Agreement FOR THE CONSOLIDATION OF FITCHBURG RAILROAD COMPANY, BOSTON & LOWELL RAILROAD CORPORATION, CONNECTICUT RIVER RAILROAD COMPANY, THE CONCORD & MONTREAL RAILROAD, LOWELL & ANDOVER RAILROAD COMPANY, MANCHESTER & LAWRENCE RAILROAD, and KENNEBUNK & KENNEBUNKPORT RAILROAD, WITH THE BOSTON & MAINE RAILROAD THE LIBRARY BE TiiE UNIVERSITY OP ILL1K01S DATED: NOVEMBER 26, 19 1 Return this book on or before the Latest Date stamped below. University of Illinois Library ib\i 14 !:I56 SEP 0 6 !;«6 AU6 Q 9 1988 L161—H41 3*5.4- b* b 5 & £ BOSTON & MAINE RAILROAD SYSTEM CONSOLIDATION AGREEMENT. THIS AGREEMENT made this 26th day of November, 1918, by and between the Boston & Maine Railroad, the Fitchburg Railroad Com¬ pany, the Boston & Lowell Railroad Corporation, The Concord & Montreal Railroad, the Connecticut River Railroad Company, the Lowell & Andover Railroad Company, the Manchester & Lawrence Railroad and the Kenne- bunk & Kennebunkport Railroad, and also by and between the directors of each of the several companies above named d t n £ & tK X Id oo cd c t 10 WITNESSETH THAT: Whereas, The Boston & Maine Railroad is a railroad corporation organized and ex¬ isting under the laws of the States of Massachusetts, New Hampshire and Maine, owning a steam railroad within said states. Its capital stock is forty- two million six hundred fifty-four thousand nine hundred dollars ($42,- 654,900) divided into four hundred twenty-six thousand five hundred forty- nine (426,549) shares of the par value of One hundred dollars ($100.) each. Three million one hundred forty-nine thousand eight hundred dollars ($3,149,- 800) of said stock consisting of thirty-one thousand four hundred ninety-eight (31,498) shares is preferred stock entitled to non-cumulative preferential divi¬ dends at the rate of six per cent (6%) per annum. All of said stock is out¬ standing in the hands of the public. The Fitchburg Railroad Company is a railroad corporation organized and existing under the laws of the States of Massachusetts, New Hampshire, Vermont and New York, owning a steam railroad within said states. Its capi¬ tal stock is twenty-five million eight hundred sixty thousand dollars ($25,- 860,000) divided into two hundred fifty-eight thousand six hundred (258,600) shares of the par value of One hundred dollars ($100.) each. Seven million dollars ($7,000,000) of said stock consisting of seventy thousand (70,000) shares is common stock and is owned by the Fitchburg Railroad Company and the Boston & Maine Railroad. Eighteen million eight hundred sixty thousand dollars ($18,860,000) of said stock consisting of one hundred eighty-eight i 0 0 56524 2 thousand six hundred (188,600) shares is preferred stock entitled to prefer¬ ential dividends at the rate of five per cent (5%) per annum, and is outstand¬ ing in the hands of the public. The railroad owned by the Fitchburg Railroad Company is leased to the Boston & Maine Kailroad by a lease dated June 30, 1900, for the term of ninety-nine (99) years from July 1,1900, at a rental which includes the payment of dividends at the rate of five per cent (5%) per annum on the preferred stock of the lessor. The Boston & Lowell Railroad Corporation is a railroad corporation organized and existing under the laws of the State of Massachusetts owning a steam railroad within said state. Its capital stock is seven million six hun¬ dred seventy-nine thousand four hundred dollars ($7,679,400) divided into seventy-six thousand seven hundred ninety-four (76,794) shares of the par value of One hundred dollars ($100.) each. Five hundred sixty-one thousand nine hundred dollars ($561,900) of said stock consisting of five thousand six hundred nineteen (5,619) shares is owned by the Boston & Maine Railroad and seven million one hundred seventeen thousand five hundred dollars ($7,- 117,500) of said stock consisting of seventy-one thousand one hundred seventy- five (71,175) shares is outstanding in the hands of the public. The railroad owned by the Boston & Lowell Railroad Corporation is leased to the Boston & Maine Railroad by a lease dated June 22, 1887, for the term of ninety-nine (99) years from April 1, 1887, at a rental which includes the payment of divi¬ dends at the rate of eight per cent (8%) per annum on the stock of the lessor. The Concord & Montreal Railroad is a railroad corporation organized and existing under the laws of the State of New Hampshire and owning a steam railroad within said state. Its capital stock is eight million two hun¬ dred fifty-seven thousand six hundred dollars ($8,257,600) divided into eighty- two thousand five hundred seventy-six shares of the par value of One hundred dollars ($100.) each. Three hundred forty thousand five hundred dollars ($340,500) of said stock consisting of three thousand four hundred and five (3,405) shares is owned by the Boston & Maine Railroad and the Manchester & Lawrence Railroad, and seven million nine hundred seventeen thousand one hundred dollars ($7,917,100) of said stock consisting of seventy- nine thousand one hundred seventy-one (79,171) shares is outstanding in the hands of the public. The railroad owned by The Concord & Montreal Rail¬ road is leased to the Boston & Maine Railroad by a lease dated June 29, 1895, for the term of ninety-one (91) years from April 1, 1895, at a rental which includes the payment of dividends at the rate of seven per cent (7%) per an¬ num on the capital stock of the lessor. The Connecticut River Railroad Company is a railroad corporation or¬ ganized and existing under the laws of the States of Massachusetts and New 3 Hampshire owning a steam railroad within said states. Its capital stock is three million two hundred thirty-three thousand three hundred dollars ($3,- 233,300) divided into thirty-two thousand three hundred thirty-three (32,333) shares of the par value of One hundred dollars ($100.) each, all of which is outstanding in the hands of the public. The railroad owned by the Connecti¬ cut Eiver Eailroad Company is leased to the Boston & Maine Eailroad by a lease dated January 1, 1893, for the term of ninety-nine (99) years from the date thereof at a rental which includes the payment of dividends at the rate of ten per cent (10%) per annum on the stock of the lessor. The Lowell & Andover Eailroad Company is a railroad corporation or¬ ganized and existing under the laws of the State of Massachusetts and own¬ ing a steam railroad within said state. Its capital stock is six hundred and twenty-five thousand dollars ($625,000) divided into six thousand two hun¬ dred and fifty (6,250) shares of the par value of One hundred dollars ($100.) each, all of which is outstanding in the hands of the public. The railroad owned by the Lowell & Andover Eailroad Company is leased to the Boston & Maine Eailroad by a lease dated October 18, 1875, for the term of ninety-nine (99) years from December 1, 1874, at a rental which yields fifty-one thou¬ sand eight hundred seventy-four dollars ($51,874) per annum, applicable to dividends on the stock of the lessor. The Manchester & Lawrence Eailroad is a railroad corporation organ¬ ized and existing under the laws of the State of New Hampshire and owning a steam railroad within said state. Its capital stock is one million dollars ($1,000,000) divided into ten thousand (10,000) shares of the par value of One hundred dollars ($100.) each, all of which is outstanding in the hands of the public. The railroad owned by the Manchester & Lawrence Eailroad is leased to the Boston & Maine Eailroad by a lease dated June 1, 1887, for the term of fifty (50) years from September 1, 1887, at a rental which includes the payment of dividends at the rate of ten per cent (10%) per annum on the capital stock of the lessor. The Kennebunk & Kennebunkport Eailroad is a railroad corporation organized and existing under the laws of the State of Maine and owning a steam railroad within said state. Its capital stock is sixty-five thousand dol¬ lars ($65,000) divided into six hundred and fifty (650) shares of the par value of One hundred dollars ($100.) each, all of which is outstanding in the hands of the public. The railroad owned by the Kennebunk & Kenne¬ bunkport Eailroad is leased to the Boston & Maine Eailroad by a lease dated June 18, 1883, for the term of ninety-nine (99) years from May 15, 1883, at a rental which includes the payment of dividends at the rate of four and one- half per cent (4%%) per annum on the capital stock of the lessor. 4 The railroads owned by said companies form a continuous or connected line of railroad with each other, and,—together wdth other railroads controlled by said companies through leases, operating contracts or stock ownership,— are now operated by the Boston & Maine Railroad as a single system of rail¬ roads. And, Whereas, a Plan has been prepared for the reorganization of the Boston & Maine Railroad System, of which a copy is annexed hereto, and in order to carry out said Plan it is desired to consolidate the companies herein mentioned into one corporation, and to vest in and to convey to such consoli¬ dated corporation the rights, property and franchises of the consolidating corporations under and pursuant to the provisions of the law's of the States of Massachusetts, New Hampshire, Maine and New York, and to such extent as may be permitted by any present or future law of the State of Vermont, and particularly pursuant to Chapter 380 of the Special Acts of Massachu¬ setts for 1915, Chapter 367 of the Acts of New Hampshire for 1917, and Chap¬ ter 186 of the Private Acts of Maine for 1915. Now, therefore, the parties hereto, each in consideration of the cove¬ nants and agreements of the others mutually covenant and agree as follows: ARTICLE I. The Fitchburg Railroad Company, the Boston & Low^ell Railroad Cor¬ poration, the Connecticut River Railroad Company, The Concord & Montreal Railroad, the Lowell & Andover Railroad'Company, the Manchester & Law¬ rence Railroad, and the Kennebunk & Kennebunkport Railroad shall be, and they hereby are, consolidated with the Boston & Maine Railroad, forming one corporation under the name of the Boston & Maine Railroad, which is hereinafter