<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
(AMENDMENT NO. 43)
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**
$943,000,000 $188,600
* For purposes of calculating the filing fee only. This calculation
assumes the purchase of an aggregate of 8,200,000 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 $115 net per
share in cash.
** 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. The amount
of $2,456,439 was paid upon previous filings of this Schedule 14D-1.
Accordingly, no additional fee is paid at this time and $2,267,839
should be credited to the account of the Bidders.
[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.
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Amount Previously Paid: $2,456,439 Filing Party: Norfolk Southern Corporation and Atlantic
Acquisition Corporation
Form or Registration No.: Schedule 14D-1 Date Filed: November 8, 1996, October 24, 1996 and
December 20, 1996
</TABLE>
<PAGE>
This Amendment No. 43 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 up to an aggregate
of 8,200,000 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 to
the Offer to Purchase, dated November 8, 1996 (the "First Supplement"), the
Second Supplement to the Offer to Purchase, dated December 20, 1996 (the
"Second Supplement"), and the Third Supplement to the Offer to Purchase,
dated January 22, 1997 (the "Third 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 First Supplement, the Second Supplement, the Third
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; Proration; Expiration Date") of the Third Supplement is
incorporated herein by reference.
(c) The information set forth in Section 3 ("Price Range of Shares;
Dividends") of the Third 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 Third 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 Third 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 the Merger; Plans for the Company; Certain Considerations") of the Third
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 Section 7 ("Conditions of the Offer") and
Section 8 ("Certain Legal Matters; Regulatory Approvals; Certain Litigation")
of the Third Supplement is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
Item 10 is hereby amended and supplemented by the following:
(b) The information set forth in the Introduction and Section 6 ("Purpose
of the Offer and the Merger; Plans for the Company; Certain Considerations")
of the Third Supplement is incorporated herein by reference.
2
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(e) The information set forth in Section 8 ("Certain Legal Matters;
Regulatory Approvals; Certain Litigation") of the Third Supplement is
incorporated herein by reference.
(f) The information set forth in the Third Supplement and the revised
Letter of Transmittal, copies of which are attached hereto as Exhibits
(a)(100) and (a)(101), respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended and supplemented by the following:
(a)(99) Press Release issued by Parent on January 22, 1997.
(a)(100) Third Supplement to the Offer to Purchase, dated January 22,
1997.
(a)(101) Revised Letter of Transmittal.
(a)(102) Revised Notice of Guaranteed Delivery.
(a)(103) Revised Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(104) Revised Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(105) Summary Advertisement dated January 22, 1997.
(a)(106) Text of Advertisement appearing in newspapers commencing
January 22, 1997.
3
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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: January 22, 1997
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
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
- ------------ ---------------------------------------------------------------------------------
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(a)(99) Press Release issued by Parent on January 22, 1997.
(a)(100) Third Supplement to the Offer to Purchase, dated January 22, 1997.
(a)(101) Revised Letter of Transmittal.
(a)(102) Revised Notice of Guaranteed Delivery.
(a)(103) Revised Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(a)(104) Revised Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(105) Summary Advertisement dated January 22, 1997.
(a)(106) Text of Advertisement appearing in newspapers commencing January 22, 1997.
</TABLE>
<PAGE>
FOR IMMEDIATE RELEASE
- ---------------------
JANUARY 22, 1997
Media Contact: Robert Fort
(757) 629-2710
NORFOLK SOUTHERN AMENDS TENDER OFFER
NORFOLK, VA -- Norfolk Southern Corporation (NYSE:NSC) today announced
that it has amended its existing all-cash tender offer in order to buy 8.2
million Conrail shares (approximately 9.9%), the approximate maximum number of
shares that Norfolk Southern can buy without triggering Conrail's "poison
pill." Norfolk Southern also stated that the tender offer has been extended
through 12:00 midnight, New York City time, on Tuesday, February 4, 1997.
According to the depositary for the Norfolk Southern tender offer,
approximately 3,192,000 Conrail shares had been tendered and not withdrawn
pursuant to Norfolk Southern's offer as of the afternoon of January 21.
###
World Wide Web Site - http://www.nscorp.com
<PAGE>
THIRD SUPPLEMENT TO THE OFFER TO PURCHASE FOR CASH DATED OCTOBER 24, 1996
ATLANTIC ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
NORFOLK SOUTHERN CORPORATION
HAS AMENDED ITS OFFER TO PURCHASE FOR CASH
AND IS NOW OFFERING TO PURCHASE UP TO
AN AGGREGATE OF 8,200,000 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.
AT
$115 NET PER SHARE
THE OFFER, WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 4, 1997, UNLESS THE OFFER
IS EXTENDED
IMPORTANT
THE OFFER, AS AMENDED, IS NO LONGER SUBJECT TO THE MINIMUM CONDITION, THE
SUBCHAPTER F CONDITION, THE RIGHTS CONDITION OR THE CSX TERMINATION CONDITION
(EACH AS DEFINED IN THE OFFER TO PURCHASE). SEE SECTION 7.
Consistent with Norfolk Southern Corporation's ("Parent") pledge that it
will not be a party to any agreement with CSX Corporation ("CSX") or Conrail
Inc. (the "Company") that delivers anything less to Company shareholders than
a $115 all-cash offer, Parent and Atlantic Acquisition Corporation
("Purchaser"), a wholly owned subsidiary of Parent, intend to continue to
seek to negotiate with the Company with respect to the acquisition of the
Company by Parent or Purchaser.
Any shareholder desiring to tender all or any portion of such
shareholder's Shares (as defined herein) should either (i) complete and sign
the revised Letter of Transmittal delivered herewith or one of the Letters of
Transmittal previously delivered to such shareholder by Parent and Purchaser
(or any facsimiles of such Letters of Transmittal) in accordance with the
instructions in such Letters of Transmittal, have such shareholder's
signature thereon guaranteed if required by Instruction 1 to such Letters of
Transmittal, mail or deliver one of such Letters of Transmittal (or such
facsimile thereof) and any other required documents (continued)
The Dealer Managers for the Offer are:
J.P. Morgan & Co. Merrill Lynch & Co.
