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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
CONRAIL INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NORFOLK SOUTHERN CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- -----------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- -----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------------------
(5) Total fee paid:
- -----------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- -----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[NORFOLK SOUTHERN LOGO]
December 11, 1996
Dear Conrail Shareholder:
NOW IS THE TIME TO ACT!
As you know, at Conrail's December 23rd Special Meeting, you will have the
opportunity to vote AGAINST the proposal to "opt out" of the Pennsylvania
Fair Value Statute and the proposal to adjourn the Special Meeting if Conrail
does not have enough votes to carry its proposals. I want to take this
opportunity to stress the importance of your vote. This is a crucial time for
Conrail. It may be your only opportunity to ensure that Norfolk Southern's
superior $110 all-cash, all-shares offer -with prompt payment through use
of a voting trust -will remain available to you.
I urge all Conrail shareholders to vote AGAINST the amendment proposal and
AGAINST the adjournment proposal. Please either:
o sign, date and return the enclosed GOLD proxy card today;
or, if you are an ESOP Participant,
o mark the enclosed GREEN instruction card AGAINST, and sign, date and
return it today.
IMPORTANT INFORMATION FOR ESOP PARTICIPANTS
If you are an ESOP Participant, it is especially important that you mark
your GREEN instruction card AGAINST, because each ESOP share that is
allocated to your account represents a significantly greater voting interest
- -by our calculation, as much as seven votes. This is because your
instructions to the Trustee also direct the voting of unallocated and unvoted
ESOP shares, as well as shares held in the Employee Benefits Trust.
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:
o 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.
o 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 retirements.
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o 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."(1) Why let CSX reap
the benefit of the protective surplus your hard work has built up?
o 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.
o 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 (based on a CSX closing
stock price on December 10 of $46 3/8). 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 any such approval is early 1998. This means you have no
assurance if and when CSX will acquire the remaining 75% of Conrail
stock.
o 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 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 and mailing it in the enclosed postage paid return envelope
to the Trustee. IT'S THE LATEST DATED INSTRUCTION CARD THAT COUNTS. Remember
- -the Trustee is required by law to keep your vote confidential. WHY LET
OTHERS DECIDE YOUR DESTINY WHEN YOU CAN CAST A VOTE FOR YOUR FUTURE?
- ------------
1 Pension Benefits Guaranty Corporation:
News Release 96-19, December 6, 1995.
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CONRAIL SHAREHOLDERS: THE FUTURE OF
YOUR INVESTMENT IS AT STAKE
TAKE A STAND FOR YOUR SHAREHOLDER RIGHTS, INCLUDING YOUR RIGHT TO RECEIVE
FAIR VALUE FOR YOUR SHARES. VOTE AGAINST THE AMENDMENT PROPOSAL AND AGAINST
THE ADJOURNMENT PROPOSAL BY SIGNING, DATING AND RETURNING THE GOLD PROXY CARD
TODAY (OR THE GREEN INSTRUCTION CARD FOR ESOP PARTICIPANTS). DO NOT TENDER
YOUR SHARES INTO CSX'S INFERIOR OFFER.
We hope this letter assists you in better understanding the issues at
stake at the Special Meeting. We will keep you apprised of continuing
developments and are firmly committed to making a Norfolk Southern/Conrail
combination a reality. We believe that this combination is clearly in the
best interests of Conrail and its employees, shareholders, customers and
other constituencies.
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 & COMPANY INC. LOGO]
CALL TOLL FREE: 800-223-2064
Banks and Brokers call: 212-440-9800
