<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ X / Definitive Additional Materials
/ / Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Santa Fe Pacific Corporation
-----------------------------------------------
Name of Registrant as Specified In Its Charter
Union Pacific Corporation
-----------------------------------------------
(Namess or Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
/ / $500 per each party of the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.
/ X / Check box if any party of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and date of its
filing.
(1) Amount Previously Paid: $125 on October 13, 1994.
(2) Form, Schedule or Registration Statement No.: Schedule 14A
(3) Filing Party: Same as above
(4) Date Filed: October 13, 1994.
<PAGE> 2
SPECIAL MEETING OF STOCKHOLDERS
OF
SANTA FE PACIFIC CORPORATION
------------------------------------
SUPPLEMENT TO PROXY STATEMENT
OF
UNION PACIFIC CORPORATION
------------------------------------
SOLICITATION OF PROXIES
IN OPPOSITION TO THE PROPOSED MERGER OF
SANTA FE PACIFIC CORPORATION AND
BURLINGTON NORTHERN INC.
This Proxy Statement Supplement is furnished by Union Pacific Corporation,
a Utah corporation ("Union Pacific"), in connection with its solicitation of
proxies to be used at a special meeting of stockholders of Santa Fe Pacific
Corporation, a Delaware corporation ("Santa Fe"), and at any adjournments,
postponements or reschedulings thereof (the "Special Meeting"). Union Pacific is
soliciting proxies from stockholders of Santa Fe to vote against Santa Fe's
proposal to merge Santa Fe with and into Burlington Northern Inc., a Delaware
corporation ("BN") (such proposed merger, the "Santa Fe/BN Merger"). According
to the Burlington Northern Inc. and Santa Fe Pacific Corporation Joint Proxy
Statement (the "Santa Fe Joint Proxy Statement"), the Special Meeting is
scheduled to be held on Friday, November 18, 1994, at 3:00 p.m., Chicago time,
at the Hyatt Regency O'Hare, 9300 West Bryn Mawr Avenue, Rosemont, Illinois.
This Proxy Statement Supplement amends and modifies, and should be read in
conjunction with, Union Pacific's Proxy Statement, dated October 28, 1994 (the
"Union Pacific Proxy Statement"), which was first sent or given to stockholders
of Santa Fe on or about October 28, 1994. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings assigned to such
terms in the Union Pacific Proxy Statement.
The Revised Union Pacific Proposal described in this Proxy Statement
Supplement is conditioned, among other things, on termination of the Santa Fe/BN
merger agreement in accordance with its terms, the stockholders of Santa Fe not
having approved the Santa Fe/BN Merger and negotiation of a mutually
satisfactory merger agreement between Santa Fe and Union Pacific in accordance
with the terms of Santa Fe's existing merger agreement with BN.
<PAGE> 3
IMPORTANT
- --------------------------------- ------------------------------------
UNION PACIFIC WILL WITHDRAW THE REVISED UNION PACIFIC PROPOSAL
IF STOCKHOLDERS OF SANTA FE APPROVE THE SANTA FE/BN MERGER.
- -------------------------------------------------------------------------------
EVEN IF YOU HAVE ALREADY VOTED IN FAVOR OF THE SANTA FE/BN MERGER, YOU HAVE
EVERY RIGHT TO CHANGE YOUR VOTE. YOU MAY REVOKE YOUR PRIOR PROXY AND VOTE
AGAINST THE SANTA FE/BN MERGER BY SIGNING, DATING AND MAILING THE ENCLOSED GOLD
PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. NO POSTAGE IS NECESSARY IF YOUR
PROXY IS MAILED IN THE UNITED STATES.
PLEASE SIGN, DATE AND MAIL THE GOLD PROXY TODAY. YOUR VOTE IS IMPORTANT NO
MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
THIS PROXY STATEMENT SUPPLEMENT IS NEITHER AN OFFER TO SELL NOR A
SOLICITATION OF OFFERS TO BUY ANY SECURITIES WHICH MAY BE ISSUED IN ANY MERGER
OR SIMILAR BUSINESS COMBINATION INVOLVING UNION PACIFIC AND SANTA FE. THE
ISSUANCE OF SUCH SECURITIES WOULD HAVE TO BE REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND SUCH SECURITIES WOULD BE OFFERED ONLY BY MEANS OF A PROSPECTUS
COMPLYING WITH THE REQUIREMENTS OF SUCH ACT.
