SANTA FE PACIFIC CORP, DEF 14A, 1994-03-09

SANTA FE PACIFIC CORP
DEF 14A, 1994-03-09
RAILROADS, LINE-HAUL OPERATING

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant /X/

Filed by a party other than the registrant / /

Check the appropriate box:

/ / Preliminary proxy statement

/X/ Definitive proxy statement

/ / Definitive additional materials

/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SANTA FE PACIFIC CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
SANTA FE PACIFIC CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of filing fee (Check the appropriate box):

/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(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.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------

(2) Aggregate number of securities to which transactions applies:

- --------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1

- --------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------

/ / Check box if any part 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:

- --------------------------------------------------------------------------------

(2) Form, schedule or registration statement no.:

- --------------------------------------------------------------------------------

(3) Filing party:

- --------------------------------------------------------------------------------

(4) Date filed:

- --------------------------------------------------------------------------------
- -------------------------
1 Set forth the amount on which the filing fee is calculated and state how it
was determined.

<PAGE> 2

[LOGO]

SANTA FE PACIFIC CORPORATION
- --------------------------------------------------------------------------------
Notice of Annual Meeting of Stockholders
- --------------------------------------------------------------------------------

The annual meeting of stockholders of Santa Fe Pacific Corporation will be
held at the Hyatt Regency-Woodfield, 1800 East Golf Road, Schaumburg, Illinois,
on Tuesday, April 26, 1994, at 10:00 a.m., for the following purposes:

(A) To elect four directors; and

(B) To transact such other business as is properly brought before the
meeting and at any adjournment or postponement thereof.

Stockholders of record at the close of business on March 1, 1994, are
entitled to notice of the meeting and are entitled to vote at the meeting. A
list of such stockholders will be kept at the offices of the Corporation at 1700
East Golf Road, Schaumburg, Illinois 60173-5860, for a period of ten days prior
to the meeting.

By order of the Board of Directors.

MARSHA K. MORGAN
Corporate Secretary

1700 East Golf Road
Schaumburg, Illinois 60173-5860
March 9, 1994

YOUR VOTE IS IMPORTANT

PLEASE MARK, SIGN, AND DATE YOUR PROXY AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR NOT
YOU INTEND TO ATTEND THE MEETING.

<PAGE> 3

SANTA FE PACIFIC CORPORATION
1700 EAST GOLF ROAD
SCHAUMBURG, ILLINOIS 60173-5860

- --------------------------------------------------------------------------------

PROXY STATEMENT
MARCH 9, 1994
- --------------------------------------------------------------------------------

ANNUAL MEETING OF STOCKHOLDERS, APRIL 26, 1994

The annual meeting of stockholders of Santa Fe Pacific Corporation (the
"Corporation") will be held at 10:00 a.m. on April 26, 1994, in Schaumburg,
Illinois. The enclosed proxy card is solicited by the Board of Directors of the
Corporation, and your execution and prompt return of the card is requested.
Every stockholder, regardless of the number of shares held, should be
represented at the annual meeting. Whether or not you expect to be present at
the meeting, please mark, sign, and date the enclosed proxy card and return it
in the enclosed envelope. Any stockholder giving a proxy has the power to revoke
it at any time before it is voted at the meeting by delivering to the
Corporation written notification of revocation or a proxy bearing a later date,
or by attending the meeting in person and casting a ballot.

The shares represented by your proxy will be voted in accordance with the
specifications made on the proxy card. Unless otherwise directed, it is intended
that such shares will be voted:

(A) For the election as directors of the four nominees named below;

(B) In accordance with the best judgment of the persons acting under the
proxy concerning other matters that are properly brought before the
meeting and at any adjournment or postponement thereof.

