<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
CONRAIL INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------
(4) Date Filed:
---------------------------------------------------------------
<PAGE> 2
[CONRAIL LOGO]
January 9, 1997
Dear Shareholders:
Your vote at the upcoming special meeting of shareholders to consider the
proposal to amend the Articles of Incorporation to opt out of a Pennsylvania
statute is important. The special meeting will be held on Friday, January 17,
1997 at 12:00 p.m., Eastern Standard Time, at The Main Auditorium at The Academy
of Music, Broad and Locust Streets, Philadelphia, Pennsylvania.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
PROPOSAL TO OPT OUT OF THE PENNSYLVANIA STATUTE.
Shareholders are urged to vote in favor of the opt out so that CSX
Corporation may complete its outstanding tender offer for an additional
18,344,845 shares at $110 per share and CSX and Conrail may proceed with its
merger-of-equals, which will provide value to Conrail shareholders at the
high-end of what has been paid in other railroad business combinations -- value
which has been increased by more than $1.5 billion since mid-October.
As soon as possible, please complete the enclosed WHITE proxy and return it
in the enclosed postage paid return envelope, if you have not already done so.
Your Board of Directors recommends that you do not send in or complete the gold
proxy from Norfolk Southern Corporation. If you have already done so, your Board
of Directors urges you to revoke the gold proxy by completing and returning the
enclosed WHITE proxy. Only your latest dated properly executed proxy will be
counted. Voting your shares by proxy does not prevent you from voting your
shares in person should you decide to attend the special meeting.
If you have any questions regarding the special meeting or need assistance
in voting your Shares or in obtaining a BLUE admission ticket for the special
meeting, please call:
D.F. KING & CO., INC.
1-800-549-6746 (TOLL FREE)
Sincerely,
/s/ David M. LeVan
------------------------
David M. LeVan
Chairman, President and
Chief Executive Officer
<PAGE> 3
CONRAIL INC.
2001 MARKET STREET
TWO COMMERCE SQUARE
PHILADELPHIA, PENNSYLVANIA 19101-1417
------------------------
SUPPLEMENT TO PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
FRIDAY, JANUARY 17, 1997
------------------------
This Supplement (this "Supplement") to the Proxy Statement dated November
25, 1996, as previously supplemented by the Proxy Supplement dated December 24,
1996 (as previously supplemented, the "Original Proxy Statement" and, as so
supplemented hereby, the "Proxy Statement") is furnished in connection with the
solicitation by the Board of Directors (the "Board") of Conrail Inc., a
Pennsylvania corporation ("Conrail"), of proxies for use at a Special Meeting
(the "Special Meeting") of shareholders which will be held at The Main
Auditorium at The Academy of Music, Broad and Locust Streets, Philadelphia,
Pennsylvania, on Friday, January 17, 1997, at 12:00 p.m., Eastern Standard Time,
and at any adjournments thereof. This Supplement is being furnished in
connection with the solicitation of proxies for the purposes described herein
and in the Original Proxy Statement.
This Supplement modifies and supersedes certain information included in the
Original Proxy Statement previously distributed to Conrail shareholders and
should be read in conjunction with the Original Proxy Statement. Capitalized
terms used but not defined in this Supplement have the meanings assigned thereto
in the Original Proxy Statement.
The Conrail Board continues to unanimously recommend a vote FOR the
Proposal and urges shareholders to complete the WHITE proxy (or GREEN trustee
instruction card). Your vote is important.
Under the terms of the CSX Transactions, the aggregate value of the
consideration to be received by the Conrail shareholders has been increased by
over $1.5 billion from the value contemplated by the original terms of the CSX
Transactions, which was already at the high-end of what has been paid in other
railroad business combinations. In addition, by voting for the Proposal,
shareholders of Conrail who wish to receive cash for a portion of their Shares
will be able to have such Shares purchased by CSX pursuant to the Second CSX
Tender Offer (which will expire on January 22, 1997) and will facilitate the
consummation of the Merger and receipt of the CSX Merger Securities (which is
expected to occur early in 1997, if the Proposal is approved). If shareholders
vote FOR the Proposal, the CSX Transactions thus permit shareholders to receive
the aggregate consideration for all outstanding Shares significantly earlier
than under the original terms of the CSX Transactions or under the Norfolk
Offer.