2
<PAGE> 4
THE REVISED UNION PACIFIC PROPOSAL AND
TENDER OFFER TO STOCKHOLDERS OF SANTA FE
On November 8, 1994, Union Pacific made a proposal to acquire Santa Fe in a
negotiated merger transaction (the "Revised Union Pacific Proposal"). Pursuant
to the Revised Union Pacific Proposal, Union Pacific would acquire Santa Fe in a
two-step transaction in which Union Pacific would purchase approximately 57% of
the Company's outstanding shares of common stock on a fully diluted basis in a
cash tender offer for $17.50 per share. Union Pacific would acquire the
remaining shares of Santa Fe common stock in a second-step merger in exchange
for Union Pacific common stock (the "Proposed Merger"). Based on the closing
price of Union Pacific's common stock on November 8, 1994 (the last trading day
prior to the public announcement of the Revised Union Pacific Proposal), the
consideration to be received in the second-step merger would have a value
equivalent to the tender offer price.
Under the Revised Union Pacific Proposal, Union Pacific has proposed to
place all shares of Santa Fe common stock acquired by Union Pacific (whether
pursuant to the first-step cash tender offer or the second-step merger) into a
voting trust (the "Voting Trust") that would be independent of Union Pacific.
Neither the cash tender offer nor the Proposed Merger would be conditioned upon
receipt of Interstate Commerce Commission ("ICC") approval (other than approval
of the Voting Trust -- see "ICC Matters; The Voting Trust"). The Revised Union
Pacific Proposal is subject, among other things, to termination of the
Burlington Northern/Santa Fe merger agreement in accordance with its terms,
negotiation of a mutually satisfactory merger agreement with Santa Fe in
accordance with the terms of Santa Fe's existing merger agreement with BN and
approval of the respective Boards of Directors of Santa Fe and Union Pacific. A
vote of stockholders of Santa Fe and Union Pacific is not required to consummate
the cash tender offer. Approval of Santa Fe stockholders (but not Union Pacific
stockholders) is required to consummate the second-step merger. The Santa Fe/BN
Merger is subject to approval of the ICC and the respective stockholders of
Burlington Northern and Santa Fe. The Revised Union Pacific Proposal would be a
taxable transaction for federal income tax purposes.
Union Pacific stands ready to enter into immediate negotiations with Santa
Fe concerning the Revised Union Pacific Proposal. In addition, Union Pacific has
advised Santa Fe that it is also prepared to negotiate Union Pacific's previous
proposal to negotiate a stock-for-stock merger, without a Voting Trust, as
described in the Union Pacific Proxy Statement and other solicitation materials
previously sent to Santa Fe stockholders. THE REVISED UNION PACIFIC PROPOSAL
CONSTITUTES AN INVITATION TO THE BOARD OF DIRECTORS OF SANTA FE TO ENTER INTO
MERGER NEGOTIATIONS WITH UNION PACIFIC. THE REVISED UNION PACIFIC PROPOSAL IS
SUBJECT TO CERTAIN MATERIAL CONDITIONS AS DESCRIBED HEREIN WHICH MAY AFFECT THE
ABILITY TO CONSUMMATE A TRANSACTION WITH SANTA FE, AND DOES NOT CONSTITUTE A
LEGALLY BINDING OBLIGATION ON THE PART OF UNION PACIFIC. Because of fluctuations
in the market value of Union Pacific common stock and BN common stock, there can
be no assurances as to the actual value that Santa Fe stockholders would receive
pursuant to the Proposed Merger or the Santa Fe/BN Merger.
On November 9, 1994, UP Acquisition Corporation, a Utah corporation and a
wholly owned subsidiary of Union Pacific (the "Purchaser"), commenced a cash
tender offer (the "Offer") to acquire 115,903,127 shares of Santa Fe common
stock at $17.50 net per share. The Offer, proration period and withdrawal rights
will expire at 12:00 midnight, New York City Time on Thursday, December 8, 1994,
unless the Offer is extended. A complete description of the terms and conditions
of the Offer and certain additional information
3
<PAGE> 5
relating to the Voting Trust is contained in the Offer to Purchase dated
November 9, 1994 (as it may be amended from time to time, the "Offer to
Purchase"). A copy of the Offer to Purchase may be obtained without charge from
Morrow & Co., Inc., by calling either of the telephone numbers set forth at the
end of this Proxy Statement Supplement.
