SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
[Amendment No. . . . . . . . . .]
Filed by the Registrant [X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or
240.14a-12
CONRAIL INC.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Registrant as Specified in Its Charter)
CONRAIL INC.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which
transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . .
2) Aggregate number of securities to which
transaction applies:
. . . . . . . . . . . . . . . . . . . . . . . . .
3) Per unit price or other underlying value of
transaction computed pursuant
to Exchange Act Rule 0-11:*
. . . . . . . . . . . . . . . . . . . . . . . . .
4) Proposed maximum aggregate value of transaction:
. . . . . . . . . . . . . . . . . . . . . . . . .
* Set forth the amount on which the filing fee is calculated
and state how it was determined.
[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:_____________________________________
2) Form Schedule or Registration Statement No._________________
3) Filing Party:_______________________________________________
4) Date Filed:_________________________________________________
<PAGE>
CONRAIL INC.
March 31, 1994
Dear Shareholder:
On behalf of the Board of Directors and Officers of
Conrail Inc., I would like to invite you to attend the
Annual Meeting of Shareholders to be held on Wednesday, May
18, 1994 at 10:00 a.m. Eastern Daylight Time in The Academy
of Music Hall, 1420 Locust Street, Philadelphia,
Pennsylvania. We look forward to seeing those shareholders
who will find it possible to attend the meeting.
At the meeting, shareholders will be asked to elect
four directors for terms expiring in 1997 and to ratify the
appointment of independent accountants. As has been the
case at each meeting of our shareholders, a report on the
activities and performance of Conrail will also be made.
As soon as possible, please complete the top part of
the enclosed proxy card, detach the completed portion and
return it in the enclosed postpaid return envelope
to ensure that your shares will be voted at the meeting.
Voting your shares by proxy does not prevent you
from voting your shares in person should you decide to
attend the meeting.
If you intend to come to the meeting, please so
indicate in the Special Action section of the proxy card
which you return. For those shareholders who do plan to
attend the meeting, please retain the bottom portion of the
card as this will serve as your admission card to the
meeting. You will also note that this bottom portion of the
proxy card outlines the agenda for the meeting.
Conrail's performance during 1993 was quite
encouraging, particularly in light of extraordinary events
such as the prolonged coal strike and the mid-year floods
that ravaged the midwest. As attention now turns to the
coming year, I am convinced that our continued focus on
customer satisfaction, strengthened by the recent
implementation of the service group concept, will enable
Conrail to address the increasing challenges of the coming
year.
Sincerely,
James A. Hagen
James A. Hagen
Chairman, President &
Chief Executive Officer
<PAGE>
CONRAIL INC.
Two Commerce Square
2001 Market Street
Philadelphia, Pennsylvania 19101
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 18, 1994
To Our Shareholders:
NOTICE is hereby given that the ANNUAL MEETING OF SHAREHOLDERS
OF CONRAIL INC. will be held in The Academy of Music Hall, 1420
Locust Street, Philadelphia, Pennsylvania, on the 18th day of May,
1994 at 10:00 a.m., Eastern Daylight Time, for the following
purposes:
1. To elect four directors in Class I to serve until the
Annual Meeting of Shareholders in 1997 and until their successors
are elected and take office;
2. To ratify the appointment of Price Waterhouse as the
independent accountants for the year 1994; and
3. To transact such other business as may properly come
before the meeting.
Only those shareholders of record as of the close of business
on March 4, 1994 will be entitled to vote at the meeting. For
purposes of any meeting of shareholders that has been previously
adjourned for one or more periods aggregating at least fifteen (15)
days because of an absence of a quorum, the shareholders who attend
such an adjourned meeting, although less than a quorum, shall
nevertheless constitute a quorum for the purposes of acting on any
matter set forth in this Notice.
By Order of the Board of Directors
Allan Schimmel
March 31, 1994 Allan Schimmel
Corporate Secretary
IMPORTANT NOTICE
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND PROMPTLY MAIL THE ACCOMPANYING PROXY IN THE RETURN
ENVELOPE WHICH HAS BEEN PROVIDED. NO POSTAGE IS NECESSARY IF MAILED
IN THE UNITED STATES. ANY PERSON GIVING A PROXY HAS THE POWER TO
REVOKE IT PRIOR TO ITS EXERCISE, AND SHAREHOLDERS WHO ARE PRESENT AT
THE MEETING MAY THEN REVOKE THEIR PROXY AND VOTE IN PERSON.
<PAGE>
CONRAIL INC.
Two Commerce Square
2001 Market Street
Philadelphia, Pennsylvania 19101
(215) 209-2000
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 18, 1994
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors (the "Board") of Conrail Inc.
("Conrail") of proxies for use at the Annual Meeting to be held in
The Academy of Music Hall, 1420 Locust Street, Philadelphia,
Pennsylvania, on the 18th day of May, 1994 at 10:00 a.m., Eastern
Daylight Time, and at any adjournments thereof. A form of proxy for
holders of Conrail's common stock (the "Conrail Common Stock") and
Series A ESOP Convertible Junior Preferred Stock (the "Conrail
Preferred Stock") is being furnished for use at the Annual Meeting.
This Proxy Statement and the form of proxy are being mailed on March
31, 1994, or as soon thereafter as practicable, to all shareholders
entitled to vote at the Annual Meeting.
On July 1, 1993, Conrail Inc. became the publicly held holding
company of Consolidated Rail Corporation, which remains the
principal subsidiary of Conrail Inc. Except as otherwise noted,
references to Conrail in this Proxy Statement are to Consolidated
Rail Corporation prior to July 1, 1993 and to Conrail Inc.
thereafter. For purposes of the disclosure set forth herein,
executive officers of Consolidated Rail Corporation are treated as
executive officers of Conrail Inc.
Voting and Revocation of Proxies. Execution of the accompanying
proxy will not affect a shareholder's right to attend the Annual
Meeting and vote in person. Any shareholder who has executed a proxy
and wishes to vote in person at the Annual Meeting must deliver a
written notice revoking that proxy to the Corporate Secretary of
Conrail before the proxy is voted. A shareholder may also revoke a
proxy by duly executing a proxy bearing a later date. Proxies for
shares of Conrail Common Stock and for shares of Conrail Preferred
Stock that have been allocated to individual employees will be voted
in accordance with the shareholder's direction. If no direction is
given, proxies for shares of Conrail Common Stock will be voted in
accordance with the recommendations of the Board as set forth in
this Proxy Statement. All shares of Conrail Preferred Stock that
have not been allocated to an individual employee, and all shares of
Conrail Preferred Stock that have been so allocated but as to which
no voting instructions have been received by the Trustee of
Conrail's Employee Stock Ownership Plan (the "ESOP"), shall be voted
in the same manner and proportion as are the shares of Conrail
Preferred Stock for which valid instructions are received.
