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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
/ X / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Santa Fe Pacific Corporation
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Name of Registrant as Specified In Its Charter
Union Pacific Corporation
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(Names 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.
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SPECIAL MEETING OF STOCKHOLDERS
OF
SANTA FE PACIFIC CORPORATION
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PROXY STATEMENT
OF
UNION PACIFIC CORPORATION
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SOLICITATION OF PROXIES
IN OPPOSITION TO THE PROPOSED MERGER OF
SANTA FE PACIFIC CORPORATION AND
BURLINGTON NORTHERN INC.
This Proxy Statement 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"). Pursuant to this Proxy Statement,
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"), Santa
Fe has fixed November 18, 1994 as the date of the Special Meeting and October
19, 1994 as the record date for determining those stockholders of Santa Fe who
will be entitled to vote at the Special Meeting (the "Record Date"). This Proxy
Statement and the enclosed proxy are first being sent or given to stockholders
of Santa Fe on or about October 28, 1994. The principal executive offices of
Santa Fe are located at 1700 East Golf Road, Schaumburg, Illinois 60173-5860.
The principal executive offices of Union Pacific are located at Martin Tower,
Eighth and Eaton Avenues, Bethlehem, Pennsylvania 18018.
On October 5, 1994, Union Pacific made a proposal to acquire Santa Fe in a
negotiated merger transaction (the "Union Pacific Proposal"), pursuant to which
based on then current market prices the stockholders of Santa Fe would have
received Union Pacific common stock representing a substantial premium to the
consideration then being offered in the Santa Fe/BN Merger. On October 11, 1994,
Union Pacific advised Santa Fe that it is prepared to receive information from
Santa Fe that might justify a higher price. On October 27, 1994, BN announced
that it had raised the price it proposed to pay in the Santa Fe/BN Merger, and
based on current market prices of Union Pacific common stock and BN common stock
as of October 26, 1994, the Union Pacific Proposal does not currently represent
a premium to the consideration currently being offered in the Santa Fe/BN
Merger. Union Pacific stands ready to enter into immediate negotiations with
Santa Fe concerning a superior alternative to the Santa Fe/BN Merger. THE UNION
PACIFIC PROPOSAL CONSTITUTES AN INVITATION TO THE BOARD OF DIRECTORS OF SANTA FE
TO ENTER INTO MERGER NEGOTIATIONS WITH UNION PACIFIC. THE UNION PACIFIC PROPOSAL
IS SUBJECT TO CERTAIN MATERIAL CONDITIONS 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 Union Pacific Proposal or the Santa Fe/BN Merger. See "Union
Pacific Proposal".
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IMPORTANT
- --------------------------------- --------------------------------------
UNION PACIFIC WILL WITHDRAW THE UNION PACIFIC PROPOSAL IF
STOCKHOLDERS OF SANTA FE APPROVE THE SANTA FE/BN MERGER.
- -------------------------------------------------------------------------------
REJECTION OF THE SANTA FE/BN MERGER WILL SEND AN IMPORTANT MESSAGE TO YOUR
BOARD THAT YOU WANT THEM TO NEGOTIATE WITH UNION PACIFIC IN AN EFFORT TO
POSSIBLY MAXIMIZE THE VALUE OF YOUR SHARES.
EVEN IF YOU HAVE ALREADY SENT A PROXY TO THE BOARD OF DIRECTORS OF SANTA
FE, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE. YOU MAY REVOKE THAT 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 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.
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SEND A MESSAGE TO THE SANTA FE BOARD
The Santa Fe Board of Directors has scheduled a Special Meeting of
Stockholders for November 18, 1994, and is trying to solicit votes to approve
the Santa Fe/BN Merger. According to the Santa Fe Joint Proxy Statement, it
could take almost 18 months to obtain regulatory approval from the Interstate
Commerce Commission ("ICC") and "there can be no assurance that the ICC will
issue a decision any sooner than the 31-month period permitted the ICC by law."
The Santa Fe/BN Merger cannot occur until ICC approval is obtained.
Union Pacific believes that there is no reason for the Santa Fe Board to
require Santa Fe stockholders to vote on the Santa Fe/BN Merger now, nor is
there any reason for Santa Fe stockholders to rush to judgment on that
transaction. Since the Santa Fe Board is insisting on proceeding with a
stockholder vote on November 18, 1994, Union Pacific believes that Santa Fe
stockholders can best protect their interests by voting AGAINST the merger with
BN. By voting AGAINST the Santa Fe/BN Merger, stockholders can send a strong
message to Santa Fe's directors that they should negotiate with Union Pacific in
accordance with the terms of Santa Fe's existing merger agreement with BN.
On October 27, 1994, BN announced that it had raised the price it proposed
to pay in the Santa Fe/BN Merger, and based on current market prices of Union
Pacific common stock and BN common stock as of October 26, 1994, the Union
Pacific Proposal does not currently represent a premium to the consideration
currently being offered in the Santa Fe/BN Merger. Union Pacific stands ready to
enter into immediate negotiations with Santa Fe concerning a superior
alternative to the Santa Fe/BN Merger.
In addition, based on the current dividend rates of Union Pacific and BN,
on a per share equivalent basis the Union Pacific Proposal would provide Santa
Fe stockholders with an indicated annual dividend of $.59 for each Santa Fe
share, as compared to only $.41 per share pursuant to the Santa Fe/BN Merger.
The indicated annual dividend rate is determined by multiplying (i) the current
annual dividend rate on shares of common stock of Union Pacific or BN, as the
case may be, by (ii) the applicable exchange ratio. There can be no assurance
that BN or Union Pacific will continue to pay dividends at rates currently in
effect or will pay any dividend in the future.
The Union Pacific Proposal, which is a stock-for-stock merger proposal, is
intended to be tax-free to stockholders of Santa Fe. If the combination of Union
Pacific and Santa Fe is structured differently, it will not necessarily be
tax-free to stockholders of Santa Fe.
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UNION PACIFIC PROPOSAL
On October 5, 1994, Mr. Drew Lewis, Chairman and Chief Executive Officer,
and Richard K. Davidson, President, of Union Pacific met with Mr. Robert D.