THIS PROXY STATEMENT SUPPLEMENT IS NEITHER AN OFFER TO PURCHASE NOR A
SOLICITATION OF OFFERS TO SELL SHARES OF SANTA FE COMMON STOCK. ANY SUCH OFFER
IS MADE ONLY PURSUANT TO THE OFFER TO PURCHASE.
TENDERING SHARES OF SANTA FE COMMON STOCK WILL NOT CONSTITUTE THE GRANT OF
A PROXY TO VOTE IN CONNECTION WITH THE SANTA FE/BN MERGER. ACCORDINGLY, UNION
PACIFIC URGES SANTA FE STOCKHOLDERS TO SUBMIT A GOLD PROXY TO VOTE AGAINST THE
SANTA FE/BN MERGER, WHETHER OR NOT YOU TENDER YOUR SANTA FE SHARES PURSUANT TO
THE OFFER.
The Offer is conditioned on, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer a number of
Santa Fe shares which, when added to the Santa Fe shares beneficially owned by
the Purchaser and its affiliates, constitutes at least a majority of the Santa
Fe shares outstanding on a fully diluted basis, (2) Santa Fe having entered into
a definitive Merger Agreement with Union Pacific and the Purchaser to provide
for the acquisition of Santa Fe pursuant to the Offer and the Proposed Merger,
(3) the stockholders of Santa Fe not having approved the Santa Fe/BN Merger (the
"Stockholder Vote Condition"), (4) the Purchaser being satisfied that Section
203 of the Delaware General Corporation Law has been complied with or is invalid
or otherwise inapplicable to the Offer and the Proposed Merger, (5) the
Purchaser being satisfied that the Agreement and Plan of Merger providing for
the Santa Fe/BN Merger has been terminated in accordance with its terms and (6)
receipt of an informal written opinion in form and substance satisfactory to the
Purchaser from the Staff of the ICC, without the imposition of any conditions
unacceptable to the Purchaser, that the Voting Trust to be used in connection
with the Offer and the Proposed Merger is consistent with the policies of the
ICC against unauthorized acquisitions of control of a regulated carrier. The
Offer is also subject to other terms and conditions described in the Offer to
Purchase. The Offer is not subject to the ICC's approval of the Purchaser's
acquisition of control of Santa Fe (other than approval of the Voting
Trust -- see "ICC Matters; The Voting Trust"), a due diligence condition or
Union Pacific obtaining financing.
The Offer is subject to conditions which may or may not be satisfied.
Unless all of the conditions to the Offer are either satisfied or waived, there
can be no assurances that Union Pacific will purchase any shares of Santa Fe
common stock pursuant to the Offer.
The Purchaser is currently reviewing its options with respect to the Offer
and may consider, among other things, changes to the material terms of the
Offer. In addition, Union Pacific and the Purchaser intend to continue to seek
to negotiate with Santa Fe with respect to the acquisition of Santa Fe by Union
Pacific or the Purchaser. The Purchaser has reserved the right to amend the
Offer (including amending the number of shares to be purchased, the purchase
price and the proposed second-step merger consideration) upon entry into a
second-step merger agreement with Santa Fe or to negotiate a merger agreement
with Santa Fe not involving a tender offer pursuant to which the Purchaser would
terminate the Offer and the shares of Santa Fe common stock would, upon
consummation of such merger, be converted into cash, Union Pacific common stock
and/or securities in such amounts as are negotiated by Union Pacific and Santa
Fe. Accordingly, such
4
<PAGE> 6
negotiations could result in, among other things, amendment or termination of
the Offer and submission of a different acquisition proposal to Santa Fe's
stockholders for their approval.
The purpose of the Offer is to acquire a majority of the shares of Santa Fe
common stock as the first-step in a negotiated acquisition of the entire equity
interest in Santa Fe. Union Pacific is seeking to negotiate with Santa Fe a
definitive merger agreement pursuant to which Santa Fe would, as soon as
practicable following consummation of the Offer, consummate a merger or other
business combination with the Purchaser or another direct or indirect
wholly-owned subsidiary of Union Pacific.
