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FIRST 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 NOVEMBER 5, 1996.
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FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of
November 5, 1996 (this "First 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 "Merger
Agreement"), pursuant to which Tender Sub has commenced a cash tender offer (the
"October 16 Offer") for shares of Green Common Stock and for shares of Green
ESOP Preferred Stock, such offer to be followed by a merger of Green with and
into Tender Sub, with Tender Sub being the surviving corporation;
WHEREAS, in consideration of Green's willingness to enter into
this First Amendment, White and Tender Sub are willing to make the amendments to
the Merger Agreement set forth herein;
WHEREAS, in consideration of White's and Tender Sub's
willingness to enter into this First Amendment, Green is willing to make the
amendments to the Merger Agreement set forth herein;
WHEREAS, the Board of Directors of Green has approved, and
deems it advisable and in the best interests of Green to enter into, this First
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 First Amendment; and
WHEREAS, except as amended by this First Amendment, it is
intended that 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 First Amendment, the
parties, intending to be legally bound, agree as follows:
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ARTICLE I
SECTION 1. The following is hereby added to the end
of Section 1.1 of the Merger Agreement:
(e) As promptly as practicable after the public announcement
of the execution of the First Amendment, dated as of November 5, 1996,
to this Agreement (the "First Amendment"), Tender Sub shall amend the
October 16 Offer to change the price offered thereunder to $110.00 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 Offer, being referred to herein as the "Amended
Offer Price"), subject to the conditions (the "Exhibit D Conditions")
set forth in Exhibit D to this Agreement (the October 16 Offer, as so
revised, the "Amended Offer"). Tender Sub shall, on the terms and
subject to the prior satisfaction or waiver of the conditions of the
Amended 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
Offer and the expiration of the Amended Offer; provided, however, that
no such payment shall be made until after calculation of proration;
provided further that immediately upon the acceptance for payment of
and payment for shares of Green ESOP Preferred Stock pursuant to the
Amended 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 obligations of Tender Sub to make
the Amended Offer and to accept for payment and to pay for any shares
of Green Common Stock or Green ESOP Preferred Stock validly tendered
shall be subject only to the Exhibit D Conditions. The Amended Offer
shall be made by means of a supplement (the "Supplement") to the offer
to purchase relating to the October 16 Offer containing the terms set
forth in the First Amendment and the Exhibit D Conditions. Without the
written consent of Green, Tender Sub shall not decrease the Amended
Offer Price, decrease the aggregate number of shares of Green Common
Stock and Green ESOP Preferred Stock sought, change the form of
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consideration to be paid pursuant to the Amended Offer, modify any of
the conditions to the Amended Offer, impose conditions to the Amended
Offer in addition to the Exhibit D Conditions, except as provided in
the proviso below, extend the Amended Offer, or amend any other term or
condition of the Amended 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")
set forth in paragraph (c) of the Exhibit D Conditions without the
consent of Green; and provided further that, if on any scheduled
expiration date of the Amended Offer (as it may be extended in
accordance with the terms hereof), all conditions to the Amended Offer
shall not have been satisfied or waived, the Amended 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 their obligation to purchase shares under the
Amended Offer at any scheduled expiration date thereof are satisfied
other than the Minimum Condition, White and Tender Sub shall, from time
to time, extend the Offer until the earlier of (i) 270 days following
the date hereof or (ii) such time as such condition is satisfied or
waived in accordance herewith. In addition, the Amended Offer Price and
the number of shares of Green Common Stock or Green ESOP Preferred
Stock sought may be increased and the Amended 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 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.
(f) White and Tender Sub shall file with the SEC as soon as
practicable on or after the date the Amended Offer is made, an
amendment to the Tender Offer Statement on Schedule 14D-1 relating to
the October 16 Offer with respect to the Amended Offer
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(together with all amendments and supplements thereto and including the
exhibits thereto, the "Amended Schedule 14D-1"), which shall include,
as exhibits, the 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 Offer Documents").
Each of White and Tender Sub agrees to take all steps necessary to
cause the Amended 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, agrees
promptly to correct any information provided by it for use in the
Amended Offer Documents if and to the extent that it shall have become
false and misleading in any material respect, and White and Tender Sub
further agree to take all steps necessary to cause the Amended 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 Offer Documents
before they are filed with the SEC. In addition, White and Tender Sub
agree to provide Green and its counsel in writing with 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 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 Offer and amending the Amended Offer in
response to any such comments.
