-cash dividend, distribution or right and may withhold the entire purchase price or deduct from the purchase price the amount of value thereof, as determined by Purchaser in its sole discretion. By executing this Letter of Transmittal, the undersigned irrevocably appoints John W. Snow, Mark G. Aron and Alan A. Rudnick as proxies of the undersigned, each with full power of substitution, to the full extent of the undersigned's rights with respect to the Shares tendered by the undersigned and accepted for payment by Purchaser (and any and all Distributions). All such proxies shall be considered coupled with an interest in the tendered Shares. This appointment will be effective if, when, and only to the extent that, Purchaser accepts such Shares for payment pursuant to the Second Offer. Upon such acceptance for payment, all prior proxies given by the undersigned with respect to such Shares, Distributions and other securities will, without further action, be revoked, and no subsequent proxies may be given. The individuals named above as proxies will, with respect to the Shares, Distributions and other securities for which the appointment is effective, be empowered (subject to the terms of the Voting Trust Agreement (as defined in the Offer to Purchase) or the Amended Voting Trust Agreement (as defined in the Supplement), if applicable, so long as it shall be in effect with respect to the Shares) to exercise all voting and other rights of the undersigned as they in their sole discretion may deem proper at any annual, special, adjourned or postponed meeting of the Company's shareholders, by written consent or otherwise, and Purchaser reserves the right to require that, in order for Shares, Distributions or other securities to be deemed validly tendered, immediately upon Purchaser's acceptance for payment of such Shares Purchaser must be able to exercise full voting rights with respect to such Shares. 5 The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and all Distributions, that the undersigned own(s) the Shares tendered hereby within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that such tender of Shares complies with Rule 14e-4 under the Exchange Act, and that when such Shares are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restrictions, charges and encumbrances, and that none of such Shares and Distributions will be subject to any adverse claim. The undersigned, upon request, shall execute and deliver all additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of Purchaser all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of the Shares tendered hereby or deduct from such purchase price, the amount or value of such Distribution as determined by Purchaser in its sole discretion. No authority herein conferred or agreed to be conferred shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned. All obligations of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase or the Supplement, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in "Procedures for Tendering Shares" of the Offer to Purchase and in the Instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Second Offer. Purchaser's acceptance for payment of Shares tendered pursuant to the Second Offer will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Second Offer. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase, Purchaser may not be required to accept for payment any of the Shares tendered hereby. Unless otherwise indicated herein in the box entitled "Special Payment Instructions," please issue the check for the purchase price of all Shares purchased, and return all Share Certificates evidencing Shares not purchased or not tendered, in the name(s) of the registered holder(s) appearing above under "Description of Shares Tendered." Similarly, unless otherwise indicated in the box entitled "Special Delivery Instructions," please mail the check for the purchase price of all Shares purchased and all Share Certificates evidencing Shares not tendered or not purchased (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Shares Tendered." In the event that the boxes entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not purchased or not tendered in the name(s) of, and mail such check and Share Certificates to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled "Special Payment Instructions," please credit any Shares tendered hereby and delivered by book-entry transfer, but which are not purchased, by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name of the registered holder(s) thereof if Purchaser does not accept for payment any of the Shares tendered hereby. 6 SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS LETTER OF TRANSMITTAL) To be completed ONLY if certificates for Shares not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be issued in the name of someone other than the undersigned, or if Shares delivered by book-entry transfer which are not purchased are to be returned by credit to an account maintained at a Book-Entry Transfer Facility other than that designated above. Issue check and/or certificates to: Name (PLEASE PRINT) Address - ------------------------------------------------------ (ZIP CODE) - ------------------------------------------------------ (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) (ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW) [ ] Credit unpurchased Shares delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below: Check appropriate box: [ ] The Depository Trust Company [ ] Philadelphia Depository Trust Company - ------------------------------------------------------ (ACCOUNT NUMBER) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS LETTER OF TRANSMITTAL) To be completed ONLY if certificates for Shares not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown above. Mail check and/or certificates to: Name (PLEASE PRINT) Address - ------------------------------------------------------ (ZIP CODE) 7 SIGN HERE (COMPLETE SUBSTITUTE FORM W-9 ON REVERSE) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- (SIGNATURE(S) OF HOLDER(S)) Date , 199 -------------------------- -- (Must be signed by registered holder(s) exactly as name(s) appear(s) on common or preferred stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5 of this Letter of Transmittal.) Name(s) ------------------------------------------------------------------------- (PLEASE PRINT) Capacity (Full Title) ----------------------------------------------------------- Address ------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number -------------------------------------------------- Tax Identification or Social Security No. --------------------------------------- (COMPLETE SUBSTITUTE FORM W-9 ON REVERSE) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5 OF THIS LETTER OF TRANSMITTAL) Authorized Signature ------------------------------------------------------------ Name ---------------------------------------------------------------------------- (PLEASE PRINT) Title --------------------------------------------------------------------------- Name of Firm -------------------------------------------------------------------- Address ------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number -------------------------------------------------- Date , 199 -------------------------- -- 8 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm which is a bank, broker, dealer, credit union, savings association, or other entity that is a member in good standing of the Securities Transfer Agent's Medallion Program (each, an "Eligible Institution"). No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this document, shall include any participant in a Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) of Shares tendered herewith, unless such holder(s) has completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the reverse hereof, or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5. If a Share Certificate is registered in the name of a person other than the signer of this Letter of Transmittal, or if payment is to be made, or a Share Certificate not accepted for payment or not tendered is to be returned, to a person other than the registered holder(s), then the Share Certificate must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the Share Certificate, with the signature(s) on such Share Certificate or stock powers guaranteed as described above. See Instruction 5. 2. Delivery of Letter of Transmittal and Share Certificates. This Letter of Transmittal is to be used either if Share Certificates are to be forwarded herewith or if Shares are to be delivered by book-entry transfer pursuant to the procedure set forth in "Procedures for Tendering Shares" of the Offer to Purchase. Share Certificates evidencing all tendered Shares, or confirmation of a book-entry transfer of such Shares, if such procedure is available, into the Depositary's account at one of the Book-Entry Transfer Facilities pursuant to the procedures set forth in "Procedures for Tendering Shares" of the Offer to Purchase, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message, as defined below) and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the reverse hereof prior to the Expiration Date (as defined in "Terms of the Second Offer; Proration; Expiration Date" of the Offer to Purchase). If Share Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Stockholders whose Share Certificates are not immediately available, who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis may tender their Shares pursuant to the guaranteed delivery procedure described in "Procedures for Tendering Shares" of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by Purchaser herewith, must be received by the Depositary prior to the Expiration Date; and (iii) in the case of a guarantee of Shares, the Share Certificates, in proper form for transfer, or a confirmation of a book-entry transfer of such Shares, if such procedure is available, into the Depositary's account at one of the Book-Entry Transfer Facilities, together with a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message), and any other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange, Inc. trading days after the date of execution of the Notice of Guaranteed Delivery, all as described in "Procedures for Tendering Shares" of the Offer to Purchase. The term "Agent's Message" means a message, transmitted by a Book-Entry Transfer Facility to, and received by the Depositary and forming a part of a Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has received an express acknowledgment from the participant in such Book-Entry Transfer Facility tendering the Shares, that such participant has received and agrees to be bound by the terms of this Letter of Transmittal and that the Purchaser may enforce such agreement against the participant. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. By execution of this Letter of Transmittal (or a facsimile hereof), all tendering stockholders waive any right to receive any notice of the acceptance of their Shares for payment. 3. Inadequate Space. If the space provided herein under "Description of Shares Tendered" is inadequate, the Share Certificate numbers, the number of Shares evidenced by such Share Certificates and the number of Shares tendered should be listed on a separate schedule and attached hereto. 4. Partial Tenders. (Not applicable to stockholders who tender by book-entry transfer.) If fewer than all the Shares evidenced by any Share Certificate delivered to the Depositary herewith are to be tendered hereby, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered." In such cases, new Share Certificate(s) evidencing the remainder of the Shares that were evidenced by the Share Certificates delivered to the Depositary herewith will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box entitled "Special Delivery Instructions," as soon as practicable after the expiration or termination of the Second Offer. All Shares evidenced by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 9 5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificates evidencing such Shares without alteration, enlargement or any other change whatsoever. If any Share tendered hereby is owned of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in the names of different holders, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such certificates. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of Share Certificates or separate stock powers are required, unless payment is to be made to, or Share Certificates evidencing Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), in which case, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any Share Certificate(s) or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to Purchaser of such person's authority so to act must be submitted. 6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6, Purchaser will pay all stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Second Offer. If, however, payment of the purchase price of any Shares purchased is to be made to, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such other person will be deducted from the purchase price of such Shares purchased, unless evidence satisfactory to Purchaser of the payment of such taxes, or exemption therefrom, is submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATE(S) EVIDENCING THE SHARES TENDERED HEREBY. 7. Special Payment and Delivery Instructions. If a check for the purchase price of any Shares tendered hereby is to be issued, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued, in the name of a person other than the person(s) signing this Letter of Transmittal or if such check or any such Share Certificate is to be sent to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal, but at an address other than that shown in the box entitled "Description of Shares Tendered," the appropriate boxes on this Letter of Transmittal must be completed. Shares tendered hereby by book-entry transfer may request that Shares not purchased be credited to such account maintained at a Book-Entry Transfer Facility as such stockholder may designate in the box entitled "Special Payment Instructions" on the reverse hereof. If no such instructions are given, all such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer Facility designated on the reverse hereof as the account from which such Shares were delivered. 8. Requests for Assistance or Additional Copies. Requests for assistance may be directed to the Information Agent or Dealer Manager at their respective addresses or telephone numbers set forth below. Additional copies of the Offer to Purchase, Supplement, this Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be obtained from the Information Agent or the Dealer Manager or from brokers, dealers, commercial banks or trust companies. 