PROSPECTUS SUPPLEMENT
- --------------------------------
(TO PROSPECTUS DATED APRIL 3, 2001)
$200,000,000
[NORFOLK SOUTHERN LOGO]
NORFOLK SOUTHERN
CORPORATION
6% SENIOR NOTES DUE 2008
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The notes will bear interest at 6% per year and will mature on April 30,
2008. We will pay interest on the notes on April 30 and October 30 of each year,
beginning October 30, 2002. We may redeem the notes prior to maturity, in whole
or in part, as described in this prospectus supplement.
Concurrently with this offering, we are offering $100 million aggregate
principal amount of our floating rate senior notes due 2005. This offering and
the offering of our floating rate senior notes due 2005 are not contingent on
each other.
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PER NOTE TOTAL
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Public offering price (1) ..................... 99.826% $199,652,000
Underwriting discount ......................... .6% $1,200,000
Proceeds, before expenses ..................... 99.226% $198,452,000
(1) Plus accrued interest from April 30, 2002, if settlement occurs after
that date
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The notes will be ready for delivery in book-entry form only through The
Depository Trust Company on or about April 30, 2002.
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MERRILL LYNCH & CO.
BNY CAPITAL MARKETS, INC. SUNTRUST ROBINSON HUMPHREY
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The date of this prospectus supplement is April 25, 2002.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT PROSPECTUS
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PAGE PAGE
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Norfolk Southern Corporation ..................... S-3 About this Prospectus .............................. 3
Use of Proceeds .................................. S-3 Where You Can Find More Information ................ 4
Capitalization ................................... S-4 Incorporation by Reference ......................... 4
Ratio of Earnings to Fixed Charges and Certain Forward-Looking Statements ................. 4
Selected Financial Ratios ...................... S-5 Norfolk Southern Corporation ....................... 5
Description of the Notes ......................... S-6 Norfolk Southern Capital Trust I ................... 5
Underwriting ..................................... S-12 Use of Proceeds .................................... 7
Legal Matters .................................... S-13 Ratio of Earnings to Fixed Charges ................. 7
The Securities We May Offer ........................ 7
Description of Capital Stock ....................... 7
Description of the Depositary Shares ............... 10
Description of Debt Securities ..................... 12
Description of the Trust
Preferred Securities ............................. 16
Description of the Trust
Preferred Securities Guarantees .................. 18
Effect of Obligations under the Trust Preferred
Securities Guarantee and the Subordinated
Debt Securities ................................ 20
Plan of Distribution ............................... 21
Legal Opinions ..................................... 22
Experts ............................................ 22
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You should read this prospectus supplement along with the prospectus that
follows. Both documents contain information you should consider when making your
investment decision. You should rely on the information contained in or
incorporated by reference into this prospectus supplement and the prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone does provide you with different or
inconsistent information, you may not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus supplement and the prospectus is
accurate only as of the date on the bottom of the front cover of this prospectus
supplement. Our business, financial condition, results of operations and
prospects may have changed since that date.
S-2
NORFOLK SOUTHERN CORPORATION
Norfolk Southern Corporation ("Norfolk Southern" or the "Company") is a
Virginia-based holding company that in 1982 acquired control of Southern Railway
Company ("Southern") and Norfolk and Western Railway Company ("NW"). Effective
December 31, 1990, Southern changed its name to Norfolk Southern Railway Company
("NSR"), and Norfolk Southern transferred all of the common stock of NW to NSR
(making NW a wholly owned subsidiary of NSR). Effective September 1, 1998, NW
was merged with and into NSR. NSR, with its consolidated subsidiaries, primarily
engages in the transportation of freight by rail in a single interterritorial
system that currently extends over more than 21,800 miles of road in 22 states
primarily in the Southeast and Midwest, in the District of Columbia and in the
Province of Ontario, Canada.
As more particularly detailed in the various filings we have incorporated
by reference herein, Norfolk Southern and CSX Corporation ("CSX") secured the
approval of the Surface Transportation Board, successor to the Interstate
Commerce Commission, to own and control Conrail Inc. ("Conrail"), the principal
subsidiary of which is Consolidated Rail Corporation ("CRC"), a common carrier
that offers rail transportation services in the Northeast. Through a jointly
owned entity, Norfolk Southern and CSX own the stock of Conrail. On June 1,
1999, Norfolk Southern and CSX, through their respective railroad subsidiaries,
began operating separate portions of Conrail's rail routes and assets.
Substantially all such assets are owned by two wholly owned subsidiaries of CRC;
one of those subsidiaries, Pennsylvania Lines LLC, has entered into various
operating and leasing arrangements with NSR. Certain rail assets still are owned
by CRC, which operates them for the joint and exclusive use of NSR and the rail
subsidiary of CSX.
Our executive offices are located at Three Commercial Place, Norfolk,
Virginia 23510-2191, and our telephone number is (757) 629-2600. Unless the
context indicates otherwise, references to "Norfolk Southern" or to the
"Company" are references to Norfolk Southern Corporation and its consolidated
subsidiaries.
USE OF PROCEEDS
Our net proceeds from this offering ($198,302,000) together with the net
proceeds from the concurrent offering of our floating rate senior notes due 2005
($99,500,000) will be approximately $297.8 million. We expect to use all of
these aggregate net proceeds, along with proceeds from the sale of accounts
receivable, proceeds from commercial paper issuances and/or cash on hand to
repay our $500,000,000 aggregate principal amount 6.950% notes due May 1, 2002.
S-3
CAPITALIZATION
The following table sets forth our debt and total capitalization at March
31, 2002, and as adjusted to give effect to the issuance of the notes described
in this prospectus supplement, the concurrent issuance of our floating rate
senior notes due 2005 and the application of the net proceeds therefrom as
described under "Use of Proceeds." You should read this along with the "Use of
Proceeds" section above and the historical financial statements and accompanying
notes that we included in our 2001 Annual Report on Form 10-K for the year ended
December 31, 2001 and in our quarterly report on Form 10-Q for the period ended
March 31, 2002, which are incorporated by reference into this prospectus
supplement. See "Where You Can Find More Information" in the accompanying
prospectus.
HISTORICAL
MARCH 31, 2002 (1) ADJUSTMENTS AS ADJUSTED (1)
-------------------- -------------- --------------
($ IN MILLIONS)
CURRENT DEBT:
Current maturities of long-term debt .......... $ 410 $ 410
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Total current debt .......................... 410 410
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LONG-TERM DEBT:
Railway equipment obligations ................. 537 537
Notes ......................................... 6,350 200 (2) 6,350
(200) (2)
100 (3)
(100) (3)
Capitalized leases ............................ 272 272
Other ......................................... 118 118
Discounts and Premiums, net ................... (31) (31)
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Total long-term debt ........................ 7,246 -- 7,246
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STOCKHOLDERS' EQUITY:
Common stock, $1.00 per share par value,
1,350,000,000 shares authorized;
409,257,341 shares issued ................... 409 409
Additional paid-in capital .................... 465 465
Accumulated other
comprehensive income ........................ (40) (40)
Retained income ............................... 5,397 5,397
Treasury stock, at cost,
21,169,125 shares ........................... (20) (20)
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Total stockholders' equity .................. 6,211 6,211
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Total capitalization ........................ $ 13,867 $ -- $ 13,867
========= ========= =========
TOTAL DEBT TO TOTAL CAPITALIZATION ............... 55.2% 55.2%
========= =========
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(1) Excludes notes payable to Conrail.
(2) Issuance of notes offered by this prospectus supplement, with proceeds to be
used to repay a portion of our 6.950% notes due May 1, 2002.
(3) Concurrent issuance of our floating rate senior notes due 2005, with
proceeds to be used to repay a portion of our 6.950% notes due May 1, 2002.
S-4
RATIO OF EARNINGS TO FIXED CHARGES AND SELECTED FINANCIAL RATIOS
For purposes of computing each ratio of earnings to fixed charges,
"earnings" represents income before income taxes, plus interest expenses
(including a portion of rental expenses representing an interest factor) and
subsidiaries' preferred dividend requirements, less the equity in undistributed
earnings of 20%-49% owned companies, net of dividends. "Fixed charges"
represents interest expenses (including a portion of rental expense representing
an interest factor) plus capitalized interest and subsidiaries' preferred
dividend requirements on a pretax basis. "Earnings before income taxes" includes
Norfolk Southern's share of Conrail's earnings before income taxes. "Interest on
indebtedness" includes Norfolk Southern's share of Conrail's interest on
indebtedness.
The following table sets forth the ratio of earnings to fixed charges and
selected financial ratios for the periods indicated:
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
--------------------- ----------------------------------------------------------
2002 2001 2001 2000 (1) 1999 1998 1997
---------- ---------- ---------- ---------- --------- ---------- -----------
Ratio of earnings to
fixed charges 1.82 1.47 1.83 1.40 1.53 2.39 2.99
EBIT/Interest (2) 1.81 1.42 1.81 1.32 1.44 2.38 3.13
EBITDA/Interest (3) 3.06 2.57 3.08 2.52 2.63 3.52 4.39
Total debt to total
capitalization (4) 55.2% 57.1% 55.6% 56.7% 57.6% 56.3% 57.9%
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(1) Year 2000 pretax earnings included $165 million of costs related to actions
taken to reduce the size of the work force, which reduced net income by $101
million. These costs included costs for voluntary early retirement and
separation programs and for certain postemployment benefits due to some
employees who were furloughed. Excluding the effects of these costs, the
2000 ratio of earnings to fixed charges would have been 1.62; EBIT/Interest
would have been 1.56; and EBITDA/Interest would have been 2.76.
(2) For purposes of computing EBIT/interest, "EBIT" represents earnings before
income taxes (including the earnings of motor carrier operations sold in
March 1998 but excluding the gain on such sale) plus interest expense on
indebtedness less equity in undistributed earnings of 20%-49% owned
companies, net of dividends. "Interest" in the denominator includes interest
on indebtedness, whether expensed or capitalized. "Earnings before income
taxes" includes Norfolk Southern's share of Conrail's earnings before income
taxes. "Interest on indebtedness" includes Norfolk Southern's share of
Conrail's interest on indebtedness.
(3) For purposes of computing EBITDA/interest, "EBITDA" represents earnings
before income taxes (including the earnings of motor carrier operations sold
in March 1998 but excluding the gain on such sale) plus interest expense on
indebtedness less equity in undistributed earnings of 20%-49% owned
companies, net of dividends, plus depreciation and amortization. "Interest"
in the denominator includes interest on indebtedness, whether expensed or
capitalized. "Earnings before income taxes" includes Norfolk Southern's
share of Conrail's earnings before income taxes, plus interest expense on
indebtedness. "Depreciation and amortization" includes Norfolk Southern's
share of Conrail's depreciation and amortization and the additional
depreciation and amortization recorded as part of Norfolk Southern's equity
in earnings of Conrail. "Interest on indebtedness" includes Norfolk
Southern's share of Conrail's interest on indebtedness. The Company has
presented EBITDA because it is commonly used by investors to analyze and
compare companies on the basis of operating performance. The Company
believes EBITDA is helpful in understanding cash flow generated from
operations that is available for debt service, taxes and capital
expenditures. EBITDA should not be considered in isolation or as a
substitute for net income or other consolidated statements of operations or
cash flow data prepared in accordance with generally accepted accounting
principles as a measure of the profitability or liquidity of the Company.
(4) Excludes notes payable to Conrail.
S-5
DESCRIPTION OF THE NOTES
Information in this section should be read in conjunction with the
statements under "Description of Debt Securities" in the accompanying
prospectus.
The notes will be senior debt issued under a supplement to an indenture,
dated as of January 15, 1991, as supplemented by the First Supplemental
Indenture, dated May 19, 1997, the Second Supplemental Indenture, dated April
26, 1999, the Third Supplemental Indenture, dated May 23, 2000, the Fourth
Supplemental Indenture, dated February 6, 2001, the Fifth Supplemental
Indenture, dated July 5, 2001, the Sixth Supplemental Indenture, dated April 30,
2002, the Seventh Supplemental Indenture, dated April 30, 2002 and as amended or
supplemented from time to time (the "Senior Indenture") between Norfolk Southern
and U.S. Bank Trust National Association, formerly known as First Trust of New
York National Association, as successor trustee (the "Trustee"). The notes
offered by this prospectus supplement are a new series of debt securities under
the Senior Indenture.
GENERAL
The notes will initially be limited to $200,000,000 principal amount unless
we "reopen" the issue of the notes by issuing additional notes of the series.
