-----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, Jp+s6KP2DzgtM2/yGqFJHOs2fexIZuvH5WcaZb/9wQ/NYLyJh5w4Gapj9q3CvHge B46c1vVFffQEHCsqv5NqcQ== 0000950123-97-002028.txt : 19970311 0000950123-97-002028.hdr.sgml : 19970311 ACCESSION NUMBER: 0000950123-97-002028 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19970310 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: 97553205 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: 97553206 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. 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-1 TENDER OFFER STATEMENT (AMENDMENT NO. 21) PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND AMENDMENT NO. 31 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** - --------------------------------- --------------------------------- $8,396,903,710 $1,679,381
================================================================================ * For purposes of calculating the filing fee only. This calculation assumes the purchase of an aggregate of 73,016,554 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 $115 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. Total Amount Previously Paid: $2,014,438.59 Amount Previously Paid: $403,586.59 Amount Previously Paid: $1,610,852 Form or Registration No.: Schedule 14D-1 Form or Registration No.: 333-19523 Filing Party: CSX Corporation and Green Filing Party: CSX Corporation Acquisition Corp. Date Filed: December 6, 1996 Date Filed: January 10, 1997
================================================================================ 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 any and all shares of (i) Common Stock, par value $1.00 per share (the "Common Shares"), and (ii) Series A ESOP Convertible Junior Preferred Stock, without par value (together with the Common Shares, the "Shares"), of Conrail Inc., a Pennsylvania corporation (the "Company"), including, in each case, the associated common stock purchase rights, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 6, 1996, the Supplement thereto, dated December 19, 1996, and the Second Supplement thereto, dated March 7, 1997 (the "Second Supplement"), and the related Letters of Transmittal (which, together with any amendments or supplements thereto, constitute the "Offer") at a purchase price of $115 per Share, net to the tendering shareholder in cash. Capitalized terms used and not defined herein shall have the meanings assigned such terms in the Offer to Purchase and the Schedule 14D-1. ITEM 1. SECURITY AND SUBJECT COMPANY. Item 1(b) is hereby amended and supplemented by reference to Section 1 of the Second Supplement which Section is incorporated herein by reference. Item 1(c) is hereby amended and supplemented by reference to Section 3 of the Second 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 5 of the Second Supplement, which Section is incorporated herein by reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 4(a) is hereby amended and supplemented by reference to Section 4 of the Second Supplement, which Section is incorporated herein by reference. Item 4(b) is hereby amended and supplemented by reference to Section 4 of the Second Supplement, which Section is incorporated herein by reference. ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. Item 5 is hereby amended and supplemented by reference to Section 6 of the Second Supplement, which Section is 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 5, Section 6, Section 7 and Section 9 of the Second Supplement, which Sections are incorporated herein by reference. ITEM 10. ADDITIONAL INFORMATION. Item 10(a) is hereby amended and supplemented by reference to Section 5 of the Second Supplement, which Section is incorporated herein by reference. Item 10(b) is hereby amended and supplemented by reference to Section 9 of the Second Supplement, which Section is incorporated herein by reference. Item 10(e) is hereby amended and supplemented by reference to Section 9 of the Supplement, which Section is incorporated herein by reference. 3 ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(31) Second Supplement to Offer to Purchase, dated March 7, 1997. (a)(32) Revised Letter of Transmittal. (a)(33) Revised Notice of Guaranteed Delivery. (a)(34) Text of Press Release issued by Parent on March 7, 1997. (a)(35) Form of Summary Advertisement, dated March 10, 1997. (c)(12) Third Amendment to Agreement and Plan of Merger, dated as of March 7, 1997, by and among Parent, Purchaser and the Company. (c)(13) Form of Amended and Restated Voting Trust Agreement.
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. CSX CORPORATION By: /s/ MARK G. ARON ------------------------------------ Name: Mark G. Aron Title: Executive Vice President -- Law and Public Affairs Dated: March 10, 1997 5 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: March 10, 1997 6 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. *(a)(19) Letter from Parent to shareholders of the Company, dated December 19, 1996. *(a)(20) Text of Press Release issued by Parent on December 20, 1996. *(a)(21) Text of Press Release issued by Parent and the Company on January 9, 1997. *(a)(22) Text of Press Release issued by Parent and the Company on January 13, 1997. *(a)(23) Text of Press Release issued by Parent and the Company on January 15, 1997. *(a)(24) Text of Press Release issued by Parent on January 17, 1997. *(a)(25) Text of Press Release issued by Parent on January 22, 1997. (a)(25) Deleted. *(a)(26) Text of Letter issued by Parent and the Company dated January 22, 1997. *(a)(27) Text of Advertisement published by Parent and the Company on January 29, 1997. *(a)(28) Text of Press Release issued by Parent and the Company on January 31, 1997. *(a)(29) Text of Press Release issued by Parent on February 14, 1997. *(a)(30) Text of Press Release issued by Parent on March 3, 1997. (a)(31) Second Supplement to Offer to Purchase, dated March 7, 1997. (a)(32) Revised Letter of Transmittal. (a)(33) Revised Notice of Guaranteed Delivery. (a)(34) Text of Press Release issued by Parent on March 7, 1997. (a)(35) Form of Summary Advertisement, dated March 10, 1997. *(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).
- --------------- * Previously filed. 7 *(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) Deleted. *(c)(9) Text of STB Decision No. 5 of STB Finance Docket No. 33220, dated January 8, 1997. *(c)(10) Unaudited Pro Forma Financial Statements reflecting the Transactions (incorporated by reference to Parent's registration statement on Form S-4, registration number 333-19523). *(c)(11) Text of opinion of Judge Donald VanArtsdalen of the United States District Court for the Eastern District of Pennsylvania as delivered from the bench on January 9, 1997. (c)(12) Third Amendment to Agreement and Plan of Merger, dated as of March 7, 1997, by and among Parent, Purchaser and the Company. (c)(13) Form of Amended and Restated Voting Trust Agreement. (d) Not applicable. (e) Not applicable. (f) Not applicable.
- --------------- * Previously filed. EX-99.A.31 2 SECOND SUPPLEMENT TO OFFER TO PURCHASE 1 SECOND SUPPLEMENT TO THE OFFER TO PURCHASE DATED DECEMBER 6, 1996 GREEN ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CSX CORPORATION HAS AMENDED ITS OFFER TO PURCHASE FOR CASH AND IS NOW OFFERING TO PURCHASE ALL 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. AT $115 NET PER SHARE 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 FRIDAY, APRIL 18, 1997, UNLESS THE SECOND OFFER IS FURTHER EXTENDED. The Second Offer is conditioned upon, among other things, prior to the expiration of the Second Offer there shall have been validly tendered and not withdrawn such number of shares, which, together with the Common Shares already owned by CSX Corporation, a Virginia corporation ("Parent"), through the Voting Trust and certain other parties, constitutes at least a majority of outstanding Shares on a fully diluted basis (as defined herein) (the "Minimum Condition"). The Second Offer is no longer conditioned upon the Pennsylvania Control Transaction Law being inapplicable to Conrail Inc. (the "Company"). The Second Offer is not conditioned on obtaining financing. UNDER THE MERGER AGREEMENT, GREEN ACQUISITION CORP. HAS THE RIGHT IN ITS DISCRETION TO EXTEND THE SECOND OFFER, FROM TIME TO TIME, THROUGH 5:00 P.M., NEW YORK CITY TIME, ON JUNE 2, 1997, WHETHER OR NOT THE CONDITIONS TO THE SECOND OFFER HAVE BEEN SATISFIED OR WAIVED. See Section 15 of the Offer to Purchase and Sections 4, 7 and 8 of this Second Supplement. ------------------------ THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE SECOND OFFER (AS AMENDED HEREBY) AND THE MERGER (AS AMENDED BY THE THIRD AMENDMENT, AS HEREINAFTER DEFINED), DETERMINED THAT THE MERGER AGREEMENT (AS AMENDED BY THE THIRD AMENDMENT) 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 ACCEPT THE SECOND OFFER AND TENDER THEIR SHARES PURSUANT TO THE SECOND OFFER. The Merger Agreement has been amended to provide, among other things, that (i) the Second Offer be amended to increase the number of Shares sought in the Second Offer to all Shares and to increase the price to be paid pursuant thereto to $115 per Share in cash, (ii) the consideration to be paid in the Merger will be $115 per Share in cash and (iii) Parent will have sole authority to conduct negotiations and enter into agreements with any other company (including Norfolk Southern Corporation) relating to the acquisition by such company of any securities or assets of the Company, or any trackage rights or other concessions relating to the Company's assets or operations. The Merger Agreement also has been amended in other respects. See Section 7 of this Second 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 one of the (blue) Letters of Transmittal (or a facsimile thereof) circulated with the Offer to Purchase (as defined herein), the First Supplement (as defined herein) or this Second Supplement in accordance with the instructions in such Letter of Transmittal, have such shareholder's signature thereon guaranteed if required by Instruction 1 to such 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 to 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 Second Supplement, the First 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 Second Supplement. The Dealer Manager for the Second Offer is: WASSERSTEIN PERELLA & CO., INC. March 7, 1997 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 (i) 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 Parent, and (ii) the Supplement to the Offer to Purchase (the "First Supplement"), dated December 19, 1996, of Parent and Purchaser. Pursuant to this Second Supplement, Purchaser is now offering to purchase all Shares of the Company, at a price of $115 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, as amended and supplemented by the First Supplement, this Second Supplement, and in the Letters of Transmittal circulated with the Offer to Purchase, the First Supplement and this Second Supplement (which together constitute the "Second Offer"). This Second Supplement should be read in conjunction with the Offer to Purchase and the First Supplement. Except as otherwise set forth in this Second Supplement and the revised Letters of Transmittal, the terms and conditions previously set forth in the Offer to Purchase, the First Supplement and the Letters of Transmittal mailed with the Offer to Purchase and the First Supplement remain applicable in all respects to the Second Offer. Unless the context requires otherwise, terms not defined herein have the meanings ascribed to them in the Offer to Purchase or the First Supplement. THIS SECOND SUPPLEMENT IS BEING PROVIDED IN CONNECTION WITH THE THIRD AMENDMENT, DATED AS OF MARCH 7, 1997 (THE "THIRD 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, THE SECOND AMENDMENT AND THE THIRD AMENDMENT, THE "MERGER AGREEMENT"). THE THIRD AMENDMENT PROVIDES, AMONG OTHER THINGS, THAT THE SECOND OFFER BE AMENDED TO INCREASE THE NUMBER OF SHARES SOUGHT IN THE SECOND OFFER TO ALL SHARES AND TO INCREASE THE PRICE TO BE PAID PURSUANT THERETO TO $115 PER SHARE IN CASH, WITHOUT INTEREST THEREON. IN ADDITION, UNDER THE THIRD AMENDMENT, IN THE MERGER, EACH SHARE NOT PURCHASED IN THE SECOND OFFER WILL BE CONVERTED INTO THE RIGHT TO RECEIVE $115 IN CASH, WITHOUT INTEREST THEREON, AND SUCH SHARES WILL NOT BE CONVERTED INTO THE RIGHT TO RECEIVE PARENT MERGER SECURITIES. SEE SECTION 7 OF THIS SECOND 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 ACCEPT THE SECOND OFFER AND TENDER THEIR SHARES PURSUANT TO THE SECOND OFFER. The Second Offer is conditioned upon the Minimum Condition which requires that prior to the expiration of the Second Offer there shall have been validly tendered and not withdrawn such number of Shares which, together with the Common Shares already owned by Parent through the Voting Trust and with any Common Shares owned by any third party that may, jointly together with Parent, acquire an equity ownership interest in any vehicle that may acquire the Company, constitutes at least a majority of outstanding Shares on a fully diluted basis (as defined herein). The Company has informed Parent that as of March 3, 1997 there were outstanding 90,791,678 Shares and options or other rights to purchase Shares. Parent beneficially owns 17,775,124 Shares (excluding 15,955,477 Common Shares issuable upon exercise of the Company Stock Option, which is currently exercisable by Parent), all of which Shares were acquired by Purchaser in the First Offer. In addition, if Parent and Norfolk Southern Corporation ("NSC") were to reach an agreement relating to the joint acquisition of the Company as described in this Second Supplement, the 8,200,100 Common Shares beneficially owned by NSC through its voting trust would be included in the computation toward satisfaction of the Minimum Condition. For purposes of the Second Offer, "fully diluted basis" assumes the issuance of all Shares upon the exercise of all outstanding stock options (other than pursuant to the Company Stock Option), whether or not such stock options are presently exercisable. 3 Based on the foregoing and assuming no additional Shares (or options, warrants or rights exercisable for, or securities convertible into, Shares) have been or will be issued after March 3, 1997, if Purchaser were to purchase 27,711,506 Shares pursuant to the Offer (or 19,511,406 Shares if Parent and NSC jointly were to acquire the Company), the Minimum Condition would be satisfied. The Merger Agreement provides that, without the consent of the Company, Purchaser will not waive the Minimum Condition. The Second Offer is no longer conditioned upon Purchaser being satisfied, in its reasonable judgment, that the Pennsylvania Control Transaction Law is inapplicable to the Company. The Second Offer is being made pursuant to the Merger Agreement which provides that, following the completion (or expiration) of the Second Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company (the "Merger"), with the Company as the surviving corporation (the "Surviving Corporation"), in accordance with the Pennsylvania Business Corporation Law of 1988, as amended (the "Pennsylvania Law"). As more fully described in Section 7 of this Second Supplement, in the Merger, each outstanding Share (other than Shares held in the treasury of the Company or owned by Parent, Purchaser or any of their respective subsidiaries or affiliates, or any third party, its subsidiaries or affiliates that may, jointly together with Parent, acquire an equity ownership interest in any vehicle that may acquire the Company) will be converted into the right to receive $115 in cash, without interest. The time at which the Merger is consummated in accordance with the Merger Agreement is hereinafter referred to as the "Effective Time." Lazard Freres and Morgan Stanley, the Company's financial advisors, have each delivered to the Board of Directors of the Company a written opinion to the effect that, as of the date of the Third Amendment, the consideration to be received by the holders of Shares pursuant to the Second Offer and the Merger, taken together, is fair from a financial point of view to such shareholders. A copy of such opinions are included in the Company's Supplement to its Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9 Supplement") which is being mailed to shareholders concurrently herewith, and shareholders are urged to read each such opinion in its entirety for a description of the assumptions made, matters considered and limitations of the reviews undertaken by each of Lazard Freres and Morgan Stanley. The Merger may be approved by the affirmative vote of holders of a majority of the outstanding Shares. Therefore, if the Minimum Condition is satisfied and the Second Offer is consummated, Purchaser will own a sufficient number of Shares to ensure that the Merger is approved. THE SECOND OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF COMPANY SHAREHOLDERS. ANY SUCH SOLICITATION WHICH PARENT OR PURCHASER MIGHT MAKE WOULD BE MADE ONLY PURSUANT TO SEPARATE PROXY MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). Under the Third Amendment, Parent has sole authority to conduct negotiations and enter into agreements with any other company (including NSC) with respect to the acquisition by any such other company of any of the Company's securities or assets or any trackage rights or other concessions relating to the Company's assets or operations. It is Parent's intention to commence negotiations with NSC promptly in order to reach an agreement that provides for a roughly equal division of the Company's system between Parent and NSC, and then together with NSC prepare and file a joint application with the STB. Parent expects that the division of the Company will be generally consistent with the basic outline received by Parent and the Company from NSC. See Sections 5, 6 and 9 of this Second Supplement. In the Third Amendment, the Company has agreed that it will use reasonable efforts to cooperate with Parent in connection with the negotiations referred to in the preceding paragraph and, if necessary or appropriate to facilitate a transaction, the Company will further amend the Merger Agreement or take any other action (including taking any Board action that may be required under any state anti-takeover statute or by amending the Rights Agreement or the Second Offer to include a co-bidder) so long as such amendment does not adversely affect the Company in respect of the benefits to be received by its shareholders or employees under the Merger Agreement or delay or adversely affect the transactions contemplated by the Merger Agreement. See Section 7 of this Second Supplement. 2 4 Procedures for tendering Shares are set forth in Section 3 of the Offer to Purchase. Tendering shareholders may use the original (blue) Letter of Transmittal and the original (gray) Notice of Guaranteed Delivery previously circulated with the Offer to Purchase, the revised (blue) Letter of Transmittal and revised (gray) Notice of Guaranteed Delivery circulated with the First Supplement or the revised (blue) Letter of Transmittal and revised (gray) Notice of Guaranteed Delivery circulated with this Second Supplement. While the original Letter of Transmittal circulated with the Offer to Purchase refers to the Offer to Purchase, the revised Letter of Transmittal circulated with the First Supplement refers to the Offer to Purchase and the First Supplement, and the Letter of Transmittal circulated with this Second Supplement refers to the Offer to Purchase, the First Supplement and this Second Supplement, shareholders using any such document to tender Shares will nevertheless receive $115 per Share for each Share validly tendered and not withdrawn and accepted for payment pursuant to the Second Offer, subject to the conditions of the Second Offer, and no proration will apply. 