9. Substitute Form W-9. Each tendering shareholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN") on the Substitute Form W-9 which is provided under "Important Tax Information" below, and to certify, under penalties of perjury, that such number is correct and that such shareholder is not subject to backup withholding of federal income tax. If a tendering shareholder has been notified by the Internal Revenue Service that such shareholder is subject to backup withholding, such shareholder must cross out item (2) of the Certification box of the Substitute Form W-9, unless such shareholder has since been notified by the Internal Revenue Service that such shareholder is no longer subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the tendering shareholder to 31% federal income tax withholding on the payment of the purchase price of all Shares purchased from such shareholder. If the tendering shareholder has not been issued a TIN and has applied for one or intends to apply for one in the near future, such shareholder should write "Applied For" in the space provided for the TIN in Part I of the Substitute Form W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% on all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. 10. Lost, Destroyed or Stolen Certificates. If any certificate(s) representing Shares has been lost, destroyed or stolen, the shareholder should promptly notify the Depositary. The shareholder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. 10 IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY COMPLETED AND DULY EXECUTED, WITH ANY REQUIRED SIGNATURE GUARANTEES, OR AN AGENT'S MESSAGE (TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). IMPORTANT TAX INFORMATION Under the federal income tax law, a shareholder whose tendered Shares are accepted for payment is required by law to provide the Depositary (as payer) with such shareholder's correct TIN on Substitute Form W-9 below. If such shareholder is an individual, the TIN is such shareholder's social security number. If the Depositary is not provided with the correct TIN, the shareholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such shareholder with respect to Shares and Rights purchased pursuant to the Second Offer may be subject to backup withholding of 31%. Certain shareholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such individual must submit a statement, signed under penalties of perjury, attesting to such individual's exempt status. Forms of such statements can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If backup withholding applies with respect to a shareholder, the Depositary is required to withhold 31% of any payments made to such shareholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments that are made to a shareholder with respect to Shares purchased pursuant to the Second Offer, the shareholder is required to notify the Depositary of such shareholder's correct TIN by completing the form below certifying (a) that the TIN provided on Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that (i) such shareholder has not been notified by the Internal Revenue Service that such shareholder is subject to backup withholding as a result of a failure to report all interest or dividends or (ii) the Internal Revenue Service has notified such shareholder that such shareholder is no longer subject to backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The shareholder is required to give the Depositary the social security number or employer identification number of the record holder of the Shares tendered hereby. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the tendering shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, the shareholder should write "Applied For" in the space provided for the TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% of all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. 11 - -------------------------------------------------------------------------------- PAYER'S NAME: CITIBANK, N.A., AS DEPOSITARY - -------------------------------------------------------------------------------- SUBSTITUTE PART I -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND / / DEPARTMENT OF DATING BELOW. THE TREASURY Employer Identification Number INTERNAL (If awaiting TIN write "Applied For") REVENUE SERVICE ------------------------------------------------------------------------------------------------- PAYER'S REQUEST PART II -- For Payees Exempt From Backup Withholding, see the enclosed Guidelines and complete FOR TAXPAYER as instructed therein. CERTIFICATION -- Under penalties of perjury, I certify that: IDENTIFICATION (1) The number shown on this form is my correct Taxpayer Identification Number (or a Taxpayer NUMBER (TIN) Identification Number has not been issued to me and either (a) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service ("IRS") or Social Security Administration office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number within sixty (60) days, 31% of all reportable payments made to me thereafter will be withheld until I provide a number), and (2) I am not subject to backup withholding either because I have not been notified by the IRS that I am subject to backup withholding as a result of failure to report all interest or dividends, or the IRS has notified me that I am no longer subject to backup withholding. ------------------------------------------------------------------------------------------------- CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines.) -------------------------------------------- DATE ________________, 199__ SIGNATURE
- -------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE SECOND OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. Questions and requests for assistance or additional copies of the Offer to Purchase, Supplement, Letter of Transmittal and other tender offer materials may be directed to the Information Agent or the Dealer Manager as set forth below: The Information Agent for the Second Offer is: [mackenzie logo] 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (call collect) or CALL TOLL FREE (800) 322-2885 The Dealer Manager for the Second Offer is: WASSERSTEIN PERELLA & CO., INC. 31 West 52nd Street New York, New York 10019 Call Collect: (212) 969-2700 EX-99.A17 4 REVISED NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK (including, in each case, the associated Common Stock Purchase Rights) OF CONRAIL INC. TO GREEN ACQUISITION CORP. a wholly owned subsidiary of CSX CORPORATION (Not to be Used for Signature Guarantees) This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Second Offer (as defined below) if (i) certificates ("Share Certificates") evidencing shares of common stock, par value $1.00 per share (the "Common Shares"), or shares of Series A ESOP Convertible Junior Preferred Stock, without par value (the "ESOP Preferred Shares" and, together with the Common Shares, the "Shares"), of Conrail Inc., a Pennsylvania corporation (the "Company"), including the associated common stock purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated July 19, 1989, between the Company and First Chicago Trust Company of New York, as Rights Agent, are not immediately available, (ii) time will not permit all required documents to reach Citibank, N.A., as Depositary (the "Depositary"), prior to the Expiration Date (as defined in "Terms of the Second Offer; Proration; Expiration Date" of the Offer to Purchase (as defined below)) or (iii) the procedure for book-entry transfer cannot be completed on a timely basis. All references herein to the Common Shares, ESOP Preferred Shares or Shares include the associated Rights. This Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary. See "Procedures for Tendering Shares" of the Offer to Purchase. The Depositary for the Second Offer is: CITIBANK, N.A.
By Hand: By Mail: By Overnight Carrier: Citibank, N.A. Citibank, N.A. Citibank, N.A. Corporate Trust Window c/o Citicorp Data Distribution, c/o Citicorp Data Distribution, 111 Wall Street, 5th Floor Inc. Inc. New York, New York 10043 P.O. Box 7072 404 Sette Drive Paramus, New Jersey 07653 Paramus, New Jersey 07652 Facsimile for Eligible Institutions: (201) 262-3240 To confirm fax only: (800) 422-2077
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. 2 Ladies and Gentlemen: The undersigned hereby tenders to Green Acquisition Corp., a Pennsylvania corporation and a wholly owned subsidiary of CSX Corporation, a Virginia corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 6, 1996 (the "Offer to Purchase"), as amended and supplemented by the Supplement thereto, dated December 19, 1996 (the "Supplement"), and the related Letters of Transmittal (which, as amended from time to time, together constitute the "Second Offer"), receipt of each of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedures described in "Procedures for Tendering Shares" of the Offer to Purchase. Number of Shares: Name(s) of Record Holder(s): - ------------------------------------------------ ------------------------------------------------ Certificate Nos. (if available): - ------------------------------------------------ ------------------------------------------------ PLEASE PRINT Check ONE box if Shares will be tendered by book-entry transfer: Address(es): [ ] The Depository Trust Company ----------------------------------- [ ] Philadelphia Depository Trust Company ------------------------------------------------ ZIP CODE Account Number: Area Code and Tel. No.: - ------------------------------------------------ ------------------------------------------------ Dated: , 199 ----------------------------------- --
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEES) The undersigned, a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States, hereby (a) represents that the tender of Shares effected hereby complies with Rule 14e-4 of the Securities Exchange Act of 1934, as amended, and (b) guarantees delivery to the Depositary, at one of its addresses set forth above, of certificates evidencing the Shares tendered hereby in proper form for transfer, or confirmation of book-entry transfer of such Shares into the Depositary's accounts at The Depository Trust Company or the Philadelphia Depository Trust Company, in each case with delivery of a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees, or an Agent's Message (as defined in "Acceptance for Payment and Payment for Shares" of the Offer to Purchase), and any other documents required by the Letter of Transmittal, (a) in the case of Shares, within three New York Stock Exchange, Inc. trading days after the date of execution of this Notice of Guaranteed Delivery, or (b) in the case of Rights, a period ending the latter of (i) three New York Stock Exchange, Inc. trading days after the date of execution of this Notice of Guaranteed Delivery or (ii) three business days after the date Right Certificates are distributed to stockholders. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in financial loss to such Eligible Institution. - ------------------------------------------------ ------------------------------------------------ NAME OF FIRM AUTHORIZED SIGNATURE - ------------------------------------------------ ------------------------------------------------ ADDRESS TITLE Name: - ------------------------------------------------ ------------------------------------------- ZIP CODE PLEASE PRINT Area Code and Tel. No.: Date: , 199 ------------------------- ----------------------------------- --
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.A18 5 TEXT OF PRESS RELEASE 1 FOR IMMEDIATE RELEASE CONTACTS: CSX Corporation Conrail Inc. Thomas E. Hoppin Craig R. MacQueen (804) 782-1450 (215) 209-4594 Kekst and Company Abernathy MacGregor Group Richard Wolff Joele Frank / Dan Katcher (212) 593-2655 (212) 371-5999 CSX AND CONRAIL INCREASE MERGER CONSIDERATION BY $16 PER SHARE VOTING TRUST TO PERMIT EARLY 1997 PAYMENT OF MERGER CONSIDERATION TO CONRAIL SHAREHOLDERS CASH PORTION TO REMAIN AT $110 PER CONRAIL SHARE TENDER OFFER EXTENDED UNTIL JANUARY 22, 1997 SPECIAL CONRAIL SHAREHOLDER MEETING NOW SCHEDULED FOR JANUARY 17, 1997 PHILADELPHIA, PA AND RICHMOND, VA (DECEMBER 19, 1996) -- Conrail Inc. [NYSE:CRR] and CSX Corporation [NYSE:CSX] announced today that they have amended their merger agreement to increase the merger consideration by $16 per Conrail share, or approximately $870 million in the aggregate. Conrail shareholders will also benefit from the significant value of receiving the merger consideration earlier than previously contemplated. Conrail shareholders will now receive in the merger, for 60% of their shares, an additional $16 per share in CSX convertible preferred stock, the terms of which will be set prior to the merger so that such securities would trade at par on a fully distributed basis. This is in addition to the tax-free 1.85619 shares of CSX common stock to be received in the merger. The amended agreement also provides that the merger will occur at the time of the CSX and Conrail shareholders meeting for approval of matters related to the merger. These meetings are expected to be held in the first quarter of 1997. Upon shareholder approval and consummation of the merger, the Conrail shareholders would receive the merger consideration of CSX common stock and CSX Convertible Preferred Stock. All the Conrail Stock acquired by CSX, both in the tender and in the merger, would be placed in a voting trust pending the outcome of the Surface Transportation Board's (STB) proceeding. CSX has already purchased 19.9% of Conrail's common and ESOP preferred stock, through a tender offer for $110 in cash per Conrail share. CSX is currently offering to purchase up to an additional 18,344,845 shares of Conrail through a second cash tender offer at $110 per share. David M. LeVan, chairman, president and chief executive officer of Conrail, said "Because of the actions taken by the Conrail board, our shareholders are receiving extraordinary value in our strategic merger-of-equals with CSX. The original terms of the merger provided our shareholders with a price at the high end of what has been paid in railroad mergers. That price has since been increased by more than $1.5 billion before taking into account the significant value associated with receiving the merger consideration in early 1997. In every respect, this merger holds great potential and clearly offers the best possible result for Conrail. This amendment to the merger agreement reaffirms the decision of the Conrail board that it is not willing to agree to the sale of Conrail to Norfolk Southern." John W. Snow, chairman, president and chief executive officer of CSX said "The actions taken by the CSX and Conrail boards allow us to move on to the next stage of the process, the filing of our merger application with the STB. We are confident that we will present a strong case and look forward to building the world's leading transportation and logistics company." The amended merger agreement provides that the period of time during which each of Conrail and CSX has agreed that it will not discuss or agree to any takeover proposal with a third party has been extended to the termination date under the merger agreement, December 31, 1998. CSX and Conrail also announced that the CSX tender offer has been extended to 5:00 p.m., Eastern Standard Time, on January 22, 1997 and the special shareholders meeting seeking approval of the opt-out of the Pennsylvania statute has been postponed to 2:00 p.m., Eastern Standard Time, on January 17, 1997. CSX has been advised by the depositary, on a preliminary basis, that fewer than 100,000 shares have been tendered into the CSX offer as of the close of business on December 18, 1996. Conrail, with corporate headquarters in Philadelphia, PA, operates an 11,000-mile rail freight network in 12 northeastern and midwestern states, the District of Columbia, and the Province of Quebec. Conrail's home page on the Internet can be reached at http://www.CONRAIL.com. CSX, headquarters in Richmond, VA, is an international transportation company offering a variety of rail, container-shipping, intermodal, trucking, barge and contract logistics management services. CSX's home page on the Internet can be reached at http://www.CSX.com. # # # EX-99.C6 6 SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER 1 EXECUTION COPY -------------- SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER by and among CONRAIL INC., a Pennsylvania corporation, GREEN ACQUISITION CORP., a Pennsylvania corporation, and CSX CORPORATION, a Virginia corporation, Dated as of December 18, 1996. 