referred to as the “reorganized” corporation, upon the terms and conditions hereinafter set forth, which are hereby agreed to and prescribed for such consolidation. ARTICLE II. The Board of Directors of the reorganized corporation shall consist of not less than fifteen (15) nor more than twenty-one (21) members, of wdiom four (4), at least, shall be residents of New r Hampshire, two (2), at least, of Maine and one (1), at least, of Vermont. The names and places of residence of its first directors, who shall hold office until the first annual meeting of 5 the stockholders of the reorganized corporation or until their successors are elected and qualified in accordance with the by-laws, are: H. Leroy Austin . . Norman L. Bassett . Charles W. Bosworth Frank P. Carpenter . Samuel Carr . . . . Charles Sumner Cook Henry B. Day . . . James L. Doherty . . Frederic C. Dumaine . Charles P. Hall . . . Woodward Hudson . James M. Prendergast John G. Sargent . . Leslie P. Snow . . . James Duncan Upham George H. Warren . . Catskill, New York Augusta, Maine Springfield, Mass. Manchester, N. H. Boston, Mass. Portland, Maine Newton, Mass. Springfield, Mass. Concord, Mass. Newton, Mass. Concord, Mass. Boston, Mass. Ludlow, Vermont Bochester, N. H. Claremont, N. H. Manchester, N. H. The foregoing-named persons shall prior to the taking effect uf this agreement be elected directors of the present Boston & Maine Railroad so far as they are not already directors of that company. ARTICLE III. The officers of the reorganized corporation shall be a President, as many Vice-Presidents as the Board of Directors may appoint, a Treasurer, as many Assistant Treasurers as the Board of Directors may appoint, a Clerk, and such other officers as may from time to time be provided for by the by-laws or appointed by the Board of Directors. The names and places of residence of the principal officers who shall hold office until the meeting of directors next following the first annual meeting of the stockholders of the reorganized cor¬ poration, or until their successors are elected and qualified in accordance with the by-laws, are: Officers President Treasurer Clerk Names Woodward Hudson A. B. Nichols A. B. Nichols Places of Residence Concord, Mass. Melrose, Mass. Melrose, Mass. The above persons are the officers of the present Boston & Maine Rail¬ road. 6 ARTICLE IY. The by-laws of the Boston & Maine Railroad in force at the time of con¬ solidation shall be the by-laws of the reorganized corporation. The present by-laws of the Boston & Maine Railroad shall, prior to the date of the con¬ solidation, be amended in so far as may be necessary to provide for the elec¬ tion of the directors specified in the Second Article hereof, and in so far as such by-laws may be inconsistent with any of the provisions of this Agree¬ ment. ARTICLE Y. The principal office of the reorganized corporation shall be in the City of Boston in the State of Massachusetts. Its principal office in the State of New York shall be in the City of Troy, Rensselaer County, New York. ARTICLE YI. The original issued capital stock of the reorganized corporation shall be eighty-one million four hundred seventy-two thousand eight hundred dollars ($81,472,800) divided into eight hundred and fourteen thousand seven hundred twenty-eight (814,728) shares of the par value of $100 each. Said stock shall be divided into classes having different rights and preferences and bearing different rates of dividend, which classes shall be of the amounts and shall bear the designations following: First preferred stock, Class A.$18,860,000 First preferred stock, Class B. 7,648,800 First preferred stock, Class C. 7,917,100 First preferred stock, Class D. 4,327,000 First preferred stock, Class E. 65,000 Total of first preferred stock.$38,817,900 Preferred stock. 3,149,800 Common stock. 39,505,100 Total stock.$81,472,800 The reorganized corporation may also in the manner and under the limita¬ tions provided in Article X issue $12,000,000, par value, of first preferred stock to be designated Class F, the proceeds of which shall be used solely for the payment and retirement of bonds of the reorganized corporation. 7 A. Rights and Preferences of First Preferred Stock. The holders of the first preferred stock of Classes A to E inclusive, shall be entitled out of the net profits or surplus of the corporation as determined from time to time by the Board of Directors in accordance with law, to semi¬ annual preferential dividends payable on the first days of January and July in each year, the first dividend to be paid on July 1,1919, for the six months from January 1, 1919 to June 30, 1919, at the respective rates per annum here¬ inafter designated for the different classes of first preferred stock, namely: Rate of dividend to and Rate of Dividend Class of Stock including Jan. 1, 1924 after Jan. 1, 1924 A. 4% 5% B. 6.4% 8% C. 5.6% 7% D. 8% 10% E. 3.6% 4.5% The holders of the first preferred stock of Class F shall be entitled out of the net profits or surplus of the corporation, as determined from time to time by the Board of Directors in accordance with law, to semi-annual preferential dividends at the rate of six per cent (6%) per annum payable upon the first days of January and July in each year, the first dividend to be paid on the January 1 or July 1 next succeeding the date of the issue of such stock for the period from the date of such issue to the date of such dividend. All the dividends above specified for the different classes of the first pre¬ ferred stock shall be cumulative, and if in any year dividends of less than the specified amount shall have been paid upon the first preferred stock of any class, the deficiency shall be payable, without interest, out of the net profits or surplus of subsequent years as determined by the Board of Directors as aforesaid. Holders of the first preferred stock shall be entitled to the divi¬ dends above specified on the respective classes thereof in preference and pri¬ ority to the holders of all other stock of the corporation unless additional pre¬ ferred stock having the same or greater preferences is hereafter authorized under the limitations of the following paragraph and in case of the liquida¬ tion or other distribution of assets of the corporation, shall be entitled to have paid to them their accrued and unpaid dividends before any payment is made on account of the par value of any class of stock. In case of liquida¬ tion or other distribution, the net assets of the corporation, after the payment of all accumulated and unpaid dividends on the first preferred stock, shall be distributed equally among the holders of all the stock of the corporation, both first preferred, preferred and common. No class of the first preferred stock 8 shall have any preference or priority over any other class and whenever any dividend is declared upon the first preferred stock less than the whole amount of accumulated dividends then remaining unpaid, such dividend shall be ap¬ portioned among all the classes of first preferred stock in proportion to the amount of preferred dividends then accumulated and unpaid on the respec¬ tive classes. No stock, whatever the rate of dividend thereof, having preferences or priorities in any respect the same as or superior to those of the first preferred stock authorized in this agreement shall be issued under any existing or fu¬ ture law, and no lease or contract for the entire operation of any railroad, other than those at present operated as part of the Boston & Maine Railroad System or controlled by it or by some party to this agreement by means of stock ownership, calling for an annual payment of more than one hundred thousand dollars ($100,000), shall be entered into by the consolidated corpor¬ ation without a vote of two-thirds in interest of the first preferred stock out¬ standing at the time approving the issue of such new stock or the execution of such lease or contract. The present Boston & Maine Railroad shall, prior to the consolidation, by appropriate action authorize the issue of the foregoing first preferred stock, and the same when issued in accordance with such authority shall be for all purposes stock of the reorganized corporation. B. Rights and Preferences of the Preferred Stock. The holders of the preferred stock shall be entitled out of the net profits or surplus of the corporation as determined from time to time by the Board of Directors according to law after the payment or setting aside of an amount equal to all accrued and unpaid dividends on the first preferred stock which may be from time to time outstanding to semi-annual, non-cumulative, preferential dividends at the rate of six per cent (6%) per annum, payable upon the first days of March and September in each year. In order to secure the repayment in part of certain advances to be made to the reorganized corporation by the Director General of Railroads, the reorganized corporation shall be bound until January 1, 1924, except as pro¬ vided in Article VII hereof, to pay into a trust fund to secure the repayment in part of such advances all of its surplus earnings over and above the amount required to pay the stipulated dividends upon the first preferred stock and dividends at the rate of four per cent (4%) per annum upon its preferred stock, so that during said period of five j^ears, except as provided in Article VII, the amount of earnings applicable for dividends on the pre- 9 ferred stock will not exceed an amount sufficient to pay dividends at the rate of four per cent (4%) per annum. ^ It is understood that any accumulated surplus, undivided profits or other income available for the payment of dividends upon the first preferred stock shall, except as otherwise herein provided, after the payment or setting aside of an amount equal to all accrued and unpaid dividends on the first pre¬ ferred stock be available for the payment of dividends on the preferred stock, and the same shall be so applied without reference to whether any dividends are paid in that year upon the common stock. This understanding shall be expressed on all new certificates issued from time to