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 Our Clients:
Enclosed for your consideration is an 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") in connection
with the offer by Atlantic Acquisition Corporation, a Pennsylvania
corporation ("Purchaser") and a wholly owned subsidiary of Norfolk Southern
Corporation, a Virginia corporation ("Parent"), to purchase all of the
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 as of
July 19, 1989, as amended, between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agreement") at a price of
$100 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer. All references herein to the Common
Shares, ESOP Preferred Shares, or Shares shall, unless the context otherwise
requires, include the associated Rights.
Unless the Rights are redeemed prior to the Expiration Date (as defined in
the Offer to Purchase), 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 (i) 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 (ii)
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
(i) Purchaser has waived that portion of the Rights Condition requiring that
a Distribution Date not have occurred and (ii) Rights Certificates have not
been distributed prior to the time Shares are purchased pursuant to the
Offer, Rights may be tendered prior to a shareholder receiving Rights
Certificates by use of the guaranteed delivery procedure described in Section
3 of the Offer to Purchase. In any case, a tender of Shares constitutes an
agreement by the tendering shareholder to deliver Rights Certificates
representing a number of Rights equal to the number of Shares tendered
pursuant to the Offer to the Depositary within three business days after the
date that Rights Certificates are distributed. Purchaser reserves the right
to require that the Depositary receive Rights Certificates, or a Book-Entry
Confirmation, if available, with respect to such Rights prior to accepting
the related Shares for payment pursuant to the Offer if the Distribution Date
has occurred prior to the Expiration Date.
If a shareholder desires to tender Shares and Rights pursuant to the Offer
and such shareholder's Share Certificates (as defined in the Offer to
Purchase) or, if applicable, Rights Certificates are not immediately
available (including, if the Distribution Date has occurred 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 delivery 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 MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD
BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE HOLDER OF
RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE
MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.
THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND
CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms
and subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $100 per Share, net to the seller in cash.
2. 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.
3. The Offer is being made for all of the outstanding Shares.
4. 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.
5. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer.
The Offer is made solely by the Offer to Purchase and the related Letter
of Transmittal and is being made to all holders of Shares. Purchaser is not
aware of any state where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of
the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a
good faith effort to comply with such state statute. If, after such good
faith effort, Purchaser cannot comply with such state statute, the Offer will
not be made to (nor will tenders be accepted from or on behalf of) the
holders of Shares in such state. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of Purchaser by the
Dealer Managers or one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares
will be tendered unless otherwise specified on the instruction form set forth
in this letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE
OFFER.
INSTRUCTIONS WITH RESPECT TO THE OFFER
TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
AND SERIES A ESOP CONVERTIBLE JUNIOR PREFERRED STOCK
OF
CONRAIL INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated October 24, 1996, and the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"), in connection with the offer by Atlantic Acquisition Corporation, a
Pennsylvania corporation ("Purchaser") and a wholly owned subsidiary of
Norfolk Southern Corporation, a Virginia corporation ("Parent"), to purchase
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, as amended, between the Company and First Chicago Trust Company of New
York, as Rights Agent. All references herein to the Common Shares, ESOP
Preferred Shares or Shares shall include the associated Rights.
This will instruct you to tender to Purchaser the number of Shares and
Rights indicated below (or, if no number is indicated in either appropriate
space below, all Shares and Rights) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.
NUMBER OF SHARES AND RIGHTS
TO BE TENDERED:*
________________Shares and Rights
Account Number:
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Dated: _____________, 199_
SIGN HERE
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Signature(s)
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Please Type or Print Name(s)
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Please Type or Print
Address(es) Here
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Area Code and Telephone Number
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Taxpayer Identification or
Social Security Number(s)
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* Unless otherwise indicated, it will be assumed that all Shares and
Rights held by us for your account are to be tendered.