SECTION 2. Section 1.1(d) of the Merger Agreement is hereby
deleted and replaced with the following:
(d) At any time prior to eleven business days before the then
scheduled expiration date of the Amended Offer if Subchapter E (Control
Transactions) of Chapter 25 of the Pennsylvania Law shall be
inapplicable to Green by such time, White shall at the written request
of Green amend the Amended Offer to increase the number of shares of
Green Common Stock and Green ESOP Preferred Stock sought thereunder to
40% of the outstanding shares of Green Common Stock on a fully diluted
basis as of the date hereof (excluding for purposes of this Section
1.1(d) shares that
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would be outstanding upon exercise of the Green Stock
Option Agreement). In addition, at any time following seven
business days after consummation of the Amended Offer, if White and it
subsidiaries do not already own at such time 40% or more of the
outstanding shares of Green Common Stock on a fully diluted basis as o
the date hereof (excluding for purposes of this Section 1.1(d) shares
that would be outstanding upon exercise of the Green Stock Option
Agreement), White may, and at the written request of Green shall,
commence an offer (the "Second Offer") to purchase up to that number
of shares of Green Common Stock and Green ESOP Preferred Stock which,
when added to the aggregate number of shares of Green Common Stock and
Green ESOP Preferred Stock then beneficially owned by White (other
than pursuant to the Green Stock Option Agreement), equals 40% of such
outstanding shares of Green Common Stock, at a price not less than
$110.00 provided that White shall not be required to consummate any
such Second Offer until after Subchapter E (Control Transactions) of
Chapter 25 of the Pennsylvania Law shall be inapplicable to Green.
Green agrees that it shall not make such written request at any time
that the Offer is outstanding and has a scheduled expiration date
within 10 business days of such time. White and Green agree that if
the Second Offer is commenced they will file such documents and make
such recommendations and take such other action as is required by this
Agreement in respect of the Amended Offer, and the Second Offer shall
be on terms (other than price) no less favorable to the shareholders
of Green than the Amended Offer.
SECTION 3. The number "$92.50" in Section 2.2 and Section 2.5
of the Merger Agreement is hereby deleted and replaced with the number
"$110.00".
SECTION 4. The following is hereby added to the end of Section
1.2 of the Merger Agreement:
(e) Green hereby approves of and consents to the Amended Offer
and represents that its Board of Directors, at a meeting duly called
and held, has unanimously by the vote of all directors present (i)
determined that this Agreement, as amended by the First Amendment, and
the transactions contemplated hereby (including the Amended Offer and
the Merger) are in the best interests of Green, (ii) approved this
Agreement, as amended by the First Amendment, and the transactions
contemplated hereby (including the Amended Offer and the Merger), such
determination and approval constituting approval thereof by the Board
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of Directors for all purposes of the Pennsylvania Law, and (iii)
resolved to recommend that the shareholders of Green who desire to
receive cash for their shares of Green Common Stock or Green ESOP
Preferred Stock accept the Amended Offer and tender their shares of
Green Common Stock or Green ESOP Preferred Stock thereunder to Tender
Sub and that all shareholders of Green approve and adopt this
Agreement, as amended by the First Amendment, and the transactions
contemplated hereby; provided, however, that prior to the purchase by
Tender Sub of shares of Green Common Stock and Green ESOP Preferred
Stock pursuant to the 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 Offer
Documents of the recommendations of Green's Board of Directors
described in this Section.
(f) Concurrently with the making of the Amended Offer, Green
shall file with the SEC an amendment to the Solicitation/Recommendation
Statement on Schedule 14D-9 relating to the October 16 Offer with
respect to the Amended 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 Schedule 14D-9"), which amendment shall contain the
recommendation referred to in clauses (i), (ii) and (iii) of Section
1.2(e) 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 agrees to take all steps necessary to
cause the Amended 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, agrees promptly
to correct any information provided by it for use in the Amended
Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect, and Green further agrees to take
all steps necessary to cause the Amended 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 Schedule 14D-9 before it is filed
with the SEC. In addition,
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Green agrees to provide White, Tender Sub and their counsel in writing
with any comments Green or its counsel may receive from time to time
from the SEC or its staff with respect to the Amended 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 Schedule 14D-9 and amending the Amended
Schedule 14D-9 in response to any such comments.
(g) Green has received the written opinions of each of the
Green Advisors, each dated as of the date of the First Amendment, to
the effect that, as of such date, the consideration to be received by
Green shareholders (other than Tender Sub and its affiliates) pursuant
to the Amended Offer and Merger, taken together, is fair from a
financial point of view to such holders (the "Second Green Fairness
Opinions"). Green has delivered to Tender Sub a copy of the Second
Green Fairness Opinions.
SECTION 5. The term "Offer" as used in the Merger Agreement
shall be deemed to include the Amended Offer; the term "Offer Price" as used in
the Merger Agreement shall be deemed to include the Amended 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 First
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
Schedule 14D-1; the term "Offer Documents" as used in the Merger Agreement shall
be deemed to include the Amended Offer Documents; the term "Schedule 14D-9" as
used in the Merger Agreement shall be deemed to include the Amended Schedule
14D-9; and the term "Green Fairness Opinions" as used in the Merger Agreement
shall be deemed to include the Second Green Fairness Opinions.