Krebs, Chairman, President and Chief Executive Officer of Santa Fe, and Robert
A. Helman, of the law firm of Mayer, Brown & Platt, counsel for Santa Fe. At the
end of the meeting, Mr. Lewis delivered the following letter to Mr. Krebs
describing the Union Pacific Proposal:
October 5, 1994
Mr. Robert D. Krebs
Chairman, President & CEO
Santa Fe Pacific Corporation
1700 E. Golf Road
Schaumburg, IL 60173
Dear Rob:
I would like to thank you for meeting with Dick and me earlier
today to discuss a possible combination of our two companies. We have
long admired Santa Fe and your excellent management and work force. As
we discussed, we at Union Pacific believe that combining the strengths
of Santa Fe and Union Pacific represents an extraordinary opportunity
for our two companies, our respective shareholders, customers and
employees, and the railroad industry.
I was disappointed by your unwillingness to consider our proposal.
As I mentioned, we view this transaction as a strategic imperative.
Accordingly, I am writing to submit the following proposal to combine
our companies. Because of the very significant benefits that it would
provide to your Company, your shareholders and other constituencies, we
ask that you and your Board of Directors give careful consideration to
our proposal.
Mr. Lewis' letter then set forth certain terms of the Union Pacific Proposal,
and discussed, among other things, Union Pacific's views of the benefits of a
possible combination of Union Pacific and Santa Fe. The letter concluded by
stating:
Our Board of Directors strongly supports the proposed transaction
and has authorized management to pursue this proposal with you. We are
prepared to immediately commence negotiation of a definitive merger
agreement containing mutually agreeable terms and conditions.
We have conducted an extensive analysis of Santa Fe based on
publicly available information. While our proposal is necessarily
subject to confirmation, through appropriate due diligence, that our
understanding of Santa Fe based on publicly available information is
accurate, we expect that such due diligence will confirm our view of
Santa Fe and its prospects. We recognize that you will need to conduct a
due diligence review of Union Pacific and its operations, and we are
ready to facilitate that process.
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Our transaction, like the proposed Burlington Northern merger, is
contingent upon ICC approval. Although this is a significant matter for
either transaction, we believe that, working together, we can present
strong arguments to the Commission as to the benefits of our transaction
to customers and the industry.
Our proposal also would be subject to termination of your merger
agreement with Burlington Northern, in accordance with the terms of that
agreement, approval of a mutually satisfactory merger agreement by our
respective Boards of Directors, and approval of our respective
shareholders.
Along with our financial advisor, CS First Boston Corporation, and
our legal advisor, Skadden, Arps, Slate, Meagher & Flom, we look forward
to meeting with you and your advisors to discuss our proposal and to
working to implement this transaction. We have the opportunity to build
the best railroad in the country and to provide significant immediate
and long-term benefits for your shareholders.
I am hopeful your Board will conclude that your shareholders should
not be denied the opportunity to consider this offer. We at Union
Pacific are determined to take every appropriate action to pursue this
transaction. In view of the importance of this matter, time is of the
essence and we await your earliest possible response.
Please call me as soon as possible so we can get together to
discuss this matter in detail.
Sincerely,
/s/ Drew Lewis
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On October 6, 1994, Mr. Krebs delivered the following letter to Mr. Lewis:
October 6, 1994
Mr. Drew Lewis
Chairman and Chief Executive Officer
Union Pacific Corporation
Martin Tower
Eighth and Eaton Avenues
Bethlehem, Pennsylvania 18018
Dear Mr. Lewis:
The Board of Directors of Santa Fe Pacific Corporation ("SFP") has
authorized me to reject, on behalf of SFP, the proposal of Union Pacific
Corporation ("UP") dated October 5, 1994, to acquire SFP. You stated at
our meeting yesterday that UP might be willing to offer more . . . and
would consider using a voting trust for UP's proposed transaction. These
statements are inconsistent with UP's proposal and its press release.
If UP makes a proposal at a fair price and with an adequate
provision for a voting trust that would substantially eliminate the
regulatory risk for SFP shareholders, the Board would consider that
proposal in light of its fiduciary duties.
Sincerely,
/s/ Robert D. Krebs
The use of a voting trust would permit stockholders to receive
consideration in a transaction prior to receiving ICC approval, which, as
discussed below, involves a lengthy review process. If a voting trust is not
used in a transaction, ICC approval must be obtained prior to consummating a
transaction and prior to stockholders receiving any consideration. At the
present time, Union Pacific does not intend to modify the Union Pacific Proposal
to include the use of a voting trust, although no final determination has been
made.
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On October 11, 1994, Mr. Lewis sent a letter to Mr. Krebs expressing
disappointment with Santa Fe's failure to give careful consideration to the
Union Pacific Proposal or to meet with Union Pacific to discuss a transaction,
and stating, among other things, that Union Pacific would be prepared to receive
information from Santa Fe that might justify a greater consideration.
On October 11, 1994, Mr. Krebs sent the following letter to Mr. Lewis:
October 11, 1994
Mr. Drew Lewis
Chairman and Chief Executive Officer
Union Pacific Corporation
Martin Tower
Eighth and Eaton Avenues
Bethlehem, Pennsylvania 18018
Dear Mr. Lewis:
Your October 11, 1994 letter has been reviewed by the Santa Fe
Pacific board. The board has concluded that your October 11 letter
really adds nothing to your October 5 letter. However, the board has
authorized me to ask you to provide us promptly with Union Pacific's
"analysis of ICC matters," as referenced in your letter. Unless and
until we receive something to change the position set forth in my
October 6, 1994 letter to you, that position still stands.
Sincerely,
/s/ ROBERT D. KREBS
Chairman, President and
Chief Executive Officer
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On October 12, 1994, Mr. Lewis sent the following letter to Mr. Krebs:
October 12, 1994
Mr. Robert D. Krebs
Chairman, President and CEO
Santa Fe Pacific Corporation
1700 East Golf Road
Schaumburg, IL 60173
Dear Rob:
We are encouraged by your October 11 response indicating a
willingness to consider our analysis of regulatory matters relating to
our proposed transaction. We will provide materials and would welcome
the opportunity, in accordance with your existing merger agreement, to
sit down with you and your advisors to address your concerns.
We will be in contact with you shortly to arrange the delivery of
materials.