VOTING AND SOLICITATION INFORMATION. Enclosed for your convenience is a
duplicate WHITE proxy. If you have not already voted on the WHITE proxy or would
like to change your vote, please complete, sign, date and promptly return the
enclosed WHITE proxy in the enclosed envelope. Voting your Shares by proxy does
not prevent you from voting your Shares in person should you decide to attend
the Special Meeting.
IF YOU HAVE ALREADY RETURNED A WHITE PROXY CARD AND DO NOT WISH TO CHANGE
YOUR VOTE, NO FURTHER ACTION IS REQUIRED.
IF YOU WISH TO VOTE FOR THE PROPOSAL, YOU MUST DO SO ON THE WHITE PROXY AND
NOT ON THE GOLD PROXY YOU HAVE RECEIVED FROM NORFOLK TO ENSURE THAT YOUR VOTE IN
FAVOR OF THE PROPOSAL WILL BE PROPERLY RECORDED AT THE SPECIAL MEETING.
See "Voting Information, Solicitation of Proxies and Admission Procedures
for Special Meeting" in the Original Proxy Statement for more information.
<PAGE> 4
INFORMATION CONCERNING CERTAIN SHAREHOLDERS
AND CONRAIL OFFICERS AND DIRECTORS
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF. To Conrail's knowledge
based on the latest publicly available information, the only persons (or "group"
as that term is used in Section 13(d)(3) of the Exchange Act), who, as of the
Record Date (except as otherwise set forth below), owned beneficially more than
5% of any class of Conrail's voting securities are listed in the following table
(which also lists the Employee Benefits Trust):
<TABLE>
<CAPTION>
TITLE OF AMOUNT AND NATURE OF PERCENT OF
CLASS NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ------------- ------------------------------------- --------------------------- ----------
<S> <C> <C> <C>
Common Stock CSX Corporation 17,860,124(1)(2) 21.7%
Green Acquisition Corp.
One James Center
801 East Cary Street
Richmond, VA 23219
Common Stock FMR Corp. 7,621,404(3) 9.3%
82 Devonshire Street
Boston, MA 02109
Common Stock Wellington Management Company 4,119,510(4) 5.0%
75 State Street
Boston, MA 02109
Common Stock Mellon Bank, N.A. 3,444,500, 4.2%
Suite 3346 solely in its capacity as
Pittsburgh, PA 15258 trustee of the Employee
Benefits Trust(5)
ESOP Stock Fidelity Management Trust Company 5,646,125, 77.3%
82 Devonshire Street solely in its capacity as
Boston, MA 02109 Trustee of the ESOP(6)
</TABLE>
- ---------------
(1) Based on information set forth on the Amendment No. 10 to the Schedule 13D
filed by CSX and Purchaser with the SEC on December 6, 1996. These Shares
represent approximately 19.9% of Conrail's total voting securities as of
the Record Date. On January 2, 1997, CSX announced that, through the Voting
Trust (as defined in footnote (2) below), CSX and Purchaser had sold
through a series of transactions on the open market an aggregate of 85,000
Shares, together with irrevocable proxies to vote such Shares at the
Pennsylvania Special Meeting, in order to moot certain contentions made by
Norfolk and certain shareholder plaintiffs in pending litigation. As a
result, CSX and Purchaser now own through the Voting Trust 17,775,124
Shares, which represent approximately 19.8% of Conrail's total voting
securities as of the Record Date. CSX also beneficially owns an additional
15,955,477 shares of Conrail Common Stock pursuant to a Conrail Stock
Option Agreement dated as of October 14, 1996 between Conrail and CSX,
pursuant to which CSX currently has the right to purchase up to that number
of additional shares at a price of $92.50 per share, subject to adjustment,
as more fully described in the CSX Schedule 14D-1/Schedule 13D filed with
the SEC on December 6, 1996. These option Shares, together with the
17,775,124 Shares referred to above, represent approximately 37.7% of
Conrail's total voting securities as of the Record Date.
