SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
(Amendment No. 21)
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
This Amendment No. 21 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 10. ADDITIONAL INFORMATION.
Item 10 is hereby amended and supplemented by the following:
(e) On December 13, 1996, Plaintiffs in the Pennsylvania
Litigation filed a Motion for Leave to File their Third Amended
Complaint (the "Third Amended Complaint") and a Motion for Preliminary
Injunction. The Third Amended Complaint would withdraw two counts
relating to the originally scheduled November 14, 1996 special meeting
of the Company's shareholders as moot, and would add the following
additional claims: (i) that Defendants' stated intention not to convene
the special meeting of the Company's shareholders scheduled for
December 23, 1996 constitutes a breach of fiduciary duty; (ii) that
Defendants' stated intention to successively postpone the vote of the
Company's shareholders scheduled for December 23, 1996 until such
shareholders submit to Defendants' will constitutes fraudulent and
fundamentally unfair conduct; (iii) that Section 5.1(b) of the CSX
Merger Agreement, as amended by the Amendment, constitutes a breach of
fiduciary duty in that it purports to delegate the Company directors'
fiduciary responsibilities relating to the processes of corporate
democracy, and, alternatively, that Section 5.1(b) is void and ultra
vires; (iv) that consummation of the CSX Offer caused a "control
transaction" to occur with respect to the Company pursuant to
Subchapter 25E of the PBCL, thus obligating the group consisting of
CSX, the Company directors and certain executive officers of the
Company to pay to each demanding Company shareholder at least $110 cash
per share; and (v) that Defendants' public statements suggesting that
the CSX merger consideration might be improved is misleading and
constitutes a violation of the federal securities laws. Plaintiffs'
Motion for Preliminary Injunction seeks an order barring Defendants
from postponing the vote of the Company's shareholders scheduled for
December 23, 1996.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended and supplemented by the following:
(a)(58) Text of Advertisement appearing in newspapers
commencing December 13, 1996.
(a)(59) Text of Advertisement appearing in newspapers
commencing December 13, 1996.
(a)(60) Press Release issued by Parent on December 13, 1996.
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: December 13, 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
EXHIBIT INDEX
Exhibit
Number Description
(a)(58) Text of Advertisement appearing in newspapers
commencing December 13, 1996.
(a)(59) Text of Advertisement appearing in newspapers
commencing December 13, 1996.
(a)(60) Press Release issued by Parent on December 13, 1996.
[Advertisement]
TO CONRAIL SHAREHOLDERS:
Give Conrail a vote they can't ignore:
AGAINST
[Graphic: Box with checkmark with the words "Vote Against" directly
below the box.] Vote AGAINST Conrail's proposal to "opt out" of
Pennsylvania's Fair Value Statute.
[Graphic: Box with checkmark with the words "Vote Against" directly
below the box.] Vote AGAINST Conrail's proposal to adjourn the
special meeting if the vote isn't going Conrail's way.
Norfolk Southern's offer is worth fighting for.
Your vote against Conrail's proposals will help preserve the
benefits of Norfolk Southern's $110 per share, all-cash offer.
Norfolk Southern's offer is worth 22% more than CSX's
problematic part-cash, part-shares offer.* CSX's offer requires
you to wait for regulatory approval before CSX can acquire the
75% of Conrail stock remaining in the hands of shareholders.
And there's no downside protection at all if CSX stock declines
in price.
Norfolk Southern's offer won't go away.
CSX and Conrail wish we'd go away. They want you to think we
won't be there. But we're gong to stick this one out. Conrail
shareholders can help support us by voting AGAINST Conrail's
proposals.
Tell the Conrail Board that you want Norfolk Southern's
superior $110 per share, all-cash offer -- with prompt payment
into a voting trust. Tell them to stop trying to force the
inferior CSX deal on Conrail shareholders.
Defend the value of your shares.
Vote now on Norfolk Southern's GOLD proxy card AGAINST
Conrail's proposals to "opt out" of Pennsylvania's Fair Value Statute
and to adjourn the special meeting. Be sure Norfolk Southern
receives your proxy before December 23.
[Norfolk Southern Logo]
Important: If you have any questions, please call our solicitor,
Georgeson & Company Inc. toll free at 1-800-223-2064. Banks and
brokers call 212-440-9800.
* Based on the closing price of CSX common stock on December 12,
1996.
December 13, 1996
[Advertisement]
TO PARTICIPANTS IN CONRAIL'S ESOP
An Open Letter To Conrail ESOP Participants From
Norfolk Southern Corporation
[Norfolk Southern Logo]
Dear ESOP Participant:
Now is the time to act.
You now have the opportunity to say "NO" to the CSX/Conrail deal at
the shareholders' meeting scheduled for December 23 by voting AGAINST
Conrail's proposal to "opt out" of the Pennsylvania Fair Value
Statute. As a participant in the Conrail ESOP, you can instruct the
ESOP Trustee to vote your shares AGAINST this proposal to amend
Conrail's Articles of Incorporation and the adjournment proposal.