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 conditions of the Second Offer, the increased tender price of $115 per Share, if the Shares are accepted for payment and paid for by Purchaser pursuant to the Second Offer, except as may be required by the guaranteed delivery procedures if such procedures were utilized. See Section 3 of the Offer to Purchase and Section 1 of this Second Supplement. THE OFFER TO PURCHASE, THE FIRST SUPPLEMENT, THIS SECOND SUPPLEMENT AND THE LETTERS OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE SECOND OFFER. 1. Amended Terms of the Second Offer; Expiration Date. The discussion set forth in Section 1 of the Offer to Purchase, Section 1 of the First Supplement and the amendments thereto are hereby amended and supplemented as follows: The Second Offer is being made for all Shares. The price per Share to be paid pursuant to the Second Offer has been increased from $110 per Share to $115 per Share, net to the seller in cash, without interest thereon. All shareholders whose Shares are validly tendered and not withdrawn and accepted for payment pursuant to the Second Offer (including Shares tendered prior to the date of this Second Supplement) will receive the increased price, and no proration will apply. The term "Expiration Date" means 5:00 P.M., New York City time, on Friday, April 18, 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. The Merger Agreement provides that, in the event all conditions to Purchaser's obligation to purchase Shares under the Second Offer at any scheduled expiration thereof are satisfied other than the Minimum Condition, Purchaser shall, from time to time, extend the Second Offer until the earlier of December 31, 1997 or such time as the Minimum Condition is satisfied or waived in accordance with the Merger Agreement. The Merger Agreement provides that, without the consent of the Company, Purchaser will not waive the Minimum Condition. The Merger Agreement further provides that Purchaser in its sole discretion may extend the Second Offer, from time to time, until June 2, 1997, whether or not the conditions to the Second Offer have been satisfied or waived. This Second 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. 2. Certain Federal Income Tax Consequences. The discussion set forth in Section 5 of the Offer to Purchase, Section 5 of the First Supplement 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 Second Offer and the Merger to holders of Shares who hold Shares as capital assets. The discussion set forth below is 3 5 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. Shareholders are urged to consult their own tax advisors to determine the specific tax consequences of the Second Offer and the Merger, including any federal, state, local or other tax consequences (including any tax return filing or other tax reporting requirements) of the Second Offer and the Merger. The receipt of cash for Shares pursuant to the Second Offer or the Merger will be a taxable transaction for federal income tax purposes and may also be a taxable transaction under applicable state, local, foreign and other tax laws. For United States federal income tax purposes, each selling or exchanging shareholder would generally recognize gain or loss equal to the difference between the amount of cash received and such shareholder's tax basis for the sold or exchanged Shares. Such gain or loss will be capital gain or loss (assuming the Shares are held as a capital asset) and any such capital gain or loss will be long term capital gain if, as of the date of sale or exchange, the Shares were held for more than one year or will be short term if, as of such date, the Shares were held for one year or less. Under present law, long-term capital gains recognized by an individual shareholder generally will be taxed at up to a maximum federal marginal tax rate of 28%, and long-term capital gains recognized by a corporate shareholder will be taxed at up to a maximum federal marginal tax rate of 35%. 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 the Second 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. 3. Price Range of Shares; Dividends. The discussion set forth in Section 6 of the Offer to Purchase, Section 2 of the First Supplement and the amendments thereto are hereby amended and supplemented as follows: According to published financial sources, the high and low sales prices per Common Share on the NYSE composite tape for the fourth quarter of 1996 were $100 7/8 and $68 1/2, respectively. The high and low sales prices per Common Share on the NYSE composite tape for the first quarter of 1997 (through March 6, 1997) were $113 and $98 1/2, respectively. On February 28, 1997, the last full trading day prior to the publication of reports that Parent and the Company were engaged in discussions relating to amending the terms of the Second Offer upon the terms set forth in this Second Supplement, the reported closing sale price per Common Share on the NYSE composite tape was $104 1/2. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE COMMON SHARES. 4 6 4. Source and Amount of Funds. The discussion set forth in Section 10 of the Offer to Purchase and the amendments thereto are hereby amended and supplemented as follows: Purchaser estimates that the total amount of funds required to purchase all outstanding Shares pursuant to the Second Offer and to pay all related costs and expenses will be approximately $8.5 billion. See "Fees and Expenses" in Section 17 of the Offer to Purchase. In the event that, prior to consummation of the Second Offer, Parent and NSC reach agreement as to a joint acquisition of the Company (see "Introduction" and Sections 5 and 6 of this Second Supplement), a portion of the funds so required may be provided by NSC (in which case, the Second Offer will be further amended). While Parent believes that it and NSC will reach an agreement as to a division of the Company, there can be no assurance that such an agreement will be reached or, if reached, the timing or terms thereof. The Second Offer is not conditioned on Parent and NSC reaching any such agreement or on NSC providing any portion of the funds required for Purchaser to purchase Shares pursuant to the Second Offer and the Merger. Purchaser plans to obtain the necessary funds through capital contributions or advances made by Parent. Parent plans to obtain the funds for such capital contributions or advances from its available cash and working capital, and either through the issuance of long- or short-term debt securities (including, without limitation, commercial paper notes) or under the Facility pursuant to an amendment, as described below, which Parent intends to seek. In connection with the Third Amendment, Parent intends to seek an amendment to the Credit Agreement to increase the aggregate principal sum of the Facility (i) to finance the purchase of all Shares pursuant to the Second Offer, the Merger, the exercise of the Company Stock Option or otherwise, regardless of whether Parent and NSC reach agreement, and (ii) following the Merger, to provide working capital and for other general corporate purposes. While Parent believes that it will be successful in obtaining such an amendment, there can be no assurance that it will be successful in achieving such an amendment. The Second Offer, however, is not conditioned on obtaining such an amendment or otherwise obtaining financing. It is anticipated that the indebtedness incurred by Parent in connection with the transactions contemplated by the Merger Agreement will be repaid from funds generated internally by Parent and its subsidiaries (including, after the Merger, if consummated, dividends paid by the Surviving Corporation and its subsidiaries), through additional borrowings, through application of proceeds of dispositions or through a combination of two or more such sources. No final decisions have been made concerning the method Parent will employ to repay such indebtedness. Such decisions, when made, will be based on Parent's review from time to time of the advisability of particular actions, as well as on prevailing interest rates and financial and other economic conditions. 5. Background of the Second Offer Since December 19, 1996; Contacts with the Company. The discussion set forth in Section 11 of the Offer to Purchase, Section 3 of the First Supplement and the amendments thereto are hereby amended and supplemented as follows: On December 19, 1996, Conrail and CSX issued the following press release announcing execution of the Second Amendment: 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 5 7 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 meetings 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 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. On December 19, 1996, NSC announced an increase in the price offered in the Hostile Offer to $115, which increased Hostile Offer was again rejected by the Conrail Board on December 20, 1996. On January 2, 1997, Parent and Purchaser, through the Voting Trust, sold 85,000 Common Shares (with proxies to vote such shares at the Pennsylvania Special Meeting), at an average per share price of $98.983, in order to moot certain claims by NSC in litigation relative to the Pennsylvania Control Transaction Law. On January 9, 1997, the United States District Court for the Eastern District of Pennsylvania denied the motions of NSC and the shareholder-plaintiffs for a preliminary injunction to invalidate certain provisions of the Merger Agreement and to enjoin the Pennsylvania Special Meeting scheduled for January 17, 1997, including on the basis of their contentions that the Pennsylvania Control Transaction Law had been triggered by Parent's purchase of Shares in the First Offer. NSC and the shareholder-plaintiffs appealed such ruling to 6 8 the United States Court of Appeals for the Third Circuit and moved for an expedited appeal and an injunction pending appeal, seeking to enjoin the Pennsylvania Special Meeting scheduled for January 17, 1997. On January 13, 1997, NSC announced a "pledge" that if Company shareholders defeated the proposal to approve the Articles Amendment at the January 17 Pennsylvania Special Meeting, NSC would promptly amend the Hostile Offer to eliminate all of the conditions thereto and to reduce the aggregate number of Shares sought in the Hostile Offer to approximately 8,200,000 Shares. At such time, NSC also announced that following completion of the amended Hostile Offer, it would commence a tender offer for all the remaining Shares at $115 per Share (the "Second Hostile Offer"). On January 13, 1997, Parent and the Company issued the following joint press release in response to NSC's January 13 "pledge." RICHMOND, VA AND PHILADELPHIA, PA (JANUARY 13, 1996) -- CSX Corporation [NYSE:CSX] and Conrail Inc. [NYSE:CRR] issued the following statement: "Today's announcement by Norfolk Southern changes nothing. The fact is the CSX-Conrail merger is the only transaction where Conrail shareholders can receive value for 100% of their shares. No transaction with Norfolk Southern can occur until January 1999, at the earliest. "Norfolk Southern has misrepresented the implications of the Surface Transportation Board's (STB) decision which refused to invalidate the two-year exclusivity provision. CSX and Conrail believe that the STB cannot require the consummation of a merger that has not been approved by the Conrail Board of Directors." On January 15, 1997, Parent and the Company issued the following joint press release: APPEALS COURT REJECTS NORFOLK SOUTHERN'S REQUEST TO ENJOIN CONRAIL SHAREHOLDER VOTE RICHMOND, VA AND PHILADELPHIA, PA, JANUARY 15, 1997 -- CSX Corp. (CSX) (NYSE:CSX) and Conrail Inc. (Conrail) (NYSE:CRR) today announced that they are pleased with the decision by the United States Court of Appeals for the Third Circuit rejecting Norfolk Southern's application for an injunction pending appeal of the January 9 decision by the U.S. District Court for the Eastern District of Pennsylvania. CSX and Conrail today issued the following statement: "We are pleased that the U.S. Court of Appeals has refused to enjoin the Conrail shareholder meeting set for Friday, January 17. This is another blow to Norfolk Southern's continuing hostile attempts to derail the merger of Conrail and CSX. We now look forward to moving ahead towards the completion of our strategic merger." The District Court decision rejected Norfolk Southern's motion for a preliminary injunction to invalidate the exclusivity period contained in the merger agreement between CSX and Conrail and enjoin the shareholder vote scheduled for January 17. In its application to the Third Circuit Court of Appeals, Norfolk Southern sought to enjoin the Conrail shareholder vote scheduled for January 17 until its appeal of the District Court decision could be heard. On January 17, 1997, the Pennsylvania Special Meeting was held, and Parent issued the following press release: CSX SAYS APPARENT VOTE WILL NOT ALTER CSX AND CONRAIL'S ABILITY TO COMPLETE MERGER RICHMOND, VA -- Jan. 17, 1997 -- CSX Corp. (CSX) (NYSE: CSX) said that today's apparent vote by Conrail shareholders refusing to opt out of the Pennsylvania Control Transaction 7 9 statute will not alter its firm commitment to the CSX-Conrail merger and will not affect the ultimate outcome. John W. Snow, chairman, president and chief executive officer of CSX, issued the following statement: "In light of Norfolk Southern's calculated and massive disinformation campaign coupled with its last-ditch, conditional 9.9% tender offer intended to provide Conrail shareholders with over $1 billion in cash as payment for a "no" vote, this apparent outcome is not surprising. The apparent "no" vote procured by Norfolk Southern simply postpones the eventual completion of our strategic merger of equals and delays the ability of Conrail's shareholders to receive the full consideration that will be provided by the CSX-Conrail transaction. "We remain fully and firmly committed to the CSX-Conrail merger of equals. We are confident we will eventually prevail with Conrail's shareholders and then present a compelling application for approval of the merger to the Surface Transportation Board. "Norfolk Southern has succeeded only in confusing the issue. The CSX-Conrail merger remains the right merger, of the right companies, at the right price and, in time, it will be approved. "There is not now, nor will there be, a viable alternative to the CSX-Conrail merger. The CSX and Conrail boards both have committed that neither company will even hold discussions with any other company regarding a business combination for at least two years, and the Federal courts and the Surface Transportation Board (STB) both have upheld that key provision of the CSX-Conrail merger agreement. "We have no intention of amending or altering our merger agreement in any way in light of this apparent vote. Those who voted against the opt-out in the expectation that their vote will force CSX to raise its price will be disappointed. We believe the CSX transaction provides the maximum value to all Conrail constituents. "CSX and Conrail's managements are now preparing a compelling case demonstrating the unique commercial and public policy benefits of the merger, which will be presented to the STB in March of 1997. This case will also demonstrate to investors the clearly realizable financial synergies, new business opportunities and transportation efficiencies that will result. At an appropriate time, Conrail will again hold an opt-out vote and, ultimately, we will proceed with the successful completion of this merger. "Our commitment to completing this merger at the stated terms is unflagging," Snow concluded. CSX also corrected four other matters raised in Norfolk Southern's disinformation campaign: -- Contrary to statements made by Norfolk Southern, both CSX and Conrail have repeatedly stated they will not meet with Norfolk Southern until after they have rebuffed all challenges to the CSX-Conrail merger. -- Norfolk Southern's claims that the Conrail board can be replaced in 1997 simply are erroneous. This situation is not possible. Conrail has a staggered board and Conrail's shareholder rights plan (poison pill) can be redeemed or altered only by participation of the current Conrail board, which is unified in its support of the CSX-Conrail merger. -- Any offer from Norfolk Southern must be discounted -- for at least the length of the two-year exclusivity period. Conrail's Board has never expressed an interest in entering into merger negotiations with Norfolk Southern at the end of the two year exclusivity period. 8 10 -- There are no circumstances under which the STB can force the Conrail board to accept a merger with Norfolk Southern without the Conrail Board's approval. The Conrail Board, unified in its support of the CSX-Conrail merger, has repeatedly rejected Norfolk Southern's overtures. On January 21, 1997, Messrs LeVan and Snow received the following letter from David R. Goode, Chairman, President and Chief Executive Officer of NSC: Dear David and John: The Conrail shareholders' vote last Friday places a responsibility on us to work out a rail structure in the East that will be in the long-term interests of all constituencies served by our companies. I believe that this can be accomplished if we sit down and try. I believe that we can achieve balanced competition in the East with the greatest continuity in existing operations by combining Norfolk Southern and Conrail and providing to a competitor such as CSX its own routes into the Northeast/Mid-Atlantic region from the West and South, so that the result is competing networks of equivalent scope, scale and market access. You have a different, but perhaps not irreconcilable, vision of the 21st century railroad map. Accordingly, we are prepared to enter into discussions with no preconditions other than recognition of our pledge to the Conrail shareholders that Norfolk Southern will only enter into an agreement with Conrail or CSX that gives to Conrail shareholders an all cash offer of $115 per share. I look forward to your reply. Your initiative and our determination are hallmarks of great companies capable of finding a public interest resolution of their differences. Sincerely, David R. Goode Also on January 21, 1997, it was reported that, in an interview, the Chairman of the STB indicated that, if Parent and NSC did not negotiate a settlement, the STB would, under certain circumstances, be prepared to develop a plan to produce two rail systems of roughly equal competitive strength, and that the STB would not necessarily view the grant of trackage rights as a sufficient competitive solution. On January 22, 1997, Messrs. LeVan and Snow delivered the following letter to Mr. Goode in response to his letter of January 21, 1997: Dear David: Thank you for your letter of January 21, 1997. It certainly is timely in light of Chairman Morgan's very positive suggestions that we work together to best serve the public's interest. We are fully committed to the CSX/Conrail merger. We believe our merger, together with your participation, will enable us to best serve the interests of all our constituencies, preserve our merger synergies and yield a pro-competitive result. We recognize that you have a different view of our merger, nevertheless, we should, as Chairman Morgan urges, meet and talk. This can and should be done without any preconditions that would limit our discussions or otherwise prejudice our respective positions. Let us be very clear, no one should interpret from our meeting that either party has changed its position. Our objective, which we are sure you share, is to assure that the public's interest in strong, viable competition is met. We want no winner or loser, other than to be sure that the public is a winner. 9 11 We sincerely hope with all that is at stake that we can begin meaningful and candid discussions. We look forward to meeting with you at your earliest convenience and will be in contact with your office to arrange a mutually convenient place and time. Sincerely, John W. Snow David M. LeVan Chairman, President & CEO Chairman, President & CEO CSX Corporation Conrail Inc.