2
<PAGE>
The Board knows of no matters likely to be brought before the
Annual Meeting other than those described in this Proxy Statement.
If any other matters, not now known or determined, properly come
before the Annual Meeting or any adjournment thereof, the persons
named in the enclosed form of proxy will vote such proxy in
accordance with their best judgment in such matters pursuant to
discretionary authority granted in the proxy.
Vote Required. Each share of Conrail Common Stock and each
share of Conrail Preferred Stock will entitle the holder thereof to
one vote on all matters that may properly come before the Annual
Meeting. The presence, in person or by proxy, of a majority of the
outstanding shares of Conrail Common Stock and Conrail Preferred
Stock, considered as one class, is necessary to constitute a quorum
at the Annual Meeting. The votes required for the election of
directors, as set forth below, assume the presence of a quorum at
the Annual Meeting.
To be elected as a director, a candidate must receive a majority
of the votes cast in his or her election contest by the holders of
Conrail Common Stock and Conrail Preferred Stock, voting as one class.
The election inspector appointed for the Annual Meeting will
determine whether or not a quorum is present and will tabulate the
votes cast, whether in person or by proxy, at the Annual Meeting.
The election inspector will treat abstentions and broker non-votes
(shares held of record in the name of a broker for which the broker
has not received voting instructions from the beneficial owner of such
shares) as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Abstentions will be treated as
unvoted for purposes of determining the approval of any matter submitted
to the shareholders for a vote. As a result, abstentions will have no
impact on the election of directors or any other matter submitted to the
shareholders for a vote, except to the extent the number of votes cast
will be reduced. Shares represented by broker non-votes will be entitled
to be voted in the elections of directors and the ratification of the
appointment of the independent accountants.
3
<PAGE>
Record Date and Outstanding Shares. Pursuant to Conrail's
bylaws, the Board has fixed the close of business on March 4,
1994 as the time for determining shareholders of record entitled
to notice of, and to vote at, the Annual Meeting. As of the close
of business on March 4, 1994, there were issued and outstanding
79,645,290 shares of Conrail Common Stock and 9,942,229 shares of
Conrail Preferred Stock. To Conrail's knowledge, the only persons
(or "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
who, as of March 4, 1994, owned beneficially more than 5% of any
class of Conrail's voting securities are listed in the following
table:
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent
Title of Class of Beneficial Owner Beneficial Ownership of Class
- -------------- ------------------- -------------------- --------
<S> <C> <C> <C>
Conrail Common FMR Corp. 5,859,638 (of which: 7.4%
Stock 82 Devonshire St. sole voting power -
Boston, MA 02109 97,438; shared voting
power - 0; sole
dispositive power -
5,859,638) (1)
Conrail Boston Safe Deposit and 8,665,019 shares, not 87.1%
Preferred Trust Company individually but
Stock One Cabot Road solely in its capacity
Medford, MA 02155 as Trustee of
the ESOP (2)
</TABLE>
(1) As of February 1, 1994, based on Schedule 13G filed by FMR
Corp. with the Securities and Exchange Commission. These
shares represent 6.5% of Conrail's total voting securities
(Common Stock and Preferred Stock voting as one class).
According to the Schedule 13G, Edward C. Johnson, 3rd, Chairman
of FMR Corp., has sole dispositive power with respect to these
5,859,638 shares and Fidelity Management & Research Company, a
wholly-owned subsidiary of FMR Corp., is a beneficial owner of
5,679,700 of such shares (7.1% of the outstanding shares of
Common Stock) by reason of its acting as investment adviser to
certain Fidelity mutual funds, including Fidelity Magellan
Fund, which beneficially owns 3,994,300 shares (5.0% of the
outstanding Common Stock.)
(2) Shares of Conrail Preferred Stock are convertible into shares
of Conrail Common Stock at any time on a share-for-share basis,
subject to certain antidilution adjustments. As a result,
ownership of shares of Conrail Preferred Stock is deemed to be
ownership of an equal number of shares of Conrail Common Stock.
These 8,665,019 shares of Conrail Preferred Stock represent
9.7% of Conrail's total voting securities.
Ownership by Management of Equity Securities. The following
table sets forth the beneficial ownership, as of February 21, 1994,
of Conrail Common Stock and Conrail Preferred Stock of each director
and nominee, each of the five executive officers named in the
Summary Compensation Table and all directors and executive officers
as a group. Unless otherwise indicated, each such person has sole
voting and investment power with respect to such shares of Conrail
Common Stock, and sole voting power with respect to such shares of
Conrail Preferred Stock. The ESOP Trustee holds sole investment
power with respect to all shares of Conrail Preferred Stock. As of
4
<PAGE>
February 21, 1994 all Conrail directors and officers as a group
owned less than one percent (1%) of the aggregate outstanding
Conrail Common Stock and Conrail Preferred Stock.
Amount and Nature
Name and Address of Beneficial
Title of Class of Beneficial Owner Ownership
- -------------- ------------------- -----------------
Conrail Common H. Furlong Baldwin 2,000
Stock Director and Nominee
Claude S. Brinegar 1,000
Director
Daniel B. Burke 2,000
Director
Kathleen Foley Feldstein 700
Director
Roger S. Hillas 2,362
Director
E. Bradley Jones 1,000
Director
David B. Lewis 1,200
Director
John C. Marous 800
Director
Michael H. Moskow 500
Nominee
Raymond T. Schuler 7,396
Director
David H. Swanson 764
Director and Nominee
James A. Hagen 144,413 (1)
Chairman, President and
Chief Executive Officer
and Nominee
David M. LeVan 71,280 (1)
Executive Vice President
5
<PAGE>
H. William Brown 86,466 (1)
Senior Vice President-
Finance
and Administration
Charles N. Marshall 30,692 (1)
Senior Vice President-
Development
Gordon H. Kuhn 28,433 (1)
Senior Vice President - Core
Service Group
All Directors and Executive 733,936 (2)
Officers as a group
(1) For Messrs. Hagen, LeVan, Brown, Marshall and Kuhn,
respectively, includes options exercisable within 60 days to acquire
71,250, 15,626, 71,026, 25,758 and 15,626 shares of Conrail Common
Stock and 1,174, 1,243, 1,227, 1,224 and 1,235 shares of Conrail
Preferred Stock allocated to the accounts of the named officers
pursuant to the ESOP. Shares of Conrail Preferred Stock are
convertible into shares of Conrail Common Stock at any time on a
share-for-share basis, subject to certain antidilution adjustments.