SECTION 6. The following is hereby added to the end of Article
IV of the Merger Agreement:
SECTION 4.3. No Third Party Discussions, etc. Without limiting
the provisions of Section 4.1, during the term of this Agreement,
neither Green nor White shall, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor,
attorney, accountant
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or other representative retained by it or any of its subsidiaries to,
directly or indirectly through another person, participate in any
conversations, discussions or negotiations, or enter into any
agreement, arrangement or understanding, with any other company engaged
in the operation of railroads (including Norfolk Southern Corporation)
with respect to the acquisition by any such other company (including
Norfolk Southern Corporation) 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, other than with respect
to sales, leases, licenses, mortgages or other disposals (a) by White
of any of the assets or properties of White or its subsidiaries (but
not Green and its subsidiaries) or (b) by Green of any of the assets or
properties of Green or its subsidiaries (but not White and its
subsidiaries), in either case to the extent permitted by Section
4.1(a)(iv). Notwithstanding the foregoing, however, Green and White
shall be permitted to engage in conversations, discussions and
negotiations with other companies engaged in the operation of railroads
(including Norfolk Southern Corporation) to the extent reasonably
necessary or reasonably advisable in connection with obtaining
regulatory approval of the transactions contemplated by this Agreement
in accordance with the terms set forth in this Agreement, and in each
case so long as (i) representatives of Green and White are both present
at any such conversation, discussion or negotiation, (ii) the general
subject matter of any such conversation, discussion or negotiation
shall have been agreed to in advance by Green and White and (iii)
Green, White and such other company shall have previously agreed to
appropriate confidentiality arrangements, on terms reasonably
acceptable to Green and White (which terms shall in any event permit
disclosure to the extent required by law), relating to the existence
and subject matter of any such conversation, discussion or negotiation.
This Section 4.3 shall terminate and be of no further force and effect
immediately upon any exercise by Green or White of its rights under the
proviso to Section 4.2(a); provided that such party exercising such
rights has given the other party prior notice thereof.
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SECTION 7. The number "180" in Section 4.2(a) and Section
4.2(b) of the Merger Agreement is hereby deleted and replaced with the number
"270".
SECTION 8. The provision at the end of Section 5.1(f) of the
Merger Agreement is hereby deleted.
SECTION 9. The following is hereby added to the end of Section
5.1(b):
Green shall not convene, adjourn or postpone the Green Pennsylvania
Shareholders Meeting without the prior consent of White, which consent
shall not be unreasonably withheld. In the event that the matters to be
considered at the Green Merger Shareholders Meeting are not approved at
a meeting called for such purpose, from time to time Green may, and
shall at the request of White, duly call, give notice of, convene and
hold one or more meeting(s) of shareholders thereafter for the purpose
of obtaining the Green Merger Shareholder Approval, in which case all
obligations hereunder respecting the Green Merger Shareholders Meeting
shall apply in respect of such other meeting(s), subject in any event
to either party's right to terminate this Agreement pursuant to Section
7.1(b)(ii) or (iii). Subject to the foregoing, Green shall convene each
such meeting(s) as soon as practicable after receipt of any request to
do so by White (and in the case of the initial Green Pennsylvania
Shareholders Meeting, as soon as practicable after December 5, 1996).
The foregoing shall not effect White's obligations to make the Amended
Offer and, if the conditions therefor in Section 1.1(d) are satisfied,
the Second Offer, whether or not the Green Merger Shareholder Approval
has been received or any such Green Merger Shareholders Meeting(s) have
been called or held.
SECTION 10. The following is hereby added to the end of
Section 5.1(c):
In the event that the matters to be considered at the White
Shareholders Meeting are not approved at a meeting called for such
purpose, from time to time White may, and shall at the request of
Green, duly call, give notice of, convene and hold one or more
meeting(s) of shareholders thereafter for the purpose of obtaining the
White Shareholder Approval, in which case all obligations hereunder
respecting the White Shareholders Meeting shall apply in respect of
such
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other meeting(s), subject in any event to either party's right to
terminate this Agreement pursuant to Section 7.1(b)(ii) or (iii). White
shall convene each such meeting(s) as soon as practicable after any
request to do so by Green.
SECTION 11. The following is hereby added to the end of each
of Sections 7.1(b)(ii) and 7.1(b)(iii):
, to the extent such meeting was held after the earlier of (i) 270 days
after October 14, 1996 or (ii) the purchase of an aggregate of 40% of
the fully diluted shares of Green Common Stock and Green ESOP Preferred
Stock under the Amended Offer and, if applicable, the Second Offer.
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 First Amendment may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 3. Entire Agreement; No Third-Party Beneficiaries.
Other than the Merger Agreement (and subject to Section 8.6 thereof), this First
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 First 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 FIRST 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.
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SECTION 5. Assignment. Neither this First Amendment nor any of
the rights, interests or obligations under this First 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 First 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 FIRST 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 FIRST AMENDMENT AND TO ENFORCE
SPECIFICALLY THE TERMS AND PROVISIONS OF THIS FIRST 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 FIRST
AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS FIRST 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 FIRST AMENDMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS FIRST 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 First
Amendment are for reference purposes only and shall not affect in any way the
meaning or interpretation of this First Amendment.
SECTION 8. Severability. If any term or other provision of
this First Amendment is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this First
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
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First 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.
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IN WITNESS WHEREOF, Conrail Inc., Green Acquisition Corp. and
CSX Corporation have caused this First 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:
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