2 SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of December 18, 1996 (this "Second Amendment"), by and among CONRAIL INC., a Pennsylvania corporation ("Green"), GREEN ACQUISITION CORP., a Pennsylvania corporation and a wholly owned subsidiary of White ("Tender Sub"), and CSX CORPORATION, a Virginia corporation ("White"). WITNESSETH: WHEREAS, Green, Tender Sub and White have entered into an Agreement and Plan of Merger, dated as of October 14, 1996 (the "October 14 Merger Agreement"); WHEREAS, Green, Tender Sub and White have entered into a First Amendment to the Merger Agreement, dated as of November 5, 1996 (the "First Amendment", and the Merger Agreement, as amended thereby, the "Merger Agreement"), pursuant to which Tender Sub has made certain amendments to the October 14 Merger Agreement; WHEREAS, pursuant to the Merger Agreement, Tender Sub has consummated a cash tender offer for an aggregate of 17,860,124 shares of Green Common Stock and Green ESOP Preferred Stock and has commenced a cash tender offer for up to an aggregate of 18,344,845 shares of Green Common Stock and Green ESOP Preferred Stock; WHEREAS, pursuant to this Second Amendment, subject to the terms and conditions set forth herein, following such offers, a wholly owned Pennsylvania subsidiary of Tender Sub ("Merger Sub") will merge with and into Green in a transaction (the "First Merger") in which each shareholder of Green (excluding White, Tender Sub and its affiliates) shall retain a percentage of their respective shareholdings of Green such that the amount not retained, when aggregated with all shares of Green Common Stock then owned by White, Tender Sub or its affiliates, collectively represents 80% of the shares of Green's outstanding capital stock, and all shareholdings of such shareholder not so retained shall be converted into the right to receive the White securities as provided herein; WHEREAS, pursuant to this Second Amendment, subject to the terms and conditions set forth herein, following the First Merger, Green will merge with and into Tender Sub pursuant to Section 1924(b)(1)(ii) of the Pennsylvania Law in a transaction (the "Second Merger" and, together with the First Merger, the "Merger") in which all outstanding shares of capital stock of Green (other than those to be canceled, as provided herein) shall be converted into the right to receive the White securities as provided herein; WHEREAS, in consideration of Green's willingness to enter into this Second Amendment, White and Tender Sub are willing to make the amendments to the Merger Agreement set forth herein; WHEREAS, in consideration of White's and Tender Sub's - 1 - 3 willingness to enter into this Second Amendment, Green is willing to make the amendments to the Merger Agreement set forth herein; WHEREAS, the Board of Directors of Green has approved, and deems it advisable and in the best interests of Green to enter into, this Second Amendment; WHEREAS, the respective Boards of Directors of Tender Sub and White have approved, and deem it advisable and in the best interests of their respective shareholders to enter into, this Second Amendment; and WHEREAS, except as amended by this Second Amendment, the Merger Agreement shall remain in full force and effect; WHEREAS, capitalized terms used herein and not defined herein shall have the respective meanings given in the Merger Agreement; NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Second Amendment, the parties, intending to be legally bound, agree as follows: ARTICLE I 1. SECTION 1. The following is hereby added to the end of Section 1.2 of the Merger Agreement: (h) Green hereby approves of and consents to the Second Offer and represents that its Board of Directors, at a meeting duly called and held, has unanimously by the vote of all directors present (i) determined that this Agreement, as amended by the First Amendment and the Second Amendment, and the transactions contemplated hereby (including the Second Offer and the Merger) are in the best interests of Green, (ii) approved this Agreement, as amended by the First Amendment and the Second Amendment, and the transactions contemplated hereby (including the Second Offer and the Merger), such determination and approval constituting approval thereof by the Board of Directors for all purposes of the Pennsylvania Law, and (iii) resolved to recommend that shareholders of Green who desire to receive cash for a portion of their shares of Green Common Stock or Green ESOP Preferred Stock accept the Second Offer and tender their shares of Green Common Stock or Green ESOP Preferred Stock thereunder to Tender Sub and that all shareholders of Green approve and adopt this Agreement, as amended by the First Amendment and the Second Amendment, and the transactions contemplated hereby; provided, however, that prior to the purchase by Tender Sub of shares of Green Common Stock and Green ESOP Preferred Stock pursuant to the Second Offer, Green may modify, withdraw or change such recommendation, but only to the - 2 - 4 extent that Green complies with Section 4.2 hereof. Green hereby consents to the inclusion in the tender offer documents relating to the Second Offer of the recommendations of Green's Board of Directors described in this Section. (i) Green has received the written opinions of each of the Green Advisors, each dated as of the date of the Second Amendment, to the effect that, as of such date, the consideration to be received by Green shareholders (other than Tender Sub and its affiliates) pursuant to the Amended Offer, the Second Offer and Merger, taken together, is fair from a financial point of view to such holders (the "Third Green Fairness Opinions"). Green has delivered to Tender Sub a copy of the Third Green Fairness Opinions. SECTION 2. Section 1.3, Section 1.4, Section 1.5, Section 1.6, Section 1.7, Section 1.8 and Section 1.9 of the Merger Agreement are hereby deleted and replaced in their entirety with the following: SECTION 1.3 The Merger. (a) Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Pennsylvania Business Corporation Law of 1988, as amended (the "Pennsylvania Law"), Merger Sub shall be merged with and into Green in the First Merger. Green shall be the surviving corporation of the First Merger and shall succeed to and assume all rights and obligations of Merger Sub in accordance with the Pennsylvania Law. (b) Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Pennsylvania Law (including, without limitation, Section 1924(b)(1)(ii) thereof), on the first business day immediately following the First Effective Time, Green shall be merged with and into Tender Sub in the Second Merger. Tender Sub shall be the surviving corporation (the "Surviving Corporation") of the Second Merger and shall succeed to and assume all rights and obligations of Green in accordance with the Pennsylvania Law. SECTION 1.4 Closing. (a) The closing of the First Merger (the "Closing") shall take place at 5:00 p.m. on a date to be specified by the parties (the "Closing Date"), which (subject to satisfaction or waiver of the conditions set forth in Article VI) shall be no later than the second business day after satisfaction or waiver of the conditions set forth in Section 6.1, unless another time or date is agreed to by the parties hereto. The Closing shall be held at such location in the City of New York as is agreed to by the parties hereto. (b) The closing of the Second Merger shall take place at 9:00 a.m. on the first business day - 3 - 5 immediately following the Closing Date, subject to the satisfaction of the condition therefor set forth in Article VI, unless another time or date is agreed to by the parties hereto. The closing of the Second Merger shall be held at such location in the City of New York as is agreed to by the parties hereto. SECTION 1.5 Effective Time. (a) Subject to the provisions of this Agreement, as soon as practicable on or after the Closing Date, the parties shall file articles of merger or other appropriate documents (such documents, collectively, the "First Articles of Merger") executed in accordance with the relevant provisions of the Pennsylvania Law and shall make all other filings or recordings as may be required under the Pennsylvania Law. The First Merger shall become effective at such time as the First Articles of Merger are duly filed with the Pennsylvania Department of State, or at such subsequent date or time as White and Green shall agree and shall be specified in the First Articles of Merger (the time the First Merger becomes effective being hereinafter referred to as the "First Effective Time"). (b) Subject to the provisions of this Agreement, as soon as practicable on or after the closing of the Second Merger, the parties shall file articles of merger or other appropriate documents (such documents, collectively, the "Second Articles of Merger" and, together with the First Articles of Merger, the "Articles of Merger") executed in accordance with the relevant provisions of the Pennsylvania Law and shall make all other filings or recordings as may be required under the Pennsylvania Law. The Second Merger shall become effective at such time as the Second Articles of Merger are duly filed with the Pennsylvania Department of State, or at such subsequent date or time as White and Green shall agree and shall be specified in the Second Articles of Merger (the time the Second Merger becomes effective being hereinafter referred to as the "Second Effective Time"). SECTION 1.6 Effects of the Merger. The Merger shall have the effects set forth in Chapter 19 of the Pennsylvania Law. SECTION 1.7 Articles of Incorporation and By-laws; Directors and Officers. (a) The articles of incorporation and by-laws of Green, as in effect immediately prior to the First Effective Time and the Second Effective Time, shall be the articles of incorporation and by-laws, respectively, of the surviving corporation of each of the First Merger and the Second Merger, respectively, until thereafter changed or amended as provided therein or by applicable law. (b) Subject to Section 1.8, the directors and - 4 - 6 the officers of Green at the First Effective Time and the Second Effective Time shall, from and after such time, be the initial directors and officers, respectively, of the surviving corporation of each of the First Merger and the Second Merger, respectively, until their successors shall have been duly elected or appointed or qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation and by-laws of the applicable surviving corporation. SECTION 1.8 Boards, Committees and Officers. At the Control Date, the Board of Directors, committees of the Board of Directors, composition of such committees (including chairmen thereof) and officers of White and/or the Surviving Corporation (as indicated on Exhibit A hereto) shall be as set forth on Exhibit A hereto until the earlier of the resignation or removal of any individual listed on or designated in accordance with Exhibit A or until their respective successors are duly elected and qualified, as the case may be, it being agreed that, if any director shall be unable to serve as a director (including as a member or chairman of any committee), the party which designated such individual as indicated in Exhibit A shall designate another individual to serve in such individual's place. If any officer listed on or appointed in accordance with Exhibit A ceases to be a full-time employee of Green or White, as applicable, prior to the Control Date, the parties shall agree upon another person to serve in such person's stead. The committees of the Board of Directors of White shall have such authority as may, subject to applicable law, be delegated to them by the Board of Directors of White. SECTION 1.9 Voting Trust. The parties agree that, (i) simultaneously with the purchase by White, Tender Sub or their affiliates of shares of Green Common Stock and Green ESOP Preferred Stock pursuant to the Amended Offer or the Second Offer, the Green Stock Option Agreement or otherwise, such shares of Green Common Stock (including pursuant to the automatic conversion of Green ESOP Preferred Stock) shall be deposited in a voting trust (the "Voting Trust") in accordance with the terms and conditions of a voting trust agreement substantially in the form attached hereto as Exhibit E and (ii) upon consummation of each of the First Merger and the Second Merger, all outstanding shares of common stock of the surviving corporation of such merger owned directly or indirectly by White, Tender Sub or their