Sincerely,
/s/ Drew Lewis
cc: Board of Directors
Santa Fe Pacific Corporation
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ICC MATTERS
Both the Santa Fe/BN Merger and a combination of Santa Fe and Union Pacific
would require approval of the ICC. ICC approval is a long and complex process
which can take two years or longer. Union Pacific believes that one cannot
predict what the ultimate outcome will be and, because one cannot predict such
outcome, the issue of ICC approval presents a significant risk to consummating
the Union Pacific Proposal. Under the Interstate Commerce Act, the ICC is
required to approve a merger between railroads, such as Santa Fe and Union
Pacific, if it finds that the transaction is consistent with the public
interest. In making that determination, the ICC must consider at least the
following factors: (i) the effect of the proposed transaction on the adequacy of
transportation to the public; (ii) the effect on the public interest of
including, or failing to include, other rail carriers in the area involved in
the proposed transaction; (iii) the total fixed charges that result from the
proposed transaction; (iv) the interest of carrier employees affected by the
proposed transaction; and (v) whether the proposed transaction would have an
adverse effect on competition among rail carriers in the affected region.
Three of these factors are, in Union Pacific's view, unlikely to affect
whether a Union Pacific/Santa Fe merger is approved by the ICC. As to factor
(ii) -- inclusion of other railroads -- the ICC disfavors this remedy, it has
rarely been requested, and Union Pacific believes it is unlikely to be requested
by any railroad in a Union Pacific/Santa Fe proceeding. As to factor
(iii) -- effect on fixed charges -- the transaction presently proposed, a
stock-for-stock merger, would have no effect on total fixed charges, and, in any
case, the capital structures of Union Pacific and Santa Fe are sufficiently
strong that this factor is unlikely, in Union Pacific's view, to be given any
weight by the ICC in deciding whether to approve a Union Pacific/Santa Fe
merger. As to factor (iv) -- the interest of affected carrier employees -- the
ICC has adopted a standard set of labor protective conditions which it imposes
in rail merger and control transactions, and Union Pacific expects that those
conditions would be imposed upon a Union Pacific/Santa Fe merger and that this
would not affect approval of the transaction.
The remaining two factors -- factor (i), effect on the adequacy of
transportation, and factor (v), effect on rail competition -- are reflected in
the public interest balancing test that the ICC applies in reviewing railroad
mergers like the proposed Union Pacific and Santa Fe combination. On the one
hand, the ICC considers the public benefits of the transaction in terms of
better service to shippers, efficiencies, cost savings and the like. On the
other hand, the ICC considers any public harms from the transaction. The
principal harm of concern to the ICC, and the principal potential obstacle to
approval of a Union Pacific/Santa Fe merger, is reduction in competition. In
applying the public interest balancing test, the ICC is guided by Congress'
intent to encourage mergers, consolidations, and joint use of facilities that
tend to rationalize and improve the Nation's rail system.
The ICC has the authority to approve a merger subject to conditions -- such
as grants of trackage rights to other railroads -- that will ameliorate harms
that otherwise would result. Also, the ICC favors private settlements aimed at
resolving claims of competitive harm through the imposition of agreed-upon
conditions. If a merger, as conditioned, is in the public interest, it will be
approved.
As described in the following paragraph, Union Pacific will seek to present
to the ICC its case that the merger of Union Pacific and Santa Fe satisfies the
public interest balancing test. First, Union Pacific will seek to show that a
Union Pacific/Santa Fe merger has significant public benefits. Second, Union
Pacific will seek to show that a Union Pacific/Santa Fe merger, especially with
competition-enhancing conditions that Union Pacific is prepared to agree to in
advance in favor of Southern Pacific, BN or other railroads, will have no
significant adverse effect on rail competition, and indeed will strengthen such
competition.
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Union Pacific recently provided the Santa Fe Board with a report
summarizing the key elements of the factual case that would be included in Union
Pacific's application to the ICC for approval of a combination with Santa Fe.
The report describes the substantial rail service improvements and other
benefits that Union Pacific believes would result from a Union Pacific/Santa Fe
combination, including new single-line service, other significant service
benefits, and cost savings and efficiencies. The report also discusses the
possible conditions, such as the right of other railroads to provide competitive
services over the consolidated system's lines and the sale or lease of lines to
other railroads, that Union Pacific would be prepared to grant to other
railroads in order to address competitive issues relating to a combination with
Santa Fe.
With regard to the public benefits of a Union Pacific/Santa Fe merger, the
report indicates that the merger would create substantial new single-line
service, including for traffic moving across the Southern Corridor between
California and points in Texas, Louisiana and Arkansas, for Union Pacific grain
producers moving product to Santa Fe feeder markets in California, Texas and
Arizona, for Santa Fe grain producers moving product to export markets, for
Union Pacific shippers in the Pacific Northwest and the Intermountain region
moving commodities to points on the Santa Fe, and for Santa Fe shippers moving
commodities to Gulf ports and Mexico. The report further indicates that a Union
Pacific/Santa Fe merger would yield new service improvements, including greater
service frequency and reliability and reduced transit time for intermodal,
automotive, manifest and bulk commodity traffic and improved utilization of
freight cars, and would attract significant volumes of traffic from the highway.
Finally, the report indicates that a Union Pacific/Santa Fe merger will generate
major savings and efficiencies, including capital savings, savings from using
shorter routes, savings from consolidating facilities and eliminating overheads,
efficiencies from using the best technologies and systems of each railroad on
the combined system, and savings from more efficient use of equipment.
With regard to competition, the report indicates that in the two markets
where Union Pacific/Santa Fe would have a combined position that Union Pacific
believes would arguably raise competitive concerns -- the Kansas/Oklahoma grain
market and the market for the handling of service-sensitive traffic between
California and the Midwest -- Union Pacific is prepared to grant conditions to
other railroads that will address those competitive concerns. Such conditions,
the report states, could include, as examples, a sale or lease of Union
Pacific's former Oklahoma, Kansas and Texas Railroad line through Kansas and
Oklahoma to Texas, and a grant of trackage rights or other conditions that would
significantly strengthen Southern Pacific's already competitive
California-Midwest routes.
Union Pacific believes that, in the context of a negotiated merger
transaction with Santa Fe and given Union Pacific's willingness to grant
appropriate conditions to other railroads, it will be able to make a credible
case for ICC approval.
Union Pacific recently retained a panel of experts on ICC and
transportation matters and asked them to review the case for a possible Union
Pacific/Santa Fe combination. In reaching their conclusion, these experts
reviewed the report Union Pacific prepared and provided to the Santa Fe Board.
