4SPOI{74

6

(flfflct of t1e (!flainnan

The Honorable Bob Goodlatte The Honorable Tom MarinoChairman ChairmanCommittee on the Judiciary Subcommittee on Regulatory Reform,United States House of Representatives Commercial and Antitrust LawWashington, DC 20515 Committee on the Judiciary

United States House of RepresentativesWashington, DC 20515

Dear Chairman Goodlatte and Subcommittee Chairman Marino:

Thank you for your letter dated December 22, 2015, concerning a potential merger ofCanadian Pacific Railway (“CP”) and Norfolk Southern Railway (“NS”). In reading ourresponses to your questions about the role of the Surface Transportation Board (“STB” or“Board”) in reviewing a potential merger, please understand that we must exercise caution toavoid prejudging issues that could arise if a merger application were submitted to this agency.Accordingly, we will endeavor to be as responsive to your questions as possible by providing thegeneral guidance below.

As you noted, the Board adopted its current merger rules in 2001. Among other things,those rules instruct major merger applicants’ to show that a proposed merger is in the publicinterest by demonstrating that public benefits, such as improved service and enhancedcompetition, outweigh potential negative effects, such as potential service disruptions and harmthat cannot be mitigated. They also require applicants to address whether claimed benefits canbe achieved by means other than a merger. See Major Rail Consolidation Procedures, 5 STB539, 546-51, 553-59 (2001) (“Merger Rules”). No major consolidation proposals have beensubmitted since the adoption of the Merger Rules.

Your first question asks whether the Board anticipates any revisions to the Merger Rulesand whether the Board will continue to consider enhancement of competition as a factor inevaluating proposed transactions. Any revisions to the Merger Rules would have to be adopted

1 A “major” transaction is a control or merger involving two or more Class I railroads. AClass I railroad is one whose annual operating revenue exceeded $475,754,803 in 2014.

‘urface !Iranzportation iMrntrbUaztiintnu, .QI. Il4a.3-Iltflfl

January 7,2016

in a notice-and-comment rulemaking. There are no such proceedings under way to change thoseregulations at this time. Therefore, under the current rules, as part of its weighing of the benefitsof a transaction, the Board would consider matters such as improved service and enhancedcompetition.

Your second question concerns whether the Board would consider the downstreameffects of a consolidation transaction — in particular, whether a proposal would lead to otherconsolidations in the industry — and how the agency would weigh this factor in its overall review.The Merger Rules require that “applicants. . . initiate a commentary, to which other parties couldrespond, that would give us the information we need to rule on what could likely be the first stepin an end-game situation in which only two or three competing transcontinental carriers wOuldremain in North America.” More particularly, the Board said, “[wje can meet our responsibilityonly if applicants file their preliminary evidence about the evolving structure of the industry thatwould likely result from their proposal and others like it; if they address the merits of such astructure; if they provide their views on how to deal with potential problems that structure couldcause to service, efficiency, and competition; and if other affected parties then come in andexpress their concerns on a full record.” Id. at 582. The Merger Rules thus direct the Board toconsider, in addressing a major merger application, likely future transactions and their impact.

Lastly, you ask whether the Board has approved an arrangement under which a proposedpurchaser’s former Chief Executive Officer (“CEO”) managed the to-be-acquired companyduring the Board’s regulatory review and what factors the Board considered in approving suchan arrangement. The Board has not approved that particular arrangement in the context of aproposed merger between two Class I railroads. The major transactions that have involved, tosome degree, proposed management swaps are the following:

• In a 1983 proposed major merger, the Southern Pacific Transportation Company(“SP”) sought to merge with the Atchison Topeka & Santa Fe Railway(“ATSF”). While the merger was pending before the Board’s predecessor, theInterstate Commerce Commission (“ICC”), the holding companies of SP andATSF were placed under a consolidated entity as part of a voting trustarrangement. During this time, four officers of SP departed to become employedby the consolidated entity. Although the ICC approved that voting trust, itexpressed “deep reservations” and imposed numerous conditions upon itsapproval. See Santa Fe Southern Pacific Corp.—Control—Southern PacificTransp. Co.: Merger—The Atchison, Topeka & Santa Fe Rwy. Co. and SouthernPacific Transp. Co., 2 I.C.C.2d 709, 715 (1986); Santa Fe Southern PacificCorp.—Control—Southern Pacific Transp. Co.: Merger—The Atchison, Topeka& Santa Fe Rwy. Co. and Southern Pacific Transp. Co., FD 30400, 1983 ICCLExis 70, at * 1-2, * 14-17 (ICC served Dec. 23, 1983). The ICC ultimatelydenied the request for merger approval and directed that the consolidated entitydivest either SP or ATSF.