(2) All of the Shares beneficially owned by CSX (other than pursuant to the
Conrail Stock Option Agreement, unless and until exercised) are required to
be deposited into a voting trust (the "Voting Trust") pursuant to a Voting
Trust Agreement dated as of October 15, 1996 between CSX and Deposit
Guaranty National Bank, as trustee, with offices at One Deposit Guaranty
Plaza, 8th Floor, Jackson, Mississippi 39201. The Voting Trust, which
terminates on December 31, 2016, unless earlier terminated
2
<PAGE> 5
in accordance with its terms, is required to vote all such Shares in favor
of the opt out Proposal, all as described in the CSX Schedule
14D-1/Schedule 13D filed with the SEC on December 6, 1996.
(3) Based on information set forth on the Schedule 13F filed by FMR Corp.
("FMR") with the SEC on November 15, 1996. Assuming that all these Shares
owned by FMR were tendered pursuant to the First CSX Tender Offer, 23.45%
of these Shares (or 1,787,219 Shares) would have been purchased by CSX
prior to the Record Date and reflected in CSX's beneficial ownership set
forth above. These Shares represent approximately 8.5% (or approximately
6.5% assuming FMR tendered all its Shares to CSX) of Conrail's total voting
securities as of the Record Date.
(4) Based on information set forth on the Schedule 13F filed by Wellington
Management Company ("Wellington") with the SEC on November 15, 1996.
Assuming that all these Shares owned by Wellington were tendered pursuant
to the First CSX Tender Offer, 23.45% of these Shares (or 966,025 Shares)
would have been purchased by CSX prior to the Record Date and reflected in
CSX's beneficial ownership set forth above. These Shares represent
approximately 4.6% (or approximately 3.5% assuming Wellington tendered all
its Shares to CSX) of Conrail's total voting securities as of the Record
Date.
(5) These shares represent approximately 3.8% of Conrail's total voting
securities as of the Record Date. The Employee Benefit Trust is listed for
information purposes only and does not represent a beneficial owner of more
than 5% of the Common Stock as of the Record Date.
(6) Shares of ESOP Stock are convertible into shares of Common Stock at any time
on a share-for-share basis, subject to certain antidilution adjustments. As
a result, ownership of shares of ESOP Stock is deemed to be ownership of an
equal number of shares of Common Stock. These shares of ESOP Stock
represent the unallocated shares of ESOP Stock contained in the ESOP. These
shares, together with the 1,657,795 shares of ESOP Stock allocated to
participants, constitute an aggregate of 7,303,920 shares of ESOP Stock,
which aggregate represents approximately 8.2% of Conrail's total voting
securities as of the Record Date.
OWNERSHIP BY MANAGEMENT OF VOTING SECURITIES. The following table sets
forth the beneficial ownership, as of the Record Date, of Common Stock and ESOP
Stock of each director, each of the six most highly compensated executive
officers of Conrail, 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 Common Stock and sole voting power with respect to
such shares of ESOP Stock. The Trustee holds sole investment power with respect
to all shares of ESOP Stock. As of the Record Date, all Conrail directors and
executive officers as a group owned less than one percent (1%) of the aggregate
outstanding Shares. To the best of Conrail's knowledge, its directors and
executive officers intend to vote for the Proposal.
3
<PAGE> 6
<TABLE>
<CAPTION>
AMOUNT PERCENT
NAME OF INDIVIDUAL OR GROUP BENEFICIALLY OWNED OF CLASS
- ----------------------------------------------------------------- ------------------ --------
<S> <C> <C>
David M. LeVan................................................... 139,112(1) *
Chairman of the Board of Directors, President and Chief Executive
Officer
H. Furlong Baldwin............................................... 2,000 *
Director
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................................................... 919 *
Director
John C. Marous................................................... 612 *
Director
Gail J. McGovern................................................. 0 *
Director
Raymond T. Schuler............................................... 6,063 *
Director
David H. Swanson................................................. 449 *
Director
Bruce B. Wilson.................................................. 28,695(1) *
Senior Vice President-Law
Ronald J. Conway................................................. 34,665(1) *
Senior Vice President-Operations
Timothy P. Dwyer................................................. 12,469(1) *
Senior Vice President-Unit Trains Service Group
John P. Sammon................................................... 23,789(1) *
Senior Vice President-CORE Service Group
George P. Turner................................................. 43,937(1) *
Senior Vice President-Automotive Service Group
Executive Officers and Directors as a Group...................... 570,461(2) *
</TABLE>
- ---------------
* Less than one percent.