January 22, 1997
<PAGE>
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 such 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 (as defined herein) 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).
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 the 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 Third Supplement. Additional
copies of the Offer to Purchase, the First Supplement (as defined herein),
the Second Supplement (as defined herein), the revised Letter of Transmittal
or other tender offer materials may be obtained from the Information Agent.
<PAGE>
TABLE OF CONTENTS
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PAGE
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INTRODUCTION ............................................................................. 1
1. Terms of the Offer; Proration; Expiration Date ........................................ 2
2. Procedures for Tendering Shares ....................................................... 3
3. Price Range of Shares; Dividends ...................................................... 3
4. Source and Amount of Funds ............................................................ 4
5. Background of the Offer; Contacts with the Company .................................... 4
6. Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations ... 5
7. Conditions of the Offer ............................................................... 6
8. Certain Legal Matters; Regulatory Approvals; Certain Litigation ....................... 6
9. Miscellaneous ......................................................................... 7
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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"), as previously amended and
supplemented by the Supplement to the Offer to Purchase, dated November 8,
1996 (the "First Supplement"), and the Second Supplement to the Offer to
Purchase, dated December 20, 1996 (the "Second Supplement"), 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
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 is now offering to purchase up to an aggregate of 8,200,000
Shares at $115 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, as amended and supplemented by the First
Supplement, the Second Supplement and this Third Supplement, and in the
revised Letter of Transmittal (which, as amended from time to time,
collectively constitute the "Offer"). THE OFFER, AS AMENDED, IS NO LONGER
SUBJECT TO THE MINIMUM CONDITION, THE SUBCHAPTER F CONDITION, THE RIGHTS
CONDITION OR THE CSX TERMINATION CONDITION (EACH AS DEFINED IN THE OFFER TO
PURCHASE). See Section 7. 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.
On January 13, 1997, Parent announced its pledge that if Company
shareholders defeated the Company proposal to approve the Articles Amendment
at the Pennsylvania Special Meeting, Parent and Purchaser would promptly
amend the Offer to eliminate all of the conditions thereto and to reduce the
aggregate number of Shares sought in the Offer to 8,200,000 Shares,
approximately the maximum number of Shares (based on currently available
information as to the number of outstanding Common Shares) that Purchaser can
acquire without becoming an "Acquiring Person" under the Rights Agreement.
See Introduction and Section 12 of the Offer to Purchase and Sections 6 and 8
of the First Supplement. Based upon an official preliminary vote count by the
inspector of election for the Pennsylvania Special Meeting, Company
shareholders defeated the Articles Amendment at the Pennsylvania Special
Meeting which was held on January 17, 1997. The Company has stated that it
may call another special meeting of the Company shareholders to approve the
Articles Amendment to "opt out" of Subchapter E of Chapter 25 of the PBCL or
to consider the Proposed CSX Merger. However, the Company has not stated
whether or when any such meeting would be held. Purchaser intends to vote any
Shares acquired in the Offer against the Articles Amendment and the Proposed
CSX Merger at any such meeting.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY ANNUAL OR
OTHER MEETING OF COMPANY SHAREHOLDERS. ANY SUCH SOLICITATION WHICH
PARENT OF PURCHASER MIGHT MAKE WOULD BE MADE ONLY PURSUANT TO SEPARATE PROXY
MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT").
The purpose of the Offer is for Parent, through Purchaser, to acquire a
significant equity interest in the Company as the first step in a business
combination of Parent and the Company. Following Purchaser's acceptance for
payment of Shares in the Offer, Purchaser intends to promptly commence
another tender offer (the "Second Offer") to purchase all outstanding Shares
not owned by Purchaser at
1
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a price of $115 per Share, net to the seller in cash, without interest
thereon, upon essentially the same terms and subject to the same conditions
set forth in the Offer to Purchase, as previously amended and supplemented by
the First Supplement and the Second Supplement, in order to acquire control
of, and the entire equity interest in, the Company.
Consistent with Parent's pledge that it will not be a party to any
agreement with CSX or the Company that delivers anything less to Company
shareholders than a $115 all-cash offer, Parent and Purchaser intend to
continue to seek to negotiate with the Company a definitive merger agreement
pursuant to which the Company would, as soon as practicable following
consummation of the Offer or the Second 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 or the Second
Offer. See Sections 11 and 12 of the Offer to Purchase, Sections 5 and 6 of
the First Supplement, Sections 7 and 8 of the Second Supplement and Sections
5 and 6 of this Third Supplement.
This Third Supplement should be read in conjunction with the Offer to
Purchase, the First Supplement and the Second Supplement. Except as set forth
in this Third Supplement and the revised Letter of Transmittal, the terms and
conditions previously set forth in the Offer to Purchase, the First
Supplement, the Second Supplement and the Letters of Transmittal mailed with
the Offer to Purchase, the First Supplement or the Second Supplement remain
applicable in all respects to the Offer. Terms used but not defined herein
have the meanings set forth in the Offer to Purchase, the First Supplement or
the Second Supplement.
Based upon information contained in the Company's Proxy Statement
Supplement mailed to Company shareholders on or about December 24, 1996 in
connection with the Pennsylvania Special Meeting, as of December 5, 1996 (the
record date for determining Company shareholders entitled to vote at the
Pennsylvania Special Meeting), 82,244,475 Common Shares and 7,303,920 ESOP
Preferred Shares were issued and outstanding. Based upon information set
forth in the Schedule 13D filed by CSX with the Securities and Exchange
Commission (the "SEC") on December 6, 1996, as amended, 17,775,124 Common
Shares are beneficially owned by CSX. Accordingly, assuming that all Company
shareholders other than CSX tender all of their Shares in the Offer, Company
shareholders will be able to sell approximately 11.4% of their Shares in the
Offer. See Section 1.
