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CONRAIL INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NORFOLK SOUTHERN CORPORATION
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TO CONRAIL SHAREHOLDERS
Norfolk Southern's offer is 18% higher.
CSX is offering inferior value - $93.14 per share, which is about $17
per share less than Norfolk Southern's offer.*
It's a $110 all-cash offer for all shares.
CSX is trying to coerce Conrail shareholders with its inferior, front-
end loaded proposal.
It protects shareholders' rights.
CSX is tendering now for only 19.9% of the Conrail shares, and then
will use those shares to try to swing the vote to "opt out" of the
Pennsylvania law protecting shareholders' rights.
It's free of market risks.
CSX wants Conrail shareholders to bear significant market risk. You
would have to wait until the back-end merger, which is subject to
conditions and could take a year or longer, to receive 60% of the
consideration. This would be paid in CSX stock, with no downside
protection if the stock declines in price.
It's free of regulatory risks.
CSX wants Conrail shareholders to take significant regulatory risk.
You would have to wait for Surface Transportation Board approval (if
it comes) before receiving 60% of your consideration.
It doesn't include any sweetheart deals.
CSX is giving Conrail's CEO a 5-year contract with a more than 50%
jump in his base salary, and a guarantee that he will be the next
Chairman and CEO of CSX.
* Based on the closing price of CSX common stock on November 11, 1996.
Now Ask yourself, who's making the "hostile" offer
Norfolk Southern or CSX?
Here's How You Can Help Yourself and Protect Your Conrail Investment:
* Vote NO on Norfolk Southern's GOLD proxy card on Conrail's
proposals to "opt out" of Pennsylvania's Fair Value Statute and
to adjourn the special meeting.
* Tender into Norfolk Southern's superior offer.
* Write to the Conrail Board and ask it why:
-- It wants Conrail to pay $580 million in breakup fees--$6.35
per share -- to protect CSX's inferior offer.
-- It doesn't take actions to remove its own roadblocks to the
Norfolk Southern offer.
-- It is trying to force the inferior CSX deal on Conrail's
shareholders.
[Graphic: Box with checkmark above the words "VOTE NO"]
[Norfolk Southern Logo]
Important: If you have any questions, please call our solicitor,
Georgeson & Company Inc. toll free at 1-800-223-2064.
Banks and brokers call 212-440-9800.
November 13, 1996
[Norfolk Southern Corporation Letterhead]
NEWS RELEASE
FOR IMMEDIATE RELEASE
November 13, 1996
Media Contact: Robert Fort
(757) 629-2714
NORFOLK SOUTHERN SAYS CONRAIL DIRECTORS
CONTINUE TO IGNORE FIDUCIARY DUTY
NORFOLK, VA -- Norfolk Southern Corporation (NYSE:NSC) issued the
following statement in response to the decision by the Conrail board
to continue to support the substantially lower offer of CSX
Corporation (NYSE:CSX):
"We are not surprised that the Conrail board, given its actions
in recent weeks, stubbornly continues to refuse to give Conrail
shareholders the opportunity to accept what is clearly a better offer.
"The Conrail board continues to ignore its fiduciary duty to
shareholders. The CSX proposal is not a `strategic combination,' but
a strategy to subvert the intent of state law and coerce Conrail
shareholders into accepting an inadequate offer for their shares.
"The CSX proposal is not free of conditions -- it requires
Conrail shareholders to wait an indeterminant length of time for
regulatory approval of the merger for an unknown return on 60 percent
of the shares outstanding. The only meaningful conditions on Norfolk
Southern's offer are those imposed by the Conrail Board of Directors.
"We would again strongly urge all Conrail shareholders to reject
a deal that:
* offers $17 per share, or $1.5 billion less than Norfolk Southern;
* transfers the risk of regulatory approval to Conrail
shareholders;
* attempts to coerce shareholders into accepting the offer through
a discriminatory, front-end loaded structure;
* with no economic justification, establishes significant financial
obstacles to a superior alternative offer.
"The self-serving actions of the Conrail board and management
should be viewed with concern not only by Conrail shareholders and
other Conrail constituencies, but by all investors. We believe that
ultimately a combination of Norfolk Southern and Conrail will prove
not only a better offer, but also a better railroad."
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