THERE IS NO REQUIREMENT THAT SANTA FE STOCKHOLDERS WISHING TO ACCEPT THE
OFFER VOTE THEIR SHARES OF COMMON STOCK IN ANY SPECIFIC WAY AND THERE IS NO
REQUIREMENT THAT SANTA FE STOCKHOLDERS TENDER THEIR SHARES IN ORDER TO VOTE
AGAINST THE SANTA FE/BN MERGER. However, by voting AGAINST the Santa Fe/BN
Merger, stockholders will be voting to satisfy one of the conditions to the
Offer. Even if the Stockholder Vote Condition is satisfied, there can be no
assurance that the other conditions to the Offer will be satisfied and
accordingly there can be no assurance that any shares of Santa Fe common stock
will be purchased in the Offer.
ICC MATTERS; THE VOTING TRUST
Certain activities of subsidiaries of Santa Fe are regulated by the ICC.
Provisions of the Interstate Commerce Act require approval of, or the granting
of an exemption from approval by, the ICC for the acquisition of control of two
or more carriers subject to the jurisdiction of the ICC ("Carriers") by a person
that is not a Carrier and for the acquisition or control of a Carrier by a
person that is not a Carrier but that controls any number of Carriers. ICC
approval or exemption is required for, among other things, the Purchaser's
acquisition of control of Santa Fe. The Purchaser intends to deposit the shares
of Santa Fe common stock purchased pursuant to the Offer or the Proposed Merger
or otherwise in the Voting Trust in order to ensure that the Purchaser does not
acquire and directly or indirectly exercise control over Santa Fe prior to
obtaining necessary ICC approvals or exemptions. ICC approval is not a condition
to the Offer or the Proposed Merger. However, the Offer and the Proposed Merger
are conditioned upon issuance by the Staff of the ICC of an informal,
non-binding opinion, without the imposition of any conditions unacceptable to
the Purchaser, that the use of the Voting Trust is consistent with the policies
of the ICC against unauthorized acquisition of control of a regulated carrier.
Union Pacific and the Purchaser will promptly request the Staff of the ICC to
issue such an opinion. Under ICC regulations that have been in effect since
1979, the ICC Staff has the power to issue such opinions. Generally, the ICC
Staff has issued such opinions within one to two weeks of a request, although
there can be no assurance that Union Pacific and Purchaser will be able to
obtain an opinion this quickly. Union Pacific and Purchaser believe they will
obtain such opinion from the Staff of the ICC.
Recently, the ICC requested public comment with regard to certain issues
raised by a proposed voting trust agreement submitted by Illinois Central
Corporation, under which the stock of Illinois Central Railroad Company would
have been placed in trust and Kansas City Southern Industries, Inc., would have
been merged into Illinois Central Corporation. Union Pacific believes that the
Voting Trust Agreement does not raise issues comparable to those raised by the
Illinois Central/Kansas City Southern transaction. The ICC's concerns with
regard to that transaction focused on a proposal to move top Illinois Central
managers to Kansas City Southern during the pendency of the voting trust. No
such arrangement is being proposed with respect to
5
<PAGE> 7
the proposed acquisition. However, there can be no assurance that the ICC will
not seek changes in, or request public comment regarding, the Voting Trust
Agreement.
Also, it is possible that railroad competitors of Union Pacific, or others,
may argue that Union Pacific should not be permitted to use the voting trust
mechanism to acquire Santa Fe prior to final ICC approval of the acquisition of
control of Santa Fe. Union Pacific believes it is unlikely that such arguments
would prevail, but there can be no assurance in this regard, nor can there be
any assurance that if such arguments are made, it will not cause delay in
obtaining a favorable ICC Staff opinion regarding the Voting Trust Agreement.
Pursuant to the proposed terms of the Voting Trust, it is expected that
Southwest Bank of St. Louis (the "Trustee") would hold the shares of Santa Fe
common stock until (i) the receipt of ICC approval, (ii) the shares are sold to
a third party or otherwise disposed of or (iii) the Voting Trust is otherwise
terminated. The Voting Trust is expected to provide that the Trustee would have
sole power to vote the Santa Fe shares held in the Voting Trust, and would
contain certain other terms and conditions designed to ensure that neither the
Purchaser nor Union Pacific would control Santa Fe during the pendency of the
ICC proceedings. In addition, it is expected that the Voting Trust would provide
that the Purchaser or its successor in interest would be entitled to receive any
dividends paid by Santa Fe other than stock dividends.