time for said preferred stock. ARTICLE VII. As additional security for the payment of the seventeen million six hun¬ dred six thousand dollars ($17,006,000) of five per cent (5%) bonds to be issued to the Director General of Railroads as provided in Article XV hereof and for the payment of the six per cent (6%) bonds which may be issued to refund the same, the Boston & Maine Railroad shall, prior to consolida¬ tion, authorize the execution of an Agreement with a Trustee to be desig¬ nated by the Director General of Railroads, by which the reorganized corporation shall pay over to the Trustee so designated for the period of five years ending on the first day of January, 1924, except as hereinafter pro¬ vided, all of its net income legally applicable to the payment of dividends re¬ maining after the payment of dividends at the stipulated rates upon its first preferred stock and dividends at the rate of four per cent (4%) per annum upon its preferred stock. The funds so received by the Trustee shall be invested by it from time to time in the purchase at par and accrued interest of said five per cent (5%) bonds to be issued to the Director General of Railroads for advances made by him or six per cent (6%) bonds issued to refund the same, to the extent requested by the Director General, and shall, except in the case of the issue of the first preferred stock, Class F, as hereinafter provided, at the expira¬ tion of the five-year period to be applied to the payment pro tanto of said $17,606,000 of bonds. Said Agreement shall, however, provide that the reorganized corpora¬ tion may at any time prior to January 1, 1924, provide the sum of twelve million dollars ($12,000,000) in cash by the issue of the six per cent (6%) first preferred stock, Class F, hereinbefore referred to at not less than par, and pay over the proceeds of such issue to the Trustee, who shall use it for 10 the payment pro tanto of said $17,606,000 of bonds, and upon such payment the Trustee shall hold the funds theretofore paid over to it subject to the order of the reorganized corporation, which may subject to the following limita¬ tions use it for any legal corporate purpose. From the funds theretofore paid over to the Trustee there shall first be deducted a sum equal to all contributions to the trust fund accruing from the reduction of the full dividends on the first preferred stock and from the fact that the preferred stock dividends have been paid at the rate of four per cent (4%) per annum instead of six per cent (6%) per annum, which sum shall be invested by the reorganized corporation in paying for additions and im¬ provements to its property without a corresponding increase in capitalization or to the diminution of its debt with proper charges to profit and loss to the end that no part of such sum shall be directly or indirectly used for the pay¬ ment of dividends on its preferred or common stock, and likewise thereafter until January 1,1924, in ascertaining the balance of income available for divi¬ dends upon the preferred and common stocks there shall be deducted from the current income each year an amount equal to twenty per cent (20%) of the aggregate dividends which would have been payable on the first preferred stock, Class A to E inclusive, if the full rate of dividend had been paid, which sum shall be used solely for the purpose of making additions or improve¬ ments to the company’s property or the diminution of debt in the manner above specified. ARTICLE VIII. Each holder of the stock of the reorganized corporation shall have one vote for each share of stock held by him, whether first preferred, preferred or common. Except as otherwise specifically provided herein or by law, all ques¬ tions submitted to the stockholders shall be determined by the vote of the whole number of stockholders, both first preferred, preferred and common, without regard to the votes of the stockholders of any particular class. ARTICLE IX. The first preferred stock, Classes A, B, C, D and E, shall be issued sim¬ ultaneously^ with the taking effect of this Agreement in the manner following: (a) The reorganized corporation shall deliver to the order of the Fitch¬ burg Railroad Company certificates for one hundred eighty-eight thousand six hundred (188,600) shares of the first preferred stock of the reorganized 11 corporation, Class A, and each preferred stockholder of the Fitchburg Rail¬ road Company shall be entitled to receive one (1) share of said preferred stock, Class A, for each share of the stock of the Fitchburg Railroad Company owned by him on surrender of the certificates therefor. The preferred stock of the Fitchburg Railroad Company surrendered in exchange for shares of the first preferred stock, Class A, of the reorganized corporation shall be delivered to the reorganized corporation. Such preferred stock together with the common stock of the Fitchburg Railroad Company now owned by the Fitchburg Railroad Company and the Roston & Maine Railroad, shall be retained by the reorganized corporation and shall be non-transfer- able and the certificates shall be so stamped. The reorganized corporation shall also at the time of the delivery of said stock pay to the order of the Fitchburg Railroad Company an amount of cash equal to a dividend at the rate of 5% per annum for the period between the date when the last prior divi¬ dend was paid upon the stock of the Fitchburg Railroad Company and the first day of January, 1919, which sum shall be paid over pro rata to the pre¬ ferred stockholders of the Fitchburg Railroad Company. (6) The reorganized corporation shall deliver to the order of the Bos¬ ton & Lowell Railroad Corporation certificates for seventy-one thousand one hundred seventy-five (71,175) shares of the first preferred stock of the reor¬ ganized corporation, Class B, and each stockholder of the Boston & Lowell Railroad Corporation other than the Boston & Maine Railroad, which is the owner of five thousand six hundred and nineteen (5,619) shares of said stock, shall be entitled to receive one share of said first preferred stock, Class B, for each share of the stock of the Boston & Lowell Railroad Corporation owned by him on surrender of the certificates therefor. The stock of the Boston & Lowell Railroad Corporation surrendered in exchange for shares of the first preferred stock, Class B, of the reorganized corporation shall be delivered to the reorganized corporation and together with the 5,619 shares owned by the Boston & Maine Railroad shall be retained by the reorganized corporation and shall be non-transferable, and the certificate shall be so stamped. The reorganized corporation shall also at the time of the delivery of said stock pay to the order of the Boston & Lowell Railroad Corporation an amount of cash sufficient to pay a dividend at the rate of eight per cent (8%) per annum on all stock of the Boston & Low T ell Railroad Corporation other than that owned by the Boston & Maine Railroad for the period between the date when the last prior dividend was paid upon such stock and the first day of January, 1919, which sum shall be paid over pro rata to the stockholders of the Boston & Lowell Railroad Corporation other than the Boston & Maine Railroad. 12 (c) The reorganized corporation shall deliver to the order of The Con¬ cord & Montreal Railroad certificates for seventy-nine thousand one hundred seventy-one (79,171) shares of the first preferred stock of the reorganized corporation, Class C, and each stockholder of The Concord & Montreal Rail¬ road other than the Boston & Maine Railroad and the Manchester & Lawrence Railroad, which together own three thousand four hundred and five (3,405) shares, shall be entitled to receive one share of said preferred stock, Class C, for each share of the stock of The Concord & Montreal Railroad owned by him on surrender of the certificates therefor. The stock of The Concord & Montreal Railroad surrendered in exchange for shares of the first preferred stock, Class C, of the reorganized corporation shall be delivered to the re¬ organized corporation and together with the 3,405 shares owned by the Man¬ chester & Lawrence Railroad and Boston & Maine Railroad shall be retained by the reorganized corporation and shall be non-transferable, and the certifi¬ cate shall be so stamped. The reorganized corporation shall also at the time of the delivery of said stock pay to the order of The Concord & Montreal Railroad an amount of cash sufficient to pay a dividend at the rate of seven per cent (7%) per annum on all stock of The Concord & Montreal Railroad other than that owned by the Boston & Maine Railroad and the Manchester & Lawrence Railroad for the period between the date when the last prior dividend was paid upon such stock and the first day of January, 1919, which sum shall be paid pro rata to the stockholders of The Concord & Montreal Railroad other than the Manchester & Lawrence Railroad and the Boston & Maine Railroad. (d) The reorganized corporation shall deliver to the order of the Con¬ necticut River Railroad Company certificates for thirty-two thousand three hundred thirty-three (32,333) shares of the first preferred stock of the re¬ organized corporation, Class D, and each stockholder of the Connecticut River Railroad Company shall be entitled to receive one share of said preferred stock, Class D, for each share of the stock of the Connecticut River Railroad Company owned b} 7 him on surrender of the certificates therefor. The stock of the Connecticut River Railroad Company surrendered in exchange for shares of the first preferred stock, Class D, of the reorganized corporation shall be delivered to the reorganized corporation and shall be retained by it and shall be non-transferable, and the certificates shall be so stamped. The reorganized corporation shall also at the time of the delivery of said stock pay to the order of the Connecticut River Railroad Company an amount of cash sufficient to pay a dividend at the rate of ten per cent (10%) per annum on all stock of the Connecticut River Railroad Company for the period between the date when the last prior dividend was paid upon such stock