The notes will bear interest at the applicable annual rates stated on the cover
page of this prospectus supplement. Interest will be payable semi-annually on
April 30 and October 30 of each year, beginning October 30, 2002. Interest on
the notes will accrue from April 30, 2002, or from the most recent date to which
interest has been paid or provided for. Interest on the notes will be paid to
holders of record on the April 15 or October 15 immediately before the interest
payment date. If any interest payment date or a maturity date falls on a day
that is not a Business Day, the required payment shall be made on the next
Business Day as if it were made on the date such payment was due, and no
interest shall accrue on the amount so payable for the period from and after
such interest payment date or such maturity date, as the case may be. "Business
Day" means any day, other than a Saturday or Sunday, on which banking
institutions in the City of New York are open for business. Interest and
principal will be payable in U.S. dollars at the Trustee's New York corporate
trust office, which is located at 100 Wall Street, Suite 1600, New York, New
York 10005. The notes will mature on April 30, 2008. The notes will be issued
only in denominations of $1,000 and integral multiples of $1,000. There will be
no sinking fund payments for the notes.
RANKING
The notes will be senior unsecured obligations of Norfolk Southern and will
rank equally with all of our other senior unsecured indebtedness. On a pro forma
basis as of March 31, 2002, after giving effect to the offering of the notes, we
would have $6,650 million of outstanding senior indebtedness (none of which is
secured indebtedness) not including the debt of our subsidiaries. Because we are
a holding company, the notes effectively will rank junior to all liabilities of
our subsidiaries. As of March 31, 2002, total liabilities (other than
intercompany liabilities) of our railroad subsidiaries were approximately $6,424
million and debt of our subsidiaries was approximately $1,395 million.
OPTIONAL REDEMPTION
The notes may be redeemed in whole at any time or in part from time to
time, at our option, at a redemption price equal to the greater of (1) 100% of
their principal amount or (2) the sum of the present values of the remaining
scheduled payments of principal and interest on the notes to be redeemed,
discounted to the date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the applicable Treasury Yield plus
20 basis points for the notes, plus accrued and unpaid interest on the principal
amount being redeemed to the redemption date.
"Treasury Yield" means, with respect to any redemption date, (1) the yield,
under the heading which represents the average for the immediately preceding
week, appearing in the most recently published statistical release designated
"H.15(519)" or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption "Treasury Constant Maturities," for the maturity corresponding
to the Comparable Treasury Issue (if no maturity is within three months before
or after the Remaining Life, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue will be determined and
the
S-6
Treasury Yield will be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month) or (2) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield-to-maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price of
such redemption date. The Treasury Yield will be calculated on the third
Business Day preceding the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity most
comparable to the remaining term of the applicable series of notes, that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of maturity
comparable to the remaining term of such notes.
"Independent Investment Banker" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated or, if such firm is unwilling or unable to select the Comparable
Treasury Issue, an independent investment banking institution of national
standing in the United States appointed by the Trustee after consultation with
us.
"Comparable Treasury Price" means, (1) the average of five Reference
Treasury Dealer Quotations for such redemption date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (2) if the Independent
Investment Banker obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Reference Treasury Dealer" means Merrill Lynch Government Securities, Inc.
and its successors; PROVIDED, HOWEVER, that if the foregoing ceases to be a
primary U.S. Government securities dealer in New York, New York (a "Primary
Treasury Dealer") or otherwise fails to provide a Reference Treasury Dealer
Quotation, the Corporation will substitute therefor another Primary Treasury
Dealer.
"Reference Treasury Dealer Quotation" means a quotation for a Comparable
Treasury Issue provided by a Reference Treasury Dealer.
COVENANTS
The Senior Indenture will be supplemented to contain the covenants
summarized below, which will be applicable (unless waived or amended) so long as
any of the notes offered hereby is outstanding.
LIMITATION ON LIENS ON STOCK OR INDEBTEDNESS OF PRINCIPAL SUBSIDIARIES. The
Company will not, and will not permit any of its Subsidiaries to, create,
assume, incur or suffer to exist any mortgage, pledge, lien, encumbrance, charge
or security interest of any kind, other than a Purchase Money Lien, upon any
stock or indebtedness, now owned or hereafter acquired, of any Principal
Subsidiary, to secure any Obligation (other than the notes) of the Company, any
Subsidiary or any other person, without in any such case making effective
provision whereby all of the outstanding notes are secured on an equal and
ratable basis with the obligations so secured. This restriction does not apply
to any mortgage, pledge, lien, encumbrance, charge or security interest on any
stock or indebtedness of a corporation existing at the time such corporation
becomes a Subsidiary. This provision does not restrict any other property of the
Company or its Subsidiaries. "Obligation" is defined as indebtedness for money
borrowed or indebtedness evidenced by a bond, note, debenture or other evidence
of indebtedness. "Purchase Money Lien" is defined as any mortgage, pledge, lien,
encumbrance, charge or security interest of any kind upon any stock or
indebtedness of any Principal Subsidiary acquired after the date any notes are
first issued if such Purchase Money Lien is for the purpose of financing, and
does not exceed, the cost to the Company or any Subsidiary of acquiring the
indebtedness of such Principal Subsidiary and such financing is effected
concurrently with, or within 180 days after, the date of such acquisition.
"Principal Subsidiary" is defined as NSR. "Subsidiary" is defined as an entity a
majority of the outstanding voting stock of which is owned, directly or
indirectly, by the Company or one or more Subsidiaries, but does not include
Conrail. The Senior Indenture does not prohibit the sale by the Company or any
Subsidiary of any stock or indebtedness of any Subsidiary.
LIMITATIONS ON FUNDED DEBT. The Senior Indenture provides that the Company
will not permit any Restricted Subsidiary to incur, issue, guarantee or create
any Funded Debt unless, after giving effect thereto, the sum of the aggregate
amount of all outstanding Funded Debt of the Restricted Subsidiaries would not
exceed an amount equal to 15% of Consolidated Net Tangible Assets.
S-7
The limitation on Funded Debt will not apply to, and there will be excluded
from Funded Debt in any computation under such restriction, Funded Debt secured
by:
(1) Liens on real or physical property of any corporation existing
at the time such corporation becomes a Subsidiary;
(2) Liens on real or physical property existing at the time of
acquisition thereof incurred within 180 days of the time of
acquisition thereof (including, without limitation, acquisition
through merger or consolidation) by the Company or any
Restricted Subsidiary;
(3) Liens on real or physical property thereafter acquired (or
constructed) by the Company or any Restricted Subsidiary and
created prior to, at the time of, or within 270 days after such
acquisition (including, without limitation, acquisition through
merger or consolidation) (or the completion of such
construction or commencement of commercial operation of such
property, whichever is later) to secure or provide for the
payment of all or any part of the purchase price (or the
construction price) thereof;
(4) Liens in favor of the Company or any Restricted Subsidiary;
(5) Liens in favor of the United States of America, any State
thereof or the District of Columbia, or any agency, department
or other instrumentality thereof, to secure partial, progress,
advance or other payments pursuant to any contract or
provisions of any statute;
(6) Liens incurred or assumed in connection with the issuance of
revenue bonds the interest on which is exempt from federal
income taxation pursuant to Section 103(b) of the Internal
Revenue Code of 1954, as amended;
(7) Liens securing the performance of any contract or undertaking
not directly or indirectly in connection with the borrowing of
money, the obtaining of advances or credit or the securing of
Funded Debt if made and continuing in the ordinary course of
business;
(8) Liens incurred (no matter when created) in connection with the
Company's or a Restricted Subsidiary's engaging in a leveraged
or single-investor lease transaction; PROVIDED, HOWEVER, that
the instrument creating or evidencing any borrowings secured by
such Lien will provide that such borrowings are payable solely
out of the income and proceeds of the property subject to such
Lien and are not a general obligation of the Company or such
Restricted Subsidiary;
(9) Liens under workers' compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts or deposits to secure
public or statutory obligations of the Company or any
Restricted Subsidiary, or deposits of cash or obligations of
the United States of America to secure surety, repletion and
appeal bonds to which the Company or any Restricted Subsidiary
is a party or in lieu of such bonds, or pledges or deposits for
similar purposes in the ordinary course of business, or Liens
imposed by law, such as laborers' or other employees',
carriers', warehousemen's, mechanics', materialmen's and
vendors' Liens and Liens arising out of judgments or awards
against the Company or any Restricted Subsidiary with respect
to which the Company or such Restricted Subsidiary at the time
shall be prosecuting an appeal or proceedings for review and
with respect to which it shall have secured a stay of execution
pending such appeal or proceedings for review, or Liens for
taxes not yet subject to penalties for nonpayment or the amount
or validity of which is being in good faith contested by
appropriate proceedings by the Company or any Restricted
Subsidiary, as the case may be, or minor survey exceptions,
minor encumbrances, easement or reservations of, or rights of
others for, rights of way, sewers, electric lines, telegraph
and telephone lines and other similar purposes, or zoning or
other restrictions or Liens on the use of real properties,
which Liens, exceptions, encumbrances easements, reservations,
rights and restrictions do not, in the opinion of the Company,
in the aggregate materially detract from the value of said
properties or materially impair their use in the operation of
the business of the Company and its Restricted Subsidiaries;
S-8
(10) Liens incurred to finance construction, alteration or repair of
any real or physical property and improvements thereto prior to
or within 270 days after completion of such construction,
alteration or repair;
(11) Liens incurred (no matter when created) in connection with a
Securitization Transaction;
(12) Liens on property (or any Receivable arising in connection with
the lease thereof) acquired by the Company or a Restricted
Subsidiary through repossession, foreclosure or liens
proceeding and existing at the time of the repossession,
foreclosure, or like proceeding;
(13) Liens on deposits of the Company or a Restricted Subsidiary
with banks (in the aggregate, not exceeding $50 million), in
accordance with customary banking practice, in connection with
the providing by the Company or a Restricted Subsidiary of
financial accommodations to any Person in the ordinary course
of business; or
(14) any extension, renewal, refunding or replacement of the
foregoing.
The definitions set forth below apply only to the foregoing limitations on
Funded Debt.
"Consolidated Net Tangible Assets" means, at any date, the total assets
appearing on the most recent consolidated balance sheet of the Company and
Restricted Subsidiaries as at the end of the fiscal quarter of the Company
ending not more than 135 days prior to such date, prepared in accordance with
generally accepted accounting principles, less (1) all current liabilities (due
within one year) as shown on such balance sheet, (2) applicable reserves, (3)
investments in and advances to Securitization Subsidiaries and Subsidiaries of
Securitization Subsidiaries that are consolidated on the consolidated balance
sheet of the Company and its Subsidiaries, and (4) Intangible Assets and
liabilities relating thereto.
"Funded Debt" means (1) any indebtedness of a Restricted Subsidiary
maturing more than 12 months after the time of computation thereof, (2)
guarantees by a Restricted Subsidiary of Funded Debt or of dividends of others
(except guarantees in connection with the sale or discount of accounts
receivable, trade acceptances and other paper arising in the ordinary course of
business), (3) all preferred stock of such Restricted Subsidiaries, and (4) all
Capital Lease Obligations (as defined in the Senior Indenture) of a Restricted
Subsidiary.
"Indebtedness" means, at any date, without duplication, (1) all obligations
for borrowed money of a Restricted Subsidiary or any other indebtedness of a
Restricted Subsidiary, evidenced by bonds, debentures, notes or other similar
instruments, and (2) Funded Debt, except such obligations and other indebtedness
of a Restricted Subsidiary and Funded Debt, if any, incurred as a part of a
Securitization Transaction.
"Intangible Assets" means at any date, the value (net of any applicable
reserves) as shown on or reflected in the most recent consolidated balance sheet
of the Company and the Restricted Subsidiaries as at the end of the fiscal
quarter of the Company ending not more than 135 days prior to such date,
prepared in accordance with generally accepted accounting principles, of: (1)
all trade names, trademarks, licenses, patents, copyrights, service marks,
goodwill and other like intangibles; (2) organizational and development costs;
(3) deferred charges (other than prepaid items, such as insurance, taxes,
interest, commissions, rents, deferred interest waiver, compensation and similar
items and tangible assets being amortized); and (4) unamortized debt discount
and expense, less unamortized premium.
"Liens" means such pledges, mortgages, security interests and other liens,
including purchase money liens, on property of the Company or any Restricted
Subsidiary which secure Funded Debt.
