Exhibit (c) (5)
FORM OF AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 1 dated as of March 4, 1998 to the Agreement and Plan of
Merger dated as of February 10, 1998 (the "Agreement") among Illinois Central
Corporation, a Delaware corporation ("IC"), Canadian National Railway Company, a
Canadian corporation ("CN"), and Blackhawk Merger Sub, Inc., a Delaware
corporation and a wholly owned subsidiary of CN ("Merger Subsidiary").
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1.01. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
Section 1.02. Contingent Amendment of Section 2.02 of the Agreement.
(a) The parties hereto expressly agree that the amendments to Section 2.02 of
the Agreement set forth in paragraphs (b) and (c) of this Section 1.02 shall
only become effective at such time as (i) the Delaware Court of Chancery has
entered an order approving the Settlement (as such term is defined in the
Memorandum of Understanding dated as of February 27, 1998 among IC, the members
of IC's Board of Directors, CN Merger Subsidiary and the plaintiffs in such
Actions) and such order has been finally affirmed on appeal or is no longer
subject to appeal and the time for any petition for reargument, appeal or
review, by certiorari or otherwise, has expired and (ii) all of the other
conditions precedent to the effectiveness of the Settlement shall have been
satisfied.
(b) (i) Subject to paragraph (a) of this Section 1.02, the proviso in
the definition of "CN Average Closing Price" in Section 2.02(c) of the Agreement
shall be amended in its entirety to read as follows:
"; provided that if such average closing price is less than $41.50 then
the CN Average Closing Price shall be $41.50 and if such average
closing price is greater than $64.50 then the CN Average Closing Price
shall be $64.50."
(ii) Subject to clause (i) of Section 1.04 of the Agreement and to
paragraph (a) of this Section 1.02, in the event that the average closing price
of the CN Common Stock on the NYSE for the twenty trading day period ending on
the second trading day prior to the date of the Effective Time shall have been
less than $43.00, CN will promptly cause the Exchange Agent to send to each
person who was a record holder of shares of IC Common Stock at the Effective
Time the additional Merger Consideration such person would have received had the
amendment referenced in clause (i) of this Section 1.02(b) been in effect
immediately prior to the Effective Time.
(c) Subject to paragraph (a) of this Section 1.02, a new paragraph (f)
shall be added to Section 2.02 of the Agreement, as follows:
"(f) if (x) the STB shall have (i) issued written notice disapproving
the acquisition of control of IC by CN or (ii) advised CN of such a
determination or (iii) imposed unacceptable conditions upon such
acquisition of control and, (y) in the case of any of (i), (ii) or
(iii), there is a subsequent disposition (a "Disposition") of the
shares of capital stock of the Surviving Corporation held in the Voting
Trust, CN will distribute or cause to be distributed to those persons
whose shares of IC Common Stock were acquired by Merger Subsidiary
pursuant to the Offer and to those persons who were record holders of
shares of IC Common Stock at the Effective Time, an amount per share,
without interest, equal to the quotient obtained by dividing (i)
one-third of any "Net Profits" realized upon any such Disposition by
(ii) the sum of (x) the number of shares of IC Common Stock acquired by
Merger Subsidiary pursuant to the Offer and (y) the aggregate number of
shares of IC Common Stock outstanding at the Effective Time. CN shall
make all computations as to Net Profits and, absent manifest error, any
such computation shall be conclusive and binding on the aforementioned
persons.
For purposes of this paragraph (f) the following terms shall have the
meanings set forth below:
"Net Profits" means the proceeds of any Disposition after deducting all
Acquisition Costs, Carry Costs, Disposition Costs and Applicable Taxes.
"Acquisition Costs" means all direct and indirect costs of CN, Merger
Subsidiary, IC or any of their respective affiliates or the Voting
Trust, associated with the acquisition of the shares of IC Common Stock
pursuant to the Offer and the Merger, including, without limitation,
the costs of CN relating to the establishment of the Senior Facilities
(and any refinancing thereof) in connection with the Offer and the
Merger, the costs of the STB application, together with the related
costs of the application proceeding, fees and expenses of attorneys,
financial advisors, experts, dealer managers, the depositary, the
information agent, the exchange agent, accountants and consultants, and
expenses for filing with the SEC, printing and mailing of any
documentation related thereto (including, without limitation, the Offer
Documents, the Form F-4 and the IC proxy statement) and all other
associated costs and expenses.