Also on January 22, 1997, Parent and Purchaser extended the Second Offer until 5:00 p.m., Eastern Standard Time, on February 14, 1997. On January 22, 1997, NSC amended the Hostile Offer to eliminate all of the conditions thereto and to reduce the aggregate number of Shares sought in the Hostile Offer to 8,200,000 Shares (or approximately 9.9% of the outstanding Shares). On January 28, 1997, the Company announced that, while its Board of Directors remains fully committed to the Merger, the Board was not taking a position with respect to the Hostile Offer for 8,200,000 Shares. The Company further stated that its Board of Directors believes that shareholders who wish to receive cash for a portion of their Shares should feel free to tender Shares into the Hostile Offer; on the other hand, shareholders who desire to continue to participate in the future growth of the railroad industry and in the substantial upside potential of the Merger should retain their Shares and not tender into the Hostile Offer. On January 31, 1997, the Company, Parent and NSC issued the following joint press release: WASHINGTON, DC -- JAN. 31, 1997 -- Conrail Inc. (NYSE: CRR), CSX Corp. (CSX) (NYSE: CSX) and Norfolk Southern Corp. (NYSE: NSC) today released the following statement following the initial meeting between the parties: "Conrail, CSX and Norfolk Southern have concluded their meeting and have agreed that no further details on this meeting or timing of future meetings will be announced." On January 31, 1997, the Company announced that it had designated December 19, 1997 as the date for its 1997 annual meeting of shareholders should one be required. On February 5, 1997, NSC announced that it had accepted for payment 8,200,000 Shares pursuant to the Hostile Offer. On February 10, 1997, NSC announced that it was nominating a slate of five directors to serve on the Company's Board of Directors and stated that it would also seek to remove all but three current members of the Company's Board at the 1997 annual meeting of shareholders. On February 12, 1997, NSC commenced the Second Hostile Offer at a price of $115 per Share in cash. On February 14, 1997, Parent and Purchaser extended the Second Offer until 5:00 p.m., Eastern Standard Time, on March 14, 1997. On February 24, 1997, Parent and the Company received the following letter from NSC: Dear David and John: As you know, we will soon file an Application at the Surface Transportation Board (STB) for authority to acquire Conrail and, in order to achieve balanced competition, make available to another Class I railroad certain lines and rights. Because of Norfolk Southern's limited presence in the region, the Application represents a solution which is effective and relatively easy to implement, and which we believe will be attractive to shippers, public agencies and the STB. However, in an effort to respond to political and regulatory calls for settling our differences, we are prepared to offer an alternative (the Plan) for comprehensive resolution of the issues confronting 10 12 the eastern railroads. The Plan offers a different approach which will require the talents of all three of our organizations to implement. The enclosed map details the Plan, showing Conrail/CSX and Conrail/Norfolk Southern operations. Conrail/CSX has a north-south route and the east-west route over Buffalo (part of old New York Central). Conrail/Norfolk Southern has a north-south route and the east-west over Pittsburgh (part of old Pennsylvania). If you endorse the Plan, promptly after completion of definitive documentation for the Plan, Norfolk Southern and CSX will offer to acquire all the common and ESOP stock of Conrail (other than shares already in the CSX and Norfolk Southern voting trusts) for $115 cash per share and upon acquisition will deposit such shares in a voting trust or trusts. Upon completion of the tender offer, the remaining Conrail shares will be acquired in a merger. To carry out all these steps, Norfolk Southern and CSX will form a new entity. As soon as regulatory approval and labor implementing agreements are effective, Conrail will make available to Norfolk Southern and to CSX for their respective operation and control the Conrail lines and rights indicated on the map and all other Conrail operating assets. Such operation and control will be exclusive except with respect to trackage rights or joint arrangements or where both CSX and Norfolk Southern would need joint rights at terminal facilities. At some point in the future consistent with our respective business objectives, the necessary steps would be taken to make the new alignments final. Conrail's corporate headquarters will continue to be Philadelphia. The assets associated with Norfolk Southern will include the Pittsburgh service center and the Altoona and Hollidaysburg shop facilities. The assets associated with CSX will include the Philadelphia headquarters. Conrail employees in general will remain with the Conrail/CSX and Conrail/Norfolk Southern operations and assets, as determined by implementing agreements under the statute. Similarly, employees affected by coordinations between Conrail and CSX, and Conrail and Norfolk Southern, will be entitled to protection to the extent provided by statute. We anticipate that Conrail employee options and benefits would be handled in a manner analogous to that in the present Conrail/CSX agreement. The costs of acquiring all of the Conrail stock will be divided in proportion to the Conrail gross freight revenues which will accrue to Conrail/CSX operations and to Conrail/Norfolk Southern operations under the Plan (the Percentages). The calculation will be based on a study of Conrail's 1996 gross freight revenues, using standard traffic study methodology familiar to all the parties. Norfolk Southern's and CSX's interests in the new entity formed to accomplish the Plan will be in proportion to their Percentages. Conrail assets and liabilities not otherwise provided for (and not relating to a Conrail/CSX line or a Conrail/Norfolk Southern line) will ultimately be discharged or allocated in accordance with the Percentages. Tax costs, if any, associated with the Plan will generally be shared in accordance with the Percentages. Norfolk Southern is ready to begin immediately drafting documentation and pursuing the corporate actions and regulatory approvals necessary to implement the Plan. It is suggested that, with respect to their individual interests, CSX and Norfolk Southern may consider jointly engaging an independent party to expedite and mediate the process of documentation, with instructions to strive for fair, realizable and administratively simple provisions consistent with the outline here provided. The Plan is offered without prejudice to our forthcoming Application to the STB. We believe that the Application and the competitive alternative it proposes will provide an appropriate resolution if we cannot agree on the Plan. Upon completion of definitive documentation for the Plan, the Norfolk Southern and CSX applications could be supplemented or converted into a joint application to accomplish the Plan. The result of either the Application or the Plan could be an eastern railroad structure in which the Conrail/CSX and Conrail/Norfolk Southern systems compete at and between most of the major ports and markets east of the Mississippi. We believe this 11 13 is a sound basis on which to build an internationally competitive economy in the region, and that the benefits of this compromise extend to our companies, employees and customers. We are willing to consider any alternative suggestions for accomplishing the same results as the Plan, which in any event is subject to confirmation of the analysis used to develop it since we do not possess the information necessary for complete validation of our estimates. Because this initiative will complicate ongoing negotiations with other railroads concerning the competitive alternative Norfolk Southern will offer in its STB Application, we must ask to hear from you by the close of business Monday, March 3, concerning your interest in seriously pursuing a solution along these lines. Sincerely, David On February 25, 1997, the Company announced that its Board of Directors had unanimously recommended that shareholders not tender their Shares pursuant to the Second Hostile Offer. Shortly thereafter, Parent and the Company began discussions toward the Third Amendment. On March 3, 1997, the Company issued the following press release: Conrail Board Acts On Stay Bonuses, Enhanced Severance Packages In Event Of Acquisition Of Company PHILADELPHIA, March 3, 1997 -- Conrail (NYSE: CRR) announced today that its Board of Directors has taken action with respect to stay bonuses and enhanced severance packages to protect Conrail employees not covered by collective bargaining agreements in the event of an acquisition of the Company. The Board was mindful that employees covered by collective bargaining agreements may qualify for up to six years' protection under federal law. While the Board expressed its disappointment that recent events indicate that all the strategic goals reflected in the Merger Agreement with CSX may not be attainable, the Board expressed confidence that the final resolution will be beneficial to all the Company's constituencies. In light of these developments, the Board also authorized its management and representatives to negotiate amendments to the CSX merger agreement that would assure that the Conrail shareholders receive $115 in cash per share at the earliest possible date. On March 3, 1997, Parent issued the following press release: RICHMOND, Va., March 3, 1997 -- CSX Corporation today confirmed it has begun negotiations with Conrail Inc. on the matters outlined by Conrail today. John W. Snow, chairman, president and chief executive officer of CSX, said, "We look forward to these negotiations with great anticipation, fully expecting to resolve these issues and bring forth a proposal that will serve the best interests of all constituents and provide a pro-competitive solution in the East." On March 3, 1997, NSC issued the following press release: NORFOLK, VA, March 3, 1997 -- The following statement was issued today by David R. Goode, Chairman, President and Chief Executive Officer of Norfolk Southern Corporation (NYSE: NSC): "We are pleased with today's announcement that CSX and Conrail are negotiating to resolve the issues facing the eastern railroads." "Norfolk Southern is hopeful that CSX and Conrail will quickly reach a definitive agreement that would permit CSX and Norfolk Southern to work out a plan to restructure the rail transportation system in the East into combined Conrail/Norfolk Southern and Conrail/CSX systems." 12 14 On March 7, 1997, Parent and the Company entered into the Third Amendment. 6. Purpose of the Second Offer and the Merger; Plans for the Company. The discussion set forth in Section 12 of the Offer to Purchase and the amendments thereto are hereby amended and supplemented as follows: On February 24, 1997, NSC sent a letter to the Company and Parent in which NSC outlined a proposal (the "NSC Proposal") for a comprehensive settlement of the issues confronting the eastern railroads. The NSC proposal contemplates a division of the Company's routes in which Parent would acquire, among other things, a north-south route between the New York area and Philadelphia and a route from the New York area through Albany, Buffalo, and Cleveland to St. Louis (part of the old New York Central line) and NSC would acquire, among other things, north-south routes from the New York area to Washington, D.C., and to Hagerstown, Maryland, a route westward from Philadelphia (part of the old Pennsylvania Railroad line) and a route westward from the New York area to Buffalo (part of the old Erie-Lackawanna line). For a further description of the NSC Proposal, including the text of NSC's letter with respect thereto, see Section 5 of this Second Supplement. It is Parent's intention to commence negotiations with NSC promptly in order to reach an agreement that provides for a roughly equal division of the Company's system between Parent and NSC. Under the Third Amendment, Parent has sole authority to conduct negotiations and enter into agreements with any other company (including NSC) with respect to the acquisition by any such other company of any of the Company's securities or assets or any trackage rights or other concessions relating to the Company's assets or operations. See Section 7 of this Second Supplement. If Parent and NSC reach an agreement relating to the division of the Company's network in a timely manner, then, in accordance with the Third Amendment (see Section 7 of this Second Supplement), the Merger Agreement may be further amended, if necessary, to provide for a joint acquisition by Parent and NSC of the Shares in the Second Offer to be followed by a second-step merger, upon the terms and subject to the conditions set forth in the Second Offer and the Merger Agreement. Any such joint acquisition may involve (a) a subsequent reorganization of the Company's assets in order to permit Parent and NSC each to enter into one or more operating agreements with the Surviving Corporation following the Control Date and/or (b) the sale or other transfer of assets of the Surviving Corporation and/or its subsidiaries following the Control Date. While Parent believes that it and NSC will reach an agreement providing for the division of the Company's system, there can be no assurance that any such agreement will be reached or, if reached, the terms, structure or timing thereof. As a result of any agreement between Parent and NSC providing for a division of the Company's network, the quantifiable benefits expected by Parent from the Merger based on the realization of cost savings from operating efficiencies, facility consolidations, overhead rationalization and other activities, and new traffic volumes earned by enhanced service will vary depending upon the specifics of such division. Pursuant to the Third Amendment, Parent has stated its intention that, following the Control Date, the Company's Juniata locomotive shops at Altoona, Pennsylvania, Sam Ray car shops at Hollidaysburg, Pennsylvania, Pittsburgh service center and a major operating presence in Philadelphia (including headquarters of the Surviving Corporation) will be maintained. In addition, under the Third Amendment, following the Effective Time, Parent and the Company will establish a transition team for the Company and will offer to include in its leadership the current Chief Executive Officers of the Company (or such other senior Company executive as may be acceptable to Parent) and of Parent's railroad operations. The transition team will not control the day-to-day railroad operations of the Company (which shall be under the control of the Company's Board of Directors and officers) or its subsidiaries prior to the Control Date, but will restrict its operation to planning for actions and operations to be undertaken from and after the Control Date. See Section 7 of this Second Supplement. Among other things, the Company and Parent, in connection with the transition team, will cooperate to ensure the orderly operation of the Company during the STB approval process and to ensure an orderly transition thereafter. 13 15 7. Merger Agreement; Other Agreements. The discussion set forth in Section 13 of the Offer to Purchase, Section 4 of the First Supplement and the amendments thereto are hereby amended and supplemented as set forth below. The following summary of certain provisions of the Merger Agreement, as amended by the Third Amendment, is qualified in its entirety by the full text of the Merger Agreement and the amendments thereto, copies of which have been filed with the SEC by Parent and Purchaser as exhibits to the Schedule 14D-1. The Second Offer. The Third Amendment provides that the Second Offer be amended so that the number of Shares sought is all Shares tendered and the price offered is $115 per Share, subject to the conditions set forth herein. Under the Third Amendment, (i) the condition relating to the Pennsylvania Control Transaction Law has been eliminated and (ii) the condition relating to pending governmental actions or proceedings has been eliminated and the condition relating to injunctions has been revised. Without the written consent of the Company, Purchaser may not decrease the Second Offer price, decrease the aggregate number of Shares sought in the Second Offer, change the form of consideration to be paid pursuant to the Second Offer, modify any of the conditions to the Second Offer, impose conditions to the Second Offer in addition to those set forth herein, except as provided hereafter, extend the Second Offer, or amend any other term or condition of the Second Offer in any manner which is adverse to the holders of Shares, it being agreed in the Merger Agreement that a waiver by Purchaser of any condition in its discretion is not deemed to be adverse to the holders of Shares; provided, however, that Purchaser may not waive the Minimum Condition without the consent of the Company; provided, further, that, if on any scheduled expiration date of the Second Offer (as it may be extended in accordance with the terms of the Merger Agreement), all conditions to the Second Offer shall not have been satisfied or waived, the Second Offer may be extended from time to time without the consent of the Company for such period of time as is reasonably expected to be necessary to satisfy the unsatisfied conditions. Parent and Purchaser have agreed that, in the event that all conditions to the Second Offer at any scheduled expiration date are satisfied other than the Minimum Condition, Purchaser will, from time to time, extend the Second Offer until the earlier of December 31, 1997 and such time as such condition is satisfied or waived in accordance herewith; provided, however, that, notwithstanding anything to the contrary contained in the Merger Agreement, without the consent of the Company (and whether or not any or all conditions to the Second Offer have been satisfied or waived), Purchaser in its discretion may, from time to time, extend the Second Offer through 5:00 p.m., New York City Time, on June 2, 1997. In addition, the Second Offer price may be increased (other than solely in order to extend the Second Offer) and the Second Offer may be extended to the extent required by law in connection with such increase, in each case without the consent of the Company. The Merger. The Merger Agreement provides that, subject to the terms and conditions thereof and in accordance with the Pennsylvania Law, at the Effective Time, Purchaser will be merged with and into the Company, and the Company will be the surviving corporation of the Merger and will succeed to and assume all rights and obligations of Purchaser in accordance with the Pennsylvania Law. Pursuant to the Merger, the Articles of Incorporation and By-Laws of Purchaser will be the Articles of Incorporation and By-Laws of the Surviving Corporation until thereafter amended (except that the Articles of Incorporation of the Surviving Corporation will provide that the Surviving Corporation will be named "Conrail Inc."). Conversion of Shares. The Merger Agreement provides that, at the Effective Time, each issued and outstanding Share (other than Shares to be canceled) will be converted into the right to receive $115 per Share (the "Per Share Merger Consideration"); and Shares owned by the Company as treasury stock and Shares owned by Parent, the Company or any of their respective subsidiaries, or affiliates or any third party, its subsidiaries or affiliates that may, jointly together with Parent, acquire an equity ownership interest in any vehicle that may acquire the Company will be canceled and retired. Pursuant to the Merger Agreement, each of the issued and outstanding shares of common stock of Purchaser will be converted at the Effective Time into a fully paid and nonassessable share of common stock of the Surviving Corporation. References to the Parent Merger Securities and the Merger Preferred Stock have been deleted from the Merger Agreement. Promptly after the Effective Time, Purchaser will cause the person authorized to act as paying agent (the "Exchange Agent") to mail to each holder of record of a certificate formerly representing Shares (i) a letter 14 16 of transmittal (which will specify that delivery will be effected, and risk of loss and title to the certificates will pass, only upon proper delivery of the certificates to the Exchange Agent and will be in such customary form and have such other provisions as Purchaser may reasonably specify) and (ii) instructions to effect the surrender of the certificates in exchange for the Per Share Merger Consideration. As promptly as practicable following the Effective Time, Purchaser will deliver, in trust (the "Exchange Trust"), to the Exchange Agent, for the benefit of holders of Shares, an amount in cash equal to the Per Share Merger Consideration multiplied by the number of Common Shares to be converted into the right to receive the Per Share Merger Consideration. Upon surrender of a certificate for cancelation to the Exchange Agent together with a letter of transmittal, duly executed, and such other customary documents as may be required pursuant to such instructions, the holder of such certificate will be paid by check in exchange therefor the amount of cash which such holder has the right to receive under the Merger Agreement and the certificate so surrendered will forthwith be canceled. In no event will the holder of any such surrendered certificate be entitled to receive interest on any cash to be received in the Merger. Until surrendered as contemplated by the Merger Agreement, each certificate will be deemed at any time after the Effective Time to evidence only the right to receive upon such surrender the Per Share Merger Consideration applicable to the Shares evidenced by such certificate. Voting Trust. The Third Amendment provides that the terms of the Voting Trust governing the voting of or transfer or disposition of Shares may not be amended prior to the consummation of the Second Offer without the Company's consent. Board of Directors; Officers. The directors and officers of the Company at the Effective Time will be the initial directors and officers of the Surviving Corporation and, following the Control Date, the Board of Directors of Parent will be expanded to include three outside directors from the current Board of Directors of the Company to be approved by Parent. The Third Amendment provides that, following the Effective Time, Purchaser and the Company will establish a transition team for the Company and will offer to include in the leadership of such transition team the current Chief Executive Officer of the Company (or another senior executive, as may be acceptable to Parent) and the current Chief Executive Officer of Purchaser's railroad operations to ensure the orderly operation of the Company during the STB approval process and to ensure an orderly transition thereafter. In addition, the provisions of the Merger Agreement relating to the change of Parent's Articles of Incorporation, the LeVan Employment Agreement and the headquarters location of Parent's operations following the Control Date have been deleted. The Third Amendment provides that it is Purchaser's intention that, following the Control Date: the Company's Juniata locomotive shops at Altoona, Pennsylvania; the Company's Sam Ray car shops at Hollidaysburg, Pennsylvania; the Company's Pittsburgh service center; and a major operating presence in Philadelphia (including headquarters of the Surviving Corporation) will be maintained. Interim Operations of the Company. Except as otherwise set forth in the Merger Agreement, from the date of the Merger Agreement to the Control Date, the Company will, and will cause its subsidiaries to, carry on their businesses in the ordinary course consistent with past practice and in compliance in all material respects with all applicable laws and regulations and, to the extent consistent therewith, will use all reasonable efforts to preserve intact their current business organizations, use reasonable efforts to keep available the services of their current officers and other key employees as a group and preserve their relationships with those persons having business dealings with them to the end that their goodwill and ongoing businesses will be unimpaired at the Control Date. In the Merger Agreement, the Company has agreed to certain restrictions on its conduct during the period from the date of the Merger Agreement to the Control Date. Such restrictions include, without limitation, (a) limitations on (i) the payment of dividends, (ii) issuance or sales of stock or rights to acquire stock, (iii) sales, leases or encumbrances of assets, (iv) acquisitions and capital expenditures, (v) discharging or settling material claims, (vi) entering into, amending or terminating contracts, (vii) adopting or amending benefit plans or agreements, (viii) increasing compensation of directors, officers or key employees and (b) adopting any amendment to the Company's or any subsidiaries' articles of incorporation or by-laws. The provisions of the Merger Agreement applying operating covenants such as the foregoing to Parent and regarding coordination with respect to the payment of dividends have been deleted. 