• In a 1994 proposed major merger, Illinois Central Railroad (“IC”) sought toacquire Kansas City Southern Railway (“KCS”). The parties proposed a votingtrust during the pendency of the transaction. As part of that arrangement, thepurchasing railroad’s officers would become officers of the to-be acquiredcompany during the transaction’s pendency. The ICC raised numerousquestions about the proposed voting trust and management plan, and took thethen-rare step of initiating a formal review process and seeking publiccomments. Because the IC-KCS deal was terminated by the parties shortlythereafter, the ICC did not rule on those proposed arrangements. See IllinoisCentral Corp.—Common Control—illinois Central R.R. Co. and the Kansas CitySouthern Rwy. Co., FD 32556, 1994 ICC LEXIS 195, at *1..2, *4, *11.48 (ICCserved Oct. 19, 1994).

• In a 1998 proposed major merger involving the Canadian National Railway(“CN”) and IC, Hunter Harrison (now CEO of CP) left his position as CEO ofIC, the to-be-acquired company, to become Chief Operating Officer (“COO”) ofthe purchasing company, CN. However, neither the Board’s staff opinion on thevoting trust, nor the agency’s subsequent decision approving the mergeraddressed any proposed management shift. See Canadian Nat? Rwy. Co, et al.—Control—illinois Central Corp., et al., FD 33556, 1998 WL 477655 (STB servedAug. 14, 1998); see also Canadian Nat’l Rwy Co, et al.—Control—illinoisCentral Corp., et al., FD 33556, Opinion Letter from Secretary Vernon A.Williams to Paul A. Cunningham (Feb. 25, 1998) (attached).

Please note that there has been a change in the Board’s policy with regard to voting trustsin major mergers since the transactions described above. In Merger Rules, the Board stated thatit would “take a much more cautious approach” with regard to voting trusts in proposed majormergers. The Board is now required to conduct a more formal review of such voting trusts,which includes a public comment period. In addition to its focus on whether a voting trustinsulated the merger partners from unlawful pre-approval control, the Board announced inMerger Rules that it would also consider a new factor in assessing voting trusts in majormergers: whether use of the trust would be consistent with the public interest. Therefore, shouldCP pursue a voting trust arrangement with NS in connection with a request for merger approval,the Board would consider issues related both to unlawful pre-approval control and to the publicinterest.

Thank you for contacting us. We hope this information is helpful to you. Please do nothesitate to contact us if you have further questions.

Sincerely,

Daniel R. Elliott III Deb Miller Ann D. BegemanChairman Vice Chairman Commissioner

lhdaa ~~Saari~ • 3 • , . a.«, !.N!l-11111

k STB F1l:a:r Dodzs So. l35!6. C;a:::qfu:! '>;gjm>! Jbihm: C!l!T!!"l!!!! Gp nd Tnmk Ct s aeu ;md Cl'lZif Tn::t ~·axm R;ilmqd lu;s1 'i41c4.-:Crnt;ri-IDjmjc CcntgJ c,, , ,.,,, l'lfi:m Cszml Brlngd Cmrrwry Clzjgcn CqttnJ am' Pari·fts RaiJn:g4

<"cc;am !i!!!l Cc:sbr fUm Jtihrg;l fm:rnm

Dar~. c · ; '

&:o::4'i ' On ~.ay 11. 1991.~ dw:rinc' oa bcmll o(Cnndim Nlloa.11 R.Ul•;ay ~ tCSJLI..S Bbd:!:rat ~ Sc:b, Lao:. G~ S+D5ny)' -s pcnum~10 -'9 CFR !~.a \ "cxz:c Tn:::st ,\;: • (VTA) ~"' br ~ a:ro by -t bcc>o-.. O.'R. ).lc;c S t . r : . Zld .a T nzs~ee.: T'br VT A prvrido fDr :lx plxnncnt imD m iodcpmdan