To the extent Purchaser determines that, as a result of the consummation
of the Offer, Purchaser would beneficially own such number of the then
outstanding Common Shares as would result in the occurrence of a Distribution
Date, Purchaser reserves the right, in its sole discretion, to further amend
the Offer to reduce the number of Shares sought in the Offer so that the
number of Common Shares that Purchaser would own upon consummation thereof
would represent such number of Common Shares then outstanding as would not
result in the occurrence of a Distribution Date at such time. Any such
amendment would be made in compliance with applicable rules and regulations
of the SEC. See Section 7.
THE OFFER TO PURCHASE, THE FIRST SUPPLEMENT, THE SECOND SUPPLEMENT, THIS
THIRD 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; PRORATION; EXPIRATION DATE. The discussion set
forth in Section 1 of the Offer to Purchase, Section 1 of the First
Supplement and Section 1 of the Second Supplement is hereby amended and
supplemented as follows:
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 extension
or amendment), Purchaser will accept for payment and pay for up to an
aggregate of 8,200,000 Shares which are validly tendered prior to the
Expiration Date (as hereinafter defined) and not properly withdrawn in
accordance with Section 4 of the Offer to
2
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Purchase. The term "Expiration Date" means 12:00 Midnight, New York City
time, on Tuesday, February 4, 1997, 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.
If more than 8,200,000 Shares are validly tendered prior to the Expiration
Date and not properly withdrawn, Purchaser will, upon the terms and subject
to the conditions of the Offer, accept for payment and pay for only 8,200,000
Shares, on a pro rata basis, with adjustments to avoid purchases of
fractional Shares, based upon the number of Shares validly tendered prior to
the Expiration Date and not properly withdrawn. The same proration factor
will be applied in the Offer to the Common Shares and the ESOP Preferred
Shares. Because of the difficulty of determining precisely the number of
Shares validly tendered and not withdrawn, if proration is required,
Purchaser would not expect to be able to announce the final results of
proration or pay for Shares until at least five New York Stock Exchange, Inc.
("NYSE") trading days after the Expiration Date. Preliminary results of
proration will be announced by press release as promptly as practicable after
the Expiration Date. Holders of Shares may obtain such preliminary
information from the Information Agent and may also be able to obtain such
preliminary information from their brokers.
2. PROCEDURES FOR TENDERING SHARES. The discussion set forth in Section 3
of the Offer to Purchase, Section 2 of the First Supplement and Section 2 of
the Second Supplement is hereby amended and supplemented as follows:
The revised Letter of Transmittal and the revised Notice of Guaranteed
Delivery distributed with this Third Supplement may be used to tender Shares.
Tendering shareholders may also continue to use the Letters of Transmittal
and the Notices of Guaranteed Delivery previously distributed with the Offer
to Purchase, the First Supplement or the Second Supplement to tender Shares.
By tendering Shares pursuant to the revised Letter of Transmittal or the
revised Notice of Guaranteed Delivery or one of the Letters of Transmittal or
Notices of Guaranteed Delivery previously delivered, tendering shareholders
will be deemed to represent and warrant to Parent and Purchaser that, among
other things, such tender of Shares complies with Rule 14e-4 under the
Exchange Act.
By executing a Letter of Transmittal, a tendering shareholder will
irrevocably appoint designees of Purchaser as such shareholder's proxies,
each with full power of substitution, to the full extent of such
shareholder's rights with respect to the Shares (including the associated
Rights) tendered by such shareholder and accepted for payment by Purchaser
(and any and all noncash dividends, distributions, rights, other Shares, or
other securities issued or issuable in respect of such Shares on or after
October 24, 1996). All such proxies shall be considered coupled with an
interest in the tendered Shares or Rights. This appointment will be effective
if, when, and only to the extent that, Purchaser accepts such Shares for
payment pursuant to the Offer. Upon such acceptance for payment, all prior
proxies given by such shareholder with respect to such Shares and other
securities will, without further action, be revoked, and no subsequent
proxies may be given. The designees of Purchaser will, with respect to the
Shares and other securities for which the appointment is effective, be
empowered (subject to the terms of the Voting Trust Agreement for so long as
it shall be in effect with respect to the Shares or Rights) to exercise all
voting and other rights of such shareholder as they in their sole discretion
may deem proper at any annual, special, adjourned or postponed meeting of the
Company's shareholders, by written consent or otherwise. Purchaser reserves
the right to require that, in order for shares or other securities to be
deemed validly tendered, immediately upon Purchaser's acceptance for payment
of such Shares, Purchaser (including through the Voting Trust) must be able
to exercise full voting rights with respect to such Shares.
Purchaser intends to vote any Shares acquired in the Offer against the
Articles Amendment and the Proposed CSX Merger at any special meeting of
Company shareholders called for such purpose.
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 AND NEED NOT TAKE ANY FURTHER ACTION IN
ORDER TO RECEIVE THE OFFER PRICE OF $115 NET PER SHARE PURSUANT TO THE OFFER.
