<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
(AMENDMENT NO. 5)
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
CONRAIL INC.
(Name of Subject Company)
NORFOLK SOUTHERN CORPORATION
ATLANTIC ACQUISITION CORPORATION
(Bidders)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
208368 10 0
(CUSIP Number of Class of Securities)
SERIES A ESOP CONVERTIBLE JUNIOR
PREFERRED STOCK, WITHOUT PAR VALUE
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
NOT AVAILABLE
(CUSIP Number of Class of Securities)
JAMES C. BISHOP, JR.
EXECUTIVE VICE PRESIDENT-LAW
NORFOLK SOUTHERN CORPORATION
THREE COMMERCIAL PLACE
NORFOLK, VIRGINIA 23510-2191
TELEPHONE: (757) 629-2750
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
with a copy to:
RANDALL H. DOUD, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 735-3000
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
$12,282,193,550 $2,456,439
* For purposes of calculating the filing fee only. This calculation
assumes the purchase of all outstanding shares of Common Stock, par
value $1.00 per share (the "Common Shares"), and Series A ESOP
Convertible Junior Preferred Stock, without par value (the "ESOP
Preferred Shares"), of Conrail Inc. (the "Company") at $110 net per
share in cash. According to information included in the
Solicitation/Recommendation Statement on Schedule 14D-9, dated October
16, 1996, filed by the Company with the Securities and Exchange
Commission, on October 10, 1996, 80,178,281 Common Shares and 9,571,086
ESOP Preferred Shares were outstanding and 5,951,461 Common Shares were
reserved for issuance pursuant to the Company's Long-Term Incentive
Plans. Also according to such Schedule 14D-9, pursuant to a Stock
Option Agreement, dated as of October 14, 1996, by and between the
Company and CSX Corporation ("CSX"), the Company has granted CSX the
option to purchase in certain circumstances up to 15,955,477 Common
Shares.
** The amount of the filing fee, calculated in accordance with Rule
0-11(d) of the Securities Exchange Act of 1934, as amended, equals
1/50th of one percent of the aggregate value of cash offered by
Atlantic Acquisition Corporation for such number of Shares.
[X] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Amount Previously Paid: $2,233,127 Filing Party: Norfolk Southern Corporation and
Atlantic Acquisition Corporation
Form or Registration No.: Schedule 14D-1 Date Filed: October 24, 1996
</TABLE>
<PAGE>
This Amendment No. 5 amends the Tender Offer Statement on Schedule 14D-1
filed on October 24, 1996, as amended (the "Schedule 14D-1"), by Norfolk
Southern Corporation, a Virginia corporation ("Parent"), and its wholly owned
subsidiary, Atlantic Acquisition Corporation, a Pennsylvania corporation
("Purchaser"), relating to Purchaser's offer to purchase all outstanding
shares of (i) Common Stock, par value $1.00 per share (the "Common Shares"),
and (ii) Series A ESOP Convertible Junior Preferred Stock, without par value
(the "ESOP Preferred Shares" and, together with the Common Shares, the
"Shares"), of Conrail Inc. (the "Company"), including, in each case, the
associated Common Stock Purchase Rights, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated October 24, 1996 (the
"Offer to Purchase"), as amended and supplemented by the Supplement thereto,
dated November 8, 1996 (the "Supplement"), and in the revised Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer"). Unless otherwise defined herein, all capitalized
terms used herein shall have the respective meanings given such terms in the
Offer to Purchase, the Supplement or the Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
Item 1 is hereby amended and supplemented by the following:
(b) The information set forth in the Introduction and Section 1 ("Terms of
the Offer; Expiration Date") of the Supplement is incorporated herein by
reference.
(c) The information set forth in Section 3 ("Price Range of Shares;
Dividends") of the Supplement is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
Item 3 is hereby amended and supplemented by the following:
(a) and (b) The information set forth in the Introduction, Section 5
("Background of the Offer; Contacts with the Company") and Section 6
("Purpose of the Offer and the Merger; Plans for the Company; Certain
Considerations") of the Supplement is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4 is hereby amended and supplemented by the following:
(a) and (b) The information set forth in Section 4 ("Source and Amount of
Funds") of the Supplement is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
Item 5 is hereby amended and supplemented by the following:
The information set forth in the Introduction, Section 5 ("Background of
the Offer; Contacts with the Company") and Section 6 ("Purpose of the Offer
and Merger; Plans for the Company; Certain Considerations") of the Supplement
is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Item 7 is hereby amended and supplemented by the following:
The information set forth in the Introduction, Section 5 ("Background of
the Offer; Contacts with the Company") and Section 6 ("Purpose of the Offer
and the Merger; Plans for the Company; Certain Considerations") and Section 8
("Certain Legal Matters; Regulatory Approvals; Certain Litigation") of the
Supplement is incorporated herein by reference.
1
<PAGE>
ITEM 10. ADDITIONAL INFORMATION.
Item 10 is hereby amended and supplemented by the following:
(b) The information set forth in the Introduction and Section 10 ("Purpose
of the Offer and the Merger; Plans for the Company; Certain Considerations")
of the Supplement is incorporated herein by reference.
(e) The information set forth in Section 8 ("Certain Legal Matters;
Regulatory Approvals; Certain Litigation") of the Supplement is incorporated
herein by reference.
The information set forth in the Supplement and the revised Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(30) and
(a)(31), respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended to add the following:
(a)(25) Charts sent on November 5, 1996 to certain coal customers of
Parent
(a)(26) Intermodal Presentation made on November 5, 1996 to The Port
Authority of New York and New Jersey and the New York State
Department of Transportation
(a)(27) Text of Press Release issued by Parent on November 5, 1996
(a)(28) Text of Advertisement published on November 5, 1996
(a)(29) Text of Press Release issued by Parent on November 6, 1996
(a)(30) Supplement to Offer to Purchase, dated November 8, 1996
(a)(31) Revised Letter of Transmittal
(a)(32) Revised Notice of Guaranteed Delivery
(a)(33) Revised Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(34) Revised Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees
(a)(35) Summary Advertisement, dated November 8, 1996
(a)(36) Text of Press Release issued by Parent on November 8, 1996
2
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: November 8, 1996
NORFOLK SOUTHERN CORPORATION
By: /s/ JAMES C. BISHOP, JR.
-----------------------------
Name: James C. Bishop, Jr.
Title: Executive Vice
President-Law
ATLANTIC ACQUISITION CORPORATION
By: /s/ JAMES C. BISHOP, JR.
-----------------------------
Name: James C. Bishop, Jr.
Title: Vice President and
General Counsel
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ----------- --------------------------------------------------------------------------------- --------
<S> <C> <C>
(a)(25) Charts sent on November 5, 1996 to certain coal customers of Parent
(a)(26) Intermodal Presentation made on November 5, 1996 to the Port Authority of New York
and New Jersey and the New York State Department of Transportation
(a)(27) Text of Press Release issued by Parent on November 5, 1996
(a)(28) Text of Advertisement published on November 5, 1996
(a)(29) Text of Press Release issued by Parent on November 6, 1996
(a)(30) Supplement to Offer to Purchase, dated November 8, 1996
(a)(31) Revised Letter of Transmittal
(a)(32) Revised Notice of Guaranteed Delivery
(a)(33) Revised Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
(a)(34) Revised Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
(a)(35) Summary Advertisement dated November 8, 1996
(a)(36) Text of Press Release issued by Parent on November 8, 1996
</TABLE>
<PAGE>
NS SERVED UTILITY PLANTS
<TABLE>
<CAPTION>
UTILITY PLANT CITY ST
- --------------------------------- -------------------- --------------- ----
<S> <C> <C> <C>
1 ALABAMA ELECTRIC COOP INC LOWMAN (TOMBIGBEE) LEROY AL
2 ALABAMA POWER CO. GASTON WILSONVILLE AL
3 APPALACHIAN POWER CO. CLINCH RIVER CLEVELAND VA
4 APPALACHIAN POWER CO. GLEN LYN GLEN LYN VA
5 CAROLINA POWER & LIGHT CO. ROXBORO ROXBORO NC
6 CAROLINA POWER & LIGHT CO. MAYO ROXBORO NC
7 CAROLINA POWER & LIGHT CO. LEE(NC) GOLDSBORO NC
8 CAROLINA POWER & LIGHT CO. ASHEVILLE ARDEN NC
9 CAROLINA POWER & LIGHT CO. CAPE FEAR MONCURE NC
10 CENTRAL ILLINOIS PUBLIC
SERVICE CO COFFEEN COFFEEN IL
11 CLEVELAND ELECTRIC ILLUM CO AVON LAKE AVON LAKE OH
12 COLUMBIA WATER & LIGHT DEPT COLUMBIA-MO COLUMBIA MO
13 DUKE POWER CO. BELEWS CREEK WALNUT COVE NC
14 DUKE POWER CO. MARSHALL (NC) TERRELL NC
15 DUKE POWER CO. DAN RIVER EDEN NC
16 DUKE POWER CO. BUCK SPENCER NC
17 DUKE POWER CO. ALLEN (NC) BELMONT NC
18 EAST KENTUCKY POWER COOP, INC. COOPER SOMERSET KY
19 GEORGIA POWER CO. WANSLEY ROOPVILLE GA
20 GEORGIA POWER CO. YATES NEWNAN GA
21 GEORGIA POWER CO. SCHERER JULIETTE GA
22 GEORGIA POWER CO. HAMMOND COOSA GA
23 GEORGIA POWER CO. ARKWRIGHT MACON GA
24 GEORGIA POWER CO. HARLEE BRANCH MILLEDGEVILLE GA
25 GEORGIA POWER CO. MCDONOUGH SMYRNA GA
26 ILLINOIS POWER CO. WOOD RIVER FEDERAL IL
27 KENTUCKY UTILITIES CO. BROWN (KY) BURGIN KY
28 LOUISVILLE GAS & ELECTRIC CO. CANE RUN LOUISVILLE KY
29 POTOMAC ELECTRIC POWER CO. POTOMAC RIVER ALEXANDRIA VA
30 PSI ENERGY, INC. GIBSON OWENSVILLE IN
31 SAVANNAH ELECTRIC & POWER CO. PLANT KRAFT PORT WENTWOR GA
32 SOUTH CAROLINA ELECTRIC & GAS WATEREE EASTOVER SC
33 SOUTH MISSISSIPPI EL PWR ASSN MORROW PURVIS MS
34 TENNESSEE VALLEY AUTHORITY KINGSTON KINGSTON TN
35 TENNESSEE VALLEY AUTHORITY JOHN SEVIER ROGERSVILLE TN
36 TOLEDO EDISON CO. BAY SHORE OREGON OH
37 VIRGINIA ELECTRIC & POWER CO CHESAPEAKE ENERGY C NORFOLK VA
38 VIRGINIA ELECTRIC & POWER CO CLOVER POWER STATION CLOVER VA
TOTALS
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CAPACITY
FACTOR CAPACITY
BASED ON FACTOR
NET NAME- BASED ON
GENERATION PLATE PROVEN PROVEN
UTILITY NAME PLATE MWH CAPACITY CAPACITY CAPACITY
- --------------------------------- ----------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1 ALABAMA ELECTRIC COOP INC 538.00 3,283,232 69.67 549.60 68.19%
2 ALABAMA POWER CO. 2,012.80 8,414,622 47.72 1,884.00 50.99%
3 APPALACHIAN POWER CO. 712.50 4,081,107 65.39 705.00 66.08%
4 APPALACHIAN POWER CO. 337.50 1,500,298 50.75 335.00 51.12%
5 CAROLINA POWER & LIGHT CO. 2,558.25 12,846,995 57.33 2,489.87 58.90%
6 CAROLINA POWER & LIGHT CO. 735.84 4,063,224 63.04 750.28 61.82%
7 CAROLINA POWER & LIGHT CO. 402.45 862,837 24.47 421.00 23.40%
8 CAROLINA POWER & LIGHT CO. 413.64 2,609,136 72.01 394.00 75.60%
9 CAROLINA POWER & LIGHT CO. 328.48 1,559,748 54.21 357.00 49.87%
10 CENTRAL ILLINOIS PUBLIC
SERVICE CO 1,005.46 3,087,677 35.06 885.00 39.83%
11 CLEVELAND ELECTRIC ILLUM CO 852.00 4,043,963 54.18 788.00 58.58%
12 COLUMBIA WATER & LIGHT DEPT 86.00 75,372 10.00 86.00 10.00%
13 DUKE POWER CO. 2,160.14 12,063,195 63.75 2,240.00 61.48%
14 DUKE POWER CO. 1,996.00 12,561,314 71.84 2,090.00 68.61%
15 DUKE POWER CO. 290.00 342,329 13.48 276.00 14.16%
16 DUKE POWER CO. 370.00 383,902 11.84 369.00 11.88%
17 DUKE POWER CO. 1,155.00 3,350,614 33.12 1,140.00 33.55%
18 EAST KENTUCKY POWER COOP, INC. 320.85 1,748,303 62.2 336.00 59.40%
19 GEORGIA POWER CO. 1,904.00 8,344,477 50.03 1,692.00 56.30%
20 GEORGIA POWER CO. 1,487.50 2,702,018 20.74 1,246.00 24.76%
21 GEORGIA POWER CO. 3,564.00 21,813,273 69.87 3,337.00 74.62%
22 GEORGIA POWER CO. 953.00 2,487,592 29.8 810.00 35.06%
23 GEORGIA POWER CO. 181.25 188,514 11.87 172.00 12.51%
24 GEORGIA POWER CO. 1,746.24 8,693,356 56.83 1,526.00 65.03%
25 GEORGIA POWER CO. 598.40 2,943,693 56.16 496.00 67.75%
26 ILLINOIS POWER CO. 650.10 1,675,138 29.41 616.00 31.04%
27 KENTUCKY UTILITIES CO. 739.54 2,378,139 36.71 661.00 41.07%
28 LOUISVILLE GAS & ELECTRIC CO. 645.00 2,398,923 42.46 678.00 40.39%
29 POTOMAC ELECTRIC POWER CO. 514.00 1,972,332 43.8 482.00 46.71%
30 PSI ENERGY, INC. 3,339.92 18,805,532 64.28 3,161.91 67.89%
31 SAVANNAH ELECTRIC & POWER CO. 333.90 438,336 14.99 303.00 16.51%
32 SOUTH CAROLINA ELECTRIC & GAS 771.80 4,127,259 61.05 720.00 65.44%
33 SOUTH MISSISSIPPI EL PWR ASSN 400.00 1,881,648 53.7 400.00 53.70%
34 TENNESSEE VALLEY AUTHORITY 1,700.00 10,192,073 68.44 1,456.00 79.91%
35 TENNESSEE VALLEY AUTHORITY 800.00 5,097,839 72.74 712.00 81.73%
36 TOLEDO EDISON CO. 639.49 3,177,345 56.72 631.00 57.48%
37 VIRGINIA ELECTRIC & POWER CO 649.64 3,195,553 56.15 605.00 60.30%
