<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
SCHEDULE 14D-1
(AMENDMENT NO. 17)
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
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<PAGE>
This Amendment No. 17 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 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended and supplemented by the following:
(a)(52) Press Release issued by Parent on December 8, 1996.
(a)(53) Parent's Proxy Statement Supplement, including attached
letter to the Company's shareholders, mailed to the
Company's shareholders commencing December 9, 1996.
<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: December 9, 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
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
(a)(52) Press Release issued by Parent on December 8, 1996.
(a)(53) Parent's Proxy Statement Supplement, including attached letter to
the Company's shareholders, mailed to the Company's shareholders
commencing December 9, 1996.
<PAGE>
FOR IMMEDIATE RELEASE
- ---------------------
DECEMBER 8, 1996
Media Contact: Robert Fort
757 629-2714
NS ISSUES PLEDGE TO CR SHAREHOLDERS
NORFOLK, VA -- Norfolk Southern today confirmed its commitment to
Conrail shareholders by pledging that it will not be a party to any agreement
with CSX or Conrail that delivers anything less to Conrail shareholders than
$110 a share in cash, for all shares, promptly into a voting trust. The
pledge is contained in a letter from David R. Goode, NS chairman, president
and chief executive officer, that will be sent to Conrail shareholders on
Monday.
"The only way Conrail shareholders are going to see our superior,
all cash offer is if they force their management to honor shareholder wishes,"
Goode said. "As things now stand, Conrail management is denying its own
shareholders the benefits of our $110, all cash offer for all shares, which is
nearly 19 percent higher than the part cash, part stock CSX offer."
Conrail has called for a shareholder vote at a meeting set for 5
p.m. on December 23. However, it has already declared that it won't convene the
meeting unless it has enough votes to assure approval of its proposal to opt
out of the Pennsylvania Fair Value Statute, and to adjourn the special meeting.
It said that it will continue to set new shareholder meetings until Conrail
shareholders approve its proposal.
"This arrogant denial of basic shareholder rights is an outrage,"
Goode said.
Goode stressed that the NS pledge also contained an important
message for both CSX management and CSX shareholders. "CSX management should
have no doubt as to our determination to acquire Conrail and our willingness to
use any and all appropriate financial means to accomplish that objective," the
NS chairman said.
"For CSX shareholders, we repeat our willingness to create today
with CSX and Conrail a structure for Eastern railroad service that will enable
both of our companies to prosper in a competitive environment," Goode noted,
"but this will be accomplished only pursuant to a $110 all cash offer for all
shares into a voting trust. Such an offer would benefit the shareholders of all
three companies.
"However, Conrail shareholders must vote 'no' in order to make this
happen," Goode said.
###
World Wide Web Site - http://www.nscorp.com
<PAGE>
[NORFOLK SOUTHERN LOGO]
December 9, 1996
Dear Conrail Shareholder:
On November 4, Norfolk Southern began soliciting your vote AGAINST a
proposal by Conrail's Board of Directors to amend the Conrail charter to "opt
out" of Subchapter E of Chapter 25 of the Pennsylvania Business Corporation
Law. On November 8, we increased the amount payable in our cash tender offer
for Conrail shares from $100 per share to $110 per share.
TODAY WE MAKE THE FOLLOWING PLEDGE TO YOU AND ALL CONRAIL SHAREHOLDERS:
NORFOLK SOUTHERN WILL NOT BE A PARTY TO ANY AGREEMENT WITH CSX OR CONRAIL
THAT DELIVERS ANYTHING LESS TO CONRAIL SHAREHOLDERS THAN A $110 ALL-CASH,
ALL-SHARES OFFER WITH PROMPT PAYMENT THROUGH USE OF A VOTING TRUST SO LONG AS
CONRAIL SHAREHOLDERS REJECT THE MANEUVERING BY CSX AND CONRAIL'S MANAGEMENT
TO PAY YOU LESS THAN YOU DESERVE FOR YOUR SHARES -which you can do by
voting 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.
That's the only way to stop Conrail's management and CSX from denying you
the benefits of Norfolk Southern's superior all-cash offer for all shares
which is worth almost 19% more than CSX's part cash, part stock offer.(1)
THE FUTURE VALUE OF YOUR CONRAIL INVESTMENT IS IN YOUR HANDS
DON'T BE COERCED INTO ACCEPTING LESS THAN FULL VALUE FOR YOUR CONRAIL
SHARES. VOTE TODAY ON THE GOLD PROXY CARD AGAINST CONRAIL'S PROPOSALS TO "OPT
OUT" OF PENNSYLVANIA'S FAIR VALUE STATUTE AND TO ADJOURN THE SPECIAL MEETING.