(1) For Messrs. LeVan, Wilson, Conway, Dwyer, Sammon and Turner, respectively,
includes options exercisable within 60 days to acquire 98,896, 0, 27,375,
0, 18,125 and 34,232 shares of Common Stock and 1,931, 1,910, 1,868, 1,634,
1,642 and 1,668 shares of ESOP Stock allocated to the accounts of each of
the named officers under the ESOP. Shares of ESOP Stock are convertible
into shares of Common Stock at any time on a share-for-share basis, subject
to certain antidilution adjustments. As a result, ownership of shares of
ESOP Stock is deemed to be ownership of an equal number of shares of Common
Stock.
(2) Includes (x) options exercisable within 60 days to acquire 347,260 shares of
Common Stock and (y) 35,396 shares of ESOP Stock allocated to the accounts
of individual officers under the ESOP. This number also includes shares
held by all officers of Consolidated Rail Corporation.
4
<PAGE> 7
Postponement, Adjournment or Calling a New Special Meeting. The Merger
Agreement provides that Conrail may not convene, adjourn or postpone the Special
Meeting without the consent of CSX, which consent may not be unreasonably
withheld. Notwithstanding this provision, pursuant to a December 17, 1996 order
by the United States District Court for the Eastern District of Pennsylvania,
Conrail will not postpone or adjourn the Special Meeting by reason of Conrail
and its nominees not having received sufficient proxies to assure approval of
the Proposal. As a result, Conrail has determined not to bring the Adjournment
Proposal to the floor of the Special Meeting nor to cause the votes with respect
to the Adjournment Proposal to be tallied.
If the Proposal is not approved at the Special Meeting, Conrail intends,
and at the request of CSX is required, to call one or more new special meetings
to seek approval of the Proposal as promptly as practicable thereafter, as
contemplated by the Merger Agreement. A new record date would be set for any
such other special meeting in accordance with the requirements of Pennsylvania
law and the NYSE.
------------------------
Your vote is extremely important. As soon as possible, please complete and
return the WHITE proxy (or GREEN trustee instruction card) in the enclosed
postage paid return envelope, to ensure that your Shares will be voted at the
Special Meeting. Any person giving a proxy as provided herein has the power to
revoke it prior to its exercise, and shareholders who are present at the Special
Meeting may then revoke such proxy and vote in person.
Your Board of Directors recommends that you do not send in or complete the
gold proxy from Norfolk. If you have already done so, you may revoke the gold
proxy by completing and returning the WHITE proxy in the enclosed postage paid
return envelope. Only your latest dated properly executed proxy will be counted.
Those shareholders who have tendered their Shares to Norfolk can still vote
those Shares by completing and returning the WHITE proxy.
Shareholders who wish to vote in favor of the Proposal should do so by
executing the WHITE proxy, and not by voting in favor of the Proposal on the
gold proxy, to ensure that your vote will be recorded at the Special Meeting.
YOU MUST PRESENT A BLUE ADMISSION TICKET TO BE ADMITTED TO THE SPECIAL
MEETING.
If you have any questions regarding the Special Meeting or the Proxy
Statement (including this Supplement), require an additional copy of the
Original Proxy Statement or the WHITE proxy or GREEN trustee instruction card or
need assistance in voting your Shares or in obtaining a BLUE admission ticket
for the Special Meeting, please call:
D.F. KING & CO., INC.
1-800-549-6746 (TOLL FREE)
This Supplement is first being mailed to Conrail shareholders on or about
January 9, 1997.