38 VIRGINIA ELECTRIC & POWER CO 424.04 1,250,524 33.67 416.00 34.32%
TOTALS 38,316.73 180,641,432 53.82% 36,216.66 56.94%
</TABLE>
BLUE--NS/CR JOINT PLANT (CR HAS TRACKAGE RIGHTS OVER NS LINE)
GREEN--NS/CSX JOINT PLANTS
1
<PAGE>
CR SERVED UTILITY PLANTS
<TABLE>
<CAPTION>
UTILITY PLANT CITY
-------------------------------- -------------------- ---------------
<S> <C> <C> <C>
1 ATLANTIC CITY ELECTRIC CO DEEPWATER PENNSVILLE
2 ATLANTIC CITY ELECTRIC CO ENGLAND MARMORA
3 BALTIMORE GAS & ELECTRIC CO. CRANE BALTIMORE
4 CENTRAL HUDSON GAS & ELECTRIC DANSKAMER ROSETON
5 CLEVELAND ELECTRIC ILLUM CO ASHTABULA ASHTABULA
6 CLEVELAND ELECTRIC ILLUM CO EASTLAKE EAST LAKE
7 CLEVELAND ELECTRIC ILLUM CO LAKE SHORE CLEVELAND
8 CONSUMERS POWER CO. WEADOCK ESSEXVILLE
9 DAYTON POWER & LIGHT CO HUTCHINGS MIAMISBURG
10 DELMARVA POWER & LIGHT CO. EDGE MOOR WILMINGTON
11 DELMARVA POWER & LIGHT CO. INDIAN RIVER MILLSBORO
12 DETROIT EDISON CO. MONROE MONROE
13 DETROIT EDISON CO. RIVER ROUGE RIVER ROUGE
14 DETROIT EDISON CO. TRENTON CHANNEL TRENTON
15 INDIANAPOLIS POWER & LIGHT CO. PRITCHARD CAMPBELL
16 JAMESTOWN BOARD OF PUBLIC UTIL CARLSON JAMESTOWN
17 METROPOLITAN EDISON CO. PORTLAND PORTLAND
18 METROPOLITAN EDISON CO. TITUS READING
19 NEW YORK STATE ELEC & GAS CORP. GOUDEY JOHNSON CITY
20 NEW YORK STATE ELEC & GAS CORP. GREENIDGE DRESDEN
21 NEW YORK STATE ELEC & GAS CORP. HICKLING EAST CORNING
22 NEW YORK STATE ELEC & GAS CORP. KINTIGH (SOMERSET) BARKER
23 NEW YORK STATE ELEC & GAS CORP. MILLIKEN STATION LANSING
24 NIAGARA MOHAWK POWER CORP. DUNKIRK DUNKIRK
25 NIAGARA MOHAWK POWER CORP. HUNTLEY TONAWANDA
26 N. INDIANA PUBLIC SERVICE CO MICHIGAN CITY MICHIGAN CITY
27 N. INDIANA PUBLIC SERVICE CO SCHAHFER WHEATFIELD
28 ORANGE & ROCKLAND UTILITIES INC. LOVETT TOMKINS COVE
29 PECO ENERGY CO. CROMBY PHOENIXVILLE
30 PECO ENERGY CO. EDDYSTONE EDDYSTONE
31 PENNSYLVANIA ELECTRIC CO. CONEMAUGH NEW FLORENCE
32 PENNSYLVANIA ELECTRIC CO. KEYSTONE SHELOCTA
33 PENNSYLVANIA POWER & LIGHT CO. BRUNNER ISLAND YORK HAVEN
34 PENNSYLVANIA POWER & LIGHT CO. MARTINS CREEK MARTINS CREEK
35 PENNSYLVANIA POWER & LIGHT CO. MONTOUR WASHINGTONVILLE
36 PENNSYLVANIA POWER & LIGHT CO. SUNBURY SHAMOKIN DAM
37 POTOMAC ELECTRIC POWER CO. CHALK POINT AQUASCO
38 POTOMAC ELECTRIC POWER CO. MORGANTOWN NEWBURG
39 PSI ENERGY, INC. GIBSON OWENSVILLE
40 ROCHESTER GAS & ELECTRIC CORP. ROCHESTER 3 (BEEBEE) ROCHESTER
41 ROCHESTER GAS & ELECTRIC CORP. ROCHESTER 7
(RUSSELL) ROCHESTER
42 VINELAND MUNICIPAL ELEC UTILITY H.M. DOWN VINELAND
TOTALS
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CAPACITY
FACTOR CAPACITY
BASED ON FACTOR
NET NAME- BASED ON
GENERATION PLATE PROVEN PROVEN
ST NAME PLATE MWH CAPACITY CAPACITY CAPACITY
---- ----------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 NJ 250.10 480,443 21.93 220 24.93%
2 NJ 475.60 1,780,644 42.74 449 45.27%
3 MD 399.84 1,631,798 46.59 380 49.02%
4 NY 537.00 2,113,927 44.90 505 47.79%
5 OH 440.00 1,272,819 33.02 420 34.59%
6 OH 1,257.00 6,220,296 56.49 1,233 57.59%
7 OH 256.00 0 0.00 245 0.00%
8 MI 312.50 1,978,526 72.27 310 72.86%
9 OH 414.00 354,511 9.78 371 10.91%
10 DE 698.20 2,811,601 45.97 674 47.62%
11 DE 782.40 3,077,482 44.90 763 46.04%
12 MI 3,279.60 19,960,060 69.48 3,000 75.95%
13 MI 933.23 3,223,260 39.43 517 71.17%
14 MI 775.50 3,730,602 54.92 725 58.74%
15 IN 393.64 688,635 19.97 341 23.05%
16 NY 57.70 156,033 30.87 50 35.62%
17 PA 426.70 1,360,174 36.39 401 38.72%
18 PA 225.00 1,036,292 52.58 249 47.51%
19 NY 75.00 548,735 83.52 84 74.57%
20 NY 162.50 685,441 48.15 107 73.13%
21 NY 86.50 290,879 38.39 44 75.47%
22 NY 655.11 4,573,081 79.69 675 77.34%
23 NY 322.48 1,987,740 70.36 300 75.64%
24 NY 628.00 3,497,480 63.58 576 69.32%
25 NY 835.20 3,343,648 45.70 730 52.29%
26 IN 680.04 2,765,924 46.43 589 53.61%
27 IN 1,943.46 7,503,431 44.07 1,625 52.71%
28 NY 495.00 1,767,446 40.76 494 40.84%
29 PA 417.50 1,622,902 44.37 358 51.75%
30 PA 1,489.20 3,892,219 29.84 1,359 32.69%
31 PA 1,872.00 11,779,958 71.83 1,712 78.55%
32 PA 1,872.00 11,572,440 70.57 1,672 79.01%
33 PA 1,558.73 7,764,322 56.86 1,469 60.34%
34 PA 2,013.50 1,809,132 10.26 1,892 10.92%
35 PA 1,641.70 8,945,801 62.20 1,525 66.96%
36 PA 409.78 2,350,950 65.49 389 68.99%
37 MD 2,046.00 5,178,965 28.90 1,907 31.00%
38 MD 1,252.00 6,637,876 60.52 1,164 65.10%
39 IN 3,339.92 18,805,532 64.28 3,162 67.89%
40 NY 81.60 431,524 60.37 80 61.58%
41 NY 252.60 1,200,409 54.25 260 52.70%
42 NJ 70.50 62,470 10.12 62 11.50%
36,114.33 160,895,408 0.51 33,088 55.51%
</TABLE>
- ------------
RED --CR/CSX JOINT PLANT
BLUE --CR/NS JOINT PLANT (CR HAS TRACKAGE RIGHTS OVER NS LINE)
2
<PAGE>
CSXT SERVED UTILITY PLANTS
<TABLE>
<CAPTION>
UTILITY PLANT CITY
-------------------------------- --------------------- ---------------
<S><C> <C> <C>
1 ALABAMA POWER CO. GASTON WILSONVILLE
2 ALABAMA POWER CO. MILLER GRAYSVILLE
3 APPALACHIAN POWER CO. AMOS ST. ALBANS
4 APPALACHIAN POWER CO. MOUNTAINEER NEW HAVEN
5 BIG RIVERS ELECTRIC CORP. HENDERSON II SEBREE
6 BIG RIVERS ELECTRIC CORP. WILSON CENTERTOWN
7 CAROLINA POWER & LIGHT CO. CAPE FEAR MONCURE
8 CAROLINA POWER & LIGHT CO. LEE (NC) GOLDSBORO
9 CAROLINA POWER & LIGHT CO. ROBINSON HARTSVILLE
10 CAROLINA POWER & LIGHT CO. SUTTON WILMINGTON
11 CAROLINA POWER & LIGHT CO. WEATHERSPOON LUMBERTON
12 CONSUMERS POWER CO. CAMPBELL WEST OLIVE
13 CONSUMERS POWER CO. KARN ESSEXVILLE
14 CONSUMERS POWER CO. WEADOCK ESSEXVILLE
15 DETROIT EDISON CO. MARYSVILLE MARYSVILLE
16 DETROIT EDISON CO. ST. CLAIR EAST CHINA
17 DUKE POWER CO. CLIFFSIDE CLIFFSIDE
18 DUKE POWER CO. LEE (SC) PELZER
19 DUKE POWER CO. MARSHALL (NC) TERRELL
20 DUKE POWER CO. RIVERBEND MT. HOLLY
21 EAST KENTUCKY POWER COOP, INC. DALE FORD
22 EAST KENTUCKY POWER COOP, INC. SPURLOCK MAYSVILLE
23 FLORIDA POWER CORP. CRYSTAL RIVER CRYSTAL RIVER
24 GAINESVILLE REGIONAL UTILITIES DEERHAVEN HAGUE
25 GEORGIA POWER CO. BOWEN TAYLORVILLE
26 GEORGIA POWER CO. HARLEE BRANCH MILLEDGEVILLE
27 GEORGIA POWER CO. MCDONOUGH SMYRNA
28 GEORGIA POWER CO. MITCHELL (GA) ALBANY
29 GULF POWER CO. SCHOLZ CHATTAHOOCHEE
30 HOOSIER ENERGY RURAL ELECTRIC MEROM MEROM
31 JACKSONVILLE ELECTRIC AUTH ST. JOHNS RIVER POWER JACKSONVILLE
32 KENTUCKY POWER CO. BIG SANDY LOUISA
33 LAKELAND DEPT OF ELEC. & WATER MCINTOSH-FL LAKELAND
34 MONONGAHELA POWER CO. HARRISON HAYWOOD
35 MONONGAHELA POWER CO. PLEASANTS WILLOW ISLAND
36 MONONGAHELA POWER CO. WILLOW ISLAND WILLOW ISLAND
37 OHIO EDISON CO. NILES NILES
38 OHIO POWER CO. GAVIN CHESHIRE
39 OHIO POWER CO. MITCHELL (WV) MOUNDSVILLE
40 OHIO POWER CO. MUSKINGUM RIVER BEVERLY
41 ORLANDO UTILITIES COMMISSION STANTON ENERGY CE ORLANDO
42 POTOMAC ELECTRIC POWER CO. DICKERSON DICKERSON
43 PSI ENERGY, INC. CAYUGA CAYUGA
44 SAVANNAH ELECTRIC & POWER CO. MCINTOSH (GA) RINCON
45 SEMINOLE ELECTRIC COOP, INC. SEMINOLE PALATKA
46 SOUTH CAROLINA ELECTRIC & GAS CANADYS CANADYS
47 SOUTH CAROLINA ELECTRIC & GAS MCMEEKIN IRMO
48 SOUTH CAROLINA ELECTRIC & GAS URQUHART BEECH ISLAND
49 SOUTH CAROLINA ELECTRIC & GAS WATEREE EASTOVER
50 SOUTH CAROLINA GENER. CO, INC. WILLIAMS STATION GOOSE CREEK
51 SOUTH CAROLINA PUB SERV AUTH CROSS CROSS
52 SOUTH CAROLINA PUB SERV AUTH GRAINGER CONWAY
53 SOUTH CAROLINA PUB SERV AUTH JEFFERIES MONCKS CORNER
54 SOUTH CAROLINA PUB SERV AUTH WINYAH GEORGETOWN
55 SOUTHERN INDIANA GAS & ELEC. CO. BROWN (IN) WEST FRANKLIN
56 TAMPA ELECTRIC CO. GANNON TAMPA
57 TENNESSEE VALLEY AUTHORITY BULL RUN OAK RIDGE
58 TENNESSEE VALLEY AUTHORITY GALLATIN GALLATIN
59 TENNESSEE VALLEY AUTHORITY KINGSTON KINGSTON
60 TENNESSEE VALLEY AUTHORITY PARADISE DRAKESBORO
61 TENNESSEE VALLEY AUTHORITY WIDOWS CREEK STEVENSON
62 VIRGINIA ELECTRIC & POWER CO BREMO BLUFF BREMO BLUFF
63 VIRGINIA ELECTRIC & POWER CO CHESTERFIELD CHESTER
64 VIRGINIA ELECTRIC & POWER CO MOUNT STORM MT. STORM
65 VIRGINIA ELECTRIC & POWER CO POSSUM POINT DUMFRIES
66 VIRGINIA ELECTRIC & POWER CO YORKTOWN YORKTOWN
TOTALS
RED --CSX/CR JOINT PLANT GREEN --CSX/NS JOINT PLANTS
OTHER
P&L RAILROAD --CSXT HOLDS A MINORITY INTEREST & SPECIAL MARKETING ARRANGEMENT
LOUISVILLE GAS & ELECTRIC CO. CANE RUN LOUISVILLE
LOUISVILLE GAS & ELECTRIC CO. MILL CREEK KOSMOSDALE
TENNESSEE VALLEY AUTHORITY SHAWNEE PADUCAH
INRD RAILROAD --CSXT HOLDS AN INTEREST
CENTRAL ILLINOIS PUBLIC SERVICE CO NEWTON NEWTON
INDIANAPOLIS POWER & LIGHT CO. STOUT INDIANAPOLIS
PSI ENERGY, INC. NOBLESVILLE NOBLESVILLE
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CAPACITY
FACTOR CAPACITY
BASED ON FACTOR
NET NAME- BASED ON
GENERATION PLATE PROVEN PROVEN
ST NAME PLATE MWH CAPACITY CAPACITY CAPACITY
---- ----------- ------------- ---------- ---------- ----------
<S><C> <C> <C> <C> <C> <C> <C>
1 AL 2,012.80 8,414,622 47.72 1,884.00 50.99%
2 AL 2,822.00 18,212,069 73.67 2,803 74.16%
3 WV 2,932.60 11,734,823 45.68 2,900 46.19%
4 WV 1,300.00 5,410,832 47.51 1,300 47.51%
5 KY 354.70 1,763,232 56.75 315 63.90%
6 KY 440.03 3,007,139 78.01 420 81.73%
7 NC 328.48 1,559,748 54.21 357.00 49.87%
8 NC 402.45 862,837 24.47 421.00 23.40%
9 SC 206.64 753,344 41.62 185 46.49%
10 NC 671.62 1,692,913 28.77 629 30.72%
11 NC 165.50 252,092 17.39 177 16.26%
12 MI 1,420.00 7,262,801 58.39 1,404 59.06%
13 MI 1,761.30 3,634,012 23.55 1,791 23.16%
14 MI 312.50 1,978,526 72.27 310 72.86%
15 MI 200.00 43,064 2.46 167 2.94%
16 MI 1,905.01 7,225,561 43.30 1,379 59.81%
17 NC 780.90 2,403,835 35.14 760 36.11%
18 SC 355.00 496,281 15.96 370 15.31%
19 NC 1,996.00 12,561,314 71.84 2,090.00 68.61%
20 NC 466.00 787,647 19.29 454.00 19.80%
21 KY 176.00 756,325 49.06 172.00 50.20%
23 KY 813.51 5,584,818 78.37 800.00 79.69%
23 FL 2,442.87 13,595,755 63.53 2,276.00 68.19%
24 FL 325.75 1,628,777 57.08 299.00 62.19%
25 GA 3,498.60 20,222,352 65.98 3,040.00 75.94%
26 GA 1,746.24 8,693,356 56.83 1,526.00 65.03%
27 GA 598.40 2,943,693 56.16 496.00 67.75%
28 GA 218.32 335,363 17.54 193.00 19.84%
29 FL 98.00 142,862 16.64 95 17.20%
30 IN 1,073.00 4,845,476 51.55 1,016 54.44%
31 FL 1,358.00 9,130,770 76.75 1,250 83.39%
32 KY 1,096.80 7,317,567 76.16 1,060 78.81%
33 FL 593.37 2,203,044 42.38 541 46.52%
34 WV 2,052.00 12,428,596 69.14 1,920 73.90%
35 WV 1,368.00 8,165,553 68.14 1,252 74.45%
36 WV 213.20 856,091 45.84 243 40.22%
37 OH 266.00 1,126,375 48.34 216 59.53%
38 OH 2,600.00 14,135,869 62.06 2,600 62.06%
39 WV 1,632.60 8,441,366 59.02 1,600 60.23%
40 OH 1,529.61 5,580,898 41.65 1,425 44.71%
1
<PAGE>
CAPACITY
FACTOR CAPACITY
BASED ON FACTOR
NET NAME- BASED ON
GENERATION PLATE PROVEN PROVEN
ST NAME PLATE MWH CAPACITY CAPACITY CAPACITY
---- ----------- ------------- ---------- ---------- ----------
41 FL 464.58 3,093,116 76.00 438 80.62%
42 MD 588.00 3,462,953 67.23 546 72.40%
43 IN 1,062.00 5,928,872 63.73 1,005 67.34%
44 GA 177.66 592,967 38.10 155 43.67%
45 FL 1,318.00 8,919,749 77.26 1,230 82.78%
46 SC 489.60 2,195,641 51.19 430 58.29%
47 SC 293.76 1,518,441 59.01 254 68.24%
48 SC 250.00 1,427,703 65.19 254 64.17%
49 SC 771.80 4,127,259 61.05 720.00 65.44%
50 SC 632.70 3,142,442 56.70 565 63.49%
51 SC 1,147.12 6,673,625 66.41 1,060 71.87%
52 SC 163.20 297,700 20.82 170 19.99%
53 SC 445.60 1,489,297 38.15 398 42.72%
54 SC 1,120.00 4,321,812 44.05 1,080 45.68%
55 IN 530.46 2,441,530 52.54 500 55.74%
56 FL 1,301.88 5,810,396 50.95 1,206 55.00%
57 TN 950.00 5,265,585 63.27 873 68.85%
58 TN 1,255.20 5,892,431, 53.59 1,018 66.08%
59 TN 1,700.00 10,192,073 68.44 1,456.00 79.91%
60 KY 2,558.20 14,861,420 66.32 2,240 75.74%
61 AL 1,968.76 9,530,981 55.26 1,613 67.45%
62 VA 254.28 1,327,251 59.58 234 64.75%
63 VA 1,352.94 7,154,327 60.37 1,280 63.80%
64 WV 1,662.48 11,251,858 77.26 1,622 79.19%
65 VA 1,373.00 2,483,120 20.65 1,272 22.28%
66 VA 1,257.00 2,529,779 22.97 1,063 27.17%
69,622.02 344,123,926 56.42% 64,818 60.61%
KY 645.00 2,398,923 42.46 678 40.39%
KY 1,717.20 7,368,357 48.98 1,456 57.77%
KY 1,750.00 8,670,992 56.56 1,242 79.70%
IL 1,234.80 5,827,031 53.87 1,114 59.71%
IN 773.13 2,786,696 41.15 720 44.18%
IN 100.00 117,535 13.42 90 14.91%
</TABLE>
2
CONRAIL-CSX-NORFOLK SOUTHERN
THE INTERMODAL STORY
<PAGE>
INTERMODAL, THE MOVEMENT OF TRAILERS AND CONTAINERS ON RAIL CARS, IS
NOW THE SECOND LARGEST RAIL COMMODITY - BEHIND COAL AND IS THE FASTEST GROWING
RAIL COMMODITY. THE MAJOR POLICY IMPLICATIONS FOR RAIL INTERMODAL ARE THAT IT
IS LESS POLLUTING PER TON MILE BY AN ORDER OF MAGNITUDE THAN TRUCK
TRANSPORTATION, IT REQUIRES LESS FUEL THAN TRUCKS AND THAT IT TAKES HEAVY
TRUCKS AND CONTAINERS OFF THE HIGHWAY, SOLVING CONGESTION PROBLEMS AND
ALLEVIATING WEAR AND TEAR ON PUBLIC HIGHWAYS.
2
<PAGE>
ONE OF THE LARGEST, IF NOT THE LARGEST, TRUCK AND INTERMODAL MARKETS
IN THE COUNTRY IS NORTH AND EAST OF THE MARYLAND/VIRGINIA BORDER. INTERMODAL
ACCESS TO AND SERVICE IN THIS AREA ARE CRITICAL TO THE FUTURE OF THE COUNTRY
AND TO THE REGION. BY INVESTIGATING HOW THE RAIL CARRIERS HAVE MANAGED THEIR
INTERMODAL FRANCHISES IN THE PAST WE CAN ACCURATELY PREDICT THE FUTURE IN THE
NORTHEAST BASED ON WHICH OF THE THREE CARRIERS HAS GOOD COMPETITIVE ACCESS.