and 13 the first (lay of January, 1919, which sum shall he paid over pro rata to the stockholders of the Connecticut River Railroad Company. (e) The reorganized corporation shall deliver to the order of the Lowell & Andover Railroad Company certificates for five thousand three hundred and thirteen (5,3.13) shares of the first preferred stock of the reorganized corporation, Class B, and nine hundred thirty-seven (937) shares of the first preferred stock of the reorganized corporation, Class D, and the same shall be distributed among the holders of the stock of the Lowell & Andover Rail¬ road Company as that company may determine upon surrender by the stock¬ holders of their certificates for stock in the Lowell & Andover Railroad Com¬ pany. The stock of the Lowell and Andover Railroad Company surrendered in exchange for the aforesaid shares of the first preferred stock of the re¬ organized corporation shall be delivered to the reorganized corporation and shall be retained by it and shall be non-transferable, and the certificates shall be so stamped. The reorganized corporation shall at the time of the delivery of said stock pay to the order of the Lowell & Andover Railroad Company an amount of cash sufficient to pay a dividend at the rate of eight per cent (8%) per an¬ num on the stock of the Lowell & Andover Railroad Company for the period between the date when the last prior dividend was paid upon such stock and the first day of January, 1919, which sum shall be paid over pro rata to’ the stockholders of the Lowell & Andover Railroad Company. (/) The reorganized corporation shall deliver to the order of the Man¬ chester & Lawrence Railroad certificates for ten thousand (10,000) shares of the first preferred stock of the reorganized corporation, Class D, and each stockholder of the Manchester & Lawrence Railroad shall be entitled to re¬ ceive one share of said preferred stock, Class 1), for each share of the stock of the Manchester & Lawrence Railroad owned by him on surrender of the cer¬ tificates therefor. The stock of the Manchester & Lawrence Railroad surren¬ dered in exchange for shares of the first preferred stock, Class D, of the re¬ organized corporation shall be delivered to the reorganized corporation and retained by it and shall be non-transferable, and the certificates shall be so stamped. The reorganized corporation shall also at the time of the delivery of said stock pay to the order of the Manchester & Lawrence Railroad an amount of cash sufficient to pay a dividend at the rate of ten per cent (10%) per annum on all stock of the Manchester & Lawrence Railroad for the period between the date when the last prior dividend was paid upon such stock and the first day of January, 1919, which sum shall be paid over pro rata to the stock¬ holders of the Manchester & Lawrence Railroad. 14 ( g ) The reorganized corporation shall deliver to the order of the Kenne- bunk & Kennebunkport Railroad certificates for six hundred and fifty (650) shares of the first preferred stock of the reorganized corporation, Class E, and each stockholder of the Kennebunk & Kennebunkport Railroad shall be entitled to receive one share of said preferred stock, Class E, for each share of the stock of the Kennebunk & Kennebunkport Railroad owned by him on surrender of the certificates therefor. The stock of the Kennebunk & Ken¬ nebunkport Railroad surrendered in exchange for shares of the first preferred stock, Class E, of the reorganized corporation shall be delivered to the re¬ organized corporation and retained by it and shall be non-transferable, and the certificates shall be so stamped. The reorganized corporation shall also at the time of the delivery of said stock pay to the order of the Kennebunk & Kennebunkport Railroad an amount of cash sufficient to pay a dividend at the rate of four and one-half per cent ( 41 / 0 %) per annum on all stock of the Kennebimk & Kennebunkport Railroad for the period between the date when the last prior dividend was paid upon such stock and the first day of January, 1919, which sum shall be paid over pro rata to the stockholders of the Kennebunk & Kennebunkport Railroad. ARTICLE X. The twelve million dollars ($12,000,000) of first preferred stock, Class F, may subject to the approval of all public authorities having jurisdiction in re¬ spect thereof be issued at any time prior to January 1,1924, by vote of two-thirds in interest of the common stockholders of the reorganized corporation at a meeting duly called for the purpose. Such stock shall be issued for not less than par, and the proceeds thereof shall be used solely for the retirement and payment pro tanto of the seventeen million six hundred and six thousand dollars ($17,606,000) of 5% bonds to be issued to the Director General of Railroads for money advanced by him, or the 6% bonds which may be issued to refund the same, in the manner provided in Article VII hereof. ARTICLE XI. The holders of the preferred stock of the present Boston & Maine Rail¬ road at the time of consolidation shall be preferred stockholders of the reorganized corporation, and the outstanding certificates for such pre¬ ferred stock shall for all purposes indicate their ownership of preferred 15 stock of the reorganized corporation without the necessity of changing such certificates for new certificates. Any new certificates, however, which may from time to time be issued for such preferred stock shall bear such refer¬ ences to the provisions of Article VI as the Board of Directors may determine. ARTICLE XII. The holders of the common stock of the present Boston & Maine Kail- road at the time of the consolidation shall be common stockholders of the reor¬ ganized corporation, and the outstanding certificates for such common stock shall for all purposes indicate their ownership of common stock of the reor¬ ganized corporation without the necessity of changing such certificates for new certificates. AKTICLE XIII. In case any non-assenting stockholder of the corporations which are par¬ ties hereto elects to have his stock valued and to recover from the reorgan¬ ized corporation the cash value thereof in accordance with any laws appli¬ cable thereto, the reorganized corporation shall pay to such non-assenting stockholder the amount so recovered in cash and the stock of the reorganized corporation to which such non-assenting stockholder would have been entitled under this Agreement shall be returned to and become the property of such reorganized corporation. Such stock may be sold by the reorganized cor¬ poration for such price in cash as may be obtained, at such time or times as the directors of the reorganized corporation may determine, and until such sale, may be pledged to the Director General of Railroads as security for any advances which he may make to enable the reorganized corporation to make such payments to non-assenting stockholders. AKTICLE XIV. Upon the consummation of this consolidation as provided by law, all and singular the rights, privileges, exemptions, franchises, property (real, personal and mixed) licenses, easements and interests of every kind, nature and description belonging to or in any way appertaining to the corporations parties hereto and each of them, including their respective railroads, their leasehold estates in railroads leased to them, or any of them, and all stock, 16 bonds, or other securities of other railroads owned by them, or any of them, shall be vested in and be the property of said reorganized corporation and it shall succeed to and there shall attach to it all the debts, obligations, leases, contracts, tariffs and any and all liabilities of each of the corporations parties hereto. Each of the corporations, parties hereto, will execute such separate confirmatory conveyances and do such acts as counsel may advise are desirable in order to vest the title to the aforesaid property in the reorganized corporation. The reorganized corporation shall indemnify and save harmless each of the corporations, parties hereto, and their respective officers and stockholders of and from every debt, obligation, lease, contract and liability of the said corporations. The foregoing shall not be deemed to exclude any other effects, rights or privileges provided by law as incident to or resulting from this consoli¬ dation and not herein specifically mentioned. ARTICLE XY. Prior to the consolidation herein provided for, the present Boston & Maine Railroad shall by appropriate action authorize the issue of the $19,879,000 of bonds specified in the Plan of Reorganization to be issued to the Director Gen¬ eral of Railroads in exchange for the cash advances made or to be made by him, and shall likewise authorize the execution of a mortgage upon all the prop¬ erty and franchises of the reorganized corporation, whether then owned or thereafter acquired, with the exception of cash and accounts receivable, and any other assets which for convenience in handling may with the consent of the Director General of Railroads be omitted. Such mortgage shall also secure all outstanding bonds, notes and other evidences of indebtedness for which the reorganized corporation is liable as required by the Statutes of Massachusetts, and shall be drawn so as to equally secure such future issues of bonds as may be required for refunding purposes or as may be required to pay in whole or in part for additions, betterments, extensions or equip¬ ment or may be issued for any lawful corporate purpose. Such provisions limiting the issue of additional bonds shall be inserted in the mortgage as will reasonably insure safety, consequent good credit and reasonable flexi¬ bility for financing. The form of said mortgage shall be subject to the ap¬ proval of the Director General of Railroads. The present Boston & Maine Railroad also shall by appropriate action authorize such agreements with the Director General of Railroads as may be deemed necessary in order to properly protect the Director General of Rail- 17 roads for the advances to be made by him in accordance with the Plan of Re¬ organization. Such bonds, mortgage and agreements, including the Trust Agreement provided