Based on their review of this report, including the benefits and
competition-preserving conditions described therein as summarized above,
discussions among members of the panel and their own analysis and experience in
this area, the panelists reached the following conclusions:
The three ICC experts on the panel concluded:
- Union Pacific has outlined a strong case for ICC approval of a
combination with Santa Fe that warrants favorable consideration by the
ICC.
- A Union Pacific/Santa Fe combination should have good prospects of
obtaining ICC approval.
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In reaching these conclusions, the ICC experts stressed, among other
things, Union Pacific's willingness to grant competition-preserving conditions
and the unwillingness of the applicants in the Santa Fe/Southern Pacific merger
case to do so; the significant benefits of a Union Pacific/Santa Fe merger,
including its potential to alleviate capacity constraints on both railroads and
achieve new levels of service quality; and the importance of such a merger in
stimulating trade with Mexico and agricultural exports.
The federal transportation policy expert on the panel concluded:
- The Department of Transportation is unlikely to oppose, and may well
support, a Union Pacific/ Santa Fe combination.
In reaching this conclusion, the federal transportation policy expert
stressed that the Union Pacific/Santa Fe proposal is in concert with the policy
of the Department of Transportation to develop a more effective intermodal
transportation system for the United States, and with the Department's policy of
increasing the capacity, efficiency and safety of our national highway system.
The expert on logistics and shipper needs concluded:
- A Union Pacific/Santa Fe combination would provide major benefits for the
shipping public as well as U.S. industry in general. A combined Union
Pacific/Santa Fe will become more cost and service competitive in their
markets to the benefit of rail industry customers.
In reaching this conclusion, the expert on logistics and shipper needs
stressed that a Union Pacific/Santa Fe merger will address shipper needs in the
areas of service quality, management of information, reduction in transportation
cost, productive use of transportation assets, reduction of risk and
simplification of supplier relationships.
The panel's conclusions also noted that ICC approval is a long and complex
process which can take two years or longer, and that at this stage, one cannot
predict with certainty the outcome of ICC review of either a Union Pacific or a
BN combination with Santa Fe.
The panel of experts consists of Malcolm M.B. Sterrett, an attorney with
extensive rail transportation experience and a former ICC Commissioner; John F.
DePodesta, an attorney who has represented numerous rail carriers and public
bodies in proceedings before the ICC and a former General Counsel of
Consolidated Rail Corporation; C. John Langley Jr., Ph.D., John H. "Red" Dove
Distinguished Professor of Logistics and Transportation, University of
Tennessee; Walter B. McCormick, Jr., Partner, Bryan Cave, Washington, D.C., and
former General Counsel of the U.S. Department of Transportation; and Robert N.
Kharasch, a Washington, D.C. lawyer for more than 40 years who specialized in
transportation law and who was coordinating counsel for railroad opponents to
the unsuccessful Santa Fe/Southern Pacific merger. No member of the panel has
previously represented Union Pacific before the ICC or on any other matter,
except that Dr. C. John Langley, Jr. has in the past done limited consulting for
Union Pacific.
IF YOU WOULD LIKE COPIES OF THE CONCLUSIONS AND REPORTS OF THE PANEL OF
EXPERTS, PLEASE CONTACT MORROW & CO., INC., AT (800) 856-8309 (TOLL-FREE), OR
(212) 754-8000 IF IN NEW YORK CITY, AND THEY WILL BE FURNISHED TO YOU PROMPTLY.
COPIES OF SUCH EXPERTS' MATERIALS CAN BE INSPECTED AND COPIED AT THE PUBLIC
REFERENCE FACILITIES MAINTAINED BY THE SECURITIES AND EXCHANGE COMMISSION (THE
"SEC") AT ROOM 1024, JUDICIARY PLAZA, 450 FIFTH STREET, N.W., WASHINGTON, D.C.
20549, AND AT THE SEC'S REGIONAL OFFICES IN NEW YORK (7 WORLD TRADE CENTER, 13TH
FLOOR, NEW YORK, NEW YORK 10048) AND IN CHICAGO (NORTHWESTERN ATRIUM CENTER,
SUITE 1400, 500 WEST MADISON STREET, CHICAGO, ILLINOIS 60661). COPIES OF THE
CONCLUSIONS AND REPORTS OF THE PANEL OF EXPERTS CAN BE OBTAINED AT PRESCRIBED
RATES BY WRITING TO THE SEC, PUBLIC REFERENCE SECTION, JUDICIARY PLAZA, 450
FIFTH STREET, N.W., WASHINGTON, D.C. 20549.
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SANTA FE/BN MERGER PROPOSAL
Santa Fe has distributed the Santa Fe Joint Proxy Statement to Santa Fe
stockholders describing the terms of the Santa Fe/BN Merger, as well as other
related matters. A summary description of the Santa Fe/BN Merger based on
publicly available information appears below under "Summary of the Santa Fe/BN
Merger".
Union Pacific is soliciting proxies from stockholders of Santa Fe in
opposition to the Santa Fe/BN Merger. Union Pacific urges all stockholders of
Santa Fe to vote AGAINST the Santa Fe/BN Merger.
SUMMARY OF THE SANTA FE/BN MERGER
The Santa Fe/BN Merger provides for the merger of Santa Fe with and into
BN. Under the terms of the Santa Fe/BN Merger as originally proposed, each
outstanding share of Santa Fe common stock (subject to certain exceptions) would
have been converted into 0.27 of a share of common stock of BN, valued at $13.50
per share of Santa Fe common stock, based upon the closing price of BN common
stock on October 27, 1994. On October 27, 1994, BN announced that it had
increased the exchange ratio in the Santa Fe/BN Merger to 0.34 of a share of
common stock of BN, valued at $17.00 per share of Santa Fe common stock, based
upon the closing price of BN common stock on October 27, 1994. According to the
Santa Fe Joint Proxy Statement, the Santa Fe/BN Merger is intended to be
tax-free to stockholders of Santa Fe.
The obligation of the parties to effect the Santa Fe/BN Merger is subject
to certain conditions, including, among others, approval by stockholders of
Santa Fe and by stockholders of BN and certain regulatory approvals. One of the
required approvals is approval of the Interstate Commerce Commission. The Santa
Fe/BN Merger must be approved by the holders of a majority of the outstanding
shares of Santa Fe common stock and the holders of a majority of the outstanding
shares of BN common stock. According to the Santa Fe Joint Proxy Statement,
Santa Fe has fixed November 18, 1994 as the date of the Special Meeting and
October 19, 1994 as the Record Date for determining those stockholders of Santa
Fe who will be entitled to vote at the Special Meeting.