As a result, ownership of shares of Conrail Preferred Stock is
deemed to be ownership of an equal number of shares of Conrail
Common Stock.
(2) Includes options exercisable within 60 days to acquire
466,900 shares of Conrail Common Stock and 26,974 shares of Conrail
Preferred Stock allocated to the accounts of individual officers
pursuant to the ESOP. This number also includes shares held by all
officers of Consolidated Rail Corporation.
Proxy Solicitation. Conrail will bear the expense of the
Board's proxy solicitation. In addition to the use of the mails,
proxies may be solicited by personal interview, telephone and
telegram by the directors, officers and employees of Conrail (none
of whom will receive additional compensation therefor). Conrail has
engaged D. F. King & Company, Inc., 77 Water Street, New York, N.Y.,
to assist in the solicitation of proxies for a fee not to exceed
$15,000, plus reimbursement of out-of-pocket expenses. Upon request,
Conrail will reimburse banks, brokerage houses and other
institutions, nominees and fiduciaries for their reasonable expenses
in forwarding proxy materials to beneficial owners.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Four directors (Class I) will be elected at the Annual Meeting
to serve until the Annual Meeting of Shareholders in 1997. Four
directors (Class II) are serving three-year terms expiring in 1995.
Four directors (Class III) are serving three-year terms expiring in
1996. Except directors elected to fill unexpired terms, all
directors of each class are elected to serve three-year terms and
until their successors are elected and take office.
Fewer nominees are named than the number of directors fixed by
Conrail's Articles of Incorporation and bylaws,
6
<PAGE>
which provide for five Class I directors, four Class II directors
and four Class III directors. The Nominating Committee of the Board
has chosen not to nominate a candidate for the vacant Class I
director position at this time. Proxies cannot be voted for a
greater number of persons than the number of nominees named.
All persons named herein as nominees for director have
consented to serve, and it is not contemplated that any nominee will
be unable to serve as a director. If such event occurs, however,
discretionary authority is reserved to cast votes for the election
of a substitute or substitutes selected by the Board, and all
proxies eligible to be voted will be voted for such other person or
persons.
Set forth below are the names and ages of the nominees for
election to the Board and the directors continuing in office (none
of whom, other than James A. Hagen, holds any position with
Conrail), each such person's prior service as a director of Conrail
and a brief description of each such person's business experience
over the past five years, including any other directorships in
certain companies.
PROPOSAL NO. 1
NOMINEES FOR ELECTION AS CLASS I DIRECTORS - TERM EXPIRING 1997:
Name, Business Experience Prior Service As
and Other Directorships Conrail Director
- ------------------------- ----------------
H. Furlong Baldwin Since 1988
Chairman and Chief Executive Officer of
Mercantile Bankshares Corporation.
Director, Mercantile Bankshares
Corporation, Baltimore Gas & Electric
Company, GRC International, Inc. and
USF&G Corporation. Age 62.
James A. Hagen Since 1989
Chairman, President and Chief Executive
Officer of Conrail since May 1989.
President of CSX Distribution Services,
Inc. between 1988 and May 1989.
Director, Philadelphia Electric Company.
Age 62.
Michael H. Moskow No Prior Service
Clinical Professor of Strategy and
International Management, J. L. Kellogg
Graduate School of Management,
Northwestern University since September
1993. Visiting Scholar, Northwestern
University between February 1993 and
August 1993. Deputy United States Trade
Representative between 1991 and 1993.
Vice President - Strategy and Business
Development of Premark International,
Inc., a multi-national consumer and
commercial products company, between
1989 and 1990. Age 56.
7
<PAGE>
David H. Swanson Since 1989
Chief Executive Officer of Premier Agri
Technologies, Inc., an international
agricultural business, since January
1994. Chairman, President and Chief
Executive Officer of Central Soya
Company, Inc. between 1986 and January
1994. Age 51.
DIRECTORS CONTINUING IN OFFICE
CLASS II DIRECTORS - TERM EXPIRING 1995:
Kathleen Foley Feldstein Since 1993
President of Economics Studies, Inc., a
private consulting firm, since prior to
January 1, 1989. Director, Bank-America
Corporation, Digital Equipment
Corporation and Kleinwort Benson
Australian Income Fund. Age 53.
David B. Lewis Since 1989
Chairman and Senior Shareholder of
Lewis, White & Clay, P.C., a law firm.
Director, LG&E Energy Corp. Lewis,
White & Clay provided legal services to
Conrail in 1993. Age 49.
John C. Marous Since 1991
Retired in July 1990 from Westinghouse
Electric Corporation where he held the
position of Chairman and Chief Executive
Officer between January 1988 and July
1990. Director, Bell Atlantic
Corporation, Connecticut Mutual Life
Insurance Company and Mellon Bank, N.A.
Age 68.
Raymond T. Schuler Since 1981
Retired in September 1990 from the
Business Council of New York State,
Inc., where he held the positions of
Vice Chairman, President and Chief
Executive Officer. Director, Northeast
Savings Bank and Oneida, Ltd. Age 64.
CLASS III DIRECTORS - TERM EXPIRING
1996:
Claude S. Brinegar Since 1990
Vice Chairman since 1989 and Executive
Vice President - Administration and
Planning from May 1991 to April 1992 of
Unocal Corporation, a high technology
earth resources company. Director,
Unocal Corp., Maxicare Health Plans,
Inc., and a visiting scholar at Stanford
University. Age 67.
Daniel B. Burke 1981 to 1986
Retired in February 1994 from Capital and since 1987
Cities/ABC, Inc. where he held the
positions of President and Chief
Executive Officer since June 1990, and
President and Chief Operating Officer of
that company prior to that time.
Director, Capital Cities/ABC, Inc., Rohm
and Haas Co. and Avon Products, Inc.
Age 65.
8
<PAGE>
Roger S. Hillas Since 1981
Retired in January 1993 from Meritor
Savings Bank where he held the positions
of Chairman and Chief Executive Officer
between July 1988 and December 1992.