Crrir~ ~ Ca::;;my • .a C.....r= ~is.~,. rd'am110 a m ....., 1':1:=. ~Jbd+ak ).lcp:r Sclo. ~.a~ c:a;x"..llban. ..s m iDdmcs •ilolly -=cS d · s : ato.ll. is rdcl:cS to :a Mcr;tt S+Rdixy. O."R iacladc:s Gr.md Tnmk Ccc;uzaaa tGTC}..::a I . 5 • ., iD !!It Ullll£d Sala.. -s GTC". ~ iDdlllfizla: Gr.md rc::a:.-c:a=~&.:. (Gn~~ v.·=Zpq-sl'xi1icR.UlwayCompmy(Dv.'P); =~a=ra::xt~lscn 0.1l.GTC.Gn". M?. SCT. -t).la;cr5ubl4iny = ~., calkcm::l! 2S cs.

: C\0 i:2::o:!s 10 od«<: :a e .S. b:l::k orr:.----IY ... dJc ,_ o{ lk VT A.

r cmmmy Gmr;t trmk at-rmtmJ-Q[rncb Ccmgl 'cmt:!l !l!!d P¥itk b l m;:d

c...mrn. ~ IUiJWQY IIY)1 =d ptm:m~ID 49 m 11110 by m1 ~-= CNR.. ocm. illlo m icdepc:adcm

!.S •':lrioasly rcfcm:d 1.0 :u CIQ ml :Ill iadirca wbolly IDclades <mud Tnmk lllidmics iDc!t.rfuqr Gl:md l.til•-my COIIIJI:III! (DWP): r. mt !tfcF s~

aflb: VTA.

. .

;m4jrreouc:ab&c~crust.of•lllhe_,.... .. ,...)rnf!!ll=,_:_ (' -"'"' ~"'r ,_ ...., ~WI .... D'f

'-" ""' .c, ~ ~ .anjtgtrc.

You I . n hrilh lb: VT A. a Agreclaalt ml PLm of Mctrrr (Mager AIIJ'CCIIICIII) dad as offdlnary I 0. 1991. :11D011B CNR.. Mcr;cr Snbsidi")'. m!IC Corp. The Merger A; ,,.,; ·, • a~CNilCma;crlrmPdiaa F'as1.Mager Sobsidbry~ill

c a CISb laldcr ofJ'cr (T CDdcr Ofli:r) 1.0 ~ up 1.0 75% or lb: CIJIIIIDO:III.oek oCIC Cap.. (m 4Pq;A or~ I. 761 OQ1'SUncfina sb=s of commonll.oek) • ml this COIIIIIIOD llDCk (mf my ocher IC Corp. •'OiiQa Sl.oCk xqailal by CN mf ia a.IJilWa) •ill be: rbccd illlb: \'CJiiDa lnzsu.,zlhljshcd I:IZXblb: VTA.' Second. folto..illacomplc1iolloflb: TeudcrOITcr. lmd Clcr RICCip of my Dt«mlJIIppVQI by JC Corp.'s stmdloldcrs fmduOqlb: Tnzsacc ofllJj: VTA). il is 1 1 h•cd dDt Mager Suhsidi:."'Y 'Will be: ma;cd ~lat;cr) •ilb I1Dd illl.o IC Corp.. stxsu:;w 1b1: sqarac czisrcncr ofMcr;cr Sal!sjdQry alaii c:c.se. =d JC Corp. siWI be: *-• j , iua ewp«aaioa (!he Sani •io11 C01po1:aiuo). Up:m COUMD!mliotr of lb: ~l.ngcr. a!