affiliates shall be deposited in the Voting Trust. Prior to the Control Date, the Voting Trust may not be modified or amended without the prior written approval of Green unless such modification or amendment is not inconsistent with this Agreement or the Option Agreements and is not adverse to Green or its shareholders (it being - 5 - 7 understood that any change to the terms of the Voting Trust relating to voting rights or rights and restrictions relating to the transfer of such shares of Green Common Stock shall in any event require the prior approval of Green); provided that, notwithstanding the foregoing, the Voting Trust may be modified or amended in any manner without the prior written approval of Green at any time after the earlier of (i) December 31, 1998 and (ii) the date of STB denial. No power of White or Tender Sub provided for in the Voting Trust Agreement may be exercised in a manner which violates this Agreement. SECTION 3. Section 2.1 of the Merger Agreement is hereby deleted and replaced in its entirety with the following: SECTION 2.1 Conversion of Shares. (a) All shares of Common Stock, par value $1.00 per share, of Merger Sub issued and outstanding immediately prior to the First Effective Time shall, at the First Effective Time, by virtue of the First Merger and without any action on the part of any person, become such number of duly authorized, validly issued, fully paid and nonassessable shares of common stock of Green as, when aggregated with all shares of Green Common Stock then owned by White, Tender Sub or its affiliates, represents 80% of the then outstanding capital stock of Green. Each share of Common Stock, par value $1.00 per share, of Tender Sub issued and outstanding immediately prior to the Second Effective Time shall, at the Second Effective Time, by virtue of the Second Merger and without any action on the part of any person, become one duly authorized, validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation. (b) (i) In the First Merger, such percentage of the respective shareholdings of each holder (other than White, Tender Sub or their affiliates) of shares of Green Common Stock and Green ESOP Preferred Stock which, when added to the shares of Green Common Stock then held by White, Tender Sub and its affiliates, represents 80% of the Shares issued and outstanding immediately prior to the Effective Time shall, at the First Effective Time, by virtue of the First Merger and without any action on the part of the holder thereof, be converted into the right to receive (x) such number of duly authorized, validly issued, fully paid and nonassessable shares of White Common Stock and such number of Shares of Convertible Preferred Stock of White that is duly authorized and validly issued and fully paid and nonassessable, having the terms determined as provided in clause (ii) below (each, a "White Merger Security" and, collectively, "White Merger Securities") or (y) cash, without interest thereon, as specified in 8 Section 2.3 hereof (the "Per Share Merger Consideration"). Each share (fractional or otherwise) of Green Common Stock issued and outstanding immediately prior to the Second Effective Time (other than shares of Green Common Stock to be canceled pursuant to Section 2.1(c) hereof) shall, at the Second Effective Time, by virtue of the Second Merger and without any action on the part of the holder thereof, be converted into the right to receive the Per Share Merger Consideration. (ii) The White Merger Securities shall be convertible preferred stock of White having the terms set forth in Exhibit H hereto. The terms of the White Merger Securities that are not fixed pursuant to Exhibit H (such terms, determined as provided in clause (1) or (2) below, the "Other Terms"), shall not be inconsistent with the terms so fixed and shall be determined in accordance with the following procedure such that the number of shares of White Merger Securities to be distributed with respect to each share of Green Common Stock (including pursuant to the automatic conversion of the Green ESOP Preferred Stock) pursuant to clause (i) above shall have a value on a fully distributed basis, as of the date of the opinions referred to below, as close as possible equal to $16: (1) the Other Terms shall be determined by mutual agreement of two investment banking firms of national reputation, one selected by Green and one selected by White, such that in their respective opinions the White Merger Securities have a value on a fully distributed basis, as of the date of their opinions, equal to $16 per share of Green Common Stock; or (2) if such two investment banking firms are unable to agree on the Other Terms or if either such firm is unable to provide the opinion referred to in clause (1) above within four business days following the fifteenth business day prior to the date of the Green Merger Shareholders Meeting, each such investment banking firm within two business days following such four- business-day period shall propose its version of the Other Terms and shall mutually select a third investment banking firm of national reputation, and within four business days thereafter the third firm shall select the proposal of one or the other of the two firms that, in the opinion of the third firm, is the closer of the two proposals to giving the White Merger Securities a value on a fully distributed basis, as of the date of its opinion, equal to $16 per share of Green Common Stock. - 7 - 9 The parties agree that the Other Terms shall be determined in accordance with the foregoing no later than five business days prior to the date of the Green Merger Shareholders Meeting. (c) In the First Merger, all shares of Green Common Stock owned by White, Tender Sub or its affiliates shall be retained. In the Second Merger, all shares of Green Common Stock that are owned by Green as treasury stock and any shares of Green Common Stock owned by White, Green or any of their respective subsidiaries shall, at the Second Effective Time, be canceled and retired and shall cease to exist, and, except as otherwise provided herein, no shares of White Common Stock, White Merger Securities or other consideration shall be delivered or owing in exchange therefor. (d) On and after the First Effective Time and the Second Effective Time, as applicable, holders of certificates ("Certificates") which immediately prior to such time represented issued and outstanding shares of Green Common Stock, including those issuable upon conversion of the shares of Green ESOP Preferred Stock (which conversion shall occur automatically pursuant to the terms of the Green Articles so that, no later than immediately prior to the First Effective Time, no shares of Green ESOP Preferred Stock shall be issued and outstanding), shall cease to have any rights as shareholders of Green, except the right to receive the Per Share Merger Consideration with respect to each share held. SECTION 4. Section 2.3(h) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: (h) No certificates or scrip representing shares of White Common Stock issuable to a Green shareholder which would be fractional shares (when the consideration due such shareholder hereunder in the First Merger and the Second Merger are aggregated) shall be issued upon the surrender for exchange of Certificates, no dividend or distribution with respect to fractional shares shall be payable on or with respect to any such fractional share and any such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a shareholder of White. In lieu of any such fractional share of White Common Stock, White shall pay to each former shareholder of Green who otherwise would be entitled to receive a fractional share of White Common Stock (when the consideration due such shareholder hereunder in the First Merger and the Second Merger are aggregated) an amount in cash determined by multiplying (i) the Average White Share Price on the date on which the First Effective Time occurs by (ii) the fractional interest in a share of White Common Stock to which such holder would otherwise be entitled. For purposes hereof, the "Average White Share Price" shall mean the average closing sales price, rounded to four - 8 - 10 decimal points, of the White Common Stock as reported on the New York Stock Exchange Composite Tape, for the twenty (20) consecutive trading days ending on the trading day which is five (5) trading days prior to the First Effective Time. SECTION 5. (a) The words "Effective Time" in Section 4.1, Section 5.4, Section 5.7, Section 5.16(b) and Section 7.4 of the Merger Agreement and "consummation of the Merger" in Section 5.16(a) of the Merger Agreement are hereby deleted and replaced with the words "Control Date". (b) The words "Effective Time" in the Merger Agreement (except as part of "First Effective Time" or "Second Effective Time") shall be deemed to refer to the words "First Effective Time", other than in the first and second sentences of Section 2.4 and in Section 2.6, which shall be deemed to refer to the words "Second Effective Time". (c) The words "Effective Date" in the first sentence of Section 2.3 of the Merger Agreement are hereby deleted and replaced in their entirety with the words "in the Merger". (d) The words "Section 2.1(a)" in the second sentence of Section 2.4 of the Merger Agreement are hereby deleted and replaced in their entirety with the words "Section 2.1(b)". (e) Notwithstanding the provisions of Section 5.1(e) of the Merger Agreement, White shall not be obligated to effect the change of name to be contained in the Amended White Articles, as contemplated by Exhibit A, until the Control Date. SECTION 6. (a) The words "or White Merger Securities" are hereby added immediately following the words "White Common Stock" in Section 2.10 of the Merger Agreement. (b) The words "and White Merger Securities" are hereby added immediately following the words "White Common Stock" in Section 2.2, Section 2.3 (other than Section 2.3(b) and Section 2.3(h)), Section 2.4, Section 2.6, Section 2.8, Section 2.9, Section 2.11, Section 3.1(f), Section 3.2(d), Section 5.1(a) and Section 5.6(c) of the Merger Agreement. SECTION 7. The first sentence of Section 2.3(b) is hereby deleted and replaced in its entirety with the following: "If Stock Elections are received for a number of shares of Green Common Stock that is 60% or less of the outstanding shares of Green Common Stock, each share of Green Common Stock covered by a Stock Election shall be converted in the Merger into (i) 1.85619 shares of White Common Stock (the "Common Stock Conversion Ratio") and (ii) such number or amount of White Merger Securities determined pursuant to Section 2.1(b)(ii) (the "White Merger Security Conversion Ratio" and, together with the Common Stock Conversion Ratio, the "Conversion Ratios")". SECTION 8. Section 5.6(a)(i) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: - 9 - 11 (i)(A) With respect to all outstanding Green Employee Stock Options granted under Green Stock Plans, which, immediately prior to the First Effective Time, are vested (the "Vested Green Employee Stock Options"), adjust the terms of such Vested Green Employee Stock Options as necessary to provide that, at the First Effective Time, each Vested Green Employee Stock Option outstanding immediately prior to the First Effective Time shall be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such Vested Green Employee Stock Option, the same number of shares of White Common Stock as the holder of such Vested Green Employee Stock Option would have been entitled to receive pursuant to the Merger had such holder exercised such Vested Green Employee Stock Option in full immediately prior to the First Effective Time and had the holder received additional White Common Stock, in lieu of White Merger Securities, of equivalent value to such White Merger Securities (based, for this purpose, upon an assumed $16 value for the White Merger Securities deliverable in respect of each share of Green Common Stock and a per share price of White Common Stock based upon the average per share closing price of White Common Stock reported on the New York Stock Exchange Composite Tape for the five consecutive trading days preceding the First Effective Time), at a price per share of (x) White Common Stock equal to (A) the aggregate exercise price for the shares of Green Common Stock otherwise purchasable pursuant to such Vested Green Employee Stock Option divided by (B) the aggregate number of shares of White Common Stock deemed purchasable pursuant to such Vested Green Employee Stock Option (each, as so adjusted, an "Adjusted Option"); provided, however, that in the case of any option to which Section 421 of the Code applies by reason of its qualification under any of Sections 422 through 424 of the Code ("qualified stock options"), the option price, the number of shares purchasable pursuant to such option and the terms and conditions of exercise of such option shall be determined in order to comply with Section 424 of the Code. (B) With respect to all outstanding Green Employee Stock Options granted under Green Stock Plans which, immediately prior to the First Effective Time, are unvested ("Other Green Options"), adjust the terms of such Other Green Options to provide that in no event shall any Other Green Option become exercisable prior to the date that the STB approval is obtained, in which case, such Other Green Options will then be adjusted as provided in clause (a) above, or (y) the date following STB denial on which a disposition of shares held in the Voting Trust occurs pursuant to Paragraph 8 of the Voting Trust Agreement, in which case such Other Green Options will be exercisable solely for Green Common Stock (on such date or dates as provided in the option agreements evidencing such Other Green Options), - 10 - 12 and such options will be equitably adjusted as necessary to preserve the value of such options in connection with any such disposition. (C) In lieu of any further option grants by Green on or after the First Effective Time, Green may grant incentive awards to its employees provided that (i) such awards are granted under arrangements which are in accordance with applicable law and (ii) such awards are of no greater aggregate value on the grant date than the aggregate value of the options which could otherwise have been awarded by Green by the Company pursuant to Section 4.1(a)(ii)(x)(A) hereof. (D) Notwithstanding any provision to the contrary herein, Green agrees that it shall not issue Green Common Stock or rights to acquire Green Common Stock for any reason following the First Merger without the prior consent of White. SECTION 9. Section 