for in Article VII, whether executed prior to or after the consolidation, shall be in all respects binding upon the reorganized cor¬ poration, and in so far as they may not be executed or delivered prior to con¬ solidation, the proper officers of the reorganized corporation shall execute and deliver them without any further action on the part of the directors or stockholders of the reorganized corporation. ARTICLE XVI. The reorganized corporation shall pay all legal and other expenses incurred by any of the corporations, parties hereto, or by any of their duly authorized officers, directors or committees incidental to the efforts to reorganize the Boston & Maine Railroad Sj T stem from the inception thereof so far as they may be approved by the Director General of Railroads. Such expenses shall be paid only after they have been approved by the District Court of the United States for the District of Massachusetts where receiver¬ ship proceedings against the Boston & Maine Railroad are pending, or if the receivership proceedings shall have been terminated before the reorganiza¬ tion is completed, then only after such expenses have been certified to be just and reasonable by the New Hampshire Public Service Commission in accordance with Section 8 of Chapter 367 of the Xew Hampshire Acts for 1917. ARTICLE XVII. Upon consolidation the deficit of the Boston & Maine Railroad as the same shall be as of June 30, 1915, shall as of that date be charged and set off as against the premiums realized on common stock of said railroad sold since July 9, 1S94, amounting as of June 30, 1914, to the sum of $6,501,620.14, and said premium account shall for the purpose of determining reasonable rates and fares which said reorganized corporation may thereafter charge, and for the purpose of determining the amount of bonds and other evidences of in¬ debtedness which such reorganized corporation may lawfully issue, and for all other purposes to the amount of such deficit be deemed to be cancelled and absorbed by such deficit. 18 ARTICLE XVIII. The reorganized corporation shall by the fact of consolidation be deemed to have accepted the condition imposed by Section 12 of Chapter 367 of the New Hampshire Acts for 1917 with reference to the exercise of the rights, privileges and franchise granted by said Act. ARTICLE XIX. This Agreement is subject to the necessary consent of the stockholders of the several corporations which are parties hereto, and is likewise subject to such approval by public authorities as may be required by the laws of the States of Massachusetts, Maine, New Hampshire and New York. After such approval has been obtained and the receivership proceedings in the case of the Boston & Maine Railroad and the Connecticut River Rail¬ road Company have been discharged and terminated, the consolidation herein provided for shall become effective, upon the filing of this Agreement, or a certified copy thereof, in the office of the Secretary of State of New York and in the office of the Clerk of the County of Rensselaer in the State of New York. In Witness Whereof each of said corporations has caused these presents to be signed by its President or Vice-President and its corporate seal to be hereto affixed by authority of its Board of Directors and the Directors of each of said corporations have hereunto set their 'hands the day and year first above written. 19 BOSTON & MAINE RAILROAD, by WOODWARD HUDSON, President. [Corporate Seal] Attest. ARTHUR B. NICHOLS, Clerk. As Directors of the Boston & Maine Railroad: Woodward Hudson Samuel Carr James M. Prendergast Frederic C. Dumaine Frank P. Carpenter Henry B. Day Charles P. Hall James L. Doherty J. Duncan Upham Norman L. Bassett Charles W. Bosworth Charles Sumner Cook FITCHBURG RAILROAD COMPANY, by MOSES WILLIAMS, President. [Corporate Seal] Attest. GEORGE O. FOSTER, Clerk. As Directors of the Fitchburg Railroad Company: Moses Williams Gordon Abbott Charles E. Ware Frederick C. Abercrombie Francis R. Bangs George O. Foster Joseph W. Stevens Moses Williams, Jr. Francis H. Dewey Robert F. Herrick George R. Wallace Alvah Crocker Charles T. Crocker 20 BOSTON & LOWELL KAILKOAD CORPORATION, by FRANCIS L. HIGGINSON, President. [Corporate Seal] Attest. GEORGE F. NOWELL, Clerk. As Directors of the Boston & Lowell Railroad Corporation: Francis L. Higginson Charles E. Cotting Charles F. Adams Arthur Lyman William C. Endicott Henry B. Cabot Philip Dexter CONNECTICUT RIVER RAILROAD COMPANY, by RICHARD BILLINGS, President. [Corporate Seal] Attest. GEORGE R. YERRALL, Clerk. As Directors of the Connecticut River Railroad Company: Richard Billings Francis R. Hart William H. McClintock Henry P. Binney John H. Williams Philip H. Faulkner Joseph W. Stevens A. Willard Damon William W. McClench William H. Brooks 21 THE CONCORD & MONTREAL RAILROAD, by BENJAMIN A. IvIMBALL, President. [Corporate Seal] Attest. BENJAMIN W. COUCH, Clerk. A* Directors of tlie Concord & Montreal Railroad: Benjamin A. Kimball Walter M. Parker George M. Kimball Arthur II. Hale Benjamin C. White William II. Moses E. R. Brown Arthur M. Heard LOWELL & ANDOVER RAILROAD COMPANY, by FREDERICK F. AYER, President. [Corporate Seal] Attest. THEO. A. WICK, Clerk. As Directors of the Lowell & Andover Railroad Company: Frederick F. Ayer Alfred L. Rifley Frederick A. Flatiier Charles F. Young 22 MANCHESTER & LAWRENCE RAILROAD, by CALVIN PAGE, President. [Corporate Seal] Attest. EDWARD M. BROOKS, Clerk. Lawrence As Directors of the Manchester & Lowell Railroad: Calvin Page Arthur M. Heard George A. Fairbanks Edward M. Brooks Sherburn M. Merrill George E. Smith KENNEBUNK & KENNEBUNKPORT RAILROAD, by FRANK M. ROSS, President. [Corporate Seal| Attest. GEORGE W. BOURNE, Clerk. As Directors of the Kennebunk & Kennebunkport Railroad: Frank M. Ross George W. Bourne Asa A. Richardson Sumner C. Parcher Almon J. Smith Walter L. Dane Note: Proper acknowledgments of all signatures are attached to the signed orig¬ inals of this agreement, but have not been printed in these copies. PLAN FOR THE REORGANIZATION OF THE BOSTON k MAINE RAILROAD SYSTEM First: It is proposed that the Boston & Maine Railroad shall, subject to the terms herein contained, acquire by purchase or consolidation, or otherwise, all of the property and franchises of the following lines, namely, —the lines of the Fitchburg Railroad Company, the Boston & Lowell Rail¬ road Corporation, the Connecticut River Railroad Company, The Concord & Montreal Railroad, the Lowell & Andover Railroad Company, the Man¬ chester & Lawrence Railroad and the Kennebunk & Kennebunkport Railroad, hereinafter called the “subsidiary companies.” Suitable provision may be made for the preservation and continuance of the corporate existence of any or all of the subsidiary companies so long as for any purpose it may be deemed necessary or desirable. Second: The Boston & Maine Railroad will authorize the issue of not exceeding $50,817,900 par value of first preferred stock of the character here¬ inafter described in the fifteenth section hereof, which stock shall be issued for the following purposes: $38,817,900 thereof in connection with the acquisition of the property and franchises of the subsidiary companies, as provided in the third, fourth, fifth, sixth, seventh, eighth and ninth sections hereof: such preferred stock to be entitled to cumulative dividends at the rates specified in such sections; and $12,000,000 thereof to be used solely for the retirement and payment of $12,000,000 of 5 per cent, bonds to be issued to the Director General of Rail¬ roads (hereinafter called the Director General), for money which may be ad¬ vanced to pay unfunded indebtedness as provided in the twelfth section hereof, or 6 per cent, bonds which may be issued to refund the same; such stock to be entitled to cumulative dividends at the rate of 6 per cent, per annum and actually issued only upon authorization by the holders of a majority in interest of the common stock of the Company at a meeting called for that purpose. 2 It will, also, in consideration of the financial assistance to be fur¬ nished by the Director General and the temporary reduction of divi¬ dends on the stock to be issued to the subsidiary companies, limit dividends, on its present preferred and common stock, in the manner hereinafter provided. Third: If the Fitchburg Railroad Company assents to the plan, the Boston & Maine Kailroad will acquire all the franchises and assets of the Fitchburg Kailroad Company and will in consideration thereof— (a) Assume all the outstanding obligations of every nature of the Fitchburg Kailroad Company, including therein (but not thereby limit¬ ing the same to the matters hereinafter recited) its indebtedness and other liabilities and its leases from the Vermont & Massachusetts Kail¬ road Company and the Troy & Bennington Kailroad Company. (h) Issue to the Fitchburg Kailroad Company or order for distri¬ bution among its preferred stockholders $18,800,000 par value of the first preferred stock of the Boston & Maine Railroad, this being one share of such new first preferred stock for each share of the present outstanding preferred stock of the Fitchburg Railroad Company. Such first preferred stock will carry dividends for the first five (5) years at the rate of 4 per cent, per annum and thereafter at the rate of 5 per cent, per annum, the latter being the rate at present payable under the lease of the Fitchburg Kailroad Company, and in all other respects will have the same preferences and priorities as the first preferred stock pro¬ posed to be issued to the subsidiary companies as set forth in section Fifteenth. ISTo payments will be made to the common stockholders of the Fitchburg Railroad Company, as this stock is entirely owned either by the Fitchburg Railroad Company itself or by the Boston & Maine Railroad and will be cancelled as soon as any necessity for retaining the corporate existence of the Fitchburg Kailroad Company ceases. All accrued dividends at the rate of 5 per cent, per annum on the outstanding preferred stock of the Fitch¬ burg Kailroad Company will be adjusted in cash up to the time when divi¬ dends commence to