" t 'I shmsofdle SormiJ1a Ccapar::llioo wrill be: ckposit:d illlo lb: •'Diinllln!Sl.' II iJ anisiolxd dDt* M~ will ocaD' ill ~•-m:cof rmy Slll'fxr Tr:wporwiaa 8o;ud \STU) ~-at of :a OIIIC CD:IIlOI ;spplinlion •

You jncfjc=ztcd iD your Fcbn::vy 11. 1991 sqbmjssjon 11m you bc:tie>-c llw ~terser Sabsidi:ay"s ~one Corp.'s-szock ill die TeDder Offer. md Mcr;cr Scb9diny' s mcr;cr •ilb ml illlo lC C~ 'lrill :101 si''C CN md its~ !he J'O'"'CI' 1.0

aa%01 JC Corp. or its~ subsidizics. To climiDzc rmy isslx or m=thorizal coauol

1 llliDois CCIU21 Corpoaboo. a Ddn:zrc corpor.ajoll. is Vllriously rdm-cd 1.0 as IC Corp. mllb: Compmy. IC Corp. iDd1llb iu ailto:>d dlili=s: illinois CGJ~nl ~ ~~

Cbiaco CCIU214: Pxi6c IUilrD*I Comp;my: ml Ccd.v Rn-a IUilro.ld Comp:lll)~ lll!d lhcir ~'C subsidmics. IC Corp. ml iu ailto:>d drllalcs = rcfami 1.0 colla:tr.'dy ;u I C.

• Tbc CISb faldcr oiTa - 1.0 em 011 01 :aboul Fcbnmy 13, 1991.

' Also p:na:IIIIIO die !tlc;cr A;ramml. ad sh= o(IC Corp. SlOCk QQlS!mfinS irmmf-ncly p'iar 10 1b: Mcr;-cr. Giber 1b1 sh=s a... 'DOd bc:D<IicWiy by CN :and lxld in !he .-olina I:USl. •iD be COII\utai upoa die COi'P'I"'"11ion of die !tlc;cr illlo die righ110 recci\'C 01 SIOCk or a cocahizmion of ':uh ml CN S!OCk.. ;u dctamiJied UDder lhe Mc:rgcr A grmncru.

• OD Fdlnmy 12.. 1991. CN :md IC filed a preatills nodfiazioo (CNIIC·I) oflhcir ilium 10

fik za ;spplicllim scckifta =bority lllllkr 49 U.S.C. 113!3-25 for !he ocquisilion of coauol by O iR. tbrooJ;b !tlc;cr Sllbsldmy, ofiC Corp~ md duoucb it ofiCR mi lts~ 1111111"" cd forlb: n:sahiua- coauol by C1l ofGTW :md its ~affilbla l!lld ICR l!lld hs ~ :al!ilala Crdami 10 ~a lbc o:nc coa~n~llniZSXIlool.

~ApW) rp. The Mag-er :r sultsldbry ... m DIII!IIO:lllodt of lC IIIII thiJ aJIIIIDOIIIIodt be (!bad ill !be

!be Tca!d OITa. IIIIlS ag !be TIUSlCC of tb: orilh :md illlo lC md IC Cc:p. s!W1 be o u{~ !>taF.IIII 1uiug INSL1 It is Ilion Boatd c STB)

0\"etlm!<ola;er Dl!<ota;cr 1CS !be power 10 llbl!riml amuol

m:d 10 as IC Coop. ~~-: ilmJ='IIr. :md their 11lccth"dy as IC.

L

outsnmfing 'N :md bcld ill !be be risbl 10 ra:rive 01 JCfAIPUlbtllL

: ·1) or their illlalliO lisitioa of CUIIIIII1 by 1 ailroJd,ttffi)iUM

~md1CR:mdib

. .

S1B Finance Docket No. llS56

~ :rua-n:qucsziDa tt= !be S1B sa1T iauc 1111 illform.d, aon·biodina opinion swlog tt= !be VT A ml !be OlllaziiCIIIGII:I dcsaibal dxrcill will cfl'ccli\'dy insuJ&Ic CN md ill affiliDcsliam q Yiobliaa of !be ICC Tamilmioa .r\cl of 1995 ml ofS1B policy aallillsl lllSIIIIIIorizlaqaisiDua of CUIIIIII1 ofiCs cmia sublidilrics.