"Receivables" mean any right of payment from or on behalf of any obligor,
whether constituting an account, chattel paper, instrument, general intangible
or otherwise, arising, either directly or indirectly, from the financing by the
Company or any Subsidiary of the Company of property or services, monies due
thereunder, security interests in the property and services financed thereby and
any and all other related rights.
"Restricted Subsidiary" means each Subsidiary of the Company other than
Securitization Subsidiaries and Subsidiaries of Securitization Subsidiaries.
S-9
"Securitization Subsidiary" means a Subsidiary of the Company (1) which is
formed for the purpose of effecting one or more Securitization Transactions and
engaging in other activities reasonably related thereto and (2) as to which no
portion of the Indebtedness (as defined in the Senior Indenture) or any other
obligations (a) is guaranteed by any Restricted Subsidiary, or (b) subjects any
property or assets of any Restricted Subsidiary, directly or indirectly,
contingently or otherwise, to any lien, other than pursuant to representations,
warranties and covenants (including those related to servicing) entered into in
the ordinary course of business in connection with a Securitization Transaction
and inter-company notes and other forms of capital or credit support relating to
the transfer or sale of Receivables or asset-backed securities to such
Securitization Subsidiary and customarily necessary or desirable in connection
with such transactions.
"Securitization Transaction" means any transaction or series of
transactions that have been or may be entered into by the Company or any of its
Subsidiaries in connection with or reasonably related to a transaction or series
of transactions in which the Company or any of its Subsidiaries may sell, convey
or otherwise transfer to (1) a Securitization Subsidiary or (2) any other
Person, or may grant a security interest in, any Receivables or asset-backed
securities or interest therein (whether such Receivables or securities are then
existing or arising in the future) of the Company or any of its Subsidiaries,
and any assets related thereto, including, without limitation, all security
interests in the property or services financed thereby, the proceeds of such
Receivables or asset-backed securities and any other assets which are sold in
respect of which security interests are granted in connection with
securitization transactions involving such assets.
BOOK-ENTRY SYSTEM
The following are summaries of certain rules and operating procedures of
DTC that affect the payment of principal and interest and the transfers of
interests in the global notes. Upon issuance, the notes will be issued only in
the form of one or more definitive global securities which will be deposited
with, or on behalf of, DTC and registered in the name of Cede & Co., as nominee
of DTC. Unless and until it is exchanged in whole or in part for notes in
definitive form under the limited circumstances described below, a global note
may not be transferred except as a whole (1) by DTC to a nominee, (2) by a
nominee of DTC to DTC or another nominee of DTC or (3) by DTC or any such
nominee to a successor of DTC or a nominee of such successor.
Ownership of beneficial interests in a global note will be limited to
persons that have accounts with DTC for such global note ("participants") or
persons that may hold interests through participants. Upon the issuance of a
global note, DTC will credit, on its book-entry registration and transfer
system, the participants' accounts with the respective principal amounts of the
notes represented by such global note beneficially owned by such participants.
Ownership of beneficial interests in the global notes will be shown on, and the
transfer of such ownership interests will be effected only through, records
maintained by DTC (with respect to interests of participants). The laws of some
states may require that certain purchasers of securities take physical delivery
of such securities in definitive form. Such laws may limit or impair the ability
to own, transfer or pledge beneficial interests in the global notes.
So long as DTC or its nominee is the registered owner of a global note, DTC
or its nominee, as the case may be, will be considered the sole owner or holder
of the notes represented by such global note for all purposes under the Senior
Indenture. Except as set forth below, owners of beneficial interests in a global
note will not be entitled to have notes represented by such global note
registered in their names, will not receive or be entitled to receive physical
delivery of such notes in certificated form and will not be considered the
registered owners or holders thereof under the Senior Indenture. Accordingly,
each person owning a beneficial interest in a global note must rely on the
procedures of DTC and, if such person is not a participant, on the procedures of
the participant through which such person owns its interest, to exercise any
rights of a holder under the Senior Indenture. We understand that under existing
industry practices, if we request any action of holders or if an owner of a
beneficial interest in a global note desires to give or take any action that a
holder is entitled to give or take under the Senior Indenture, DTC would
authorize the participants holding the relevant beneficial interests to give or
take such action, and such participants would authorize beneficial owners owning
through such participants to give or to take such action or would otherwise act
upon the instructions of beneficial owners holding through them.
Principal and interest payments on interests represented by a global note
will be made to DTC or its nominee, as the case may be, as the registered owner
of such global note. None of Norfolk Southern, the Trustee or any other
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agent of Norfolk Southern or agent of the Trustee will have any responsibility
or liability for any facet of the records relating to or payments made on
account of beneficial ownership of interests. We expect that DTC, upon receipt
of any payment of principal or interest in respect of a global note, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in such global note as shown on the
records of DTC. We also expect that payments by participants to owners of
beneficial interests in the global notes held through such participants will be
governed by standing customer instructions and customary practice, as is now the
case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants.
If DTC is at any time unwilling or unable to continue as depository for the
notes, and we fail to appoint a successor depository registered as a clearing
agency under the Securities Exchange Act of 1934 (the "Exchange Act") within 90
days, we will issue notes in definitive form in exchange for the respective
global notes. Any notes issued in definitive form in exchange for the global
notes will be registered in such name or names, and will be issued in
denominations of $1,000 and integral multiples of $1,000, as DTC shall instruct
the Trustee. It is expected that such instructions will be based upon directions
received by DTC from participants with respect to ownership of beneficial
interests in the global notes.
DTC is a limited purpose trust company organized under the Banking Law of
the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold the securities of its participants and to
facilitate the clearance and settlement of transactions among its participants
in such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations, some of
which (and/or their representatives) own DTC. Access to the DTC book-entry
system is also available to others, such as banks, brokers and dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the notes will be made by the underwriter in immediately
available funds. All payments of principal and interest in respect of the notes
will be made by us in immediately available funds.
The notes will trade in DTC's Same-Day Funds Settlement System until
maturity and secondary market trading activity in the notes will settle in
immediately available funds. No assurance can be given as to the effect, if any,
of settlement in immediately available funds on trading activity in the notes.
FURTHER ISSUES
We may from time to time, without notice to or the consent of the
registered holders of the notes, create and issue further notes ranking PARI
PASSU with the notes in all respects (or in all respects except for the payment
of interest accruing prior to the issue date of such further notes or except for
the first payment of interest following the issue date of such further notes)
and so that such further notes may be consolidated and form a single series with
the notes and have the same terms as to status, redemption or otherwise as the
notes.
ADDITIONAL TERMS
For additional important information about the notes, see "Description of
Debt Securities" in the accompanying prospectus. That information includes:
o additional information on the terms of the notes;
o general information on the Senior Indenture and Trustee;
o a description of the limitation on consolidation, merger and sale
of assets; and
o a description of events of default under the Senior Indenture.
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UNDERWRITING
We are selling the notes to the underwriters named below pursuant to an
underwriting agreement dated April 25, 2002. Merrill Lynch, Pierce, Fenner &
Smith Incorporated is acting as sole bookrunner. Subject to certain conditions,
we have agreed to sell to each of the underwriters named below, and each of the
underwriters has severally agreed to purchase, the principal amount of notes set
forth in the following table:
PRINCIPAL AMOUNT
UNDERWRITERS OF NOTES DUE 2008
------------ ----------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ............................ $166,666,000
BNY Capital Markets, Inc. ............................ 16,667,000
SunTrust Capital Markets, Inc. ....................... 16,667,000
--------------
Total ................................... $200,000,000
==============
The underwriters have advised us that they propose initially to offer the
notes to the public at the public offering price set forth on the cover page of
this prospectus supplement and to certain dealers at such price less a
concession not in excess of .35% of the principal amount of the notes. The
underwriters may allow, and such dealers may reallow, a discount not in excess
of .25% of the principal amount of the notes to certain other dealers. After the
initial public offering, the public offering price, concession and discount for
the notes may be changed.
The notes are a new issue of securities, and there is currently no
established trading market for them. In addition, we do not intend to apply for
the notes to be listed on any securities exchange or to arrange for them to be
quoted on any quotation system. The underwriters have advised us that they
intend to make a market in the notes, but they are not obligated to do so. The
underwriters may discontinue any market making in the notes at any time without
notice. We can give you no assurances as to the liquidity of, or any trading
market for, the notes.
In connection with this offering, the underwriters are permitted to engage
in certain transactions that stabilize the price of the notes. Such transactions
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the notes. If the underwriters create a short position in the notes
in connection with this offering, I.E., if they sell a greater aggregate
principal amount of notes than is set forth on the cover of this prospectus
supplement, the underwriters may reduce that short position by purchasing notes
in the open market. In general, purchases of a security for the purpose of
stabilization or to reduce a short position could cause the price of the
security to be higher than it might be in the absence of such purchases.
Neither we nor any underwriter makes any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the notes. In addition, neither we nor any underwriter
makes any representation that the underwriters will engage in such transactions
or that such transactions, once commenced, will not be discontinued without
notice.
We have agreed to indemnify the underwriters against, or to contribute to
payments that the underwriters may be required to make in respect of, certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
In the ordinary course of their respective businesses, certain of the
underwriters or their affiliates from time to time have provided and may
continue to provide commercial and investment banking and other financial
services to us.
We estimate that the total expense of the offering, excluding underwriting
discounts and commissions, will be approximately $150,000.
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LEGAL MATTERS
The validity of the notes will be passed upon for us by James A. Squires,
Esq., Senior General Counsel of the Company, Norfolk, Virginia (or by such other
senior corporate counsel as may be designated by us). Mr. Squires, in his
capacity as Senior General Counsel for us, is a participant in various employee
benefit and incentive plans, including stock option plans, offered to employees
of the Company. Certain legal matters relating to the offering of the notes will
be passed upon for the underwriter by Skadden, Arps, Slate, Meagher & Flom LLP,
New York, New York. Skadden, Arps, Slate, Meagher & Flom LLP may rely as to
certain matters of Virginia law on the opinion of James A. Squires, Esq., Senior
General Counsel for us (or such other senior corporate counsel as may be
designated by us). Skadden, Arps, Slate, Meagher & Flom LLP has from time to
time provided and may continue to provide legal advice and services to us.
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PROSPECTUS
$1,000,000,000
NORFOLK SOUTHERN CORPORATION
Common Stock, Preferred Stock, Depositary Shares and Debt Securities
NORFOLK SOUTHERN CAPITAL TRUST I
Trust Preferred Securities (fully and unconditionally guaranteed on a
subordinated basis, as described herein, by Norfolk Southern Corporation)
- --------------------------------------------------------------------------------
The following are types of securities that Norfolk Southern Corporation
(the "Company," "Norfolk Southern," "us" or "we") may offer and sell from time
to time in one or more offerings under this prospectus:
o common stock
o preferred stock
o depositary shares
o debt securities
In addition, Norfolk Southern, in conjunction with its newly created trust
subsidiary Norfolk Southern Capital Trust I (the "Trust"), may offer and sell:
o trust preferred securities and related guarantees
The total offering price of these securities, in the aggregate, will not
exceed $1,000,000,000. Norfolk Southern and/or the Trust may offer these
securities separately or as units which may include other securities. Norfolk
Southern and/or the Trust will provide the specific terms of any securities
actually offered for sale in one or more supplements to this prospectus. You
should read this prospectus and the supplements carefully before you decide to
invest in any of these securities.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
THIS PROSPECTUS MAY NOT BE USED TO SELL SECURITIES UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
The date of this prospectus is April 3, 2001.
TABLE OF CONTENTS
PAGE
About this Prospectus...................................................... 3
Where You Can Find More Information........................................ 4
Incorporation by Reference................................................. 4
Certain Forward-Looking Statements......................................... 4
Norfolk Southern Corporation............................................... 5
Norfolk Southern Capital Trust I........................................... 5
Use of Proceeds............................................................ 7
Ratio of Earnings to Fixed Charges......................................... 7
The Securities We May Offer................................................ 7
Description of Capital Stock............................................... 7
Description of the Depositary Shares....................................... 10
Description of Debt Securities............................................. 12
Description of the Trust Preferred Securities.............................. 16
Description of the Trust Preferred Securities Guarantees................... 18
Effect of Obligations under the Trust Preferred Securities Guarantee
and the Subordinated Debt Securities..................................... 20
Plan of Distribution....................................................... 21
Legal Opinions............................................................. 22
Experts.................................................................... 22
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ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we and the
Trust have filed jointly with the Securities and Exchange Commission ("SEC"). By
using a shelf registration statement, we and/or the Trust may sell, from time to
time, in one or more offerings, any combination of the securities described in
this prospectus in a dollar amount that does not exceed $1,000,000,000. For
further information about the Company's business, the Trust and the securities,
you should refer to this registration statement and its exhibits. The exhibits
to the registration statement and the documents incorporated by reference in the
registration statement contain the full text of certain contracts and other
important documents summarized in this prospectus. Since these summaries may not
contain all the information that you may find important in deciding whether to
purchase the securities that we and/or the Trust may offer, you should review
the full text of these documents. The registration statement can be obtained
from the SEC as indicated under the heading "Where You Can Find More
Information."