Even if you have tendered your shares into CSX's new offer or voted earlier,
you can still vote those shares against the "opt out" amendment by signing
and returning the GOLD proxy card. You must act now to protect the value of
your Conrail investment.
Sincerely,
/s/ David R. Goode
David R. Goode
Chairman, President and
Chief Executive Officer
IMPORTANT
If you have any questions, please call our
solicitor:
[GEORGESON AND COMPANY INC. LOGO]
CALL TOLL FREE: 800-223-2064
Banks and Brokers call: 212-440-9800
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(1) Based on the closing price of CSX common stock on December 6, 1996.
<PAGE>
SPECIAL MEETING OF SHAREHOLDERS
OF
CONRAIL INC.
--------------------
PROXY STATEMENT SUPPLEMENT
of
NORFOLK SOUTHERN CORPORATION
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SOLICITATION OF PROXIES
IN OPPOSITION TO THE PROPOSED AMENDMENT TO THE
ARTICLES OF INCORPORATION OF CONRAIL INC.
INTRODUCTION
This Proxy Statement Supplement (this "Supplement") is furnished by
Norfolk Southern Corporation ("Norfolk Southern") and relates to a Special
Meeting of Shareholders of Conrail Inc. ("Conrail" or the "Company") to vote
upon Conrail's proposal (the "Amendment Proposal") to amend its Articles of
Incorporation to "opt out" of Subchapter E (the "Fair Value Statute") of
Chapter 25 of the Pennsylvania Business Corporation Law of 1988, as amended,
and to any adjournments, postponements or reschedulings thereof (the "Special
Meeting"). This Supplement amends and supplements, to the extent set forth
herein, the Proxy Statement of Norfolk Southern, dated November 4, 1996,
which was first mailed to Conrail Shareholders on or about November 4, 1996
and which was subsequently amended and supplemented by a proxy supplement
dated November 8, 1996 (as amended to date, the "Proxy Statement").
Capitalized terms used in this Supplement and not otherwise defined in this
Supplement shall have the respective meanings assigned to such terms in the
Proxy Statement. This Supplement is first being mailed to Conrail
Shareholders on or about December 9, 1996.
RECENT DEVELOPMENTS
THE SPECIAL MEETING
On November 25, 1996, Conrail publicly announced that the Special Meeting
had now been scheduled for December 23, 1996, and would be held at The
Academy of Music Hall, 1420 Locust Street, Philadelphia, Pennsylvania, at
5:00 p.m. Eastern Standard Time. According to Conrail's proxy statement, the
Record Date for the Special Meeting is December 5, 1996. Norfolk Southern is
soliciting proxies from Conrail Shareholders to vote AGAINST both (i) the
Amendment Proposal and (ii) Conrail's proposal to adjourn (the "Adjournment
Proposal") the Special Meeting, if necessary, to permit Conrail to further
solicit proxies in the event that there are not sufficient votes at the time
of the Special Meeting to approve the Amendment Proposal.
The proxy cards previously furnished to you by Norfolk Southern remain
valid for Shareholders entitled to vote at the Special Meeting. Nonetheless,
new GOLD proxy cards are being provided to you with this Supplement to vote
AGAINST both the Amendment Proposal and the Adjournment Proposal. ESOP
Participants can instruct the ESOP Trustee to vote their ESOP shares AGAINST
the Amendment Proposal on the enclosed GREEN instruction card. In addition,
if you have already voted Conrail's white proxy card (or GREEN instruction
card) in favor of the Amendment Proposal, you may revoke that vote by
completing and returning the GOLD proxy (or GREEN instruction card) and
indicating your vote AGAINST the Amendment Proposal. It's the latest dated
proxy which will be counted.
PLEASE SIGN AND DATE THE ENCLOSED GOLD PROXY CARD OR GREEN INSTRUCTION
CARD TODAY AND VOTE AGAINST THE "OPT OUT" AMENDMENT.
1
<PAGE>
SUMMARY OF THE CSX SECOND TENDER OFFER
On December 6, 1996, CSX announced the commencement of a second tender
offer for 18,344,845 Shares (representing approximately 20% of the
outstanding Shares) at a price of $110 per Share (the "CSX Second Offer").
The CSX Second Offer is scheduled to expire on January 6, 1997. CSX has
conditioned the CSX Second Offer on, among other things, Shareholder approval
of the Amendment Proposal.