Director, P.H. Glatfelter Company, Toll
Bros., Inc., The Bon-Ton Stores, Inc.
and VF Corporation. Age 66.
E. Bradley Jones Since 1987
Retired in December 1984 from LTV Steel
Company where he held the positions of
Chairman and Chief Executive Officer and
Group Vice President of LTV Corporation.
Director, TRW, Inc., Hyster-Yale
Materials Handling, Inc., NACCO
Industries, Inc., Cleveland-Cliffs,
Inc., Birmingham Steel Corporation and
RPM, Inc.; Trustee, First Union Real
Estate Equity and Mortgage Investments
and Trustee, Fidelity Group of Funds.
Age 66.
BOARD COMMITTEES AND MEETlNGS
During 1993, the Board held nine meetings, and each director
attended more than 75 percent of the aggregate of the total number
of meetings held by the Board and the total number of meetings held
by committees of the Board on which such director served.
The Board has a number of committees, including an Audit
Committee, a Compensation Committee and a Nominating Committee. The
Audit Committee, consisting of Messrs. Lewis (Chairman), Baldwin,
Brinegar, Jones, Marous and Schuler and Ms. Feldstein, met three
times during 1993. The Audit Committee reviews Conrail's accounting
processes, financial control and reporting systems, as well as the
selection of Conrail's independent accountants and the scope of the
audits to be conducted. The Compensation Committee, consisting of
Messrs. Burke (Chairman), Brinegar, Hillas, William G. Milliken and
Swanson, met five times during 1993. The Compensation Committee
reviews Conrail's compensation programs and structure. The
Nominating Committee, consisting of Messrs. Jones (Chairman),
Hillas, Lewis and Schuler, met six times during 1993. The
Nominating Committee has the responsibility for recommending
individuals for election as members of the Board. The Nominating
Committee will consider written recommendations from shareholders
for nominees for election to the Board, provided that such
recommendations, together with (i) such information regarding each
nominee as would be required to be included in a proxy statement
filed pursuant to the Exchange Act, (ii) a description of all
arrangements or understandings among the recommending shareholder
and each nominee and any other person with respect to such
nomination, and (iii) the consent of each nominee to serve as a
director of Conrail if so elected, are received by the Corporate
Secretary of Conrail by, in the case of an annual meeting of
shareholders, not later than the date specified in the most recent
proxy statement of Conrail as the date by which shareholder
proposals for consideration at the next annual meeting of
shareholders must be received and, in the case of
9
<PAGE>
a special meeting of shareholders, not later than the tenth day after
the giving of notice of such meeting.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors' Compensation. Directors who are not officers of
Conrail receive an annual fee of $25,000 and a fee of $750 for each
Board and Board Committee meeting they attend. Each such director
who is a chairman of a Board Committee receives an additional annual
fee of $2,000, except the chairman of the Audit Committee who
receives an additional annual fee of $2,500. Directors who are
officers of Conrail are not paid any fees for service on the Board
or on any Board Committees.
Conrail maintains a Retirement Plan for Non-Employee Directors
("Directors' Retirement Plan") that provides each director who is
not an employee or former employee of Conrail with a retirement
benefit equal to the product of (1) one-twelfth of his or her annual
retainer fee from Conrail in effect at the time the director ceases
to serve as a member of the Board and (2) the number of full months,
up to 120, he or she served on the Board, including service on the
Board of Consolidated Rail Corporation prior to July 1, 1993.
Benefits are payable in cash, from Conrail's general assets, in
equal monthly installments over the ten-year period beginning with
the month following the later of (1) the month in which the director
ceases to serve on the Board or (2) the month in which the director
attains age 65. Notwithstanding the foregoing, (1) the benefits of
directors who cease to serve on the Board on account of disability
commence with the month following the month in which the director
ceases to serve on the Board, and (2) after a director's death, his
or her benefits shall be paid to the director's designated
beneficiary, or in the absence of a written designation, to the
director's estate, in a lump sum, as soon as practicable following
the director's death.
Benefits are forfeited in the event the director, before he or
she attains age 65, is removed from the Board for cause or
voluntarily resigns from the Board, unless the resignation is
approved by the Board on account of a conflict between the interests
of the director and the interests of Conrail.
Conrail also maintains a Board of Directors Charitable
Contributions Program pursuant to which Conrail has purchased life
insurance policies of $1 million on the life of each director. Upon
the death of an individual director, Conrail will donate $1 million
in five annual installments of $200,000 each to one or more
qualifying educational or charitable organizations designated by the
director, and will be reimbursed by the life insurance proceeds.
Individual directors derive no financial benefit from the program;
all charitable deductions accrue solely to Conrail. In 1993, a
donation of $200,000 was made under the program on behalf of the
late Ann F. Friedlaender.
10
<PAGE>
Compensation of Executive Officers. The following table
provides certain summary information concerning compensation awarded
to, earned by or paid to Conrail's Chairman, President and Chief
Executive Officer, Mr. James A. Hagen, and each of the four other
most highly compensated executive officers of Conrail (determined as
of the end of the last fiscal year (December 31, 1993) and hereafter
referred to as the "named executive officers") for all services
rendered in all capacities to Conrail and its subsidiaries during
the fiscal years ended December 31, 1991, 1992 and 1993.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
----------------------- ----------------------------
(a) (b) (c) (d) (f) (g) (i)
Securities
Name and Restricted Underlying All Other
Principal Salary Bonus Stock Award(s) Options/SARS Compensation
Position Year ($) ($) ($) (#) ($) (1)
- --------- ---- ------ ----- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
J. A. Hagen 1993 $646,899 $ 19,500 $ 615,576 (2) 0 $15,434
Chairman, 1992 607,428 - 685,831 (3) 62,500 15,167
President & CEO 1991 535,665 235,614 354,226 (4) 0 -
H.W. Brown 1993 264,995 7,990 189,163 (2) 0 8,994
Sr.Vice President- 1992 259,255 - 219,294 (3) 31,250 8,727
Finance & Admin. 1991 245,904 - 243,788 (4) 0 -
C.N. Marshall 1993 259,159 131,040 - 0 8,994
Sr.Vice President- 1992 252,480 145,596 - 31,250 8,727
Development 1991 245,904 162,156 - 0 -
D.M. LeVan 1993 255,218 7,784 189,170 (2) 0 8,994
Executive 1992 209,255 59,904 89,857 (3) 31,250 8,727
Vice President 1991 175,794 58,054 87,081 (4) 0 -
G.H. Kuhn 1993 252,544 67,456 77,761 (2) 0 8,994
Sr.Vice President- 1992 222,207 63,411 94,123 (3) 31,250 8,727
Core Service Group 1991 184,419 121,897 - 0 -
<FN>
(1) The amounts of $8,994 and $8,727, respectively, represent
Conrail's matching contribution in the form of Conrail
Preferred Stock of amounts deferred by the named executive
officers through a 401(k) plan during 1993 and 1992. The
shares are allocated based on the per share price set at the
time the shares were purchased by the plan. With respect to Mr.