15 17 Pursuant to the Merger Agreement, except as required by law, the Company has agreed that it will not, and will not permit any of its subsidiaries to, voluntarily take any action that would, or that could reasonably be expected to, result in (1) any of the representations and warranties of it set forth in the Merger Agreement or the Company Stock Option Agreement that are qualified as to materiality becoming untrue, (2) any of such representations and warranties that are not so qualified becoming untrue in any material respect, (3) any of the conditions to the consummation of the transactions contemplated by the Merger Agreement not being satisfied or (4) any material impairment or delay of STB approval. Pursuant to the Third Amendment, Parent has agreed that, except as required by law, Parent will not, and will not permit any of its subsidiaries to, voluntarily take any action that would, or that could reasonably be expected to, result in (x) any of the representations and warranties of Parent set forth in the Merger Agreement or the Company Stock Option Agreement that are qualified as to materiality becoming untrue, (y) any of such representations and warranties that are not so qualified becoming untrue in any material respect or (z) any of the conditions to the consummation of the Second Offer or the Merger not being satisfied, in any of the foregoing cases (x), (y) or (z), such as would give rise to a right to terminate the Merger Agreement. See "Termination" below. Without limiting the foregoing, Parent has agreed not to, and to not permit any of its subsidiaries to, take any action that could reasonably be expected to impair, or delay in any material respect, the consummation of the Second Offer and the Merger. No Solicitation. Under the Third Amendment, (i) the obligations described under "No Solicitation" in Section 13 of the Offer to Purchase are no longer applicable to Parent, (ii) the time period described in the proviso to the first sentence of the first paragraph under "No Solicitation" in Section 13 of the Offer to Purchase has been changed to any time prior to the consummation of the Second Offer and after December 31, 1997 and (iii) the time period described in the second sentence of the second paragraph under "No Solicitation" has been changed to any time prior to the consummation of the Second Offer and after December 31, 1997 and the determination of the Company's Board of Directors required under such sentence has been changed to a determination by the Company's Board of Directors that, due to the existence of a Superior Proposal, there is not a substantial probability that the Minimum Condition will be satisfied. Third Party Discussions. Notwithstanding anything to the contrary contained in the Merger Agreement, during the term of the Merger Agreement, Parent will have sole authority to (and, without the consent of Parent, the Company will not, directly or indirectly through another person) conduct and participate in any conversations, discussions or negotiations, and enter into any agreement, arrangement or understanding, with any other company engaged in the operation of railroads (including NSC) or any other person with respect to the acquisition by any such other company (including NSC) or person of any securities or assets of the Company and its subsidiaries or Parent and its subsidiaries, or any trackage rights or other concessions relating to the assets or operations of the Company and its subsidiaries or Parent and its subsidiaries, except to the extent the Company is expressly permitted to take any such action without the consent of Parent pursuant to the provisions described in "Interim Operations of the Company" above. Parent has agreed to use reasonable efforts to keep the Company apprised of the status of any such conversations, discussions or negotiations, and the Company has agreed to use reasonable efforts to cooperate and assist with Parent's efforts relating to such conversations, discussions or negotiations. In the event that, as a result of any such conversations, discussions or negotiations, it becomes necessary or appropriate to amend the Merger Agreement or to take any other action to facilitate a transaction (including by amending the Company Rights Agreement or taking any Board action that may be required under any state anti-takeover statute or by amending the Second Offer to include a co-bidder), and Parent proposes to do so, the Company will enter into an appropriate amendment to the Merger Agreement or will take such further action, provided that any such amendment will not change the form or amount of the Per Share Merger Consideration or the Second Offer Price, modify certain provisions of the Merger Agreement relating to employee benefits or otherwise adversely affect the Company (in respect of the benefits to be received by its shareholders or employees under the Merger Agreement) or delay or adversely affect the transactions contemplated by the Merger Agreement and provided further that any such amendment will be in accordance with all applicable law. Shareholders' Meetings. To the extent required by applicable law, the Company will, as soon as practicable following the consummation (or expiration) of the Second Offer, file with the SEC preliminary 16 18 proxy materials and use reasonable efforts to clear such materials and thereafter duly call, give notice of, convene and hold on a date mutually agreed to by Parent and the Company a meeting of its shareholders for the purpose of obtaining the Company Merger Shareholder Approval. The Company will, through its Board of Directors, recommend to its shareholders the approval and adoption of the Second Offer and the matters to be considered at the Company Merger Shareholders Meeting, except to the extent that the Board of Directors of the Company will have withdrawn or modified its approval or recommendation of the Second Offer or the matters to be considered at the Company Merger Shareholders Meeting or terminated the Merger Agreement in accordance with the provisions described under "No Solicitation" above. Subject to the terms of the Voting Trust Agreement, Purchaser has agreed to cause all Shares acquired by it or its wholly owned subsidiaries pursuant to the First Offer, the Second Offer or otherwise to be voted in favor of approval and adoption of the matters to be considered at the Company Merger Shareholders Meeting. Notwithstanding the foregoing, in the event that Purchaser acquires at least 80% of the outstanding shares of each class of the Company's capital stock, Parent and the Company together will, subject to the conditions to the Merger, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after such acquisition, without a meeting of the Company's shareholders, in accordance with the Pennsylvania Law. Tax-Free Reorganization. The provisions described under "Tax-Free Reorganization" in Section 13 of the Offer to Purchase have been deleted. Rights Agreements. The provisions relating to Parent's Rights Agreement described in the second paragraph under "Rights Agreements" in Section 13 of the Offer to Purchase have been deleted. Certain Fees and Expenses. The provisions described in the second paragraph under "Certain Fees and Expenses" in Section 13 of the Offer to Purchase with respect to the Company's right to receive a termination fee under certain circumstances have been deleted. Reasonable Efforts; Regulatory Approvals. At Parent's request, the Company will, and will cause each of its subsidiaries to, take all such actions as are reasonably necessary or appropriate to (i) cooperate with Parent to prepare and present to the STB or before any other federal, state or local body as soon as practicable all filings and other presentations in connection with seeking any approval, exemption or other authorization necessary to consummate the transactions contemplated by the Merger Agreement and the Company Stock Option Agreement, (ii) cooperate with Parent in the prosecution of such filings and the making of such other presentations with diligence and take no action in connection therewith without Parent's consent (including meetings with public officials and making public statements), (iii) at Parent's request, diligently join with Parent in opposing any objections to, appeals from or petitions to reconsider or reopen any such approval by persons not party to the Merger Agreement, (iv) take all actions reasonably requested by Parent to implement the transactions that are the subject of the STB proceeding, including the entry into appropriate labor implementing agreements to be effective following the Control Date, (v) take all such further action as reasonably may be requested by Parent to obtain the STB approval or any related approvals, including, subject to the other provisions of the Merger Agreement, by providing access to the Company's properties, financial records and traffic data, and (vi) take no action inconsistent with the foregoing. The actions to be taken will include the joinder by the Company, to the extent requested by Parent, in an application to exercise control over the Company and its subsidiaries and such other matters as Parent will include therein. Compensation and Benefits; Stock Options. Immediately prior to the Effective Time, each Company Employee Stock Option, whether or not then exercisable, will be canceled and the holder thereof will be entitled to receive at the Effective Time or as soon as practicable thereafter (or, if later, the date six months and one day following the grant of such Company Employee Stock Option) from the Company, an amount in cash equal to the product of (i) the number of Common Shares previously subject to such Company Employee Stock Option and (ii) the excess, if any, of the Per Share Merger Consideration over the exercise price per Common Share previously subject to such option. At Parent's request, the Company will request that the trustee of the ESOP enter into a pledge agreement with respect to the unallocated stock held in the ESOP suspense account and, thereafter, the Company will use its reasonable efforts to enter into such a pledge agreement as promptly as practicable and to cause the ESOP debt to be repaid. 17 19 Executive Agreements. Following the Control Date, Mr. LeVan will no longer be employed by the Company or the Surviving Corporation. Parent and the Company have agreed that Parent will pay Mr. LeVan, on the Control Date, in lieu of any stay bonus and severance or termination benefits, a lump sum equal to the economic value of the LeVan Employment Agreement (as reasonably determined by the parties in good faith). Company executives (other than Mr. LeVan) will be paid the value of their "change of control" contracts in accordance with the terms thereof if their employment with the Surviving Corporation is terminated under certain specified circumstances after the consummation of the Second Offer or if they remain employed by the Surviving Corporation until May 31, 1998. Effects of Merger on Employee Benefit and Stock Plans. Parent has agreed to cause the Surviving Corporation to honor all obligations under employment agreements and employee benefit plans, programs and policies and arrangements of the Company in accordance with the terms of the Merger Agreement and, after the Control Date, to provide benefits to those employees of the Company transferred to Parent or another entity on a basis no less favorable in the aggregate than those provided to similarly situated employees of such entity. The Surviving Corporation will provide severance or supplemental retirement benefits to non-union employees (other than executive level employees) who are terminated within three years following the Control Date equal to between six months and 24 months of salary (depending upon an employee's service). Medical coverage will also be continued for these employees for specified periods. The Surviving Corporation will also establish a stay bonus program that provides a lump sum cash payment to non-union employees who remain employed until the Control Date with additional payments made to those employees who remain employed for up to six months thereafter. Conditions to the Merger. The respective obligations of the Company, on the one hand, and Parent and Purchaser, on the other, to effect the Merger are subject to the satisfaction or waiver on or prior to the Closing Date (as defined in the Merger Agreement) of the following conditions: (a) the Company Shareholder Merger Approval, if required, shall have been obtained; and (b) no judgment, order, decree, statute, law, ordinance, rule, regulation, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any court of competent jurisdiction or other Governmental Entity or other legal restraint or prohibition (collectively, "Restraints") preventing the consummation of the Merger may be in effect, provided that the party asserting this condition shall have used reasonable efforts to prevent the entry of any such Restraints and to appeal as promptly as possible any such Restraints that may be entered, and there shall not be any Restraint enacted, entered, enforced or promulgated that is reasonably likely to result in a material adverse effect on the Company and Parent on a combined basis. The obligation of Parent to effect the Merger is further subject to satisfaction or waiver of the following conditions: (a) the Company shall not have breached or failed to observe or perform in any material respect any of its covenants or agreements under the Merger Agreement to be performed by it at or prior to the Closing Date (as defined in the Merger Agreement), and the representations and warranties of the Company in the Merger Agreement shall be true and accurate both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to "materiality" or "material adverse effect" set forth therein), does not have, and is not likely to have, individually or in the aggregate, a material adverse effect on the Company (provided, however, that this condition shall be inapplicable in the event that, following consummation of the Second Offer, Parent shall have caused the removal and replacement of a majority of the members of the Company's Board of Directors); (b) at any time after the date of the Merger Agreement there will not have occurred any material adverse change relating to the Company; and (c) all actions by or in respect of or filings with any Governmental Entity required to permit the consummation of the Merger (other than approval of the STB) will have been obtained, excluding any consent, approval, clearance or confirmation the failure to obtain which would not have a material adverse effect on Parent, the Company or, after the Effective Time, the Surviving Corporation. The obligation of the Company to effect the Merger is further subject to satisfaction or waiver of the condition that Parent shall not have breached or failed to observe or perform in any material respect any of its covenants or agreements under the Merger Agreement to be performed by it at or prior to the Closing Date, 18 20 and certain of the representations and warranties of Parent in the Merger Agreement shall be true and accurate both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to "materiality" or "material adverse effect" set forth therein), does not have, and is not likely to have, individually or in the aggregate, a material adverse effect on Parent's ability to consummate the transactions contemplated by the Merger Agreement. Neither Parent nor the Company is permitted under the Merger Agreement to rely on the failure of any condition described in this paragraph or the two immediately preceding paragraphs, as the case may be, to be satisfied if such failure was caused by such party's failure to use reasonable efforts to consummate the Merger and the other transactions contemplated by the Merger Agreement, as required by and subject to the provisions of the Merger Agreement described above under "Reasonable Efforts; Regulatory Approval." Termination. The Merger Agreement may be terminated at any time prior to the Effective Time, whether before or after the Company Merger Shareholder Approval: (a) by mutual written consent of Parent and the Company; or (b) by either Parent or the Company: (i) if the Merger is not consummated by December 31, 1998, provided, however, that the right to terminate the Merger Agreement pursuant to clause (i) will not be available to (x) the Company if Purchaser consummates the Second Offer prior to such date or (y) any party whose failure to perform any of its obligations under the Merger Agreement results in the failure of the Merger to be consummated by such time; (ii) if any Governmental Entity shall have issued a Restraint or taken any other action permanently enjoining, restraining or otherwise prohibiting the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement and such Restraint or other action will have become final and nonappealable, provided, however, that the party seeking to terminate the Merger Agreement pursuant to clause (ii) shall have used all reasonable efforts to prevent the entry of and to remove such Restraint or other action; (c) by Parent, if the Company shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the Merger Agreement, which breach or failure to perform (A) would give rise to the failure of the condition to the Merger relating to the performance of obligations and the truth of representations and warranties, and (B) cannot be or has not been cured within 30 days after the giving of written notice to the Company of such breach (a "Company Material Breach") (provided that Parent is not then in Parent Material Breach of any covenant or other agreement contained in the Merger Agreement and provided that, if such breach is curable through the exercise of the Company's best efforts, the Merger Agreement may not be terminated pursuant to clause (c) for so long as the Company is so using its best efforts to cure such breach); (d) by Parent, if (i) the Board of Directors of the Company (or, if applicable, any committee thereof) shall have withdrawn or modified in a manner adverse to Parent its approval or recommendation of the Second Offer or the Merger or the matters to be considered at the Company Merger Shareholders Meeting or failed to reconfirm its recommendation within 15 business days after a written request to do so, or approved or recommended any Takeover Proposal in respect of the Company or (ii) the Board of Directors of the Company or any committee thereof have resolved to take any of the foregoing actions; (e) by Purchaser, if the Company or any of its officers, directors, employees, representatives or agents take any of the actions that would be proscribed by the provisions described under "No Solicitation" but for the exceptions therein allowing certain actions to be taken pursuant to the proviso in the first sentence of the first paragraph thereof or the second sentence of the second paragraph thereof; (f) by the Company, prior to consummation of the Second Offer, if Parent shall have breached or failed to perform in any material respect certain of its representations and warranties or any of its covenants or other agreements contained in the Merger Agreement, which breach or failure to perform (A) would give rise to the failure of the condition relating to performance of obligations and the truth of representations and warranties and (B) cannot be or has not been cured within 30 days after the giving of written notice to Purchaser of such breach (a "Parent Material Breach") (provided that the Company is not then in Company Material Breach of any representation, warranty, covenant or other agreement contained in the Merger Agreement and provided that, if such breach is curable through the exercise of Parent's best efforts, the Merger Agreement may not be terminated pursuant to clause (f) for so long as Parent is so using its best efforts to cure such breach); (g) by the Company in accordance with the provisions described under "No Solicitation," provided that it has complied with all provisions therein contained, including the notice 19 21 provisions therein, and that it complies with applicable requirements described under "Certain Fees and Expenses"; and (h) following June 2, 1997, by the Company, if Purchaser shall have failed to consummate the Second Offer unless such failure is due to the non-occurrence of a condition to the Second Offer. Amendments. Prior to the Effective Time, the Merger Agreement may not be amended without the approval of a majority of Continuing Directors (as defined in the Company Rights Agreement) present on the Company Board of Directors (provided that at such time there are a minimum of two such Continuing Directors then present on the Company Board of Directors). OPTION AGREEMENTS The Parent Stock Option Agreement has been canceled in connection with the Third Amendment. EMPLOYMENT AGREEMENTS The LeVan Employment Agreement has been canceled in connection with the Third Amendment. See also "Executive Agreements" above. VOTING TRUST AGREEMENT For a description of the Voting Trust Agreement as amended in connection with the Third Amendment, see Section 9 of this Second Supplement. 8. Conditions of the Second Offer. The discussion set forth in Section 15 of the Offer to Purchase and the amendments thereto are hereby amended and supplemented as follows: The condition set forth in clause (i) of Section 15 of the Offer to Purchase relating to the Pennsylvania Control Transaction Law is deleted and replaced with the following: (i) there shall not have been validly tendered and not withdrawn such a number of Shares which, together with the Common Shares already owned by Parent through the Voting Trust and with any Common Shares already owned by any third party, its subsidiaries or affiliates that may, jointly together with Parent, acquire an equity ownership interest in any vehicle that may acquire the Company, constitute at least a majority of the Shares outstanding on a fully diluted basis (other than upon exercise of the Company Stock Option) The conditions set forth in subsections (2)(a) and (2)(b) of Section 15 of the Offer to Purchase are deleted and replaced with the following: (a) there shall be any action taken, or any statute, rule, regulation, injunction, order or decree enacted, enforced, promulgated, issued or deemed applicable to the transactions contemplated by the Second Offer, the Merger or the Merger Agreement, by or before any court, government or governmental authority or agency, domestic or foreign, that, directly or indirectly, results in (x) making illegal or otherwise directly or indirectly restraining or prohibiting the making of the Second Offer, the acceptance for payment of or payment for some of or all the Shares by Parent or Purchaser or the consummation by Parent or Purchaser of the Merger or the Second Offer or (y) except for the requirements of the Voting Trust Agreement and other than any STB action which does not result in the effects described in the foregoing (x), imposing material limitations on the ability of Parent, Purchaser or any of their subsidiaries or affiliates effectively to exercise full rights of ownership of the Common Shares, including, without limitation, the right to vote any Common Shares acquired or owned by Parent, Purchaser or any of their subsidiaries; or 9. Certain Legal Matters; Regulatory Approvals. The discussion set forth in Section 16 of the Offer to Purchase, Section 6 of the First Supplement 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. As noted in Section 16 of the Offer to Purchase, on October 18, 1996, Parent and the Company filed with the STB a Notice of Intent to File Railroad Control Application, which indicated that the parties intended to file on or before March 1, 1997 the STB Application seeking STB approval of the acquisition of control by Parent and its affiliates of the Company and its affiliates. Under the STB's 20 22 regulations, the control application must be filed no sooner than three months and no later than six months from the date of filing the Notice of Intent. Parent and the Company have not filed the STB Application. In addition, also as noted in Section 16 of the Offer to Purchase, on November 6, 1996, NSC filed a Notice of Intent to File Railroad Control Application indicating that NSC planned to file with the STB a control application with respect to the Company on or before May 1, 1997. On February 21, 1997, NSC filed a preliminary environmental report that is required under the STB's schedule to be filed at least thirty days prior to the filing of the control application. On January 30, 1997, the STB issued a procedural schedule in the Parent/Company docket that requires that the STB issue its final decision within 365 days of the filing of the Parent/Company application. Also on January 30, 1997, the STB issued an identical procedural schedule in the NSC docket. The STB indicated in both procedural schedules that the first application to be filed seeking control of the Company would be deemed to be the primary application and that any application from any other party would be considered a responsive or inconsistent application to that primary application. The STB would thus effectively consolidate the two applications. Parent intends to commence negotiations with NSC promptly to effect a consensual division of the Company on a basis generally consistent with the NSC Proposal. See Section 5 of the Second Supplement. While Parent believes that it will reach agreement with NSC, there can be no assurance that such a division can be successfully negotiated. If Parent successfully negotiates a division of the Company with NSC, it is contemplated that Parent and NSC would file a joint application with the STB for control of the Company and for such other matters involved in such division as might be required to be approved by the STB. Parent and NSC may file a new Notice of Intent to File Railroad Control Application or may request a waiver of that requirement in light of the separate filing of such notices by Parent and NSC. In addition, Parent and NSC may request that the STB establish an expedited procedural schedule to consider Parent and NSC's joint application in light of the fact that the STB will not be required to consider two competing applications for control of the Company. The STB approval process described in "STB Matters; Acquisition of Control," "Conditions" and "Judicial Review -- Stay" in Section 16 of the Offer to Purchase, as amended by Section 6 of the First Supplement, would be applicable to any application to be filed by Parent and NSC seeking STB approval of acquisition of control over, or a division of, the Company. 