3.01(o) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: (o) Tax Status. Neither Green nor any of its subsidiaries has taken any action or, as of the date hereof, is aware of any fact that would jeopardize the qualification of the Amended Offer, the Second Offer, the First Merger and the Second Merger, if integrated and treated as a single transaction, as a reorganization under Section 368 of the Code. SECTION 10. Section 3.02(o) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: (o) Tax Status. Neither White, merger Sub, Tender Sub, or any subsidiary of White or Tender Sub has taken any action or, as of the date hereof, is aware of any fact that would jeopardize the qualification of the Amended Offer, the Second Offer, the First Merger and the Second Merger, if integrated and treated as a single transaction, as a reorganization under Section 368 of the Code. SECTION 11. The following is hereby added to the end of Section 4.1(a)(i) of the Merger Agreement: and provided further that, following the First Effective Time, subject to applicable legal restrictions and financial covenants contained in instruments relating to outstanding indebtedness, the surviving corporation of each of the First Merger and the Second Merger shall not decrease the aggregate amount of dividends and other distributions paid in respect of Green's outstanding capital stock from the level paid - 11 - 13 immediately prior to the First Effective Time or the Second Effective Time, as applicable. SECTION 12. The last sentence of Section 4.1(c) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: Without limiting the foregoing, Green and White shall use reasonable efforts to not, and to not permit any of their respective subsidiaries to, take any action that could reasonably be expected to impair, or delay in any material respect, obtaining the STB approval or complying with or satisfying the terms thereof. SECTION 13. The following is hereby added to the end of Section 4.1 of the Merger Agreement: (e) Additional Pre-Control Date Covenants of White. During the period from the Second Effective Time until the Control Date, White shall not, nor shall it permit any of its subsidiaries to (without the consent of Green): (i) operate its railroad business other than in the ordinary course of business consistent with past practice provided that, without limiting the generality of the foregoing or of Section 4.1(a)(xii) or Section 4.3, (x) the direct or indirect acquisition or disposition of a significant portion of the assets of its railroad business, and (y) a merger, consolidation or other business combination with any other company involved in the railroad business that would have the effect set forth in clause (x) shall not be considered in the ordinary course of business consistent with past practice; or (ii) enter into (including by merger, acquisition of assets or securities or otherwise) any new line of business, in a material way, other than those engaged in by White as of the date of this Agreement; or (iii) authorize, or commit or agree to take, any of the foregoing actions. SECTION 14. (a) Section 5.3(a) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: The Parties intend that the Amended Offer, the Second - 12 - 14 Offer, the First Merger and the Second Merger, if integrated and treated as a single transaction (the "Reorganization"), shall qualify as a reorganization within the meaning of Section 368 of the Code. Each party and its affiliates shall use reasonable efforts to cause the Reorganization to so qualify and to obtain, as of the Closing Date, the opinions (the "Tax Opinions") of Wachtell, Lipton, Rosen & Katz, counsel to White, and Cravath, Swaine & Moore, counsel to Green, in each case to the effect that the Reorganization shall qualify as a reorganization within the meaning of Section 368 of the Code, it being understood that in rendering such Tax Opinions, such tax counsel shall be entitled to rely upon representations of officers of Green and White substantially in the form of Exhibits F and G (with appropriate conforming modification thereto to reflect the changes made by the Second Amendment). Each party agrees that from and after the time hereof it will not (and will not permit its affiliates to) take any action that would result in the Reorganization failing to qualify as a reorganization within the meaning of Section 368 of the Code except to the extent that such action is specifically contemplated by this Agreement or is required by the STB. The parties shall take the position for all purposes that the Reorganization qualifies as a reorganization within the meaning of Section 368 of the Code unless and until the parties fail to obtain either of the Tax Opinions as of the Closing Date. The provisions of this Section 5.3 shall not terminate on the Control Date and shall survive indefinitely. (b) The first use of the word "will" in Section 5.3(b) of the Merger Agreement is hereby deleted and replaced with the word "may". SECTION 15. (a) The words "For three years after the Effective Time" in the first sentence of Section 5.8(c) of the Merger Agreement are hereby deleted and replaced in their entirety with the words "From the Control Date through the third anniversary of the Effective Time". (b) The second and third uses of the words "Effective Time" in Section 5.8(c) is hereby deleted and replaced with the words "Control Date". SECTION 16. The following is hereby added to the end of Section 5.12 of the Merger Agreement: White shall use reasonable efforts to cause the White Merger Securities to be issued in the Merger or under the Green Stock Plans to be listed on the NYSE prior to the Closing Date, subject to official notice of issuance. SECTION 17. (a) The following is added at the end of Section 6.1 of the Merger Agreement: - 13 - 15 (a) Additional Condition to Second Merger. The First Effective Time shall have occurred and White shall own at least 80% of Green's outstanding capital stock, on a fully diluted basis; and at a meeting duly called and held after the First Effective Time, Green's Board of Directors shall have approved the Second Merger (as a plan of merger and liquidation under Section 332, Section 337 and Section 368 of the Code). Except as provided in this Section 6.1, there shall be no other conditions to the consummation of the Second Merger, and as of the First Effective Time, all consents of shareholders of White, Tender Sub or Green necessary to consummate the Second Merger shall have been given. (b) The term "Merger" in Sections 6.2 and 6.3 of the Merger Agreement is hereby deleted and replaced with the term "First Merger". SECTION 18. Section 6.1(d) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: (d) Listing. The White Common Stock and the White Merger Securities issuable to Green's shareholders pursuant to this Agreement and under the Green Stock Plans shall have been approved for listing on the NYSE prior to the Closing Date, subject to official notice of issuance. SECTION 19. Section 6.2(d) and Section 6.3(c) of the Merger Agreement are hereby deleted in their respective entireties, and all references to such Sections are hereby deleted in their respective entireties. SECTION 20. The words "which is addressed above" in Section 6.2(e) of the Merger Agreement are hereby deleted in their entirety. SECTION 21. The following is hereby added to the end of Section 8.1 of the Merger Agreement: The parties agree that the provisions of Articles IV and V shall be binding through the Control Date, provided that the provisions of Article IV (other than Sections 4.1(a)(xii), Section 4.1(d), the last sentence of Section 4.1(c), Section 4.1(e) and Section 4.3) and Section 5.15 shall not be binding as against White and its subsidiaries following the Effective Time; provided, however, that all obligations of White or its affiliates under this Agreement shall terminate upon the earlier of (i) December 31, 1998 and (ii) the date of STB denial. SECTION 22. The following is hereby added to the end of Section 8.3(f) of the Merger Agreement: (g) "STB approval," for all purposes under this Agreement, means the issuance by the STB of a decision, which decision shall become effective and which - 14 - 16 decision shall not have been stayed or enjoined, that (A) constitutes a final agency action approving, exempting or otherwise authorizing the acquisition of control over Green's railroad operations by White and (B) does not (1) change or disapprove of the consideration to be given in the Merger or other material provisions of Article II of this Agreement or (2) unless White chooses to assume control despite such conditions, impose on White, Green or any of their respective subsidiaries any other terms or conditions (including, without limitation, labor protective provisions but excluding conditions heretofore imposed by the ICC in New York Dock Railway--Control-- Brooklyn Eastern District, 360 I.C.C. 60 (1979)), other than those proposed by the applicants, that materially and adversely affect the long-term benefits expected to be received by White from the transactions contemplated by this Agreement; (h) the "Control Date" means the date on which White lawfully is permitted to assume control over Green's railroad operations pursuant to STB approval or exemption; (i) "STB denial," for all purposes under this Agreement, means (i) STB approval shall not have been obtained by December 31, 1998 or (ii) the STB shall have, by an order which shall have become final and no longer subject to review by the courts, either (x) refused to approve the acquisition of control of Green by White or (y) approved such acquisition of control subject to conditions that cause such approval not to constitute STB approval; and (j) following the Second Effective Time, all rights and obligations of Green under this Agreement shall be exercisable or performed by the Surviving Corporation (as successor to Green), and any consent or approval of Green hereunder following the First Effective Time or the Second Effective Time shall mean the consent or approval of the Surviving Corporation's board of directors (or its duly authorized representatives). SECTION 23. The term "Merger Agreement" or "this Agreement" as used in the Merger Agreement shall be deemed to refer to the Merger Agreement as amended by the First Amendment and the Second Amendment (provided that the terms "date hereof" or "date of this Agreement" as used in the Merger Agreement shall mean October 14, 1996); the "Merger" as used in the Merger Agreement shall be deemed to refer to the First Merger and the Second Merger; and the term "Green Fairness Opinions" as used in the Merger Agreement shall be deemed to include the Second Green Fairness Opinions and the Third Green Fairness Opinions. SECTION 24. The words "270 days from the date hereof," "270 days after the date hereof", "270 days after October 14, 1996" and "270 days after October 14, 1996" in - 15 - 17 Section 4.2(a), Section 4.2(b), Section 7.1(b)(ii) and Section 7.1(b)(iii), respectively, of the Merger Agreement are hereby deleted and replaced with the words "December 31, 1998". SECTION 25. Exhibit H hereto is hereby added as such an exhibit to the Merger Agreement. SECTION 26. Exhibits A and E to the Merger Agreement are hereby deleted and replaced in their entireties with Exhibits A and E hereto respectively. SECTION 27. Exhibit C will be amended as may be necessary to permit the issuance of the White Merger Securities. ARTICLE II GENERAL SECTION 1. Merger Agreement. Except as amended hereby, the provisions of the Merger Agreement shall remain in full force and effect. SECTION 2. Counterparts. This Second Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. SECTION 3. Entire Agreement; No Third-Party Beneficiaries. Other than the Merger Agreement (and subject to Section 8.6 thereof), this Second Amendment (a) constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Second Amendment and (b) is not intended to confer upon any person other than the parties hereto any rights or remedies. SECTION 4. GOVERNING LAW. THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF; PROVIDED, HOWEVER, THAT THE LAWS OF THE RESPECTIVE STATES OF INCORPORATION OF EACH OF THE PARTIES HERETO SHALL GOVERN THE RELATIVE RIGHTS, OBLIGATIONS, POWERS, DUTIES AND OTHER INTERNAL AFFAIRS OF SUCH PARTY AND ITS BOARD OF DIRECTORS. SECTION 5. Assignment. Neither this Second Amendment nor any of the rights, interests or obligations under this Second Amendment shall be assigned, in whole or in part, by operation of law or otherwise by either of the parties hereto without the prior written consent of the other party. Any assignment in violation of the preceding sentence shall be void. Subject to the preceding sentence, this Second Amendment will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. SECTION 6. ENFORCEMENT. THE PARTIES AGREE THAT IRREPARABLE DAMAGE WOULD OCCUR AND THAT THE PARTIES WOULD NOT HAVE ANY ADEQUATE REMEDY AT LAW IN THE EVENT THAT ANY OF THE - 16 - 18 PROVISIONS OF THIS SECOND AMENDMENT WERE NOT PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED. IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OF THIS SECOND AMENDMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS OF THIS SECOND AMENDMENT IN ANY FEDERAL COURT LOCATED IN THE STATE OF NEW YORK OR IN NEW YORK STATE COURT, THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. IN ADDITION, EACH OF THE PARTIES HERETO (A) CONSENTS TO SUBMIT ITSELF TO THE PERSONAL JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE STATE OF NEW YORK OR ANY NEW YORK STATE COURT IN THE EVENT ANY DISPUTE ARISES OUT OF THIS SECOND AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS SECOND AMENDMENT, (B) AGREES THAT IT WILL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT AND (C) AGREES THAT IT WILL NOT BRING ANY ACTION RELATING TO THIS SECOND AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS SECOND AMENDMENT IN ANY COURT OTHER THAN A FEDERAL COURT SITTING IN THE STATE OF NEW YORK OR A NEW YORK STATE COURT. SECTION 7. Headings. The headings contained in this Second Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Second Amendment. SECTION 8. Severability. If any term or other provision of this Second Amendment is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Second Amendment shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Second Amendment so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. - 17 - 19 IN WITNESS WHEREOF, Conrail Inc., Green Acquisition Corp. and CSX Corporation have caused this Second Amendment to be signed by their respective officers thereunto duly authorized, all as of the date first written