1W vaa. Tnar ,cg,~ bt GmtraL Tbo: •'Oiias ~ 10 be csr•hlisbcc!ID!Ikr lbc VTA .;n be iudtpc:Dda4. ~ 9 Jll'll'idcs l!w lb= 11e10 be ao QJillOniiC officcn or baozd -ben ill-=-lld1oun CNR IIIIlS ils affiblr! 011 !be om h:md.lllld !be Trust !C and ils affiT121r! 011 !be ocla h:md. P=gnph 9 also prll\idcs 11m. Cll:Cpl for tbc \'OUng UUSI i:ldf IIIIlS with !be cxu:tGw DOled ill !be DCI!IICIUCDCC. lbcll: In! "' be 110 dim:t or il:dirul business »I & 1 or dnlinp 11z1;mcW or CJibaoaiK. btttl=l CK.t :md its aJ!iliatcs. on tbe oac b:md. ml !be TIUSlCC ml ils afJiliatrs on !be otber bal. 1 P~ 9 fllnber pro•ida l!w lhc T.-_,- aakr limiJcd um:ouumu ID CN' nvCiDg sccuritia. Tbcse limited iii\""'""""IS in IIIJjnda 1 lboaldDDlw.lamib:lbcilldq • nc ofrbeTrustcc.

U1ldcf P;a:lp:ltil7. !be Tnaza: siWI. Qnmcdi;:wcly follawina !be nuipt of ew:b Q.Sb dmdald or czsb cliszriblltioD as cmy be dccbml :md p.1id upon !be Trust SIOck. p;l)' lbc same 0\U 10 or as din:ocd by !be rq;isu:ml bolda{s) ofTIIISl CcruJIQia.. but s!W1 =ch-e 111111 bold ~ idald:s :md dislribalioas ocJa Ibm ash upoa !be s:~~~~e tams md amdilions u lbc Trust S1DCk m! siWI issue Trust Catilk:llc:s ~:my ocw or Ddditloaal securities llw may be p:lid :as dhidalds upoa !be Trust SIOCk or o1bcrwise cfuuibulcd upon !be Trust SIDCk 10 lhc ~ holdcs{s) ofTNSI Cerlifialcs in proponioo to their ~-e iiiJa'CSlS.

~.a pnnidcs 11m !be •'Oiins 1nW 10 be ... nhlbbcd cmda !be VT A ,.;u be ~ P;a:atp:aph .a Also pnnidcs 11m lhc lllllllimllon oflbc Tlt.!Ske dariaa lbc ICru oflhc tras1 s!W1 be im:\'Oable by OIR lllld its allili=s.

ucx~cr P;a:zp:&pb ). !be Trus~ee siWl 1101 p:uUa~ ill or intafm: ,.;th the IIWI:Ill= of lC Corp.lllld s!W1 We no olhcr XllDaJ •ilh raped 10 IC Corp. cxttpt in acconlm:c "'ith the VTA"sca:ns. The VTA Wn:m !be TNSI«.IIDda P;a;qp:aph l , IO \'Ole lhe TNSl S10tk in f~nw of !be Ma;cr lllld mpiaslll:IDS¥tions iacomp:llible ..;tb WI Ma;a.lllld 10 \'OlD 1111 sb=s of TniSls-k ill llnwof:Jny prvpos1l or oaioow1 ordc:sim>lc 10 disposcofTNSI SIDCk ill ~ ..;m P=llf:aph a. Unda l';aOijjLijtll.ooly"'ilh lhe prior "'nllal app~V•-a.l oflhc

' \ ' oa iDdicllc ill )'OUr 1a1cr 11m. puna:IIIIIO S«tioa 7.02 or lhr MCiler AfiJftiiiCIII. liD)' cnnfodcmbl illformmou COIIIIIIIIIIk:a ~uo CNR.. illlllbsidi.aics -s llflltl11es, :md IC,lts ~ 111111 •ffifrz~es Cor due dills== pgrpoKS ,.;u be bdd in COIIIIdalce IIDd used solely for lh:l parposc. You Alfo expect CN and IC 10 file a RqUeSI for a prv1ec1h-e order with lbc S1B shonly.

