Repeal of Section; Continuing Responsibilities of Consolidated Rail Corporation After Sale Date
Pub. L. 99–509
, title IV, § 4024(c)–(f), Oct. 21, 1986, 100 Stat. 1904
, as amended by Pub. L. 99–514
, § 2,Oct. 22, 1986, 100 Stat. 2095
, provided that:
“(c) Repeal of Section 701.—Section 701 of the Regional Rail Reorganization Act of 1973 [45
] is repealed effective on the sale date [Apr. 2, 1987, see 45
(17A)]. Notwithstanding this repeal—
“(1) any dispute or controversy regarding benefits under section
shall be determined under the terms of the law in effect prior to such repeal; and
“(2) the Railroad Retirement Board shall take such actions as may be necessary to complete administration and closeout of the section
program and the Board is authorized to receive and apply Corporation funds for this purpose.
“(d) Continuing Responsibilities.—(1) On and after the sale date, the Corporation shall provide the protection for its employees described in ‘Part III, Article III, Employee Protection’, of the ‘Definitive Agreement of September 17, 1985, By and Between Conrail and the Undersigned Representatives of Conrail’s Agreement Employees’ and Appendix 3 thereto, together with any amendments thereto, or under any other terms and conditions as shall be agreed between the Corporation and the representatives of its employees.
“(2) The Corporation shall pay, as designated by the Railroad Retirement Board, any remaining benefits under section 701 of the Regional Rail Reorganization Act of 1973 [45
] that accrued, but were not disbursed, prior to the sale date.
“(3) The Railroad Retirement Board shall transfer to the Corporation such information regarding administration of the labor protection program under such section
as may be reasonably necessary for the Corporation to discharge its responsibilities under this subsection, including copies of the individual claim records of employees of the Corporation.
“(4) The United States shall have no liability for benefits under this subsection.
“(e) Compensation for Wages Below Industry Standard.—The Corporation shall pay $200,000,000 to present and former employees subject to collective bargaining agreements, in accordance with the terms and conditions in the Definitive Agreement referred to in subsection (d)(1), or as otherwise agreed between the parties.
“(f) ESOP Transactions.—(1) As soon as practicable after the date of the enactment of this Act [Oct. 21, 1986], the employee stock ownership plan of the Corporation (hereafter in this subsection referred to as the ‘ESOP’) shall be amended to provide that—
“(A) the shares of the ConRail Equity Corporation preferred stock held by the ESOP shall be surrendered by the ESOP in exchange for an equal number of shares of the common stock of the Corporation, and such common stock of the Corporation shall be allocated by the ESOP to the same persons in the same amounts as the shares of ConRail Equity Corporation preferred stock had been allocated; and
“(B) the remaining shares of the ConRail Equity Corporation preferred stock held by the Corporation shall be cancelled, and an equal number of shares of the common stock of the Corporation shall be contributed by the Corporation to the ESOP, which shares shall be allocated by the ESOP to persons who are or were ESOP participants in accordance with the formula set forth in section 2 of Article II of Part III of the Definitive Agreement referred to in subsection (d)(1), and in accordance with a comparable formula for present and former employees of the Corporation not covered by such section of the Definitive Agreement, except that no contribution by the Corporation to the ESOP shall be made which would affect the tax-qualified status of the ESOP, or of any of the employee benefit plans maintained by the Corporation or any affiliate of the Corporation, under the Internal Revenue Code of 1986 [26
“(2)(A)(i) As soon as practicable after the expiration of 180 days after 100 percent of the United States shares are sold, the ESOP shall distribute all of the stock in the accounts of its participants and beneficiaries, except as provided in clause (ii).
“(ii) Fractional shares shall not be distributed under clause (i). Shares equal to the aggregate amount of fractional shares shall be surrendered by the ESOP and redeemed by the Corporation for cash at the average closing price for the common stock of the Corporation on a national securities exchange for the 10 business days immediately preceding the date of distribution under clause (i), or, if the common stock of the Corporation is not listed on a national securities exchange, at the average closing price for such stock for such 10 business days as appearing in any regularly published reporting or quotation service, and the proceeds of such redemption shall be distributed by the ESOP to the same participants and beneficiaries and in the same amounts as the fractional shares had been allocated.
“(B) After completing the distribution under subparagraph (A), the ESOP shall terminate.
“(3) The Corporation shall distribute any full shares of its common stock which, because of the exception under paragraph (1)(B), could not be contributed to the ESOP to those persons to whom the ESOP would have allocated such shares pursuant to paragraph (1)(B) had such shares been contributed to the ESOP. The Corporation shall pay cash pursuant to the formula set forth in paragraph (2)(A)(ii) in lieu of fractional shares.
“(4) For purposes of Rule
promulgated under the Securities Act of 1933 [15
et seq.], each share of the common stock of the Corporation distributed under this subsection shall be deemed to have been beneficially owned by the recipient, as of the date of such distribution, for a period of 3 years.”