Stockholders of record at the close of business on March 1, 1994 are
entitled to notice of the meeting and are entitled to vote at the meeting in
person or by proxy. Each share of common stock of the Corporation is entitled to
one vote. The Corporation's common stock is the only issued and outstanding
class of stock. At the close of business on March 1, 1994, the Corporation had
186,217,883 shares of common stock outstanding and entitled to vote. The
Corporation anticipates first sending this proxy statement and the enclosed
proxy card to stockholders on or about March 9, 1994.

ELECTION OF DIRECTORS

The Board of Directors consists of three classes, as nearly equal in number
as possible. One of the three classes, comprising approximately one-third of the
directors, is elected each year to succeed the directors whose terms are
expiring. The number of directors of the Corporation, as determined by the Board
under Article Fifth of the Corporation's Restated Certificate of Incorporation,
is currently eleven. The Board has voted to reduce the size of the Board to ten
effective as of the Annual Meeting on April 26, 1994. Mr. George B. Munroe, a
director since 1972, and whose term would otherwise expire in 1995, will resign
effective as of the Annual Meeting on April 26, 1994,

<PAGE> 4

pursuant to the Board's retirement policy. The terms of four current directors
expire in 1994, and all four are standing for election this year for three-year
terms ending in 1997. Three current directors will continue to serve in terms
that expire in 1995, and three current directors will continue to serve in terms
that expire in 1996. Directors hold office until the annual meeting for the year
in which their terms expire and until their successors are elected and qualify
unless, prior to that time, they have resigned, retired, or otherwise left
office.

The nominees for whom the enclosed proxy is intended to be voted are set
forth below. It is not contemplated that any of these nominees will be
unavailable for election, but if such a situation should arise, the proxy will
be voted in accordance with the best judgment of the persons acting under it
unless the stockholder has directed otherwise. Under the Corporation's By-laws,
directors are elected by a plurality of the votes cast at the meeting for
election of directors. Shares represented at the meeting in person or by proxy
but withheld or otherwise not cast for the election of directors will have no
effect on the outcome of the election.

Unless otherwise indicated, each director listed below has served in his or
her present occupation for at least five years. The indicated periods of service
as a director of the Corporation include prior service as directors of Santa Fe
Industries, Inc. and Southern Pacific Company.

NOMINEES FOR ELECTION AS DIRECTORS TO BE ELECTED
FOR A TERM OF THREE YEARS ENDING IN 1997

ROY S. ROBERTS, 54............................................... 1993(2) 0
Vice President since October 1992 of General Motors Corporation (manufacturer of motor vehicles)
and General Manager, GMC Truck Division. Previously, Manufacturing Manager of General Motors
Corporation's North American Operations Flint Automotive Division from 1992 and Manufacturing
Manager of its Cadillac Motor Car Division from 1990 to 1992. From 1988 to 1990, Vice President
and General Manager, Truck Operations for Navistar International Corporation (manufacturer of
trucks). Mr. Roberts serves on the Audit Committee of the Board.

JOHN S. RUNNELLS II, 70.......................................... 1975 11,247(3)
Owner and Operator, Runnells-Pierce Ranch in Bay City, Texas (ranching). Mr. Runnells serves on
the Committee on Directors and the Audit Committee of the Board.

ROBERT H. WEST, 55............................................... 1980 703(3)
Chairman of the Board and a director of Butler Manufacturing Company (manufacturer of systems and
components for non-residential structures) since May 1986. Also a director of Commerce
Bancshares, Inc. and Kansas City Power & Light Company. Mr. West is Chairman of the Audit
Committee and serves on the Executive and the Compensation and Benefits Committees of the Board.