3
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3. PRICE RANGE OF SHARES; DIVIDENDS. The discussion set forth in Section 6
of the Offer to Purchase, Section 3 of the First Supplement and Section 3 of
the Second Supplement 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 were $100 7/8 and $68
1/2, respectively. The high and low closing sale prices per Common Share on
the NYSE for the First Quarter of 1997 (through January 21, 1997) were $104
3/4 and $98 1/2, respectively. On January 21, 1997, 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 Third Supplement, the reported closing sale
price per Common Share on the NYSE Composite Tape was $104. 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, Section 4 of the First Supplement and Section 6 of the
Second Supplement is hereby amended and supplemented as follows:
Purchaser estimates that the total amount of funds now required to acquire
Shares pursuant to the Offer, the Second Offer and the Proposed Merger (in
each case as amended and as described in this Third 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 $13 billion, of
which up to approximately $1.0 billion will be required to consummate the
Offer and to pay costs and expenses related thereto. Parent anticipates
borrowing up to approximately $1.0 billion either under the revolving credit
facility of the Credit Facility on a short-term basis or through the issuance
of commercial paper to finance the acquisition of the Shares pursuant to the
Offer and to pay such related costs and expenses.
As of January 8, 1997, signed commitments (including the commitments of
the Arrangers and their affiliates as Lenders) in excess of the amount needed
to complete Parent's proposed acquisition of the Company had been received by
the Arrangers from banks and other financial institutions in respect of the
$13 billion financing for Parent's $115 per Share Offer for all outstanding
Shares. Parent has received oral confirmations from the Arrangers (and their
affiliates as Lenders) in respect of their original commitments that the
proceeds of the revolving credit facility will be available for the purchase
of the 8,200,000 Shares pursuant to the Offer, as amended by this Third
Supplement, and such other related purposes in connection therewith as
described above, and Parent and the Arrangers are highly confident that the
other Potential Syndicate Members will also agree to such use of proceeds in
respect of their original commitments.
To the extent Parent elects that loans outstanding under the Credit
Facility prior to the date on which the Borrower owns at least 51% of the
Shares (the "Acquisition Date") bear interest at a rate based on the base
rate, the adjusted CD rate or the Eurodollar rate, it is currently
anticipated that such loans shall bear interest at margins over such rates
equal to 0%, 0.225% and 0.1%, respectively.
To the extent Parent elects that any loans under the Credit Facility bear
interest at a rate based on the adjusted CD rate on and after the Acquisition
Date, it is currently anticipated that such loans shall bear interest at the
adjusted CD rate plus a margin which will initially be .875% and may be
adjusted depending on Parent's senior unsecured long-term debt ratings
following the Acquisition Date to between .350% and 1.00%.
It is currently anticipated that, during all times that both Parent's
senior unsecured long-term debt and the loans under the Credit Facility have
ratings below investment grade, such loans will bear interest at a rate per
annum equal to the rates described in the Offer to Purchase (as modified as
described in the Second Supplement and, in the case of adjusted CD rate
loans, this Third Supplement) that would otherwise be applicable to such
loans plus an additional margin of .125%.
It is also currently anticipated that the $3.5 billion term loan facility,
which is one of the three term loan facilities (in addition to the revolving
credit facility) which will comprise the Credit Facility, will be subject to
a mandatory repayment in the amount of $1.0 billion on the first anniversary
of the Acquisition Date.
4
<PAGE>
5. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. The discussion set
forth in Section 11 of the Offer to Purchase, Section 5 of the First
Supplement and Section 7 of the Second Supplement is hereby amended and
supplemented as follows:
On January 13, 1997, Parent announced its pledge that if Company
shareholders defeated the Company proposal to approve the Articles Amendment
at the Pennsylvania Special Meeting and to allow the Company's management to
adjourn or postpone the Pennsylvania Special Meeting, Parent and Purchaser
would promptly amend the Offer to eliminate all of the conditions thereto and
to reduce the aggregate number of Shares sought in the Offer to approximately
8,200,000 Shares, the maximum number of Shares (based on currently available
information as to the number of outstanding Common Shares) that Purchaser can
acquire without becoming an "Acquiring Person" under the Rights Agreement. At
such time, Parent also announced that, following Purchaser's acceptance for
payment of Shares in such amended Offer, Purchaser would commence the Second
Offer for all the remaining Shares at $115 per Share and upon essentially the
same terms and subject to the same conditions as the Offer as in effect on
January 13, 1997.
On January 17, 1997, the Pennsylvania Special Meeting was held.
On January 21, 1997, Parent issued a press release stating that, based on
the official preliminary vote count by the inspector of election for the
Pennsylvania Special Meeting, the Company's shareholders defeated the
Articles Amendment at the Pennsylvania Special Meeting.
Also on January 21, 1997, Mr. Goode sent the following letter to Messrs.
LeVan and Snow:
January 21, 1997
Mr. David M. LeVan Mr. John W. Snow
Chairman, President and Chairman, President and
Chief Executive Officer Chief Executive Officer
Conrail Inc. CSX Corporation
2001 Market Street 901 East Cary Street
Philadelphia, PA 19101 Richmond, VA 23219
Dear David and John:
The Conrail shareholders' vote last Friday places a responsibility on us
to work out a rail structure in the East that will be in the long-term
interests of all constituencies served by our companies. I believe that this
can be accomplished if we sit down and try.
I believe that we can achieve balanced competition in the East with the
greatest continuity in existing operations by combining Norfolk Southern and
Conrail and providing to a competitor such as CSX its own routes into the
Northeast/Mid-Atlantic region from the West and South, so that the result is
competing networks of equivalent scope, scale and market access.
You have a different, but perhaps not irreconcilable, vision of the 21st
century railroad map. Accordingly, we are prepared to enter into discussions
with no preconditions other than recognition of our pledge to the Conrail
shareholders that Norfolk Southern will only enter into an agreement with
Conrail or CSX that gives to Conrail shareholders an all cash offer of $115
per share.
I look forward to your reply. Your initiative and our determination are
hallmarks of great companies capable of finding a public interest resolution
of their differences.