3
<PAGE>
RELATIVE INTERMODAL GROWTH BY CARRIER
1988 BASE YEAR
(GRAPHICS CHART OMITTED)
4
<PAGE>
RELATIVE INTERMODAL GROWTH BY CARRIER
1988 BASE YEAR
CR CSX CR/CSX NS INDUSTRY
88 100% 100% 100% 100% 100%
89 104 82 94 120 104
90 106 84 96 121 106
91 104 81 94 127 106
92 113 88 102 136 114
93 125 93 110 147 122
94 146 102 127 167 138
95 136 99 120 187 141
96* 143 101 124 194 143
* PROJECTION THROUGH 42 WEEKS
SOURCE: CS54/AAR DATA ORIGINATED AND RECEIVED
5
<PAGE>
INTERMODAL SHIPMENTS BY YEAR
CR CSX CR/CSX NS INDUSTRY
88 1,100,849 872,486 1,973,335 677,154 7,809,904
89 1,144,231 716,810 1,861,041 810,118 8,119,346
90 1,164,023 733,042 1,897,085 822,199 8,272,550
91 1,140,414 706,833 1,847,217 880,275 8,294,087
92 1,247,161 764,341 2,011,502 992,085 8,863,412
93 1,372,787 807,696 2,180,485 992,850 9,494,403
94 1,611,852 889,169 2,501,021 1,127,385 10,807,025
95 1,500,634 865,161 2,365,795 1,265,582 11,032,417
96* 1,574,634 878,138 2,432,303 1,316,582 11,164,417
* PROJECTION THROUGH 42 WEEKS
SOURCE: CS54/AAR DATA ORIGINATED AND RECEIVED
6
<PAGE>
NORFOLK INTERNATIONAL VOLUME
(GRAPHICS CHART OMITTED)
AVERAGE ANNUAL INCREASE = 9.3%
7
<PAGE>
NORFOLK INTERNATIONAL VOLUME
YEAR VOLUME % INCREASE
85 79,393
86 88,493 11.4
87 91,455 3.3
88 113,037 23.6
89 124,649 10.3
90 137,778 10.5
91 145,535 5.6
92 152,588 4.8
93 154,134 1.3
94 170,156 10.4
95 200,557 17.9
96 208,780 4.1
AVERAGE ANNUAL INCREASE = 9.3%
8
<PAGE>
NS REVENUE SHIPMENTS WITH NORTHEAST ORIGINS
AND TERMINATIONS
TRAILERS & TRIPLE NSCS54/ TOTAL W/
CONTAINERS CROWN TOTAL %TOTAL NS CP HAULAGE* HAULAGE
86 23,896
87 24,516
88 24,860 3.7
89 48,454 5,700 54,154 6.7
90 66,567 8,509 75,076 9.1
91 72,945 10,115 83,060 9.7
92 77,150 10,685 87,835 9.5 2,531
93 89,624 41,842 131,466 13.2 39,734 171,200
94 139,694 58,968 198,662 17.6 52,284 250,946
95 178,466 49,051 227,517 18 45,493 273,010
96 163,332 54,100 217,432 16.5 5,831 223,263
* CP HAULAGE LOADS WERE NOT INCLUDED IN CS54 DATA
9
<PAGE>
NS REVENUE SHIPMENTS WITH NORTHEAST ORIGINS
AND TERMINATIONS
(GRAPHICS CHART OMITTED)
* CP HAULAGE LOADS WERE NOT INCLUDED IN CS54 DATA
10
<PAGE>
o USING 1988 AS THE BASE YEAR (BECAUSE CSX AND NS INTERM-
ODAL INITIATIVES BEGIN IN THAT YEAR), WE SEE THAT NS
HAS GROWN ITS VOLUME BY 94% VERSUS 43% FOR CONRAIL AND
NO GROWTH FOR CSX OVER THE EIGHT YEAR PERIOD. NS MORE
THAN DOUBLES THE GROWTH OF THE INDUSTRY AVERAGE WHILE
CONRAIL REACHES THE MEAN AND CSX FALLS BEHIND. THESE
ARE ACCURATE MEASURES OF HOW THE RAILROADS MANAGE THEIR
FRANCHISES.
o IN FACT, NS WHILE CARRYING ONLY 13% OF THE VOLUME OF
THE INDUSTRY ACCOUNTS FOR 52% OF INDUSTRY GROWTH IN
1995 AND 1996.
o CONRAIL HAS ENTERED AND ABANDONED MARKETS RANDOMLY, AS IN
1994 WHEN THEY DROPPED SHORT HAUL MARKETS IN THE MIDDLE OF
THE FALL BUSY SEASON. THE STRONG GROWTH THAT THEY SHOW IN
1996 IS THE RETURN OF THIS BUSINESS AND THEIR 1996 VOLUME
WILL BARELY MEET 1994 LEVELS.
o CSX HAS DONE MUCH THE SAME, INCREASING TRANSIT TIMES
OUT OF ATLANTA, THEIR BIGGEST MARKET, IN THE MIDDLE OF
THE FALL BUSY SEASON IN 1996.
11
<PAGE>
CAPITAL EXPENDITURES ON INTERMODAL RELATED
PROJECTS
(COSTS IN MILLIONS)
CONV I/M CLEARANCE TCS TCS
TERMINALS PROJECTS TERMINALS EQUIPMENT TOTAL
88 $4.48 $0.25 $2.36 $33.96 $41.05
89 $4.99 $0.60 $0.97 $0.26 $6.82
90 $1.50 $2.93 $0.00 $0.00 $4.43
91 $3.50 $2.14 $8.11 $19.91 $33.67
92 $10.10 $3.65 N/A N/A $13.75
93 $9.70 $1.62 $1.77 $23.45 $36.55
94 $25.72 $0.00 $0.00 $0.00 $25.72
95 $26.23 $4.00 $0.00 N/A $30.29
96 $18.04 $0.00 $0.00 N/A $18.04
TOTAL $104.06 $15.18 $13.22 $77.59 $210.25
12
<PAGE>
o AT NORFOLK, NS HAS HAD A SIGNIFICANT ROLE IN THE GROWTH
OF INTERNATIONAL TRAFFIC. INTERNATIONAL INTERMODAL
BUSINESS AT NORFOLK HAS GROWN AT TWICE THE AVERAGE RATE
OF INTERNATIONAL BUSINESS IN THE U.S. DURING THAT
PERIOD OF TIME.
o THIS VOLUME, ALONG WITH INTERNATIONAL INTERMODAL BUSI-
NESS MOVED AT CHARLESTON, SAVANNAH, JACKSONVILLE AND
MIAMI, MAKES NS THE LEADER IN ATLANTIC PORT INTERMODAL
TRAFFIC IN THE U.S.
13
<PAGE>
o WHILE NS DOES NOT HAVE TRACKS INTO THE NORTHEAST, WE DO
HAVE SEVERAL INITIATIVES THAT HAVE GIVEN US A SIGNIFI-
CANT NORTHEAST PRESENCE.
o UNFORTUNATELY, THE ERRATIC NATURE OF THE GROWTH PROVES OUR
POINT ABOUT COMPETITION. WHILE THERE REMAINS SIGNIFICANT
DEMAND FOR ANOTHER RAIL INTERMODAL CARRIER IN THE NORTHEAST,
SERVICE VIA TRACKAGE OR HAULAGE RIGHTS IS TOO ERRATIC TO
SUSTAIN.
o CP DEVELOPED A SIGNIFICANT BUSINESS INTO THE NORTHEAST
ONLY TO ABANDON THE MARKET BECAUSE OF INCONSISTENT
HAULAGE SERVICE.
14
<PAGE>
NS SPECIFIC INTERMODAL PROPOSAL FOR THE
NORTHEAST
o COMPETE FOR THE "LOCAL" DOMESTIC MARKET VIA ROADRAIL-
ERS.
o USE THE NORTHEAST CORRIDOR FOR NORTH/SOUTH AND BOSTON
ACCESS. ROADRAILER PROFILE FITS THIS CORRIDOR WELL.
o AGGRESSIVELY USE THE HAGERSTOWN GATEWAY, THE ONLY
NORTH/SOUTH DOUBLESTACK ROUTE BETWEEN THE ATLANTIC
OCEAN AND CINCINNATI FOR CONTAINER TRAFFIC.
o DEVELOP HUB CENTERS AT MAJOR NORTHEAST PORTS WITH
INLAND ROUTINGS TO ALL POINTS EAST OF THE MINNEAPOLIS,
KANSAS CITY, DALLAS, HOUSTON, LINE IN LESS THAN 72
HOURS.
15
FOR IMMEDIATE RELEASE
November 5, 1996
News Media Contact: Robert C. Fort
(757) 629-2714
NORFOLK SOUTHERN CONFIRMS OFFER FOR CONRAIL
NORFOLK, VA -- Norfolk Southern late today reaffirmed its all-cash $100 per
share offer for Conrail. As originally announced, the offer will close to a
voting trust, providing immediate cash payment to all shareholders.
The company also said that it had terminated the discussions begun by
CSX.
"Let there be no misunderstanding and no disinformation: We are
committed to taking every necessary step to provide Conrail shareholders with
the choice of our better offer," said David R. Goode, Chairman and Chief
Executive Officer of Norfolk Southern Corporation.
"It is clear to me that CSX and Conrail intend to continue their joint
efforts to railroad Conrail shareholders into accepting a proposal
significantly inferior to Norfolk Southern's $100 per share all cash tender
offer. Until CSX acknowledges that all Conrail shareholders are entitled to the
$100 cash that they can only receive from Norfolk Southern's offer, any
discussions between us are a waste of time."
The company made its statement in advance of the expected announcement
by Conrail's Board of Directors following a meeting held Tuesday.
###
World Wide Web Site - http://www.nscorp.com
TO CONRAIL SHAREHOLDERS:
ACT NOW TO PROTECT
YOUR INVESTMENT
NORFOLK SOUTHERN URGES YOU TO VOTE NO ON THE GOLD PROXY CARD
Norfolk Southern Corporation has offered $100 per share in cash for each of
your Conrail shares. This exceeds by more than $15 the blended value per share
offered under the ill advised merger agreement which Conrail has signed with
CSX Corporation (based upon the closing sale price of CSX stock on
November 1, 1996).
But you may not have the chance to accept this more valuable offer unless you
vote NO on the GOLD proxy card. The Conrail Board wants you to "opt out" of the
"Fair Value Statute" of the Pennsylvania Business Corporation Law. Essentially,
this law protects the rights of shareholders to receive fair value for their
shares in the company. You must vote NO to preserve your rights!
DON'T BE FORCED INTO
ACCEPTING AN INFERIOR OFFER!
Look at the lockup devices and sweetheart
deals that Conrail has given to CSX:
CONRAIL HAD AGREED TO "SWALLOW" ITS "POI-
SON PILL" SO THAT NO ONE OTHER THAN CSX
COULD ACQUIRE CONRAIL UNTIL 2005. FOLLOW-
ING NORFOLK SOUTHERN'S LEGAL ACTION, THE
CONRAIL BOARD BACKED DOWN.
- ------------------------------------------------------------
CONRAIL HAS AGREED TO PAY APPROXI-
MATELY $420 MILLION IN "BREAK-UP" FEES
AND OPTION BENEFITS (BASED ON OUR CURRENT
OFFER) TO CSX IF THE MERGER AGREEMENT IS
TERMINATED. THESE GIVEAWAYS AMOUNT TO
MORE THAN $4.60 PER SHARE OF YOUR STOCK.
- ------------------------------------------------------------
THE CONRAIL BOARD HAS AGREED NOT
TO TERMINATE THE CSX MERGER AGREEMENT
FOR SIX MONTHS, EVEN IF ITS FIDUCIARY DUTIES
TO YOU REQUIRE OTHERWISE.
- ------------------------------------------------------------
Clearly, it's up to you to protect your legal
rights. Don't opt out of the chance to get
"fair value" for your shares.
- ------------------------------------------------------------
ASK YOURSELF,
WHY IS CONRAIL:
Putting up roadblock after roadblock in an
attempt to prevent you from receiving the
benefit of our higher offer?
Asking you to "opt out" of the "Fair Value
Statute," one of the few protections you
have left?
Not negotiating in your interests for a
higher price?
Ignoring our superior $100 per share offer?
- ------------------------------------------------------------
VOTE NO ON THE "OPT-OUT" AND ADJOURNMENT PROPOSALS BY SIGNING, DATING AND
RETURNING THE GOLD PROXY CARD TODAY.
- -------------------------------------------------------------------------------
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.
NS LOGO
FOR IMMEDIATE RELEASE
November 6, 1996
News Media Contact: Robert C. Fort
(757) 629-2714
NORFOLK SOUTHERN CALLS NEW CSX OFFER INFERIOR
NORFOLK, VA -- Norfolk Southern today issued the following statement in
response to Conrail's decision to approve an amended merger offer from CSX:
"The action by CSX and Conrail comes as no surprise. The fact remains
that CSX has not provided an overall price comparable to Norfolk Southern's
$100 per-share cash offer. Furthermore, CSX's coercive two-tiered front-end
loaded tender offer is all the more abusive for having been aided and abetted
by Conrail's board."
"Norfolk Southern will review all of its options and intends to take
all steps necessary to ensure that Conrail shareholders are offered a fair
deal."
###
World Wide Web Site - http://www.nscorp.com
<PAGE>
SUPPLEMENT TO THE OFFER TO PURCHASE FOR CASH DATED OCTOBER 24, 1996
ATLANTIC ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
NORFOLK SOUTHERN CORPORATION
HAS INCREASED THE PRICE OF ITS OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES
OF
COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
CONRAIL INC.
TO
$110 NET PER SHARE
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, NOVEMBER 22, 1996, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, PRIOR TO THE EXPIRATION
OF THE OFFER, (1) THE RECEIPT BY ATLANTIC ACQUISITION CORPORATION
("PURCHASER"), A WHOLLY OWNED SUBSIDIARY OF NORFOLK SOUTHERN CORPORATION
("PARENT"), OF AN INFORMAL WRITTEN OPINION IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO PURCHASER FROM THE STAFF OF THE SURFACE TRANSPORTATION BOARD
(THE "STB"), WITHOUT THE IMPOSITION OF ANY CONDITIONS UNACCEPTABLE TO
PURCHASER, THAT THE USE OF A VOTING TRUST IN CONNECTION WITH THE OFFER AND
THE PROPOSED MERGER IS CONSISTENT WITH THE POLICIES OF THE STB AGAINST
UNAUTHORIZED ACQUISITIONS OF CONTROL OF A REGULATED CARRIER, (2) THE RECEIPT
BY PURCHASER OF AN INFORMAL STATEMENT FROM THE PREMERGER NOTIFICATION OFFICE
OF THE FEDERAL TRADE COMMISSION THAT THE TRANSACTIONS CONTEMPLATED BY THE
OFFER AND THE PROPOSED MERGER ARE NOT SUBJECT TO, OR ARE EXEMPT FROM, THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR
ACT"), OR, IN THE ABSENCE OF THE RECEIPT OF SUCH INFORMAL STATEMENT, ANY
APPLICABLE WAITING PERIOD UNDER THE HSR ACT HAVING EXPIRED OR BEEN
TERMINATED, (3) PARENT AND PURCHASER HAVING OBTAINED, ON TERMS REASONABLY
ACCEPTABLE TO PARENT, SUFFICIENT FINANCING TO ENABLE CONSUMMATION OF THE
OFFER AND THE PROPOSED MERGER, (4) THERE BEING VALIDLY TENDERED AND NOT
PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF COMMON
SHARES AND ESOP PREFERRED SHARES WHICH TOGETHER CONSTITUTE AT LEAST A
MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS, (5) PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT SUBCHAPTER F OF CHAPTER 25 OF
THE PENNSYLVANIA BUSINESS CORPORATION LAW HAS BEEN
(CONTINUED)
The Dealer Managers for the Offer are:
J.P. MORGAN & CO. MERRILL LYNCH & CO.
November 8, 1996
<PAGE>
COMPLIED WITH OR IS INVALID OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE
PROPOSED MERGER, (6) THE COMMON STOCK PURCHASE RIGHTS HAVING BEEN REDEEMED BY
THE BOARD OF DIRECTORS OF CONRAIL INC. OR PURCHASER BEING SATISFIED, IN ITS
SOLE DISCRETION, THAT SUCH COMMON STOCK PURCHASE RIGHTS ARE INVALID OR
OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER, AND (7)
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PREVIOUSLY
ANNOUNCED AGREEMENT AND PLAN OF MERGER, AS AMENDED, BETWEEN THE COMPANY AND
CSX CORPORATION HAS BEEN TERMINATED IN ACCORDANCE WITH ITS TERMS OR
OTHERWISE. SEE THE INTRODUCTION TO THE OFFER TO PURCHASE AND TO THE
SUPPLEMENT.
IMPORTANT
Purchaser is currently reviewing its options with respect to the Offer and
may consider, among other things, changes to the material terms of the Offer.
In addition, Parent and Purchaser intend to continue to seek to negotiate
with the Company with respect to the acquisition of the Company by Parent or
Purchaser. Purchaser reserves the right to amend the Offer (including
amending the number of shares to be purchased, the purchase price and the
proposed merger consideration) upon entering into a merger agreement with the
Company or to negotiate a merger agreement with the Company not involving a
tender offer pursuant to which Purchaser would terminate the Offer and the
Common Shares (as defined herein) and ESOP Preferred Shares (as defined
herein, and together with the Common Shares, the "Shares") would, upon
consummation of such merger, be converted into cash, common stock of Parent
and/or other securities in such amounts as are negotiated by Parent and the
Company.
Any shareholder desiring to tender all or any portion of such
shareholder's Shares should either (i) complete and sign one of the Letters
of Transmittal (or a facsimile thereof) in accordance with the instructions
in the Letters of Transmittal, have such shareholder's signature thereon
guaranteed if required by Instruction 1 to the Letters of Transmittal, mail
or deliver one of the Letters of Transmittal (or such facsimile thereof) and
any other required documents to the Depositary and either deliver the
certificates for such Shares and, if separate, the certificates representing
the associated Rights (as defined herein) to the Depositary along with one of
the Letters of Transmittal (or a facsimile thereof) or deliver such Shares
(and Rights, if applicable) pursuant to the procedure for book-entry transfer
set forth in Section 3 of the Offer to Purchase (as defined herein) prior to
the expiration of the Offer or (ii) request such shareholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such shareholder. A shareholder having Shares (and, if
applicable, Rights) registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such broker, dealer,
commercial bank, trust company or other nominee if such shareholder desires
to tender such Shares (and, if applicable, Rights). Unless and until
Purchaser declares that the Rights Condition (as defined herein) is
satisfied, shareholders will be required to tender one Right for each Share
tendered in order to effect a valid tender of such Share. The tender of
Rights is also required for the valid tender of ESOP Preferred Shares.
Participants in the Company's Matched Savings Plan (the "ESOP") desiring
that Fidelity Management Trust Company, as trustee under the ESOP (the "ESOP
Trustee"), tender the ESOP Preferred Shares allocated to their accounts,
which will be converted into Common Shares upon consummation of the Offer,
should so instruct the ESOP Trustee by completing the form that will be
provided to participants for that purpose. ESOP participants cannot tender
shares allocated to their ESOP accounts by executing one of the Letters of
Transmittal.
