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:
(X) Preliminary Proxy Statement
( ) Definitive Proxy Statement
( ) 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
(Names of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
( ) 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 the date of its filing.
(1) Amount Previously Paid: $0
(2) Form, Schedule or Registration Statement No.: Schedule 14A
(3) Filing Party: Same as above
(4) Date Filed: October 13, 1994
PRELIMINARY COPY
SPECIAL MEETING OF STOCKHOLDERS
OF
SANTA FE PACIFIC CORPORATION
__________________
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 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 , 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 publicly announced
its proposal to acquire Santa Fe (the "Union Pacific
Proposal"), pursuant to which the stockholders of Santa Fe
would receive, per share of Santa Fe common stock, 0.344 of
a share of Union Pacific common stock, valued at $18.00 per
Santa Fe common share, based upon the closing price of Union
Pacific common stock on October 4, 1994. The Union Pacific
Proposal is intended to be tax-free to stockholders of Santa
Fe. See "Union Pacific Proposal".
BASED UPON CLOSING PRICES ON OCTOBER 12, 1994, UNDER
THE UNION PACIFIC PROPOSAL STOCKHOLDERS OF SANTA FE WOULD
RECEIVE UNION PACIFIC COMMON STOCK HAVING AN INDICATED PER
SHARE VALUE OF $17.37, AN AMOUNT WHICH IS 26% HIGHER THAN
THE $13.77 INDICATED PER SHARE VALUE OF BN COMMON STOCK THAT
STOCKHOLDERS OF SANTA FE WOULD RECEIVE UNDER THE SANTA FE/BN
MERGER. UNION PACIFIC HAS FURTHER ADVISED SANTA FE THAT IT
IS PREPARED TO RECEIVE INFORMATION FROM SANTA FE THAT MIGHT
JUSTIFY A HIGHER PRICE.
IF YOU WANT THE OPPORTUNITY TO RECEIVE THE HIGHER
CONSIDERATION BEING OFFERED BY UNION PACIFIC, WE URGE YOU TO
PROMPTLY VOTE AGAINST THE SANTA FE/BN MERGER BY SIGNING,
DATING AND MAILING THE ENCLOSED GOLD PROXY.
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 BE AN
IMPORTANT STEP IN ALLOWING YOU THE OPPORTUNITY TO RECEIVE
THE HIGHER CONSIDERATION TO BE PAID UNDER THE UNION PACIFIC
PROPOSAL.
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.
CERTAIN ECONOMIC ADVANTAGES OF UNION PACIFIC PROPOSAL
COMPARED TO SANTA FE/BN MERGER
* PRICE: Based upon the closing prices on October 12,
1994, stockholders of Santa Fe would receive
Union Pacific common stock having an
indicated per share value of $17.37, as
compared to an indicated per share value of
only $13.77 of BN common stock that
stockholders of Santa Fe would receive under
the Santa Fe/BN Merger. Union Pacific has
further advised Santa Fe that it is prepared
to receive information from Santa Fe that
might justify a higher price.
* PREMIUM: The indicated per share value of $17.37 for
each share of Santa Fe common stock under the
Union Pacific Proposal represents a premium
of 34% over the closing price of Santa Fe
common stock on October 4, 1994, the day
prior to the announcement of the Union
Pacific Proposal.
* FAIRNESS: Sante Fe has been told by its financial
advisor that the exchange ratio in the Santa
Fe/BN Merger is fair to the stockholders of
Santa Fe -- but, the Union Pacific Proposal
represents a premium of 26% over the current
indicated per share value of the Santa Fe/BN
Merger.
* DIVIDENDS: On a per share equivalent basis, the Union
Pacific Proposal would provide stockholders
of Santa Fe with an indicated annual dividend
of $.59 for each Santa Fe share, as compared
to only $.32 pursuant to the Santa Fe/BN
Merger.
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.
Terms
We propose that Union Pacific acquire Santa
Fe in a merger in which Santa Fe shareholders
would receive, for each of their shares, .344 of a
share of Union Pacific common stock, having a
value of $18 per Santa Fe share based on
yesterday's closing price of Union Pacific stock.
This price represents a premium of 38% over
yesterday's closing price of Santa Fe common
stock. Our proposed price also represents a
premium of 33% over the current value of the
Burlington Northern transaction, which was
endorsed by your financial advisors as fair to
your shareholders.
In addition to receiving a substantial
premium, your shareholders would be able to
participate in an exceptional opportunity for
growth and increased value through their ongoing
interest in what we believe would be the
preeminent railroad company in the country.
Our proposed transaction would be tax-free to
both our companies and to your shareholders. This
would allow your shareholders to defer paying tax,
or recognizing gain or loss on their shares, until
they sell at a time of their choice.