Sincerely,
David R. Goode
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, Section 6 of the First Supplement and Section 8 of the Second
Supplement is hereby amended and supplemented as follows:
5
<PAGE>
The purpose of the Offer is for Parent, through Purchaser, to acquire a
significant equity interest in, the Company as the first step in a business
combination of Parent and the Company. Following Purchaser's acceptance for
payment of Shares in the Offer, Purchaser intends to promptly commence the
Second Offer to acquire control of, and the entire equity interest in, the
Company. The Second Offer will be subject to essentially the same terms and
conditions set forth in the Offer to Purchase, as previously amended and
supplemented by the First Supplement and the Second Supplement, including
there being validly tendered and not properly withdrawn prior to the
expiration thereof a number of Shares which, together with Shares then owned
by Parent or Purchaser, constitute at least a majority of the Shares
outstanding on a fully diluted basis. The Second Offer would also be subject
to the Subchapter F Condition, the Rights Condition and the CSX Termination
Condition.
In furtherance of its efforts to acquire control of, and the entire equity
interest in, Parent intends to solicit proxies at the Company's 1997 Annual
Meeting of Shareholders seeking to remove some or all of the current members
of the Company Board and elect a new slate of directors. The Company has not
set the date for its 1997 Annual Meeting of Shareholders. Although the
Company's Proxy Statement for its 1996 Annual Meeting of Shareholders
stated that the Company's 1997 Annual Meeting of Shareholders was
currently scheduled for May 21, 1997, the Company has stated that its 1997
Annual Meeting of Shareholders may be held as late as the end of 1997.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY ANNUAL OR
OTHER MEETING OF COMPANY SHAREHOLDERS. ANY SUCH SOLICITATION WHICH
PARENT OR PURCHASER MIGHT MAKE WOULD BE MADE ONLY PURSUANT TO SEPARATE PROXY
MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 14 (A) OF THE
EXCHANGE ACT.
7. CONDITIONS OF THE OFFER. The Purchaser has eliminated all of the
conditions to the Offer. However, to the extent Purchaser determines that, as
a result of the consummation of the Offer, Purchaser would beneficially own
such number of the then outstanding Common Shares as would result in the
occurrence of a Distribution Date, Purchaser reserves the right, in its sole
discretion, to further amend the Offer to reduce the number of Shares sought
in the Offer so that the number of Common Shares that Purchaser would own
upon consummation thereof would represent such number of Common Shares then
outstanding as would not result in the occurrence of a Distribution Date at
such time. Such amendment to the Offer could be required in the event that the
Company amends the Rights Agreement, changes its capitalization by way of a
recapitalization or takes certain other actions in respect of the Shares. Any
such amendment would be made in compliance with applicable rules and
regulations of the SEC.
8. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; CERTAIN LITIGATION. The
discussion set forth in Section 15 of the Offer to Purchase, Section 8 of the
First Supplement and Section 10 of the Second Supplement is hereby amended
and supplemented as follows:
STB Matters; Acquisition of Control. On December 27, 1996, Parent filed a
petition with the STB alleging that the No Negotiation Provision, as in
effect after the Second Amendment, constitutes unlawful control of the
Company by CSX for the purposes of the federal statute that requires prior
STB approval of control and seeking, among other things, a declaratory order
that CSX is in violation of such federal law by reason of the No Negotiation
Provision and that such provision is unlawful and unenforceable.
On January 9, 1997, the STB denied, as premature, Parent's petition for an
order declaring that the No Negotiation Provision, as in effect after the
Second Amendment, gave CSX unlawful control over the Company.
In denying the petition, the STB stated that the No Negotiation Provision
would not preclude the STB from approving Parent's Proposed Merger. The STB,
which indicated that the No Negotiation Provision "appears excessive on its
face," also stated that the No Negotiation Provision could not be used to
prevent the Company from negotiating or agreeing to a Parent-Company merger
agreement once the STB approves Parent's Proposed Merger.
The STB explained that applicable law can preempt contractual rights,
including the No Negotiation Provision, if necessary to permit consummation
of an STB-approved transaction. Thus, CSX and the Company cannot preclude STB
approval of a transaction by entering into a contract that purports to
prevent all alternatives to their own preferred outcome.
6
<PAGE>
Certain Litigation. On January 2, 1997, Plaintiffs in the Pennsylvania
Litigation filed a Motion for Preliminary Injunction and a Motion for Partial
Summary Judgment in the District Court. In their Motion for Partial Summary
Judgment, Plaintiffs requested an order stating that consummation of the CSX
Offer caused a "Control Transaction" with respect to the Company to occur
under the Pennsylvania Control Transaction Law and created joint and several
liability among the members of the Control Transaction Group to pay at least
$110 cash per Share to each demanding Company shareholder. In their Motion for
Preliminary Injunction, Plaintiffs requested that the District Court enjoin
the Defendants, and all persons acting in concert with them, from seeking to
enforce or requiring compliance with, the No Negotiation Provision, as
extended, and to enjoin Defendants from convening the Pennsylvania Special
Meeting until ten business days after the Company shareholders receive notice
of the District Court's ruling on Plaintiffs' Motions for Preliminary
Injunction and Partial Summary Judgment. On January 8, 1997, Plaintiffs filed
a Supplemental Motion for Preliminary Injunction requesting that Defendants
be enjoined from convening the Pennsylvania Special Meeting until ten
business days after the Company shareholders receive notice of the District
Court's final judgment on the Pennsylvania Control Transaction Law issue.
On January 9, 1997, the District Court denied Plaintiffs' Motion for
Preliminary Injunction, Plaintiffs' Supplemental Motion for a Preliminary
Injunction and Plaintiffs' Motion for Partial Summary Judgment. After the
ruling, Plaintiffs asked the District Court for an injunction pending appeal
which was denied. Plaintiffs later that day filed a notice of appeal with the
District Court.
