OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES
OF
COMMON STOCK AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
(INCLUDING, IN EACH CASE, THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
CONRAIL INC.
AT
$100 NET PER SHARE
by
ATLANTIC ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
NORFOLK SOUTHERN CORPORATION
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME
ON THURSDAY, NOVEMBER 21, 1996 UNLESS THE OFFER IS EXTENDED.
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October 24, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by Atlantic Acquisition Corporation, a Pennsylvania
corporation ("Purchaser") and a wholly owned subsidiary of Norfolk Southern
Corporation, a Virginia corporation ("Parent"), to act as Dealer Managers in
connection with Purchaser's offer to purchase all outstanding shares of (i)
common stock, par value $1.00 per share (the "Common Shares"), and (ii)
Series A ESOP Convertible Junior Preferred Stock, without par value (the
"ESOP Preferred Shares" and, together with the Common Shares, the "Shares"),
of Conrail Inc., a Pennsylvania corporation (the "Company"), including in
each case, the associated Common Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, dated July 19, 1989, by and between the
Company and First Chicago Trust Company of New York, as Rights Agent (as
amended, the "Rights Agreement") at a price of $100 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated October 24, 1996 (the "Offer to Purchase"), and the
related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer") enclosed herewith.
Unless the Rights are redeemed prior to the Expiration Date (as defined in
the Offer to Purchase) of the Offer, holders of Shares will be required to
tender one associated Right for each Share tendered in order to effect a
valid tender of such Share. Accordingly, shareholders who sell their Rights
separately from their Shares and do not otherwise acquire Rights may not be
able to satisfy the requirements of the Offer for the tender of Shares. If
the Distribution Date (as defined in the Offer to Purchase) has not occurred
prior to the Expiration Date, a tender of Shares will also constitute a
tender of the associated Rights. If the Distribution Date has occurred and
Purchaser has waived that portion of the Rights Condition (as defined in the
Offer to Purchase) requiring that a Distribution Date not have occurred and
Rights Certificates (as defined in the Offer to Purchase) have been
distributed to holders of Shares prior to the time a holder's Shares are
purchased pursuant to the Offer, in order for Rights (and the corresponding
Shares) to be validly tendered, Rights Certificates representing a number of
Rights equal to the number of Shares tendered must be delivered to the
Depositary (as defined in the Offer to Purchase) or, if available, a
Book-Entry Confirmation (as defined in the Offer to Purchase) must be
received by the Depositary with
respect thereto. If the Distribution Date has occurred and Purchaser has
waived that portion of the Rights Condition requiring that a Distribution
Date not have occurred and Rights Certificates have not been distributed
prior to the time Shares are purchased pursuant to the Offer, Rights may be
tendered prior to a shareholder receiving Rights Certificates by use of the
guaranteed delivery procedure described in Section 3 of the Offer to
Purchase. In any case, a tender of Shares constitutes an agreement by the
tendering shareholder to deliver Rights Certificates representing a number of
Rights equal to the number of Shares tendered pursuant to the Offer to the
Depositary within three business days after the date that Rights Certificates
are distributed. Purchaser reserves the right to require that the Depositary
receive Rights Certificates, or a Book-Entry Confirmation, if available, with
respect to such Rights prior to accepting the relating Shares for payment
pursuant to the Offer if the Distribution Date has occurred prior to the
Expiration Date.
If a shareholder desires to tender Shares and Rights pursuant to the Offer
and such shareholder's Share Certificates (as defined in the Offer to
Purchase) or, if applicable, Rights Certificates are not immediately
available (including, if the Distribution Date has occurred and Purchaser
waives that portion of the Rights Condition requiring that a Distribution
Date not have occurred, because Rights Certificates have not yet been
distributed) or time will not permit all required documents to reach the
Depositary prior to the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares or Rights may
nevertheless be tendered according to the guaranteed deliver procedures set
forth in Section 3 of the Offer to Purchase. See Instruction 2 of the Letter
of Transmittal. Delivery of documents to a Book-Entry Transfer Facility (as
defined in the Offer to Purchase) in accordance with the Book-Entry Transfer
Facility's procedures does not constitute delivery to the Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THE RECEIPT BY
PURCHASER, PRIOR TO THE EXPIRATION OF THE OFFER, OF AN INFORMAL WRITTEN
OPINION IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO PURCHASER FROM THE
STAFF OF THE SURFACE TRANSPORTATION BOARD (THE "STB"), WITHOUT THE IMPOSITION
OF ANY CONDITIONS UNACCEPTABLE TO PURCHASER, THAT THE USE OF A VOTING TRUST
IN CONNECTION WITH THE OFFER AND THE PROPOSED MERGER (AS DEFINED IN THE OFFER
TO PURCHASE) IS CONSISTENT WITH THE POLICIES OF THE STB AGAINST UNAUTHORIZED
ACQUISITIONS OF CONTROL OF A REGULATED CARRIER, (2) THE RECEIPT BY PURCHASER,
PRIOR TO THE EXPIRATION OF THE OFFER, OF AN INFORMAL STATEMENT FROM THE
PREMERGER NOTIFICATION OFFICE OF THE FEDERAL TRADE COMMISSION THAT THE
TRANSACTIONS CONTEMPLATED BY THE OFFER AND THE PROPOSED MERGER ARE NOT