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 Third Amendment. The amendments would, among other things, delete certain provisions requiring the Company's prior approval with respect to the amendment of provisions relating to the voting and disposition of the Trust Stock and the provision naming the Company as an express third party beneficiary of the Voting Trust Agreement following consummation of the Second Offer. Amendment of the Voting Trust Agreement requires approval by 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. 21 23 Under the terms of the Amended Voting Trust Agreement, the Voting Trustee is required to vote the Trust Stock in favor of the Merger, in favor of any proposal necessary or desirable to effectuate Parent and Purchaser's acquisition of 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 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 holders of the trust certificates (representing ownership interests in the Trust Stock) solely as investors in the stock of the Company and without reference to such holders' interests in other railroads than the subsidiaries of the Company. 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, the Voting Trustee shall either transfer the Trust Stock to Parent, Purchaser or the holder(s) of trust certificates or, if shareholder approval of the Merger has not previously been obtained, vote the Trust Stock in favor of the 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 within two years after such date or STB denial, or such extension of that period as the STB shall approve. 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 or, on a pro rata basis, to the holder(s) of trust certificates as then known to the Voting Trustee. Pursuant to the Merger Agreement, subject to applicable law and the rules, regulations and practices of the STB, the Amended Voting Trust Agreement may be modified or amended, or other voting trusts may be employed with respect to Shares, at any time by Parent in its sole discretion, except that the terms of the Amended Voting Trust Agreement governing the voting of or transfer or disposition of the Shares may not be amended prior to the consummation of the Second Offer without the Company's consent. Norfolk Southern Litigation and Shareholder Litigation. On January 2, 1997, CSX sold 85,000 shares of Conrail Common Stock (including the proxy to vote such Shares at the Pennsylvania Special Meeting) at an average per Share price of $98.983, in order to moot certain claims of the Plantiffs in the purported shareholder derivative actions. On January 2, 1997, Plaintiffs in the Pennsylvania Litigation filed a Motion for Preliminary Injunction and a Motion for Partial Summary Judgment in the District Court. In their Motion for Partial Summary 22 24 Judgment, Plaintiffs requested an order stating that consummation of the First Offer caused a "Control Transaction" with respect to the Company to occur under the Pennsylvania Control Transaction Law which created joint and several liability among the members of the Control Transaction Group to pay at least $110 cash per Share to each demanding Company shareholder. In their Motion for Preliminary Injunction, Plaintiffs requested that the District Court enjoin the Defendants, and all persons acting in concert with them, from seeking to enforce or requiring compliance with, the "No Negotiation Provision," as extended, and to enjoin Defendants from convening the Pennsylvania Special Meeting until ten business days after the Company shareholders receive notice of the District Court's ruling on Plaintiffs' Motions for Preliminary Injunction and Partial Summary Judgment. On January 8, 1997, Plaintiffs filed a Supplemental Motion for Preliminary Injunction requesting that Defendants be enjoined from convening the Pennsylvania Special Meeting until ten business days after the Company shareholders receive notice of the District Court's final judgment on the Pennsylvania Control Transaction Law issue. On January 9, 1997, after a hearing, the District Court denied Plaintiffs' Motion for Preliminary Injunction, Plaintiffs' Supplemental Motion for a Preliminary Injunction and Plaintiffs' Motion for Partial Summary Judgment. After the ruling, Plaintiffs asked the District Court for an injunction pending appeal, which was denied. Plaintiffs later that day filed a notice of appeal with the District Court. On January 10, 1997, Plaintiffs filed a motion for expedited appeal or, in the alternative, an injunction pending appeal with the Third Circuit. On the same date, the Third Circuit set a briefing schedule to consider Plaintiffs' motion for an injunction pending appeal but declined to expedite a final decision on the appeal. On January 15, 1997, after hearing oral arguments, the Third Circuit denied Plaintiffs' motion for an injunction pending appeal. On February 6, 1997, NSC filed an amended complaint alleging substantially the same claims referred to above in the description of NSC's prior complaints and motions for preliminary injunction. As of the date hereof, Defendants have not been required to file an answer with respect to the amended complaint. On February 25, the Third Circuit heard argument on Plaintiffs' appeals from the District Court's orders of November 19, 1996 and January 9, 1997, denying relief to Plaintiffs. No decision has as yet been rendered by the Third Circuit on these appeals. On February 18, 1997, a separate purported shareholder class action was filed against the Company and Mr. LeVan entitled Berkowitz v. Conrail Inc., C.A. No. 97-1214. The Berkowitz action was filed in the United States District Court for the Eastern District of Pennsylvania and alleges violations by the Defendants of the disclosure provisions of the Exchange Act, principally that Defendants failed to disclose alleged discussions and attempts to negotiate by NSC prior to October 14, 1996. As relief, the complaint seeks damages in an unspecified amount on behalf of persons who sold shares of Company stock during the period October 15, 1996 through October 22, 1996. As of the date hereof, Defendants have not filed an answer with respect to this complaint. GREEN ACQUISITION CORP. March 7, 1997 23 25 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 such shareholder's 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 the Offer to Purchase, the First Supplement, this Second Supplement, 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.A.32 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, THE SUPPLEMENT THERETO DATED DECEMBER 19, 1996, AND THE SECOND SUPPLEMENT THERETO DATED MARCH 7, 1997, 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 FRIDAY, APRIL 18, 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, 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 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 procedures 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 Letter of Transmittal circulated with the Second Supplement, the Letter of Transmittal circulated with the First Supplement (as defined below) or the Letter of Transmittal circulated with the Offer to Purchase 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 procedures 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 Second 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 procedures 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 all Shares, including, in each case, the associated Rights, at a price of $115 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 "First Supplement"), and the Second Supplement thereto, dated March 7, 1997 (the "Second Supplement"), receipt of which is hereby acknowledged, and in the related Letters 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 Second 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 Share, 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, the First Supplement or the Second 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, the First Supplement or the Second Supplement, 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 , 1997 (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 , 1997 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 procedures 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 "Amended Terms of the Second Offer; Expiration Date" of the Second Supplement). 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 SHAREHOLDER, 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, the First Supplement, the Second 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 SECOND SUPPLEMENT). 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 - -------------------------------------------------------------------------------- PART I -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR BOX AT RIGHT AND CERTIFY BY SIGNING AND / / DATING BELOW. Employer Identification Number (If awaiting TIN write "Applied For") -------------------------------------------------------------------------------------------- PART II -- For Payees Exempt From Backup Withholding, see the enclosed Guidelines and complete as instructed therein. CERTIFICATION -- Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or a Taxpayer 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 ________________, 1997 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, the First Supplement, the Second Supplement, the 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 SUBSTITUTE FORM W-9 DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN) EX-99.A.33 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 "Amended Terms of the Second Offer; Expiration Date" of the Second Supplement (as defined below)) or (iii) the procedures 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, and the Second Supplement thereto, dated March 7, 1997 ("Second Supplement"), and the related Letters of Transmittal (which, as amended from time to time, collectively 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 Area Code and Tel. No.: Account Number: ------------------------ ------------------------------------------------ Dated: , 1997 ---
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: , 1997 ------------------------- --
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.A.34 5 TEXT OF PRESS RELEASE ISSUED BY PARENT 1 [CSX CORPORATION LETTERHEAD] CONTACTS: CSX Corporation Kekst and Company Thomas E. Hoppin Richard Wolff (804) 782-1450 (212) 593-2655 FOR IMMEDIATE RELEASE CSX AND CONRAIL SUCCESSFULLY AMEND MERGER AGREEMENT SHAREHOLDERS TO RECEIVE $115 PER SHARE IN CASH FOR REMAINING STOCK BY JUNE 2, 1997; FAR-REACHING RETENTION PACKAGE FOR SUPERVISORY AND MANAGEMENT EMPLOYEES INCLUDED RICHMOND, VA., MARCH 7, 1997 - CSX Corp. (NYSE: CSX) today announced it has successfully negotiated an amendment to its merger agreement with Conrail Inc. (NYSE: CRR), providing for an increase in the price to be paid for the remaining outstanding shares of Conrail to $115 per share, all in cash. Under the amended agreement, CSX is amending its outstanding tender offer to increase the price and number of shares sought. The tender offer, which is not subject to any financing condition and is no longer subject to a Conrail shareholder opt-out vote of certain Pennsylvania statutory provisions, is subject to a minimum condition. The tender offer will be followed by a merger in which all Conrail shares not purchased in the tender offer will be converted into $115 per share in cash. The new expiration date for the tender offer is 5:00 p.m., New York City time, on April 18, 1997. However, under the revised merger agreement, CSX in its discretion may extend the tender offer for any reason through June 2, 1997. The amended agreement also provides a far-reaching retention and severance package for Conrail's supervisory and management employees and allows CSX to enter into negotiations with Norfolk Southern (NYSE: NSC) on a division of Conrail. John W. Snow, chairman, president and chief executive officer of CSX, said, "When we initiated our merger with Conrail, we recognized that some concessions would have to be made to Norfolk Southern to ensure that our transaction would result in (more) 2 -2- competitive rail systems in the East. Calls from shippers, influential public officials, and other railroads for a pro-competitive division of Conrail only heightened the need for a negotiated settlement. "We regret that we were not able to proceed with our merger as originally intended, but the amendment we have agreed to today will protect the interests of the shareholders, customers and employees of both Conrail and CSX. It will, I believe, result in two strong, competitive railroads in the East. Just as important, it will help to ensure that the regulatory reforms of the 1980s will be preserved for many generations to come," Snow said. "We will now focus on negotiating an agreement, including a joint purchase of the Conrail shares, with Norfolk Southern, a determined and fair competitor," Snow said. "We will make every effort to see that the result is a roughly equal division of Conrail and the emergence of two exceptional rail systems in the East. In achieving that, I am confident that together we will produce the winning, pro-competitive application to the Surface Transportation Board (STB) to which we at CSX always have been committed. "The people of Conrail, the board of directors, the employees, and most certainly senior management," Snow added, "deserve much credit for what they have accomplished. From the dark days of the collapse of the Northeastern railroads now more than 20 years ago, they have created a strong, successful railroad that is widely acclaimed for the tremendous strides it has made in becoming an industry leader. "Now, with ourselves and with Norfolk Southern, they are about to begin writing a new chapter of railroading in the region. I have no doubt that together we will build an even greater railroad system in the East and two even stronger railroad companies. We welcome the Conrail employees who will join the CSX family," he said. Prior to the amendment of the merger agreement, CSX had offered $110 per share in cash for 40 percent of the outstanding shares of Conrail, and a tax-free exchange at a ratio of 1.85619 CSX common shares and an additional $16 per share in CSX convertible preferred stock for the remaining 60 percent of Conrail's outstanding shares. As of the close of business on March 6, 1997, 564,577 Conrail shares had been tendered and not withdrawn in the CSX tender offer. CSX, 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 internet address is http://www.csx.com. ### EX-99.A.35 6 SUMMARY ADVERTISEMENT DATED MARCH 10, 1997 1 Exhibit (a)(35) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Second Offer is made solely by the Offer to Purchase, dated December 6, 1996, the Supplement thereto, dated December 19, 1996, the Second Supplement thereto, dated March 7, 1997, and the related Letters of Transmittal and is being made to all holders of Shares. The Second Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Second Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In those jurisdictions where securities, blue sky or other laws require the Second Offer to be made by a licensed broker or dealer, the Second Offer shall be deemed to be made on behalf of Green Acquisition Corp. by Wasserstein Perella & Co., Inc. or one or more registered brokers or dealers licensed under the laws of such jurisdiction. GREEN ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF CSX CORPORATION HAS AMENDED ITS OFFER TO PURCHASE FOR CASH AND IS NOW OFFERING TO PURCHASE ALL 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. AT $115 NET PER SHARE Green Acquisition Corp. ("Purchaser"), a Pennsylvania corporation and a wholly owned subsidiary of CSX Corporation, a Virginian corporation ("Parent"), hereby offers to purchase all shares of (i) common stock, par value $1.00 per share (the "Common Shares"), and (ii) Series A ESOP Convertible Junior Preferred Stock, without par value (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"), at a price of $115 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 6, 1996 (the "Offer to Purchase"), the Supplement thereto, dated December 19, 1996 (the "First Supplement"), the Second Supplement thereto, dated March 7, 1997 (the "Second Supplement"), and in the related Letters of Transmittal (which, as amended from time to time, collectively constitute the "Second Offer"). Unless the context otherwise requires, all references to Common Shares, ESOP Preferred Shares or Shares shall include the associated Rights, and all references to the Rights shall include the benefits that may enure to holders of the Rights pursuant to the Rights Agreement, including the right to receive any payment due upon redemption of the Rights. ------------------------------------------------------------------------ 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 FRIDAY, APRIL 18, 1997, UNLESS THE SECOND OFFER IS FURTHER EXTENDED. ------------------------------------------------------------------------ THE SECOND OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, PRIOR TO THE EXPIRATION OF THE SECOND OFFER THERE SHALL HAVE BEEN VALIDLY TENDERED AND NOT WITHDRAWN SUCH NUMBER OF SHARES WHICH, TOGETHER WITH THE COMMON SHARES ALREADY OWNED BY PARENT THROUGH THE VOTING TRUST AND BY CERTAIN OTHER PARTIES, CONSTITUTES AT LEAST A MAJORITY OF OUTSTANDING SHARES ON A FULLY DILUTED BASIS (AS DEFINED IN THE OFFER TO PURCHASE). THE SECOND OFFER IS NO LONGER CONDITIONED UPON THE PENNSYLVANIA CONTROL TRANSACTION LAW BEING INAPPLICABLE TO THE COMPANY. UNDER THE MERGER AGREEMENT, PURCHASER HAS THE RIGHT IN ITS DISCRETION TO EXTEND THE SECOND OFFER, FROM TIME TO TIME, THROUGH 5:00 P.M., NEW YORK CITY TIME, ON JUNE 2, 1997, WHETHER OR NOT THE CONDITIONS TO THE SECOND OFFER HAVE BEEN SATISFIED OR WAIVED. THE SECOND OFFER IS NOT CONDITIONED ON OBTAINING FINANCING. SEE SECTION 15 OF THE OFFER TO PURCHASE AND SECTIONS 4, 7 AND 8 OF THE SECOND SUPPLEMENT. THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE SECOND OFFER (AS AMENDED) AND THE MERGER (AS AMENDED), DETERMINED THAT THE MERGER AGREEMENT (AS AMENDED) 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 ACCEPT THE SECOND OFFER AND TENDER THEIR SHARES PURSUANT TO THE SECOND OFFER. The Second Offer is being made pursuant to the Agreement and Plan of Merger, dated as of October 14, 1996 (as amended by the First Amendment (as defined in the Offer to Purchase), the Second Amendment (as defined in the First Supplement) and the Third Amendment (as defined in the Third Supplement), the "Merger Agreement"). The Merger Agreement provides, among other things, that, following the completion (or expiration) of the Second Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company (the "Merger"), with the Company as the surviving corporation. In the Merger, each outstanding Share (other than Shares held in the treasury of the Company or owned by Parent, Purchaser or any of their respective subsidiaries or affiliates, or any third party, its subsidiaries or affiliates that may, jointly together with Parent, acquire an equity ownership interest in any vehicle that may acquire the Company) will be converted into the right to receive $115 in cash, without interest. See Section 13 of the Offer to Purchase, Section 4 of the First Supplement and Section 7 of the Second Supplement. Purchaser expressly reserves the right, in its sole judgment and subject to the terms of the Merger Agreement, at any time and from time to time and regardless of whether any of the events set forth in Section 15 of the Offer to Purchase, as supplemented by the First and Second Supplements, shall have occurred or shall have been determined by Purchaser to have occurred, (i) to extend the period of time during which the Second Offer is open and thereby delay acceptance for payment of, and the payment for, any Shares, by giving oral or written notice of such extension to the Depositary (as defined in the Offer to Purchase) and (ii) to amend the Second Offer in any respect by giving oral or written notice of such amendment to the Depositary. Any such extension or amendment will be followed as promptly as practicable by a public announcement thereof, such announcement in the case of an extension, to be issued not later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date (as defined in the Offer to Purchase). During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Second Offer, subject to the right of a tendering shareholder to withdraw such shareholder's Shares. For purposes of the Second Offer, Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn if, as and when Purchaser gives oral or written notice to the Depositary of Purchaser's acceptance of such Shares for payment pursuant to the Second Offer. In all cases, upon the terms and subject to the conditions of the Second Offer, payment for Shares purchased pursuant to the Second Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the purpose of receiving payment from Purchaser and transmitting payment to validly tendering shareholders. Under no circumstances will interest on the purchase price for Shares be paid by Purchaser by reason of any delay in making such payment. In all cases, payment for Shares purchased pursuant to the Second Offer will be made only after timely receipt by the Depositary of (a) certificates for such Shares ("Certificates") or a book-entry confirmation of the book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company or the Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer Facilities"), pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (b) the Letters of Transmittal (or facsimile thereof) properly completed and duly executed with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer, and (c) any other documents required by the Letters of Transmittal. If, for any reason whatsoever, acceptance for payment of any Shares tendered pursuant to the Second Offer is delayed, or if Purchaser is unable to accept for payment or pay for Shares tendered pursuant to the Second Offer, then, without prejudice to Purchaser's rights set forth in the Offer to Purchase, the Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares and such Shares may not be withdrawn except to the extent that the tendering shareholder is entitled to and duly exercises withdrawal rights as described in Section 4 of the Offer to Purchase. Any such delay will be followed by an extension of the Second Offer to the extent required by law. If any tendered Shares are not accepted for payment for any reason pursuant to the terms and conditions of the Second Offer, or if Share Certificates are submitted evidencing more Shares than are tendered, Share Certificates evidencing unpurchased Shares will be returned, without expense to the tendering shareholder (or, in the case of Shares tendered by book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3 of the Offer to Purchase, such Shares will be credited to an account maintained at such Book-Entry Transfer Facility), as promptly as practicable following the expiration or termination of the Second Offer. Except as otherwise provided in Section 4 of the Offer to Purchase, tenders of Shares made pursuant to the Second Offer are irrevocable. Shares tendered pursuant to the Second Offer may be withdrawn at any time prior to 5:00 p.m., New York City time, on Friday, April 18, 1997 (or if Purchaser shall have extended the period of time for which the Second Offer is open, at the latest time and date at which the Second Offer, as so extended by Purchaser, shall expire). In order for a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn, and, if Certificates for Shares have been tendered, the name of the registered holder of the Shares as set forth in the tendered Certificate, if different from that of the person who tendered such Shares. If Certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then prior to the physical release of such Certificates, the serial numbers shown on such Certificates evidencing the Shares to be withdrawn must be submitted to the Depositary and the signature on the notice of withdrawal 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 (an "Eligible Institution"), unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the appropriate Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility's procedures. Withdrawal of tenders of Shares may not be rescinded, and any Shares properly withdrawn will be deemed not to be validly tendered for purposes of the Second Offer. Withdrawn Shares may, however, be retendered by repeating one of the procedures set forth in Section 3 of the Offer to Purchase at any time before the Expiration Date. Purchaser, in its sole judgment, will determine all questions as to the form and validity (including time of receipt) of notices of withdrawal, and such determination will be final and binding. The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided Purchaser with the Company's shareholder list and security position listings for the purpose of disseminating the Second Offer to holders of Shares. The Second Supplement, the related Letters of Transmittal and other relevant materials will be mailed to record holders of Shares and will be furnished 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 for subsequent transmittal to beneficial owners of Shares. THE OFFER TO PURCHASE, THE FIRST SUPPLEMENT AND THE SECOND SUPPLEMENT AND THE RELATED LETTERS OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE SECOND OFFER. Questions and requests for assistance or for additional copies of the Offer to Purchase, the First Supplement, the Second Supplement, the Letters of Transmittal or other tender offer materials may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers as set forth below, and copies will be furnished promptly at Purchaser's expense. No fees or commissions will be paid to brokers, dealers or other persons (other than the Information Agent and the Dealer Manager) for soliciting tenders of Shares pursuant to the Second Offer. The Information Agent for the Second Offer is: [MACKENZIE PARTNERS, INC. 