aaa: OocRt No. JJS56

cliq opiDiaD mliq lllleCNatill llJ policy llpiasz

mblisbcd lllldc:r the ~ofllcas01 Ill. md the T nDii:c at the •'UIU!a tna1 i!SCI( or il:diRI:I busiDea iiDtcs. oa the oac rm.r proYido d:alllx: ailed Uno• *"" m

uipt of c:dJ ash lOCk. lilY the s:zmc IWI n:cci\-c md bold lioas ;u the Trust acamtics th» m:ay be IIISl SIOCk to the ICI'CSIS..

uhllx:~ D~wilbthe Trust SIOCk iD &.u o \'Ole~ sb:a of IlK ofT rust SIOCk iD 11 appnMJ of the

,\pw :my tllili=s. Df IC. ill ace D!ID!d solely corder wilb the sm

1'=1 A. Ctmaiqlgm Fcbtur~.l991 ~ . . ._..

. .

STD Finance Docket No. JJ "6

S1B m:sy :a n&iszua1 bolder of 11 TIUSI Catific::m: imlnxl the Trustec in 1111iliq 10 \'Ole the Trast SlDdt 1q:cc:scuu1 by SDtb Trast Ccz1iti=cs in ay maDCf. ~ S prohibiiJ !be Tnzsll:e liamcxucisiq the •"DDiila po~~oas of the TiliSl Sud: in ay "';!)'so ILl 10 c:rc:uc 1111)'

clq t. e or iulaWipoa:dt: rri'J'igmhjp bcl1o=t CNR lad iiS •ffilill"' Oil the OliC lmDd, cmd IC CGrp. md ib :affiljms on lhe oda bm1. Uadcr P=;r2pb S. only •ilh the prior ~~o'riUcn ~ ofllle STB 1113)' lhe TiUSieC •'Ole lhe Trust Slock10 elcctllll)' officer. dirretor. aomince 01 iCpt:z:iCIIh'C ofCNR OUII)' ofiiS :Uiiliak:s liS 1111 offia:r or dircaor of dJc busiDc:u osw• •• m oliC Corp. 01 of :my llffili::lla of IC Corp. Olb:rlloise. ~ 3 t*V'ides llw "'lhe TniSlD: wlhvlullllma ofTIIISI Stock ,.ilh n:spCCIIO ;&)) mmca .•• Ia lhe TiUSiec•s sole clliadian. Dilla due rq;:ud far lhe inlcrcsu oflhe boldm oflhe Trust CcniflCIU:IIIS in•-cston ill 111e ~- ddumina1•-ilbolll rrfcreaa: 10 such boldcn• immsls Ia ~ Olher dwl llle Compmy 01 ill mbsidi:ario::s ••.. • 1lxsle tomu in lhe VT A. in my judpnall. will ..Uow !be Tnzs~~:e 10 lXI illdcpc::udai1Jy.

I =li:zle tma l':u"SL'Ph 1-l llpp:IRIIII~· Cll\":.•icas rcmo•-:al oflhe TIIISICC by CN in the C\"all of :a "lmlcri:ll •iob!ioo• by lbe Trustecoflle .mm llld CODdiliOOJ of the VT A. ThiJ t*V'ision. thouGh i1 clarly 6miiS the illdepc:DIIaxc ,..., or!C\"OC1biliry of !be •-olina trust. b. in DIY j1dg 1 ~,. The Trustee. in DIY juclgmcftl. em be~ upon 10 IIS:Sim iu rishiJ ill 111e C\'alllll:at lhe "'lmlcri:al •-ioblion • nW: is C\U wal as :a JIRI&:XI.

rnr I'GiinJ: TnDI AgTUJIIDII: Dr.arln rt.. The VTA COII13ias t*V'Uiom llw "'illi!O•un 111e di\"CSiillft ofthc Trust SIOCk iflhe Olllf. comrol lr.IIISXtion is ile\tt CODS\IIIIIMted. P:.a:ap:qoG l(m) pnn;dcs: •11 b lhe ~ oflhis P=~b llw oo •iol.lllion of .&9 U.S.C. I 1313 •ill rau!1 from :a ICmliiJ:aljQn oflh:s Trust. • P=gnph I( c) pro•idcs: "Ally such 6sposiriaa (disposUioa by CNR oflhe l rust SIDCk) Wll tc Sllbjea 10 ••• :my jurisdiclion of !he S1B to 0\-c:D.:C P:acnt"s dn-cslilllrC on rust Stock.. These sus=s.ln my judsmm~. :arDOWll