Any shareholder who desires to tender Shares (and, if applicable, Rights)
and whose certificates for such Shares (and, if applicable, Rights) are not
immediately available, or who cannot comply with the procedures for
book-entry transfer described in this Offer to Purchase on a timely basis,
may tender such Shares (and, if applicable, Rights) by following the
procedures for guaranteed delivery set forth in Section 3 of the Offer to
Purchase.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone
numbers set forth on the back cover of this Supplement. Additional copies of
the Offer to Purchase, this Supplement, the revised Letter of Transmittal or
other tender offer materials may be obtained from the Information Agent.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
INTRODUCTION .............................................................................. 1
1.Terms of the Offer; Expiration Date ..................................................... 2
2.Procedures for Tendering Shares ......................................................... 3
3.Price Range of Shares; Dividends ........................................................ 3
4.Source and Amount of Funds .............................................................. 3
5.Background of the Offer; Contacts with the Company ...................................... 4
6.Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations ..... 6
7.Conditions of the Offer ................................................................. 6
8.Certain Legal Matters; Regulatory Approvals; Certain Litigation ......................... 6
9.Fees and Expenses ....................................................................... 8
10.Miscellaneous .......................................................................... 8
</TABLE>
<PAGE>
TO THE HOLDERS OF COMMON STOCK AND
SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK OF CONRAIL INC.:
INTRODUCTION
The following information amends and supplements the Offer to Purchase,
dated October 24, 1996 (the "Offer to Purchase"), of Atlantic Acquisition
Corporation ("Purchaser"), a Pennsylvania corporation and a wholly owned
subsidiary of Norfolk Southern Corporation, a Virginia corporation
("Parent"), pursuant to which Purchaser is offering to purchase all
outstanding shares of (i) common stock, par value $1.00 per share (the
"Common Shares"), and (ii) Series A ESOP Convertible Junior Preferred Stock,
without par value (the "ESOP Preferred Shares" and, together with the Common
Shares, the "Shares"), of Conrail Inc., a Pennsylvania corporation (the
"Company"), including, in each case, the associated Common Stock Purchase
Rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
July 19, 1989, as amended, between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agreement"). Purchaser has
increased the price to be paid in the Offer (as defined below) to $110 per
Share, net to the seller in cash, without interest thereon (the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer
to Purchase, this Supplement, and in the revised Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer").
Unless the context otherwise requires, all references to Common Shares, ESOP
Preferred Shares or Shares shall include the associated Rights, and all
references to the Rights shall include the benefits that may enure to holders
of the Rights pursuant to the Rights Agreement, including the right to
receive any payment due upon redemption of the Rights.
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. Parent is seeking to negotiate with the Company a
definitive merger agreement pursuant to which the Company would, as soon as
practicable following consummation of the Offer, consummate a merger or
similar business combination with Purchaser or another direct or indirect
subsidiary of Parent (the "Proposed Merger"). In the Proposed Merger, each
Common Share and ESOP Preferred Share then outstanding (other than Shares
held by the Company or any subsidiary of the Company and Shares owned by
Parent, Purchaser or any direct or indirect subsidiary of Parent) would be
converted into the right to receive an amount in cash equal to the price per
Common Share and ESOP Preferred Share paid pursuant to the Offer. If
Purchaser acquires 80% or more of the outstanding Shares in the Offer,
Purchaser intends to effect the Proposed Merger as a "short-form" merger
under the Pennsylvania Business Corporation Law (the "PBCL"), without a vote
of the Company's shareholders or the Board of Directors of the Company (the
"Company Board"). See Section 11 and Section 12 of the Offer to Purchase and
Sections 5 and 6 of this Supplement.
This Supplement should be read in conjunction with the Offer to Purchase.
Except as set forth in this Supplement and the revised Letter of Transmittal,
the terms and conditions previously set forth in the Offer to Purchase and
the Letter of Transmittal mailed with the Offer to Purchase, remain
applicable in all respects to the Offer. Terms used but not defined herein
have the meanings set forth in the Offer to Purchase.
According to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") filed on November 6, 1996 with the SEC,
the Board of Directors of the Company (the "Company Board") recommended that
shareholders of the Company reject Purchaser's initial offer of $100 per
Share and not tender any of their Shares pursuant thereto. In addition, on
November 5, 1996, the Company Board approved an amendment to the CSX Merger
Agreement (the "Amendment") pursuant to which CSX increased the price per
Share payable under the CSX Offer to $110 and agreed that the per Share cash
consideration to be paid in the Proposed CSX Merger, if any, would be $110,
while leaving unchanged the number of Shares sought to be purchased or
otherwise acquired for cash pursuant to the CSX Offer and the Proposed CSX
Merger. The provision of the CSX Merger Agreement providing that 60% of the
outstanding Shares will be exchanged for CSX Common Stock at a rate of
1.85619 Shares of CSX Common Stock for each Share remained unchanged. Based
on the closing sale price of the CSX Common Stock on the New York Stock
Exchange (the "NYSE") on November 7, 1996, 1.85619 shares of CSX Common Stock
were worth approximately $82.14.
<PAGE>
By reason of the increase in the Offer Price, the increased punitive
effect of the CSX Lockup Option on Parent will be approximately $160 million.
On such basis, in the event that the CSX Termination Fee is paid and the CSX
Lockup Option Agreement is exercised by CSX, the aggregate additional cost to
an acquiror of the Company (including Parent) by reason of the CSX Lockup
Option Agreement and the CSX Termination Fee will amount to approximately
$580 million (assuming an acquisition of the Company at $110 per Share). In
the Pennsylvania Litigation, Parent and Purchaser are contesting the validity
of both the CSX Lockup Option Agreement and the CSX Termination Fee. See
Section 15 of the Offer to Purchase and Section 8 of this Supplement.
Pursuant to the Amendment, the Company and CSX also agreed, among other
things, to a provision (the "No Discussions Provision") providing that,
subject to certain exceptions, neither the Company nor CSX will, nor will
they permit any of their subsidiaries to, nor will they authorize or permit
any of their officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by
them or any of their subsidiaries to, directly or indirectly through another
person, participate in any conversations, discussions or negotiations, or
enter into any agreement, arrangement or understanding, with any other
company engaged in the operation of railroads (including Parent) with respect
to the acquisition by any such other company (including Parent) of any
securities or assets of the Company and its subsidiaries or CSX and its
subsidiaries, or any trackage rights or other concessions relating to the
assets or operations of the Company and its subsidiaries or CSX and its
subsidiaries, other than with respect to certain sales, leases, licenses,
mortgages or other disposals of assets or properties.
In the Amendment, the Company also agreed to extend the term of the No
Negotiation Provision from 180 days to 270 days, with the intended effect of
preventing the Company from considering or otherwise facilitating until July
1997 any competing proposal to acquire the Company, such as the Offer. See
Section 5 of this Supplement.
On November 6, 1996, the Company announced that the special meeting of the
Company's shareholders (the "Pennsylvania Special Meeting") to seek approval
of an amendment (the "Articles Amendment") to the Company's Articles of
Incorporation (the "Company Articles") to "opt out" of Subchapter E of
Chapter 25 of the PBCL had been cancelled, and a new record date of December
5, 1996 had been set for a new Pennsylvania Special Meeting expected to be
held in mid-December. Parent is currently soliciting proxies against the
adoption of the Articles Amendment and intends to continue to solicit proxies
against the Articles Amendment at any meeting of the Company's shareholders
held to consider the Articles Amendment.
THIS SUPPLEMENT DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY
MEETING OF THE COMPANY'S SHAREHOLDERS. ANY SUCH SOLICITATION WHICH PARENT OR
PURCHASER MIGHT MAKE WOULD BE MADE ONLY PURSUANT TO SEPARATE PROXY MATERIALS
COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT").
THE OFFER TO PURCHASE, THIS SUPPLEMENT AND THE REVISED LETTER OF
TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY
BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE. The discussion set forth in
Section 1 of the Offer to Purchase is hereby amended and supplemented as
follows:
The price to be paid for Shares purchased pursuant to the Offer has been
increased from $100 to $110 per Share, net to the seller in cash without
interest thereon, upon the terms and subject to the conditions of the Offer.
The term "Expiration Date" has been amended to mean 12:00 Midnight, New
York City time, on Friday, November 22, 1996, unless and until Purchaser, in
its sole discretion, shall have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall refer to the
latest time and date at which the Offer, as so extended by Purchaser, shall
expire.
2
<PAGE>
2. PROCEDURES FOR TENDERING SHARES. The discussion set forth in Section 3
of the Offer to Purchase is hereby amended and supplemented as follows:
The revised Letter of Transmittal and the revised Notice of Guaranteed
Delivery distributed with this Supplement may be used to tender Shares.
Tendering shareholders may also continue to use the Letter of Transmittal and
the Notice of Guaranteed Delivery previously distributed with the Offer to
Purchase to tender Shares.
SHAREHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED SHARES PURSUANT TO THE
OFFER AND NOT PROPERLY WITHDRAWN SUCH SHARES HAVE VALIDLY TENDERED SUCH
SHARES FOR PURPOSES OF THE OFFER, AS AMENDED, AND NEED NOT TAKE ANY FURTHER
ACTION IN ORDER TO RECEIVE THE INCREASED PRICE OF $110 NET PER SHARE PURSUANT
TO THE OFFER.
3. PRICE RANGE OF SHARES; DIVIDENDS. The discussion set forth in Section 6
of the Offer to Purchase is hereby amended and supplemented as follows:
According to public sources, the high and low closing sale prices per
Common Share on the NYSE for the Fourth Quarter of 1996 (through November 7,
1996) were $981/4 and $681/2, respectively. On November 7, 1996, the last
full trading day prior to Parent's announcement that it was amending the
terms of the Offer upon the terms set forth in this Supplement, the reported
closing sale price per Common Share on the NYSE Composite Tape was $93.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE COMMON
SHARES.
4. SOURCE AND AMOUNT OF FUNDS. The discussion set forth in Section 10 of
the Offer to Purchase is hereby amended and supplemented as follows:
Purchaser estimates that the total amount of funds now required to acquire
Shares pursuant to the Offer and the Proposed Merger (in each case as amended
as described in this Supplement), to pay all related costs and expenses, to
refinance Parent's and the Company's existing debt and for working capital
purposes will be approximately $12.5 billion.
As of November 7, 1996, signed commitments (including the commitments of
the Arrangers and their affiliates as Lenders) in excess of $15 billion had
been received by the Arrangers from banks and other financial institutions
(the "Potential Syndicate Members") in respect of the $11.5 billion financing
for Parent's $100 per Share Offer described in the Summary of Terms and
Conditions previously filed as an exhibit to the Schedule 14D-1. The
respective commitments of the Potential Syndicate Members will expire on
March 1, 1997 if a satisfactory definitive credit agreement is not entered
into on or prior to such date.
In order to finance the Offer and the Proposed Merger at the $110 per
Share Offer Price, Parent has begun the process of seeking confirmations from
the Potential Syndicate Members that their respective commitments may apply
to a $12.5 billion (as opposed to an $11.5 billion) financing for Parent in
connection with the $110 per Share Offer Price. Parent has already received
oral confirmations from the Arrangers (and their affiliates as Lenders) in
respect of their original commitments of $2 billion each, and Parent and the
Arrangers are highly confident that such confirmations will also be received
from the other Potential Syndicate Members in respect of their original
commitments in the near future. The terms and conditions on which the
Potential Syndicate Members would be willing to make such confirmations, as
well as the structure and pricing they may require for a larger financing,
may vary from those set forth in the Financing Commitment, the related
Summary of Terms and Conditions and Section 10 of the Offer to Purchase.
It is anticipated that the indebtedness incurred by Parent and Purchaser
under the Credit Facility will be repaid from funds generated internally by
Parent and its subsidiaries (including, after the Proposed Merger, if
consummated, funds generated by the Company and its subsidiaries), through
additional borrowings, or through a combination of such sources. No final
decisions have been made concerning the method Parent will employ to repay
such indebtedness. Such decisions when made will be based on Parent's review
from time to time of the advisability of particular actions, as well as on
prevailing interest rates and financial and other economic conditions.
3
<PAGE>
5. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. The discussion set
forth in Section 11 of the Offer to Purchase is hereby amended and
supplemented as follows:
During the weekend of November 2 and November 3, 1996, representatives of
Parent and CSX met to discuss matters related to their respective offers to
acquire the Company. Such discussions were commenced at the suggestion of
CSX, were represented by CSX to have been held with the knowledge of the
Company and were pursued by Parent consistent with Parent's previously
announced position of favoring a balanced competitive structure for Eastern
railroad service. These discussions included an exchange of term sheets,
first from CSX to Parent and then from Parent to CSX, Parent announced on
November 4, 1996 that it had terminated such discussions and reaffirmed its
$100 per Share offer for all Shares.
On November 4, 1996, Parent filed its definitive proxy statement with the
SEC relating to its solicitation of proxies against the adoption of the
Articles Amendment at the Pennsylvania Special Meeting and provided copies of
the proxy statement to the Company for dissemination to the Company's
shareholders. Also on November 4, 1996, the Company provided a shareholder
list and a substantial portion of the other information requested by Parent
and Purchaser pursuant to Pennsylvania law.
On November 7, 1996, the Company issued a news release in the form of a
letter purportedly from the "Independent Directors" of the Company and
ostensibly addressed to the Parent Board. The letter reiterated such
directors' publicized commitment to the Proposed CSX Transaction and to Mr.
LeVan. Also on November 7, 1996, the Parent Board met to review events
surrounding the Offer and the revised CSX Offer and authorized the increase
in the Offer Price to $110 per Share. On November 8, 1996, Parent publicly
announced the increased Offer Price.
THE AMENDMENT
On November 5, 1996, the Company and CSX entered into the Amendment. The
Amendment effects certain changes to the CSX Merger Agreement. Other than as
amended by the Amendment, the provisions of the CSX Merger Agreement remain
in full force and effect.
The CSX Offer. Pursuant to the Amendment, CSX has amended the CSX Offer
for 19.9% of the outstanding Shares to increase the price to be paid to $110
per Share, net to the seller in cash. The obligations of CSX and the Company
set forth in the CSX Merger Agreement with respect to the CSX Offer apply
with respect to the CSX Offer as so amended.
The Amendment provides that, at any time prior to eleven business days
before the then-scheduled expiration date of the CSX Offer if the
Pennsylvania Control Transaction Law is inapplicable to the Company by such
time, CSX will, at the written request of the Company, amend the CSX Offer to
increase the number of Shares sought to 40% of the outstanding Shares on a
fully diluted basis as of the date of the CSX Merger Agreement (excluding
Shares that would be outstanding upon exercise of the CSX Lockup Option). In
addition, at any time following seven business days after consummation of the
CSX Offer, if CSX and its subsidiaries do not already own at such time 40% or
more of the Shares outstanding as of the date of the CSX Merger Agreement
(excluding Shares that would be outstanding upon exercise of the CSX Lockup
Option), CSX may, and at the written request of the Company is required to,
commence a second tender offer (the "CSX Second Offer") to purchase up to
that number of Shares which, when added to the aggregate number of Shares
then beneficially owned by CSX (other than pursuant to the CSX Lockup
Agreement) equals 40% of such outstanding Shares, at a price of not less than
$110 and on other terms no less favorable to shareholders of the Company than
the CSX Offer, provided that CSX will not be required to consummate the
Second CSX Offer until after the Pennsylvania Control Transaction Law is
inapplicable to the Company. The Company has agreed that it will not make any
such written request at any time that the CSX Offer is outstanding and the
expiration date of such CSX Offer is within 10 business days thereof.
The Proposed CSX Merger. The Amendment provides that the per Share cash
consideration to be paid in the Proposed CSX Merger, if any, will be $110.
The provision of the CSX Merger Agreement
4
<PAGE>
providing that 60% of the outstanding Shares will be exchanged for CSX Common
Stock at a rate of 1.85619 Shares of CSX Common Stock for each Share remains
unchanged. Based on the closing sale price of CSX Common Stock on the NYSE on
November 7, 1996, 1.85619 shares of CSX Common Stock were worth approximately
$82.14.
Shareholders' Meetings. The Amendment provides that the Company will not
convene, adjourn or postpone the Pennsylvania Special Meeting without CSX's
prior consent, and such consent will not be unreasonably withheld. In the
event that the matters to be considered at the meetings of the shareholders
of the Company and CSX to be held to consider the Proposed CSX Merger are not
approved, from time to time the Company or CSX, as applicable, may, and will
at the request of CSX or the Company, as applicable, duly call one or more
meeting(s) of shareholders for such purposes. Subject to the foregoing, the
Amendment further provides that the Company shall convene any such
shareholder meetings as soon as practicable after receipt of any request to
do so by CSX (and, in the case of the Pennsylvania Special Meeting, as soon
as practicable after December 5, 1996).
The Amendment also provides that, following the approval of the Articles
Amendment, the Company will take all necessary or advisable action to cause
the Articles Amendment to become effective.
No Discussions. In the Amendment, the Company and CSX agreed to the No
Discussion Provision which provides that during the term of the CSX Merger
Agreement, neither the Company nor CSX, will, nor will they permit any of
their subsidiaries to, nor will they authorize or permit any of their
officers, directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by them or any of their
subsidiaries to, directly or indirectly through another person, participate
in any conversations, discussions or negotiations, or enter into any
agreement, arrangement or understanding, with any other company engaged in
the operation of railroads (including Parent) with respect to the acquisition
by any such other company (including Parent) of any securities or assets of
the Company and its subsidiaries or CSX and its subsidiaries, or any trackage
rights or other concessions relating to the assets or operations of the
Company and its subsidiaries or CSX and its subsidiaries, other than with
respect to certain sales, leases, licenses, mortgages or other disposals of
assets or properties. Notwithstanding the foregoing, however, CSX and the
Company will be permitted to engage in conversations, discussions and
negotiations with other companies engaged in the operation of railroads
(including Parent) to the extent reasonably necessary or reasonably advisable
in connection with obtaining regulatory approval of the transactions
contemplated by the CSX Merger Agreement in accordance with the terms set
forth in the CSX Merger Agreement, and in each case so long as (i) a
representative of each party is present at any such conversation, discussion
or negotiation, (ii) the general subject matter of any such conversation,
discussion or negotiation has been agreed to in advance by the Company and
Parent and (iii) the Company, CSX and such other company have previously
agreed to appropriate confidentiality arrangements, on terms reasonably
acceptable to the Company and CSX (which terms shall in any event permit
disclosure to the extent required by law), relating to the existence and
subject matter of any such conversation, discussion or negotiation.
Provisions of the Amendment described in this paragraph will terminate and be
of no further force and effect in certain circumstances if the Board of
Directors of the Company or CSX, as the case may be, determines in the good
faith exercise of its fiduciary duties that it is necessary to so terminate
these provisions.
No Negotations. The Amendment extends to 270 days the original 180 day
limitation on negotiations in the No Negotiation Provision described in
Section 11 of the Offer to Purchase.
Termination. The Amendment provides that the right to terminate the CSX
Merger Agreement in connection with certain shareholder meetings will be
exercisable only to the extent that such shareholder meetings are held after
the earlier of (i) 270 days after the date of the CSX Merger Agreement or
(ii) the purchase of an aggregate of 40% of the fully diluted shares under
the CSX Offer or, if applicable, the CSX Second Offer.
The foregoing is a summary of certain provisions of the Amendment. This
summary is qualified in its entirety by reference to the Amendment, which has
been filed as an exhibit to Amendment No. 4 to CSX's Schedule 14D-1, dated
November 6, 1996, and is incorporated herein by reference.
