45 U.S.C. § 1311 — Preparation for public offering

Page 262 TITLE 45—RAILROADS § 1311 (4) the term ‘‘consolidated tangible net worth’’ means the market value of the com- mon equity of the Corporation as of the sale date, plus or minus the change from the sale date to the date of measurement in the excess, after making appropriate deductions for any minority interest in the net worth of subsidi- aries, of— (A) the assets of the Corporation and its subsidiaries (excluding intercompany items) which, in accordance with generally accept- ed accounting principles, are tangible assets, after deducting adequate reserves in each case where, in accordance with generally ac- cepted accounting principles, a reserve is proper, over (B) all liabilities of the Corporation and its subsidiaries (excluding intercompany items), taking into account inventory and securities on the basis of the cost or current market value, whichever is lower, and not taking into account patents, trademarks, trade names, copyrights, licenses, goodwill, treasury stock, or any write-up in the book value of any as- sets; (5) the term ‘‘Corporation’’ means the Con- solidated Rail Corporation; (6) the term ‘‘cumulative net income’’ means, for any period, the net income of the Corporation and its consolidated subsidiaries as determined in accordance with generally accepted accounting principles, before provi- sion for expenses (net of income tax effect) re- lated to— (A) amounts paid by the Corporation under section 4024(e), and comparable payments made to present and former employees of the Corporation not covered by such section; and (B) the aggregate value of any shares and cash distributed by the Corporation under section 4024(f); (7) the term ‘‘debt’’ means (A) indebtedness, whether or not represented by bonds, deben- tures, notes, or other securities, for the repay- ment of money borrowed, (B) deferred indebt- edness for the payment of the purchase price of property or assets purchased, (C) guaran- tees, endorsements, assumptions, and other contingent obligations in respect of, or to pur- chase or to otherwise acquire, indebtedness of others, and (D) indebtedness secured by any mortgage, pledge, or lien existing on property owned, subject to such mortgage, pledge, or lien, whether or not indebtedness secured thereby shall have been assumed; (8) the term ‘‘funded debt’’ means all debt created, assumed, or guaranteed, directly or indirectly, by the Corporation and its subsidi- aries which matures by its terms, or is renew- able at the option of the Corporation or any such subsidiary to a date, more than 1 year after the date of the original creation, as- sumption, or guarantee of such debt by the Corporation or such subsidiary; (9) the term ‘‘liabilities’’ means all items of indebtedness or liability which, in accordance with generally accepted accounting principles, would be included in determining total liabil- ities as shown on the liabilities side of a bal- ance sheet as at the date as of which liabilities are to be determined; (10) the term ‘‘person’’ means an individual, corporation, partnership, association, trust, or other entity or organization, including a gov- ernment or political subdivision thereof or a governmental body; (11) the term ‘‘preferred stock’’ means any class or series of preferred stock, and any class or series of common stock having liquidation and dividend rights and preferences superior to the common stock of the Corporation of- fered for sale under section 1312 of this title; (12) the term ‘‘public offering’’ means an un- derwritten offering to the public of such com- mon stock of the Corporation as the Secretary of Transportation determines to sell under section 1312 of this title; (13) the term ‘‘sale date’’ means the date on which the initial public offering is closed; (14) the term ‘‘subsidiary’’ means any cor- poration more than 50 percent of whose out- standing voting securities are directly or indi- rectly owned by the Corporation; and (15) the term ‘‘United States share’’ means a share of common stock of the Corporation held by the United States Government on Oc- tober 21, 1986, or as a result of any split re- quired pursuant to section 1312(d) of this title. (Pub. L. 99–509, title IV, § 4004, Oct. 21, 1986, 100 Stat. 1894.) Editorial Notes REFERENCES IN TEXT Section 4024(e) and section 4024(f), referred to in par. (6), are section 4024(e) and (f) of Pub. L. 99–509, and are set out as a note under section 797 of this title. Statutory Notes and Related Subsidiaries ABOLITION OF INTERSTATE COMMERCE COMMISSION AND TRANSFER OF FUNCTIONS Interstate Commerce Commission abolished and func- tions of Commission transferred, except as otherwise provided in Pub. L. 104–88, to Surface Transportation Board effective Jan. 1, 1996, by section 1302 of Title 49, Transportation, and section 101 of Pub. L. 104–88, set out as a note under section 1301 of Title 49. References to Interstate Commerce Commission deemed to refer to Surface Transportation Board, a member or employee of the Board, or Secretary of Transportation, as appro- priate, see section 205 of Pub. L. 104–88, set out as a note under section 1301 of Title 49. SUBCHAPTER II—CONRAIL PART A—SALE OF CONRAIL § 1311. Preparation for public offering (a) Public offering managers (1) Not later than 30 days after October 21, 1986, the Secretary of Transportation, in con- sultation with the Secretary of the Treasury and the Chairman of the Board of Directors of the Corporation, shall retain the services of in- vestment banking firms to serve jointly and be compensated equally as co-lead managers of the public offering (hereafter in this part referred to as the ‘‘co-lead managers’’) and to establish a syndicate to underwrite the public offering. The total number of co-lead managers shall be no fewer than 4 nor greater than 6. The Secretary shall designate