OTHER INFORMATION
Approval of the Santa Fe/BN Merger requires the affirmative vote of the
holders of a majority of all outstanding shares of Santa Fe common stock. All
outstanding shares of Santa Fe common stock as of the close of business on the
Record Date will be entitled to vote at the Special Meeting. Each share of Santa
Fe common stock is entitled to one vote. According to the Santa Fe Joint Proxy
Statement, there were outstanding 186,996,400 shares of Santa Fe common stock as
of October 10, 1994. As of the date hereof, Union Pacific beneficially owns 200
shares of Santa Fe common stock. Shares of Santa Fe common stock not voted
(including broker non-votes) and shares of Santa Fe common stock voted to
"abstain" from such vote will have the same effect as a vote "against" the Santa
Fe/BN Merger.
The accompanying GOLD proxy will be voted in accordance with the
stockholder's instructions on such GOLD proxy. Stockholders may vote against the
Santa Fe/BN Merger by marking the proper box on the GOLD proxy. If no
instructions are given, the GOLD proxy will be voted AGAINST the Santa Fe/BN
Merger.
UNION PACIFIC STRONGLY RECOMMENDS A VOTE AGAINST THE SANTA FE/BN MERGER.
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VOTING YOUR SHARES
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, WE URGE YOU TO VOTE
AGAINST THE SANTA FE/BN MERGER ON THE ENCLOSED GOLD PROXY AND IMMEDIATELY MAIL
IT IN THE ENCLOSED ENVELOPE. YOU MAY DO THIS EVEN IF YOU HAVE ALREADY SENT IN A
DIFFERENT PROXY SOLICITED BY SANTA FE'S BOARD OF DIRECTORS. IT IS THE LATEST
DATED PROXY THAT COUNTS. EXECUTION AND DELIVERY OF A PROXY BY A RECORD HOLDER OF
SHARES OF SANTA FE COMMON STOCK WILL BE PRESUMED TO BE A PROXY WITH RESPECT TO
ALL SHARES OF SANTA FE COMMON STOCK HELD BY SUCH RECORD HOLDER UNLESS THE PROXY
SPECIFIES OTHERWISE.
YOU MAY REVOKE ANY PROXY YOU SUBMIT (WHETHER THE WHITE PROXY SOLICITED BY
SANTA FE OR THE GOLD PROXY SOLICITED BY UNION PACIFIC) AT ANY TIME PRIOR TO ITS
EXERCISE BY ATTENDING THE SPECIAL MEETING AND VOTING IN PERSON, BY SUBMITTING A
DULY EXECUTED LATER DATED PROXY OR BY SUBMITTING A WRITTEN NOTICE OF REVOCATION.
UNLESS REVOKED IN THE MANNER SET FORTH ABOVE, DULY EXECUTED PROXIES IN THE FORM
ENCLOSED WILL BE VOTED AT THE SPECIAL MEETING ON THE PROPOSED SANTA FE/BN MERGER
IN ACCORDANCE WITH YOUR INSTRUCTIONS. IN THE ABSENCE OF SUCH INSTRUCTIONS, SUCH
PROXIES WILL BE VOTED AGAINST THE SANTA FE/BN MERGER. IF ANY OTHER MATTERS ARE
PROPERLY BROUGHT BEFORE THE SPECIAL MEETING, SUCH PROXIES WILL BE VOTED ON SUCH
MATTERS AS UNION PACIFIC, IN ITS SOLE DISCRETION, MAY DETERMINE.
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN THE GOLD PROXY TODAY.
IF YOU HAVE ALREADY SENT A PROXY TO THE BOARD OF DIRECTORS OF SANTA FE, YOU
MAY REVOKE THAT PROXY AND VOTE AGAINST THE SANTA FE/BN MERGER BY SIGNING, DATING
AND MAILING THE ENCLOSED GOLD PROXY.
If you have any questions about the voting of shares of Santa Fe common
stock, please call:
MORROW & CO., INC.
Call Toll Free: (800) 856-8309
In New York City, call: (212) 754-8000
13
<PAGE> 15
CERTAIN LITIGATION CONCERNING
THE SANTA FE/BN MERGER
On October 6, 1994, Union Pacific filed suit in the Court of Chancery in
Delaware against Santa Fe, BN and the members of the Board of Directors of Santa
Fe seeking, among other things, a declaratory judgment that the Merger Agreement
between Santa Fe and BN is terminable by Santa Fe in order to allow Santa Fe to
accept Union Pacific's merger proposal, and an injunction requiring Santa Fe to
negotiate with Union Pacific regarding the Union Pacific Proposal. Union Pacific
is also seeking a declaratory judgment that Union Pacific has not tortiously
interfered with the contractual relations of Santa Fe and BN. On October 7,
1994, Union Pacific moved for expedited discovery on the ground that expedition
is essential to permit Union Pacific to obtain timely relief against the
continuing breaches of fiduciary duty by the Board of Directors of Santa Fe. As
of October 21, 1994, the defendants had not yet filed an answer.
On June 30, 1994, four suits were filed in the Court of Chancery in
Delaware by stockholders of Santa Fe against Santa Fe, BN and the members of the
Board of Directors of Santa Fe. Each of these suits was filed as a class action
on behalf of all stockholders of Santa Fe except the defendants and their
affiliates, and alleged, among other things, that the defendants had breached
their fiduciary duties to the plaintiffs by agreeing to sell Santa Fe's railroad
assets to BN for grossly inadequate consideration. On October 6, 1994, an
amended complaint was filed in these actions alleging in addition that the
defendants had breached their fiduciary duties by failing to fully inform
themselves with regard to the Union Pacific Proposal.
On October 6 and 7, 1994, eight additional suits were filed in the Court of
Chancery in Delaware by stockholders of Santa Fe against Santa Fe, BN and the
members of the Board of Directors of Santa Fe. Each of these suits was filed as
a class action on behalf of all stockholders of Santa Fe except the defendants
and their affiliates, and alleged, among other things, that the defendants had
breached their fiduciary duties to the plaintiffs by failing to negotiate with
Union Pacific regarding the Union Pacific Proposal.