5
<PAGE>
6. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; CERTAIN
CONSIDERATIONS. The discussion set forth in Section 12 of the Offer to
Purchase is hereby amended and supplemented as follows:
Following a motion by the plaintiffs in the Pennsylvania Litigation
seeking to compel such action, on November 4, 1996, the Company Board adopted
a resolution extending the Distribution Date with respect to the Rights (as
so extended, the "Distribution Date") so that it will occur only on the tenth
business day after the acquisition by any Person (such as Purchaser pursuant
to the Offer), together with all Affiliates and Associates of such Person (as
such terms are defined in the Rights Agreement), of beneficial ownership of
at least 10% of the outstanding Shares. Absent such resolution, the
Distribution Date with respect to the Rights would have occurred on November
7, 1996. See Section 8 of this Supplement.
7. CONDITIONS OF THE OFFER. The Offer remains subject to the terms and
conditions contained in the Offer to Purchase. See the Introduction and
Sections 1 and 14 of the Offer to Purchase and the Introduction to this
Supplement.
8. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; CERTAIN LITIGATION. The
discussion set forth in Section 15 of the Offer to Purchase is hereby amended
and supplemented as follows:
STB Matters; The Voting Trust. As previously disclosed, Parent has
requested the staff of the STB to issue an informal, nonbinding opinion that
the use of the Voting Trust is consistent with the policies of the STB
against unauthorized acquisitions of control of a regulated carrier, and the
staff of the STB has done so in a letter dated November 1, 1996. On November
6, 1996, Parent requested that the STB staff clarify certain aspects of its
informal nonbinding opinion of November 1, 1996. Also on November 6, 1996,
the Company submitted a letter to the STB staff objecting to the staff's
November 1, 1996 letter of informal nonbinding approval of the Voting Trust.
On November 7, 1996, Parent submitted to the STB staff its response to the
Company's letter of November 6, 1996 in which Parent vigorously took issue
with the objections raised by the Company and noted that the CSX Merger
Agreement already gives CSX far more control of the Company then Parent could
ever achieve under the terms of the proposed Voting Trust.
The Voting Trust Agreement submitted to the staff of the STB for approval
provides that the Voting Trustee will have sole power to vote the Shares in
the Voting Trust, will vote those Shares in favor of the Proposed Merger, and
in favor of any proposal or action necessary or desirable to effect, or
consistent with the effectuation of, the Proposed Merger, and against any
other acquisition transaction, and will vote the Shares in favor of any
permitted disposition of the Shares. The Voting Trust Agreement contains
other terms and conditions designed to ensure that neither Purchaser nor
Parent will control the Company during the pendency of the STB proceedings.
In addition, the Voting Trust Agreement provides that Purchaser or its
successor in interest will be entitled to receive any cash dividends paid by
the Company.
It is possible that the Department of Justice or railroad competitors of
Parent and the Company, or others, may argue that Purchaser should not be
permitted to use the voting trust mechanism to acquire Shares prior to the
final STB approval of the acquisition of control of the Company. Purchaser
believes it is unlikely that such arguments will prevail, but there can be no
assurance in this regard, nor can there be an assurance that if such
arguments are made, the STB staff will not rescind their opinion regarding
the Voting Trust Agreement.
STB Matters; Acquisition of Control. On November 6, 1996, Parent and
Purchaser filed with the STB a Notice of Intent to File Railroad Control
Application. On or before May 1, 1997 (but not before February 6, 1997),
Parent and various of its affiliates plan to file an application seeking
approval of the STB for the acquisition of control over the Company and its
affiliates by Parent and its affiliates.
Certain Litigation. On October 28, 1996, defendants in the litigation (the
"Pennsylvania Litigation") brought by Parent, Purchaser and a company
shareholder (collectively, the "Plaintiffs") against the Company, its
directors and CSX (collectively, the "Defendants") in the United States
District Court for the Eastern District of Pennsylvania (the "District
Court") filed a motion to dismiss the Pennsylvania Litigation alleging that
the Plaintiffs failed to state a claim in the Complaint for which relief
could be
6
<PAGE>
granted based upon, among other things, Defendants' allegations that
shareholders are not permitted to sue directors directly for breach of
fiduciary duty under Pennsylvania law; and that, as a result of Parent's
breach of its confidentiality agreement with the Company, the Plaintiffs'
claims for equitable relief are barred.
On October 30, 1996, the Plaintiffs amended the Complaint. In addition to
the allegations cited in the original Complaint, the amended Complaint
alleges, among other things, that the provisions in the CSX Merger Agreement
which prohibit the Company Board from redeeming the Rights, and amending or
otherwise taking further action with respect to the Rights Agreement, are
ultra vires under Pennsylvania law and constitute a breach of the Company
directors' fiduciary duties of loyalty and care; that the tender offer
materials disseminated by the Company and CSX misrepresent key terms of the
Rights Agreement necessary to an understanding of the effects of the Rights
Agreement; that the provisions of the CSX Merger Agreement which prohibits
the Company Board from withdrawing their recommendation that the Company's
shareholders accept and approve the Proposed CSX Transaction and from
terminating the CSX Merger Agreement for a period of 180 days from execution
of the CSX Merger Agreement is ultra vires under Pennsylvania law and
constitutes a breach of the Company directors' fiduciary duties of loyalty
and care; and that CSX has knowingly participated in the illegal conduct of
the Company and its directors.
In the amended Complaint, in addition to the relief sought pursuant to the
original Complaint, the Plaintiffs seek declaratory relief and an order
preliminarily and permanently enjoining the Defendants, their directors,
officers, partners, employees, agents, subsidiaries and affiliates, and all
other persons acting in concert with or on behalf of the Defendants directly
or indirectly from, among other things: (a) taking any action to enforce the
provisions in the CSX Merger Agreement regarding the Rights Agreement
described in the immediately preceding paragraph; (b) failing to take such
action as is necessary to postpone the occurrence of a Distribution Date
under the Rights Agreement; and (c) taking any action to enforce the
provisions of the CSX Merger Agreement regarding the 180-day lock-out
restrictions described in the immediately preceding paragraph.
On October 30, 1996, Parent and Purchaser filed with the District Court a
Complaint for Injunctive Relief against the Commissioners of the Pennsylvania
Securities Commission, the Attorney General of Pennsylvania and the Company,
together with a Consent Order agreed to by all parties, seeking to enjoin
enforcement of the Pennsylvania Takeover Disclosure Law as it would relate to
the Offer.
On October 31, 1996, the Plaintiffs filed a memorandum of law with the
District Court in opposition to the Defendants' motion to dismiss the
Pennsylvania Litigation. The memorandum of law sets forth, among other
things, Plaintiffs' arguments that (i) they have standing to sue the Company
Board for breach of fiduciary duty, (ii) they are adequate representatives of
the Company's shareholders for purposes of Federal Rule of Civil Procedure
23.1, (iii) pre-suit demand upon the Company Board should be excused since
such a demand would have been futile, (iv) the Company's proposed amendment
to the Company Articles to "opt-out" of the Pennsylvania Control Transaction
Law is invalid under Pennsylvania law, (v) Plaintiffs' federal claims state a
cause of action, and (vi) Defendants' unclean hands claim lacks merit.
On November 1, 1996, the Plaintiffs filed a motion, supporting brief and
proposed form of order with the District Court seeking a temporary
restraining order in the Pennsylvania Litigation (the "TRO Motion"). In the
TRO Motion, the Plaintiffs requested that the District Court temporarily
enjoin the Defendants and all persons acting on their behalf or in concert
with them from taking any action to enforce Sections 3.1(n) and 5.13 of the
CSX Merger Agreement and any other provisions of the CSX Merger Agreement
which purport to limit the ability of the Company Board to take action or
make any determination with regard to the Rights Agreement and temporarily
enjoin the Defendants and all persons acting on their behalf or in concert
with them from distributing any Rights pursuant to the Rights Agreement. The
Plaintiffs also requested that the District Court require the Defendants to
take such action as necessary to prevent a "Distribution Date" from occurring
pursuant to the Rights Agreement. At the hearing on November 4, 1996 to hear
arguments concerning the TRO Motion, counsel to the Company advised the
District Court that the Company Board had on that date adopted a resolution
7
<PAGE>
deferring the "Distribution Date" under the Rights Agreement until such date
as the Rights become exercisable (i.e., ten days after a party other than CSX
Corporation acquires more than 10% of the Shares). Counsel to CSX advised the
District Court that CSX had consented to the terms of such resolution. In
view of the fact that the Company and CSX had taken the action that
Plaintiffs requested be ordered by the District Court, the District Court
stated that it was not necessary for the District Court to take further
action and therefore denied the TRO Motion as moot.
As a result of the cancellation of the Pennsylvania Special Meeting, which
was originally scheduled to be held on November 14, 1996, and the extension
of the expiration date of the CSX Offer to November 20, 1996, the District
Court has rescheduled from November 12, 1996 to November 18, 1996 a hearing
on the Plaintiffs' motion for a preliminary injunction. At such hearing, the
Plaintiffs will seek to enjoin (i) the CSX Offer from expiring on November
20, 1996 and (ii) CSX from acquiring Shares pursuant to the CSX Offer.
9. FEES AND EXPENSES. The discussion set forth in Section 16 of the Offer
to Purchase is hereby amended and supplemented as follows:
Parent has retained Georgeson & Company to act as Information Agent in
connection with the Offer and to assist Parent in its communications with the
Company's shareholders with respect to, and to provide other services in
connection with, the Pennsylvania Special Meeting. Georgeson & Company will
receive reasonable and customary compensation for its services, will be
reimbursed for certain out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith.
10. MISCELLANEOUS. Parent and Purchaser have filed with the SEC
amendments to the Schedule 14D-1, together with exhibits, pursuant to Rule
14d-3 of the General Rules and Regulations under the Exchange Act, furnishing
certain additional information with respect to the Offer. The Schedule 14D-1,
and any amendments thereto, may be inspected at, and copies may be obtained
from, the same places and in the same manner as set forth in Section 8 of the
Offer to Purchase (except that they may not be available at the regional
offices of the SEC).
ATLANTIC ACQUISITION CORPORATION
November 8, 1996
8
<PAGE>
Facsimile copies of the revised Letter of Transmittal, properly completed
and duly signed, will be accepted. The revised Letter of Transmittal,
certificates for the Shares and any other required documents should be sent
by each shareholder of the Company or his broker, dealer, commercial bank,
trust company or other nominee to the Depositary as follows:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
By Mail: By Hand or Overnight Courier:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 By Facsimile Transmission: 101 Barclay Street Receive &
Church Street Station (for Eligible Institutions Only) Deliver Window New York, New
New York, New York 10286-1248 (212) 815-6213 York 10286
For Information Telephone:
(800) 507-9357
</TABLE>
Any questions or requests for assistance may be directed to the
Information Agent or the Dealer Managers at their respective telephone
numbers and locations listed below. Additional copies of the Offer to
Purchase, this Supplement, the revised Letter of Transmittal and the Notice
of Guaranteed Delivery may be obtained from the Information Agent at its
address and telephone numbers set forth below. Holders of Shares may also
contact their broker, dealer, commercial bank or trust company or other
nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
[LOGO]
Wall Street Plaza
New York, NY 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Managers for the Offer are:
J.P. Morgan & Co. Merrill Lynch & Co.
60 Wall Street World Financial Center
Mail Stop 2860 North Tower
New York, New York 10260 New York, New York 10281-1305
(800) 576-5070 (toll free) (212) 449-8211 (call collect)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK AND
SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
CONRAIL INC.
PURSUANT TO THE OFFER TO PURCHASE, DATED OCTOBER 24, 1996
AND
THE SUPPLEMENT THERETO, DATED NOVEMBER 8, 1996
BY
ATLANTIC ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY
OF
NORFOLK SOUTHERN CORPORATION
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME,
ON FRIDAY, NOVEMBER 22, 1996, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (for Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive & Deliver Window
New York, New York 10286-1248 New York, New York 10286
For Information Telephone:
(800) 507-9357
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OR TELEX TRANSMISSION
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST
SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL
SHOULD BE READ CAREFULLY BEFORE THIS LETTER
OF TRANSMITTAL IS COMPLETED.
THIS REVISED LETTER OF TRANSMITTAL OR THE PREVIOUSLY CIRCULATED LETTER OF
TRANSMITTAL IS TO BE COMPLETED BY SHAREHOLDERS OF CONRAIL INC. EITHER IF
CERTIFICATES EVIDENCING SHARES AND/OR RIGHTS (EACH AS DEFINED BELOW) ARE TO
BE FORWARDED HEREWITH, OR IF DELIVERY OF SHARES AND/OR RIGHTS IS TO BE MADE
BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE DEPOSITORY TRUST
COMPANY OR THE PHILADELPHIA DEPOSITORY TRUST COMPANY (EACH, A "BOOK-ENTRY
TRANSFER FACILITY" AND COLLECTIVELY, THE "BOOK-ENTRY TRANSFER FACILITIES")
PURSUANT TO THE BOOK-ENTRY TRANSFER PROCEDURE DESCRIBED IN "PROCEDURES FOR
TENDERING SHARES" OF THE OFFER TO PURCHASE (AS DEFINED BELOW) AS SUPPLEMENTED
BY THE SUPPLEMENT (AS DEFINED BELOW). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
SHAREHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED SHARES AND/OR RIGHTS
PURSUANT TO THE OFFER USING THE PREVIOUSLY CIRCULATED LETTER OF TRANSMITTAL
OR THE NOTICE OF GUARANTEED DELIVERY AND WHO HAVE NOT PROPERLY WITHDRAWN SUCH
SHARES AND/OR RIGHTS HAVE VALIDLY TENDERED SUCH SHARES AND/OR RIGHTS FOR THE
PURPOSES OF THE OFFER, AS AMENDED, AND NEED NOT TAKE ANY FURTHER ACTION.
Unless the Rights are redeemed prior to the Expiration Date (as defined in
the Supplement) holders of Shares will be required to tender one Right for
each Share tendered to effect a valid tender of such Share. Until the
Distribution Date (as defined in the Supplement) occurs, the Rights are
represented by and transferred with the Shares. Accordingly, if the
Distribution Date does not occur prior to the Expiration Date (as defined in
the Supplement), a tender of Shares will constitute a tender of the
associated Rights. If a Distribution Date has occurred and (i) Purchaser (as
defined below) has waived that portion of the Rights Condition (as defined in
the Offer to Purchase) requiring that a Distribution Date not have occurred
and (ii) separate certificates ("Rights Certificates") have been distributed
by the Company (as defined below) to holders of Shares prior to the date of
tender pursuant to the Offer to Purchase, Rights Certificates representing a
number of Rights equal to the number of Shares being tendered must be
delivered to the Depositary in order for such Shares to be validly tendered.
If a Distribution Date has occurred and (i) Purchaser has waived any portion
of the Rights Condition (as defined in the Offer to Purchase) and (ii) Rights
Certificates have not been distributed prior to the time Shares are tendered
pursuant to the Offer to Purchase, a tender of Shares without Rights
constitutes an agreement by the tendering shareholder to deliver Rights
Certificates representing a number of Rights equal to the number of Shares
tendered pursuant to the Offer to the Depositary within three business days
after the date Rights Certificates are distributed. Purchaser reserves the
right to require that it receive such Rights Certificates prior to accepting
Shares for payment. Payment for Shares tendered and purchased pursuant to the
Offer to Purchase will be made only after timely receipt by the Depositary
of, among other things, Rights Certificates, if such certificates have been
distributed to holders of Shares. Purchaser will not pay any additional
consideration for the Rights tendered pursuant to the Offer to Purchase.
Shareholders whose certificates for Shares and, if applicable, Rights, are
not immediately available or who cannot deliver such certificates and all
other documents required hereby to the Depositary prior to the Expiration
Date or who cannot complete the procedure for delivery by book-entry transfer
on a timely basis and who wish to tender their Shares and Rights must do so
pursuant to the guaranteed delivery procedure described in "Procedures for
Tendering Shares" of the Offer to Purchase as supplemented by the Supplement.
See Instruction 2.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
------------------------------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
- -----------------------------------------------------------------------------
Transaction Code Number
- -----------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
------------------------------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
- -----------------------------------------------------------------------------
Transaction Code Number
- -----------------------------------------------------------------------------
2
<PAGE>
[ ] CHECK HERE IF TENDERED SHARES ARE BEING TENDERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s):
-----------------------------------------------------------------------
Window Ticket No. (if any):
-----------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------------------------------------------------------------
Name of Institution which Guaranteed Delivery:
-----------------------------------------------------------------------
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer
Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
- -----------------------------------------------------------------------------
Transaction Code Number
- -----------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED RIGHTS ARE BEING TENDERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s):
-----------------------------------------------------------------------
Window Ticket No. (if any):
-----------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------------------------------------------------------------
Name of Institution which Guaranteed Delivery:
-----------------------------------------------------------------------
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer
Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
- -----------------------------------------------------------------------------
Transaction Code Number
- -----------------------------------------------------------------------------
3
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) SHARE CERTIFICATE(S) TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- -------------------------------------------- --------------------------------------------------------
TOTAL NUMBER OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S) TENDERED**
---------------- ---------------------- --------------
<S> <C> <C> <C>
---------------- ---------------------- --------------
---------------- ---------------------- --------------
---------------- ---------------------- --------------
---------------- ---------------------- --------------
Total Shares
- ------------------------------------------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares being delivered to the Depositary
are being tendered.
See Instruction 4.
======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
======================================================================================================
DESCRIPTION OF RIGHTS TENDERED
- -------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) RIGHTS CERTIFICATE(S) TENDERED*
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- -------------------------------------------- ---------------------------------------------------------
TOTAL NUMBER OF RIGHTS NUMBER OF
CERTIFICATE REPRESENTED BY RIGHTS
NUMBER(S)** CERTIFICATE(S) TENDERED***
---------------- ---------------------- --------------
<S> <C> <C> <C>
---------------- ---------------------- --------------
---------------- ---------------------- --------------
---------------- ---------------------- --------------
---------------- ---------------------- --------------
Total Rights
- ------------------------------------------------------------------------------------------------------
* If the tendered Rights are represented by separate Rights Certificates, provide the certificate
numbers of such Rights Certificates. Shareholders tendering Rights which are not represented by
separate certificates will need to submit an additional Letter of Transmittal if Rights
Certificates are distributed.
** Need not be completed by shareholders tendering by book-entry transfer.
*** Unless otherwise indicated, it will be assumed that all Rights being delivered to the Depositary
are being tendered.
See Instruction 4.
======================================================================================================
</TABLE>
The names and addresses of the registered holders should be printed, if
not already printed above, exactly as they appear on the certificates
representing Shares and/or Rights tendered hereby. The certificates and
number of Shares and/or Rights that the undersigned wishes to tender should
be indicated in the appropriate boxes.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL
CAREFULLY.