On January 10, 1997, Plaintiffs filed a motion for expedited appeal or, in
the alternative, an injunction pending appeal with the Third Circuit. On the
same date, the Third Circuit set a briefing schedule to consider Plaintiffs'
motion for an injunction pending appeal but declined to expedite a final
decision on the appeal. On January 14, 1997, the Third Circuit scheduled oral
arguments on such motion. On January 15, 1997, after hearing oral arguments,
the Third Circuit denied Plaintiffs' motion for an injunction pending appeal.
9. 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
January 22, 1997
7
<PAGE>
Facsimile copies of the revised Letter of Transmittal or any Letter of
Transmittal previously distributed by Parent and Purchaser, properly
completed and duly signed, will be accepted. Any such 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
Church Street Station (for Eligible Institutions Only) Receive & Deliver Window
New York, New York 10286-1248 (212) 815-6213 New York, New York 10286
</TABLE>
For Information Telephone:
(800) 507-9357
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, the First Supplement, the Second Supplement, this Third Supplement,
the revised Letter of Transmittal and the revised 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
AS AMENDED AND SUPPLEMENTED BY
THE SUPPLEMENT TO THE OFFER TO PURCHASE, DATED NOVEMBER 8, 1996,
THE SECOND SUPPLEMENT TO THE OFFER TO PURCHASE, DATED DECEMBER 20, 1996
AND THE THIRD SUPPLEMENT TO THE OFFER TO PURCHASE, DATED JANUARY 22, 1997
BY
ATLANTIC ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY
OF
NORFOLK SOUTHERN CORPORATION
THE OFFER, WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 4, 1997, 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 COM-
PLETE 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 ONE OF THE LETTERS OF TRANSMITTAL
PREVIOUSLY DELIVERED TO SHAREHOLDERS 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 DEPOSITARY TRUST COMPANY
(EACH, A "BOOK-ENTRY TRANSFER FACILITY" AND COLLECTIVELY, THE "BOOK-ENTRY
TRANSFER FACILITIES") PURSUANT TO THE BOOK-ENTRY TRANSFER PROCEDURE DESCRIBED
IN
<PAGE>
"PROCEDURES FOR TENDERING SHARES" OF THE OFFER TO PURCHASE AS SUPPLEMENTED BY
THE FIRST SUPPLEMENT, THE SECOND SUPPLEMENT AND THE THIRD SUPPLEMENT (EACH 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.
SHAREHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED SHARES AND/OR RIGHTS
PURSUANT TO THE OFFER USING ONE OF THE LETTERS OF TRANSMITTAL PREVIOUSLY
DELIVERED TO SHAREHOLDERS OR ONE OF THE NOTICES OF GUARANTEED DELIVERY
PREVIOUSLY DELIVERED TO SHAREHOLDERS 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 Third 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 First 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, a tender of
Shares will constitute a tender of the associated Rights. If a Distribution
Date has occurred and 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 (as defined below), 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 Rights
Certificates have not been distributed prior to the time Shares are tendered
pursuant to the Offer, 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 (as defined below)
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.
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 First
Supplement, the Second Supplement and the Third 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
- -----------------------------------------------------------------------------
2
<PAGE>
[ ] 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
- -----------------------------------------------------------------------------
[ ] 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 Number (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 Number (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 NUMBER OF
CERTIFICATE SHARES REPRESENTED SHARES
NUMBER(S)* BY CERTIFICATE(S) TENDERED**
---------------------------------------------------------
<S> <C> <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 NUMBER OF
CERTIFICATE RIGHTS REPRESENTED RIGHTS
NUMBER(S)** BY CERTIFICATE(S) TENDERED***
<S> <C> <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.
4
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL
CAREFULLY.
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 up to an aggregate of 8,200,000 Shares, including, in each case, the
associated Rights, at a price of $115 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 to
the Offer to Purchase, dated November 8, 1996 (the "First Supplement"), the
Second Supplement to the Offer to Purchase, dated December 20, 1996 (the
"Second Supplement"), and the Third Supplement to the Offer to Purchase,
dated January 22, 1997 (the "Third 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
5
<PAGE>
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
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 within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that such tender of Shares complies with Rule 14e-4 under
the Exchange Act, 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, the First Supplement, the Second Supplement and the
Third 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, 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
- -----------------------------------------------------------------------------
(INCLUDE 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
- -----------------------------------------------------------------------------
(INCLUDE 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 Number
- -----------------------------------------------------------------------------
(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 Third 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 Third 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.
9
<PAGE>
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 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.
Shareholders tendering Shares or Rights 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.
10
<PAGE>
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 First Supplement, the Second Supplement, the
Third Supplement, this Letter of Transmittal, the revised 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 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 THIRD SUPPLEMENT).
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
11
<PAGE>
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
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
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 First Supplement, the Second Supplement, the Third Supplement,
this 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.
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:
<TABLE>
<CAPTION>
<S> <C>
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)
</TABLE>
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 Third Supplement to the Offer to Purchase,
dated January 22, 1997 (the "Third 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 to the Offer to Purchase, dated November 8, 1996 (the "First
Supplement"), the Second Supplement to the Offer to Purchase, dated December
20, 1996 (the "Second Supplement"), and the Third Supplement.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
By Hand or by
By Mail: By Facsimile Transmission: Overnight Delivery:
Tender & Exchange Department (for Eligible Institutions Only)
P.O. Box 11248 (212) 815-6213 Tender & Exchange Department
Church Street Station 101 Barclay Street
New York, New York 10286-1248 Receive and Deliver Window
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 First Supplement, the
Second Supplement, the Third 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, the First Supplement, the Second Supplement, and the Third
Supplement.