No separate financial statements of the Trust are included in this
prospectus. The Company and the Trust do not consider that such financial
statements would be material to holders of the trust preferred securities
because the Trust is a newly formed special purpose entity, has no operating
history or independent operations and is not engaged in and does not propose to
engage in any activity other than holding as trust assets certain subordinated
debt securities (as more fully described below under the heading "Norfolk
Southern Capital Trust I") of the Company and issuing the trust preferred
securities and the Trust's common securities.
Furthermore, taken together, the Company's obligations under
o the series of subordinated debt securities issued by the Company in
connection with an issuance of trust preferred securities by the Trust,
o the indenture under which those subordinated debt securities will be
issued,
o the Declaration (as defined below) and
o the trust preferred securities guarantee
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of distributions and other amounts due on the trust preferred
securities. For a more detailed discussion see "Norfolk Southern Capital Trust
I," "Description of the Trust Preferred Securities," "Description of the Debt
Securities," "Description of the Trust Preferred Securities Guarantees" and
"Effect of Obligations under the Trust Preferred Securities Guarantee and the
Subordinated Debt Securities." In addition, the Company does not expect that the
Trust will be filing reports with the SEC under the Securities Exchange Act of
1934.
This prospectus provides you with only a general description of the
securities that we and/or the Trust may offer. Each time we and/or the Trust
sell securities, we will provide a prospectus supplement that contains specific
information about the terms of those securities. The prospectus supplement also
may add, update or change information contained in this prospectus. You should
read both this prospectus and any prospectus supplement together with the
additional information described below under the heading "Where You Can Find
More Information."
----------------------
You should rely only on the information contained or incorporated by
reference in this prospectus and the prospectus supplement. Neither we nor the
Trust has authorized anyone to provide you with different information. If anyone
does provide you with different or inconsistent information, you should not rely
on it. Neither we nor the Trust will make an offer to sell these securities in
any jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this prospectus, as well as information we
previously filed with the SEC and incorporated by reference in this prospectus,
is accurate only as of the date on the front cover of this prospectus. Our
business, financial condition, results of operations and prospects may have
changed since that date. You should rely only on the information contained or
incorporated by reference in this prospectus and the prospectus supplement.
Neither we nor the Trust has authorized anyone to provide you with different
information. If anyone does provide you with different or inconsistent
information, you should not rely on it. Neither we nor the Trust will make an
offer to sell these securities in any jurisdiction where the offer or
-3-
sale is not permitted. You should assume that the information appearing in this
prospectus, as well as information we previously filed with the SEC and
incorporated by reference in this prospectus, is accurate only as of the date on
the front cover of this prospectus. Our business, financial condition, results
of operations and prospects may have changed since that date.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. Our
SEC filings are available over the Internet at the SEC's web site at
http://www.sec.gov. You also may read and copy any document we file with the SEC
at the SEC's public reference rooms at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549; Seven World Trade Center, 13th Floor, New York, New York
10048; and Citicorp Center, 5000 West Madison Street (Suite 1400), Chicago,
Illinois 60601. Please call the SEC at 1-800-SEC-0330 for more information on
the public reference rooms and their copy charges. Our common stock is listed
and traded on the New York Stock Exchange (the "NYSE"). You may also inspect the
information we file with the SEC at the NYSE, 20 Broad Street, New York, New
York 10005.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information in
documents we file with it. This means that we can disclose important information
to you by referring you to those documents. Any information we incorporate in
this manner is considered part of this prospectus. Any information we file with
the SEC after the date of this prospectus automatically will update and
supersede information contained in this prospectus.
We incorporate by reference the following documents that we have filed with
the SEC:
o Annual Report on Form 10-K for the year ended December 31, 2000;
o Current Reports on Form 8-K, dated January 23, 2001, January 26, 2001,
February 6, 2001 and February 6, 2001;
o Registration Statement on Form 8-B, dated April 23, 1982, describing our
common stock, including any amendments or reports filed for the purpose
of updating such description; and
o Registration Statement on Form 8-A, dated September 26, 2000, describing
our preferred stock purchase rights plan, including any amendments or
reports filed for the purpose of updating such description.
We also incorporate by reference any future filings we will make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this prospectus but before the end of the offering of the securities under
this prospectus.
You may request a copy of any filings referred to above (including
exhibits), at no cost, by contacting us at the following address: Norfolk
Southern Corporation, Three Commercial Place, Norfolk, Virginia 23510-9219,
Attention: Corporate Secretary, telephone number: (757) 629-2680.
CERTAIN FORWARD-LOOKING STATEMENTS
This prospectus (including the documents incorporated by reference herein)
contains certain forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) and information relating to
Norfolk Southern that is based on the beliefs of management as well as
assumptions made by, and information currently available to, the management of
Norfolk Southern. When used in this prospectus or any prospectus supplement, the
words "anticipate," "believe," "estimate," "expect," "intend" and similar
expressions, as they relate to Norfolk Southern or the management of Norfolk
Southern, identify forward-looking statements. Such statements, which include,
without limitation, the matters set forth herein or in any prospectus supplement
under the caption "Norfolk Southern Corporation," reflect the views of the
Company with respect to future events over which the Company has no or
incomplete control. In addition, realization of the expected outcomes is subject
to certain risks. These forward-looking statements also are subject to
uncertainties and assumptions relating to the operations and results of
operations of Norfolk Southern. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results or
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outcomes may vary materially from those described herein, or in any prospectus
supplement, as anticipated, believed, estimated, expected, intended (or words of
similar import).
NORFOLK SOUTHERN CORPORATION
Norfolk Southern, a Virginia-based holding company, was incorporated on
July 23, 1980 under the laws of the Commonwealth of Virginia. In 1982, Norfolk
Southern acquired control of Southern Railway Company ("Southern") and Norfolk
and Western Railway Company ("NW"). Effective December 31, 1990, Southern
changed its name to Norfolk Southern Railway Company ("NSR"), and Norfolk
Southern transferred all common stock of NW to NSR (making NW a wholly owned
subsidiary of NSR). Effective September 1, 1998, NW was merged with and into
NSR. NSR, with its consolidated subsidiaries, primarily engages in the
transportation of freight by rail in a single interterritorial system that
extends over approximately 21,800 miles of road in 22 states, in the District of
Columbia and in the Province of Ontario, Canada. Norfolk Southern's noncarrier
subsidiaries engage principally in telecommunications, the acquisition and
subsequent leasing of coal, oil, gas and timberlands, the development of
commercial real estate and the leasing or sale of rail property and equipment.
As more particularly detailed in the various filings we have incorporated
by reference herein, Norfolk Southern and CSX Corporation ("CSX") secured the
approval of the Surface Transportation Board, successor to the Interstate
Commerce Commission, to own and control Conrail Inc. ("Conrail"), the principal
subsidiary of which is Consolidated Rail Corporation ("CRC"), a common carrier
that offers rail transportation services in the Northeast. Through a jointly
owned entity, Norfolk Southern and CSX own the stock of Conrail. On June 1,
1999, Norfolk Southern and CSX, through their respective railroad subsidiaries,
began operating separate portions of Conrail's rail routes and assets.
Substantially all such assets are owned by two wholly owned subsidiaries of CRC;
one of those subsidiaries, Pennsylvania Lines LLC ("PRR"), has entered into
various operating and leasing arrangements with NSR. Certain rail assets still
are owned by CRC, which operates them for the joint and exclusive benefit of and
use by NSR and the rail subsidiary of CSX.
Our executive offices are located at Three Commercial Place, Norfolk,
Virginia 23510-2191, and our telephone number is (757) 629-2600. Unless the
context indicates otherwise, references to "Norfolk Southern" or the "Company"
are references to Norfolk Southern Corporation and its consolidated
subsidiaries.
NORFOLK SOUTHERN CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware law pursuant
to:
o the declaration of trust executed by the Company, as sponsor of the Trust
and
o a certificate of trust filed with the Delaware Secretary of State.
The declaration of trust will be amended and restated in its entirety (as
so amended and restated, the "Declaration") substantially in the form filed as
an exhibit to the registration statement of which this prospectus forms a part.
The Declaration will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act").
The Trust may offer to the public, from time to time, trust preferred
securities representing preferred beneficial interests in itself.
The Trust exists for the exclusive purposes of:
o issuing and selling its common securities and trust preferred securities,
o using the proceeds from the sale of those common securities and trust
preferred securities to acquire a series of subordinated debt securities
issued by the Company and
o engaging in only those other activities necessary or incidental to the
above activities (such as registering the transfer of the common
securities and the trust preferred securities).
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The Trust will sell common securities representing undivided beneficial
ownership interests in itself to the Company and trust preferred securities
representing undivided beneficial ownership interests in itself to the public.
When the Trust sells its trust preferred securities to the public it will
use the money it receives, together with the money it receives from the sale of
its common securities, to buy a series of the Company's subordinated debt
securities. The payment terms of those subordinated debt securities will be
virtually the same as the terms of the Trust's trust preferred securities.
The Trust will own only the applicable series of subordinated debt
securities it purchases from the Company with the money it receives from the
sale of its common securities and trust preferred securities. The only source of
funds for the Trust will be the payments it receives from the Company on those
subordinated debt securities. The Trust will use those funds to make cash
payments to holders of the trust preferred securities.
The Trust will also have the right to be reimbursed by the Company for
certain expenses.
All of the common securities of the Trust will be owned by the Company. The
common securities of the Trust will rank equally, and payments will be made on
such securities pro rata, with the trust preferred securities of the Trust,
except that upon the occurrence and continuance of an event of default under the
Declaration resulting from an event of default under the subordinated indenture,
the rights of the Company, as holder of the common securities, to payment in
respect of distributions and payments upon liquidation or redemption will be
subordinated to the rights of the holders of the trust preferred securities. See
"Description of the Trust Preferred Securities." The Company will acquire common
securities in an aggregate liquidation amount equal to not less than 3% of the
total capital of the Trust.
The prospectus supplement relating to any trust preferred securities will
contain the details of the cash distributions to be made periodically to the
holders of the trust preferred securities.
Under certain circumstances, the Company may redeem the subordinated debt
securities which it sold to the Trust. If the Company does this, the Trust will
redeem a like amount of the trust preferred securities which it sold to the
public and the common securities which it sold to the Company.
Under certain circumstances the Company may terminate the Trust and cause
the subordinated debt securities sold to the Trust to be distributed to the
holders of the related trust preferred securities. If this happens, owners of
those trust preferred securities will no longer have any interest in the Trust
and will only own the subordinated debt securities.
Unless otherwise specified in the applicable prospectus supplement:
o The Trust will have a term of approximately 40 years from the date it
issues its common securities and trust preferred securities, but may
terminate earlier as provided in the Declaration.
o The Trust's business and affairs will be conducted by its trustees.
o The trustees will be appointed by the Company as holder of the Trust's
common securities.
o The duties and obligations of the trustees are governed by the
Declaration.
o The trustees will be U.S. Bank Trust National Association, as the
institutional trustee and as the Delaware trustee, and one or more
regular trustees who are employees or officers of or affiliated with the
Company. The institutional trustee will act as sole indenture trustee
under the Declaration for purposes of compliance with the Trust Indenture
Act. The institutional trustee will also act as trustee under the
guarantees and the subordinated indenture. See "Description of the Trust
Preferred Securities Guarantees" and "Description of Debt Securities."
o The Company will pay all fees and expenses related to the Trust and the
offering of the trust preferred securities and will pay, directly or
indirectly, all ongoing costs, expenses and liabilities of the Trust.
o No amendment or modification may be made to the Declaration which would
adversely affect the rights or preferences of the common securities and
trust preferred securities without the approval of the majority
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in liquidation amount of the common securities and trust preferred
securities (which may be only the trust preferred securities or common
securities of such trust if only that class is affected).