Benefits of Transaction
In addition to providing superior benefits
for your shareholders, we believe our transaction
will provide greater benefits to the shipping
public and will do more to strengthen rail
competition in the west than the Burlington
Northern transaction. A Union Pacific-Santa Fe
combination will produce service breakthroughs
that a Burlington Northern-Santa Fe merger cannot,
including more new single-line service and greater
savings and efficiencies. To insure that our
transaction will strengthen rail competition in
all affected markets, we are prepared to grant
conditions to Southern Pacific, Burlington
Northern or other railroads, including access to
points that would otherwise change from two
serving railroads to one, rights to handle
service-sensitive business moving between
California, Chicago and the Midwest, and access to
the Kansas and Oklahoma grain markets.
Continuity of Management
We have great respect for your management and
employees and believe they would make important
contributions to our combined company. We
envision that certain members of the Santa Fe
Board would be invited to serve on Union Pacific's
Board. This participation would facilitate the
integration and growth of the two companies.
Process
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.
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
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 -- $20 per
share -- 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
On October 11, 1994, Mr. Lewis sent the following letter to
Mr. Krebs:
October 11, 1994
Mr. Robert D. Krebs
Chairman, President and CEO
Santa Fe Pacific Corporation
1700 East Golf Road
Schaumburg, IL 60173
Dear Rob:
I am in receipt of your October 6 letter.
In light of your Board's fiduciary
obligations, we were disappointed by your failure
to give careful consideration to our proposal or
to meet with us to discuss our transaction. We
remain convinced that our proposal is a superior
alternative to your proposed transaction with
Burlington Northern, providing a premium price to
your shareholders as well as significant benefits
for shippers and the rail industry.
We believe it is a disservice to your
shareholders for you to publicly speculate,
inaccurately, as to the motivation for our
proposal rather than giving us an opportunity to
respond to your concerns. We do not understand
how you, your Board and advisors could pass
judgment on complex regulatory matters only one
day after receiving our proposal without
considering our analysis of ICC matters, including
the unprecedented public benefits that would
result from the UP-Santa Fe transaction and the
conditions we are prepared to grant to other
railroads to strengthen rail competition in the
West.
If you and your advisors agree to discuss our
proposal in the exercise of your fiduciary duties
in accordance with the terms of your merger
agreement with Burlington Northern, we can present
compelling reasons to convince you that our
proposal is superior and in the best interests of
your shareholders, and address your stated
concerns regarding regulatory approvals.
As to your stated willingness to consider a
"fair price," our current proposed purchase price
represents a significant premium over the value of
the Burlington Northern transaction, which your
financial advisors have already endorsed as fair
to your shareholders. We would be prepared to
receive information from you that might justify a
greater consideration.
I again call upon you and your Board to give
careful consideration to our proposal and to
exercise your fiduciary obligations to meet with
us and our advisors at the earliest possible time.
Your shareholders should not be denied the
opportunity to consider our proposal.
Sincerely,
/s/ Drew Lewis
cc: Board of Directors
Santa Fe Pacific Corporation
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,
Robert D. Krebs
Chairman, President and
Chief Executive Officer
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
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, each outstanding share of Santa Fe common stock
(subject to certain exceptions) would be converted into 0.27
of a share of common stock of BN, valued at $13.77 per share
of Santa Fe common stock, based upon the closing price of BN
common stock on October 12, 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.
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 YOUR PROXY 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
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
superior 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 12, 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.
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
$ at such time as Union Pacific commences the actual
solicitation of proxies in connection with the Santa Fe/BN
Merger. 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 will become payable 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
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.
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 , 1994
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
NAME AND PRINCIPAL POSITION
BUSINESS ADDRESS
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
Union Pacific Corporation Pacific.
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
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
555-13th Street, N.W. Relations of Union Pacific.
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
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.
CERTAIN EMPLOYEES AND OTHER REPRESENTATIVES
OF UNION PACIFIC WHO MAY ALSO SOLICIT PROXIES
NAME AND PRINCIPAL
BUSINESS ADDRESS POSITION
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.
Richard H. Bott Managing Director at CS
CS First Boston First Boston.
55 East 52nd Street
New York, NY 10055
David A. DeNunzio Managing Director at CS
CS First Boston First Boston.
55 East 52nd Street
New York, NY 10055
Gerald M. Lodge Managing Director at CS
CS First Boston 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
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.
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 $131/2 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.
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
PRELIMINARY COPY
IN OPPOSITION TO THE PROPOSED
MERGER OF SANTA FE PACIFIC CORPORATION AND
BURLINGTON NORTHERN INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
UNION PACIFIC CORPORATION
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 the 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
and 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, as
follows:
1. The Santa Fe/BN Merger.
Union Pacific strongly recommends a vote AGAINST the Santa Fe/BN
Merger.
( ) AGAINST ( ) FOR ( ) ABSTAIN
(Continued and to be dated and signed on reverse side.)
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.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE UNION PACIFIC
CORPORATION PROXY STATEMENT DATED OCTOBER , 1994 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.
DATED: , 1994
(Signature)
Title:
(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.