4
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Atlantic Acquisition Corporation, a
Pennsylvania corporation ("Purchaser") and a wholly owned subsidiary of
Norfolk Southern Corporation, a Virginia corporation, the above described
shares of common stock, par value $1.00 per share (the "Common Shares"), or
shares of Series A ESOP Convertible Junior Preferred Stock, without par value
(the "ESOP Preferred Shares" and, together with the Common Shares, the
"Shares"), of Conrail Inc., a Pennsylvania corporation (the "Company"),
including, in each case, the associated Common Stock Purchase Rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of July 19, 1989,
as amended, between the Company and First Chicago Trust Company of New York,
as Rights Agent (the "Rights Agreement"), pursuant to Purchaser's offer to
purchase all outstanding shares, including, in each case, the associated
Rights, at a price of $110 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
October 24, 1996 (the "Offer to Purchase"), the Supplement, dated November 8,
1996 (the "Supplement"), receipt of which is hereby acknowledged, and in this
revised Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"). UNLESS THE CONTEXT REQUIRES OTHERWISE, ALL
REFERENCES HEREIN TO THE COMMON SHARES, ESOP PREFERRED SHARES OR SHARES SHALL
INCLUDE THE ASSOCIATED RIGHTS, AND ALL REFERENCES TO THE RIGHTS SHALL INCLUDE
ALL BENEFITS THAT MAY INURE TO THE HOLDERS OF THE RIGHTS PURSUANT TO THE
RIGHTS AGREEMENT.
The undersigned understands that Purchaser reserves the right to transfer
or assign, in whole at any time, or in part from time to time, to one or more
of its affiliates, the right to purchase all or any portion of the Shares
and/or Rights tendered pursuant to the Offer, but any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering shareholders to receive
payment for Shares validly tendered and accepted for payment pursuant to the
Offer.
Subject to, and effective upon, acceptance for payment of the Shares and
Rights tendered herewith, in accordance with the terms of the Offer
(including, if the Offer is extended or amended, the terms and conditions of
any such extension or amendment), the undersigned hereby sells, assigns and
transfers to, or upon the order of, Purchaser all right, title and interest
in and to all the Shares and Rights that are being tendered hereby (and any
and all non-cash dividends, distributions, rights, other Shares or other
securities issued or issuable in respect thereof or declared, paid or
distributed in respect of such Shares on or after October 24, 1996
(collectively, "Distributions")), and irrevocably appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares, Rights and all Distributions, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with
an interest), to (i) deliver certificates for such Shares (individually, a
"Share Certificate"), Rights and all Distributions, or transfer ownership of
such Shares, Rights and all Distributions on the account books maintained by
a Book-Entry Transfer Facility, together, in either case, with all
accompanying evidence of transfer and authenticity to, or upon the order of
Purchaser, (ii) present such Shares, Rights and all Distributions for
transfer on the books of the Company and (iii) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares, Rights
and all Distributions, all in accordance with the terms of the Offer.
If, on or after October 24, 1996, the Company should declare or pay any
cash or stock dividend or other distribution on (other than regular quarterly
cash dividends), or issue any rights (other than the Rights), or make any
distribution with respect to, the Shares that is payable or distributable to
shareholders of record on a date prior to the transfer to the name of
Purchaser or its nominee or transferee on the Company's stock transfer
records of the Shares accepted for payment pursuant to the Offer, then,
subject to the provisions of Section 13 of the Offer to Purchase, (i) the
purchase price per Share payable by Purchaser pursuant to the Offer will be
reduced by the amount of any such cash dividend or cash distribution and (ii)
any such non-cash dividend, distribution or right to be received by the
tendering shareholder will be received and held by such tendering shareholder
for the account of Purchaser and will be required to be remitted promptly and
transferred by each such tendering shareholder to the Depositary for the
account of Purchaser, accompanied by appropriate documentation of transfer.
Pending such remittance, Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend, distribution or right and
may withhold the entire purchase price or deduct from the purchase price the
amount of value thereof, as determined by Purchaser in its sole discretion.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints David R. Goode, James C. Bishop, Jr. and Henry C. Wolf as proxies of
the undersigned, each with full power of substitution, to the full extent of
the undersigned's rights with respect to the Shares and Rights tendered by
the undersigned and accepted for payment by Purchaser (and any and all
Distributions). All such proxies shall be considered coupled with an interest
in the tendered Shares and Rights. This appointment will be effective if,
when, and only to the extent that, Purchaser accepts such Shares and Rights
for payment pursuant to the Offer. Upon such acceptance for payment, all
prior proxies given by the undersigned with respect to such Shares, Rights,
Distributions and other securities will, without further action, be revoked,
and no subsequent proxies may be given. The individuals named above as
proxies will, with respect to the Shares, Rights, Distributions and other
securities for which the appointment is effective, be empowered (subject to
the terms of the Voting Trust Agreement (as defined in the Offer to Purchase)
so long as it shall be in effect with respect to the Shares) to exercise all
voting and other rights of the undersigned as they in their sole discretion
may deem proper at any annual, special, adjourned or postponed meeting of the
5
<PAGE>
Company's shareholders, by written consent or otherwise, and Purchaser
reserves the right to require that, in order for Shares, Rights,
Distributions or other securities to be deemed validly tendered, immediately
upon Purchaser's acceptance for payment of such Shares and Rights, Purchaser
or Purchaser's designee must be able to exercise full voting rights with
respect to such Shares and Rights.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares and
Rights tendered hereby and all Distributions, that the undersigned own(s) the
Shares and Rights tendered hereby and that, when such Shares and Rights are
accepted for payment by Purchaser, Purchaser will acquire good, marketable
and unencumbered title thereto and to all Distributions, free and clear of
all liens, restrictions, charges and encumbrances, and that none of such
Shares, Rights and Distributions will be subject to any adverse claim. The
undersigned, upon request, shall execute and deliver all additional documents
deemed by the Depositary or Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares and Rights tendered
hereby and all Distributions. In addition, the undersigned shall remit and
transfer promptly to the Depositary for the account of Purchaser all
Distributions in respect of the Shares and Rights tendered hereby,
accompanied by appropriate documentation of transfer, and, pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and
may withhold the entire purchase price of the Shares and Rights tendered
hereby or deduct from such purchase price, the amount or value of such
Distribution as determined by Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, executors, personal and legal representatives,
administrators, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable, provided that Shares and Rights tendered pursuant to the offer
may be withdrawn at any time prior to their acceptance for payment.
The undersigned understands that tenders of Shares and Rights pursuant to
any one of the procedures described in "Procedures for Tendering Shares" of
the Offer to Purchase and the Supplement and in the Instructions hereto will
constitute the undersigned's acceptance of the terms and conditions of the
Offer. Purchaser's acceptance for payment of Shares and Rights tendered
pursuant to the Offer will constitute a binding agreement between the
undersigned and Purchaser upon the terms and subject to the conditions of the
Offer. The undersigned recognizes that under certain circumstances set forth
in the Offer to Purchase, Purchaser may not be required to accept for payment
any of the Shares and Rights tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price and/or return
any certificates evidencing Shares or Rights not tendered or accepted for
payment, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated in
the box entitled "Special Delivery Instructions," please mail the check for
the purchase price and/or return any certificates evidencing Shares or Rights
not tendered or accepted for payment (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price and/or return any
certificates for Shares or Rights not purchased or not tendered or accepted
for payment in the name(s) of, and mail such check and/or return such
certificates to, the person(s) so indicated. Unless otherwise indicated
herein in the box entitled "Special Payment Instructions," please credit any
Shares or Rights tendered hereby and delivered by book-entry transfer, but
which are not purchased, by crediting the account at the Book-Entry Transfer
Facility designated above. The undersigned recognizes that Purchaser has no
obligation, pursuant to the Special Payment Instructions, to transfer any
Shares or Rights from the name of the registered holder(s) thereof if
Purchaser does not accept for payment any of the Shares or Rights tendered
hereby.
6
<PAGE>
===============================================================================
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS
LETTER OF TRANSMITTAL)
To be completed ONLY if certificates for Shares and/or Rights not tendered
or not purchased and/or the check for the purchase price of Shares and/or
Rights purchased are to be issued in the name of someone other than the
undersigned, or if Shares and/or Rights delivered by book-entry transfer
which are not purchased are to be returned by credit to an account maintained
at a Book-Entry Transfer Facility other than that designated above.
Issue check and/or certificates to:
Name
- -----------------------------------------------------------------------------
(PLEASE PRINT)
Address
- -----------------------------------------------------------------------------
(ZIP CODE)
- -----------------------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
[ ] Credit unpurchased Shares and/or Rights delivered by book-entry transfer
to the Book-Entry Transfer Facility account set forth below:
Check appropriate box:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
------------------------------------------------------------------------
(ACCOUNT NUMBER)
===============================================================================
===============================================================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS
LETTER OF TRANSMITTAL)
To be completed ONLY if certificates for Shares and/or Rights not
tendered or not purchased and/or the check for the purchase price of
Shares and/or Rights purchased are to be sent to someone other than the
undersigned, or to the undersigned at an address other than that shown
above.
Mail check and/or certificates to:
Name
------------------------------------------------------------------------
(PLEASE PRINT)
Address
------------------------------------------------------------------------
(ZIP CODE)
------------------------------------------------------------------------
===============================================================================
7
<PAGE>
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated: , 199_
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Common or ESOP Preferred stock certificate(s) or on a security position
listing or by person(s) authorized to become registered holder(s) by
certificates and documents transmitted herewith. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity,
please provide the following information. See Instruction 5 of this Letter of
Transmittal.)
Name(s)
- -----------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title)
- -----------------------------------------------------------------------------
Address
- -----------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
- -----------------------------------------------------------------------------
Tax Identification or Social Security No.
- -----------------------------------------------------------------------------
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5 OF THIS LETTER OF TRANSMITTAL)
Authorized Signature
- -----------------------------------------------------------------------------
Name
- -----------------------------------------------------------------------------
(PLEASE PRINT)
Title
- -----------------------------------------------------------------------------
Name of Firm
- -----------------------------------------------------------------------------
Address
- -----------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
- -----------------------------------------------------------------------------
Dated: , 199_
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which
is a bank, broker, dealer, credit union, savings association, or other entity
that is a member in good standing of the Securities Transfer Agents Medallion
Program (each, an "Eligible Institution"). No signature guarantee is required
on this Letter of Transmittal (a) if this Letter of Transmittal is signed by
the registered holder(s) (which term, for purposes of this document, shall
include any participant in a Book-Entry Transfer Facility whose name appears
on a security position listing as the owner of Shares or Rights) of Shares
and/or Rights tendered herewith, unless such holder(s) has completed either
the box entitled "Special Delivery Instructions" or the box entitled "Special
Payment Instructions" on the reverse hereof, or (b) if such Shares or Rights
are tendered for the account of an Eligible Institution. See Instruction 5.
If a certificate evidencing Shares and/or Rights (a "Certificate") is
registered in the name of a person other than the signer of this Letter of
Transmittal, or if payment is to be made, or a Certificate not accepted for
payment or not tendered is to be returned, to a person other than the
registered holder(s), then the Certificate must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the Certificate, with the signature(s) on
such Certificate or stock powers guaranteed as described above. See
Instruction 5.
2. Delivery of Letter of Transmittal and Share Certificates. This Letter
of Transmittal is to be used either if Certificates are to be forwarded
herewith or if Shares and/or Rights are to be delivered by book-entry
transfer pursuant to the procedure set forth in "Procedures for Tendering
Shares" of the Offer to Purchase. Certificates evidencing all tendered Shares
and/or Rights, or confirmation of a book-entry transfer of such Shares and/or
Rights, if such procedure is available, into the Depositary's account at one
of the Book-Entry Transfer Facilities pursuant to the procedures set forth in
"Procedures for Tendering Shares" of the Offer to Purchase, together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message, as defined below) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the reverse hereof prior to
the Expiration Date (as defined in the Supplement). If Certificates are
forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery.
Shareholders whose Certificates are not immediately available, who cannot
deliver their Certificates and all other required documents to the Depositary
prior to the Expiration Date or who cannot complete the procedure for
delivery by book-entry transfer on a timely basis may tender their Shares or
Rights pursuant to the guaranteed delivery procedure described in "Procedures
for Tendering Shares" of the Offer to Purchase. Pursuant to such procedure:
(i) such tender must be made by or through an Eligible Institution; (ii) a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by Purchaser, must be received by the
Depositary prior to the Expiration Date; and (iii) in the case of a guarantee
of Shares or Rights, the Certificates, in proper form for transfer, or a
confirmation of a book-entry transfer of such Shares or Rights, if such
procedure is available, into the Depositary's account at one of the
Book-Entry Transfer Facilities, together with a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) with
any required signature guarantees (or, in the case of a book-entry transfer,
an Agent's Message), and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three New York Stock
Exchange, Inc. trading days after the date of execution of the Notice of
Guaranteed Delivery, all as described in "Procedures for Tendering Shares" of
the Offer to Purchase as supplemented by the Supplement. The term "Agent's
Message" means a message, transmitted by a Book-Entry Transfer Facility to,
and received by the Depositary and forming a part of a Book-Entry
Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares or Rights, that such participant has
received and agrees to be bound by the terms of this Letter of Transmittal
and that Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, CERTIFICATES AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE SOLE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares or Rights will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering shareholders waive any
right to receive any notice of the acceptance of their Shares or Rights for
payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Certificate numbers, the number of Shares
or Rights evidenced by such Certificates and the number of Shares or Rights
tendered should be listed on a separate schedule and attached hereto.
4. Partial Tenders. (Not applicable to shareholders who tender by
book-entry transfer.) If fewer than all the Shares or Rights evidenced by any
Certificate delivered to the Depositary herewith are to be tendered hereby,
fill in the number of
9
<PAGE>
Shares or Rights which are to be tendered in the box entitled "Number of
Shares Tendered." In such cases, new Certificate(s) evidencing the remainder
of the Shares or Rights that were evidenced by the Certificates delivered to
the Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions," as soon as practicable after the expiration or termination of
the Offer. All Shares or Rights evidenced by Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the
Shares or Rights tendered hereby, the signature(s) must correspond with the
name(s) as written on the face of the Certificates evidencing such Shares or
Rights without alteration, enlargement or any other change whatsoever.
If any Shares or Rights tendered hereby is owned of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares or Rights tendered hereby are registered in the names
of different holders, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
such certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares or Rights tendered hereby, no endorsements of Certificates or separate
stock powers are required, unless payment is to be made to, or Certificates
evidencing Shares or Rights not tendered or not purchased are to be issued in
the name of, a person other than the registered holder(s), in which case, the
Certificate(s) evidencing the Shares or Rights tendered hereby must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such
Certificate(s). Signatures on such Certificate(s) and stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares or Rights tendered hereby, the Share or
Rights Certificate(s) evidencing the Shares or Rights tendered hereby must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such
Certificate(s). Signatures on such Certificate(s) and stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Certificate(s) or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of such person's authority so to
act must be submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares or Rights to it or its order pursuant to the Offer.
If, however, payment of the purchase price of any Shares or Rights purchased
is to be made to, or Certificate(s) evidencing Shares or Rights not tendered
or not purchased are to be issued in the name of, a person other than the
registered holder(s), the amount of any stock transfer taxes (whether imposed
on the registered holder(s), such other person or otherwise) payable on
account of the transfer to such other person will be deducted from the
purchase price of such Shares or Rights purchased, unless evidence
satisfactory to Purchaser of the payment of such taxes, or exemption
therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) EVIDENCING THE SHARES
TENDERED HEREBY.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares or Rights tendered hereby is to be issued, or
Certificate(s) evidencing Shares or Rights not tendered or not purchased are
to be issued, in the name of a person other than the person(s) signing this
Letter of Transmittal or if such check or any such Certificate is to be sent
to someone other than the person(s) signing this Letter of Transmittal or to
the person(s) signing this Letter of Transmittal but at an address other than
that shown in the box entitled "Description of Shares Tendered," the
appropriate boxes on this Letter of Transmittal must be completed. Shares or
Rights tendered hereby by book-entry transfer may request that Shares or
Rights not purchased be credited to such account maintained at a Book-Entry
Transfer Facility as such shareholder may designate in the box entitled
"Special Payment Instructions" on the reverse hereof. If no such instructions
are given, all such Shares or Rights not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated on the
reverse hereof as the account from which such Shares or Rights were
delivered.
8. Requests for Assistance or Additional Copies. Requests for assistance
may be directed to the Information Agent or the Dealer Managers at their
respective addresses or telephone numbers set forth below. Additional copies
of the Offer to Purchase, the Supplement, this Letter of Transmittal, the
Notice of Guaranteed Delivery and the Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 may be obtained from
the Information Agent or the Dealer Managers or from brokers, dealers,
commercial banks or trust companies.
9. Substitute Form W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information"
below, and to certify, under penalties of perjury, that such number is
correct and that such shareholder is not subject to backup
10
<PAGE>
withholding of federal income tax. If a tendering shareholder has been
notified by the Internal Revenue Service that such shareholder is subject to
backup withholding, such shareholder must cross out item (2) of the
Certification box of the Substitute Form W-9, unless such shareholder has
since been notified by the Internal Revenue Service that such shareholder is
no longer subject to backup withholding. Failure to provide the information
on the Substitute Form W-9 may subject the tendering shareholder to 31%
federal income tax withholding on the payment of the purchase price of all
Shares or Rights purchased from such shareholder. If the tendering
shareholder has not been issued a TIN and has applied for one or intends to
apply for one in the near future, such shareholder should write "Applied For"
in the space provided for the TIN in Part I of the Substitute Form W-9, and
sign and date the Substitute Form W-9. If "Applied For" is written in Part I
and the Depositary is not provided with a TIN within 60 days, the Depositary
will withhold 31% on all payments of the purchase price to such shareholder
until a TIN is provided to the Depositary.
10. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares or Rights has been lost, destroyed or stolen, the
shareholder should promptly notify the Depositary. The shareholder will then
be instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates
have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, WITH ANY REQUIRED SIGNATURE GUARANTEES, OR AN
AGENT'S MESSAGE (TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF
BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED
AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE SUPPLEMENT).
11
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares or
Rights are accepted for payment is required by law to provide the Depositary
(as payer) with such shareholder's correct TIN on Substitute Form W-9 below.
If such shareholder is an individual, the TIN is such shareholder's social
security number. If the Depositary is not provided with the correct TIN, the
shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such shareholder with respect
to Shares or Rights purchased pursuant to the Offer may be subject to backup
withholding of 31%.