one co-lead manager to coordi- nate and administer the public offering. Page 263 TITLE 45—RAILROADS § 1312 (2) In selecting the investment banking firms to serve as co-lead managers of the public offer- ing under paragraph (1), consideration shall be given to the firm’s institutional and retail dis- tribution capabilities, financial strength, knowl- edge of the railroad industry, experience in large scale public offerings, research capability, and reputation. In addition, recognition shall also be given to contributions made by particular in- vestment banking firms before October 21, 1986, in demonstrating and promoting the long-term financial viability of the Corporation. (b) Payment to United States (1) Not later than 30 days after October 21, 1986, the Corporation shall transfer to the Sec- retary of the Treasury $200,000,000. (2) On or before February 1, 1987, or 30 days be- fore the sale date, whichever occurs first, the Secretary of Transportation shall determine whether to require the Corporation to transfer to the Secretary of the Treasury, in addition to amounts transferred under paragraph (1), not to exceed $100,000,000, taking into account the via- bility of the Corporation. The Corporation shall transfer such funds as are required to be trans- ferred under this paragraph. (c) Registration statement The Corporation shall prepare and cause to be filed with the Securities and Exchange Commis- sion a registration statement with respect to the securities to be offered and sold in accord- ance with the securities laws and the rules and regulations thereunder in connection with the initial and any subsequent public offering. (d) Omitted (Pub. L. 99–509, title IV, § 4011, Oct. 21, 1986, 100 Stat. 1895.) Editorial Notes REFERENCES IN TEXT This part, referred to in subsec. (a), was in the origi- nal ‘‘this subpart’’ meaning subpart A (§§ 4011–4013) of part 2 of subtitle A of title IV of Pub. L. 99–509, Oct. 21, 1986, 100 Stat. 1895, which enacted this part and amend- ed section 726 of this title. For complete classification of subpart A to the Code, see Tables. CODIFICATION Subsec. (d) of this section amended section 726 of this title. § 1312. Public offering (a) Structure of public offering (1) After the registration statement referred to in section 1311(c) of this title is declared ef- fective by the Securities and Exchange Commis- sion, the Secretary of Transportation, in con- sultation with the Secretary of the Treasury, the Chairman of the Board of Directors of the Corporation, and the co-lead managers, shall offer the United States shares for sale in a pub- lic offering, except as provided in paragraphs (2) and (3). (2) The Secretary of Transportation, after such consultation, may elect to offer less than all of the United States shares for sale at the time of the initial sale. (3) Under no circumstances shall the Secretary of Transportation offer any of the United States shares for sale unless, before the sale date, the Secretary determines, after such consultation, that the estimated sum of the gross proceeds from the sale of all the United States shares will be an adequate amount. A determination by the Secretary under this paragraph shall not be re- viewable. (4) In making a determination under para- graph (3), the Secretary shall have the goal of obtaining at least $2,000,000,000 in aggregate gross proceeds for the United States from the public offering and any payments made under section 1311(b) of this title. (b) Subsequent sales If the Secretary of Transportation elects to offer for sale less than all the United States shares, the Secretary shall sell the remaining United States shares in subsequent public offer- ings. (c) Consent of Corporation not required Any public offering under this section may be made without the consent of the Corporation. (d) Authority to require stock splits (1) The Secretary of Transportation, in con- sultation with the co-lead managers and the Chairman of the Board of Directors of the Cor- poration, may, in connection with the initial public offering described in subsection (a), be- fore the filing of the registration statement re- ferred to in section 1311(c) of this title, require the Corporation to declare a stock split or re- verse stock split. (2) The Corporation shall take such action as may be necessary to comply with the Sec- retary’s requirements under this subsection. (e) Cancellation of other securities held by United States (1) In consideration for amounts transferred to the United States under section 1311(b) of this title, the Secretary of Transportation shall, con- current with the initial public offering described in subsection (a), deliver to the Corporation all preferred stock, 7.5 percent debentures, and con- tingent interest notes of the Corporation. The Corporation shall immediately cancel such de- bentures, preferred stock, and contingent inter- est notes, and any interest of the United States in such debentures, preferred stock, and contin- gent interest notes shall be thereby extin- guished. (2) For purposes of regulation by the Commis- sion and State public utility regulation, the ac- tions authorized by this subsection, the public offering, and the value of the consideration re- ceived therefor shall not change the value of the Corporation’s assets net of depreciation and shall not be used to alter the calculation of the Corporation’s stock or asset values, rate base, expenses, costs, returns, profits, or revenues, or otherwise affect or be the basis for a change in the regulation of any railroad service, rate, or practice provided or established by the Corpora- tion, or any change in the financial reporting practice of the Corporation. (f) Minority investment banking firms The Secretary of Transportation shall ensure that minority owned or controlled investment banking firms shall have an opportunity to par-