On October 14, 1994, the Santa Fe stockholder-plaintiffs in the twelve
suits previously filed in the Delaware Court of Chancery filed a Consolidated
and Amended Complaint against Santa Fe, the members of its Board of Directors
(the "director defendants") and BN, styled In re Santa Fe Pacific Shareholder
Litigation, Del. Ch., Cons. C.A. No. 13567 (the "Consolidated Shareholder
Action"). The Consolidated Shareholder Action, which was filed as a class action
on behalf of all stockholders of Santa Fe as of June 30, 1994 (except for the
defendants and their affiliates) who are or will be threatened with injury
arising from the defendants' actions, alleged, among other things, that (i) the
director defendants breached their fiduciary duties of care and loyalty by
failing to inform themselves and explore adequately all alternatives available
to Santa Fe stockholders (including the Union Pacific Proposal), by approving
and recommending the Santa Fe/BN Merger, and by approving and enforcing the
Merger Agreement; (ii) the director defendants breached their fiduciary duties
of disclosure by failing to completely disclose all material information in the
Santa Fe Joint Proxy Statement; and (iii) BN aided and abetted such breaches of
fiduciary duty. The Consolidated Shareholder Action, among other things, seeks
preliminary and permanent injunctive relief against the consummation of the
Santa Fe/BN Merger, a court order requiring the director defendants to explore
alternatives with, provide information to and negotiate in good faith with any
bona fide bidder (including Union Pacific), a court order decreeing that the
Merger Agreement is terminable by Santa Fe in response to the Union Pacific
Proposal, and invalid under Delaware law, and joint and several damages against
the defendants as a result of their conduct.
14
<PAGE> 16
On October 18, 1994, the Delaware Court of Chancery denied Union Pacific's
and the Santa Fe stockholder-plaintiffs' motions for expedited discovery. The
Court of Chancery, among other things, held that because the Santa Fe/BN Merger,
if approved by Santa Fe stockholders, could not be consummated for at least
eighteen months, the Court would have sufficient time to evaluate Union
Pacific's and the Santa Fe stockholder-plaintiffs' claims and, if necessary, set
aside the Santa Fe/BN Merger before any steps are taken to consummate it.
On October 19, 1994, Union Pacific filed its First Amended and Supplemental
Complaint, and was joined in that action as plaintiff by James A. Shattuck, an
officer of Union Pacific Railroad Company, a subsidiary of Union Pacific, who
also is a stockholder of Santa Fe. The First Amended and Supplemental Complaint
is styled Union Pacific Corporation and James A. Shattuck v. Santa Fe Pacific
Corporation, et. al., C.A. No. 13778. In addition to the claims stated and
relief sought in Union Pacific's original complaint, the First Amended and
Supplemental Complaint alleged, among other things, that Santa Fe and the
director defendants have breached their fiduciary duties of candor by joining BN
in a wrongful campaign to mislead Santa Fe's stockholders (via press releases
and the Santa Fe Joint Proxy Statement) into believing, among other things, that
(i) Santa Fe cannot lawfully consider the Union Pacific Proposal; (ii) the Union
Pacific Proposal is illusory and made solely for the purpose of preventing a
merger of Santa Fe and Burlington Northern; and (iii) a merger of Union Pacific
and Santa Fe cannot lawfully occur.
SOLICITATION OF PROXIES
Proxies will be solicited by mail, telephone, telefax and in person. Union
Pacific has retained Morrow & Co., Inc. ("Morrow") for solicitation and advisory
services in connection with solicitations relating to the Special Meeting, for
which Morrow is to receive an initial proxy advisory retainer fee of $75,000 and
an additional fee of $500,000 in connection with the solicitation of proxies for
the Special Meeting. Union Pacific has also agreed to reimburse Morrow for its
reasonable out-of-pocket expenses and indemnify Morrow against certain
liabilities and expenses, including reasonable legal fees and related charges.
Morrow will solicit proxies for the Special Meeting from individuals, brokers,
banks, bank nominees and other institutional holders. Directors, officers and
employees of Union Pacific may assist in the solicitation of proxies without any
additional remuneration. The entire expense of soliciting proxies for the
Special Meeting by or on behalf of Union Pacific is being borne by Union
Pacific.
CS First Boston Corporation ("CS First Boston") is acting as financial
advisor to Union Pacific in connection with its effort to acquire Santa Fe.
Union Pacific has agreed to pay CS First Boston for its services an initial
financial advisory fee of $500,000, an additional financial advisory fee of $2
million (the "Additional Advisory Fee"), $1 million of which was paid on October
17, 1994 and the remaining $1 million of which will become payable on December
31, 1994, an ongoing quarterly advisory fee of $125,000 payable during the term
of the engagement ("Quarterly Advisory Fees"), with the first payment payable on
March 31, 1995, and a transaction fee payable in connection with Union Pacific's
proposed acquisition of Santa Fe, determined based on the size of such
transaction, but in an amount not to exceed $12.5 million (the "Transaction
Fee"). Any portion of the Additional Advisory Fee and Quarterly Advisory Fees
paid prior to consummation of Union Pacific's acquisition of Santa Fe will be
fully credited against the Transaction Fee. Union Pacific has also agreed to
reimburse CS First Boston for its reasonable out-of-pocket expenses, including
the fees and expenses of its legal counsel, incurred in connection with its
engagement, and to indemnify CS First Boston and certain related persons against
certain liabilities and expenses in connection with its engagement, including
certain liabilities under the federal securities laws. In connection with CS
First Boston's engagement as financial
15
<PAGE> 17
advisor, Union Pacific anticipates that certain employees of CS First Boston may
communicate in person, by telephone or otherwise with a limited number of
institutions, brokers or other persons who are stockholders of Santa Fe for the
purpose of assisting in the solicitation of proxies for the Special Meeting. CS
First Boston will not receive any fee for or in connection with such
solicitation activities apart from the fees which it is otherwise entitled to
receive as described above. CS First Boston has rendered various investment
banking and other advisory services to Union Pacific and its affiliates in the
past and is expected to continue to render such services, for which it has
received and will continue to receive customary compensation from Union Pacific
and its affiliates.
CERTAIN INFORMATION ABOUT UNION PACIFIC
Union Pacific, incorporated in Utah, operates, through subsidiaries, in the
areas of rail transportation (Union Pacific Railroad Company and Missouri
Pacific Railroad Company (collectively, the "Railroad")), oil, gas and mining
(Union Pacific Resources Company ("Resources")), trucking (Overnite
Transportation Company ("Overnite")), and waste management (USPCI, Inc.