Hagen, an additional $6,440 was contributed in each of 1993 and
1992 for his annual supplemental term life insurance premium.
(2) This figure represents the full market value as of the
February 7, 1994 grant date of restricted shares of Conrail
Common Stock awarded to the named executive officer as a result
of a 1993 bonus deferral, and is composed of the amount of 1993
bonus which such officer elected to defer ($410,800, $126,237,
$126,241 and $59,877 for Messrs. Hagen, Brown, LeVan and Kuhn,
respectively) plus a matching contribution by Conrail in the
amount of 50% for Messrs. Hagen, Brown and LeVan, and 30% for
Mr. Kuhn (each as determined by the length of the deferral
period elected by such named executive officer). Dividends are
paid on all restricted shares. The number of shares of
restricted stock was determined by the fair market value of
Conrail Common Stock on February 7, 1994 ($61.6875).
As of December 31, 1993, Messrs. Hagen, Brown, LeVan and Kuhn
held, respectively, 21,200, 9,943, 3,751 and 1,731 restricted
shares of Conrail Common Stock worth $720,187, $355,060,
$132,890 and $52,350, respectively, net of the payments which
such officers would have been entitled to receive absent their
elections to take restricted shares instead of cash bonuses.
Mr. Marshall held no restricted stock as of December 31, 1993.
Valuation is based on the closing price of Conrail Common Stock
on December 31, 1993 ($66.875). These numbers reflect the
aggregate restricted stock holdings of the named executive officers
as of December 31, 1993, but exclude shares received in February
1994 pursuant to such officers' 1993 bonus deferrals.
(3) This figure represents the full market value as of the February
26, 1993 grant date of restricted shares of Conrail Common
Stock awarded to the named executive officer as a result of a
1992 bonus deferral, and is composed of the amount of the 1992
bonus which such officer elected to defer ($461,949, $147,722,
$59,904, and $63,411 for Messrs. Hagen, Brown, LeVan and Kuhn,
respectively), plus a 50% matching grant by Conrail. The number
of shares of restricted stock was determined by the fair market
value of Conrail Common Stock on February 26, 1993 ($54.9375).
Shares in the amounts of 8,409, 2,689, 1,090 and 1,154, respectively,
for Messrs. Hagen, Brown, LeVan and Kuhn will vest on February 26,
1995, two years from the date of the award. Dividends are paid on the
restricted shares.
(4) This figure represents the full market value as of the February
19, 1992 grant date of restricted shares of Conrail Common
Stock awarded to the named executive officer as a result of a
1991 bonus deferral, and is composed of the amount of the 1991
bonus which such officer elected to defer ($235,614, $162,156
and $58,054 for Messrs. Hagen, Brown and LeVan, respectively),
plus a 50% matching grant by Conrail. The number of shares of
restricted stock was determined by the fair market value of
Conrail Common Stock on February 19, 1992 ($41.15625, as
adjusted to reflect the two-for-one Conrail common stock split
effected as a dividend on September 15, 1992).
Shares in the amounts of 5,724, 3,940 and 1,410, respectively,
for Messrs. Hagen, Brown and LeVan vested on February 22, 1994,
two years from the date of the award. Dividends were paid
on the restricted shares.
</FN>
</TABLE>
_________________________________
No stock options or stock appreciation rights were granted to
any of the named executive officers during the fiscal year ended
December 31, 1993.
____________________________________
The following table provides information concerning each
exercise of stock options during the fiscal year ended December 31,
1993 by each of the named executive officers and the value of
unexercised stock options held by each such officer as of December
31, 1993.
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
<CAPTION>
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Option/SARs Options/SARs
at FY-End (#) at FY-End ($)
Shares Acquired Exercisable/ Exercisable/
Name On Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ---- --------------- ------------------ ------------- -------------
<S> <C> <C> <C> <C>
J.A. Hagen 140,000 $ 5,651,885 E 71,250 E $2,713,828
U 31,250 U 767,578
H.W. Brown 25,000 1,067,700 E 71,026 E 3,197,345
U 15,624 U 383,765
C.N. Marshall 77,866 2,832,694 E 25,758 E 898,963
U 15,624 U 383,765
D.M. LeVan 84,200 3,265,700 E 15,626 E 383,814
U 15,624 U 383,765
G.H. Kuhn 65,700 2,241,972 E 15,626 E 383,814
U 15,624 U 383,765
<FN>
(1) This valuation is based on the fair market value of Conrail
Common Stock on December 31, 1993 ($67.1875).
</FN>
</TABLE>
13
<PAGE>
Pension Plan Table and Related Disclosure
-----------------------------------------
The following table shows estimated annual retirement benefits
payable under the Supplemental Pension Plan of Consolidated Rail
Corporation.
<TABLE>
Years Of Service
------------------------------------------------
<CAPTION>
Remuneration 15 YRS 20 YRS 25 YRS 30 YRS 35 YRS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 125,000 $ 21,368 $ 28,491 $ 35,614 $ 42,736 $ 49,860
150,000 26,618 35,491 44,364 53,236 62,110
175,000 31,868 42,491 53,114 63,736 74,360
200,000 37,118 49,491 61,864 74,236 86,610
225,000 42,368 56,491 70,614 84,736 98,860
250,000 47,618 63,491 79,364 95,236 111,110
300,000 58,118 77,491 96,864 116,236 135,610
400,000 79,118 105,491 131,364 158,236 184,610
450,000 89,618 119,491 149,364 179,236 209,110
500,000 100,118 133,491 166,864 200,236 233,610
600,000 121,118 161,491 201,864 242,236 282,610
700,000 142,118 189,491 236,864 284,236 331,610
800,000 163,118 217,491 271,864 326,236 380,610
900,000 184,118 245,491 306,864 368,236 429,610
</TABLE>
Messrs. Hagen, Brown, Marshall, LeVan and Kuhn have 13, 15, 15,
16 and 19 years of credited service, respectively. Compensation
covered by the Pension Plan consists of an employee's wages for
federal income tax purposes (see column (c) to the Summary
Compensation Table plus any bonus paid in 1993; column (d) reflects
bonuses earned in the stated year, but not paid in such year),
excluding reimbursements, fringe benefits, gains from the exercise
of employee stock options, and contributions to deferred
compensation plans other than employee deferrals under Conrail's
Matched Savings Plan. In 1993, the covered compensation of Messrs.