</TABLE>
2

<PAGE> 5

DIRECTORS WHOSE TERMS OF OFFICE CONTINUE

TERMS EXPIRING AT 1995 ANNUAL MEETING OF STOCKHOLDERS

<TABLE>
<CAPTION>
Shares of Common
Stock
First Beneficially
Name, Age and Elected a Owned as of
Business Experience Director March 1, 1994(1)
- ------------------- --------- ----------------
<S> <C> <C>
JOSEPH F. ALIBRANDI, 65.......................................... 1982 1,550
Chairman, Chief Executive Officer and a director of Whittaker Corporation (an aerospace company)
since December 1985, and Chairman and a director of BioWhittaker Inc. (a biotechnology company)
since October 1991; also Chief Executive Officer of BioWhittaker Inc. from October 1991 to
September 1992. Also a director of Catellus Development Corporation, BankAmerica Corporation, and
Jacobs Engineering Group Inc. Mr. Alibrandi is Chairman of the Compensation and Benefits
Committee and serves on the Audit Committee of the Board.

GEORGE DEUKMEJIAN, 65............................................ 1991 500
Partner of Sidley & Austin (law firm) since January 1991. Formerly, Governor of the State of
California from 1983 until January 1991. Also a director of Qual-Med, Inc. Mr. Deukmejian serves
on the Audit Committee and the Committee on Directors of the Board.

JEAN HEAD SISCO, 68.............................................. 1975 2,039
Partner, Sisco Associates (management consultants). Also a director of Chesapeake & Potomac
Telephone Company, Chiquita Brands International, K-Tron International, Inc., McArthur/Glen
Realty Corp., The Neiman Marcus Group, Inc., Textron Inc., and Washington Mutual Investors Fund.
Mrs. Sisco serves on the Committee on Directors and the Compensation and Benefits Committee of
the Board.
</TABLE>

TERMS EXPIRING AT 1996 ANNUAL MEETING OF STOCKHOLDERS

<TABLE>
<CAPTION>
Shares of Common
Stock
First Beneficially
Name, Age and Elected a Owned as of
Business Experience Director March 1, 1994(1)
- ------------------- --------- ----------------
<S> <C> <C>
ROBERT D. KREBS, 51.............................................. 1983 957,395(4)
Chairman, President and Chief Executive Officer of the Corporation since June 1988; formerly
President and Chief Executive Officer of the Corporation from July 1987. Also a director of
Phelps Dodge Corporation, Northern Trust Corporation, Catellus Development Corporation, and
Santa Fe Energy Resources, Inc. Mr. Krebs is Chairman of the Executive Committee and serves on
the Committee on Directors of the Board.

MICHAEL A. MORPHY, 61............................................ 1972 7,000
Retired Chairman of the Board and Chief Executive Officer of California Portland Cement Company
(cement manufacturer). Mr. Morphy has served as President of MorMarketing (marketing of employee
benefit concepts) since June 1985. Also a director of Cyprus Amax Minerals Company, First
Interstate Bank of California, and Santa Fe Energy Resources, Inc. Mr. Morphy serves on the
Compensation and Benefits and the Audit Committees of the Board.

EDWARD F. SWIFT, 70.............................................. 1973 5,568(3,5)
Consultant to Lehman Brothers, Inc. (investment banker and broker-dealer) since December 1989,
and prior to that, advisory director of Shearson Lehman Hutton, Inc. from January 1988. Also a
director of Illinois Tool Works, Inc. Mr. Swift is Chairman of the Committee on Directors of the
Board and serves on the Executive and Audit Committees of the Board.
</TABLE>

- ------------
(1) The nature of beneficial ownership for shares listed in this column is sole
voting and investment power, except as otherwise indicated in the following
notes. Pursuant to the Board of Directors'