above. CONRAIL INC. by _________________________ Name: Title: GREEN ACQUISITION CORP. by _________________________ Name: Title: CSX CORPORATION by _________________________ Name: Title: - 18 - 20 EXHIBIT A CORPORATE GOVERNANCE Board of Directors of White Immediately following the Control Date, the Board of Directors of White shall consist of the current Chairmen of the Boards of each of White and Green and an even number of other directors (all of whom shall be outside directors) to be agreed upon, of whom 50% shall be designated by each of White and Green. Committees of the Board of Directors and Chairpersons of Committees Immediately following the Control Date: The Board of Directors of White shall initially have six committees: the finance and planning committee, the executive committee, the audit committee, the ethics committee, the compensation committee and the nominating committee. Each committee shall be comprised of four directors, of which two shall be designated by each of White and Green. The only committees on which the current Chairman of the Board of each of White and Green shall serve shall be the executive committee and the finance and planning committee, and the current Chairman and Chief Executive Officer of White shall chair the executive committee and designate the chair of the finance and planning committee. White shall designate the chairperson of the compensation committee and the audit committee and Green shall designate the chairperson of the nominating committee and the ethics committee. Executive Management At the Control Date and for two years thereafter, the current Chairman and Chief Executive Officer of White shall continue as the Chairman and Chief Executive Officer of White and the current Chairman of the Board and Chief Executive Officer of Green shall be President and Chief Operating Officer of White and President and Chief Executive Officer of each of its railroad subsidiaries (the "Railroad CEO"). Immediately following such period, the current Chairman and Chief Executive Officer of White shall continue as Chairman of White for an additional two-year period (and Chairman Emeritus for a one-year period thereafter) and the current Chairman of the Board and Chief Executive Officer of Green shall be elected to the additional office of Chief Executive Officer of White on the second anniversary of the Control Date and shall succeed as Chairman of White at the end of such additional two-year period. The foregoing arrangements under this heading "Executive Management" may be altered only by a vote following the Control Date of 75% of the members of the Board of Directors of White. A-1 21 White Articles of Incorporation At or prior to the Control Date, the Articles of Incorporation of White shall be amended to change the corporate name of White to a new neutral name not including, except with the prior written consent of each of Green and White, any aspect of the names of either Green or White or their subsidiaries or predecessors. White By-laws At or prior to the Control Date, the White By-laws shall be amended to provide that any amendment to or modification of the arrangements set forth under the heading "Executive Management" or of the employment agreements with the current Chairmen of White and Green entered into as of the date of this Agreement shall require a vote of 75% following the Control Date of the members of the Board of Directors of White. A-2 22 EXHIBIT H Convertible Preferred Stock Type: Convertible preferred stock(1) Amount: $ million ($16 per share) - million shares Liquidation Preference: $50 per share Maturity: [7-10 years, perpetual] Yield: Quarterly, market yield such that securities are expected to trade at par on a fully distributed basis. Conversion Premium: [20%-25%] Established relative to [10-20] day average closing price ending 2 days before distribution of the security. Call Protection: [3-4] years. Standard redemption schedule thereafter. Fundamental Change: Upon the occurrence of a fundamental change (i.e. a merger or acquisition of the issuer for consideration which is not all or substantially all common stock) the conversion price will be adjusted downward if necessary to insure that the preferred share is convertible into consideration worth at least the prevailing redemption price. (Standard for convertible preferred stock underwritten by Conrail's and CSX's financial advisors). Antidilution Language: Standard for convertible preferred stock underwritten by Conrail's and CSX's financial advisors. - -------------------- (1) May be trust convertible preferred stock. EX-99.C7 7 AMENDED AND RESTATED VOTING TRUST AGREEMENT 1 EXHIBIT (C)(7) AMENDED AND RESTATED VOTING TRUST AGREEMENT THIS AMENDED AND RESTATED VOTING TRUST AGREEMENT, dated as of December 18, 1996, by and among CSX Corporation, a Virginia corporation ("Parent"), Green Acquisition Corp., a Pennsylvania corporation and a wholly-owned subsidiary of Parent ("Acquiror"), and Deposit Guaranty National Bank, a national banking association (the "Trustee"), W I T N E S S E T H: WHEREAS, Parent, Acquiror and Conrail Inc., a Pennsylvania corporation (the "Company"; which term shall instead refer, from and after the effectiveness of the Second Merger, to the corporation resulting from the Second Merger), have entered into an Agreement and Plan of Merger, dated as of October 14, 1996 (as it has been and may be amended from time to time, the "Merger Agreement"; capitalized terms used but not defined herein shall have the meanings set forth therein), pursuant to which (i) Acquiror was to commence and did commence the Offer and Second Offer (collectively, the "Tender Offer") for shares of Common Stock of the Company (all such shares accepted for payment pursuant to the Tender Offer or otherwise received, acquired or purchased by or on behalf of Parent or Acquiror, including pursuant to the Option Agreement, the "Acquired Shares"), and (ii) a subsidiary of Acquiror will merge into the Company pursuant to the First Merger and thereafter the Company will merge into Acquiror pursuant to the Second Merger. As it is in the Merger Agreement, 2 - 2 - the word "Merger" shall herein be a collective reference to the First Merger and the Second Merger taken together. WHEREAS, Parent, Acquiror and the Trustee have entered into a Voting Trust Agreement, dated as of October 15, 1996 (the "Original Voting Trust Agreement"); WHEREAS, Parent, Acquiror and the Company entered into a First Amendment to the Merger Agreement dated November 5, 1996, and a Second Amendment thereto dated December 18, 1996; WHEREAS, Parent, Acquiror and the Company have entered into a Stock Option Agreement, dated as of October 14, 1996 (as it may be amended from time to time, the "Option Agreement") providing Parent and Acquiror the option to purchase 15,955,477 shares of common stock of the Company; WHEREAS, the parties intend that, prior to the authorization and approval of the Surface Transportation Board (the "STB"), neither Parent nor Acquiror nor any of their affiliates shall control the Company and the Company shall not have as a director any officer, director, nominee or representative of the Parent, the Acquiror or any of their affiliates; WHEREAS, Parent and Acquiror wish (and are obligated pursuant to the Merger Agreement and the Option Agreement), simultaneously with the acceptance for payment of Acquired Shares pursuant to the Tender Offer, the Option Agreement, the First Merger, or otherwise to deposit such Shares of 3 - 3 - Common Stock, and upon the consummation of the Second Merger shall deposit all of the common stock and any other voting stock of the Company (being then the corporation resulting from the Second Merger), in an independent, irrevocable voting trust, pursuant to the rules of the STB, in order to avoid any allegation or assertion that the Parent or the Acquiror is controlling or has the power to control the Company prior to the receipt of any required STB approval or exemption; WHEREAS, Parent, Acquiror and the Trustee wish to amend the Original Voting Trust Agreement to reflect certain changes made in the Merger Agreement by the Second Amendment thereto, and the Company has consented to such amendment, and Parent, Acquiror and the Trustee wish to restate the Voting Trust Agreement as so amended; WHEREAS, the holder of all outstanding Trust Certificates has assented to such amendment of the Original Voting Trust Agreement, and all requirements for the amendment of the Original Voting Trust Agreement contained therein have been satisfied; WHEREAS, neither the Trustee nor any of its affiliates has any officers or board members in common or any direct or indirect business arrangements or dealings (as described in Paragraph 9 hereof) with the Parent or the Acquiror or any of their affiliates; and WHEREAS, the Trustee is willing to continue to act as voting trustee pursuant to the terms of this Trust Agreement and the rules of the STB, 4 - 4 - NOW THEREFORE, the parties hereto agree as follows: 1. CREATION OF TRUST -- The Parent and the Acquiror hereby appoint Deposit Guaranty National Bank as Trustee hereunder, and Deposit Guaranty National Bank hereby accepts said appointment and agrees to act as Trustee under this Trust Agreement as provided herein. 2. TRUST IS IRREVOCABLE -- This Trust Agreement and the nomination of the Trustee during the term of the trust shall be irrevocable by the Parent and the Acquiror and their affiliates and shall terminate only in accordance with, and to the extent of, the provisions of Paragraphs 8 and 14 hereof. 3. DEPOSIT OF TRUST STOCK -- The Parent and the Acquiror agree that, prior to acceptance of Acquired Shares purchased pursuant to the Tender Offer, the Acquiror will direct the depositary for the Tender Offer to transfer to the Trustee any such Acquired Shares purchased pursuant to the Tender Offer. The Parent and the Acquiror also agree that simultaneously with receipt, acquisition or purchase of any additional shares of Common Stock by either of them, directly or indirectly, or by any of their affiliates, including, without limitation, upon any exercise of the option provided for in the Option Agreement, they will transfer to the Trustee the certificate or certificates for such shares. The Parent and the Acquiror also agree that simultaneously with the receipt by them or by any of their affiliates of any shares of common stock or other voting stock of the Company upon the effectiveness of the First Merger or the Second Merger, they will transfer to the Trustee the certificate or certificates for such shares, including 5 - 5 - without limitation, shares of common stock or other voting securities of the corporation resulting from the Second Merger. All such certificates shall be duly endorsed or accompanied by proper instruments duly executed for transfer thereof to the Trustee or otherwise validly and properly transferred, and shall be exchanged for one or more Voting Trust Certificates substantially in the form attached hereto as Exhibit A (the "Trust Certificates"), with the blanks therein appropriately filled in. Voting Trust Certificates executed in the form attached to the Original Voting Trust Agreement as Exhibit A shall continue to be valid and obligatory and shall, from and after the execution and delivery of this instrument, be deemed in every respect to be Trust Certificates executed and delivered under this instrument. All shares of Common Stock all other shares of common stock or other voting securities at any time delivered to the Trustee hereunder are called the "Trust Stock." The Trustee shall present to the Company all certificates representing Trust Stock for surrender and cancellation and for the issuance and delivery to the Trustee of new certificates registered in the name of the Trustee or its nominee. 4. POWERS OF TRUSTEE -- The Trustee shall be present, in person or represented by proxy, at all annual and special meetings of shareholders of the Company so that all Trust Stock may be counted for the purposes of determining the presence of a quorum at such meetings. Parent and Acquiror agree, and the Trustee acknowledges, that the Trustee shall not participate in or interfere with the management of the Company and shall take no other actions with respect to the Company except in accordance with the terms hereof. The Trustee shall exercise all voting rights in respect of the Trust Stock to approve and effect the Merger, and in favor of any proposal or action necessary or desirable to effect, or 6 - 6 - consistent with the effectuation of, the Parent and Acquiror's acquisition of the Company, pursuant to the Merger Agreement, and without limiting the generality of the foregoing, if there shall be with respect to the Board of Directors of the Company an "Election Contest" as defined in the Proxy Rules of the Securities and Exchange Commission ("SEC"), in which one slate of nominees shall support the effectuation of the Merger and another slate oppose it, then the Trustee shall vote in favor of the slate supporting the effectuation of the Merger. In addition, for so long as the Merger Agreement is in effect, the Trustee shall exercise all voting rights in respect of the Trust Stock, to cause any other proposed merger, business combination or similar transaction (including, without limitation, any consolidation, sale or purchase of assets, reorganization, recapitalization, liquidation or winding up of or by the Company) involving the Company, but not involving the Parent or one of its subsidiaries or affiliates (otherwise than in connection with a disposition pursuant to Paragraph 8), not to be effected. In addition, the Trustee shall exercise all voting rights in respect of the Trust Stock in favor of any proposal or action necessary or desirable to dispose of Trust Stock in accordance with Paragraph 8 hereof. Except as provided in the three immediately preceding sentences, the Trustee shall vote all shares of Trust Stock with respect to all matters, including without limitation the election or removal of directors, voted on by the shareholders of the Company (whether at a regular or special meeting or pursuant to a unanimous written consent) in the same proportion as all shares of Common Stock (other than Trust Stock) are voted with respect to such matters; provided that, except as provided in the three immediately preceding sentences, from and after the effectiveness of the First Merger, the Trustee shall vote all shares of Trust Stock in accordance with the instructions of a majority of the persons who are currently the directors of the 7 - 7 - Company and their nominees as successors and who shall then be directors of the Company, except that the Trustee shall not vote the Trust Stock in favor of taking or doing any act which violates the Merger Agreement or which if taken or done prior to the consummation of the Merger would have been a violation of the Merger Agreement; and except further 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 the Company, determined without reference to such holders' interests in other railroads than the subsidiaries of the Company. In exercising its voting rights in accordance with this Paragraph 4, the Trustee shall take such actions at all annual, special or other meetings of stockholders of the Company or in connection with any and all consents of shareholders in lieu of a meeting. 