RECEIPT OF ICC APPROVAL (OTHER THAN APPROVAL OF THE VOTING TRUST AS
DESCRIBED ABOVE) IS NOT A CONDITION TO CONSUMMATION OF THE OFFER OR THE PROPOSED
MERGER. IF THE ICC APPROVAL IS NOT OBTAINED OR THE ICC IMPOSES UNACCEPTABLE
CONDITIONS, THE PURCHASER WILL BE REQUIRED TO USE ITS BEST EFFORTS TO SELL OR
OTHERWISE DISPOSE OF THE SHARES OF SANTA FE COMMON STOCK DEPOSITED IN THE VOTING
TRUST AFTER THE ICC ORDER DENYING SUCH APPROVAL BECOMES FINAL OR AFTER UNION
PACIFIC DETERMINES NOT TO ASSUME CONTROL OF THE SANTA FE SHARES BECAUSE
UNACCEPTABLE CONDITIONS WOULD BE IMPOSED BY THE ICC. IN SUCH CASE, THE PURCHASER
WOULD BE ENTITLED TO ANY PROCEEDS OF SUCH SALE OR OTHER DISPOSITION.
CERTAIN LITIGATION CONCERNING
THE SANTA FE/BN MERGER -- RECENT DEVELOPMENTS
On October 26, 1994, Santa Fe and the director defendants filed an Answer
denying the allegations of the First Amended and Supplemental Complaint. On
November 2, 1994, BN moved to dismiss the First Amended and Supplemental
Complaint for failure to state a claim against BN upon which relief can be
granted.
ADDITIONAL INFORMATION REGARDING PARTICIPANTS
In addition to the persons identified in Schedule I to the Union Pacific
Proxy Statement, the following persons may be deemed to be participants on
behalf of Union Pacific in the solicitation of proxies from stockholders of
Santa Fe. The principal business address of each such person is Martin Tower,
Eighth and Eaton Avenues, Bethlehem, PA 18018. Such persons are: David A.
Heywood, General Tax Counsel -- Federal; Robert M. Knight, Jr., Assistant
Treasurer -- Banking and Cash Management; John B. Larsen, Assistant
Treasurer -- Corporate Finance and Development; Fred H. van Naerssen,
Director -- Accounting Practice and Planning; Joseph E. O'Connor, Jr.,
Director -- Planning; and Thomas O. Powell, Assistant Controller -- Planning and
Analysis. None of the foregoing persons own any shares of Santa Fe common stock,
except for Mr. Heywood who beneficially owns 48 shares.
6
<PAGE> 8
------------------------------------
PLEASE SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY TODAY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES. BY SIGNING AND MAILING THE ENCLOSED
GOLD PROXY, ANY PROXY PREVIOUSLY SIGNED BY YOU RELATING TO THE SUBJECT MATTER
HEREOF WILL BE AUTOMATICALLY REVOKED.
UNION PACIFIC CORPORATION
Dated: November 9, 1994
7
<PAGE> 9
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION
If your shares of Santa Fe common stock are held in the name of a bank or
broker, only your bank or broker can vote your shares of Santa Fe common stock
and only upon receipt of your specific instructions. Please instruct your bank
or broker to execute the GOLD proxy card today. If you have any questions or
require any assistance in voting your shares of Santa Fe common stock, please
call:
MORROW & CO., INC.
Call Toll Free: (800) 662-5200
909 Third Avenue
New York, New York 10022
In New York City, call: (212) 754-8000
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<PAGE> 10
[LOGO]
Union Pacific Corporation
CASH + VOTING TRUST = FAST TRACK DEAL
November 9, 1994
Dear Santa Fe Pacific Stockholder:
Union Pacific Corporation wants to acquire all shares of Santa Fe common
stock -- and we want to do it AS SOON AS POSSIBLE. We want you to have NO DELAYS
and NO RISKS in connection with approval of a Union Pacific/Santa Fe combination
by the Interstate Commerce Commission.*
So we've entirely revised our proposal to negotiate an acquisition of
Santa Fe. Here's what we've proposed to do:
/ / PURCHASE APPROXIMATELY 57% OF ALL SHARES OF SANTA FE COMMON
STOCK IN A CASH TENDER OFFER AT $17.50 PER SHARE. The cash
tender offer has already begun.