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. LOGO] 31 West 52nd Street New York, New York 10019 (212) 969-2700 (Call Collect) March 10, 1997 EX-99.C.12 7 THIRD AMENDMENT TO AGREEMENT AND PLAN OF MERGER 1 THIRD 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 MARCH 7, 1997. 2 THIRD AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of March 7, 1997 (this "Third 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 October 14 Merger Agreement, dated as of November 5, 1996 (the "First Amendment"), pursuant to which White, Green and Tender Sub have made certain amendments to the October 14 Merger Agreement; WHEREAS, pursuant to the October 14 Merger Agreement as amended by the First Amendment, Tender Sub has commenced an offer (the "Second Offer") to purchase up to an aggregate of 18,344,845 shares of Green Common Stock and Green ESOP Preferred Stock; WHEREAS, Green, Tender Sub and White have entered into a Second Amendment to the October 14 Merger Agreement, dated as of December 18, 1996 (the "Second Amendment", and the October 14 Merger Agreement, as amended by the First Amendment and the Second Amendment, the "Merger Agreement"), pursuant to which White, Green and Tender Sub have made certain further amendments to the October 14 Merger Agreement; WHEREAS, in consideration of Green's willingness to enter into this Third Amendment, White and Tender Sub are willing to make the amendments to the Merger Agreement set forth herein, including increasing the price to be paid pursuant to the Second Offer to $115 in cash and increasing the number of shares sought to be purchased pursuant to such offer to all shares of Green Common Stock and Green ESOP Preferred Stock and increasing the price paid in the Merger to $115 in cash for each remaining share of Green Common Stock and Green ESOP Preferred Stock; WHEREAS, in consideration of White's and Tender Sub's willingness to enter into this Third Amendment, Green is willing to make the amendments to the Merger Agreement set forth herein; -1- 3 WHEREAS, the Board of Directors of Green has approved, and deems it advisable and in the best interests of Green to enter into, this Third 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 Third Amendment; and WHEREAS, except as amended by this Third 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 Third Amendment, the parties, intending to be legally bound, agree as follows: ARTICLE I SECTION 1. The following is hereby added to the end of Section 1.1 of the Merger Agreement: (g) As promptly as practicable after the public announcement of the execution of the Third Amendment, dated as of March 7, 1997, to this Agreement (the "Third Amendment"), Tender Sub shall amend the Second Offer (as so amended, the "Amended Second Offer") so that the number of shares sought therein is increased to all shares tendered thereunder and so that the price offered therein is $115 per share of Green Common Stock and Green ESOP Preferred Stock, net to the seller in cash (such price, or such higher price per share as may be paid in the Amended Second Offer, being referred to herein as the "Amended Second Offer Price"), subject to the conditions set forth in Section 15 of the offer to purchase, dated December 6, 1996, as previously amended (such offer to purchase, as so amended, together with all amendments and supplements thereto, the "Offer to Purchase"), relating to the Second Offer, other than (i) the condition set forth in clause (1) thereof relating to the Pennsylvania Control Transaction Law, which shall be deleted and replaced in its entirety with clause (1) as -2- 4 set forth on Exhibit A hereto, and (ii) the conditions set forth in subsections (2)(a) and (2)(b) thereof, which shall be deleted and replaced with subsection (a) as set forth on Exhibit A hereto. Subject to the second sentence below, Tender Sub shall, on the terms and subject to the prior satisfaction or waiver of the conditions of the Amended Second Offer, accept for payment and pay for shares of Green Common Stock and Green ESOP Preferred Stock tendered as soon as practicable after the later of the satisfaction of the conditions to the Amended Second Offer and the expiration of the Amended Second Offer; provided that immediately upon the acceptance for payment of and payment for shares of Green ESOP Preferred Stock pursuant to the Amended Second Offer, such shares shall be automatically converted on a one-for-one basis into shares of Green Common Stock in accordance with the terms of the Green Articles. The Amended Second Offer shall be made by means of a second supplement (the "Second Supplement") to the Offer to Purchase containing the terms set forth herein. Without the written consent of Green, Tender Sub shall not decrease the Amended Second Offer Price, decrease the aggregate number of shares of Green Common Stock and Green ESOP Preferred Stock sought, change the form of consideration to be paid pursuant to the Amended Second Offer, modify any of the conditions to the Amended Second Offer, impose conditions to the Amended Second Offer in addition to those described above, except as provided in the last two provisos below, extend the Amended Second Offer, or amend any other term or condition of the Amended Second Offer in any manner which is adverse to the holders of shares of Green Common Stock, it being agreed that a waiver by Tender Sub of any condition in its discretion shall not be deemed to be adverse to the holders of Green Common Stock; provided, however, that Tender Sub shall not waive the condition (the "Minimum Condition") to be set forth in clause (1) of the Offer to Purchase as described above without the consent of Green; provided further that, if on any scheduled expiration date of the Amended Second Offer (as it may be extended in accordance with the terms hereof), all conditions to the Amended Second Offer shall not have been satisfied or waived, the Amended Second Offer may be extended from time to time without the consent of Green for such period of time as is reasonably expected to be necessary to satisfy the unsatisfied conditions. White and Tender Sub agree that, in the event that all conditions to -3- 5 the Amended Second Offer at any scheduled expiration date thereof are satisfied other than the Minimum Condition, Tender Sub shall, from time to time, extend the Amended Second Offer until the earlier of December 31, 1997 and such time as such condition is satisfied or waived in accordance herewith; provided, however, that, notwithstanding anything to the contrary contained in this Agreement, without the consent of Green (and whether or not any or all conditions to the Amended Second Offer shall have been satisfied or waived), Tender Sub in its discretion may, from time to time, extend the Amended Second Offer through 5:00 p.m., New York City Time, on June 2, 1997. In addition, the Amended Second Offer Price may be increased (other than solely in order to extend the Amended Second Offer) and the Amended Second Offer may be extended to the extent required by law in connection with such increase, in each case without the consent of Green. It is agreed that the conditions to the Amended Second Offer are for the benefit of White and Tender Sub and may be asserted by White or Tender Sub regardless of the circumstances giving rise to any such condition (including any action or inaction by White or Tender Sub not inconsistent with the terms hereof) or may be waived by White or Tender Sub, in whole or in part at any time and from time to time, in its sole discretion. (h) White and Tender Sub shall file with the SEC as soon as practicable on or after the date the Amended Second Offer is made, an amendment to the Tender Offer Statement on Schedule 14D-1 relating to the Second Offer with respect to the Amended Second Offer (together with all amendments and supplements thereto and including the exhibits thereto, the "Amended Second Schedule 14D-1"), which shall include, as exhibits, the Second Supplement and a form of letter of transmittal and any summary advertisement (such Tender Offer Statement on Schedule 14D-1 as so amended and such documents, collectively, together with any amendments and supplements thereto, the "Amended Second Offer Documents"). Each of White and Tender Sub shall take all steps necessary to cause the Amended Second Offer Documents to be filed with the SEC and to be disseminated to Green's shareholders, in each case as and to the extent required by applicable federal securities laws. Each of White and Tender Sub, on the one hand, and Green, on the other hand, shall promptly correct any information provided by it for use in the Amended Second Offer -4- 6 Documents if and to the extent that it shall have become false and misleading in any material respect, and White and Tender Sub shall take all steps necessary to cause the Amended Second Offer Documents as so corrected to be filed with the SEC and to be disseminated to Green's shareholders, in each case as and to the extent required by applicable federal securities laws. Green and its counsel shall be given the opportunity to review the Amended Second Offer Documents before they are filed with the SEC. In addition, White and Tender Sub shall provide Green and its counsel in writing any comments White, Tender Sub or their counsel may receive from time to time from the SEC or its staff with respect to the Amended Second Offer Documents promptly after the receipt of such comments. White and Tender Sub shall cooperate with Green in responding to any comments received from the SEC with respect to the Amended Second Offer and amending the Amended Second Offer in response to any such comments. SECTION 2. Section 1.1(d) of the Merger Agreement is hereby deleted in its entirety and replaced with the following: "(d) [Intentionally deleted]". SECTION 3. The following is hereby added to the end of Section 1.2 of the Merger Agreement: (j) Green hereby approves of and consents to the Amended Second Offer and represents that its Board of Directors, at a meeting duly called and held, has by the vote of all directors present (i) determined that this Agreement, as amended by the Third Amendment, and the transactions contemplated hereby (including the Amended Second Offer and the Merger) are in the best interests of Green, (ii) approved this Agreement, as amended by the Third Amendment, and the transactions contemplated hereby (including the Amended 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 the shareholders of Green accept the Amended 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 Third Amendment, and the transactions contemplated hereby; provided, however, that prior to the purchase by Tender Sub of shares of Green Common Stock and Green -5- 7 ESOP Preferred Stock pursuant to the Amended Second Offer, Green may modify, withdraw or change such recommendation, but only to the extent that Green complies with Section 4.2 hereof. Green hereby consents to the inclusion in the Amended Second Offer Documents of the recommendations of Green's Board of Directors described in this Section. (k) Concurrently with the making of the Amended Second Offer, Green shall file with the SEC an amendment to the Solicitation/Recommendation Statement on Schedule 14D-9, dated December 6, 1996, as previously amended, relating to the Second Offer, with respect to the Amended Second Offer (such Solicitation/Recommendation Statement on Schedule 14D-9 as so amended, together with all amendments and supplements thereto and including the exhibits thereto, the "Amended Second Schedule 14D-9"), which amendment shall contain the recommendation referred to in clauses (i), (ii) and (iii) of Section 1.2(j) hereof; provided, however, that Green may modify, withdraw or change such recommendation, but only to the extent that Green complies with Section 4.2 hereof. Green shall take all steps necessary to cause the Amended Second Schedule 14D-9 to be filed with the SEC and to be disseminated to Green's shareholders, in each case as and to the extent required by applicable federal securities laws. Each of Green, on the one hand, and White and Tender Sub, on the other hand, shall promptly correct any information provided by it for use in the Amended Second Schedule 14D-9 if and to the extent that it shall have become false and misleading in any material respect, and Green shall take all steps necessary to cause the Amended Second Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated to Green's shareholders, in each case as and to the extent required by applicable federal securities laws. White and its counsel shall be given the opportunity to review the Amended Second Schedule 14D-9 before it is filed with the SEC. In addition, Green shall provide White, Tender Sub and their counsel in writing any comments Green or its counsel may receive from time to time from the SEC or its staff with respect to the Amended Second Schedule 14D-9 promptly after the receipt of such comments. Green shall cooperate with White and Tender Sub in responding to any comments received from the SEC with respect to the Amended Second Schedule 14D-9 and amending the Amended Second Schedule 14D-9 in response to any such comments. -6- 8 (l) Green has received the written opinions of each of the Green Advisors, each dated as of the date of the Third 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 this Agreement, is fair from a financial point of view to such holders (the "Fourth Green Fairness Opinions"). Green has delivered to White a copy of the Fourth Green Fairness Opinions. SECTION 4. 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. 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"), Tender Sub shall be merged with and into Green at the Effective Time (the "Merger"). Green shall be the surviving corporation (the "Surviving Corporation") of the Merger and shall succeed to and assume all rights and obligations of Tender Sub in accordance with the Pennsylvania Law. SECTION 1.4. Closing. The closing of the Merger (the "Closing") shall take place at 10:00 a.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. SECTION 1.5. Effective Time. 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 "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 Merger shall become effective at such time as the Articles of Merger are duly filed with the Pennsylvania Department of State, or at such subsequent date or time as White, Tender Sub -7- 9 and Green shall agree and shall be specified in the Articles of Merger (the time the Merger becomes effective being hereinafter referred to as the "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 Tender Sub, as in effect immediately prior to the Effective Time, shall be the articles of incorporation and by-laws, respectively, of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable law, provided that the articles of incorporation of the Surviving Corporation shall provide that the Surviving Corporation shall be named "Conrail Inc." (b) The directors and officers of Green at the Effective Time shall, from and after the Effective Time, be the initial directors and officers, respectively, of the Surviving Corporation, until their successors shall have been duly elected or appointed or qualified or until their earlier death, resignation or removal in accordance with the Surviving Corporation's articles of incorporation and by-laws. SECTION 1.8. Certain Matters. The arrangements set forth in Attachment A to the Green Disclosure Schedule delivered in connection with the Third Amendment or on Exhibit B hereto shall be applicable hereto as if set forth herein. SECTION 1.9. Voting Trust. The parties agree that, 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 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 (the "Voting Trust Agreement"). Subject to applicable law and to the rules, regulations and practices of the Surface Transportation Board, the Voting -8- 10 Trust may be modified or amended, and other voting trusts may be employed with respect to Green Common Stock, at any time by White in its sole discretion (provided that the terms of the Voting Trust governing the voting of or transfer or disposition of Green Common Stock shall not be amended prior to the consummation of the Amended Second Offer without Green's consent). SECTION 5. 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) Each share of Common Stock, par value $1.00 per share, of Tender Sub issued and outstanding immediately prior to the Effective Time shall, at the Effective Time, by virtue of the 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) Each share 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 prior to the Effective Time so that, immediately prior to the Effective Time, no shares of Green ESOP Preferred Stock shall be issued and outstanding), issued and outstanding immediately prior to the Effective Time (other than shares of Green Common Stock to be canceled pursuant to Section 2.1(c) hereof) shall, at the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, be converted into the right to receive $115 in cash (the "Per Share Merger Consideration"). (c) 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 or affiliates (or any third party, its subsidiaries or affiliates that may, jointly together with White, acquire an equity ownership interest in any vehicle that may acquire Green) shall, at the Effective Time, be canceled and retired and shall cease to exist, and no consideration shall be delivered or owing in exchange therefor. -9- 11 (d) On and after the Effective Time, holders of certificates ("Certificates") which immediately prior to the Effective Time represented issued and outstanding shares of Green Common Stock shall cease to have any rights as shareholders of Green, except the right to receive the consideration set forth in this Article II with respect to each share held by them. SECTION 6. Section 2.2, Section 2.3 and Section 2.5 of the Merger Agreement are hereby deleted and replaced in their entirety with the following: "[Intentionally deleted]". SECTION 7. Section 2.4 of the Merger Agreement is hereby deleted and replaced in its entirety with the following: SECTION 2.4. Payment Procedures. Promptly after the Effective Time, White shall cause the person authorized to act as paying agent under this Agreement (the "Exchange Agent") to mail to each holder of record of a Certificate (i) a letter of transmittal (the "Letter of Transmittal") (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Exchange Agent and shall be in such customary form and have such other provisions as White may reasonably specify) and (ii) instructions to effect the surrender of the Certificates in exchange for the Per Share Merger Consideration. As promptly as practicable following the Effective Time, White shall deliver, in trust (the "Exchange Trust"), to the Exchange Agent, for the benefit of Green shareholders, an amount in cash equal to the Per Share Merger Consideration multiplied by the number of shares of Green Common Stock to be converted into the right to receive the Per Share Merger Consideration. Upon surrender of a Certificate for cancellation to the Exchange Agent together with a Letter of Transmittal, duly executed, and such other customary documents as may be required pursuant to such instructions, the holder of such Certificate shall be paid by check in exchange therefor the amount of cash which such holder has the right to receive in accordance with Section 2.1(b), and the Certificate so surrendered shall forthwith be canceled. In no event shall the holder of any such surrendered Certificates be entitled to receive interest on any cash to be received in the Merger. If such check is to be issued in the name of a person other than the person in whose name the Certificates surrendered for exchange therefor -10- 12 are registered, it shall be a condition of payment that the person requesting such payment shall pay to the Exchange Agent any transfer or other taxes required by reason of issuance of such check to a person other than the registered holder of the Certificates surrendered, or shall establish to the satisfaction of the Exchange Agent that such tax has been paid or is not applicable. In the event of a transfer of ownership of shares of Green Common Stock or Green ESOP Preferred Stock which is not registered in the transfer records of Green, cash may be issued and paid in accordance with this Article II to a transferee if the Certificate evidencing such shares of Green Common Stock or Green ESOP Preferred Stock is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid. Until surrendered as contemplated by this Section, each Certificate shall be deemed at any time after the Effective Time to evidence only the right to receive upon such surrender the Per Share Merger Consideration applicable to the shares of stock evidenced by such Certificate. SECTION 8. The words "and/or certificates representing White Common Stock and White Merger Securities" are hereby deleted from Section 2.6 of the Merger Agreement. SECTION 9. Section 2.8 of the Merger Agreement is hereby deleted and replaced in its entirety with the following: SECTION 2.8. No Further Ownership Rights. All cash paid upon the surrender for exchange of Certificates in accordance with the terms of this Article II shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares theretofore represented by such Certificates, subject, however, to the Surviving Corporation's obligation to pay any dividends or make any other distributions with a record date prior to the Effective Time which may have been declared or made by Green on such shares of Green Common Stock or Green ESOP Preferred Stock which remain unpaid at the Effective Time. SECTION 10. The words "the Per Share Cash Consideration or shares of White Common Stock and White Merger Securities, any cash, dividends or distributions with respect to White Common Stock and White Merger Securities" are hereby deleted from the final sentence of Section 2.9 of the Merger -11- 13 Agreement and replaced with the words "any consideration due hereunder". SECTION 11. The words "shares of White Common Stock or White Merger Securities (or dividends or distributions with respect thereto) or" are hereby deleted from the first sentence of Section 2.10 of the Merger Agreement. The words ", shares of White Common Stock or White Merger Securities or any cash dividends or distributions" are hereby deleted from the parenthetical in the second sentence of Section 2.10 of the Merger Agreement. The words "any such Per Share Cash Consideration or shares of White Common Stock or White Merger Securities or cash, dividends or distributions" are hereby deleted from