5. FURTHER PROVISIONS CONCERNING VOTING OF TRUST STOCK -- The Trustee shall be entitled and it shall be its duty to exercise any and all voting rights in respect of the Trust Stock either in person or by proxy, as herein provided (including without limitation Paragraphs 4 and 8(b) hereof), unless otherwise directed by the STB or a court of competent jurisdiction. Subject to Paragraph 4, the Trustee shall not exercise the voting powers of the Trust Stock in any way so as to create any dependence or intercorporate relationship between (i) any or all of the Parent, the Acquiror and their affiliates, on the one hand, and (ii) the Company or its affiliates, on the other hand. The term "affiliate" or "affiliates" wherever used in this Trust Agreement shall have the meaning specified in Section 11323(c) of Title 49 of the United States Code, as amended. 8 - 8 - The Trustee shall not, without the prior approval of the STB, vote the Trust Stock to elect any officer, director, nominee or representative of the Parent, the Acquiror or their affiliates as an officer or director of the Company or of any affiliate of the Company. The Trustee shall be kept informed respecting the business operations of the Company by means of the financial statements and other public disclosure documents periodically filed by the Company and affiliates of the Company with the SEC and the STB, and by means of information respecting the Company contained in such statements and other documents filed by the Parent with the SEC and the STB, copies of which shall be promptly furnished to the Trustee by the Company or the Parent, as the case may be, and the Trustee shall be fully protected in relying upon such information. Notwithstanding the foregoing provisions of this Paragraph 5 or any other provision of this Agreement, however, the registered holder of any Trust Certificate may at any time with the prior written approval of the Company -- but only with the prior written approval of the STB -- instruct the Trustee in writing to vote the Trust Stock represented by such Trust Certificate in any manner, in which case the Trustee shall vote such shares in accordance with such instructions. 6. TRANSFER OF TRUST CERTIFICATES -- Until the earlier of STB Denial or December 31, 1998, the Trust Certificates shall be transferable only with the prior written consent of the Company. They may be transferred on the books of the Trustee by the registered holder upon the surrender thereof properly assigned, in accordance with rules from time to time established for that purpose by the Trustee. Until so transferred, the Trustee may treat the registered holder as owner for all purposes. Each transferee of a Trust Certificate issued hereunder 9 - 9 - shall, by his acceptance thereof, assent to and become a party to this Trust Agreement, and shall assume all attendant rights and obligations. Any such transfer in violation of this Paragraph 6 shall be null and void. 7. DIVIDENDS AND DISTRIBUTIONS -- Pending the termination of this Trust as hereinafter provided, the Trustee shall, immediately following the receipt of each cash dividend or cash distribution as may be declared and paid upon the Trust Stock, pay the same over to or as directed by the Acquiror or to or as directed by the holder of the Trust Certificates hereunder as then appearing on the books of the Trustee. The Trustee shall receive and hold dividends and distributions other than cash upon the same terms and conditions as the Trust Stock and shall issue Trust Certificates representing any new or additional securities that may be paid as dividends or otherwise distributed upon the Trust Stock to the registered holders of Trust Certificates in proportion to their respective interests. 8. DISPOSITION OF TRUST STOCK; TERMINATION OF TRUST -- (a) This Trust is accepted by the Trustee subject to the right hereby reserved in the Parent at any time to direct the sale or other disposition of the whole or any part of the Trust Stock, but only as permitted by subparagraph (e) below, whether or not an event described in subparagraph (b) below has occurred. The Trustee shall take all actions reasonably requested by the Parent (including, without limitation, exercising all voting rights in respect of Trust Stock) in favor of any proposal or action necessary or desirable to effect, or consistent with the effectuation of or with respect to any proposed sale or other disposition of the whole or any part of the Trust Stock by the Acquiror or Parent that is otherwise permitted pursuant to 10 - 10 - this Paragraph 8, including, without limitation, in connection with the exercise by Parent of its registration rights under the Merger Agreement. The Trustee shall be entitled to rely on a certification from the Parent, signed by its President or one of its Vice Presidents and under its corporate seal, that a disposition of the whole or any part of the Trust Stock is being made in accordance with the requirements of subparagraph (e) below. In the event of a permitted sale of Trust Stock by the Acquiror, the Trustee shall, to the extent the consideration therefor is payable to or controllable by the Trustee, promptly pay, or cause to be paid, upon the order of the Acquiror the net proceeds of such sale to the registered holders of the Trust Certificates in proportion to their respective interests. It is the intention of this Paragraph that no violation of 49 U.S.C. Section 11323 will result from a termination of this Trust. (b) In the event the STB Approval shall have been granted, then immediately upon the direction of the Parent and the delivery of a certified copy of such order of the STB or other governmental authority with respect thereof, or, in the event that Subtitle IV of Title 49 of the United States Code, or other controlling law, is amended to allow the Acquiror, the Parent or their affiliates to acquire control of the Company without obtaining STB or other governmental approval, upon delivery of an opinion of independent counsel selected by the Trustee that no order of the STB or other governmental authority is required, and, in the event that shareholder approval of the First Merger shall not have previously been obtained, with the prior written consent of the Company, the Trustee shall either (x) transfer to or upon the order of the Acquiror, the Parent or the holder or holders of Trust Certificates hereunder as then appearing on the records of the Trustee, its right, title and interest in and to all of the Trust Stock 11 - 11 - then held by it (or such portion as is represented by the Trust Certificates in the case of such an order by such holders) in accordance with the terms, conditions and agreements of this Trust Agreement and not theretofore transferred by it as provided in subparagraph (a) hereof, or (y) if shareholder approval has not previously been obtained for the First Merger or the Second Merger, vote the Trust Stock in favor of the First Merger or the Second Merger, and upon any such transfer of all of the Trust Stock, or any such merger following such STB approval or law amendment permitting control without governmental approval, this Trust shall cease and come to an end. (c) In the event that (i) the STB Approval shall not have been obtained by December 31, 1998, or (ii) there shall have been an STB Denial, Parent shall use its best efforts to sell the Trust Stock during a period of two years after such date or STB Denial, or such extension of that period as the STB shall approve. Any such disposition shall be subject to the requirements of subparagraph (e) below, and to any jurisdiction of the STB to oversee Parent's divestiture of Trust Stock. At all times, the Trustee shall continue to perform its duties under this Trust Agreement and, should Parent be unsuccessful in its efforts to sell or distribute the Trust Stock during the period referred to, the Trustee shall then as soon as practicable, and subject to the requirements of subparagraph (e) below, sell the Trust Stock for cash to eligible purchasers in such manner and for such price as the Trustee in its discretion shall deem reasonable after consultation with Parent. (An "eligible purchaser" hereunder shall be a person or entity that is not affiliated with Parent and which has all necessary regulatory authority, if any, to purchase the Trust Stock.) Parent agrees to cooperate with the Trustee in 12 - 12 - effecting such disposition and the Trustee agrees to act in accordance with any direction made by Parent as to any specific terms or method of disposition, to the extent not inconsistent with any of the terms of this Trust Agreement, including subparagraph (e) below, and with the requirements of the terms of any STB or court order. The proceeds of the sale shall be distributed to or upon the order of Parent or, on a pro rata basis, to the holder or holders of the Trust Certificates hereunder as then known to the Trustee. The Trustee may, in its reasonable discretion, require the surrender to it of the Trust Certificates hereunder before paying to the holder his share of the proceeds. Upon disposition of all the Trust Stock pursuant to this paragraph 8(c), this Trust shall cease and come to an end. (d) Unless sooner terminated pursuant to any other provision herein contained, this Trust Agreement shall terminate on December 31, 2016, and may be extended by the parties hereto, so long as no violation of 49 U.S.C. Section 11323 will result from such termination or extension. All Trust Stock and any other property held by the Trustee hereunder upon such termination shall be distributed to or upon the order of the Acquiror. The Trustee may, in its reasonable discretion, require the surrender to it of the Trust Certificates hereunder before the release or transfer of the stock interests evidenced thereby. (e) No disposition of Trust Stock under this paragraph 8 or otherwise hereunder shall be made except pursuant to one or more broadly distributed public offerings and subject to all necessary regulatory approvals, if any. Notwithstanding the foregoing, Trust Stock may be distributed as otherwise directed by Parent (but, if prior to the earlier of (i) December 31, 1998, if STB Approval shall not have by then been granted or (ii) the occurrence of an STB 13 - 13 - Denial, only with the prior written consent of the Company), subject to any order of the STB pursuant to any of its jurisdiction, in which case the Trustee shall be entitled to rely on a certificate of Parent (acknowledged by the Company) that such person or entity to whom the Trust Stock is disposed is not an affiliate of the Parent and has all necessary regulatory authority, if any is necessary, to purchase such Trust Stock. The Trustee shall promptly inform the STB of any transfer or disposition of Trust Stock pursuant to this Paragraph 8. Upon the transfer of all of the Trust Stock pursuant to this paragraph 8(e), this Trust shall cease and come to an end. (f) Except as expressly provided in this Paragraph 8, the Trustee shall not dispose of, or in any way encumber, the Trust Stock, and any transfer, sale or encumbrance in violation of the foregoing shall be null and void. 9. INDEPENDENCE OF THE TRUSTEE -- Neither the Trustee nor any affiliate of the Trustee may have (i) any officers, or members of their respective boards of directors, in common with the Acquiror, the Parent, or any affiliate of either, or (ii) any direct or indirect business arrangements or dealings, financial or otherwise, with the Acquiror, the Parent or any affiliate of either, other than dealings pertaining to the establishment and carrying out of this voting trust. Mere investment in the stock or securities of the Acquiror or the Parent or any affiliate of either by the Trustee, short of obtaining a controlling interest, will not be considered a proscribed business arrangement or dealing, but in no event shall any such investment by the Trustee in voting securities of the Acquiror, the Parent or their affiliates exceed five percent of their outstanding voting securities and in no event shall the Trustee hold a proportion of such voting securities so 14 - 14 - substantial as to permit the Trustee in any way to control or direct the affairs of the Acquiror, the Parent or their affiliates. Neither the Acquiror, the Parent nor their affiliates shall purchase the stock or securities of the Trustee or any affiliate of the Trustee. 10. COMPENSATION OF THE TRUSTEE -- The Trustee shall be entitled to receive reasonable and customary compensation for all services rendered by it as Trustee under the terms hereof and said compensation to the Trustee, together with all counsel fees, taxes, or other expenses reasonably incurred hereunder, shall be promptly paid by the Acquiror or the Parent. 11. TRUSTEE MAY ACT THROUGH AGENTS -- The Trustee may at any time or from time to time appoint an agent or agents and may delegate to such agent or agents the performance of any administrative duty of the Trustee. 