/ / ACQUIRE THE REMAINING SHARES OF SANTA FE COMMON STOCK IN A
SECOND-STEP MERGER IN EXCHANGE FOR SHARES OF UNION PACIFIC
COMMON STOCK. Based on Union Pacific's closing market price
on November 8 (the last trading day before our revised
proposal was publicly announced), the value of the
consideration in the second-step merger would be equivalent
to the tender offer price.
/ / SET UP A VOTING TRUST in which we would place ALL SHARES of
Santa Fe common stock acquired by Union Pacific -- whether
in the cash tender offer or second-step merger. THIS MEANS
YOU DO NOT HAVE TO WAIT FOR OR BEAR THE RISK OF ICC APPROVAL
IN ORDER TO RECEIVE PAYMENT FOR YOUR SANTA FE SHARES.*
/ / Enter into immediate merger negotiations with Santa Fe's
board of directors. Towards this end, we are sending Santa
Fe a proposed form of Merger Agreement.
- ---------------
* Union Pacific is requesting the Staff of the ICC to provide an informal,
non-binding opinion to the effect that the ICC approves the use of a Voting
Trust by Union Pacific without the imposition of any conditions unacceptable
to Union Pacific. Receipt of such opinion is a condition of Union Pacific's
revised proposal and of the cash tender offer. Union Pacific believes it will
obtain such opinion from the Staff of the ICC.
<PAGE> 11
Union Pacific's revised proposal and the cash tender offer are conditioned
on the Burlington Northern merger not being approved by Santa Fe stockholders
and on Santa Fe and Union Pacific entering into a negotiated Merger Agreement.
IF SANTA FE STOCKHOLDERS APPROVE THE BURLINGTON NORTHERN MERGER, UNION PACIFIC
WILL WITHDRAW ITS PROPOSAL AND TERMINATE THE CASH TENDER OFFER.
HERE'S HOW FAST IT COULD GO
The sooner your board of directors begins good faith negotiations with
Union Pacific, the sooner you could receive payment for your Santa Fe shares. In
order to move things along even more quickly, we've eliminated our due diligence
condition and our proposal is not subject to a financing condition. If Santa Fe
stockholders vote AGAINST the Burlington Northern merger and Santa Fe enters
into a Merger Agreement with Union Pacific:
/ / You could receive $17.50 per share in cash for
approximately 57% of your shares before the end of
next month pursuant to the terms and conditions of
Union Pacific's cash tender offer.
/ / You could receive the merger consideration for your
remaining shares just a few months later.
Remember, under the Burlington Northern merger, you -- as a Santa Fe
stockholder -- bear the entire risk of ICC approval, and even if ICC approval is
obtained you may have to wait from 1 1/2 to 2 1/2 years before you receive
anything for your shares from Burlington Northern.
The revised Union Pacific proposal would represent a premium based on
current market prices over the price of Santa Fe common stock.
<PAGE> 12
IT'S TIME TO NEGOTIATE
Robert D. Krebs, Santa Fe's Chairman, President and Chief Executive
Officer, has stated time and again:
"If [Union Pacific] makes a proposal at a fair price and with an
adequate provision for a voting trust that would substantially
eliminate the regulatory risk for [Santa Fe] shareholders, the Board
would consider that proposal in light of its fiduciary duties."
Union Pacific has now made just such a proposal. There should be no more
excuses. It's time to negotiate.
Send a message to the Santa Fe board of directors. By voting AGAINST the
Burlington Northern merger, you can TELL THE SANTA FE BOARD TO COME TO THE
NEGOTIATING TABLE NOW.
Time is short. The vote on the Burlington Northern merger is scheduled to
be held on November 18. We urge you to protect your interests by voting AGAINST
the Burlington Northern merger on the enclosed GOLD proxy card. Your vote is
important. Please vote today.
Thank you for your consideration and support.
Sincerely,
[insert signature art]
Dick Davidson
President, Union Pacific Corporation
Chairman and Chief Executive Officer
Union Pacific Railroad Company
- -----------------------------------IMPORTANT------------------------------------
1. Regardless of how many or how few shares you own, your vote is very
important.