SPECIAL NOTICE TO ESOP PARTICIPANTS
VOTING OF ESOP UNALLOCATED SHARES
Based upon publicly available information, the ESOP Trust currently holds
approximately 7.3 million ESOP Preferred Shares and, prior to the completion
of the first CSX Tender Offer, approximately 2.1 million ESOP Preferred
Shares were allocated to individual shareholder-participants' ("ESOP
Participants") accounts pursuant to the ESOP. Assuming that all such
allocated ESOP Preferred Shares were tendered to CSX and approximately
490,871 were accepted for payment by CSX, Norfolk Southern estimates that
approximately 1.6 million ESOP Preferred Shares are currently allocated to
ESOP Participants' accounts. The remaining shares are held in an ESOP
suspense account (the "Unallocated ESOP Shares"). In accordance with the ESOP
trust agreement between Consolidated Rail Corporation and Fidelity Management
Trust Company, as trustee (the "Trustee") of the ESOP Preferred Shares, the
Trustee is obligated, except under certain circumstances, to vote the ESOP
Preferred Shares credited to ESOP Participants' accounts in accordance with
their instructions, and will vote the ESOP Preferred Shares credited to the
ESOP Participants' accounts for which it does not receive timely instructions
and the Unallocated Shares in the same proportion as the ESOP Preferred
Shares for which valid instruction are received from ESOP Participants. IN
EFFECT, EACH ESOP PREFERRED SHARE COULD DIRECT THE VOTING OF MORE THAN 4.5
ESOP PREFERRED SHARES BY THE TRUSTEE IN ACCORDANCE WITH THE INSTRUCTIONS
GIVEN. IN ADDITION, BECAUSE IT IS LIKELY THAT NOT ALL ESOP PARTICIPANTS WILL
GIVE VOTING INSTRUCTIONS, THE ESOP PARTICIPANTS WHO DO VOTE WILL BE DIRECTING
THE VOTING OF AN EVEN GREATER NUMBER OF SHARES. AS A RESULT OF THIS
"SUPER-VOTING" ABILITY, IT IS ESPECIALLY IMPORTANT FOR EACH HOLDER OF ESOP
PREFERRED SHARES TO PROPERLY INSTRUCT THE TRUSTEE AS TO HOW THE ESOP
PARTICIPANT WANTS ESOP PREFERRED SHARES ALLOCATED TO HIS OR HER ACCOUNT TO BE
VOTED.
Holders of ESOP Preferred Shares cannot instruct the Trustee how to vote
those shares by completing the gold proxy card -they can only instruct the
Trustee as to how to vote their ESOP Preferred Shares by completing the GREEN
INSTRUCTION card provided with this Supplement. VOTING INSTRUCTIONS WILL BE
TREATED CONFIDENTIALLY BY THE TRUSTEE.
VOTING OF EMPLOYEE BENEFITS TRUST
Based upon publicly available information, Norfolk Southern estimates that
approximately 4.3 million Common Shares are held in the Conrail Employee
Benefits Trust (the "EBT"). Based on the terms of the trust agreement, the
trustee of the EBT must follow the directions of the ESOP Participants with
respect to the manner of voting the Common Shares held in the Employee
Benefits Trust on each matter pending before an annual or special meeting of
Shareholders. Consequently, not only will each ESOP Preferred Share voted
direct the vote of more than 4.5 ESOP Preferred Shares, but it will also
direct the vote of more than 2.5 additional Common Shares held in the EBT.
PASS THROUGH VOTING PROCEDURE FOR NON-VOTING SHARES
As discussed above, all ESOP Preferred Shares that have been allocated to
ESOP Participants' accounts but as to which no voting instructions have been
received by the Trustee will be voted in the same proportion as are the ESOP
Preferred Shares for which valid instructions have been received. This means
that if an ESOP Participant does not instruct the Trustee regarding the
voting of his or her allocated ESOP Preferred Shares, those allocated ESOP
Preferred Shares will be voted based upon the voting percentages of other
ESOP Participants who have timely provided the Trustee with their voting
instructions.
As a result of the aggregate effect of the EBT, the pass through voting of
unallocated ESOP Preferred Shares and the likelihood that some allocated ESOP
Preferred Shares will not be voted, ESOP Participants who do vote will direct
the voting of at least 7, and possibly more Shares. Accordingly, we encourage
ESOP Participants to vote the GREEN INSTRUCTION card provided with this
Supplement today AGAINST the Amendment Proposal and the Adjournment Proposal.