tD"" xmo..-le<tsme"' t1a1.. if tho T cndct OtTer ....S Mnscr succccdo. bu&llz CN/lC corurol 1 • • •i<l , ll!liDgsdy coll 'lp'C' lhe STU .. ill b:a\-c the IWIIIority 10 :IJIPfO\'C bolh :a plm of W."CSiillft llllillhe s:ak (or olher disposition) of the TIUSI Stock. ,.·brnc\u such dh'CIIIrun: 1111d disposition w.. pbcc.lVId .. ~or not the pc10ll.xquirinll •.he liUSI SIDCk n:qwn:s sc:ction II )!3 3lllboriry 10 COUSII!!I!!U!C such :acquisition. I

1 ~ J fajsm Prifi£ Cgrrgpdm <' ol - Bcqpnt Cqr lnfmnaJ Orinjon-Yrtinp Tnm Agw • Ft~a~XC Docket No. 32619 (lCC scn"Cd Dec. 20, 199-l), slip op. 1116. Sa: 111m SAIIIA Fe Smnbcm P¥jfi£ Cgrp ::(Jmqpl-SPT Co :! I.C.C.:!d 709. 134 ( 1916) (the juriJdlctloo of the lazersme COIIIIIItice Commjulon "'10 0\'CI'SI'I' the orderly dh-cstirun:' orlhe Tnlll SIDCk b "iilbormtty •;~bin [IU) =boriry 10 "''P""\'C comolid.Jiiaas 111111 .xquisilions or COD!nll "). Or cuanc.lhe sro ,."OIIId b:a\-c ao mllboril)' 10 CI\'CIW: :he ullim.Jtt disposition orlhc Trust Stoek

(COIIIimaed...)

d

D F1mDcc Docka No. 33SS6

IC ill '"1'iliq to \"QIC !he ll:lp:lpb s prohibits lbr: f4110 iiS to CI'CI1I: my Illes, QQ !he - bmd. 011111 ~., wilh lbr: prior wriDm ., ollk:cr. Wra:tor. DllllliDc: liOf of lbc buslDess r.!p:IJib l pnn-idcs tiW "the 1 ••• iD tbe TNSICC's soL: 'IDl Ccnifla1es u ill\'eS101S CSIS ill albmds odJcr th:m 11 jada-za. will allow lbr:

tc r- by CN ill !he JOtD of tho: VT A. This y of tho: •-otin;IJUSI. is. ill IICI1 upoa to :men iu riglw

s pnnisioas llw ,.;n SO''ml X"U COGPJ'"'!!tled

• •ioblloo of ~9 U.S. C. 10\i.lcs: • Any ...,;b

r.o ••• m y jariJdictioa of tho: ts.. in my j udiJIIICIII. muoum • but tho: CNnC control pprcn-c both :~ pbD of 11C\'I:f such diTC:Siitlft 011111 "'IDl SIOCk rcq\lircs scaioa

llriqn-Vgsjgq Inm &lip op. =6. &ulm ~ 1916) (lh.c: jurisdictioa of tho: ··of tho: TNSt Stock Is lsitions of cantrol "). Of IOSitioo of tho: T nm Stadt

(wii!ift!!cd )

. .

Pml A. C•mninghWI r= "-") ~. a»ll ~s

lh: VTA (hnal~ IS) anisioos tiW it my be GIDCJidal purslWll to 1111 ~of tho: STD. 011111 abu•ledces tho: :anllocUy of tho: S11) (hlap;lpb 16) to compel c:ompUaoce ~tb allY ~arodacfircai•=

(T]o !he c:llclll allY pnl\isiou bcmlf my be found iDcaniistmt ,.;th !he ICC T ermimlioo Ad of 199S or rqJUl:ulon promulgA!Cd tbacoodcr by the STU. such Ad andlqiUblicms Wll cantrollllld such provision br:teof WJJ be gi\'CII effect only to the c:llclll pcnzDllll:d by such Aa l>Diiq~ .. lbc C\'all tiJ;u lbc STD IIWl. al allY lime bcrcUlcr by timl order. lind tiW complimcc .;th bw rcq\lircs allY other or dllTCftllllXIion by the T nmcc tlw! is prcnickd ~~ami. tho: Tnzsuc WJJ liiCt iu ~ ,.;tb such 6mJ onlcr imtA:Id of tho: pro•isiom of IIU Truss Agreement.