Certain shareholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, such individual must submit a statement, signed under
penalties of perjury, attesting to such individual's exempt status. Forms of
such statements can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If backup withholding applies with respect to a shareholder, the
Depositary is required to withhold 31% of any payments made to such
shareholder. Backup withholding is not an additional tax. Rather, the tax
liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares or Rights purchased pursuant to the Offer, the
shareholder is required to notify the Depositary of such shareholder's
correct TIN by completing the form below certifying (a) that the TIN provided
on Substitute Form W-9 is correct (or that such shareholder is awaiting a
TIN), and (b) that (i) such shareholder has not been notified by the Internal
Revenue Service that such shareholder is subject to backup withholding as a
result of a failure to report all interest or dividends or (ii) the Internal
Revenue Service has notified such shareholder that such shareholder is no
longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
or Rights tendered hereby. If the Shares or Rights are in more than one name
or are not in the name of the actual owner, consult the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9
for additional guidance on which number to report. If the tendering
shareholder has not been issued a TIN and has applied for a number or intends
to apply for a number in the near future, the shareholder should write
"Applied For" in the space provided for the TIN in Part I, and sign and date
the Substitute Form W-9. If "Applied For" is written in Part I and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% of all payments of the purchase price to such shareholder until
a TIN is provided to the Depositary.
12
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
PAYER'S NAME: THE BANK OF NEW YORK, AS DEPOSITARY
- ---------------------------------------------------------------------------------------------------------------
SUBSTITUTE Part I --PLEASE PROVIDE YOUR TIN IN THE BOX AT ----------------------------
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Social Security Number
Department of the Treasury OR
Internal Revenue Service ----------------------------
Employer Identification
Number
(If awaiting TIN write
"Applied For")
- ------------------------------ -------------------------------------------------- ---------------------------
PAYER'S REQUEST FOR PART II -- For Payees Exempt From Backup Withholding, see the enclosed
TAXPAYER IDENTIFICATION Guidelines and complete as instructed therein.
NUMBER (TIN)
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification (1)
Number (or a Taxpayer Identification Number has not been issued to me and
either (a) I have mailed or delivered an application to receive a
Taxpayer Identification Number to the appropriate Internal Revenue
Service ("IRS") or Social Security Administration office or (b) I intend
to mail or deliver an application in the near future. I understand that
if I do not provide a Taxpayer Identification Number within sixty (60)
days, 31% of all reportable payments made to me thereafter will be
withheld until I provide a number), and
(2) I am not subject to backup withholding because (a) I am exempt from (2)
backup withholding, (b) I have not been notified by the IRS that I am
subject to backup withholding as a result of failure to report all
interest or dividends or (c) the IRS has notified me that I am no longer
subject to backup withholding.
CERTIFICATE INSTRUCTIONS --You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines.)
- ---------------------------------------------------------------------------------------------------------------
SIGNATURE _______________________________________________________ DATE _________________, 199_
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
Questions and requests for assistance or additional copies of the Offer to
Purchase, the Supplement, the Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or the Dealer Managers as
set forth below:
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
[LOGO]
Wall Street Plaza
New York, New York 10005
(800) 223-2064 (Toll-Free)
Banks and Brokers Call: (212) 440-9800 (Collect)
The Dealer Managers for the Offer are:
J.P. Morgan & Co. Merrill Lynch & Co.
60 Wall Street World Financial Center
Mail Stop 2860 North Tower
New York, New York 10260 New York, New York 10281-1305
(800) 576-5070 (toll free) (212) 449-8211 (call collect)
13
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF
COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
CONRAIL INC.
TO
ATLANTIC ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
NORFOLK SOUTHERN CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This revised Notice of Guaranteed Delivery, or one substantially in the
form hereof, must be used to accept the Offer (as defined below) if (i)
certificates ("Share Certificates") evidencing shares of common stock, par
value $1.00 per share (the "Common Shares"), or shares of Series A ESOP
Convertible Junior Preferred Stock, without par value (the "ESOP Preferred
Shares" and, together with the Common Shares, the "Shares"), of Conrail Inc.,
a Pennsylvania corporation (the "Company"), including the associated Common
Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement,
dated July 19, 1989, as amended, between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agreement"), are not
immediately available, (ii) time will not permit all required documents to
reach The Bank of New York, as Depositary (the "Depositary"), prior to the
Expiration Date (as defined in the Supplement, dated November 8, 1996 (the
"Supplement")) or (iii) the procedure for book-entry transfer cannot be
completed on a timely basis. All references herein to the Common Shares, ESOP
Preferred Shares or Shares include the associated Rights. This Notice of
Guaranteed Delivery may be delivered by hand or transmitted by telegram,
facsimile transmission or mail to the Depositary. See "Procedures for
Tendering Shares" of the Offer to Purchase, dated October 24, 1996 (the
"Offer to Purchase"), as supplemented by the Supplement.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or by Overnight Delivery:
Tender & Exchange Department (for Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
For Information Telephone:
(800) 507-9357
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Letter of
Transmittal.
<PAGE>
- -------------------------------------------------------------------------------
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Atlantic Acquisition Corporation, a
Pennsylvania corporation and a wholly owned subsidiary of Norfolk Southern
Corporation, a Virginia corporation, upon the terms and subject to the
conditions set forth in the Offer to Purchase, the Supplement and the
revised Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares and Rights specified below pursuant to
the guaranteed delivery procedures described in "Procedures for Tendering
Shares" of the Offer to Purchase and the Supplement.
Number of Shares (including the associated Rights):
---------------------------------------------------------------------------
Name(s) of Record Holder(s)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
PLEASE TYPE OR PRINT
Address(es):
---------------------------------------------------------------------------
ZIP CODE
Area Code and Tel. No.:
---------------------------------------------------------------------------
Certificate No(s). (if available)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Check ONE box if Shares or Rights will be tendered by book-entry transfer:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Signature(s):
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Account Number
---------------------------------------------------------------------------
Dated , 199_
- -------------------------------------------------------------------------------
2
<PAGE>
- -------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc.
or a commercial bank or trust company having an office or correspondent in
the United States, hereby guarantees delivery to the Depositary, at one of
its addresses set forth above, of certificates evidencing the Shares and
Rights tendered hereby in proper form for transfer, or confirmation of
book-entry transfer of such Shares and Rights into the Depositary's
accounts at The Depository Trust Company or the Philadelphia Depository
Trust Company, in each case with delivery of a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees, or an Agent's Message (as defined in "Acceptance for
Payment and Payment for Shares" of the Offer to Purchase), and any other
documents required by the Letter of Transmittal, (x) in the case of Shares,
within three New York Stock Exchange, Inc. trading days after the date of
execution of this Notice of Guaranteed Delivery, or (y) in the case of
Rights, within a period ending the latter of (i) three New York Stock
Exchange, Inc. trading days after the date of execution of this Notice of
Guaranteed Delivery or (ii) three business days after the date Rights
Certificates are distributed to shareholders.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares and Rights to the Depositary within the time period
shown herein. Failure to do so could result in financial loss to such
Eligible Institution.
Name of Firm:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
AUTHORIZED SIGNATURE
Address:
---------------------------------------------------------------------------
(ZIP CODE)
Area Code and
Tel. No.:
---------------------------------------------------------------------------
Name:
---------------------------------------------------------------------------
PLEASE TYPE OR PRINT
Title:
---------------------------------------------------------------------------
Date , 199_
NOTE: DO NOT SEND CERTIFICATES FOR SHARES OR RIGHTS WITH THIS NOTICE. SUCH
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
- -------------------------------------------------------------------------------
3
<PAGE>
ATLANTIC ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
NORFOLK SOUTHERN CORPORATION
HAS INCREASED THE PRICE OF ITS
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES
OF
COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
CONRAIL INC.
TO
$110 NET PER SHARE
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME,
ON FRIDAY, NOVEMBER 22, 1996, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
November 8, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by Atlantic Acquisition Corporation, a Pennsylvania
corporation ("Purchaser") and a wholly owned subsidiary of Norfolk Southern
Corporation, a Virginia corporation ("Parent"), to act as Dealer Managers in
connection with Purchaser's offer to purchase all outstanding shares of (i)
common stock, par value $1.00 per share (the "Common Shares"), and (ii)
Series A ESOP Convertible Junior Preferred Stock, without par value (the
"ESOP Preferred Shares" and, together with the Common Shares, the "Shares"),
of Conrail Inc., a Pennsylvania corporation (the "Company"), including, in
each case, the associated Common Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, dated July 19, 1989, by and between the
Company and First Chicago Trust Company of New York, as Rights Agent (as
amended, the "Rights Agreement") at a price of $110 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated October 24, 1996 (the "Offer to Purchase"), the
Supplement, dated November 8, 1996 (the "Supplement"), and the revised Letter
of Transmittal (which, as amended from time to time, together constitute the
"Offer") enclosed herewith.
Unless the Rights are redeemed prior to the Expiration Date (as defined in
the Supplement), holders of Shares will be required to tender one associated
Right for each Share tendered in order to effect a valid tender of such
Share. Accordingly, shareholders who sell their Rights separately from their
Shares and do not otherwise acquire Rights may not be able to satisfy the
requirements of the Offer for the tender of Shares. If the Distribution Date
(as defined in the Supplement) has not occurred prior to the Expiration Date,
a tender of Shares will also constitute a tender of the associated Rights. If
the Distribution Date has occurred and Purchaser has waived that portion of
the Rights Condition (as defined in the Offer to Purchase) requiring that a
Distribution Date not have occurred and Rights Certificates (as defined in
the Offer to Purchase) have been distributed to holders of Shares prior to
the time a holder's Shares are purchased pursuant to the Offer, in order for
Rights (and the corresponding Shares) to be validly tendered, Rights
Certificates representing a number of Rights equal to the number of Shares
tendered must be delivered to the Depositary (as defined in the Offer to
Purchase) or, if available,
<PAGE>
a Book-Entry Confirmation (as defined in the Offer to Purchase) must be
received by the Depositary with respect thereto. If the Distribution Date has
occurred and Purchaser has waived that portion of the Rights Condition
requiring that a Distribution Date not have occurred and Rights Certificates
have not been distributed prior to the time Shares are purchased pursuant to
the Offer, Rights may be tendered prior to a shareholder receiving Rights
Certificates by use of the guaranteed delivery procedure described in Section
3 of the Offer to Purchase. In any case, a tender of Shares constitutes an
agreement by the tendering shareholder to deliver Rights Certificates
representing a number of Rights equal to the number of Shares tendered
pursuant to the Offer to the Depositary within three business days after the
date that Rights Certificates are distributed. Purchaser reserves the right
to require that the Depositary receive Rights Certificates, or a Book-Entry
Confirmation, if available, with respect to such Rights prior to accepting
the relating Shares for payment pursuant to the Offer if the Distribution
Date has occurred prior to the Expiration Date.
If a shareholder desires to tender Shares and Rights pursuant to the Offer
and such shareholder's Share Certificates (as defined in the Offer to
Purchase) or, if applicable, Rights Certificates are not immediately
available (including, if the Distribution Date has occurred and Purchaser
waives that portion of the Rights Condition requiring that a Distribution
Date not have occurred, because Rights Certificates have not yet been
distributed) or time will not permit all required documents to reach the
Depositary prior to the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares or Rights may
nevertheless be tendered according to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase. See Instruction 2 of the revised
Letter of Transmittal. Delivery of documents to a Book-Entry Transfer
Facility (as defined in the Offer to Purchase) in accordance with the
Book-Entry Transfer Facility's procedures does not constitute delivery to the
Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, PRIOR TO THE EXPIRATION
OF THE OFFER, (1) THE RECEIPT BY PURCHASER OF AN INFORMAL WRITTEN OPINION IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO PURCHASER FROM THE STAFF OF THE
SURFACE TRANSPORTATION BOARD (THE "STB"), WITHOUT THE IMPOSITION OF ANY
CONDITIONS UNACCEPTABLE TO PURCHASER, THAT THE USE OF A VOTING TRUST IN
CONNECTION WITH THE OFFER AND THE PROPOSED MERGER (AS DEFINED IN THE OFFER TO
PURCHASE) IS CONSISTENT WITH THE POLICIES OF THE STB AGAINST UNAUTHORIZED
ACQUISITIONS OF CONTROL OF A REGULATED CARRIER, (2) THE RECEIPT BY PURCHASER
OF AN INFORMAL STATEMENT FROM THE PREMERGER NOTIFICATION OFFICE OF THE
FEDERAL TRADE COMMISSION THAT THE TRANSACTIONS CONTEMPLATED BY THE OFFER AND
THE PROPOSED MERGER ARE NOT SUBJECT TO, OR ARE EXEMPT FROM, THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR
ACT"), OR, IN THE ABSENCE OF THE RECEIPT OF SUCH INFORMAL STATEMENT, ANY
APPLICABLE WAITING PERIOD UNDER THE HSR ACT HAVING EXPIRED OR BEEN
TERMINATED, (3) PARENT AND PURCHASER HAVING OBTAINED, ON TERMS REASONABLY
ACCEPTABLE TO PARENT, SUFFICIENT FINANCING TO ENABLE CONSUMMATION OF THE
OFFER AND THE PROPOSED MERGER, (4) THERE BEING VALIDLY TENDERED AND NOT
PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF COMMON
SHARES AND ESOP PREFERRED SHARES WHICH TOGETHER CONSTITUTE AT LEAST A
MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS, (5) PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT SUBCHAPTER F OF CHAPTER 25 OF
THE PENNSYLVANIA BUSINESS CORPORATION LAW HAS BEEN COMPLIED WITH OR IS
INVALID OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER, (6)
THE RIGHTS HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT SUCH RIGHTS ARE
INVALID OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER AND
(7) PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PREVIOUSLY
ANNOUNCED AGREEMENT AND PLAN OF MERGER, AS AMENDED, BETWEEN THE COMPANY AND
CSX CORPORATION HAS BEEN TERMINATED IN ACCORDANCE WITH ITS TERMS OR
OTHERWISE.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following
documents:
1. Supplement, dated November 8, 1996;
2. Revised Letter of Transmittal to be used by holders of Shares and
Rights in accepting the Offer and tendering Shares and/or Rights;
3. Revised Notice of Guaranteed Delivery to be used to accept the Offer
if the certificates evidencing such Shares and/or Rights are not
immediately available or time will not permit all required documents to
reach the Depositary prior to the Expiration Date or the procedure for
book-entry transfer cannot be completed on a timely basis;
4. A revised letter which may be sent to your clients for whose accounts
you hold Shares and/or Rights registered in your name or in the name of
your nominees, with space provided for obtaining such clients'
instructions with regard to the Offer;
2
<PAGE>
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
6. Return envelope addressed to the Depositary.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Purchaser will purchase, by accepting for payment,
and will pay for, all Shares (and, if applicable, Rights) validly tendered
prior to the Expiration Date promptly after the later to occur of (i) the
Expiration Date and (ii) the satisfaction or waiver of the conditions set
forth in "Conditions of the Offer" of the Offer to Purchase. For purposes of
the Offer, Purchaser will be deemed to have accepted for payment, and thereby
purchased, tendered Shares and Rights if, as and when Purchaser gives oral or
written notice to the Depositary of Purchaser's acceptance of such Shares and
Rights for payment. In all cases, payment for Shares and Rights purchased
pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) the certificates evidencing such Shares and Rights or
timely confirmation of a book-entry transfer of such Shares and Rights, if
such procedure is available, into the Depositary's account at The Depository
Trust Company or the Philadelphia Depository Trust Company pursuant to the
procedures set forth in "Procedures for Tendering Shares" of the Offer to
Purchase, as supplemented by the Supplement, (ii) the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, or an Agent's
Message (as defined in the Offer to Purchase) and (iii) any other documents
required by the Letter of Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
any other person (other than the Dealer Managers and the Information Agent as
described in "Fees and Expenses" of the Offer to Purchase) in connection with
the solicitation of tenders of Shares and Rights pursuant to the Offer.
Purchaser will, however, upon request, reimburse you for customary mailing
and handling expenses incurred by you in forwarding the enclosed materials to
your clients.
Purchaser will pay any stock transfer taxes incident to the transfer to it
of validly tendered Shares, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 22, 1996, UNLESS THE OFFER
IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Shares or Rights should
be delivered or such Shares and/or Rights should be tendered by book-entry
transfer, all in accordance with the Instructions set forth in the revised
Letter of Transmittal, the Offer to Purchase and the Supplement.
If holders of Shares and/or Rights wish to tender, but it is impracticable
for them to forward their certificates or other required documents prior to
the Expiration Date, a tender may be effected by following the guaranteed
delivery procedures specified under "Procedures for Tendering Shares" of the
Offer to Purchase as supplemented by the Supplement.
Any inquiries you may have with respect to the Offer should be addressed
to the Dealer Managers or the Information Agent at their respective addresses
and telephone numbers set forth on the back cover page of the Offer to
Purchase.
Additional copies of the enclosed materials may be obtained from J.P.
Morgan Securities Inc. at 60 Wall Street, New York, New York 10260, telephone
(800) 576-5070 (Toll Free), Merrill Lynch & Co., at World Financial Center,
North Tower, New York, New York 10281-1305, telephone (212) 449-8211
(Collect) or by calling the Information Agent, Georgeson & Company Inc., at
Wall Street Plaza, New York, New York 10005, telephone (800) 223-2064 (Toll
Free), or from brokers, dealers, commercial banks or trust companies.
Very truly yours,
J.P. MORGAN & CO. MERRILL LYNCH & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF PARENT, PURCHASER, THE DEPOSITARY, THE
INFORMATION AGENT OR THE DEALER MANAGERS, OR ANY AFFILIATE OF ANY OF THE
FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
ATLANTIC ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
NORFOLK SOUTHERN CORPORATION
HAS INCREASED THE PRICE OF ITS
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES
OF
COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
CONRAIL INC.
TO
$110 NET PER SHARE
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME,
ON FRIDAY, NOVEMBER 22, 1996, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
November 8, 1996
To Our Clients:
Enclosed for your consideration is the Supplement, dated November 8, 1996
(the "Supplement"), to the Offer to Purchase, dated October 24, 1996 (the
"Offer to Purchase"), and the revised Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") in connection
with the offer by Atlantic Acquisition Corporation, a Pennsylvania
corporation ("Purchaser") and a wholly owned subsidiary of Norfolk Southern
Corporation, a Virginia corporation ("Parent"), to purchase all of the
outstanding shares of (i) common stock, par value $1.00 per share (the
"Common Shares"), and (ii) Series A ESOP Convertible Junior Preferred Stock,
without par value (the "ESOP Preferred Shares" and, together with the Common
Shares, the "Shares"), of Conrail Inc., a Pennsylvania corporation (the
"Company"), including, in each case, the associated Common Stock Purchase
Rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
July 19, 1989, as amended, between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agreement") at a price of
$110 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer. All references herein to the Common
Shares, ESOP Preferred Shares, or Shares shall, unless the context otherwise
requires, include the associated Rights.