accrue upon the new first preferred stock to be issued to that Company as herein provided. Fourth: If the Boston & Lowell Railroad Corporation assents to the Plan, the Boston & Maine Kailroad will acquire all the franchises and assets of the Boston & Lowell Kailroad Corporation, and will in consider¬ ation thereof— (a) Assume all the outstanding obligations of every nature of the Boston & Lowell Kailroad Corporation, including therein (but not 3 thereby limiting the same to the matters hereinafter recited) its in¬ debtedness and other liabilities and its leases from other corporations, the principal leases being those from the Nashua & Lowell Railroad Corporation, Stony Brook Railroad Corporation, Wilton Railroad Com¬ pany, Peterborough Railroad, the Connecticut & Passumpsic Rivers Railroad Company, Massawippi Valley Railway Company and the Northern Railroad. (ft) Issue to the Boston & Lowell Railroad Corporation or order for distribution among its stockholders $7,117,500 par value of the first preferred stock of the Boston & Maine Railroad, this being one share of such new first preferred stock for each share of the present outstanding stock of the Boston & Lowell Railroad Corporation, ex¬ cept the stock which is to be cancelled as provided below. Such first preferred stock will carry dividends for the first five (5) years at the rate of G.4 per cent, per annum, and thereafter at the rate of 8 per cent, per annum, the latter being the rate at present payable under the lease of the Boston & Lowell Railroad Corporation, and in all other respects will have the same preferences and priorities as the first pre¬ ferred stock proposed to be issued to the subsidiary companies as set forth in section Fifteenth. $5G1,900 par value of the stock of the Boston & Lowell Railroad Cor¬ poration is owned by the Boston & Maine Railroad, and will be cancelled in connection with this transaction. All accrued dividends on the present stock of the Boston & Lowell Railroad Corporation at the rate of 8 per cent, per annum will be adjusted in cash up to the date when dividends commence to accrue upon the first preferred stock to be issued to that company as herein provided. Fifth: If The Concord & Montreal Railroad assents to the plan, the Boston & Maine Railroad will acquire all the franchises and assets of The Concord & Montreal Railroad and will in consideration thereof— (a) Assume all the outstanding obligations of every nature of the Concord & Montreal Railroad, including therein (but not thereby limit¬ ing the same to the matters hereinafter recited) its indebtedness and other liabilities and its leases from the Nashua & Acton Railroad, Suncook Valley Railroad, New Boston Railroad Company, Franklin & Tilton Railroad and Pemigewasset Valley Railroad, and including also the performance of the obligations of the Concord Railroad Corpora¬ tion contained in the indenture between that corporation and the Con¬ cord & Portsmouth Railroad dated May 26, 18G2. (Z>) Issue to The Concord & Montreal Railroad or order for distri¬ bution among its stockholders $7,917,100 par value of the first preferred 4 stock of the Boston & Maine Railroad, this being one share of such new first preferred stock for each share of the present outstanding stock of The Concord & Montreal Railroad, except the stock to be can¬ celled as provided below. Such first preferred stock will carry divi¬ dends for the first five (5) years at the rate of 5.6 per cent, per annum, and thereafter at the rate of 7 per cent, per annum, the latter being the rate at present payable under the lease of The Concord & Montreal Railroad, and in all other respects will have the same preferences and priorities as the first preferred stock proposed to be issued to the subsid¬ iary companies as set forth in section Fifteenth. $333,500 par value of the stock of The Concord & Montreal Railroad is owned by the Boston & Maine Railroad and $7,000 par value is owned by the Manchester & Lawrence Railroad, and this stock will be cancelled in connection with the transaction. All accrued dividends on the present out¬ standing stock at the rate of 7 per cent, per annum will be adjusted in cash up to the date when dividends commence to accrue upon the new first pre¬ ferred stock to be issued to that Company as herein provided. Sixth: If the Connecticut River Railroad Company assents to the Plan, the Boston & Maine Railroad will acquire all the franchises and assets of the Connecticut River Railroad Company and will in consideration thereof— (a) Assume all the outstanding obligations of every nature of the Connecticut River Railroad Company, including therein (but not thereby limiting the same to the matters hereinafter recited) its in¬ debtedness and other liabilities and its contracts with the Vermont Valley Railroad for the operation of that road and the Sullivan County Railroad. (Z>) Issue to the Connecticut River Railroad Company or order for distribution among its stockholders $3,233,300 par value of the first preferred stock of the Boston & Maine Railroad, this being one share of such new first preferred stock for each share of the present outstanding stock of the Connecticut River Railroad Com¬ pany. Such first preferred stock will carry dividends for the first five (5) years at the rate of 8 per cent, per annum and thereafter at the rate of 10 per cent, per annum, the latter being the rate at present payable under the lease of the Connecticut River Railroad Company, and in all other respects will have the same preferences and priorities as the first preferred stock proposed to be issued to the subsidiary companies as set forth in section Fifteenth. All accrued dividends on the present outstanding stock of the Con¬ necticut River Railroad Company will be adjusted in cash at the rate of 10 per cent, per annum up to the date when dividends com- 5 mence to accrue upon the new first preferred stock to be issued to that Company as herein provided. Seventh: If the Lowell & Andover Bailroad Company assents to the Plan, the Boston & Maine Bailroad will acquire all the franchises and assets of the Lowell & Andover Bailroad Company, and will in consider¬ ation thereof— (a) Assume all the outstanding obligations of every nature of the Lowell & Andover Bailroad Company. (5) Issue to the Lowell & Andover Bailroad Company or order $625,000 par value of first preferred stock of the Boston & Maine Bailroad, this being one share of such new first preferred stock for each share of the present outstanding stock of the Lowell & Andover Bailroad Company. $531,300 of such first preferred stock shall carry dividends for the first five (5) years at the rate of 6.4 per cent, per annum and thereafter at the rate of 8 per cent, per annum, and $93,700 par value of such first preferred stock shall carry dividends for the first five (5) years at the rate of 8 per cent, per annum and thereafter at the rate of 10 per cent, per annum, the latter rates of dividends called for by such stock being equivalent to the present rental applicable for dividends to the stockholders of the Lowell & Andover Bailroad Company. Such first preferred stock shall in all other respects have the same preferences and priorities as the first preferred stock proposed to be issued to the subsidiary companies, as set forth in section Fifteenth. All accrued dividends on the present outstanding stock of the Lowell & Andover Bailroad Company will be adjusted in cash at the present existing rate up to the time when divi¬ dends commence to accrue upon the new first preferred stock to be is¬ sued to that company as herein provided. Eighth: If the Manchester & Lawrence Bailroad assents to the Plan, the Boston & Maine Bailroad will acquire all the franchises and assets of the Manchester & Lawrence Bailroad, and will in consideration thereof— (a) Assume all the outstanding obligations of every nature of the Manchester & Lawrence Bailroad. (6) Issue to the Manchester & Lawrence Bailroad or order for distribution among its stockholders $1,000,000 par value of the first preferred stock of the Boston & Maine Bailroad, this being one share of such new first preferred stock for each share of the present out¬ standing stock of the Manchester & Lawrence Bailroad. Such preferred stock will carry dividends for the first five (5) years at the rate of 8 per cent, per annum, and thereafter at the rate of 10 per cent, per 6 annum, the latter being the rate at present payable under the lease of the Manchester & Lawrence Railroad, and in all other respects will have the same preferences and priorities as the first preferred stock proposed to be issued to the subsidiary companies as set forth in section Fifteenth. All accrued dividends on the present outstand¬ ing stock of the Manchester & Lawrence Railroad will be adjusted in cash at the rate of 10 per cent, per annum up to the time when dividends commence to accrue upon the new first preferred stock to be issued to that company as herein provided. Ninth: If the Kennebunk & Kennebunkport Railroad assents to the Plan, the Boston & Maine Railroad will acquire all the franchises and assets of the Kennebunk & Kennebunkport Railroad and will in consideration thereof— (a) Assume all the outstanding obligations of every nature of the Kennebunk & Kennebunkport Railroad. (?