("USPCI")). Each of these subsidiaries is indirectly wholly-owned by Union
Pacific. Substantially all of Union Pacific's operations are in the United
States.
The Railroad is the third largest railroad in the United States by mileage,
with over 17,000 route miles linking West Coast and Gulf Coast ports with the
Midwest. The Railroad maintains coordinated schedules with other carriers for
the handling of freight to and from the Atlantic seaboard, the Pacific Coast,
the Southeast, the Southwest, Canada and Mexico. Export and import traffic is
moved through Gulf Coast and Pacific Coast ports and across the Texas-Mexico
border.
Resources is an independent oil and gas company engaged in exploration for
and production of natural gas, crude oil and associated products. Substantially
all of its exploration and production programs are concentrated in the Austin
Chalk trend and Carthage area in eastern Texas and Louisiana, the Union Pacific
Land Grant in Colorado, Wyoming and Utah, the Gulf of Mexico and Canada.
Resources is also responsible for developing Resources' reserves of coal and
trona which are located primarily in the Rocky Mountain region.
Overnite, a major interstate trucking company, serves all 50 states and
portions of Canada through 166 service centers and through agency partnerships
with several small, high-quality carriers serving areas not directly covered by
Overnite. As one of the largest trucking companies in the United States,
specializing in less-than-truckload shipments, Overnite transports a variety of
products, including machinery, textiles, plastics, electronics and paper
products.
USPCI provides comprehensive waste management services (analysis,
treatment, recovery, recycling, disposal, remediation and transportation) to
industry and government. On October 20, 1994, Union Pacific announced that its
Board of Directors approved a plan to divest Union Pacific's waste business.
16
<PAGE> 18
OTHER INFORMATION
The information concerning Santa Fe and the Santa Fe/BN Merger contained
herein has been taken from, or based upon, publicly available documents on file
with the Securities and Exchange Commission and other publicly available
information. Although Union Pacific has no knowledge that would indicate that
statements relating to Santa Fe or the Santa Fe/BN Merger contained in this
Proxy Statement in reliance upon publicly available information are inaccurate
or incomplete, it has not to date had access to the books and records of Santa
Fe, was not involved in the preparation of such information and statements and
is not in a position to verify any such information or statements. Accordingly,
Union Pacific does not take any responsibility for the accuracy or completeness
of such information or for any failure by Santa Fe to disclose events that may
have occurred and may affect the significance or accuracy of any such
information.
Reference is made to the Santa Fe Joint Proxy Statement for information
concerning the common stock of Santa Fe, the beneficial ownership of such stock
by the principal holders thereof, other information concerning Santa Fe's
management, the procedures for submitting proposals for consideration at the
next annual meeting of stockholders of Santa Fe and certain other matters
regarding Santa Fe and the Special Meeting. Union Pacific assumes no
responsibility for the accuracy or completeness of any such information.
Union Pacific is not aware of any other matter to be considered at the
Special Meeting. However, if any other matter properly comes before the Special
Meeting, Union Pacific will vote all proxies held by it as Union Pacific, in its
sole discretion, may determine.
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 October 28, 1994
17
<PAGE> 19
[This Page Intentionally Left Blank.]
18
<PAGE> 20
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF UNION PACIFIC
AND CERTAIN EMPLOYEES AND OTHER
REPRESENTATIVES OF UNION PACIFIC
The following table sets forth the name and title of persons who may be
deemed to be participants on behalf of Union Pacific in the solicitation of
proxies from stockholders of Santa Fe. Unless otherwise indicated, the principal
business address of each director, executive officer, employee or representative
is Martin Tower, Eighth and Eaton Avenues, Bethlehem, Pennsylvania 18018.
DIRECTORS AND EXECUTIVE OFFICERS OF UNION PACIFIC
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITION
- ------------------ --------
<S> <C>
Robert P. Bauman..................... Director.
SmithKline Beecham Consumer
Healthcare
1500 Littleton Road
Parsippany, NJ 07054
Charles E. Billingsley............... Vice President and Controller of Union Pacific.
Richard B. Cheney.................... Director.
American Enterprise Institute
1150 17th Street, NW
Suite 1100
Washington, DC 20036
E. Virgil Conway..................... Director.
101 Park Avenue
31st Floor
New York, NY 10178
Richard K. Davidson.................. Director, President of Union Pacific.
Union Pacific Railroad Company
1416 Dodge Street
Omaha, NE 68179
John E. Dowling...................... Vice President -- Corporate Development of Union
Pacific.
Spencer F. Eccles.................... Director.
First Security Corporation
P.O. Box 30006
Salt Lake City, UT 84130
Ursula F. Fairbairn.................. Senior Vice President -- Human Resources of Union
Pacific.
Elbridge T. Gerry, Jr. .............. Director.
Brown Brothers Harriman & Co.
59 Wall Street
New York, NY 10005
</TABLE>
19
<PAGE> 21
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITION
- ------------------ --------
<S> <C>
William H. Gray, III................. Director.
United Negro College Fund, Inc.
8260 Willow Oaks Corporate Drive
P.O. Box 10444
Fairfax, VA 22031
John B. Gremillion, Jr. ............. Vice President -- Taxes of Union Pacific.
Judith Richards Hope................. Director.
Paul, Hastings, Janofsky & Walker
1299 Pennsylvania Avenue, N.W.
Tenth Floor
Washington, DC 20004
Lawrence M. Jones.................... Director.
The Coleman Company, Inc.
250 N. St. Francis Street
P.O. Box 1762
Wichita, KS 67201
Drew Lewis........................... Director, Chairman and Chief Executive Officer of
Union Pacific.
Richard J. Mahoney................... Director.
Monsanto Company
800 N. Lindbergh Boulevard
St. Louis, MO 63167
Claudine B. Malone................... Director.
Financial & Management Consulting,
Inc.
7570 Potomac Fall Road
McLean, VA 22102
L. White Matthews, III............... Director, Executive Vice President -- Finance of Union
Pacific.
Mary E. McAuliffe.................... Vice President -- External Relations of Union Pacific.
555-13th Street, N.W.
Suite 450W
Washington, DC 20004
Jack L. Messman...................... Director.
Union Pacific Resources Company
801 Cherry Street
Fort Worth, TX 76102
John R. Meyer........................ Director.