2. We urge you NOT to sign the WHITE proxy sent to you by Santa Fe.
3. If any of your shares are held in the name of a bank, broker or other
nominee, please direct the party responsible for your account to vote
AGAINST the Burlington Northern merger.
4. For assistance in voting your shares or further information, please
contact the firm assisting us in the solicitation of proxies:
MORROW & CO., INC.
Call toll free 800-856-8309
In New York City, call: (212) 754-8000
- --------------------------------------------------------------------------------
<PAGE> 13
UNION PACIFIC'S PROXY STATEMENT DATED OCTOBER 28, 1994, WHICH PREVIOUSLY HAS
BEEN SENT TO SANTA FE STOCKHOLDERS, AS AMENDED AND SUPPLEMENTED BY THE PROXY
STATEMENT SUPPLEMENT DATED NOVEMBER 9, 1994 WHICH ACCOMPANIES THIS LETTER (THE
"PROXY STATEMENT SUPPLEMENT"), SETS FORTH ADDITIONAL INFORMATION CONCERNING
UNION PACIFIC, MATTERS CONCERNING THE INTERSTATE COMMERCE COMMISSION AND UNION
PACIFIC'S PROPOSAL. IN PARTICULAR, UNION PACIFIC'S REVISED PROPOSAL AS DESCRIBED
IN THIS LETTER IS DISCUSSED MORE FULLY IN THE PROXY STATEMENT SUPPLEMENT. UNION
PACIFIC'S REVISED PROPOSAL IS SUBJECT TO TERMINATION OF THE BURLINGTON
NORTHERN/SANTA FE MERGER AGREEMENT IN ACCORDANCE WITH ITS TERMS, NEGOTIATION OF
A MUTUALLY SATISFACTORY MERGER AGREEMENT WITH SANTA FE IN ACCORDANCE WITH THE
TERMS OF SANTA FE'S EXISTING MERGER AGREEMENT WITH BURLINGTON NORTHERN AND
APPROVAL OF THE RESPECTIVE BOARDS OF DIRECTORS OF SANTA FE AND UNION PACIFIC. A
VOTE OF STOCKHOLDERS OF SANTA FE AND UNION PACIFIC IS NOT REQUIRED IN ORDER TO
CONSUMMATE THE CASH TENDER OFFER. APPROVAL OF SANTA FE STOCKHOLDERS (BUT NOT
UNION PACIFIC STOCKHOLDERS) IS REQUIRED IN ORDER TO CONSUMMATE THE SECOND-STEP
MERGER. THE REVISED UNION PACIFIC PROPOSAL IS NOT SUBJECT TO APPROVAL OF THE
INTERSTATE COMMERCE COMMISSION (OTHER THAN AS REFERRED TO IN THE FOOTNOTE ON THE
FIRST PAGE OF THIS LETTER), A DUE DILIGENCE CONDITION OR FINANCING. THE
BURLINGTON NORTHERN/SANTA FE MERGER AGREEMENT IS SUBJECT TO APPROVAL OF THE
INTERSTATE COMMERCE COMMISSION AND THE RESPECTIVE STOCKHOLDERS OF BURLINGTON
NORTHERN AND SANTA FE. BECAUSE OF FLUCTUATIONS IN THE MARKET VALUE OF UNION
PACIFIC COMMON STOCK AND BURLINGTON NORTHERN COMMON STOCK, THERE CAN BE NO
ASSURANCES AS TO THE ACTUAL VALUE THAT SANTA FE STOCKHOLDERS WOULD RECEIVE
PURSUANT TO THE SECOND-STEP MERGER CONTEMPLATED BY THE REVISED UNION PACIFIC
PROPOSAL OR THE BURLINGTON NORTHERN/SANTA FE MERGER.
THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF OFFERS TO BUY ANY
SECURITIES WHICH MAY BE ISSUED IN ANY MERGER OR SIMILAR BUSINESS COMBINATION
INVOLVING UNION PACIFIC AND SANTA FE. THE ISSUANCE OF SUCH SECURITIES WOULD HAVE
TO BE REGISTERED UNDER THE SECURITIES ACT OF 1933 AND SUCH SECURITIES WOULD BE
OFFERED ONLY BY MEANS OF A PROSPECTUS COMPLYING WITH THE REQUIREMENTS OF SUCH
ACT.