The principal executive office of the Trust is Three Commercial Place,
Norfolk, Virginia 23510 and its telephone number is (757) 629-2600.
USE OF PROCEEDS
Unless the accompanying prospectus supplement indicates otherwise, we
expect to use the net proceeds we receive from any offering of these securities
for our general corporate purposes, including the redemption and refinancing of
outstanding indebtedness, acquisitions, increasing our working capital and other
business opportunities.
RATIO OF EARNINGS TO FIXED CHARGES
For purposes of computing each ratio of earnings to fixed charges,
"earnings" represents income before income taxes, plus interest expenses
(including a portion of rental expenses representing an interest factor) and
subsidiaries' preferred dividend requirements, less the equity in undistributed
earnings of 20%-49% owned companies, net of dividends. "Fixed charges"
represents interest expenses (including a portion of rental expense representing
an interest factor) plus capitalized interest and subsidiaries' preferred
dividend requirements on a pretax basis.
The following table sets forth the ratio of earnings to fixed charges for
each period indicated:
YEAR ENDED DECEMBER 31
-------------------------------
2000(1) 1999 1998 1997 1996
------ ---- ---- ---- ----
Ratio of earnings to fixed charges ....... 1.40 1.53 2.39 2.99 6.84
- ------------------
(1) Year 2000 pretax earnings included $165 million of workforce reduction
costs, which reduced net income by $101 million. These costs included
pension expense associated with early retirement programs, costs for
voluntary separation programs and protective benefits related to other
actions taken to reduce the workforce. Excluding the effects of these costs,
the 2000 ratio of earnings to fixed charges would have been 1.62.
THE SECURITIES WE MAY OFFER
We may sell from time to time, in one or more offerings, common stock,
preferred stock, depositary shares and debt securities and/or the Trust may sell
from time to time, in one or more offerings, one series of trust preferred
securities (fully and unconditionally guaranteed on a subordinated basis by the
Company) in a dollar amount that does not exceed $1,000,000,000. This prospectus
contains only a summary of the securities we may offer. The specific terms of
any securities actually offered for sale, together with the terms of that
offering, the initial price and the net proceeds to the Company and/or the Trust
from the sale of such securities, will be set forth in an accompanying
prospectus supplement. That prospectus supplement also will contain information,
where applicable, about material United States federal income tax considerations
relating to the securities, and the securities exchange, if any, on which the
securities will be listed. THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE
OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
DESCRIPTION OF CAPITAL STOCK
The following summary of our common stock and preferred stock is not meant
to be a complete description. For more information, you also should refer to our
Restated Articles of Incorporation (the "Articles of Incorporation"), our Bylaws
(the "Bylaws"), the Virginia Stock Corporation Act (the "Virginia Act") and the
Rights Agreement (the "Rights Agreement"), dated as of September 26, 2000,
between Norfolk Southern and The Bank of New York. Under the Articles of
Incorporation, our authorized capital stock consists of 1,350,000,000 shares of
common stock, par value $1.00 per share, and 25,000,000 shares of preferred
stock, without par value. We will describe the specific terms of any common
stock or preferred stock we may offer in
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a prospectus supplement. The specific terms we describe in a prospectus
supplement may differ from the terms we describe below.
COMMON STOCK
As of February 28, 2001, Norfolk Southern had 384,491,145 shares of common
stock issued and outstanding. For all matters submitted to a vote of
stockholders, each holder of common stock is entitled to one vote for each share
registered in his or her name on the books of the Company. Our common stock does
not have cumulative voting rights. As a result, subject to the voting rights of
any outstanding preferred stock (of which there currently is none), the persons
who hold 50% or more of the outstanding common stock entitled to elect members
of the board of directors (the "Board"), can elect all of the directors who are
up for election in a particular year.
If the Board declares a dividend, common stockholders will receive payments
from the funds of Norfolk Southern that are legally available to pay dividends.
However, this dividend right is subject to any preferential dividend rights we
may grant to the persons who hold preferred stock, if any is issued. If Norfolk
Southern is dissolved, the holders of common stock will be entitled to share
ratably in all the assets that remain after we pay (i) our liabilities and (ii)
any amounts we may owe to the persons who hold our preferred stock, if any is
issued. Common stockholders do not have preemptive rights, and they have no
right to convert their common stock into any other securities. All outstanding
shares of common stock are duly authorized, validly issued, fully paid and
nonassessable.
The transfer agent and registrar for our common stock is The Bank of New
York.
PREFERRED STOCK
No shares of preferred stock are issued or outstanding. However, 600,000
shares of preferred stock designated as "Series A Junior Participating Preferred
Stock" are authorized and reserved for issuance in connection with the Rights
Agreement described below. Our Articles of Incorporation authorize the Board to
issue preferred stock in one or more series and to determine the liquidation
preferences, voting rights, dividend rights, conversion rights and redemption
rights of each such series. The ability of the Board to issue and set the terms
of preferred stock could make it more difficult for a third person to acquire
control of Norfolk Southern. The Board has the authority to fix the following
terms of any series of preferred stock, each of which will be set forth in the
related prospectus supplement:
o the designation of the series;
o the number of shares offered;
o the initial offering price;
o the dividend rate, the dividend periods, the dates payable and whether
dividends will be cumulative or noncumulative;
o the voting rights;
o any redemption or sinking fund provisions;
o any conversion or exchange provisions;
o whether the shares will be listed on a securities exchange;
o the liquidation preference, and other rights that arise upon the
liquidation, dissolution or winding-up of Norfolk Southern; and
o any other rights, preferences and limitations that pertain to the series.
Norfolk Southern will designate the transfer agent and registrar for each
series of preferred stock in the prospectus supplement.
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RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On September 26, 2000, the Board adopted the Rights Agreement and declared
a dividend of one right for each share of common stock outstanding as of October
16, 2000. Each right entitles the holder to purchase one one-thousandth
(1/1000th) of a share of a new series of preferred stock of the Company
designated as "Series A Junior Participating Preferred Stock" at an exercise
price of $85.00. Rights are only exercisable (under certain circumstances
specified in the Rights Agreement) when there has been a distribution of the
rights (and such rights are no longer redeemable by the Company). A distribution
of the rights would occur upon the earlier of: (i) 10 business days (or such
later date as the Board shall determine) following a public announcement that
any person or group has acquired beneficial ownership of 15% or more of the
outstanding shares of common stock, other than as a result of repurchases of
stock by the Company or through inadvertence by certain institutional
stockholders or (ii) 10 business days (or such later date as the Board shall
determine) following the commencement of a tender offer or exchange offer that
would result in any person or group acquiring beneficial ownership of 15% or
more of the outstanding shares of common stock.
The rights will expire at 5:00 P.M. (New York City time) on September 26,
2010, unless such date is extended or the rights are earlier redeemed or
exchanged by the Company. Until a right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company, including, without
limitation, no right to vote or to receive dividends.
If any person or group acquires 15% or more of the Company's outstanding
common stock, the "flip-in" provision of the rights will be triggered and the
rights will entitle a holder (other than such person or any member of such
group, as such rights will be null and void) to acquire a number of additional
shares of the Company's common stock having a market value of twice the exercise
price of each right. In the event the Company is involved in a merger or other
business combination transaction, each right will entitle its holder to
purchase, at the right's then-current exercise price, a number of shares of the
acquiring company's common stock having a market value at that time of twice the
rights' exercise price.
Any of the provisions of the Rights Agreement may be amended by the Board
prior to the distribution of the rights. After such distribution, the provisions
of the Rights Agreement may be amended by the Board in order to cure any
ambiguity, to make changes which do not adversely affect the interests of
holders of rights or to shorten or lengthen any time period under the Rights
Agreement. The foregoing notwithstanding, no amendment may be made at such time
as the rights are not redeemable.
The existence of the Rights Agreement and the rights is intended to deter
coercive or partial offers which will not provide fair value to all stockholders
and to enhance the Board's ability to represent all stockholders and thereby
maximize stockholder value.
CERTAIN PROVISIONS OF OUR ARTICLES OF INCORPORATION
Our Articles of Incorporation contain certain provisions that, in effect,
may delay, deter or prevent a third person from acquiring control of Norfolk
Southern. Under the Articles of Incorporation, the Board consists of three
classes of directors; each class serves a staggered three-year term, and each
such term ends in a successive year. This provision may make it more difficult
for a third person to acquire control of Norfolk Southern since it normally
would require two annual stockholders' meetings in order for a potential
acquiror to elect a majority of the directors. Because it may take a relatively
long period of time for potential acquirors to obtain control, they may be less
likely to initiate a proxy contest to elect directors or purchase a substantial
block of Norfolk Southern's common stock. These provisions, together with
certain terms of preferred stock noted above, could cause our common stock to
trade at a lower price than if these provisions did not exist.
CERTAIN PROVISIONS OF THE VIRGINIA STOCK CORPORATION ACT
The Virginia Act contains certain anti-takeover provisions regarding, among
other things, affiliated transactions and control share acquisitions. In
general, the Virginia Act's affiliated transactions provisions prevent a
Virginia corporation from engaging in an "affiliated transaction" (as defined in
the Virginia Act) with an "interested shareholder" (generally defined as a
person owning more than 10% of any class of voting securities of the
corporation) unless approved by a majority of the "disinterested directors" (as
defined in the
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Virginia Act) and the holders of at least two thirds of the outstanding voting
stock not owned by the interested shareholder, subject to certain exceptions.
Under the control share acquisition provisions of the Virginia Act, shares
acquired in a "control share acquisition," generally defined as transactions
that increase the voting strength of the person acquiring such shares above
certain thresholds in elections of directors generally, have no voting rights
unless they are granted by a majority of the outstanding voting stock not owned
by such acquiring person or by an employee-director of the company. If such
voting rights are granted and the acquiring person controls 50% or more of the
voting power, all shareholders, other than the acquiring person, are entitled to
receive "fair value" (as defined in the Virginia Act) for their shares. If such
voting rights are not granted, the corporation may, if authorized by its
articles of incorporation or bylaws, purchase the acquiring person's shares at
their cost to the acquiring person. A Virginia corporation has the right to "opt
out" of the control share acquisition statute. Although Norfolk Southern has not
done so, its Board at any time and without stockholder approval could "opt out"
of the statute.
DESCRIPTION OF THE DEPOSITARY SHARES
Norfolk Southern may elect to offer fractional shares of preferred stock
rather than full shares of preferred stock. If so, Norfolk Southern will issue
receipts for these "depositary shares," each of which will represent a fraction
of a share of a particular series of preferred stock. Each holder of a
depositary share will be entitled, in proportion to the fraction of preferred
stock represented by that depositary share, to the rights and preferences of the
preferred stock, including any dividend, voting, redemption, conversion and
liquidation rights. Norfolk Southern will enter into an agreement (the "Deposit
Agreement") with a depositary, which will be named in the related prospectus
supplement, and with the holders of the "depositary receipts" that represent the
depositary shares.
The following summary of the depositary shares is not meant to be complete.
For more information, you should refer to the Deposit Agreement, to the
depositary receipts and the certificate of designation of the series of
preferred stock that underlies that series of depositary shares and to the
related prospectus supplement. A form of Deposit Agreement, depositary receipt
and certificate of designation will be filed as exhibits to, or incorporated by
reference into, the registration statement before we issue depositary receipts.
GENERAL
In order to issue depositary shares, Norfolk Southern will issue preferred
stock, and immediately deposit these shares with the depositary. The depositary
then will issue and deliver depositary receipts to the persons who purchase
depositary shares. The depositary will issue depositary receipts in a form that
reflects whole depositary shares, and each may evidence any number of whole
depositary shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash and non-cash distributions it
receives, with respect to the underlying preferred stock, to the record holders
of depositary shares in proportion to the number of depositary shares they hold.
In the case of non-cash distributions, the depositary may determine that the
distribution cannot be made proportionately or that it may not be feasible to
make the distribution. If so, the depositary will, with our approval, adopt a
method it deems equitable and practicable to effect the distribution, including
the sale (public or private) of the securities or other non-cash property it
receives in the distribution at a place and on terms it deems proper. Norfolk
Southern or the depositary may reduce the amount it distributes in order to pay
taxes or other governmental charges.
REDEMPTION OF DEPOSITARY SHARES
If Norfolk Southern redeems the series of preferred stock that underlies
the depositary shares, the depositary will redeem the depositary shares from the
proceeds it receives from the redemption of the preferred stock it holds. The
depositary will redeem the number of depositary shares that represent the amount
of underlying
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preferred stock that Norfolk Southern redeemed. The redemption price per
depositary share will be in proportion to the redemption price per share that
Norfolk Southern paid for the underlying preferred stock. If Norfolk Southern
redeems less than all the depositary shares, the depositary will select by lot,
or by some substantially equivalent method, which depositary shares to redeem.