January 9, 1997 By Order of the Board of Directors
/s/ James D. McGeehan
James D. McGeehan
Corporate Secretary
5
<PAGE> 8
CONRAIL INC.
SPECIAL MEETING ADMISSION TICKET
-------------------
SHAREHOLDER IDENTIFICATION CARD
Special Meeting of Shareholders, Friday, January 17, 1997, 12:00 p.m.
The Main Auditorium at The Academy of Music
Broad and Locust Streets, Philadelphia, Pennsylvania
YOU MUST BRING THIS CARD TO BE ADMITTED TO THE MEETING
<PAGE> 9
IT IS IMPORTANT TO FOLLOW THESE INSTRUCTIONS
TO BE ADMITTED TO THE MEETING
IF YOU ARE A REGISTERED HOLDER (you hold the physical certificate), an
admission ticket is enclosed. Please present your admission ticket along with
proof of identification at the meeting.
IF YOU HOLD YOUR SHARES THROUGH A BANK OR BROKER, please request from
your representative an admission ticket. Please present the admission ticket
along with proper identification including a statement from your bank or broker
showing evidence of your ownership in Conrail Inc. at the meeting.
IF YOU ARE AN INSTITUTIONAL HOLDER, please notify Messrs. Conroy or
Zuccarrelli of Conrail's Investor Relations Department at (215) 209-5592 or
(215) 209-5323, respectively. They will place you on an attendance list and
issue you an admission ticket.
YOU MUST HAVE AN ADMISSION TICKET TO BE ADMITTED TO THE MEETING.
<PAGE> 10
PROXY
CONRAIL INC.
PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF CONRAIL INC. FOR THE
SPECIAL MEETING OF SHAREHOLDERS, JANUARY 17, 1997
The undersigned hereby constitutes and appoints Timothy T. O'Toole and Bruce B.
Wilson, and each or either of them, as true and lawful agents and proxies with
full power of substitution in each to represent the undersigned at the Special
Meeting of Shareholders of Conrail Inc. to be held on Friday, January 17, 1997,
at 12:00 p.m., Eastern Standard Time, at The Main Auditorium at The Academy of
Music, Broad and Locust Streets, Philadelphia, Pennsylvania, and at any
adjournments thereof, on all matters coming before said meeting. A participant
in the Consolidated Rail Corporation Matched Savings Plan (the "ESOP")
desiring that Fidelity Management Trust Company, as trustee under the ESOP (the
"Trustee"), vote shares of Conrail Inc. Series A ESOP Convertible Junior
Preferred Stock ("ESOP Stock") allocated to such participant's account should
so instruct the Trustee by completing the trustee instruction card that has
been provided to ESOP participants for such purpose. ESOP participants cannot
vote their shares of ESOP Stock or instruct the Trustee as to how to vote their
shares of ESOP Stock by completing this proxy card.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX ON
THE REVERSE SIDE OF THIS PROXY CARD. IF YOU SIGN AND RETURN THIS PROXY CARD BUT
DO NOT MARK ANY BOXES, YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH THE BOARD
OF DIRECTORS' RECOMMENDATIONS. THE PERSONS LISTED ABOVE CANNOT VOTE YOUR SHARES
UNLESS YOU SIGN AND RETURN THIS PROXY CARD.
|SEE REVERSE|
| SIDE |
<PAGE> 11
2570
[X] Please mark your
vote as in this
sample
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
The Proposal to approve an amendment to Conrail Inc.'s Articles of Incorporation which would [ ] [ ] [ ]
cause the provisions of Subchapter E of Chapter 25 of the Pennsylvania Business Corporation
Law of 1988, as amended, to no longer be applicable to Conrail Inc.
The Adjournment Proposal to adjourn the Special Meeting, if necessary, to permit further [ ] [ ] [ ]
solicitation of proxies in the event that there are not sufficient votes at the time of
the Special Meeting to approve the foregoing Proposal.
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 SHARES, THIS PROXY WILL BE VOTED
FOR THE PROPOSALS DESCRIBED ABOVE.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED POSTAGE PAID RETURN
ENVELOPE
</TABLE>
SIGNATURE(S) TITLE DATE
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.