Hagen, Brown, Marshall, LeVan and Kuhn was $650,000, $266,323,
$317,038, $316,513, and $279,379, respectively. The table above
shows estimated annual retirement benefits, after application of the
Pension Plan's railroad retirement offset, payable to participants
as a straight life annuity under the Pension Plan upon normal
retirement at age 65 based upon final average compensation and years
of Conrail service. The table does not reflect statutory limits on
benefits under tax-qualified plans.
Employment Agreements and Termination of Employment and Change-In-
- ------------------------------------------------------------------
Control Arrangments
- -------------------
Conrail entered into an employment agreement with Mr. Hagen in
connection with Mr. Hagen's employment as Conrail's Chairman,
President and Chief Executive Officer. Mr. Hagen also serves as a
member of the Board, subject to shareholder approval. The employment
agreement is for an initial term of five years, which began
April 17, 1989, and continues for additional one-year terms at the
expiration of the initial term unless earlier terminated. The
initial base salary under the employment agreement was $450,000 per
year, subject to upward adjustment by the Board.
14
<PAGE>
In addition to the employee benefits generally available to
Conrail's non-union employees, Mr. Hagen is entitled to the
following benefits under the agreement: (1) supplemental retirement
benefits equal to any difference between (a) the estimated
retirement benefits to which he would have been entitled from CSX
Distribution Services, Inc. ("CSX") if he had continued his
employment with CSX throughout the time employed by Conrail and (b)
his actual retirement benefits from Conrail and CSX; (2)
supplemental long-term disability benefits equal to any difference
between (a) 60 percent of his base salary and (b) the amounts
payable to him under Conrail's long-term disability plan; and (3)
supplemental term life insurance coverage in amounts up to
$1,000,000. Conrail estimates that Mr. Hagen's annual supplemental
retirement benefits if he is employed by Conrail until age 65 will
be approximately $276,852.
The supplemental retirement benefits are forfeited if Mr.
Hagen's employment with Conrail is terminated by Conrail (1) for
"cause" (as defined in the employment agreement) or (2) by reason of
a voluntary act of Mr. Hagen in resigning as a member of the Board
of Directors or otherwise making himself unavailable to serve as a
member of the Board of Directors. The supplemental retirement
benefits may not be paid during any period in which Mr. Hagen is
receiving salary from Conrail. The supplemental retirement benefits
are payable from Conrail's general assets in the form of an annuity
for the life of Mr. Hagen with a fully subsidized survivor annuity
for his wife equal to 50 percent of his annuity (or, at Mr. Hagen's
election, a 100 percent annuity with an actuarial reduction in his
benefits), and are actuarially reduced in the event they commence
before age 65.
If Mr. Hagen's employment is terminated by Conrail at any time
on account of disability, he will receive compensation in the same
amounts and for the same duration as if he were disabled under both
Conrail's and the supplemental long-term disability plans, plus, if
otherwise entitled thereto at the time of disability, the
supplemental retirement benefits. Conrail may terminate Mr. Hagen's
employment without cause at any time. In any such event, Mr. Hagen
will receive, during any unexpired term of the agreement, continued
base salary at his then current rate plus medical and the
supplemental life insurance and retirement benefits. If following a
"change in control" (as defined in the employment agreement) of
Conrail (1) Mr. Hagen terminates his employment after a substantial
and continuing diminution of his responsibilities or a substantial
adverse change in his compensation, or (2) Conrail terminates his
employment without cause, Mr. Hagen will receive, from the date he
is no longer entitled to receive the compensation described in the
immediately preceding sentence, until he reaches age 65, continued
base salary at his then current rate plus medical and the
supplemental life insurance and retirement benefits. The aggregate
amount of Mr. Hagen's current base salary from April 1, 1994 to his
65th birthday is $1,996,925. The "change in control" provisions
described in the second preceding sentence terminate on June 3,
1995.
Conrail entered into Continuation Agreements with each of its
executive officers, including the named executive officers, other
than Mr. Hagen. If within two years following a "change in control"
of Conrail (as defined in the Continuation Agreements, excluding a
15
<PAGE>
"change in control" in which such officer has participated without
the approval of Conrail's Board), (1) Conrail terminates an
executive officer's employment without cause, or (2) an executive
officer terminates his or her employment after a reduction in his or
her "compensation rate" (as defined in the Continuation Agreements,
which includes amounts payable pursuant to Conrail's annual
management incentive compensation plans) or in his or her other
employee benefits, such executive officer will receive any
supplemental retirement benefits to which such executive officer may
be entitled, and for two years after such termination of employment,
compensation at such executive officer's "compensation rate," plus
medical and life insurance benefits.
Conrail and each of its executive officers, including the named
executive officers, have agreed to terminate the Continuation
Agreements effective June 3, 1995, the first date on which all of
the agreements could be terminated simultaneously.
BOARD COMPENSATION COMMITTEE REPORT
Conrail's Compensation Committee of the Board of Directors is
composed entirely of outside directors, none of whom has an
interlocking relationship with Conrail.
The Compensation Committee's executive officer compensation
policies for 1993 were as follows:
1. The Committee continued its emphasis on at-risk
compensation related to corporate performance objectives.
2. The Committee believes an appropriate cash compensation
structure for Conrail executive officers is a base salary slightly
below the average for officers with similar positions at comparable
companies, together with a significant component of performance-
related at-risk compensation in the form of an annual incentive
opportunity resulting in a total cash compensation opportunity that
is slightly above the average for the executive officers'
counterparts at comparable companies. The Committee believes that
setting total cash compensation opportunities slightly above the
total cash compensation opportunities at comparable companies is an
effective method to attract, retain and motivate qualified executive
officers.
3. In determining 1993 compensation levels, the Committee
considered executive officer compensation at those companies
included in the railroad peer group index used in the performance
graph and other companies of a size comparable to Conrail, i.e.,
companies with revenues in the $3 - $4 billion range.