Number of Shares (including the associated Rights):
---------------------------------------------------------------------------
Name(s) of Record Holder(s)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Address(es):
---------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
---------------------------------------------------------------------------
Certificate Number(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 (a) represents that the tender of Shares effected
hereby complies with Rule 14e-4 of the Securities Exchange Act of 1934, as
amended, and (b) 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 revised
Letter of Transmittal or other Letter of Transmittal previously delivered
to shareholders by Parent and Purchaser (or any 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 revised 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 revised Notice of Guaranteed
Delivery, or (y) in the case of Rights, within a period ending the later of
(i) three New York Stock Exchange, Inc. trading days after the date of
execution of this revised 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 revised Letter of
Transmittal or other Letter of Transmittal previously delivered to
shareholders by Parent and Purchaser (or any facsimile thereof) 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:
---------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and
Telephone Number:
---------------------------------------------------------------------------
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 AMENDED ITS
OFFER TO PURCHASE FOR CASH
AND IS NOW OFFERING TO
PURCHASE UP TO AN AGGREGATE OF 8,200,000 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.
AT
$115 NET PER SHARE
THE OFFER, WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME,
ON TUESDAY, FEBRUARY 4, 1997, UNLESS THE OFFER IS EXTENDED.
January 22, 1997
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 up to an aggregate of 8,200,000
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 $115 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 to the Offer to Purchase, dated November
8, 1996 (the "First Supplement"), the Second Supplement to the Offer to
Purchase, dated December 20, 1996 (the "Second Supplement"), the Third
Supplement to the Offer to Purchase, dated January 22, 1997 (the "Third
Supplement"), and the revised Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer"). The Third Supplement and the
revised Letter of Transmittal are enclosed herewith.
Unless the Rights are redeemed prior to the Expiration Date (as defined in
the Third 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 First 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 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
<PAGE>
number of Shares tendered must be delivered to the Depositary (as defined in
the Offer to Purchase) or, if 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 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, 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, AS AMENDED, IS NO LONGER SUBJECT TO THE MINIMUM CONDITION, THE
SUBCHAPTER F CONDITION, THE RIGHTS CONDITION, OR THE CSX TERMINATION
CONDITION.
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. Third Supplement to the Offer to Purchase, dated January 22, 1997;
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;
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, up to an aggregate of 8,200,000 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 as supplemented by the First Supplement, the Second Supplement and
the Third Supplement. 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 First
Supplement, the Second Supplement and the Third
2
<PAGE>
Supplement, (ii) the revised Letter of Transmittal delivered herewith or one
of the Letters of Transmittal previously delivered to you (or any facsimilies
of such Letters of Transmittal), 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 revised 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 revised Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 4, 1997,
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, the First Supplement, the
Second Supplement and the Third 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 First Supplement, the Second
Supplement and the Third 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, the First Supplement, the Second Supplement or the Third
Supplement.
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 the Information Agent, Georgeson & Company Inc. at Wall Street
Plaza, New York, New York 10005, telephone (800) 223-2064 (Toll Free).
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 AMENDED ITS
OFFER TO PURCHASE FOR CASH
AND IS NOW OFFERING TO
PURCHASE UP TO AN AGGREGATE OF 8,200,000 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.
AT
$115 NET PER SHARE
THE OFFER, WITHDRAWAL RIGHTS AND THE PRORATION PERIOD WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME,
ON TUESDAY, FEBRUARY 4, 1997, UNLESS THE OFFER IS EXTENDED.
January 22, 1997
To Our Clients:
Enclosed for your consideration is the Third Supplement to the Offer to
Purchase, dated January 22, 1997 (the "Third Supplement"), to the Offer to
Purchase, dated October 24, 1996 (the "Offer to Purchase"), as supplemented
by the Supplement to the Offer to Purchase, dated November 8, 1996 (the
"First Supplement"), the Second Supplement to the Offer to Purchase, dated
December 20, 1996 (the "Second Supplement"), and the revised Letter of
Transmittal (which, as amended from time to time, collectively 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
up to an aggregate of 8,200,000 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 $115 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 Third 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 First Supplement) has not occurred prior to the
Expiration Date, a tender of Shares will also constitute a tender of the
associated
<PAGE>
Rights. If the Distribution Date has 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, 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 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, 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 REVISED 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 is $115 per Share, net to the seller in cash.
2. The Offer, withdrawal rights and the proration period will expire at
12:00 Midnight, New York City time, on Tuesday, February 4, 1997, unless
the Offer is extended.
3. The Offer is being made for up to an aggregate of 8,200,000 Shares.
Following completion of the Offer, Purchaser intends to promptly commence
a second tender offer to purchase all outstanding Shares not owned by
Purchaser at a price of $115 per Share, net to the seller in cash, without
interest thereon, upon essentially the same terms and conditions set forth
in the Offer to Purchase, as previously amended and supplemented by the First
Supplement and the Second Supplement.
4. Purchaser has eliminated all conditions of the Offer.
5. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the revised 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 First Supplement,
the Second Supplement, the Third 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.
2
<PAGE>
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.
3
<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
Third Supplement to the Offer to Purchase, dated January 22, 1997, 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 up to an aggregate of 8,200,000 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.
4
<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 to the Offer to Purchase, dated November 8,
1996, the Second Supplement to the Offer to Purchase, dated December 20, 1996,
and the Third Supplement to the Offer to Purchase, dated January 22, 1997, 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 Amended its Offer to Purchase for Cash
and is Now Offering to Purchase up to
an Aggregate of 8,200,000 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.
at
$115 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 up to an aggregate of
8,200,000 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
<PAGE>
amended, between the Company and First Chicago Trust Company of New York, as
Rights Agent (the "Rights Agreement"), at a price of $115 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 to the Offer to Purchase,
dated November 8, 1996 (the "First Supplement"), the Second Supplement to the
Offer to Purchase, dated December 20, 1996 (the "Second Supplement"), the Third
Supplement to the Offer to Purchase, dated January 22, 1997 (the "Third
Supplement"), and in the revised Letter of Transmittal (which, as amended from
time to time, collectively 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, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 4, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
THE OFFER, AS AMENDED, IS NO LONGER SUBJECT TO THE MINIMUM CONDITION, THE
SUBCHAPTER F CONDITION, THE RIGHTS CONDITION OR THE CSX TERMINATION CONDITION
(EACH AS DEFINED IN THE OFFER TO PURCHASE).