2
<PAGE>
CERTAIN LITIGATION--RECENT DEVELOPMENTS
On November 15, 1996, Norfolk Southern filed a Motion for Leave to
Supplement and Amend the Complaint, previously filed in the District Court
for the Eastern District of Pennsylvania (the "District Court"), in which
Norfolk Southern requests permission to file its Second Amended Complaint for
Declaratory and Injunctive Relief (the "Second Amended Complaint"). The
Second Amended Complaint updates the description of counts contained in the
earlier complaints and adds certain additional allegations of disclosure and
fiduciary duty violations relating to such updated description of events.
Among other allegations, the Second Amended Complaint includes allegations
regarding the coercive front-end loaded, two-tier structure of the CSX
Acquisition Proposal (and the fundamental unfairness thereof), and
allegations concerning material misrepresentations and omissions by Conrail
and its Board members in connection with the supplement to the CSX Offer to
Purchase and with Conrail's Schedule 14D-9 statements relating to the CSX
Acquisition Proposal and the Norfolk Southern Offer to Purchase and the
Proposed Norfolk Southern/Conrail Merger.
On November 18 and 19, 1996, a hearing was held before the Honorable
Donald W. VanArtsdalen, United States District Court Judge for the Eastern
District of Pennsylvania, on Norfolk Southern's motion for a preliminary
injunction against Conrail. Norfolk Southern was seeking to enjoin the CSX
Tender Offer from expiring on November 20, 1996 and to enjoin CSX from
acquiring Shares pursuant to the CSX Tender Offer.
On November 19, 1996 Judge VanArtsdalen issued an oral ruling denying
Norfolk Southern's motion for a preliminary injunction. After the ruling,
Norfolk Southern asked the District Court for an injunction pending appeal.
The District Court denied this motion. On the same date, Norfolk Southern
filed an emergency motion for an injunction pending appeal and a motion
seeking an expedited appeal with the United States Court of Appeals for the
Third Circuit (the "Third Circuit").
On November 20, 1996 the Third Circuit denied Norfolk Southern's motion
for an injunction pending appeal. Accordingly, the CSX Tender Offer expired
on November 20, 1996. On November 21, 1996, Norfolk Southern announced that
no purpose would be served by seeking expedited review of the decision not to
enjoin CSX's purchase, since CSX had completed its purchase of 19.9% of the
Conrail Shares, and therefore Norfolk Southern would withdraw that motion.
However, Norfolk Southern continues to pursue on the merits its lawsuit
against Conrail and CSX.
On December 5, 1996, Defendants in the Pennsylvania litigation filed their
Answer and Defenses to Plaintiffs' Second Amended Complaint, generally
denying, and asserting various defenses to, the allegations contained therein
and requesting judgment on all claims and an award of costs and attorneys
fees. Conrail and CSX also filed a Counterclaim to Plaintiffs' Second Amended
Complaint (the "Counterclaim"), naming Norfolk Southern, Atlantic Acquisition
Corporation and Kathryn B. McQuade as counterclaim defendants, alleging that
David R. Goode and Henry C. Wolf are co-conspirators/aiders and abettors, and
purporting to state the following claims: tortious interference with current
and prospective contractual relationships, intentional infliction of harm,
unfair competition and civil conspiracy. Further, the Counterclaim alleges
that Norfolk Southern and certain of its executive officers have engaged in
(i) dissemination of materially false and misleading information, (ii)
promotion of an illusory tender offer, (iii) purportedly improper
commencement of a lawsuit, (iv) false and misleading solicitation of proxies
for the upcoming Conrail shareholder vote and (v) efforts to manipulate the
market through unfair, tortious conduct, in violation of the federal
securities laws. The Counterclaim requests a jury trial and an award of
damages, punitive damages, costs and attorneys fees. Norfolk Southern
believes that the Counterclaim is without merit and intends to defend it
vigorously.
* * *
NORFOLK SOUTHERN CORPORATION
Dated: December 9, 1996
3
<PAGE>
ADDITIONAL INFORMATION
If your Shares are held in the name of a bank or broker, only your bank or
broker can vote your Shares and only upon receipt of your specific
instructions. Please instruct your bank or broker to vote AGAINST the
Amendment Proposal and the Adjournment Proposal by executing the GOLD proxy
card today. If you have any questions or require any assistance in voting
your Shares, please call:
[GEORGESON AND COMPANY INC. LOGO]
Wall Street Plaza
New York, New York 10005
Call Toll Free: 800-223-2064
Banks and Brokers call: 212-440-9800