The Committee, in setting 1993 base salaries for executive
officers and, in particular, the changes in those base salaries
between 1992 and 1993, also considered each
<PAGE>
executive officer's expertise, responsibilities and achievement,
all of which were given equal weight with the compensation data for
comparable companies. Achievement is measured against a management
style that promotes customer focus, teamwork and process improvement.
Consistent with the cas compensation structure outlined above, base
salaries of the named executives in 1993 were below the average for
officers with similar positions at comparable companies.
4. The 1993 annual portion of the performance-related at-risk
compensation of the executive officers was provided under an
incentive plan pursuant to which all non-union employees were
eligible to receive incentive payments. The size of the incentive
award opportunities were determined for the named executive officers
at a level which, when added to the base salary for such executive
officer, could result in a total cash compensation opportunity
slightly above the average for the executive officers' counterparts
at comparable companies. In December 1992, the Committee
set two measurements of corporate performance relevant to
the 1993 incentive plan, net income and operating ratio (operating
expenses as a percent of revenues). No payment would have been made
under the plan unless a specified level of net income for 1993 had
been attained. Once the net income threshold was met, the amount of
the payments under the plan were solely a function of the 1993 operating
ratio, which was superior to the targeted 1993 operating ratio. The
effects of one time charges in 1993 for adoption of changes in accounting
for income taxes and post retirement benefits, the planned disposition of
Concord Resources Group, Inc. and changes in deferred taxes because of the
increase in the federal corporate income tax rate were excluded for
purposes of these measurements.
5. Executive officers (and all non-union employees) could
defer receipt of their 1993 annual incentive awards for up to five
years by electing to receive all or a portion of those awards in
restricted shares of Conrail common stock. As an incentive to so
elect, a further award of restricted stock (bonus shares) was
offered to the participant, the amount of which was determined by
the period of restriction elected by the participant for those bonus
shares. The percentage of the bonus shares in relation to the
deferred incentive was equal to 10%, 20%, 30%, 40% or 50% for an
election of a one, two, three, four, or five-year restriction,
respectively, on the bonus shares. As a consequence, the size of
the restricted stock award is a function of Conrail's performance
under the 1993 incentive plan and the individual elections of
participants in the plan to take their incentive payments in the
form of restricted stock awards. The Committee believes these
incentives are appropriate because they more closely align the
personal financial interests of employees with the financial
interests of shareholders.
6. The Committee determined the 1993 base salary of James A.
Hagen as Chairman, President and Chief Executive Officer after
considering both individual and business performance. The Committee
also took into account the base salaries of Chief Executive Officers
of the comparable companies referred to above. The Committee
determined an increase in base salary for 1993 was appropriate for
the following reasons: 1993 base salary was within the target range
of the average base salary for Chief Executive Officers at the
comparable companies; Conrail completed and successfully
communicated a five year business plan to employees and the
investment community; the Conrail management structure was
reorganized to increase customer focus, a change that led to
Conrail's new service networks; financial goals expressed in terms
of a reduced operating ratio and net income were achieved; and Mr.
Hagen provided leadership to the entire railroad industry to promote
seamless, joint operations among carriers.
17
<PAGE>
7. The amount of Mr. Hagen's bonus under the incentive plan
was determined by the incentive plan formula and resulted from
Conrail's having exceeded the plan goals for both net income and
operating ratio in 1993.
Daniel B. Burke, Chairman
Claude S. Brinegar Roger S. Hillas
William G. Milliken David H. Swanson
PERFORMANCE GRAPH
The following line graph depicts a comparison of Conrail's
five-year cumulative total shareholder return, assuming reinvestment
of dividends, with the S&P 500 Stock Index and a railroad peer group
index.
SEE ATTACHED
Assumes $100 invested on December 31, 1988 in Conrail Common
Stock, S&P 500 Stock Index and the rail peer group composite (the
returns of which have been weighted according to their respective
market capitalization as of the close of business on each December 31,
the beginning of the periods for which returns are indicated).
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Conrail $100 $146 $127 $263 $313 $449
S&P 500 $100 $127 $119 $150 $157 $168
Rail $100 $ 89 $ 88 $130 $153 $180
Composite
</TABLE>
18
<PAGE>
PROPOSAL NO. 2
PROPOSAL TO RATIFY THE APPOINTMENT OF PRICE WATERHOUSE
AS THE INDEPENDENT ACCOUNTANTS FOR THE YEAR 1994
On February 16, 1994, the Board, with the approval of the Audit
Committee, dismissed Coopers & Lybrand, Conrail's previous
independent accountants, and selected the firm of Price Waterhouse
as independent accountants to audit the books, records and accounts
of Conrail for the current fiscal year, subject to ratification by
vote of Conrail's shareholders. If the shareholders do not ratify
the selection of Price Waterhouse, the selection of independent
accountants will be reconsidered and made by the Board. It is
understood that even if the selection is ratified, the Board, in its
discretion, may direct the appointment of a new independent
accounting firm at any time during the year if it determines that
such a change would be in the best interests of Conrail and its
shareholders.
Neither of Coopers & Lybrand's reports on Conrail's financial
statements for the years 1992 or 1993 contained an adverse opinion
or a disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope or accounting principles. Since January 1,
1992, there have been no disagreements between Conrail and Coopers &
Lybrand on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Coopers &
Lybrand, would have caused it to refer thereto in connection with
its report. Since January 1, 1992, Coopers & Lybrand has not
advised Conrail that (1) the internal controls necessary for Conrail
to develop reliable financial statements do not exist; (2)
information has come to the attention of Coopers & Lybrand that led
it to no longer be able to rely on Conrail management's
representations, or that has made Coopers & Lybrand unwilling to be
associated with the financial statements prepared by Conrail's
management; (3) there was a need to expand significantly the scope
of the Coopers & Lybrand audit, or that information has come to the
attention of Coopers & Lybrand that if further investigated may (i)
materially affect the fairness or reliability of either a previously
issued audit report or the underlying financial statements, or the
financial statements issued or to be issued covering the fiscal
periods subsequent to the date of the most recent financial
statements covered by an audit report (including information that
may prevent it from rendering an unqualified audit report on those
financial statements), or (ii) cause Coopers & Lybrand to be
unwilling to rely on Conrail management's representations or be
associated with Conrail's financial statements; or (4) information
has come to the attention of Coopers & Lybrand that it has concluded
materially affects the fairness or reliability of either (i) a
previously issued audit report or the underlying financial
statements or (ii) the financial statements issued or to be issued
covering the fiscal periods subsequent to the date of the most
recent financial statements covered by an audit report (including
information that, unless resolved to the satisfaction of Coopers &
Lybrand, would prevent it from rendering an unqualified audit report
on those financial statements). Since January 1, 1992, neither
Conrail nor anyone on its behalf has consulted
19
<PAGE>
Price Waterhouse on any matter.
Representatives of Price Waterhouse are expected to be present
at the Annual Meeting and will have the opportunity to make a
statement if they desire to do so and are expected to be available
to respond to appropriate questions. Coopers & Lybrand is not
expected to be represented at the meeting.
The Board of Directors recommends a vote for approval of Proposal 2.
SHAREHOLDER PROPOSALS
Proposals which shareholders wish to be presented at the 1995
Annual Meeting of Shareholders, scheduled for May 17, 1995, must be
received by Conrail no later than December 1, 1994 to be considered
for inclusion in the Proxy Statement and the form of proxy for the
1995 Annual Meeting. Proposals should be addressed to the Secretary
of the Corporation, Conrail Inc., Two Commerce Square, 2001 Market
Street, Philadelphia, Pennsylvania 19101-1417. All proposals should
be sent by certified mail, return receipt requested.
By Order of the Board of Directors
Allan Schimmel
Allan Schimmel
Corporate Secretary
March 31, 1994
20
<PAGE>
X 2570
Please mark your
vote as in this
example.
This Proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made with respect to the
voting of Common Stock, this Proxy will be voted FOR Proposals 1 and 2. With
respect to the effect of the undersigned shareholder's failure to direct the
voting of ESOP Stock, SEE REVERSE SIDE.
The Board of Directors recommends a vote FOR:
1. Election of 2. Ratification of
Directors FOR WITHELD Auditors. FOR AGAINST WITHELD
Class I-Term
Expiring 1997
(see reverse). Special Action
For, except vote withheld Will Attend Comments
from the following nominee(s): Annual Meeting on Reverse
- ------------------------------
- -------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
------------------------
------------------------
SIGNATURE(S) DATE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Detach Proxy Card Here
<PAGE>
Admission Ticket
CONRAIL INC.
Annual Meeting
of
Shareholders
Wednesday, May 18, 1994
10:00 a.m.
The Academy of Music Hall
1420 Locust Street
Philadelphia, PA
Meeting Agenda
--------------
* Welcome by James A. Hagen, Chairman, President and Chief Executive Officer
* Presentation of Affidavit of Notice of Meeting
* Report on Quorum
* Report on Appointment of Judge of Election
* Election of Directors to serve until Annual Meeting of Shareholders in 1997
* Ratification of Price Waterhouse as Independent Auditors
* Remarks by James A. Hagen, Chairman, President and Chief Executive Officer
* Discussion Period
* Report on Results of Balloting
* Adjournment
It is important that your shares are represented at this meeting, whether or
not you attend the meeting in person. To make sure your shares are represented,
we urge you to complete, detach and mail the proxy card above.
If you plan to attend the Annual Meeting, please mark the appropriate box in
- ----------------------------------------------------------------------------
the Special Action Section of the proxy card above. Display this ticket to the
- ------------------------------------------------------------------------------
Conrail representative at the entrance to The Academy of Music Hall.
- -------------------------------------------------------------------
<PAGE>
CONRAIL INC.
Proxy Solicited on behalf of the Board of Directors of
The Company for the Annual Meeting of Shareholders, May 18, 1994
P
R
O
X
Y
The undersigned hereby constitutes and appoints Daniel B. Burke, Roger S.
Hillas and E. Bradley Jones, and each of them, as true and lawful agents and
proxies with full power of substitution in each to represent the undersigned at
the Annual Meeting of Shareholders of CONRAIL INC. to be held on Wednesday, May
18, 1994 at 10:00 a.m. in The Academy of Music Hall, 1420 Locust Street,
Philadelphia, Pennsylvania, and at any adjournments thereof, on all matters
coming before said meeting. If the undersigned participates in the Consolidated
Rail Corporation Employee Stock Ownership Plan (ESOP), pursuant to which the
ESOP account of the undersigned has been allocated shares of Conrail Inc.
Series A ESOP Convertible Junior Preferred Stock (ESOP Stock), the undersigned
hereby directs Boston Safe Deposit and Trust Company, as Trustee to the ESOP,
to vote all such shares at the aforesaid Annual Meeting and any adjournments
thereof as designated on the reverse side of this proxy and in its discretion
on such other matters as may properly come before the meeting.
Election of Directors. Nominees:
Class I-Term Expiring 1997
1. H. Furlong Baldwin
2. James A. Hagen
3. Michael H. Moskow
4. David H. Swanson
You are encouraged to specify your choices by marking the appropriate boxes.
SEE REVERSE SIDE. If you sign and return this card but do not mark any boxes,
your shares of Common Stock will be voted in accordance with the Board of
Directors' recommendations. The Proxy Committee cannot vote your shares of
Common Stock unless you sign and return this card. If you do not sign and
return this card, or if you sign and return the card but do not mark the boxes,
your shares of ESOP Stock, if any, will be voted by the ESOP Trustee, together
with unallocated ESOP Stock, in the same manner and proportion as the shares of
ESOP Stock for which valid voting instructions have been received.
Comments:
- -----------------------------------------------
- -----------------------------------------------
SEE REVERSE
SIDE
<PAGE>
The Academy of Music Hall is located in Center City Philadelphia and is in
close proximity to SEPTA's major mass transit lines. Shareholders attending the
Conrail meeting may use, at their own expense, any of the commercial parking
lots in and around The Academy of Music Hall.
Annual
Meeting of
Shareholders
May 18, 1994, 10:00 a.m.
The Academy of Music Hall
1420 Locust Street
Philadelphia, PA
INTRODUCING
CONRAIL SHAREHOLDER DIRECTsm
1-800-215-RAIL
In late 1993, shareholders were notified of Conrail's plan to introduce a new
communications tool designed to provide more timely and cost-effective
corporate information, including quarterly financial results, news releases and
other items of corporate interest. This communications device would replace the
customary mailing of Quarterly Reports to shareholders with dividend checks.
Effective April 1, 1994, Conrail Shareholder Directsm is available for use by
holders of Conrail Inc. stock and can be accessed by dialing 1-800-215-RAIL
anytime day or night. After accessing this toll-free system, shareholders will
be able to choose the information they desire by selecting from a menu driven
list of options and can even arrange for printed copies of various information
pieces via fax or the U.S. Postal Service.