After a redemption date is fixed, the depositary shares to be redeemed no
longer will be considered outstanding. The rights of the holders of the
depositary shares will cease, except the right to receive money or other
property they are entitled to receive upon the redemption. In order to redeem
their depositary shares, holders will surrender their depositary receipts to the
depositary. If Norfolk Southern deposits funds with the depositary to redeem
depositary shares, and the holders fail to redeem their receipts, the money will
be returned to Norfolk Southern within two years from the date the funds are
deposited.
VOTING THE PREFERRED STOCK
When Norfolk Southern notifies the depositary about any meeting at which
the holders of preferred stock are entitled to vote, the depositary will mail
the information to the record holders of depositary shares related to that
preferred stock. Each record holder of such depositary shares on the record date
(which will be the same date as the record date for the related preferred stock)
will be entitled to instruct the depositary how to vote the shares of preferred
stock represented by that holder's depositary shares. The depositary will try to
vote the preferred stock represented by the depositary shares in accordance with
these instructions, provided the depositary receives these instructions
sufficiently in advance of the meeting. Norfolk Southern will take all
reasonable action necessary to provide the depositary with sufficient notice of
any meeting. If the depositary does not receive instructions from the holders of
the depositary shares, the depositary will abstain from voting the preferred
stock that underlies those depositary shares.
WITHDRAWAL OF PREFERRED STOCK
When a holder surrenders depositary receipts at the corporate trust office
of the depositary, and pays any necessary taxes, charges or other fees, the
holder will be entitled to receive the number of whole shares of the related
series of preferred stock, and any money or other property, if any, represented
by their depositary shares. Once a holder exchanges depositary shares for whole
shares of preferred stock, that holder cannot "re-deposit" these shares of
preferred stock with the depositary, or exchange them for depositary shares. If
a holder delivers depositary receipts that represent a number of depositary
shares that exceeds the number of whole shares of related preferred stock the
holder seeks to withdraw, the depositary will issue a new depositary receipt to
the holder that evidences the excess number of depositary shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
Norfolk Southern and the depositary can agree, at any time, to amend the
form of depositary receipt and any provisions of the Deposit Agreement. However,
if an amendment has a material adverse affect on the rights of the holders of
related depositary shares, it must first be approved by the holders of at least
a majority of these depositary shares then outstanding. Every holder of a
depositary receipt at the time an amendment becomes effective will be bound by
the amended Deposit Agreement. However, subject to any conditions in the Deposit
Agreement or applicable law, no amendment can impair the right of any holder of
a depositary share to receive shares of the related preferred stock, and any
money or other property represented by the depositary shares, upon surrender the
depositary receipts that represent their depositary shares.
Norfolk Southern can terminate the Deposit Agreement at any time, as long
as it provides at least 60 days' prior written notice to the depositary. If
Norfolk Southern terminates the Deposit Agreement, then within 30 days from the
date the depositary receives notice, the depositary will deliver whole or
fractional shares of the related preferred stock to the holders of depositary
shares, when they surrender their depositary receipts. The Deposit Agreement
will terminate automatically after all outstanding depositary shares have been
redeemed, or, in connection with any liquidation, dissolution or winding up of
Norfolk Southern, after the final distribution of Norfolk Southern's assets has
been made to the holders of the related series of preferred stock and, in turn,
to the holders of depositary shares.
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CHARGES OF DEPOSITARY
Norfolk Southern will pay the charges of the depositary, including charges
in connection with the initial deposit of the related series of preferred stock,
the initial issuance of the depositary shares, and all withdrawals of shares of
the related series of preferred stock. Norfolk Southern also will pay all
transfer and other taxes and the government charges that arise solely from the
existence of the depositary arrangements. However, holders of depositary shares
will have to pay all other transfer and other taxes and government charges, as
provided in the Deposit Agreement.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign, at any time, by delivering written notice of its
decision to Norfolk Southern. We may remove the depositary at any time. Any
resignation or removal will take effect when we appoint a successor depositary.
Norfolk Southern must appoint the successor depositary within 60 days after
delivery of the notice of resignation or removal, and the successor depositary
must be a bank or trust corporation that has its principal office in the United
States, and has a combined capital and surplus of at least $50,000,000.
MISCELLANEOUS
Norfolk Southern will be required to furnish certain information to the
holders of the preferred stock. The depositary, as the holder of the underlying
preferred stock, will forward any reports or information it receives from
Norfolk Southern to the holders of depositary shares.
Neither the depositary nor Norfolk Southern will be liable if its ability
to perform its obligations under the Deposit Agreement is prevented or delayed
by law or any circumstance beyond its control. Both Norfolk Southern and the
depositary will be obligated to use their best judgment and to act in good faith
in performing their duties under the Deposit Agreement. Each of Norfolk Southern
and the depositary will be liable for gross negligence and willful misconduct in
the performance of its duties under the Deposit Agreement. They will not be
obligated to appear in, prosecute or defend any legal proceeding with respect to
any depositary receipts, depositary shares or preferred stock unless they
receive what they, in their sole discretion, determine to be a satisfactory
indemnity. Norfolk Southern and the depositary may rely on the advice of legal
counsel (including in-house counsel) or accountants of their choice. They may
also rely on information provided by persons they believe, in good faith, to be
competent, and on documents they believe, in good faith, to be genuine.
The depositary's corporate trust office will be identified in the related
prospectus supplement. Unless the prospectus supplement indicates otherwise, the
depositary will act as transfer agent and registrar for depositary receipts, and
if Norfolk Southern redeems shares of preferred stock, the depositary will act
as redemption agent for the corresponding depositary receipts.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the debt securities. The particular terms of each series of debt securities
we may offer will be described in the related prospectus supplement. Any senior
debt securities will be issued under a senior indenture, dated as of January 15,
1991, between the Company and U.S. Bank Trust National Association, formerly
known as First Trust of New York, National Association, as successor trustee.
Any subordinated debt securities will be issued under a subordinated indenture
between the Company and U.S. Bank Trust National Association, as trustee. The
senior indenture and the subordinated indenture are sometimes referred to
collectively as the "indentures," and the indenture trustee under each indenture
are sometimes referred to collectively as the "indenture trustees."
The following summary of certain provisions of the indentures and the debt
securities is not meant to be complete. For more information, you should refer
to the full text of the indentures and the debt securities, including the
definitions of certain terms not defined herein, and the related prospectus
supplement. The senior indenture and a form of subordinated indenture have been
incorporated by reference as exhibits to this registration statement, and any
supplements to either of the indentures, will be filed as exhibits to, or
incorporated by reference into, the registration statement before we issue debt
securities.
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GENERAL
The indentures do not limit the aggregate principal amount of debt
securities Norfolk Southern may issue. Unless otherwise specified in a
prospectus supplement,
o debt securities will be unsecured obligations of Norfolk Southern;
o senior debt securities will rank equally with all other unsecured and
unsubordinated indebtedness of Norfolk Southern; and
o subordinated debt securities will be subordinate, in right of payment, to
all senior indebtedness (as defined in the applicable subordinated
indenture).
A prospectus supplement will describe the following terms of any series of
debt securities we may offer:
o the title;
o any limit on the amount that may be issued;
o the date(s) of maturity;
o the rate(s) of interest, if any, or the method of calculation, the
date(s) interest will begin to accrue, the date(s) interest will be
payable and the regular record dates for interest payment dates or the
method for determining such date(s);
o the covenants applicable to the debt securities;
o any mandatory or optional sinking fund or analogous provisions;
o the date(s), if any, on which, and the price(s) at which Norfolk Southern
is obligated, pursuant to any mandatory sinking fund provisions or
otherwise, to redeem, or at a holder's option to purchase, such series of
debt securities and other related terms and provisions;
o the applicability of any provisions described under "Satisfaction and
Discharge of Indenture" in the indentures;
o the index used to determine any payments to be made on the debt
securities;
o the currency or currencies of any payments to be made on the debt
securities;
o whether or not the debt securities will be issued in global form, their
terms and the depositary;
o the terms upon which a global note may be exchanged in whole or in part
for other debt securities; and
o any other terms of the series of debt securities.
CONVERSION OR EXCHANGE OF DEBT SECURITIES
The prospectus supplement will set forth the terms on which a series of
debt securities may be converted into or exchanged for other securities of
Norfolk Southern. These terms will include whether conversion or exchange is
mandatory, or is at the option of the holder or of Norfolk Southern. We also
will describe how we will calculate the number of securities that holders of
debt securities would receive if they convert or exchange their debt securities.
EVENTS OF DEFAULT
Under the indentures, an "event of default" includes the following:
o failure to pay any principal or premium, if any, when due;
o failure to pay any interest when due, and this failure continues for 30
days and the time for payment has not been extended or deferred;
o failure to pay any sinking fund installment when due;
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o failure to perform any covenant in the indenture, and the failure
continues for 90 days;
o acceleration of any indebtedness of Norfolk Southern (or any "significant
subsidiary" of Norfolk Southern, as defined in the federal securities
laws) in an aggregate principal amount that exceeds $30,000,000; and
o certain events of bankruptcy, insolvency or reorganization.
If an event of default occurs and is continuing, either the indenture
trustee or the holders of at least 25%, in aggregate principal amount, of the
outstanding debt securities affected by the default, may notify Norfolk Southern
(and the indenture trustee, if notice is given by the holders) and declare that
the unpaid principal, premium, and accrued interest, if any, is due and payable
immediately. However, under certain circumstances, the holders of a majority in
aggregate principal amount of outstanding debt securities may be able to rescind
and annul this declaration for accelerated payment. Norfolk Southern will
furnish the indenture trustee with an annual statement that describes how
Norfolk Southern has performed its obligations under the indenture, and that
specifies any defaults that may have occurred.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The terms of a series of subordinated debt securities will be set forth in
the subordinated indenture and the related prospectus supplement. The
subordinated debt securities will be unsecured obligations of Norfolk Southern
and will be subordinate in right of payment to certain other indebtedness of
Norfolk Southern. Unless otherwise indicated in the related prospectus
supplement, the subordinated indenture does not contain any restrictions on the
amount of senior or other subordinated indebtedness that Norfolk Southern may
incur.
The subordinated debt securities will be subordinate only to senior debt
securities and secured debt. In the event of the bankruptcy or insolvency of
Norfolk Southern before or after maturity of the subordinated debt securities,
unsecured creditors who do not hold senior debt securities will rank equally
with the holders of the subordinated debt securities in priority of payment.
However, federal bankruptcy courts have broad equity powers. A bankruptcy court
may, among other things, reclassify subordinated debt securities into a class of
claims with a different relative priority than other claims against the Company.
In the event subordinated debt securities are issued to the Trust or a
trustee of the Trust in connection with the issuance of common securities and
trust preferred securities by the Trust, those subordinated debt securities
subsequently may be distributed pro rata to the holders of the common securities
and trust preferred securities in connection with the dissolution of the Trust,
as described in the prospectus supplement relating to the trust preferred
securities. Only one series of subordinated debt securities will be issued to
the Trust or a trustee of the Trust in connection with the issuance of common
securities and trust preferred securities by the Trust.
SATISFACTION AND DISCHARGE OF INDENTURES
Norfolk Southern may terminate its obligations with respect to a series of
debt securities under the indentures if:
o all the outstanding debt securities have been delivered to the indenture
trustee for cancellation;
o Norfolk Southern has paid all sums it is required to pay under the
respective indentures; or
o Norfolk Southern deposits with the indenture trustee sufficient funds, or
the equivalent thereof, to cover payments due under the indentures.
As a condition to defeasance, Norfolk Southern must deliver to the
indenture trustee an opinion of counsel to the effect that (i) the holders will
not recognize gain or loss on such debt securities for federal income tax
purposes solely as a result of Norfolk Southern's defeasance, and (ii) the
holders will be subject to federal income tax in the same amounts and at the
same times as would have been the case if Norfolk Southern's defeasance had not
occurred. In the event of defeasance, holders of debt securities must look to
the funds Norfolk Southern has deposited with the indenture trustee to cover
payments due under the indentures.