You should know that your ESOP votes are very important because each
share you have in your ESOP account represents a voting interest, by
our calculations, equal to at least seven shares. This is because
your shares direct the voting of 1) ESOP shares allocated your
account, 2) ESOP shares not yet allocated to your account, 3) any
ESOP shares that are not voted, and 4) Employee Benefits Trust
shares. Therefore, it is very important that you vote and be heard.
Remember, the ESOP Trustee is required by law to keep your vote
confidential.
Why should you instruct the ESOP Trustee to vote AGAINST the "opt
out" proposal? Here are six reasons:
1. There is substantially more overlap with a CSX/Conrail
system than there is with a Norfolk Southern/Conrail
system. A merger between CSX and Conrail would
eliminate competitive service in 64 cities, including
Philadelphia, Baltimore, Youngstown and Pittsburgh.
Conrail's Hollidaysburg and Altoona shops are within
70 miles of CSX's facilities at Cumberland, MD.
Redundancies like these could add up to lost jobs.
2. Our managers are valuable to us and are treated as
such. We have avoided massive layoffs and involuntary
separations. Since the formation of Norfolk Southern
in June 1982, we have matched people to needs through
attrition, voluntary separation and early retire-
ments.
3. Norfolk Southern and Conrail both can boast fully
funded, healthy pension funds, ensuring peace of mind
for both employees and retirees. CSX, on the other
hand, has been listed as one of the "Top 50 Companies
with the Largest Underfunded Pension Liability" by
the Pension Benefits Guaranty Corporation. Why let CSX
reap the benefit of the protective surplus your hard
work has built up?
4. Norfolk Southern is committed to maintaining a major
operating presence in Philadelphia as we have done in
Roanoke, Virginia and Atlanta, Georgia -- major
operating centers for Norfolk Southern's two
predecessor railroads. Norfolk Southern also has made
public plans for a multimodal rail-highway facility at
the dormant Philadelphia Navy base.
5. Norfolk Southern's $110 all-cash offer for Conrail
shares is the superior offer. CSX's proposal for the
remaining Conrail stock is currently valued at
approximately $92 per share.* Unlike the Norfolk
Southern offer, the second-step stock portion of the
CSX offer is contingent on Surface Transportation
Board approval. The earliest CSX expects to receive
such approval is early 1998. This means you have no
assurance if and when CSX will acquire the remaining
75% of Conrail stock.
6. You should know that a number of senior Conrail
executives have been selling Conrail shares recently,
not only pursuant to the first CSX offer but also on
the open market. Ask yourself if this indicates a lack
of confidence in the value and chances of completion
of CSX's proposed deal.
Many of you have worked with Norfolk Southern people for many years
and are familiar with our values and beliefs. You know us. Together,
we can form an even better railroad -- a process that you can help.
Say "NO" to the CSX/Conrail merger by voting today. Instruct the ESOP
Trustee to vote your shares "AGAINST" Conrail's amendment proposal
and the adjournment proposal.
Your vote is important to us. If you have already sent a Trustee
instruction card in response to the Conrail solicitation, you may
revoke it and vote "AGAINST" the proposal by signing and dating the
enclosed green instruction card previously sent to you and mailing it
to the Trustee. It's the latest dated instruction card that counts.
The Trustee's deadline for receiving your instructions is Thursday,
December 19. Why let others decide your destiny when you can cast a
vote for your future?
Sincerely,
NORFOLK SOUTHERN CORPORATION
[Norfolk Southern Logo]
Important: If you have any questions, please call our solicitor,
Georgeson & Company Inc. toll free at 1-800-223-2064. Banks and
brokers call 212-440-9800.
* Based on the closing price of CSX common stock on December 12,
1996.
December 13, 1996
FOR IMMEDIATE RELEASE
December 13, 1996
Media Contact: Robert C. Fort
(757) 629-2714
NS SEEKS INJUNCTION TO STOP POSTPONEMENT OF CONRAIL SHAREHOLDER VOTE
NORFOLK, VA -- Norfolk Southern Corporation today filed a motion
in U.S. District Court in Philadelphia to block Conrail, Inc.
from postponing a scheduled December 23 meeting at which
shareholders are to vote on whether to "opt out" of
Pennsylvania's Fair Value statute.
In its motion for a preliminary injunction, Norfolk Southern
said Conrail and CSX Corporation are "subverting the processes of
corporate democracy" by announcing they will refuse to allow the
vote to proceed unless they are assured of victory. The motion
alleges that this represents "fundamentally unfair conduct
directed at Conrail's shareholders' most fundamental right - the
right to vote." Norfolk Southern said Conrail and CSX are
allowing shareholders no choice on December 23, effectively
denying them the right to vote against the proposed amendment to
Conrail's charter.
"Permitting defendants to disenfranchise those shareholders
who refuse to opt out of the statute designed to protect them
against coercive, two-tiered front-end loaded tender offers like
the CSX transaction defeats the purpose and intent" of the
Pennsylvania law and "contravenes the public policy concern for
credible corporate democracy," Norfolk Southern said in its
motion.
Norfolk Southern has offered $110 a share in cash for all
Conrail shares, a $10 billion offer worth at least $1.3 billion
more than CSX's proposal.
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