the clause following the parenthetical in the second sentence of Section 2.10 of the Merger Agreement and replaced with the words "any Per Share Merger Consideration". SECTION 12. The words "or shares of White Common Stock and White Merger Securities and, if applicable, any cash, dividends and distributions on shares of White Common Stock and White Merger Securities" are hereby deleted in their entirety from Section 2.11 of the Merger Agreement. SECTION 13. Section 3.1(d)(3) and Section 3.1(d)(4) of the Merger Agreement are hereby deleted and replaced in their entirety with the following: (3) the filing with the SEC of (A) the Green Proxy Statement (as defined in Section 5.1), if required, (B) the Schedule 14D-9 and (C) such reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act, as may be required in connection with this Agreement, the Green Stock Option Agreement and the transactions contemplated by this Agreement and the Green Stock Option Agreement; (4) the filing of the Articles of Merger as provided in Section 1.3 and appropriate documents with the relevant authorities of other states in which Green is qualified to do business and such filings with Governmental Entities to satisfy the applicable requirements of state securities or "blue sky" laws; SECTION 14. Section 3.1(f) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: (f) Information Supplied. None of the Schedule 14D-9 or the Green Proxy Statement, if required, nor any of the information supplied or to be supplied by Green for inclusion or incorporation by reference in -12- 14 the Offer Documents or the Green Proxy Statement will, at the date such documents are first published, sent or delivered to shareholders and, in the case of the Green Proxy Statement, at the time of the Green Merger Shareholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein, in light of the circumstances under which they are made, not misleading. The Schedule 14D-9 and the Green Proxy Statement, if required, will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder. Notwithstanding the foregoing, no representation or warranty is made by Green with respect to statements made or incorporated by reference therein based on information supplied by White for inclusion or incorporation by reference in any of the foregoing documents. SECTION 15. The words "and except for the transactions provided for or permitted by this Agreement" are hereby added to the second sentence of Section 3.1(i) of the Merger Agreement immediately after the words "Except for rail labor agreements negotiated in the ordinary course" and to Section 3.1(j)(iii) of the Merger Agreement immediately after the words "accelerated as a result of the transactions contemplated hereunder." SECTION 16. The words "and White Merger Securities" are hereby deleted in their entirety from Section 3.2(d) of the Merger Agreement. SECTION 17. Section 3.2(d)(3) and Section 3.2(d)(4) of the Merger Agreement are hereby deleted and replaced in their entirety with the following: (3) the filing with the SEC of (A) the Schedule 14D-1 and (B) such reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act, as may be required in connection with this Agreement, the Green Stock Option Agreement and the transactions contemplated by this Agreement and the Green Stock Option Agreement; (4) the filing of the Articles of Merger as provided in Section 1.3 and appropriate documents with the relevant authorities of other states in -13- 15 which Green is qualified to do business and such filings with Governmental Entities to satisfy the applicable requirements of state securities or "blue sky" laws; SECTION 18. Section 3.2(f) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: (f) Information Supplied. None of the Offer Documents nor any of the information to be supplied by White for inclusion or incorporation by reference in the Green Proxy Statement, if required, will, at the date such documents are first published, sent or delivered to shareholders and, in the case of the Green Proxy Statement, at the time of the Green Merger Shareholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Schedule 14D-1 and the Green Proxy Statement, if required, will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder. Notwithstanding the foregoing, no representation or warranty is made by White with respect to statements made or incorporated by reference therein based on information supplied by Green for inclusion or incorporation by reference in any of the foregoing documents. SECTION 19. Section 3.1(k) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: (k) Voting Requirements. The affirmative vote of the holders of a majority of the votes cast by all outstanding shares of Green Common Stock and Green ESOP Preferred Stock, voting as a single class, at the Green Merger Shareholders Meeting (the "Green Merger Shareholder Approval") to adopt and approve this Agreement and the transactions contemplated hereby, are the only votes of the holders of any class or series of Green capital stock or indebtedness necessary to approve and adopt this Agreement, the Green Stock Option Agreement and the transactions contemplated by this Agreement (including the Amended Second Offer and the Merger) and the Green Stock Option Agreement. -14- 16 SECTION 20. The words "Subject to receipt of the Green Pennsylvania Shareholder Approval, in the case of Subchapter E (Control Transactions) of Chapter 25 of the Pennsylvania Law, and assuming that White, together with its affiliates, does not have voting power with respect to 20% or more of the votes that all Green shareholders would be entitled to cast in an election of directors prior to the date of filing of the Amended Green Articles" in Section 3.1(l) of the Merger Agreement are hereby deleted and replaced in their entirety by the words "Other than with respect to Subchapter E (Control Transactions) of Chapter 25 of the Pennsylvania Law". SECTION 21. Section 3.1(o) of the Merger Agreement is hereby deleted in its entirety. SECTION 22. Section 3.2(k) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: "[Intentionally deleted]". SECTION 23. Section 3.2(o) of the Merger Agreement is hereby deleted in its entirety. SECTION 24. Section 4.1 (other than Section 4.1.(e)) and Section 4.2 of the Merger Agreement shall be inapplicable to White and shall apply to Green through the Control Date. SECTION 25. Section 4.1(a) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: SECTION 4.1 Conduct of Business. (a) Conduct of Business. Except as contemplated by this Agreement or as set forth in Section 4.1 of or Attachment A to the Green Disclosure Schedule delivered in connection with the Third Amendment, during the period from the date of this Agreement to the Control Date, Green shall, and shall cause it subsidiaries to, carry on their businesses in the ordinary course consistent with past practice and in compliance in all material respects with all applicable laws and regulations and, to the extent consistent therewith, shall use all reasonable efforts to preserve intact their current business organizations, use reasonable efforts to keep available the services of their current officers and other key employees as a group and preserve their relationships with those persons having business dealings with them to the end that their goodwill and ongoing businesses shall be unimpaired at the Control Date. Except as contemplated by this Agreement or as set forth in Section -15- 17 4.1 of or Attachment A to the Green Disclosure Schedule delivered in connection with the Third Amendment, without limiting the generality of the foregoing, during the period from the date of this Agreement to the Control Date, Green shall not, and shall not permit any of its subsidiaries to (without the consent of White): (i) prior to the Effective Time, other than dividends and distributions (including liquidating distributions) by a direct or indirect wholly owned subsidiary of Green, to its parent, or by a subsidiary that is partially owned by Green or any of its subsidiaries, provided that Green or any such subsidiary receives or is to receive its proportionate share thereof, and other than the regular quarterly dividends of $.475 per share with respect to Green Common Stock, regular quarterly dividends of $.54125 per share with respect to Green ESOP Preferred Stock in accordance with its terms, (x) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, (y) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (z) except in connection with the funding of employee benefit plans, purchase, redeem, retire or otherwise acquire any shares of its capital stock or the capital stock of any of its Significant Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, and provided further that, following the Effective Time, subject to applicable legal restrictions and financial covenants contained in instruments relating to outstanding indebtedness, the Surviving Corporation shall not decrease the aggregate amount of dividends and other distributions paid in respect of Green's outstanding capital stock from the level paid immediately prior to the Merger; (ii) issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities (other than, prior to the Effective Time, (w) in accordance with the terms of the Green Rights Agreement, (x) the issuance of Green Common Stock (A) upon the exercise of Green Employee Stock Options and listed in the Green Disclosure Schedule outstanding on the date of this Agreement and in accordance with their present terms or (B) pursuant to a -16- 18 grant existing as of the date hereof or otherwise permitted under this Section under any Employee Benefit Plan, (y) the issuance of Green Common Stock upon conversion of Green ESOP Preferred Stock in accordance with its terms and (z) the issuance of Green Common Stock pursuant to the Green Stock Option Agreement); (iii) adopt, propose or agree to any amendment to its (or any subsidiary's) articles of incorporation, bylaws or other comparable organizational documents; (iv) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets, other than in transactions in the ordinary course of business consistent with past practice not involving rail lines, yards and other fixed railroad operating property; (v) make or agree to make any acquisition (other than of inventory in the ordinary course of business) or capital expenditure, except for agreements and commitments made through March 1, 1997 in conformity with this Agreement; (vi) except for elections identical to those made in past tax returns, make any tax election; (vii) pay, discharge, settle or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction of claims, liabilities or obligations (A) in the ordinary course of business consistent with past practice or in accordance with their terms, (B) of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of Green included in the Green Filed SEC Documents or (C) incurred since the date of such financial statements in the ordinary course of business consistent with past practice and with this Agreement; (viii) except in the ordinary course of business, enter into any contract or agreement, or modify, amend or terminate any contract or agreement to which Green or any of its subsidiaries is a party significant to such contract or agreement, or waive, release or assign any rights or claims under any contract or agreement significant to such contract or agreement, -17- 19 provided that in making, entering into, modifying and amending and terminating its contracts in the ordinary course of business, Green shall act entirely in its own interest as an independent enterprise, and no action in making, entering into, modifying or amending any such contract shall bind Green or any successor in interest after the Control Date (without limiting the foregoing, the inclusion of a mutual right of each party to terminate any contract by 30 days' notice to be given within 90 days after the Control Date shall satisfy this last provision; (ix) make any change to its accounting methods, principles or practices, except as may be required by generally accepted accounting principles; (x) except as required by law and except for changes to any rail labor agreement which are not in the aggregate significant to such agreement, enter into, adopt or amend in any material respect or terminate any Green Benefit Plan or any other agreement, plan or policy involving Green or any of its subsidiaries, and one or more of their directors, officers or employees, or materially change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan, or change the manner in which contributions to any pension plan are made or the basis on which such contributions are determined, provided that in no event shall Green take any action hereunder that would have an effect during the period of time following the Control Date; (xi) except as provided by the terms of any contract made prior to March 1, 1997 the existence of which does not constitute a violation of this Agreement or as provided in Exhibit B hereto, increase the compensation of any director, executive officer or other key employee or pay any benefit or amount not required by a plan or arrangement as in effect on the date of this Agreement to any such person; (xii) enter into any agreement containing any provision or covenant (x) limiting in any respect the ability to compete with any person which would bind Green or any successor or (y) granting any concessions or rights to any railroad or other person with respect to the use of Green's rail lines, yards or other fixed railroad property (whether through divestiture of lines, the grant of trackage rights or otherwise); or (xiii) authorize, or commit or agree to take, any of the foregoing actions. SECTION 26. Section 4.1(b) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: "[Intentionally deleted]". SECTION 27. Section 4.1(e) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: -18- 20 (e) Other Actions; Advice of Changes. Except as required by law, White shall not, and shall not permit any of its subsidiaries to, voluntarily take any action that would, or that could reasonably be expected to, result in (x) any of the representations and warranties of White set forth in this Agreement or the Green Stock Option Agreement that are qualified as to materiality becoming untrue, (y) any of such representations and warranties that are not so qualified becoming untrue in any material respect or (z) any of the conditions to the consummation of the Amended Second Offer or the Merger not being satisfied, in any of the foregoing cases (x), (y) or (z), such as would give rise to a right to terminate this Agreement pursuant to Section 7.1. Without limiting the foregoing, White shall not, and shall not permit any of its subsidiaries to, take any action that could reasonably be expected to impair, or delay in any material respect, the consummation of the Amended Second Offer and the Merger. White shall promptly advise Green orally and in writing of (i) any representation or warranty made by it contained in this Agreement that is qualified as to materiality becoming untrue or inaccurate in any respect or any such representation or warranty that is not so qualified becoming untrue or inaccurate in any material respect, (ii) the failure by it to comply in any material respect with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement and (iii) any change or event having, or which, insofar as can reasonably be foreseen, would reasonably be expected to have a material adverse effect on the truth of its representations and warranties or the ability of the conditions to the consummation of the Amended Second Offer and the Merger to be satisfied, in any of the foregoing cases (i), (ii) or (iii), such as would give rise to a right to terminate this Agreement pursuant to Section 7.1; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties (or remedies with respect thereto) or the conditions to the obligations of the parties under this Agreement or the Green Stock Option Agreement. SECTION 28. The first proviso to Section 4.2(a) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: -19- 21 provided, however, that if, at any time prior to the consummation of the Amended Second Offer and after December 31, 1997, the Board of Directors of Green determines in good faith, based on the advice of outside counsel, that it is necessary to do so to avoid a breach of its fiduciary duties to Green under applicable law, Green may, upon prior notice to White, in response to a Takeover Proposal which was not solicited by it and which did not otherwise result from a breach of this Section 4.2(a), and subject to Green's compliance with Section 4.2(c),(A) furnish information with respect to it and its subsidiaries to any person pursuant to a customary confidentiality agreement (as determined by Green after consultation with its outside counsel), the benefits of the terms of which, if more favorable to the other party to such confidentiality agreement than those in place with White, shall be extended to White, and (B) participate in negotiations regarding such Takeover Proposal. SECTION 29. The first sentence of Section 4.2(b) of the Merger Agreement is hereby amended by deleting the words "Green Shareholders Meetings" and replacing them in their entirety with the words "Green Merger Shareholders Meeting"; and the second sentence of Section 4.2(b) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: Notwithstanding the foregoing, in the event that, at any time prior to the consummation of the Amended Second Offer and following December 31, 1997, there exists a Superior Proposal with respect to Green and Green's Board of Directors determines that, due to the existence of such Superior Proposal, there is not a substantial probability that the Minimum Condition will be satisfied, the Board of Directors of Green may (subject to this and the following sentences) withdraw or modify its approval or recommendation of the Amended Second Offer, the Merger or the adoption and approval of the matters to be considered at the Green Merger Shareholders Meeting, the Board of Directors of Green may (subject to this and the following sentences) approve or recommend such Superior Proposal or terminate this Agreement (and concurrently with such termination, if it so chooses, cause Green to enter into any Acquisition Agreement with respect to such Superior Proposal), but only at a time that is after the fifth business day following White's receipt of written notice advising White that -20- 22 the Board of Directors of Green has received a Superior Proposal, specifying the material terms and conditions of such Superior Proposal and identifying the person making such Superior Proposal. SECTION 30. Section 4.3 of the Merger Agreement is hereby deleted and replaced in its entirety with the following: SECTION 4.3. Third Party Discussions, etc. Notwithstanding anything to the contrary contained herein, during the term of this Agreement, White shall have sole authority to (and, without the consent of White, Green shall not, directly or indirectly through another person) conduct and participate in any conversations, discussions or negotiations, and enter into any agreement, arrangement or understanding, with any other company engaged in the operation of railroads (including Norfolk Southern Corporation) or any other person with respect to the acquisition by any such other company (including Norfolk Southern Corporation) or person of any securities or assets of Green and its subsidiaries or White and its subsidiaries, or any trackage rights or other concessions relating to the assets or operations of Green and its subsidiaries or White and its subsidiaries, except to the extent Green is expressly permitted to take any such action without the consent of White pursuant to Section 4.1(a) or as set forth in Section 4.1 of the Green Disclosure Schedule. White shall use reasonable efforts to keep Green apprised of the status of any such conversations, discussions or negotiations, and Green shall use reasonable efforts to cooperate and assist with White's efforts relating to such conversations, discussions or negotiations (including, subject to the other provisions hereof, by providing access and information). In the event that, as a result of any such conversations, discussions or negotiations, it becomes necessary or appropriate to amend this Agreement or to take any other action to facilitate a transaction (including by taking any Board action that may be required under any state anti-takeover statute or by amending the Green Rights Agreement or, subject to the other provisions hereof, by amending the Amended Second Offer to include a co-bidder thereunder), and White proposes to do so, Green will enter into an appropriate amendment to this Agreement or shall take such further action, provided that any such amendment shall not change the form or amount of the Per Share Merger Consideration or the Amended Second Offer Price, modify Exhibit B or otherwise adversely affect Green -21- 23 (in respect of the benefits to be received by its shareholders or employees under this Agreement) or delay or adversely affect the transactions contemplated hereby and provided further that any such amendment shall be in accordance with all applicable law including subtitle IV of title 49, U.S. Code and the rules and regulations of the STB thereunder. SECTION 31. Section 5.1 of the Merger Agreement is hereby deleted and replaced in its entirety with the following: SECTION 5.1. Shareholders Meeting. To the extent required by applicable law, Green shall, as soon as practicable following the consummation (or expiration) of the Amended Second Offer, file with the SEC preliminary proxy materials and use reasonable efforts to clear such materials (the "Green Proxy Statement") and thereafter duly call, give notice of, convene and hold on a date mutually agreed to by White and Green a meeting of its shareholders (the "Green Merger Shareholders Meeting") for the purpose of obtaining the Green Merger Shareholder Approval. Without limiting the generality of the foregoing, but subject to Section 4.2(b), Green agrees that its obligations pursuant to the first sentence of this Section shall not be affected by the commencement, public proposal, public disclosure or communication to Green of any Takeover Proposal in respect of Green. Green shall, through its Board of Directors, recommend to its shareholders the approval and adoption of the Amended Second Offer and the matters to be considered at the Green Merger Shareholders Meeting, except to the extent that the Board of Directors of Green shall have withdrawn or modified its approval or recommendation of the Amended Second Offer or the matters to be considered at the Green Merger Shareholders Meeting or terminated this Agreement in accordance with Section 4.2(b). Subject to the terms of the Voting Trust Agreement, White shall cause all shares of Green Common Stock and Green ESOP Preferred Stock acquired by it or its wholly owned subsidiaries pursuant to the Amended Second Offer (which shall be deposited in the Voting Trust) or otherwise to be voted in favor of approval and adoption of the matters to be considered at the Green Merger Shareholders Meeting. Notwithstanding the foregoing, in the event that Tender Sub shall acquire at least 80% of the outstanding shares of each class of Green capital stock, White and Green together shall, subject to Article VI, take all necessary and appropriate action -22- 24 to cause the Merger to become effective as soon as practicable after such acquisition, without a meeting of the Green shareholders, in accordance with the Pennsylvania Law. SECTION 32. Section 5.2, Section 5.3, Section 5.7, Section 5.9(c), Section 5.11, Section 5.12, Section 5.15 and Section 5.16 of the Merger Agreement are hereby deleted and replaced in their entirety with the following: "[Intentionally deleted]". SECTION 33. Section 5.4 of the Merger Agreement is hereby amended to delete the requirement that White provide the access and information required thereunder to Green, provided that White shall remain subject to its obligations to keep certain information confidential under the Confidentiality Agreement and provided further that the Confidentiality Agreement is hereby amended to permit White, in connection with Section 4.3 of this Agreement, to provide to third parties information provided to White thereunder provided such third parties are bound by obligations to keep such information confidential substantially similar to those contained in the Confidentiality Agreement. SECTION 34. Section 5.5(b) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: (b) In furtherance of the foregoing, at White's request, Green shall, and shall cause each of its subsidiaries to, take all such actions as are reasonably necessary or appropriate to (i) cooperate with White to prepare and present to the STB or before any other federal, state or local body as soon as practicable all filings and other presentations in connection with seeking any approval, exemption or other authorization necessary to consummate the transactions contemplated by this Agreement and the Green Stock Option Agreement, (ii) cooperate with White