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MODIFICATION AND WAIVER
Norfolk Southern and the indenture trustee may modify or amend the
indentures by obtaining the written consent of the individuals who hold at least
a majority, in aggregate principal amount, of the outstanding debt securities of
each series that is affected. However, certain changes can be made only with the
consent of each holder of an outstanding series of debt securities. For example,
each holder must consent to changes in:
o the stated maturity date;
o the principal, premium, or interest payments, if any;
o the place or currency of any payment;
o the rights of holders to enforce payment;
o the percentage of outstanding debt securities of any series, if the
consent of the holders of those debt securities is needed to modify,
amend or waive certain provisions of the indenture;
o the conversion provisions of any convertible debt security; or
o the subordination provisions.
The holders of a majority, in aggregate principal amount, of the
outstanding debt securities of any series can consent, on behalf of the holders
of the entire series, to waive certain provisions of the indentures. In
addition, these holders also can consent to waive any past default under the
indentures, except:
o a default in any payments due; and
o a default on an indenture provision that can be modified or amended only
with the consent of each holder of an outstanding debt security.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Norfolk Southern cannot merge with, or sell, transfer or lease
substantially all of its assets to, another corporation, without the consent of
the holders of a majority, in aggregate principal amount, of the outstanding
debt securities under the indentures, unless:
o the successor corporation is organized and existing under the laws of the
United States and assumes Norfolk Southern's obligations under the
respective indenture;
o after giving effect to the transaction, no event of default (and no event
which, after notice or lapse of time, would become an event of default)
will have occurred and be continuing; and
o the successor corporation executes a supplemental indenture that assumes
the obligations of the related indenture, satisfies the indenture
trustees, and provides the necessary opinions and certificates.
Since Norfolk Southern is a holding company, if one of its subsidiaries
distributes its assets as a result of a liquidation or recapitalization of that
subsidiary, the rights of Norfolk Southern, of Norfolk Southern's creditors and
of the holders of debt securities to participate in the subsidiary's
distribution of assets will be subject to the prior claims of that subsidiary's
creditors, except to the extent that Norfolk Southern itself may be a creditor
with prior claims enforceable against its subsidiary.
FORM, EXCHANGE AND TRANSFER
Unless otherwise indicated in a prospectus supplement, the debt securities
of each series will be issued only in fully registered form, without coupons,
and in denominations of $100,000 and integral multiples of $1,000 thereof. At
the option of the holder, subject to the terms of the indentures and the
limitations on global securities described in a prospectus supplement, debt
securities of any series will be exchangeable for other debt securities of the
same series, in any authorized denomination and of like tenor and aggregate
principal amount. Holders can exchange or register the transfer of their debt
securities, in the manner prescribed by Norfolk Southern or the indenture
trustee, at the office of Norfolk Southern's security registrar or transfer
agent which Norfolk Southern will designate in the related prospectus
supplement. Unless the debt securities provide otherwise, there
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is no service charge to exchange or register the transfer of debt securities.
However, Norfolk Southern may require holders to pay any taxes or other
governmental charges. Norfolk Southern can designate additional transfer agents,
terminate any transfer agent, or change the office through which a transfer
agent acts, but Norfolk Southern must maintain a transfer agent in each place,
as described in the related prospectus supplement, where debt securities
payments are made.
CONCERNING THE INDENTURE TRUSTEE
Unless the related prospectus supplement indicates otherwise, U.S. Bank
Trust National Association will be the indenture trustee under each of the
indentures, and will act as the security registrar and paying agent for the
Company's debt securities.
The holders of a majority, in aggregate principal amount, of the debt
securities of any series will have the right to direct the time, method and
place to conduct any proceeding to exercise any remedy available to the
indenture trustee, subject to certain exceptions. The indentures provide that if
an event of default occurs (and is not cured) with respect to a series of debt
securities, the indenture trustee will be required, in the exercise of its
power, to use the same degree of care a prudent person would use in the conduct
of that person's own affairs. Subject to this standard, the indenture trustee is
not obligated to exercise any of its powers under the indentures at the request
of a debt securities holder, unless the holder offers to indemnify the indenture
trustee against any loss, liability or expense, and then only to the extent
required by the terms of the applicable indenture.
GOVERNING LAW
The indentures and the debt securities will be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
Trust Indenture Act shall be applicable.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The Trust may issue only one series of trust preferred securities and that
series will have the terms described in the applicable prospectus supplement.
The Declaration authorizes the regular trustees of the Trust to issue on behalf
of the Trust one series of trust preferred securities. The Declaration will be
qualified as an indenture under the Trust Indenture Act. The trust preferred
securities will have terms, including with respect to distributions, redemption,
voting, liquidation rights and such other preferred, deferred or other special
rights or such restrictions as described in the Declaration or made part of the
Declaration by the Trust Indenture Act and which will mirror the terms of the
subordinated debt securities held by the Trust and described in the applicable
prospectus supplement.
You must review the prospectus supplement relating to the trust preferred
securities for specific terms, including:
o the distinctive designation of the trust preferred securities;
o the number and the initial public offering price of trust preferred
securities issued by the Trust;
o the annual distribution rate (or method of determining such rate) for the
trust preferred securities, the date or dates upon which the
distributions will be payable and the date or dates from which
distributions will accrue;
o whether distributions on the trust preferred securities will be
cumulative, and, in the case of trust preferred securities having
cumulative distribution rights, the date or dates or method of
determining the date or dates from which the distributions on the trust
preferred securities will be cumulative;
o the amount or amounts which will be paid out of the assets of the Trust
to the holders of trust preferred securities of the Trust upon voluntary
or involuntary dissolution, winding-up or termination of the Trust;
o the obligation, if any, of the Trust to purchase or redeem trust
preferred securities issued by the Trust and the price or prices at
which, the period or periods within which, and the terms and conditions
upon which, the trust preferred securities will be purchased or redeemed,
in whole or in part, pursuant to such obligation;
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o the voting rights, if any, of the trust preferred securities in addition
to those required by law, including the number of votes per trust
preferred security and any require ment for the approval by the holders
of trust preferred securities as a condition to specified action or
amendments to the Declaration of the Trust;
o the terms and conditions, if any, upon which the subordinated debt
securities may be distributed to holders of trust preferred securities;
o the right and/or obligation, if any, of the Company to redeem or purchase
the trust preferred securities pursuant to any sinking fund or similar
provisions or at the option of the holder of the trust preferred
securities and the period or periods for which, the price or prices at
which, and the terms and conditions upon which, the trust preferred
securities will be redeemed or repurchased, in whole or in part, pursuant
to such right and/or obligation;
o the terms and conditions, if any, upon which the trust preferred
securities may be converted into shares of the common stock of the
Company, including the conversion price and the circumstances, if any,
under which the conversion right will expire;
o if applicable, any securities exchange upon which the trust preferred
securities will be listed; and
o any other relevant rights, preferences, privileges, limitations or
restrictions of trust preferred securities issued by the Trust not
inconsistent with the Declaration or with applicable law.
All trust preferred securities will be guaranteed by the Company to the
extent described below under "Description of the Trust Preferred Securities
Guarantees."
Certain United States federal income tax considerations applicable to any
offering of trust preferred securities will be described in the applicable
prospectus supplement.
In connection with the issuance of trust preferred securities, the Trust
will issue one series of common securities. The Declaration authorizes the
regular trustees of the Trust to issue on behalf of the Trust one series of
common securities. The common securities will have the terms relating to
distributions, redemption, voting, liquidation rights or such restrictions as
are described in the Declaration. Except for voting rights, the terms of the
common securities issued by the Trust will be substantially identical to the
terms of the trust preferred securities issued by the trust. The common
securities will rank on a parity, and payments will be made on the common
securities pro rata, with the trust preferred securities except that, upon an
event of default under the Declaration, the rights of the holders of the common
securities to payment for distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the trust preferred securities. Except in certain limited circumstances, the
common securities will also carry the right to vote to appoint, remove or
replace any of the trustees of the Trust. All of the common securities of the
Trust will be directly or indirectly owned by the Company.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF THE TRUST PREFERRED SECURITIES
If an event of default under the Declaration occurs and is continuing, then
the holders of trust preferred securities will rely on the enforcement by the
institutional trustee of its rights as a holder of the applicable series of
subordinated debt securities against the Company. In addition, the holders of a
majority in liquidation amount of the trust preferred securities will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the institutional trustee or to direct the exercise of any
trust or power conferred upon the institutional trustee under the Declaration,
including the right to direct the institutional trustee to exercise the remedies
available to it as a holder of the subordinated debt securities.
If the institutional trustee fails to enforce its rights under the
applicable series of subordinated debt securities, a holder of trust preferred
securities may institute a legal proceeding directly against the Company to
enforce the institutional trustee's rights without first instituting any legal
proceeding against the institutional trustee or any other person or entity.
However, if an event of default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the applicable series of subordinated debt securities
on the date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a holder of trust preferred securities
of the Trust may
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directly institute a proceeding for enforcement of payment to the holder of the
principal of or interest on the applicable series of subordinated debt
securities having a principal amount equal to the aggregate liquidation amount
of the trust preferred securities of such holder (a "Direct Action") on or after
the respective due date. In connection with a Direct Action, the Company will be
subrogated to the rights of such holder of trust preferred securities under the
Declaration to the extent of any payment made by the Company to a holder of
trust preferred securities in a Direct Action. This means that the Company will
be entitled to payment of amounts that a holder of trust preferred securities
receives in respect of an unpaid distribution that resulted in the bringing of
the Direct Action to the extent that such holder receives or has already
received full payment relating to such unpaid distribution from the Trust.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
Information concerning the relationship between the institutional trustee
and the Company will be set forth in the prospectus supplement relating to the
trust preferred securities.
INFORMATION CONCERNING THE DELAWARE TRUSTEE
Information concerning the relationship between the Delaware trustee and
the Company will be set forth in the prospectus supplement relating to the trust
preferred securities.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES GUARANTEES
The guarantees with respect to the trust preferred securities will be
executed and delivered by the Company for the benefit of the holders from time
to time of trust preferred securities. Each guarantee will be qualified as an
indenture under the Trust Indenture Act. An institutional trustee will act as
trustee under each guarantee for purposes of the Trust Indenture Act. Such
trustee under each guarantee shall be referred to throughout this prospectus as
the guarantee trustee. The terms of each guarantee will be as set forth in that
guarantee and those made part of that guarantee by the Trust Indenture Act. The
summary of the terms and provisions of the guarantees in this section does not
claim to be complete and is subject in all respects to the provisions of, and is
qualified in its entirety by reference to, the form of guarantee, which is filed
as an exhibit to the registration statement of which this prospectus forms a
part, and the Trust Indenture Act. Each guarantee will be held by the guarantee
trustee for the benefit of the holders of the trust preferred securities of the
Trust.
GENERAL
Under each guarantee, the Company will irrevocably and unconditionally
agree, to the extent set forth in the guarantee, to pay in full, to the holders
of the trust preferred securities, the guarantee payments (as defined below),
except to the extent paid by the Trust, as and when due, regardless of any
defense, right of set-off or counterclaim which the Trust may have or claim to
have.
The following guarantee payments with respect to trust preferred
securities, to the extent not paid by the Trust, will be subject to the
applicable guarantee (without duplication):
o any accrued and unpaid distributions which are required to be paid on the
trust preferred securities, to the extent the Trust has funds available
for such payments;
o the redemption price, including all accrued and unpaid distributions to
the date of payment, to the extent the Trust has funds available for such
payments with respect to any trust preferred securities called for
redemption by the Trust; and
o upon a voluntary or involuntary dissolution, winding-up or termination of
the Trust, other than in connection with the distribution of subordinated
debt securities to the holders of trust preferred securities or the
redemption of all of the trust preferred securities, the lesser of (a)
the aggregate of the liquidation amount and all accrued and unpaid
distributions on the trust preferred securities to the date of payment to
the extent the Trust has funds available for the payment and (b) the
amount of assets of the Trust remaining available for distribution to
holders of the trust preferred securities in liquidation of the Trust.
-18-
The redemption price and liquidation amount will be fixed at the time the
trust preferred securities are issued.
The Company's obligation to make a guarantee payment may be satisfied by
direct payment of the required amounts by the Company to the holders of trust
preferred securities or by causing the Trust to pay such amounts to the holders.