I ~of counc.llw ill the M~ t\SJmiiCIII. Section 1.03 ptUpORS to accord IC a •-rto pov.-c:r 0\'CIDey VT A mcdillc:llioas or lllllCDdmcms.' I ~Wt~~DC. ho"''C\'1:1, t1w P:nllrll!'h 16 of lbr: VTA "'ill pm'ilil 0\'Cf Mavcr t\gRcmcnt. Scction 1.03 , in the C\'CIII of a conflict. The STD's =lloril)' rcspcctiDa dh'I:Siinae CIIIIIOI be ~led by the MCll:Cf Agn:cmcnl.

l/yopbJJDrl. Ill my opinion. the \'OUns OUR to be c:Nblisballllll1cr the VTA \\ill cfTe::zndy imublc OJ md iu oUiilbles from tho: ,;obtion ofSubtillc IV of Title 49 oflbr: Uailcd Sales Code lllld tho: policy of tho: S11) llw •'1111l4 rault lfCN "'-c:rc to :acquire. "'itbout ~.a sufficicus imcrc:st ill tho: arricr subsidl;rics ofiC Corp. :u otbcNm to n:sultln COIIIlOl. Uadcnbe VT1\ . iD my judgmcm. c:omrol o f iCCcnp. l>Dii iu =ricr subsidlllria c:m be cxerciscd by CN and iu :llliiWc:s oaly subscqucru to IIJ'Pftl\'ili by the STD oftlu: CN/IC conuol ~iarion

My opinion rcsptetlnll the •-otina OUR b :mlnfonml su1T opinion thAI iJ DOl bindlna on the STD. ~~9CFR IOIJJ (.a).

'(~ "= it C\'CIIliWI)' to rule tiW Of'' dircc1o-.llmhlp of lbc T rus1 SIOCk did not rc:su111n c:onuol md di4 11111 •iol= allY otbr:t prmision of Ltw.

' lD the Mavcr Apm!ICIII. S«<ion 1.03 pnnidcs: •, •• the Voting Trusl AIJTCCII1Cilllll3)' DOl lx modi.fJcd or !I!!!C!!dcd ..;tbolll the prior ,.,;om Gppnl\111 of IC ualcss such modUia~~lon or ._.,.,mcm is IIIII bxonnnm1 ~tb this AgJmiiCIII md {s not ad•'l:fle to IC or ltsllOCkholdcn .

Ill

lied l llld

iT'D c II= ch

=miiCa\~ 11~[6of cc:arua. The ccmo:m.

bcVTAt~iD -t1lc 49 of lb: ' xquin:. IOilholll !mOUe to n:mlt in IUbsidiaric:s CtD be !be 01/JC coauol

I is not biDdiDa 011

IIJI CCUiCUi !my not II!Odjficztioo or illstodholdas

l'd~r~­fdlnmy 2.5. 1991 ~6

..

Matti,., COIUida at 111 =mua ar my opillioa rcspcaiaalbc \'lllina tnm. tllll\~ ai\u ID • "&mion ~'Crto tbcmcriuoflbo49 U.S.C. lll23·2S CNIIC CIIIIIIOI oppllc:uioo 11m CN Gild IC imaJd to lilc oo or before J~~~~e 12, 1991. lbm, my opiDioo sbould aot be ialupdal by 11117 pasoo a 111 inO'C"ioo dw llhink the STD will or will aot appnl\~ any mcb l;lJlfH"'!!joa • .

hblk Dcdzt. A copy of lhiJ lcacr t~iU be pbced in tbe public dockd in STD Flo:mcc DaQa No.ll556.

SU!ee:rly,