Unless the Rights are redeemed prior to the Expiration Date (as defined in
the Supplement), holders of Shares will be required to tender one associated
Right for each Share tendered in order to effect a valid tender of such
Share. Accordingly, shareholders who sell their Rights separately from their
Shares and do not otherwise acquire Rights may not be able to satisfy the
requirements of the Offer for the tender of Shares. If the Distribution Date
(as defined in the Supplement) has not occurred prior to the Expiration Date,
a tender of Shares will also constitute a tender of the associated Rights. If
the Distribution Date has occurred and (i) Purchaser has waived that portion
of the Rights Condition (as defined in the Offer to Purchase) requiring that
a Distribution Date not have occurred and (ii) Rights Certificates (as
defined in the Offer to Purchase) have been distributed to holders of Shares
prior to the time a holder's Shares are purchased pursuant to the Offer, in
order for Rights (and the corresponding Shares) to be validly tendered,
Rights Certificates representing a number of Rights equal to the number of
Shares tendered must be delivered to the Depositary (as defined in the Offer
to Purchase) or, if
<PAGE>
available, a Book-Entry Confirmation (as defined in the Offer to Purchase)
must be received by the Depositary with respect thereto. If the Distribution
Date has occurred and (i) Purchaser has waived that portion of the Rights
Condition requiring that a Distribution Date not have occurred and (ii)
Rights Certificates have not been distributed prior to the time Shares are
purchased pursuant to the Offer, Rights may be tendered prior to a
shareholder receiving Rights Certificates by use of the guaranteed delivery
procedure described in Section 3 of the Offer to Purchase. In any case, a
tender of Shares constitutes an agreement by the tendering shareholder to
deliver Rights Certificates representing a number of Rights equal to the
number of Shares tendered pursuant to the Offer to the Depositary within
three business days after the date that Rights Certificates are distributed.
Purchaser reserves the right to require that the Depositary receive Rights
Certificates, or a Book-Entry Confirmation, if available, with respect to
such Rights prior to accepting the related Shares for payment pursuant to the
Offer if the Distribution Date has occurred prior to the Expiration Date.
If a shareholder desires to tender Shares and Rights pursuant to the Offer
and such shareholder's Share Certificates (as defined in the Offer to
Purchase) or, if applicable, Rights Certificates are not immediately
available (including, if the Distribution Date has occurred and Purchaser
waives that portion of the Rights Condition requiring that a Distribution
Date not have occurred, because Rights Certificates have not yet been
distributed) or time will not permit all required documents to reach the
Depositary prior to the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares or Rights may
nevertheless be tendered according to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase. See Instruction 2 of the revised
Letter of Transmittal. Delivery of documents to a Book-Entry Transfer
Facility (as defined in the Offer to Purchase) in accordance with the
Book-Entry Transfer Facility's procedures does not constitute delivery to the
Depositary.
THE MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD
BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE HOLDER OF
RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE
MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.
THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND
CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms
and subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price has been increased to $110 per Share, net to the
seller in cash.
2. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on Friday, November 22, 1996, unless the Offer is extended.
3. The Offer is being made for all of the outstanding Shares.
4. The Offer is conditioned upon, among other things, prior to the
expiration of the Offer, (1) the receipt by Purchaser of an informal written
opinion in form and substance reasonably satisfactory to Purchaser from the
staff of the Surface Transportation Board (the "STB"), without the imposition
of any conditions unacceptable to Purchaser, that the use of a voting trust
in connection with the Offer and the Proposed Merger (as defined in the Offer
to Purchase) is consistent with the policies of the STB against unauthorized
acquisitions of control of a regulated carrier, (2) the receipt by Purchaser
of an informal statement from the Premerger Notification Office of the
Federal Trade Commission that the transactions contemplated by the Offer and
the Proposed Merger are not subject to, or are exempt from, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), or, in the absence of the receipt of such informal statement, any
applicable waiting period under the HSR Act having expired or been
terminated, (3) Parent and Purchaser having obtained, on terms reasonably
acceptable to Parent, sufficient financing to enable consummation of the
Offer and the Proposed Merger, (4) there being validly tendered and not
properly withdrawn prior to the expiration of the Offer a number of Common
Shares and ESOP Preferred Shares which together constitute at least a
majority of the Shares outstanding on a fully diluted basis, (5) Purchaser
being satisfied, in its sole discretion, that Subchapter F of Chapter 25 of
the Pennsylvania Business Corporation Law has been complied with or is
invalid or otherwise inapplicable to the Offer and the Proposed Merger, (6)
the Rights having been redeemed by the Board of Directors of the Company or
Purchaser being satisfied, in its sole discretion, that such Rights are
invalid or otherwise inapplicable to the Offer and the Proposed Merger and
(7) Purchaser being satisfied, in its sole discretion, that the previously
announced Agreement and Plan of Merger, as amended, between the Company and
CSX Corporation has been terminated in accordance with its terms or
otherwise.
<PAGE>
5. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer.
The Offer is made solely by the Offer to Purchase, the Supplement and the
revised Letter of Transmittal and is being made to all holders of Shares.
Purchaser is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto,
Purchaser will make a good faith effort to comply with such state statute.
If, after such good faith effort, Purchaser cannot comply with such state
statute, the Offer will not be made to (nor will tenders be accepted from or
on behalf of) the holders of Shares in such state. In any jurisdiction where
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by the Dealer Managers or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares
will be tendered unless otherwise specified on the instruction form set forth
in this letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE
OFFER.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER
TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
OF
CONRAIL INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Supplement, dated November 8, 1996, and the revised Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"), in
connection with the offer by Atlantic Acquisition Corporation, a Pennsylvania
corporation ("Purchaser") and a wholly owned subsidiary of Norfolk Southern
Corporation, a Virginia corporation ("Parent"), to purchase all outstanding
shares of (i) common stock, par value $1.00 per share (the "Common Shares")
and (ii) Series A ESOP Convertible Junior Preferred Stock, without par value
(the "ESOP Preferred Shares" and, together with the Common Shares, the
"Shares"), of Conrail Inc., a Pennsylvania corporation (the "Company"),
including, in each case, the associated Common Stock Purchase Rights (the
"Rights") issued pursuant to the Rights Agreement, dated July 19, 1989, as
amended, between the Company and First Chicago Trust Company of New York, as
Rights Agent. All references herein to the Common Shares, ESOP Preferred
Shares or Shares shall include the associated Rights.
This will instruct you to tender to Purchaser the number of Shares and
Rights indicated below (or, if no number is indicated in either appropriate
space below, all Shares and Rights) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.
NUMBER OF SHARES AND RIGHTS
TO BE TENDERED:*
______________Shares and Rights
Account Number:
- -----------------------------------------------------------------------------
Dated: , 199_
SIGN HERE
-------------------------------
-------------------------------
Signature(s)
-------------------------------
-------------------------------
Please Type or Print Name(s)
-------------------------------
-------------------------------
Please Type or Print
Address(es) Here
-------------------------------
Area Code and Telephone Number
-------------------------------
Taxpayer Identification or
Social Security Number(s)
- ------------
* Unless otherwise indicated, it will be assumed that all Shares and
Rights held by us for your account are to be tendered.
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated
October 24, 1996, the Supplement, dated November 8, 1996, and the revised
Letter of Transmittal and is being made to all holders of Shares. The Offer is
not being made to (nor will tenders be accepted from or on behalf of) holders
of Shares in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. In those jurisdictions where securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Atlantic Acquisition Corporation by J.P. Morgan
Securities Inc., Merrill Lynch & Co., or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
Atlantic Acquisition Corporation,
a wholly owned subsidiary of
Norfolk Southern Corporation
Has Increased the Price of its Offer to Purchase for Cash
All Outstanding Shares
of
Common Stock and Series A ESOP Convertible Junior Preferred Stock (including, in
each case, the associated Common Stock Purchase Rights)
of
Conrail Inc.
to
$110 Net Per Share
Atlantic Acquisition Corporation ("Purchaser"), a Pennsylvania corporation and
a wholly owned subsidiary of Norfolk Southern Corporation, a Virginia
corporation ("Parent"), hereby offers to purchase all of the outstanding shares
of (i) common stock, par value $1.00 per share (the "Common Shares"), and (ii)
Series A ESOP Convertible Junior Preferred Stock, without par value (the "ESOP
Preferred Shares" and, together with the Common Shares, the "Shares"), of
Conrail Inc., a Pennsylvania corporation (the "Company"), including, in each
case, the associated Common Stock Purchase
<PAGE>
Rights (the "Rights") issued pursuant to the Rights Agreement, dated as of July
19, 1989, as amended, between the Company and First Chicago Trust Company of
New York, as Rights Agent (the "Rights Agreement"), at a price of $110 per
Share, net to the seller in cash, without interest thereon (the "Offer Price"),
upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated October 24, 1996 (the "Offer to Purchase"), the Supplement,
dated November 8, 1996 (the "Supplement"), and in the revised Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). Unless the context otherwise requires, all references to Common
Shares, ESOP Preferred Shares or Shares shall include the associated Rights,
and all references to the Rights shall include the benefits that may inure to
holders of the Rights pursuant to the Rights Agreement, including the right to
receive any payment due upon redemption of the Rights.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 22, 1996, UNLESS THE OFFER
IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, PRIOR TO THE EXPIRATION OF
THE OFFER, (1) THE RECEIPT BY PURCHASER OF AN INFORMAL WRITTEN OPINION IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO PURCHASER FROM THE STAFF OF THE
SURFACE TRANSPORTATION BOARD (THE "STB"), WITHOUT THE IMPOSITION OF ANY
CONDITIONS UNACCEPTABLE TO PURCHASER, THAT THE USE OF A VOTING TRUST IN
CONNECTION WITH THE OFFER AND THE PROPOSED MERGER (AS DEFINED HEREIN) IS
CONSISTENT WITH THE POLICIES OF THE STB AGAINST UNAUTHORIZED ACQUISITIONS OF
CONTROL OF A REGULATED CARRIER, (2) THE RECEIPT BY PURCHASER OF AN INFORMAL
STATEMENT FROM THE PREMERGER NOTIFICATION OFFICE OF THE FEDERAL TRADE
COMMISSION THAT THE TRANSACTIONS CONTEMPLATED BY THE OFFER AND THE PROPOSED
MERGER ARE NOT SUBJECT TO, OR ARE EXEMPT FROM, THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), OR, IN THE ABSENCE OF THE
RECEIPT OF SUCH INFORMAL STATEMENT, ANY APPLICABLE WAITING PERIOD UNDER THE HSR
ACT HAVING EXPIRED OR BEEN TERMINATED, (3) PARENT AND PURCHASER HAVING
OBTAINED, ON TERMS REASONABLY ACCEPTABLE TO PARENT, SUFFICIENT FINANCING TO
ENABLE CONSUMMATION OF THE OFFER AND THE PROPOSED MERGER, (4) THERE BEING
VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER A NUMBER OF COMMON SHARES AND ESOP PREFERRED SHARES WHICH TOGETHER
CONSTITUTE AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED
BASIS, (5) PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT SUBCHAPTER F
OF CHAPTER 25 OF THE PENNSYLVANIA BUSINESS CORPORATION LAW HAS BEEN COMPLIED
WITH OR IS INVALID OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED
MERGER, (6) THE RIGHTS HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF THE
COMPANY OR PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT SUCH RIGHTS
ARE INVALID OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER AND
(7) PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PREVIOUSLY
ANNOUNCED AGREEMENT AND PLAN OF MERGER, AS AMENDED, BETWEEN THE COMPANY AND CSX
CORPORATION HAS BEEN TERMINATED IN ACCORDANCE WITH ITS TERMS OR OTHERWISE.
The purpose of the Offer is for Parent to acquire control of, and the entire
equity interest in, the Company. Parent is seeking to negotiate with the
Company a definitive merger agreement pursuant to which the Company would, as
soon as practicable following consummation of the Offer, consummate a merger or
similar business combination with Purchaser or another direct or indirect
subsidiary of
2
<PAGE>
Parent (the "Proposed Merger"). In the Proposed Merger, each Common Share and
ESOP Preferred Share then outstanding (other than Shares held by the Company or
any subsidiary of the Company and Shares owned by Parent, Purchaser or any
direct or indirect subsidiary of Parent) would be converted into the right to
receive an amount in cash equal to the price per Share paid pursuant to the
Offer.
Purchaser expressly reserves the right, in its sole judgment, at any time and
from time to time and regardless of whether any of the events set forth in
Section 14 of the Offer to Purchase shall have occurred or shall have been
determined by Purchaser to have occurred, (i) to extend the period of time
during which the Offer is open and thereby delay acceptance for payment of, and
the payment for, any Shares, by giving oral or written notice of such extension
to the Depositary (as defined in the Offer to Purchase) and (ii) to amend the
Offer in any respect by giving oral or written notice of such amendment to the
Depositary. Any such extension or amendment will be followed as promptly as
practicable by a public announcement thereof, such announcement in the case of
an extension, to be issued not later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date (as defined in
the Supplement). During any such extension, all Shares previously tendered and
not withdrawn will remain subject to the Offer, subject to the right of a
tendering shareholder to withdraw such shareholder's Shares.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such Shares for payment pursuant to the
Offer. In all cases, upon the terms and subject to the conditions of the Offer,
payment for Shares purchased pursuant to the Offer will be made by deposit of
the aggregate purchase price therefor with the Depositary, which will act as
agent for tendering shareholders for the purpose of receiving payment from
Purchaser and transmitting payment to validly tendering shareholders. Under no
circumstances will interest on the purchase price for Shares be paid by
Purchaser by reason of any delay in making such payment.
In all cases, payment for Shares purchased pursuant to the Offer will be made
only after timely receipt by the Depositary of (i) certificates for such Shares
("Certificates") or a book-entry confirmation of the book-entry transfer of
such Shares into the Depositary's account at The Depository Trust Company or
the Philadelphia Depository Trust Company (collectively, the "Book-Entry
Transfer Facilities"), pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, (ii) subject to Section 2 of the Supplement, the revised
Letter of Transmittal (or facsimile thereof) properly completed and duly
executed, with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry transfer, and
(iii) any other documents required by the revised Letter of Transmittal.
If, for any reason whatsoever, acceptance for payment of any Shares tendered
pursuant to the Offer is delayed, or if Purchaser is unable to accept for
payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to Purchaser's rights set forth in the Offer to Purchase and the
Supplement, the Depositary may, nevertheless, on behalf of Purchaser, retain
tendered Shares and
3
<PAGE>
such Shares may not be withdrawn except to the extent that the tendering
shareholder is entitled to and duly exercises withdrawal rights as described in
Section 4 of the Offer to Purchase. Any such delay will be followed by an
extension of the Offer to the extent required by law.
Except as otherwise provided in Section 4 of the Offer to Purchase, tenders of
Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to
the Offer may be withdrawn at any time prior to 12:00 Midnight, New York City
time, on Friday, November 22, 1996 (or if Purchaser shall have extended the
period of time for which the Offer is open, at the latest time and date at
which the Offer, as so extended by Purchaser, shall expire) and unless
theretofore accepted for payment and paid for by Purchaser pursuant to the
Offer, may also be withdrawn at any time after December 22, 1996. In order for
a withdrawal to be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase or the
Supplement. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn, and,
if Certificates for Shares have been tendered, the name of the registered
holder of the Shares as set forth in the tendered Certificate, if different
from that of the person who tendered such Shares. If Certificates for Shares to
be withdrawn have been delivered or otherwise identified to the Depositary,
then prior to the physical release of such Certificates, the serial numbers
shown on such Certificates evidencing the Shares to be withdrawn must be
submitted to the Depositary and the signature on the notice of withdrawal must
be guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity that is a member in good standing of the Securities
Transfer Agent's Medallion Program (an "Eligible Institution"), unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedures for book-entry transfer set forth
in Section 3 of the Offer to Purchase, any notice of withdrawal must also
specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures. Withdrawal of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will be deemed
not to be validly tendered for purposes of the Offer. Withdrawn Shares may,
however, be retendered by repeating one of the procedures set forth in Section
3 of the Offer to Purchase as supplemented by Section 2 of the Supplement at
any time before the Expiration Date. Purchaser, in its sole judgment, will
determine all questions as to the form and validity (including time of receipt)
of notices of withdrawal, and such determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), is contained in the Offer to Purchase and the
Supplement and is incorporated herein by reference. The Supplement, the revised
Letter of Transmittal and other relevant materials will be mailed to record
holders of Shares and Rights and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the Company's shareholder lists and the Company's
list of holders of Rights or, if applicable, who are listed as participants in
a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
4
<PAGE>
THE OFFER TO PURCHASE, THE SUPPLEMENT AND THE REVISED LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Information Agent
or the Dealer Managers at their respective addresses and telephone numbers as
set forth below. Additional copies of the Offer to Purchase, the Supplement,
the revised Letter of Transmittal or other tender offer materials may be
obtained from the Information Agent. Such copies will be furnished promptly at
Purchaser's expense. No fees or commissions will be paid to brokers, dealers or
other persons (other than the Information Agent and the Dealer Managers) for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
ALL OTHERS CALL TOLL FREE: (800) 223-2064
The Dealer Managers for the Offer are:
[J.P. Morgan & Co. logo] [Merrill Lynch & Co. logo]
60 Wall Street World Financial Center
Mail Stop 2860 North Tower
New York, New York 10260 New York, New York 10251-1305
(800) 576-5070 (toll free) (212) 449-8211 (Call Collect)
November 8, 1996
5
<PAGE>
FOR IMMEDIATE RELEASE
November 8, 1996 Contact: Robert C. Fort
(757) 629-2714 or
(757) 463-3276
NORFOLK, VA--Norfolk Southern Corporation (NYSE: NSC) today announced that it
has increased to $110 per share its all-cash offer for all of Conrail's
outstanding common shares and Series A ESOP convertible junior preferred shares.
The $110 offer gives shareholders a premium of $17 (or 18 percent) over the
blended value of CSX's 40 percent cash and 60 percent stock proposal (based on
yesterday's closing price for CSX stock).
Norfolk Southern's all-cash offer also provides Conrail shareholders other
significant benefits. Shares will be purchased into a voting trust, providing
immediate cash payment to shareholders. Unlike 60% of CSX's offer, Norfolk
Southern's purchase is not contingent upon regulatory approval, which may force
shareholders to wait until late next year or longer to receive an as-yet
undetermined total value from CSX.
"Our increased offer demonstrates our total commitment to this combination. We
are determined to take every step necessary to ensure that Conrail shareholders
will have an opportunity to choose between our superior offer and CSX's coercive
two-tiered, front-end loaded offer," said David R. Goode, Chairman, President
and Chief Executive Officer of Norfolk Southern.
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