SUBJECT TO, OR ARE EXEMPT FROM, THE XXXX-XXXXX-XXXXXX ANTITRUST IMPROVEMENTS
ACT OF 1976, AS AMENDED (THE "HSR ACT"), OR, IN THE ABSENCE OF THE RECEIPT OF
SUCH INFORMAL STATEMENT, ANY APPLICABLE WAITING PERIOD UNDER THE HSR ACT
HAVING EXPIRED OR BEEN TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER, (3)
PARENT AND PURCHASER HAVING OBTAINED, PRIOR TO THE EXPIRATION OF THE OFFER,
ON TERMS REASONABLY ACCEPTABLE TO PARENT, SUFFICIENT FINANCING TO ENABLE
CONSUMMATION OF THE OFFER AND THE PROPOSED MERGER, (4) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF COMMON SHARES AND ESOP PREFERRED SHARES WHICH TOGETHER CONSTITUTE
AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS, (5)
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT SUBCHAPTER F OF
CHAPTER 25 OF THE PENNSYLVANIA BUSINESS CORPORATION LAW HAS BEEN COMPLIED
WITH OR IS INVALID OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED
MERGER, (6) THE RIGHTS HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF THE
COMPANY OR PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT SUCH
RIGHTS ARE INVALID OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED
MERGER AND (7) PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
PREVIOUSLY ANNOUNCED AGREEMENT AND PLAN OF MERGER BETWEEN THE COMPANY AND CSX
CORPORATION HAS BEEN TERMINATED IN ACCORDANCE WITH ITS TERMS OR OTHERWISE.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following
documents:
1. Offer to Purchase, dated October 24, 1996;
2. Letter of Transmittal to be used by holders of shares in accepting the
Offer and tendering Shares and Rights;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
certificates evidencing such Shares and Rights are not immediately
available or time will not permit all required documents to reach the
Depositary prior to the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis;
4. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominees, with space
provided for obtaining such clients' instructions with regard to the
Offer;
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5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
6. Return envelope addressed to the Depositary.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Purchaser will purchase, by accepting for payment,
and will pay for, all Shares (and, if applicable, Rights) validly tendered
prior to the Expiration Date promptly after the later to occur of (i) the
Expiration Date and (ii) the satisfaction or waiver of the conditions set
forth in "Conditions of the Offer" of the Offer to Purchase. For purposes of
the Offer, Purchaser will be deemed to have accepted for payment, and thereby
purchased, tendered Shares and Rights if, as and when Purchaser gives oral or
written notice to the Depositary of Purchaser's acceptance of such Shares and
Rights for payment. In all cases, payment for Shares and Rights purchased
pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) the certificates evidencing such Shares and Rights or
timely confirmation of a book-entry transfer of such Shares and Rights, if
such procedure is available, into the Depositary's account at The Depository
Trust Company or the Philadelphia Depository Trust Company pursuant to the
procedures set forth in "Procedures for Tendering Shares" of the Offer to
Purchase, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, or an Agent's Message (as defined in the Offer
to Purchase) and (iii) any other documents required by the Letter of
Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
any other person (other than the Dealer Managers and the Information Agent as
described in "Fees and Expenses" of the Offer to Purchase) in connection with
the solicitation of tenders of Shares and Rights pursuant to the Offer.
Purchaser will, however, upon request, reimburse you for customary mailing
and handling expenses incurred by you in forwarding the enclosed materials to
your clients.
Purchaser will pay any stock transfer taxes incident to the transfer to it
of validly tendered Shares, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, NOVEMBER 21, 1996, UNLESS THE
OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Shares should be
delivered or such Shares and Rights should be tendered by book-entry
transfer, all in accordance with the Instructions set forth in the Letter of
Transmittal and the Offer to Purchase.
If holders of Shares and Rights wish to tender, but it is impracticable
for them to forward their certificates or other required documents prior to
the Expiration Date, a tender may be effected by following the guaranteed
delivery procedures specified under "Procedures for Tendering Shares" of the
Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed
to the Dealer Managers or the Information Agent at their respective addresses
and telephone numbers set forth on the back cover page of the Offer to
Purchase.
Additional copies of the enclosed materials may be obtained from X.X.
Xxxxxx Securities Inc. at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, telephone
(000) 000-0000 (Toll Free), Xxxxxxx Xxxxx & Co., at World Financial Center,
North Tower, New York, New York 00000-0000, telephone (000) 000-0000
(Collect) or by calling the Information Agent, Xxxxxxxxx & Company Inc., at
Wall Street Plaza, New York, New York 10005, telephone (000) 000-0000 (Toll
Free), or from brokers, dealers, commercial banks or trust companies.
Very truly yours,
X.X. XXXXXX & CO. XXXXXXX XXXXX & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF PARENT, PURCHASER, THE DEPOSITARY, THE
INFORMATION AGENT OR THE DEALER MANAGERS, OR ANY AFFILIATE OF ANY OF THE
FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
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