in the prosecution of such filings and the making of such other presentations with diligence and take no action in connection therewith without White's consent (including meetings with public officials and making public statements), (iii) at White's request, diligently join with White in opposing any objections to, appeals from or petitions to reconsider or reopen any such approval by persons not party to this Agreement, (iv) take all actions reasonably requested by White to implement the transactions that are the subject of the STB proceeding, including the entry into -23- 25 appropriate labor implementing agreements to be effective following the Control Date, (v) take all such further action as reasonably may be requested by White to obtain the STB approval or any related approvals, including, subject to the other provisions hereof, by providing access to Green's properties, financial records and traffic data, and (vi) take no action inconsistent with the foregoing. The actions to be taken shall include the joinder by Green, to the extent requested by White, in an application to exercise control over Green and its subsidiaries and such other matters as White shall include therein. In addition, without limiting the generality of the foregoing, Green shall make available to White the services of any experts retained by Green and any work product of such experts in connection with the preparation and presentation of any filings in connection with seeking the STB approval or any related approvals. Green shall take no regulatory or legal action in respect of any disposition of property or assets without White's consent. White shall use reasonable efforts to keep Green apprised of the status of the STB proceedings. SECTION 35. Section 5.6 of the Merger Agreement is hereby deleted and replaced in its entirety with the following: SECTION 5.6. Certain Employee Stock Matters. (a) Immediately prior to the Effective Time, each Green Employee Stock Option, whether or not then exercisable, shall be canceled by Green, and each holder of a canceled Green Employee Stock Option shall be entitled to receive at the Effective Time or as soon as practicable thereafter (or, if later, the date six months and one day following the grant of such Green Employee Stock Option) from Green, in consideration for the cancellation of such Green Employee Stock Option, an amount in cash equal to the product of (i) the number of shares of Green Common Stock previously subject to such Green Employee Stock Option and (ii) the excess, if any, of the Per Share Merger Consideration over the exercise price per share of Green Common Stock previously subject to such Green Employee Stock Option. (b) At White's request, Green shall request that the trustee of Green's employee stock ownership plan enter into a pledge agreement pursuant to Section 6.4 of that certain stock purchase agreement, by and between Green's predecessor and such trustee's -24- 26 predecessor, and, thereafter, Green shall use its reasonable efforts to enter into such a pledge agreement as promptly as practicable. SECTION 36. Section 5.8(c) of the Merger Agreement is hereby amended to (i) insert the words "(or shall cause the Surviving Corporation to provide)" following the words "White shall provide" and (ii) insert the words "or the Surviving Corporation, as the case may be," following the word "White" in both provisos therein. SECTION 37. The following is added as Section 5.8(e) of the Merger Agreement: (e) White shall cause the Surviving Corporation to satisfy all its obligations under this Section 5.8. SECTION 38. Section 5.9(b) of the Merger Agreement is hereby amended by deleting the references to Section 7.1(h) and Section 7.1(e) therein and substituting therefor references to Section 7.1(g) and references to Section 7.1(d), respectively. SECTION 39. Section 5.13 of the Merger Agreement is hereby deleted and replaced in its entirety with the following: SECTION 5.13. Shareholder Litigation. Green shall afford White the reasonable opportunity to participate in the prosecution or defense of any shareholder or other litigation brought by or against Green and/or its directors relating to the Merger Agreement, the Green Stock Option Agreement or the transactions contemplated hereby or thereby. In furtherance of the foregoing: until the Effective Time, Green shall take no action in respect of any such litigation without White's consent, which shall not be unreasonably withheld, and shall at White's request join in any stay or similar adjournment of any such proceedings; and, following the Effective Time, White shall have the right to control any such action or related proceeding (other than the defense of Green directors, as to which White shall not have the right to control, but as to which the other covenants contained herein shall govern), with Green's cooperation. -25- 27 SECTION 40. Section 6.1(a) of the Merger Agreement is hereby amended by deleting the words "Each of" and substituting therefor the words "If required," and deleting the words "and the White Shareholder Approval" therefrom. SECTION 41. Section 6.1(b), Section 6.1(d), the paragraph entitled "Additional Condition to Second Merger" at the end of Section 6.1, Section 6.2(c) and Section 6.3(b) of the Merger Agreement are hereby deleted and replaced in their entirety with the following: "[Intentionally deleted"]. SECTION 42. Section 6.2(a) of the Merger Agreement is hereby amended by adding the following immediately prior to the end thereof: (provided, however, that this condition shall be inapplicable in the event that, following consummation of the Amended Second Offer, White shall have caused the removal and replacement of a majority of the members of the Green Board of Directors) SECTION 43. Section 6.3(a) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: (a) Compliance. White shall not have breached or failed to observe or perform in any material respect any of its covenants or agreements hereunder to be performed by it at or prior to the Closing Date, and the representations and warranties of White set forth in Section 3.2(a) and Section 3.2(d) shall be true and accurate both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except where the breach or failure to observe or perform such covenants and agreements, or the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to "materiality" or "material adverse effect" set forth therein), does not have, and is not likely to have, individually or in the aggregate, a material adverse effect on White's ability to consummate the transactions contemplated hereby. SECTION 44. Section 7.1 of the Merger Agreement is hereby deleted and replaced in its entirety with the following: SECTION 7.1. Termination. This Agreement may be terminated at any time prior to the Effective -26- 28 Time, whether before or after the Green Merger Shareholder Approval, only as provided below: (a) by mutual written consent of White and Green; (b) by either White or Green: (i) if the Merger shall not have been consummated by December 31, 1998; provided, however, that the right to terminate this Agreement pursuant to this Section 7.1(b)(i) shall not be available to (x) Green if Tender Sub consummates the Amended Second Offer prior to such date or (y) any party whose failure to perform any of its obligations under this Agreement results in the failure of the Merger to be consummated by such time; (ii) if any Governmental Entity shall have issued a Restraint or taken any other action permanently enjoining, restraining or otherwise prohibiting the consummation of the Merger or any of the other transactions contemplated by this Agreement and such Restraint or other action shall have become final and nonappealable; provided, however, that the party seeking to terminate this Agreement pursuant to this clause (ii) shall have used all reasonable efforts to prevent the entry of and to remove such Restraint or other action; (c) by White, if Green shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (A) would give rise to the failure of the condition set forth in Section 6.2(a), and (B) cannot be or has not been cured within 30 days after the giving of written notice to Green of such breach (a "Green Material Breach") (provided that White is not then in White Material Breach of any covenant or other agreement contained in this Agreement and provided that, if such breach is curable through the exercise of Green's best efforts, this Agreement may not be terminated hereunder for so long as Green is so using its best efforts to cure such breach); (d) by White, if (i) the Board of Directors of Green (or, if applicable, any committee thereof) shall have withdrawn or modified in a manner adverse to White its approval or recommendation of the Offer or the Merger or the matters to be considered at the Green Merger Shareholders Meeting or failed to reconfirm its recommendation within 15 business days after a written request to do so, -27- 29 or approved or recommended any Takeover Proposal in respect of Green or (ii) the Board of Directors of Green or any committee thereof shall have resolved to take any of the foregoing actions; (e) by White, if Green or any of its officers, directors, employees, representatives or agents shall take any of the actions that would be proscribed by Section 4.2 but for the exceptions therein allowing certain actions to be taken pursuant to the proviso in the first sentence of Section 4.2(a) or the second sentence of Section 4.2(b); (f) by Green, prior to consummation of the Amended Second Offer, if White shall have breached or failed to perform in any material respect paragraphs (a) or (d) of Section 3.2 of its representations and warranties or any of its covenants or other agreements contained in this Agreement, which breach or failure to perform (A) would give rise to the failure of the condition set forth in Section 6.3(a) and (B) cannot be or has not been cured within 30 days after the giving of written notice to White of such breach (a "White Material Breach") (provided that Green is not then in Green Material Breach of any representation, warranty, covenant or other agreement contained in this Agreement and provided that, if such breach is curable through the exercise of White's best efforts, this Agreement may not be terminated hereunder for so long as White is so using its best efforts to cure such breach); (g) by Green in accordance with Section 4.2(b); provided that it has complied with all provisions contained in Section 4.2, including the notice provisions therein, and that it complies with applicable requirements of Section 5.9; (h) following June 2, 1997, by Green, if Tender Sub shall have failed to consummate the Amended Second Offer unless such failure is due to the non-occurrence of a condition to the Amended Second Offer (in addition to any other remedies Green may have as a result of such failure to consummate). SECTION 45. Section 7.3 of the Merger Agreement is hereby amended by deleting (a) the words "any of the Green Shareholder Approvals or the White Shareholder Approval" and substituting therefor the words "the Green Merger Shareholder Approval" and (b) the words "or White" from the proviso to the first sentence; and by adding the following sentence to the end thereof: -28- 30 Prior to the Effective Time, this Agreement may not be amended without the approval of a majority of Continuing Directors (as defined in the Green Rights Agreement) present on the Green Board of Directors (provided that at such time there are a minimum of two such Continuing Directors then present on the Green Board of Directors). SECTION 46. The last sentence of Section 8.1 of the Merger Agreement is hereby deleted in its entirety. SECTION 47. Section 8.3(j) of the Merger Agreement is hereby deleted in its entirety; and Section 8.3(b) of the Merger Agreement is hereby deleted and replaced in its entirety with the following: (b) "material adverse change" or "material adverse effect" means, when used in connection with Green or White, any change, effect, event or occurrence that is materially adverse to the business, financial condition or results of operations of such party and its subsidiaries taken as a whole or materially impairs the ability of such person to consummate the transactions contemplated hereby (including the Offer and the Merger) and by the Option Agreements other than any change, effect, event or occurrence (x) relating to the United States economy in general or to the transportation industry in general, and not specifically relating to Green or White or their respective subsidiaries, or (y) arising from this Agreement or the transactions contemplated hereby or from the restrictions of Section 4.1 or any conversations, discussions or negotiations, agreements or arrangements under Section 4.3 hereof or any public announcement of any of the foregoing; SECTION 48. Section 8.6 of the Merger Agreement is hereby amended by adding the following immediately prior to the end thereof: "(other than Attachment A to the Green Disclosure Schedule delivered in connection with the Third Amendment, to the extent expressly provided therein)". SECTION 49. The White Stock Option Agreement is hereby canceled and rescinded in its entirety, and all references to such agreement in the Merger Agreement are hereby abandoned. SECTION 50. The term "Offer" as used in the Merger Agreement shall be deemed to include the Amended Second Offer; the term "Offer Price" as used in the Merger -29- 31 Agreement shall be deemed to include the Amended Second Offer Price; 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 Third Amendment (provided that the terms "date hereof" or "date of this Agreement" as used in the Merger Agreement shall mean October 14, 1996); the term "Schedule 14D-1" as used in the Merger Agreement shall be deemed to include the Amended Second Schedule 14D-1; the term "Offer Documents" as used in the Merger Agreement shall be deemed to include the Amended Second Offer Documents; the term "Schedule 14D-9" as used in the Merger Agreement shall be deemed to include the Amended Second Schedule 14D-9; the term "Green Fairness Opinions" as used in the Merger Agreement shall be deemed to include the Fourth Green Fairness Opinions; and the term "Form S-4" shall be deemed to include the Green Proxy Statement. SECTION 51. All references in the Merger Agreement to either the "First Effective Time" or the "Second Effective Time" shall be deemed to refer to the "Effective Time"; all reference in the Merger Agreement to either the "First Merger" or the "Second Merger" shall be deemed to refer to the "Merger"; all references in the Merger Agreement to the "Per Share Cash Consideration" shall be deemed to refer to the "Per Share Merger Consideration"; and all references in the Merger Agreement to the "Green Shareholders Meetings" shall be deemed to refer to the "Green Merger Shareholders Meeting". SECTION 52. Exhibit B, Exhibit C, Exhibit F, Exhibit G and Exhibit H are hereby deleted in their entirety as exhibits to the Merger Agreement and replaced with the following: "[Intentionally deleted]". SECTION 53. Exhibit A and Exhibit E to the Merger Agreement are hereby deleted and replaced in their entirety with Exhibit B and Exhibit E hereto, respectively. 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 Third 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. -30- 32 SECTION 3. Entire Agreement; No Third-Party Beneficiaries. Other than the Merger Agreement (and subject to Section 8.6 thereof), this Third 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 Third 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 THIRD 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 Third Amendment nor any of the rights, interests or obligations under this Third 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 Third 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 PROVISIONS OF THIS THIRD 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 THIRD AMENDMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS OF THIS THIRD 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 THIRD AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS THIRD 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 THIRD AMENDMENT OR ANY -31- 33 OF THE TRANSACTIONS CONTEMPLATED BY THIS THIRD 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 Third Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Third Amendment. SECTION 8. Severability. If any term or other provision of this Third Amendment is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Third 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 Third 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. -32- 34 IN WITNESS WHEREOF, Conrail Inc., Green Acquisition Corp. and CSX Corporation have caused this Third 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: -33- 35 EXHIBIT A NEW CONDITION (1) (1) there shall not have been validly tendered and not withdrawn such a number of Shares which, together with the Common Shares already owned by Parent through the Voting Trust and with any Common Shares already owned by any third party, its subsidiaries or affiliates that may, jointly together with Parent, acquire an equity ownership interest in any vehicle that may acquire the Company, constitute at least a majority of the Shares outstanding on a fully diluted basis (other than upon exercise of the Company Stock Option). NEW CONDITION (a) (a) there shall be any action taken, or any statute, rule, regulation, injunction, order or decree enacted, enforced, promulgated, issued or deemed applicable to the transactions contemplated by the Second Offer, the Merger or the Merger Agreement, by or before any court, government or governmental authority or agency, domestic or foreign, that, directly or indirectly, results in (x) making illegal or otherwise directly or indirectly restraining or prohibiting the making of the Second Offer, the acceptance for payment of or payment for some of or all the Shares by Parent or Purchaser or the consummation by Parent or Purchaser of the Merger or the Second Offer or (y) except for the requirements of the Voting Trust Agreement and other than any STB action which does not result in the effects described in the foregoing (x), imposing material limitations on the ability of Parent, Purchaser or any of their subsidiaries or affiliates effectively to exercise full rights of ownership of the Common Shares, including, without limitation, the right to vote any Common Shares acquired or owned by Parent, Purchaser or any of their subsidiaries; or A-1 36 EXHIBIT B CERTAIN MATTERS Pennsylvania It is White's intention that, following the Control Date: Green's Juniata locomotive shops at Altoona, Pennsylvania; Green's Sam Ray car shops at Hollidaysburg, Pennsylvania; Green's Pittsburgh service center; and a major operating presence in Philadelphia (including headquarters of the Surviving Corporation) shall be maintained. Board of Directors of White Following the Control Date, the Board of Directors of White shall be expanded to include three outside directors from the current Board of Directors of Green who shall be approved by White. Transition Team Following the Effective Time, White and Green shall establish a transition team for Green and shall offer to include in the leadership of such transition team the current Chief Executive Officer of Green (or such other senior Green executive as may be acceptable to White) and the current Chief Executive Officer of White's railroad operations, provided that such transition team shall not control the day-to-day railroad operations of Green or its subsidiaries prior to the Control Date, but shall restrict its operation to planning for actions and operations to be undertaken from and after the Control Date. Among other things, Green and White, in connection with the transition team, shall cooperate to ensure the orderly operation of Green during the STB approval process under the control of Green's directors and officers and to ensure an orderly transition thereafter. B-1 EX-99.C.13 8 FORM OF AMENDED AND RESTATED VOTING TRUST AGRMT. 1 AMENDED AND RESTATED VOTING TRUST AGREEMENT THIS AMENDED AND RESTATED VOTING TRUST AGREEMENT, dated as of March 7, 1997, 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 Merger, to the corporation resulting from the 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 Merger. 2 -2- 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, a Second Amendment thereto dated December 18, 1996, and a Third Amendment thereto dated March 7, 1997; 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 Merger, or otherwise to deposit such Shares of Common Stock in an independent, irrevocable voting trust, pursuant to the rules of the STB, in order to avoid any 3 -3- 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 and Third Amendments 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, 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 4 -4- 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 Merger, they will transfer to the Trustee the certificate or certificates for such shares. 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 5 -5- 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 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 6 -6- 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 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 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 7 -7- 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. 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 8 -8- 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 -- The Trust Certificates shall be transferable 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 the consummation of the Amended Second Offer, any transferee shall be subject to the obligations of the transferor hereunder. Until so transferred, the Trustee may treat the registered holder as owner for all purposes. Each transferee of a Trust Certificate issued hereunder 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 9 -9- 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 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. 10 -10- (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 the Amended Second Offer shall not have previously been consummated, with the prior 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 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 Merger, vote the Trust Stock in favor of the 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. 11 -11- 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 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 12 -12- 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 earliest of (i) the consummation of the Amended Second Offer; (ii) December 31, 1998, if STB Approval shall not have by then been granted; or (iii) the occurrence of an STB 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 (in circumstance under which the consent of the Company is required under the preceding parenthetical expression, acknowledged by the Company) that any 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, 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 13 -13- (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 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 14 -14- 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 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. 15 -15- 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. 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 16 -16- successor trustee shall have been selected in the manner provided by this paragraph. 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. Any modification or amendment of this Trust Agreement effected after the Merger may be executed by agreement executed by the Trustee, the Parent and all registered holders of the Trust Certificates, subject to clauses (i), (ii), (iii) or (iv), as may be the case, of the preceding sentence. 16. Governing Law; Powers of the STB -- The provisions of this Trust Agreement and the rights and obligations of the parties hereunder shall be governed by the laws of the Commonwealth 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 -17- 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 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 earliest of (i) the consummation of the Amended Second Offer; (ii) December 31, 1998, if STB Approval shall not have been granted; or (iii) 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 18 -18- or companies controlling them, and the exemption of approved rail mergers and combinations from the antitrust laws. 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, 19 -19- 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 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 20 -20- By - --------------------------- ------------------------------ 21 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"). 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 March 7, 1997, 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. 22 -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 23 - 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: ____________________________________ -----END PRIVACY-ENHANCED MESSAGE-----