"Carry Costs" means all direct and indirect costs of CN, Merger
Subsidiary, IC or of their respective affiliates or the Voting Trust,
relating to the shares of IC Common Stock and/or shares of the
Surviving Corporation, as the case may be, held in the Voting Trust
during the period from the acquisition of any shares of IC Common Stock
pursuant to the Offer through the date of any Disposition, including,
without limitation, financing costs, costs of maintaining the Voting
Trust, expenses of the trustee of the Voting Trust pursuant to the
Voting Trust Agreement and any related expenses. The parties agree that
financing costs shall be equal to an amount per annum equal to 10%
(compounded daily) of the sum of (i) the product of (x) the aggregate
number of shares of IC Common Stock acquired by CN and Merger
Subsidiary pursuant to the Offer and the Merger and (y) the amount paid
by Merger Subsidiary for each share of IC Common Stock acquired by it
pursuant to the Offer and (ii) with respect to each IC Option converted
into a CN Option pursuant to the Merger, an amount equal to the
difference between the amount in sub-clause (y) and the exercise price
of such IC Option.
"Disposition Costs" means all direct and indirect costs of CN, Merger
Subsidiary, IC or any of their respective affiliates or the Voting
Trust, associated with any Disposition, including, without limitation,
fees and expenses of attorneys, financial advisors, accountants and
consultants, and expenses of any filing with the SEC, printing and
mailing of any documentation related thereto.
"Applicable Taxes" means the taxes incurred (determined on the basis of
the highest marginal effective tax rate applicable at such time) by CN,
Merger Subsidiary, IC and any of their respective affiliates or the
Voting Trust in connection with the ownership, acquisition and
disposition of shares of IC Common Stock and/or shares of capital stock
of the Surviving Corporation, as the case may be.
Section 1.05. Amendment of Section 10.01. A new paragraph (d) shall be
added to Section 10.01, to read as follows:
"(d) Merger Subsidiary shall have purchased shares of IC Common Stock
pursuant to the Offer."
Section 1.06. Amendment of Exhibit B to the Agreement. The first
sentence of Section B.1. of Article 7 of Exhibit B to the Agreement is hereby
replaced and amended in its entirety to read in full as follows:
"Each person who was or is a party or is threatened to be made a party
to, or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person is or was a director or officer of the Corporation
or is or was serving at the request of the Corporation as a director or officer
of another corporation, partnership, joint venture, trust or other enterprise,
shall be indemnified and held harmless by the Corporation to the fullest extent
permitted by applicable law."
Section 1.07. Amendment of Exhibit D to the Agreement. The first
sentence of the final paragraph of Exhibit D to the Agreement is hereby replaced
and amended in its entirety to read in full as follows:
"The parties agree that any cross-references, section references or
designations or schedule designations shall be deemed to be modified to
reflect the modifications set forth in this Exhibit D, it being
understood that the deletion, pursuant to this Exhibit D, of any
provision of the Agreement that contains a definition of a term that is
used in other provisions of the Agreement shall not result in the
deletion of such term in such other provisions (unless such other
provisions are also expressly deleted pursuant to this Exhibit D)."
Section 1.08. Amendment of Section 12.03 of the Agreement. Section
12.03 of the Agreement is hereby replaced and amended in its entirety to read as
follows:
"Subject to Section 11.02, the representations and warranties and
agreements contained herein and in any certificate or other writing delivered
pursuant hereto shall terminate at the Effective Time or upon the termination of
this Agreement, except that (i) the provisions of Section 2.02, (ii) the
covenants and agreements of IC contained in Sections 6.01 and 6.02 and (iii) the
covenants and agreements of CN contained in Sections 7.06, 8.01, 8.02, 8.03,
8.07 and 9.03 shall survive the Effective Time and shall remain in full force
and effect in accordance with their terms."
Section 1.09. Representations of Each Party. Each party represents and
warrants that (i) the execution, delivery and performance of this Amendment by
such party have been duly authorized by all necessary corporate action and (ii)
this Amendment constitutes a valid and binding agreement of such party.
Section 1.10. Governing Law. This Amendment shall be construed in
accordance with and governed by the laws of the State of Delaware.
Section 1.11. Counterparts; Effectiveness. This Amendment may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Amendment shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.1
to be duly executed by their respective authorized officers as of the day and
year first above written.
CANADIAN NATIONAL RAILWAY
COMPANY
By:
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Name:
Title:
BLACKHAWK MERGER SUB, INC.
By:
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Name:
Title:
ILLINOIS CENTRAL CORPORATION
By:
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Name:
Title:
