=======================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
AMENDMENT NO. 11
to
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
------------------------------------
CONRAIL INC.
(Name of Subject Company)
------------------------------------
CONRAIL INC.
(Name of Person(s) Filing Statement)
------------------------------------
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)
N/A
(CUSIP Number of Class of Securities)
------------------------------------
James D. McGeehan
Corporate Secretary
Conrail Inc.
2001 Market Street
Two Commerce Square
Philadelphia, Pennsylvania 19101
(215) 209-4000
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
Robert A. Kindler, Esq.
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
(212) 474-1000
=======================================================================
<PAGE>
INTRODUCTION
Conrail Inc. ("Conrail") hereby amends and supplements its
Solicitation/Recommendation Statement on Schedule 14D-9, originally
filed on November 6, 1996, and amended on November 7, 1996, November
8, 1996, November 13, 1996, November 18, 1996, November 20, 1996,
November 21, 1996, November 26, 1996, December 3, 1996, December 6,
1996 and December 12, 1996 (as amended, the "Norfolk Schedule 14D-
9"), with respect to an offer by Atlantic Acquisition Corporation, a
Pennsylvania corporation ("Atlantic") and a wholly owned subsidiary of
Norfolk Southern Corporation, a Virginia corporation ("Norfolk"), to
purchase all the issued and outstanding Shares of Conrail. Capitalized
terms not defined herein have the meanings assigned thereto in the
Norfolk Schedule 14D-9.
Items 4 and 8 of the Norfolk Schedule 14D-9 are hereby
amended and supplemented by adding the following text at the end
thereof:
On December 19, 1996, CSX and Conrail issued a press
release, pursuant to which they announced that they had entered into
the Second Amendment to the Merger Agreement dated as of December 18,
1996 (the "Second Amendment") to, among other things, (i) increase the
consideration payable pursuant to the Merger, (ii) accelerate the
consummation of the Merger to immediately following the receipt of
applicable shareholder approvals and prior to Surface Transportation
Board approval and (iii) extend the period (the "Exclusivity Period")
during which the Conrail Board has agreed under the Merger Agreement
not to withdraw or modify its recommendations of the CSX Transactions,
approve or recommend any takeover proposal or cause Conrail to enter
into any agreement related to any takeover proposal to December 31,
1998.
On December 18, 1996, the Second Amendment was approved by
the Conrail Board and the disinterested members of the Conrail Board,
with one abstention. Mr. David B. Lewis advised the Conrail Board that
while he continues to fully support the Second CSX Offer and the
Merger, he wished to abstain from the vote approving the Second
Amendment in light of the provision in the Second Amendment extending
the Exclusivity Period to December 31, 1998.
The Conrail Board continues to believe that a merger of
equals with CSX is in the best interests of Conrail; the Conrail Board
believes that the amended terms of the Merger Agreement represent a
significant improvement over the original terms of the CSX
Transactions.
<PAGE>
The Conrail Board, including the disinterested members of the
Conrail Board, also reaffirmed its determination that the transactions
contemplated by the Merger Agreement (such as the Second CSX Offer and
the Merger) are in the best interests of Conrail (taking into account
all the Conrail constituencies affected by such proposed transactions,
the short-term and long-term interests of Conrail, the resources,
intent and conduct (past, stated and potential) of any person seeking
to acquire control of Conrail, and all other pertinent factors).
Accordingly, the Conrail Board recommends that the shareholders of
Conrail who desire to receive cash for a portion of their Shares
tender their Shares pursuant to the Second CSX Offer.
The Conrail Board, including the disinterested members of
the Conrail Board, also determined that a sale of Conrail to Norfolk
would not be in the best interests of Conrail (taking into account all
the Conrail constituencies affected by such proposed transactions, the
short-term and long-term interests of Conrail, the resources, intent
and conduct (past, stated and potential) of any person seeking to
acquire control of Conrail, and all other pertinent factors).
Accordingly, the Conrail Board recommends that the shareholders of
Conrail not tender their Shares pursuant to the Norfolk Offer.
In making the determinations and recommendations set forth
above, the Conrail Board considered the same factors which previously
led the Conrail Board to recommend the Second CSX Offer and Merger.
A copy of the Second Amendment and a copy of the press
release are attached hereto as Exhibits (c)(9) and (a)(16),
respectively, are incorporated herein by reference and qualify the
foregoing summary in its entirety.
On December 19, 1996, Norfolk announced that it had
increased the price offered in the Norfolk Offer to $115 per Share. On
December 20, 1996, Conrail issued a press release, announcing that the
Conrail Board has rejected the revised Norfolk Offer and continues to
recommend that Conrail shareholders not tender their shares pursuant
to the Norfolk Offer.
On December 13, 1996, Norfolk amended its complaint to add
claims (a) that any postponement by Conrail of the Pennsylvania
Special Meeting scheduled for
<PAGE>
December 23, 1996 (assuming such postponement was caused by Conrail
having failed to receive the requisite number of votes for approval)
would be, and that granting CSX the right to consent to such
postponement was, a breach of the fiduciary duties of the directors of
Conrail, and (b) that CSX has, in effect, acquired more than 20% of
the Shares (within the meaning of Subchapter E of Chapter 25 of the
Pennsylvania Business Corporation Law ("Subchapter 25E")) by virtue of
the allegation that shares owned by CSX should be aggregated with
Shares that could be voted by directors of Conrail and, accordingly,
that CSX is obligated to pay "fair value" in cash, to be determined
pursuant to Subchapter 25E, to all shareholders of Conrail other than
CSX. Norfolk also added allegations to its Federal securities law
claims that the defendants had made misleading statements regarding
the possibility that the consideration being offered by CSX might be
improved.
At a hearing on December 17, 1996, the Court granted a
limited injunction enjoining the defendants from postponing,
adjourning or not convening the Pennsylvania Special Meeting scheduled
for December 23, 1996, by reason of Conrail or its nominees not having
received sufficient proxies to assure approval of the Articles
Amendment. The Court specified that adjournment or postponement for
other reasons would be permissible under the injunction.
Item 9. Materials to be filed as Exhibits.
Item 9 of the Norfolk Schedule 14D-9 is hereby amended and
supplemented by adding the following text thereto:
(a)(16) Text of press release issued by CSX and Conrail dated
December 19, 1996 (incorporated by reference to Exhibit
(a)(12) to the Second CSX 14D-9).
(a)(17) Text of press release issued by Conrail dated December
20, 1996 (incorporated by reference to Exhibit (a)(13)
to the Second CSX 14D-9).
(c)(9) Second Amendment to Agreement and Plan of Merger dated
as of December 18, 1996, (incorporated by reference to
Exhibit (c)(10) to the Second CSX 14D-9).
<PAGE>
(c)(10) Form of Amended and Restated Voting Trust Agreement
(incorporated by reference to Exhibit (c)(11) to the
Second CSX 14D-9).
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true,
complete and correct.
CONRAIL INC.
By /s/ Timothy T. O'Toole
----------------------
Name: Timothy T. O'Toole
Title: Senior Vice President--Finance
Dated as of December 20, 1996
<PAGE>
EXHIBIT INDEX
Exhibit Description Page No.
- ------- ----------- --------
*(a)(1) Text of press release issued by Conrail dated
October 23, 1996 (incorporated by reference
to Exhibit (a)(9) to the
Solicitation/Recommendation Statement on
Schedule 14D-9 of Conrail Inc. dated October
16, 1996, as amended (the "CSX
14D-9")).......................................
*(a)(2) Text of press release issued by Norfolk,
dated October 23, 1996 (incorporated by
reference to Exhibit (a)(8) to the CSX
14D-9).........................................
*(a)(3) Text of press release issued by Conrail and
CSX dated November 6, 1996.....................
*(a)(4) Letter to shareholders of Conrail dated
November 6, 1996...............................
*(a)(5) Text of press release issued by Conrail,
dated November 7, 1996 (incorporated by
reference to Exhibit (a)(16) to the CSX
14D-9).........................................
*(a)(6) Text of press release issued by Conrail,
dated November 7, 1996 (incorporated by
reference to Exhibit (a)(17) to the CSX
14D-9).........................................
*(a)(7) Text of press release issued by Conrail,
dated November 8, 1996 (incorporated by
reference to Exhibit (a)(18) to the CSX
14D-9).........................................
*(a)(8) Text of press release issued by Conrail and
CSX, dated November 13, 1996 (incorporated by
reference to Exhibit (a)(19) to the CSX
14D-9).........................................
*(a)(9) Text of press release issued by Conrail and
CSX dated November 19, 1996 (incorporated by
reference to Exhibit (a)(20) to the CSX
14D-9).........................................
*(a)(10) Text of press release issued by Conrail and
CSX dated November 20, 1996 (incorporated by
reference to Exhibit (a)(21) to the CSX
14D-9).........................................
<PAGE>
Exhibit Description Page No.
- ------- ----------- --------
*(a)(11) Text of press release issued by CSX dated
November 21, 1996 (incorporated by reference
to Exhibit (a)(22) to the CSX
14D-9).........................................
*(a)(12) Text of press release issued by Conrail,
dated November 25, 1996........................
*(a)(13) Text of press release issued by CSX, dated
November 26, 1996 (incorporated by reference
to Exhibit (a)(23) to the CSX
14D-9).........................................
*(a)(14) Text of press release issued by Conrail and
CSX dated December 5, 1996.....................
*(a)(15) Text of press release issued by Conrail and
CSX dated December 10, 1996 (incorporated by
reference to Exhibit (a)(8) to the
Solicitation/Recommendation Statement on
Schedule 14D-9 of Conrail dated December 6,
1996, as amended, relating to the second
tender offer by CSX (the "Second CSX
14D-9")).......................................
(a)(16) Text of press release issued by CSX and
Conrail dated December 19, 1996 (incorporated
by reference to Exhibit (a)(12) to the Second
CSX 14D-9).....................................
(a)(17) Text of press release issued by Conrail dated
December 20, 1996 (incorporated by reference
to Exhibit (a)(13) to the Second CSX
14D-9).........................................
(b) Not applicable.................................
*(c)(1) Pages 4-5 and 9-14 of Conrail's Proxy
Statement dated April 3, 1996 (incorporated
by reference to Exhibit (c)(7) to the CSX
14D-9).........................................
*(c)(2) Employment Agreement of Mr. David M. LeVan
dated as of October 14, 1996 (incorporated by
reference to Exhibit (c)(5) to the CSX
14D-9).........................................
*(c)(3) Change of Control Agreement of Mr. David M.
LeVan dated as of October 14, 1996
(incorporated by reference to Exhibit (c)(6)
to the CSX 14D-9)..............................
<PAGE>
Exhibit Description Page No.
- ------- ----------- --------
*(c)(4) First Amended Complaint in Norfolk Southern
et al. v. Conrail Inc., et al., No. 96-CV-
7167, filed on October 28, 1996 in the United
States District Court for the Eastern
District of Pennsylvania (incorporated by
reference to Exhibit (c)(9) to the CSX
14D-9).........................................
*(c)(5) Second Amended Complaint in Norfolk Southern
et. al. v. Conrail Inc., et al., No.
96-CV-7167, filed on November 15, 1996 in the
United States District Court for the Eastern
District of Pennsylvania (incorporated by
reference to Exhibit (c)(12) to the CSX
14D-9).........................................
*(c)(6) Text of opinion of Judge Donald VanArtsdalen
of the United States District Court for the
Eastern District of Pennsylvania as delivered
from the bench on November 20, 1996............
*(c)(7) Conrail's Definitive Proxy Statement, dated
November 25, 1996..............................
*(c)(8) Answer and Defenses of Conrail, CSX and the
individual defendants to Second Amended
Complaint, and Counterclaim of Conrail and
CSX in Norfolk Southern et al. v. Conrail
Inc. et al., filed on December 5, 1996, in
the United States District Court for the
Eastern District of Pennsylvania...............
(c)(9) Second Amendment to Agreement and Plan of
Merger dated as of December 18, 1996,
(incorporated by reference to Exhibit (c)(10)
to the Second CSX 14D-9).......................
(c)(10) Form of Amended and Restated Voting Trust
Agreement (incorporated by reference to
Exhibit (c)(11) to the Second CSX 14D-9).......
- ---------------------
* Previously filed