12. CONCERNING THE RESPONSIBILITIES AND INDEMNIFICATION OF THE TRUSTEE -- The Trustee shall not be liable for any mistakes of fact or law or any error of judgment, or for any act or omission, except as a result of the Trustee's willful misconduct or gross negligence. The Trustee shall not be answerable for the default or misconduct of any agent or attorney appointed by it in pursuance hereof if such agent or attorney has been selected with reasonable care. The duties and responsibilities of the Trustee shall be limited to those expressly set forth in this Trust Agreement. The Trustee shall not be responsible for the sufficiency or the accuracy of the form, execution, validity or genuineness of the Trust Stock, or of any documents relating thereto, or for any lack of endorsement thereon, or for any description therein, nor shall the Trustee be responsible or 15 - 15 - liable in any respect on account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any such Trust Stock or document or endorsement or this Trust Agreement, except for the execution and delivery of this Trust Agreement by this Trustee. The Acquiror and the Parent agree that they will at all times protect, indemnify and save harmless the Trustee, its directors, officers, employees and agents from any loss, cost or expense of any kind or character whatsoever in connection with this Trust except those, if any, growing out of the gross negligence or willful misconduct of the Trustee, and will at all times themselves undertake, assume full responsibility for, and pay all costs and expense of any suit or litigation of any character, including any proceedings before the STB, with respect to the Trust Stock of this Trust Agreement, and if the Trustee shall be made a party thereto, the Acquiror or the Parent will pay all costs and expenses, including reasonable counsel fees, to which the Trustee may be subject by reason thereof; provided, however, that the Acquiror and the Parent shall not be responsible for the cost and expense of any suit that the Trustee shall settle without first obtaining the Parent's written consent. The Trustee may consult with counsel and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or omitted or suffered by the Trustee hereunder in good faith and in accordance with such opinion. 13. TRUSTEE TO GIVE ACCOUNT TO HOLDERS -- To the extent requested to do so by the Acquiror or any registered holder of a Trust Certificate, the Trustee shall furnish to the party making such request full information with respect to (i) all property theretofore delivered to it as Trustee, (ii) all property then held by it as Trustee, and (iii) all actions theretofore taken by it as Trustee. 16 - 16 - 14. RESIGNATION, SUCCESSION, DISQUALIFICATION OF TRUSTEE -- The Trustee, or any trustee hereafter appointed, may at any time resign by giving forty-five days' written notice of resignation to the Parent and the STB. The Parent shall at least fifteen days prior to the effective date of such notice appoint a successor trustee which shall (i) satisfy the requirements of Paragraph 9 hereof and (ii) be a corporation organized and doing business under the laws of the United States or of any State thereof and authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authority. If no successor trustee shall have been appointed and shall have accepted appointment at least fifteen days prior to the effective date of such notice of resignation, the resigning Trustee may petition any competent authority or court of competent jurisdiction for the appointment of a successor trustee. Upon written assumption by the successor trustee of the Trustee's powers and duties hereunder, a copy of the instrument of assumption shall be delivered by the Trustee to the Parent and the STB and all registered holders of Trust Certificates shall be notified of its assumption, whereupon the Trustee shall be discharged of the powers and duties of the Trustee hereunder and the successor trustee shall become vested with such powers and duties. In the event of any material violation by the Trustee of the terms and conditions of this Trust Agreement, the Trustee shall become disqualified from acting as trustee hereunder as soon as a successor trustee shall have been selected in the manner provided by this paragraph. 17 - 17 - 15. AMENDMENT -- Subject to the requirements of Section 1.9 of the Merger Agreement, this Trust Agreement may from time to time be modified or amended by agreement executed by the Trustee, the Acquiror (if executed prior to the Merger), the Parent and all registered holders of the Trust Certificates (i) pursuant to an order of the STB, (ii) with the prior approval of the STB, (iii) in order to comply with any order of the STB or (iv) upon receipt of an opinion of counsel satisfactory to the Trustee and the holders of Trust Certificates that an order of the STB approving such modification or amendment is not required and that the amendment is consistent with the STB's regulations regarding voting trusts. 16. GOVERNING LAW; POWERS OF THE STB -- The provisions of this Trust Agreement and of the rights and obligations of the parties hereunder shall be governed by the laws of the State of Pennsylvania, except that to the extent any provision hereof may be found inconsistent with subtitle IV, title 49, United States Code or regulations promulgated thereunder, such statute and regulations shall control and such provision hereof shall be given effect only to the extent permitted by such statute and regulations. In the event that the STB shall, at any time hereafter by final order, find that compliance with law requires any other or different action by the Trustee than is provided herein, the Trustee shall act in accordance with such final order instead of the provisions of this Trust Agreement. 17. COUNTERPARTS -- This Trust Agreement is executed in four counterparts, each of which shall constitute an original, and one of which shall be held by each of the Parent and the Acquiror and the other two shall be held by 18 - 18 - the Trustee, one of which shall be subject to inspection by holders of Trust Certificates on reasonable notice during business hours. 18. FILING WITH THE STB -- A copy of this Agreement and any amendments or modifications thereto shall be filed with the STB by the Acquiror. 19. SUCCESSORS AND ASSIGNS -- This Trust Agreement shall be binding upon the successors and assigns to the parties hereto, including without limitation successors to the Acquiror and the Parent by merger, consolidation or otherwise. The parties agree that the Company shall be an express third party beneficiary of this Trust Agreement through and including the earlier of (i) December 31, 1998, if STB Approval shall not have been granted or (ii) the occurrence of an STB Denial, but that thereafter the Company shall not be any such third-party beneficiary. Except as otherwise expressly set forth herein, any consent or approval required from the Company hereunder shall mean the prior written consent or approval by a duly adopted resolution of the Company's board of directors, or by its duly authorized officer or other representative, and shall be granted or withheld in the sole discretion of such board, officer or representative. 20. SUCCESSION OF FUNCTIONS -- The term "STB" includes any successor agency or governmental department that is authorized to carry out the responsibilities now carried out by the STB with respect to the consideration of the consistency with the public interest of rail mergers and combinations, the regulation of voting trusts in respect of the acquisition of securities of rail carriers or companies controlling them, and the exemption of approved rail mergers and combinations from the antitrust laws. 19 - 19 - 21. NOTICES -- Any notice which any party hereto may give to the other hereunder shall be in writing and shall be given by hand delivery, or by first class registered mail, or by overnight courier service, or by facsimile transmission confirmed by one of the aforesaid methods, sent, If to Purchaser or Acquiror, to: CSX Corporation One James Center 901 East Cary Street Richmond, Virginia 23219 Attention: General Counsel If to the Trustee, to: Deposit Guaranty National Bank One Deposit Guaranty Plaza, 8th Floor Jackson, Mississippi 39201 Attention: Corporate Trust Department With a required copy to: Deposit Guaranty National Bank c/o Commercial National Bank In Shreveport 333 Texas Street Shreveport, LA 71101 Attention: Corporate Trust Department And if to the holders of Trust Certificates, to them at their addresses as shown on the records maintained by the Trustee. 22. REMEDIES -- Each of the parties hereto acknowledges and agrees that in the event of any breach of this Agreement, each non-breaching party would be irreparably and immediately harmed and could not be made whole by monetary damages. It is accordingly agreed that the parties hereto (a) will waive, 20 - 20 - in any action for specific performance, the defense of adequacy of a remedy at law and (b) shall be entitled, in addition to any other remedy to which they may be entitled at law or in equity, to an order compelling specific performance of this Agreement in any action instituted in any state or federal court sitting in Philadelphia, Pennsylvania. Each party hereto consents to personal jurisdiction in any such action brought in any state or federal court sitting in Philadelphia, Pennsylvania. IN WITNESS WHEREOF, CSX Corporation and Green Acquisition Corp. have caused this Amended and Restated Trust Agreement to be executed by their authorized officers and their corporate seals to be affixed, attested by their Secretaries or Assistant Secretaries, and Deposit Guaranty National Bank has caused this Amended and Restated Trust Agreement to be executed by its authorized officer or agent and its corporate seal to be affixed, attested to by its 21 - 21 - Secretary or one of its Assistant Secretaries or other authorized agent, all as of the day and year first above written. Attest: CSX CORPORATION By - ----------------------------------- -------------------------------------- Secretary Attest: GREEN ACQUISITION CORP. By - ----------------------------------- -------------------------------------- Secretary Attest: DEPOSIT GUARANTY NATIONAL BANK By - ----------------------------------- -------------------------------------- 22 No. ________________ EXHIBIT A _______ Shares VOTING TRUST CERTIFICATE FOR COMMON STOCK OF CONRAIL INC. INCORPORATED UNDER THE LAWS OF THE STATE OF PENNSYLVANIA THIS IS TO CERTIFY that _______________will be entitled, on the surrender of this Certificate, to receive on the termination of the Voting Trust Agreement hereinafter referred to, or otherwise as provided in Paragraph 8 of said Voting Trust Agreement, a certificate or certificates for _____________ shares of the Common Stock, $1.00 par value, of Conrail Inc., a Pennsylvania corporation (the "Company," which term shall instead refer, from and after the effectiveness of the Second Merger, to the corporation resulting from the Second Merger, as defined under the Voting Trust Agreement). This Certificate is issued pursuant to, and the rights of the holder hereof are subject to and limited by, the terms of an Amended and Restated Voting Trust Agreement, dated as of December 18, 1996, executed by CSX Corporation, a Virginia corporation, Green Acquisition Corp., a Pennsylvania corporation, and Deposit Guaranty National Bank, as Trustee (as it may be amended from time to time, the "Voting Trust Agreement"), a copy of which Voting Trust Agreement is on file in the office of said Trustee at One Deposit Guaranty Plaza, 8th Floor, Jackson, Mississippi 39201 and open to inspection of any stockholder of the Company and the holder hereof. The Voting Trust Agreement, unless earlier terminated (or extended) pursuant to the terms thereof, will terminate on December 31, 2016, so long as no violation of 49 U.S.C. Section 11323 will result from such termination. 23 - 2 - The holder of this Certificate shall be entitled to the benefits of said Voting Trust Agreement, including the right to receive payment equal to the cash dividends, if any, paid by the Company with respect to the number of shares represented by this Certificate. This Certificate shall be transferable only on the books of the undersigned Trustee or any successor, to be kept by it, on surrender hereof by the registered holder in person or by attorney duly authorized in accordance with the provisions of said Voting Trust Agreement, and until so transferred, the Trustee may treat the registered holder as the owner of this Voting Trust Certificate for all purposes whatsoever, unaffected by any notice to the contrary. By accepting this Certificate, the holder hereof assents to all the provisions of, and becomes a party to, said Voting Trust Agreement. IN WITNESS WHEREOF, the Trustee has caused this Certificate to be signed by its officer duly authorized. Dated: DEPOSIT GUARANTY NATIONAL BANK By ------------------------ Authorized Officer 24 - 3 - [FORM OF BACK OF VOTING TRUST CERTIFICATE] FOR VALUE RECEIVED _______________ hereby sells, assigns, and transfers unto _______________ the within Voting Trust Certificate and all rights and interests represented thereby, and does hereby irrevocably constitute and appoint _______________ Attorney to transfer said Voting Trust Certificate on the books of the within mentioned Trustee, with full power of substitution in the premises. ______________________________ Dated: In the Presence of: ______________________________ EX-99.C8 8 LETTER FROM PARENT TO SHAREHOLDERS 1 ONE JAMES CENTER CSX RICHMOND, VIRGINIA 23219 CORPORATION (904)782-1400 - -------------------------------------------------------------------------------- December 19, 1996 Dear Conrail Shareholder: We are pleased to enclose a supplement to CSX's tender offer to purchase 20.1% of Conrail voting shares outstanding for $110 per share in cash. The $110 CSX tender offer has been extended until 5:00 p.m. EST on January 22, 1997, and the conditions remain the same, including obtaining shareholder approval to opt out of Subchapter 25E of the Pennsylvania statute. Conrail has scheduled this special shareholders meeting for 12:00 noon EST on January 17, 1997. The supplement describes in detail the terms of our amended merger agreement with Conrail Inc., which will provide you with increased consideration in the merger of $16 per Conrail share in CSX convertible preferred stock. The $16 per share is in addition to the 1.85619 shares of CSX common stock to be received in the merger. You will also benefit from the significant value of receiving the merger consideration upon shareholder approval and consummation of the merger, which is significantly earlier than previously contemplated and prior to regulatory approval. We urge you to give this supplement to our tender offer prompt consideration. We believe that the tender offer, combined with our earlier purchase of 19.9% of Conrail shares at $110 per share in cash, gives shareholders the advantages of a significant and immediate payment of cash combined with the upside potential of continued stock ownership. If you have any questions, or require assistance in tendering your shares, please call MacKenzie Partners, the information agent for our tender offer, toll-free at 800-322-2885 or collect at 212-929-5500. We look forward to building the world's leading transportation and logistics company by joining forces with Conrail. Sincerely, /s/ John W. Snow John W. Snow Chairman and Chief Executive Officer - POST OFFICE BOX 85629, RICHMOND, VIRGINIA 23285-5629 - -----END PRIVACY-ENHANCED MESSAGE-----