Center for Business and Government
Harvard University
79 Kennedy Street
Cambridge, MA 02138
</TABLE>
20
<PAGE> 22
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITION
- ------------------ --------
<S> <C>
Thomas A. Reynolds, Jr. ............. Director.
Winston & Strawn
35 West Wacker Drive
Suite 4700
Chicago, IL 60601
James D. Robinson, III............... Director.
J. D. Robinson Inc.
126 East 56th Street
26th Floor
New York, NY 10022
Robert W. Roth....................... Director.
P.O. Box 1219
Pebble Beach, CA 93953
Gary F. Schuster..................... Vice President -- Corporate Relations of Union
Pacific.
Richard D. Simmons................... Director.
International Herald Tribune
1150 15th Street, NW
Washington, DC 20071
Gary M. Stuart....................... Vice President and Treasurer of Union Pacific.
Judy L. Swantak...................... Vice President and Corporate Secretary of Union
Pacific.
Carl W. von Bernuth.................. Senior Vice President and General Counsel of Union
Pacific.
</TABLE>
CERTAIN EMPLOYEES AND OTHER REPRESENTATIVES
OF UNION PACIFIC WHO MAY ALSO SOLICIT PROXIES
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITION
- ------------------ --------
<S> <C>
Mary S. Jones...................... Assistant Treasurer of Union Pacific.
Gary W. Grosz...................... Manager -- Investor Relations of Union Pacific.
John J. Koraleski.................. Executive Vice President, Finance and Information
Technologies of Union Pacific Railroad Company.
James A. Shattuck.................. Executive Vice President, Marketing and Sales of Union
Pacific Railroad Company.
Arthur L. Shoener.................. Executive Vice President, Operations of Union Pacific
Railroad Company.
James V. Dolan..................... Vice President, Law of Union Pacific Railroad Company.
Michael F. Kelly................... Vice President, Marketing -- Services of Union Pacific
Railroad Company.
John H. Rebensdorf................. Vice President, Strategic Planning of Union Pacific
Railroad Company.
</TABLE>
21
<PAGE> 23
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITION
- ------------------ --------
<S> <C>
Richard H. Bott.................... Managing Director at CS First Boston.
CS First Boston
55 East 52nd Street
New York, NY 10055
David A. DeNunzio.................. Managing Director at CS First Boston.
CS First Boston
55 East 52nd Street
New York, NY 10055
Gerald M. Lodge.................... Managing Director at CS First Boston.
CS First Boston
55 East 52nd Street
New York, NY 10055
Stephen C. Month................... Director at CS First Boston.
CS First Boston
55 East 52nd Street
New York, NY 10055
Scott R. White..................... Associate at CS First Boston.
CS First Boston
55 East 52nd Street
New York, NY 10055
Samuel H. Schwartz................. Associate at CS First Boston.
CS First Boston
55 East 52nd Street
New York, NY 10055
Caroline P. Sykes.................. Analyst at CS First Boston.
CS First Boston
55 East 52nd Street
New York, NY 10055
</TABLE>
In the normal course of its business, CS First Boston may trade the debt
and equity securities of Santa Fe for its own account and the accounts of its
customers and, accordingly, may at any time hold a long or short position in
such securities. As of October 27, 1994, CS First Boston held a net short
position of less than 1% of all the outstanding shares of Santa Fe common stock.
SHARES HELD BY UNION PACIFIC, ITS DIRECTORS AND EXECUTIVE OFFICERS
Union Pacific is the beneficial holder of 200 shares of Santa Fe common
stock purchased on October 6, 1994. 100 of such shares were purchased for $14
per share in an open market transaction entered into on the over-the-counter
market and 100 of such shares were purchased for $13 1/2 per share in an open
market transaction executed on the NYSE. No directors or executive officers of
Union Pacific own any shares of Santa Fe common stock.
22
<PAGE> 24
- ------------------------------------------------------------------------------
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) 856-8309
909 Third Avenue
New York, New York 10022
In New York City, call: (212) 754-8000
- ------------------------------------------------------------------------------
<PAGE> 25
SANTA FE PACIFIC CORPORATION
SOLICITATION BY UNION PACIFIC CORPORATION
IN OPPOSITION TO THE PROPOSED
MERGER OF SANTA FE CORPORATION AND
BURLINGTON NORTHERN INC.
PROXY
SPECIAL MEETING OF STOCKHOLDERS OF SANTA FE PACIFIC CORPORATION
The undersigned hereby appoints DREW LEWIS and JUDY L. SWANTAK as
proxies, each with the power to appoint a substitute, and hereby authorizes
them to represent and to vote all shares of stock of Santa Fe Pacific
Corporation, a Delaware corporation ("Santa Fe"), which the undersigned is
entitled to vote at the special meeting of stockholders of Santa Fe, scheduled
to be held on November 18, 1994, called for the purpose of considering the
proposed merger of Santa Fe with and into Burlington Northern Inc., a Delaware
corporation ("BN")(such proposed merger, the "Santa Fe/BN Merger"), or any
adjournment(s), postponement(s), or rescheduling(s) thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED AGAINST THE SANTA FE/BN
MERGER. IF ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE SPECIAL MEETING,
THIS PROXY WILL BE VOTED ON SUCH MATTERS AS UNION PACIFIC CORPORATION, IN ITS
SOLE DISCRETION, MAY DETERMINE.
(Continued and to be dated and signed on reverse side.)
<PAGE> 26
1. The Santa Fe/BN Merger.
Union Pacific strongly recommends a vote "AGAINST" the Santa
Fe/BN Merger.
/ / AGAINST / / FOR / / ABSTAIN
The undersigned hereby acknowledges receipt of the Union Pacific
Corporation Proxy Statement soliciting proxies in opposition to the Santa Fe/BN
Merger. The undersigned hereby revokes any proxies heretofore given by the
undersigned relating to the subject matter hereof and confirms all that the
Proxies may lawfully do by virtue hereof.
DATE:_____________________________, 1994
________________________________________
(Signature)
________________________________________
(Signature if jointly held)
Title:__________________________________
Please sign exactly as name appears
hereon. When signing as an
attorney, executor, administrator,
trustee or guardian, please give
full title as such.
PLEASE SIGN, DATE AND MAIL PROMPTLY IN THE POSTAGE-PAID
ENVELOPE ENCLOSED.