>) Issue to the Kennebunk & Kennebunkport Railroad or order for distribution among its stockholders $65,000 par value of the first preferred stock of the Boston & Maine Railroad, this being one share of such new first preferred stock for each share of the present out¬ standing stock of the Kennebunk & Kennebunkport Railroad. Such preferred stock will carry dividends for the first five (5) years at the rate of 3.6 per cent, per annum, and thereafter at the rate of 414 per cent, per annum, the latter being the rate at pres¬ ent payable under the lease of the Kennebunk & Kennebunkport Railroad, and in all other respects will have the same preferences and priorities as the first preferred stock proposed to be issued to the subsidiary companies as set forth in section Fifteenth. If the said Kennebunk & Kennebunkport Railroad prefers, there may be issued to it $58,500 par value of such first preferred stock bearing dividends for the first five 3 r ears at the rate of 4 per cent, and thereafter at the rate of 5 per cent, per annum, instead of the stock above specified. All accrued dividends on the present outstanding stock of the Kennebunk & Kenne¬ bunkport Railroad will be adjusted in cash at the rate of 4^ per cent, per annum up to the time when dividends commence to accrue upon the new first preferred stock to be issued to that company as herein provided. Tenth: Effective provision will be made by which the present pre¬ ferred stock of the Boston & Maine Railroad will be entitled to non- cumulative dividends, payable semi-annually which will be at the rate of 4 per cent, per annum during the first five (5) years, except as provided in section thirteenth, and thereafter at the rate of 6 per cent, per annum. It is understood that any accumulated surplus, undivided profits or other income available for the payment of dividends upon the first preferred stock shall, 7 after the payment or setting aside of an amount equal to all accrued divi¬ dends thereon, be available for the payment of dividends upon the preferred stock, and the same shall be so applied up to 4 or G per cent, per annum, as the case may be, without reference to whether any dividends are paid in that year upon the common stock. This understanding shall be expressed on all new certificates issued from time to time for said preferred stock in place of the certificates now outstanding. The temporary reduction in the rate of dividends on the preferred stock from 6 per cent, to 4 per cent, is in consideration of and for the pur¬ pose of securing the advances to be made by the Director General to pay the unfunded debt of the Boston & Maine Bailroad and its subsidiaries. Eleventh: In order to secure the discharge of the temporary receiver now acting with respect to the Boston & Maine Railroad and certain of its subsidiaries, and to permit the Boston & Maine Railroad to acquire the property and franchises of the subsidiary companies, it is necessary to pro¬ vide cash as follows: (a) $19,879,060 to pay the principal of the overdue unfunded indebt¬ edness of the Boston & Maine Railroad and its subsidiaries and certain other indebtedness which will presently become due; the details with re¬ spect to such indebtedness being set forth in section Twelfth; (b) an amount sufficient to pay whatever sums may be required to be paid to non-assenting stockholders of subsidiary companies who may bring proceedings to have the value of their stock paid in cash in accord¬ ance with the legislation authorizing the carrying out of the Plan ; (c) an amount sufficient to pay the accrued and unpaid interest on the indebtedness of the Boston & Maine Railroad and its subsidiary com¬ panies ; and (d) an amount sufficient to pay all legal and other expenses incurred by the Boston & Maine Railroad, or by any subsidiary company, or by any of their duly authorized officers, directors or committees, incidental to the efforts to reorganize the Boston & Maine Railroad System. Items (c) and (d) shall be paid by the Boston & Maine Railroad out of its cash on hand. Items (a) and (b) will be paid out of sums provided in accordance with section Twelfth. Tioelfth: It is understood that the Director General will advance to the reorganized Boston & Maine Railroad the amount required to pay the prin¬ cipal of certain indebtedness amounting to $19,879,000, as stated in the pre¬ ceding section. Of this amount $17,606,060 is to be advanced to provide for 8 the payment of the following unfunded indebtedness, namely: $13,306,060 of the Boston & Maine Railroad, $2,000,000 of the Connecticut River Railroad Company, and $2,300,000 of the Vermont Valley Railroad, the payment of which has been guaranteed, principal and interest, by the Connecticut River Rail¬ road Company, and for which the Boston & Maine Railroad is also liable as endorser. For this $17,606,060 the Boston & Maine Railroad will issue to the Director General an equal amount at par of its five per cent, bonds, due July 1, 1920, to be secured by a mortgage as hereinafter provided. Contempo¬ raneously with the issuance of said bonds the Director General will agree that on or about the maturity date thereof he will, if requested by the Boston & Maine Railroad, purchase from it its six per cent, ten year mortgage bonds for the $17,606,060 at OS 1 /^, subject to interest adjustment to date; said bonds to be secured by the mortgage hereinafter provided for and to mature at the same time as the six per cent, bonds next herein referred to. The balance of said $19,879,060 will be advanced to pay off $1,859,000 of Fitchburg notes, $200,000 of Boston & Lowell notes, and $214,000 of Boston & Lowell bonds maturing on October 1, 1918, or any obligations that may be issued in place of them. For the aggregate of these latter amounts, viz., $2,273,000, the reorganized Boston & Maine Railroad will issue to the Director General its ten year six per cent, bonds to be secured by mortgage as hereinafter provided. The reorganized Boston & Maine Railroad will also issue to the Director General its ten year six per cent, bonds for such amounts as he has advanced or may hereafter advance to the company to pay for additions, betterments, extensions or equipment. In case the Hampden Railroad Corporation during Federal Control of the Boston & Maine System by reason of the Federal Control Act passed March 21, 1918, shall finally recover a judgment against the Boston & Maine Rail¬ road, in court of last resort, the Director General will advance to the Boston & Maine Railroad an amount of cash sufficient to enable it to satisfy such judg¬ ment, and for any sums so advanced the Boston & Maine Railroad Company shall issue to the Director General its ten year six per cent, bonds. All of the foregoing bonds will be secured by a mortgage upon all the property and franchises of the reorganized corporation, whether then owned or thereafter acquired, with the exception of cash and accounts receivable, and any other assets which for convenience in handling may with the con¬ sent of the Director General be omitted, which mortgage shall also secure all outstanding bonds, notes and other evidences of indebted¬ ness for which the reorganized corporation is liable as required by the Stat- 9 utes of Massachusetts, and shall be drawn so as to equally secure such fu¬ ture issues of bonds as may be required for refunding purposes or as may be required to pay in whole or in part for additions, betterments, extensions or equipment or may be issued for any lawful corporate purpose. Such pro¬ visions limiting the issue of additional bonds shall be inserted in the mort¬ gage as will reasonably insure safety, consequent good credit and reasonable flexibility for financing. The form and provisions of said mortgage shall be subject to the approval of the Director General. The mortgage will be a first mortgage on all the above property and franchises, subject only, however, to the following mortgages upon certain portions of the system: Mortgage of Portsmouth, Great Falls & Conway R.R., due June 1, 1937.$1,000,000 Mortgage of Worcester, Nashua & Rochester R.R., due January 1, 1930. 735,000 Mortgage of Worcester, Nashua & Rochester R.R., due October 1, 1934 . 380,000 Mortgage of Worcester, Nashua & Rochester R.R., due January 1, 1935 . 150,000 Mortgage of The Concord & Montreal R.R., due June 1,1920. 5,500,000 Mortgage of Troy & Boston R.R., due July 1, 1924. 573,000 It is anticipated that these bonds will be refunded by 10 year bonds issued under the proposed mortgage, and upon such refunding the proposed mortgage will become a first mortgage upon these properties. The mortgage may also be subject to the lien of the attachment in the suit brought by the Hampden Railroad Company, so far as a portion of the property of the present Boston & Maine Railroad is concerned. As additional security for the payment of the $17,606,060 of five per cent, bonds to be issued to the Director General as hereinbefore provided, and for the payment of the six per cent, bonds which may be issued to refund the same, the reorganized Boston & Maine Railroad shall provide in legally effec¬ tive fashion that all of its net income legally applicable to the payment of divi¬ dends on its common stock, including all sums made available from the re¬ duction of its dividends on the preferred stocks for five years as above provided, shall for a period of five years, except as hereinafter provided, be paid over to a Trustee to be selected by the Director General to be held by said Trustee as additional security for the payment of said bonds. 