Each guarantee will not apply to any payment of distributions except to the
extent the Trust has funds available for the payments. If the Company does not
make interest payments on the subordinated debt securities purchased by the
Trust, the Trust will not pay distributions on the trust preferred securities
issued by it and will not have funds available for such a payment. The
guarantee, when taken together with the Company's obligations under the
subordinated debt securities, the subordinated indenture and the Declaration,
including its obligations to pay costs, expenses, debts and liabilities of the
Trust, other than with respect to the common securities and trust preferred
securities of the Trust, will provide a full and unconditional guarantee on a
subordinated basis by the Company of payments due on the trust preferred
securities.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Trust with respect to the common securities to
the same extent as the guarantees, except that upon an event of default under
the subordinated indenture, holders of trust preferred securities will have
priority over holders of common securities with respect to distributions and
payments on liquidation, redemption or otherwise.
MODIFICATION OF THE GUARANTEES; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of trust preferred securities (in which case no vote will be
required), each guarantee may be amended only with the prior approval of the
holders of not less than a majority in liquidation amount of the outstanding
trust preferred securities issued by the Trust. The manner of obtaining the
approval of holders of the trust preferred securities will be described in the
applicable prospectus supplement. All guarantees and agreements contained in a
guarantee will bind the successors, assigns, receivers, trustees and
representatives of the Company and will benefit the holders of the outstanding
trust preferred securities.
TERMINATION
Each guarantee will terminate as to the trust preferred securities issued
by the Trust:
o upon full payment of the redemption price of all trust preferred
securities of the Trust;
o upon distribution of the subordinated debt securities held by the Trust
to the holders of the trust preferred securities of the Trust; or
o upon full payment of the amounts payable under the Declaration upon
liquidation of the Trust.
Each guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any holder of trust preferred securities issued by
the Trust must restore payment of any sums paid under the trust preferred
securities or the guarantee.
EVENTS OF DEFAULT
An event of default under a guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations under the guarantee.
The holders of a majority in liquidation amount of the trust preferred
securities relating to a guarantee have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the guarantee
trustee in respect of the guarantee or to direct the exercise of any trust or
power conferred upon the guarantee trustee under such trust preferred
securities. If the guarantee trustee fails to enforce the guarantee, any holder
of trust preferred securities relating to the guarantee may institute a legal
proceeding directly against the Company to enforce the guarantee trustee's
rights under the guarantee, without first instituting a legal proceeding against
the Trust, the guarantee trustee or any other person or entity. However, if the
Company has failed to make a guarantee payment, a holder of trust preferred
securities may directly institute a proceeding against the
-19-
Company for enforcement of the guarantee for the payment. The Company waives any
right or remedy to require that any action be brought first against the Trust or
any other person or entity before proceeding directly against the Company.
STATUS OF THE GUARANTEES
Unless otherwise provided in the applicable prospectus supplement, the
guarantees with respect to the trust preferred securities of the Trust will
constitute unsecured obligations of the Company and will rank (i) subordinate
and junior in right of payment to certain other liabilities of the Company, as
described in the prospectus supplement and (ii) on a parity with any guarantee
now or hereafter entered into by the Company in respect of the Trust or any
other similar financing vehicle sponsored by the Company.
The terms of the trust preferred securities provide that each holder of
trust preferred securities by acceptance of the trust preferred securities
agrees to the subordination provisions and other terms of the guarantee as
described in the applicable prospectus supplement.
The guarantees will constitute a guarantee of payment and not of
collection, meaning that the guaranteed party may institute a legal proceeding
directly against the guarantor to enforce its rights under the guarantee without
instituting a legal proceeding against any other person or entity.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
Prior to the occurrence of a default with respect to a guarantee, the trust
preferred guarantee trustee will undertake to perform only the duties that are
specifically described in the guarantee and, after default, will exercise the
same degree of care as a prudent individual would exercise in the conduct of his
or her own affairs. Subject to such provisions, the guarantee trustee will be
under no obligation to exercise any of the powers given it by a guarantee at the
request of any holder of trust preferred securities, unless the guarantee
trustee is offered reasonable indemnity against the costs, expenses and
liabilities which it might incur in exercising the powers.
Information concerning the relationship between the guarantee trustee and
the Company will be set forth in the prospectus supplement relating to the trust
preferred securities.
GOVERNING LAW
The guarantees will be governed by and construed in accordance with the
laws of the State of New York.
EFFECT OF OBLIGATIONS UNDER THE TRUST PREFERRED SECURITIES
GUARANTEE AND THE SUBORDINATED DEBT SECURITIES
The sole purpose of the Trust is to issue the common securities and the
trust preferred securities evidencing undivided beneficial ownership interests
in the assets of the Trust and to invest the proceeds from the issuance and sale
in a series of subordinated debt securities issued by the Company.
As long as payments of interest and other payments are made when due on the
subordinated debt securities, the payments will be sufficient to cover
distributions and payments due on the trust securities because of the following
factors:
o the aggregate principal amount of subordinated debt securities will be
equal to the sum of the aggregate stated liquidation amount of the common
securities and the trust preferred securities;
o the interest rate and the interest and other payment dates on the
subordinated debt securities will match the distribution rate and
distribution and other payment dates for the trust preferred securities;
o the Company will pay, and the Trust will not be obligated to pay,
directly or indirectly, all costs, expenses, debt, and obligations of the
Trust, other than with respect to the common securities and the trust
preferred securities; and
o the Declaration provides that the trustees of the Trust will not take or
cause or permit the Trust to, among other things, engage in any activity
that is not consistent with the purposes of the Trust.
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Payments of distributions, to the extent funds are available, and other
payments due on the trust preferred securities, to the extent funds are
available, are guaranteed by the Company as and to the extent described under
"Description of the Trust Preferred Securities Guarantees". If the Company does
not make interest payments on the subordinated debt securities purchased by the
Trust, it is expected that the Trust will not have sufficient funds to pay
distributions on the trust preferred securities. The guarantee does not apply to
any payment of distributions unless and until the Trust has sufficient funds for
the payment of such distributions.
The guarantee covers the payment of distributions and other payments on the
trust preferred securities only if and to the extent that the Company has made a
payment of interest or principal on the subordinated debt securities held by the
Trust as its sole asset. The guarantee, when taken together with the Company's
obligations under the subordinated debt securities held by the Trust and the
subordinated indenture and its obligations under the Declaration, including its
obligations to pay costs, expenses, debts and liabilities of the Trust (other
than with respect to the common securities and trust preferred securities of the
Trust), provide a full and unconditional guarantee on a subordinated basis of
amounts due on the trust preferred securities.
If the Company fails to make interest or other payments on the subordinated
debt securities held by the Trust when due, taking account of any extension
period, the Declaration provides a mechanism whereby the holders of the trust
preferred securities may direct the institutional trustee to enforce its rights
under those subordinated debt securities. If the institutional trustee fails to
enforce its rights under those subordinated debt securities, a holder of trust
preferred securities may institute a legal proceeding against the Company to
enforce the institutional trustee's rights under the subordinated debt
securities without first instituting any legal proceeding against the
institutional trustee or any other person or entity. However, if an event of
default under the Declaration has occurred and is continuing and such event is
due to the failure of the Company to pay interest or principal on the
subordinated debt securities held by the Trust on the date that interest or
principal is otherwise payable (or in the case of redemption on the redemption
date), then a holder of trust preferred securities may institute a Direct Action
for payment on or after the respective due date.
In connection with a Direct Action, the Company will be subrogated to the
rights of such holder of trust preferred securities under the Declaration to the
extent of any payment made by the Company to such holder of trust preferred
securities in a Direct Action. The Company, under the guarantee, acknowledges
that the guarantee trustee will enforce the guarantee on behalf of the holders
of the trust preferred securities. If the Company fails to make payments under
the guarantee, the guarantee provides a mechanism whereby the holders of the
trust preferred securities may direct the guarantee trustee to enforce its
rights under the guarantee. Any holder of trust preferred securities may
institute a legal proceeding directly against the Company to enforce the
guarantee trustee's rights under the guarantee without first instituting a legal
proceeding against the Trust, the guarantee trustee, or any other person or
entity.
The Company and the Trust believe that the mechanisms and obligations
described above, taken together, provide a full and unconditional guarantee by
the Company on a subordinated basis of payments due on the trust preferred
securities. See "Description of the Trust Preferred Securities
Guarantees--General."
PLAN OF DISTRIBUTION
The securities offered under this prospectus may be sold in one or more of
the following ways:
o to underwriters for resale to the public or to institutional investors;
o directly to institutional investors; or
o through agents to the public or to institutional investors.
The related prospectus supplements will set forth the terms of the offering
of the securities including:
o the name or names of any underwriters or agents;
o the purchase price of such securities;
o the proceeds to Norfolk Southern and/or the Trust from such sale;
-21-
o any underwriting discounts, agency fees and other items constituting
underwriters' or agents' compensation;
o any initial public offering price;
o any discounts, concessions or commissions dealers receive from
underwriters; and
o any securities exchanges on which the securities may be listed.
If underwriters are used in the sale, the underwriters will acquire the
securities for their own account, and they may resell the securities, from time
to time, in one or more transactions, including negotiated transactions, either
at a fixed public offering price or at varying prices determined at the time of
sale. Underwriters may receive compensation from Norfolk Southern and/or the
Trust in the form of discounts or commissions, and to the extent they act as
agents, they may also receive commissions from the purchasers of securities.
Underwriters also may sell securities to or through dealers. Dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters, and to the extent they act as agents, commissions from the
purchasers of securities.
Unless otherwise set forth in a prospectus supplement, the obligations of
the underwriters to purchase any series of securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all of
such series of securities, if any are purchased.
Underwriters and agents may be entitled, under agreements entered into with
Norfolk Southern and/or the Trust, to be indemnified by Norfolk Southern and/or
the Trust against certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended (the"Securities Act") or to contribution with
respect to payments which the underwriters or agents may be required to make in
respect thereof. Underwriters and agents may be customers of, engage in
transactions with, or perform services for Norfolk Southern and/or the Trust and
their affiliates in the ordinary course of business.
Other than Norfolk Southern common stock which is listed on the NYSE, each
series of securities will be a new issue of securities and will have no
established trading market. Any common stock sold pursuant to a prospectus
supplement will be listed on the NYSE, subject to official notice of issuance.
Any underwriters to whom securities are sold by Norfolk Southern and/or the
Trust for public offering and sale may make a market in the securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. The securities, other than common stock, may
or may not be listed on a national securities exchange.
LEGAL OPINIONS
Joseph C. Dimino, General Counsel - Corporate for Norfolk Southern (or
another senior corporate counsel designated by the Company) will pass upon the
validity of the common stock, preferred stock, depositary shares and debt
securities for Norfolk Southern. Skadden, Arps, Slate, Meagher & Flom LLP, New
York will pass upon the validity of the trust preferred securities for the Trust
and upon certain United States federal income taxation matters for Norfolk
Southern and the Trust. The counsel named in the applicable prospectus
supplement will pass upon the validity of the securities for any underwriter.
Mr. Dimino, as General Counsel - Corporate for Norfolk Southern, participates in
various employee benefit and incentive plans, including stock option plans,
offered to employees of Norfolk Southern.
EXPERTS
KPMG LLP, independent certified public accountants, audited Norfolk
Southern Corporation's consolidated financial statements and related schedule as
of December 31, 2000 and 1999, and for each of the years in the three-year
period ended December 31, 2000, as indicated in their report. All of these
documents have been incorporated by reference into this prospectus and elsewhere
in the registration statement in reliance on the report of KPMG LLP and upon
their authority as experts in auditing and accounting. The consolidated
financial statements of Conrail Inc. as of December 31, 2000 and 1999, and for
each of the years in the two-year period ended December 31, 2000, appearing in
the Annual Report on Form 10-K of Norfolk Southern Corporation for
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the year ended December 31, 2000, have been incorporated by reference into this
prospectus and elsewhere in the registration statement in reliance on the report
of KPMG LLP and Ernst & Young LLP, both independent certified public
accountants, given on the authority of said firms, as experts in auditing and
accounting.
The consolidated statements of income, of stockholders' equity and of cash
flows of Conrail Inc. and subsidiaries for the year ended December 31, 1998
incorporated in this prospectus and elsewhere in the registration statement by
reference to the Annual Report on Form 10-K of Norfolk Southern Corporation for
the year ended December 31, 2000 which includes such financial statements of
Conrail Inc. in Exhibit 99, have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
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$200,000,000
[NORFOLK SOUTHERN LOGO]
NORFOLK SOUTHERN CORPORATION
6% SENIOR NOTES DUE 2008
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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.
BNY CAPITAL MARKETS, INC.
SUNTRUST ROBINSON HUMPHREY
APRIL 25, 2002
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