In order to prevent a "Distribution Date" under the Rights Agreement from
occurring while enabling Purchaser to acquire a significant equity interest in
the Company, Purchaser has decreased the aggregate number of Shares sought in
the Offer to 8,200,000, which, together with the 100 Shares already owned by
Purchaser, represent approximately 9.9% of the Common Shares outstanding as of
December 5, 1996 (the most recent date for which such information is publicly
available). To the extent Purchaser determines that, as a result of the
consummation of the Offer, Purchaser would beneficially own such number of the
then outstanding Common Shares as would result in the occurrence of a
Distribution Date, Purchaser reserves the right, in its sole discretion, to
further amend the Offer to reduce the number of Shares sought in the Offer so
that the number of Common Shares that Purchaser would own upon consummation
thereof would represent such number of Common Shares then outstanding as would
not result in the occurrence of a Distribution Date at such time. Any such
amendment would be made in compliance with applicable rules and regulations of
the Securities and Exchange Commission.
The purpose of the Offer is for Parent, through Purchaser, to acquire a
significant equity interest in the Company as the first step in a business
combination of Parent and the Company. Following Purchaser's acceptance for
payment of Shares in the Offer, Purchaser intends to promptly commence another
tender offer (the "Second Offer") to purchase all outstanding Shares not owned
by Purchaser at a price of $115 per Share, net to the seller in cash, without
interest thereon, upon essentially the same terms and subject to the same
conditions set forth in the Offer to Purchase, as previously amended and
supplemented by the First Supplement and the Second Supplement, in order 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 or the Second Offer,
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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
or the Second Offer.
Purchaser expressly reserves the right, in its sole judgment, at any time and
from time to time (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 Third
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.
If more than 8,200,000 Shares are validly tendered prior to the Expiration Date
and not properly withdrawn, Purchaser will, upon the terms and subject to the
conditions of the Offer, accept for payment and pay for only 8,200,000 Shares
on a pro rata basis, with adjustments to avoid purchases of fractional Shares,
based upon the number of Shares properly tendered on or prior to the Expiration
Date and not properly withdrawn. The same proration factor will be applied in
the Offer to the Common Shares and the ESOP Preferred Shares. Because of the
difficulty of determining the precise number of Shares validly tendered and not
withdrawn, if proration is required, Purchaser would not expect to be able to
announce the final results of proration or pay for Shares until at least five
New York Stock Exchange, Inc. trading days after the Expiration Date.
Preliminary results of proration will be announced by press release as promptly
as practicable after the Expiration Date. Holders of Shares may obtain such
preliminary information when it becomes available from the Information Agent
(as defined in the Offer to Purchase) and may be able to obtain such
preliminary information from their brokers.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, up to an aggregate of 8,200,000 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) the revised Letter of Transmittal or one of the Letters
of Transmittal previously distributed with the Offer to
3
<PAGE>
Purchase, the First Supplement or the Second Supplement (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, the First
Supplement, the Second Supplement and the Third Supplement, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares and 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.
If any tendered Shares are not accepted for payment for any reason pursuant to
the terms and conditions of the Offer (including proration due to tenders of
more than 8,200,000 Shares), or if Share Certificates are submitted evidencing
more Shares than are tendered, Share Certificates evidencing unpurchased Shares
will be returned, without expense to the tendering shareholder (or, in the case
of Shares tendered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3
of the Offer to Purchase, such Shares will be credited to an account maintained
at such Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.
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 Tuesday, February 4, 1997 (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). 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, the First
Supplement, the Second Supplement or the Third 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 Third Supplement at any time before the
Expiration Date. Purchaser, in its sole judgment, will determine all questions
as to the form
4
<PAGE>
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, the First
Supplement, the Second Supplement and the Third Supplement and is incorporated
herein by reference. The Third 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.
THE OFFER TO PURCHASE, THE FIRST SUPPLEMENT, THE SECOND SUPPLEMENT, THE THIRD
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 First
Supplement, the Second Supplement, the Third 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)
January 22, 1997
5
<PAGE>
[Advertisement]
AN OPEN LETTER
TO CONRAIL AND CSX
[Letterhead of David R. Goode, Chairman, President and
Chief Executive Officer of Norfolk Southern]
January 21, 1997
Mr. David M. LeVan Mr. John W. Snow
Chairman, President and Chairman, President and
Chief Executive Officer Chief Executive Officer
Conrail Inc. CSX Corporation
2001 Market Street 901 East Cary Street
Philadelphia, PA 19101 Richmond, VA 23219
Dear David and John:
The Conrail shareholders' vote last Friday places a responsibility on
us to work out a rail structure in the East that will be in the long-term
interests of all constituencies served by our companies. I believe that this
can be accomplished if we sit down and try.
I believe that we can achieve balanced competition in the East with
the greatest continuity in existing operations by combining Norfolk Southern
and Conrail and providing to a competitor such as CSX its own routes into the
Northeast/Mid-Atlantic region from the West and South, so that the result is
competing networks of equivalent scope, scale and market access.
You have a different, but perhaps not irreconcilable, vision of the
21st century railroad map. Accordingly, we are prepared to enter into
discussions with no preconditions other than recognition of our pledge to the
Conrail shareholders that Norfolk Southern will only enter into an agreement
with Conrail or CSX that gives to Conrail shareholders an all cash offer of
$115 per share.
I look forward to your reply. Your initiative and our determination
are hallmarks of great companies capable of finding a public interest
resolution of their differences.
Sincerely,
/s/ DAVID R. GOODE
[Norfolk Southern Logo]