10 The funds in the possession of the Trustee shall be invested by said Trus¬ tee from time to time in the purchase at par and'accrued interest of five per cent, bonds to be issued to the Director General for advances made by him, or six per cent, bonds issued to refund the same, and, unless there shall have been made available sufficient funds for the payment of such bonds the proceeds of issue of $12,000,000 preferred stock as below provided, shall at the expiration of said five-year period be applied in such manner as may be agreed upon to the payment pro tanto of said $17,G0G,0G0 of bonds; and adequate provision shall be inserted in said bonds so that they may be called pro tanto for payment either at the expiration of said five-year period or upon the payment over as next hereinafter provided to the Trustee of $12,000,000 in cash. Effective provision shall, however, be made by which the corporation may at any time before the expiration of the five-year period provide the sum of $12,000,000 in cash by the issue of six per cent, first preferred stock at not less than par, the proceeds of such issue to be paid over to the Trustee and used for the payment pro tanto of said $17,GOG,060 of bonds, and upon such payment the Trustee shall hold the amount paid over to it under the provisions of the preceding paragraph subject to the disposition of the corporation for any legal corporate purpose. When the advances made by the Director General shall have been repaid in this manner, and to this extent, the present preferred stock of the Boston & Maine Kailroacl shall thereafter be entitled, out of any funds applicable thereto as provided in the tenth section, to dividends at the rate of 6 per cent, per annum, and all other net income shall thereafter, except as next herein pro¬ vided, be available for the payment of dividends upon the common stock of the Boston & Maine Railroad, or for other corporate purposes. Out of any funds then remaining in the hands of the Trustee there shall first be deducted a sum equal to all contributions to the trust fund accruing from the reduction from the full dividends on the first preferred and preferred stocks, which sum shall be invested by the Boston & Maine Railroad in pay¬ ing for additions and improvements to its property without a correspond¬ ing increase in capitalization or to the diminution of its debt with proper charges to profit and loss, to the end that no part of such sum shall directly or indirectly be used for the pa 3 unent of dividends on its preferred or com¬ mon stock; and likewise thereafter, during any remainder of the said five- year period, in ascertaining the balance of income available for dividends on its common and present preferred stocks there shall be deducted each year an amount equal to 20 per cent, of the aggregate dividends which would have been payable on the first preferred stock issued to the subsidiary companies if the full rate of dividend had been paid, which sum shall be used solely for 11 the purpose of paying for additions and improvements or for diminution of debt in the manner above specified. Thirteenth: In case any non-assenting stockholders of any of the subsid¬ iary companies elect to have their stock valued and to recover from the Bos¬ ton & Maine Railroad the cash value thereof, it is understood that the Director General will, if requested, advance to the reorganized Boston & Maine Rail¬ road an amount equal to whatever said company may be compelled to pay such dissenting stockholders, and the reorganized Boston & Maine Railroad will in such case deliver to the Director General as collateral security for such advances the number of shares of stock to which such non-assenting stock¬ holders would otherwise have been entitled under this plan. Such stock shall at the expiration of one year, or earlier at the request of the reorganized Boston & Maine Railroad, be sold by the Director General for the account of the reorganized Boston & Maine Railroad, and, in case the net proceeds of said sale are less than the amount advanced by him, the reorganized Boston & Maine Railroad will issue to the Director General its ten-year six per cent, mortgage bonds of the character hereinbefore described for the amount of such deficit, or at its option will pay the amount of such deficit in cash, and in the meantime will pay interest on the amount so advanced at the rate of six per cent, per annum. All dividends paid upon the stock so delivered to the Director General prior to the sale thereof shall be received by the Boston & Maine Railroad. Fourteenth: The issued capitalization of the reorganized Boston & Maine Railroad after the discharge of the temporary receiver and the acquisition of the property and franchises of the subsidiary companies (not including any mortgage bonds issued to the Director General for additions, betterments, ex¬ tensions or equipment prior to or pending reorganization, and subject to slight correction if the amount of stock issued to the Kennebunk & Kenne- bunkport Railroad be changed) will be as follows: 12 First Preferred Stock: To Fitchburg Railroad Company.$18,860,000 ” Boston & Lowell Railroad Corporation. 7,117,500 ” The Concord & Montreal Railroad. 7,917,100 ” Connecticut River Railroad Company. 3,233,300 ” Lowell & Andover Railroad. 93,700 ” Lowell & Andover Railroad. 531,300 ” Manchester & Lawrence Railroad. 1,000,000 ” Kennebunk & Kennebunkport Railroad .... 65,000 Total First Preferred Stock to be issued . . . $38,817,900 Preferred Stock: Total Preferred Stock. 3,149,800 Common Stock. 39,505,100 Total Stock.$81,472,800 Funded Debt Boston & Maine Railroad.$43,338,000 Fitchburg Railroad Company. 24,080,000 Boston & Lowell Railroad Corporation. 6,114,000 The Concord & Montreal Railroad. 7,223,000 Connecticut River Railroad Company. 2,259,000 Manchester & Lawrence Railroad. 274,000 For advances from the Federal Government to pay indebtedness. 19,879,060 Total.$103,167,060 Fifteenth: The first preferred stock to be issued in accordance with sec¬ tion Second of this Plan shall be entitled to cumulative dividends at the re¬ spective rates hereinbefore specified and as regards such dividends shall have priority over any other stock of the new corporation. In case of liquidation or other distribution of assets of the corporation the holders of the first pre¬ ferred stock shall be entitled to have paid to them their accrued dividends before any payment is made on account of the par value of any class of stock. Said first preferred stock shall have the further preference that no lease or contract for the entire operation of any railroad other than those at pres¬ ent operated as part of the Boston & Maine Railroad system or controlled by it or by any subsidiary by means of stock ownership, calling for an annual payment of more than one hundred thousand dollars, shall be entered into 13 without a vote in approval thereof of two-thirds in interest of the first pre¬ ferred stock outstanding at the time. No stock, whatever the rate of dividend thereof, having preferences or priorities in any respect the same as or superior to those of said first pre¬ ferred stock shall thereafter be issued either under the provisions of Chapter 380 of the Special Acts of Massachusetts for the year 1915 or under any other existing or future law without a vote approving such issue of two-thirds in in¬ terest of the first preferred stock outstanding at the time. The certificates of stock shall contain provisions embodying the rights and preferences set forth in this Plan. Sixteenth: The stockholders of the various companies which assent to the plan of reorganization may at the option of the Reorganization Mana¬ gers be requested to deposit their stock with the stockholders’ committees representing their respective companies. The expenses of the stockholders’ committees and of the reorganization managers, hereinafter referred to, will be borne by the reorganized corporation, subject to the approval of the Director General. Seventeenth: The terms of this Plan are subject to the approval of all public bodies whose approval is required by law and to the extent to which such approval is so required. Eighteenth: All unpaid legal or other expenses incurred by the Boston & Maine Railroad or by any subsidiary company or by any of their duly au¬ thorized officers, directors or committees incidental to the efforts to reor¬ ganize the Boston & Maine Railroad system from the inception thereof so far as they may be approved by the Director General shall be paid by the Boston & Maine Railroad. Such expenses shall be subject to the approval of the Dis¬ trict Court of the United States for the District of Massachusetts, where re¬ ceivership proceedings against the Boston & Maine Railroad are pending. If the receivership proceedings shall be terminated before the reorganization is ef¬ fected, then the legal and other expenses provided for in this section shall be paid only after the New Hampshire Public Service Commission shall have certified that they are just and reasonable in accordance with the provisions of Section 8 of the New Hampshire Act. Nineteenth: The board of directors of the reorganized Boston & Maine Railroad shall consist of not less than fifteen nor more than twenty-one mem¬ bers, of whom two at least shall be residents of Maine, one at least of Ver¬ mont and four at least of New Hampshire. 14 Twentieth: There shall be a board, to be called the reorganization managers, which shall consist of seven members of whom three shall be chosen by the directors of the Boston & Maine Kailroad and one each by the directors of the Fitchburg Kailroad Company, the Boston & Lowell Railroad Corporation, The Concord & Montreal Railroad and the Connecticut River Railroad Company. The reorganization managers may act by a majority and shall have full authority subject to the approval of the Director General to determine and declare when this Plan shall be deemed operative, to make such changes as they see fit in the names of the various classes of stock herein provided for, and in general to prescribe the details and methods of procedure necessary for its execution and to carry it out. Any vacancy in said board oc¬ casioned by the death, disability or resignation of any member thereof shall be filled by the directors of the company by which such member was chosen; or, if said company has ceased to exist as a separate corporation or has no board of directors, then such vacancy may be filled by the remaining members of the Board of Reorganization Managers. Until such vacancy is so filled the remain¬ ing members shall have all the powers of the full board. Twenty-first: The foregoing Plan contemplates the acquisition by the present Boston & Maine Railroad of the property and franchises of the sub¬ sidiary corporations either through purchase or consolidation. If it is deemed impracticable by the directors of the Boston & Maine to carry out the Plan through the medium of that corporation, it may be carried out through the medium of a new corporation formed to carry out its provisions under the authority of the legislation authorizing the same; provided, how¬ ever, that in such case the capitalization of the new corporation shall be ad¬ justed both as to stocks, bonds and other obligations so as to be the same in all respects as that proposed for the proposed reorganized Boston & Maine Railroad, and that the rights of the stockholders of the subsidiary companies shall be in all respects the same as those set forth in this Plan and all its substantial provisions shall be fully carried out. • / >