<PAGE> 6

Retirement Policy, Director George B. Munroe is retiring as of the 1994
annual meeting. Mr. Munroe holds 3,940 shares of the Corporation's common
stock, of which shares Mr. Munroe disclaims beneficial ownership in 2,015
shares held by his spouse.
(2) Mr. Roberts was elected by the Board as a director of the Corporation
effective August 1, 1993, to fill a vacancy created by an increase in the
size of the Board. Mr. Roberts was late in filing his initial Form 3 under
Section 16(a) of the Securities and Exchange Act of 1934.
(3) Includes 2,567 shares, 240 shares, and 932 shares which are held by or in
trust for members of the families of Messrs. Runnells, West, and Swift,
respectively, and as to which beneficial ownership is disclaimed by them.
(4) Includes 45,708 shares of restricted stock held under the Santa Fe Pacific
Incentive Stock Compensation Plan and Santa Fe Pacific Long Term Incentive
Stock Plan, 21,269 shares arising from participation in the Santa Fe Pacific
Retirement and Savings Plan for Salaried Employees as of December 31, 1993,
and 650,473 shares which may be acquired by Mr. Krebs within 60 days upon
the exercise of stock options granted under the Santa Fe Pacific Incentive
Stock Compensation Plan.
(5) Mr. Swift owns beneficially 3,500 preference depositary units of Santa Fe
Pacific Pipeline Partners, L.P., a Delaware limited partnership described
under "Other Information Concerning Directors" in this proxy statement. Mr.
Swift's ownership includes 1,000 preference depositary units held by his
spouse as to which Mr. Swift disclaims beneficial ownership.
------------------------

Certain Relationships and Related Transactions. Mr. Jerome F. Donohoe, Vice
President-Law of the Corporation, is a partner of the law firm of Mayer, Brown &
Platt. Mayer, Brown & Platt serves as principal outside counsel for the
Corporation and its subsidiaries. Mayer, Brown & Platt's fees and disbursements
for services rendered to the Corporation and its subsidiaries during 1993
aggregated approximately $7.6 million. While Mr. Donohoe serves as Vice
President-Law of the Corporation, he is compensated by Mayer, Brown & Platt. In
addition, Mr. Deukmejian is a partner of the Sidley & Austin law firm, which
firm provided legal services to the Corporation in 1993 and is expected to
provide legal services in 1994.

Other Information Concerning Directors. In 1993, the Board met eight times,
and each incumbent member of the Board attended 75 percent or more of the
aggregate of the total number of meetings of the Board and the total number of
meetings held by all committees of the Board on which he or she served.

Mr. Krebs also serves as Chairman, President and Chief Executive Officer
and as a director of The Atchison, Topeka and Santa Fe Railway Company ("Santa
Fe Railway"), a subsidiary of the Corporation, and serves as a director of Santa
Fe Pacific Gold Corporation ("Gold Corporation"), a subsidiary of the
Corporation. Mr. Krebs and Mr. Swift are directors of Santa Fe Pacific
Pipelines, Inc., which is a subsidiary of the Corporation and the general
partner of Santa Fe Pacific Pipeline Partners, L.P., a Delaware limited
partnership. Santa Fe Pacific Pipelines, Inc. owns a two percent general partner
interest and a 42 percent limited partnership interest in Santa Fe Pacific
Pipeline Partners, L.P. Mr. Runnells is a director of SFP Pipeline Holdings,
Inc., a subsidiary of the Corporation.

Directors' Compensation. Directors who are not employees of the Corporation
or its subsidiaries receive an annual retainer fee of $24,000, a fee of $1,000
for each meeting of the Board attended, and a fee of $1,000 ($1,500 for the
Committee Chairman) for each Committee meeting attended, plus expenses for each
Board or Committee meeting attended. Directors are given the option of deferring
all or a specified part of their compensation for services as a director.
Compensation is deferred, at the director's option, until he or she retires from
the Board, reaches age 72, or retires from his or her principal occupation.
Deferred amounts are credited with interest at the prevailing treasury bill
rate. The amounts deferred by directors are secured by the Trust Agreement which
is described under "EXECUTIVE COMPENSATION AND OTHER INFORMATION,

4
<PAGE> 7

Employment Contracts and Change in Control Arrangements, Trust Agreement" in
this proxy statement.

By reason of Board resolution, no individual may serve as a director beyond
the annual meeting of stockholders on or following his or her seventy-second
birthday; a director who is also an employee of the Corporation, except the
Chairman of the Board, must retire as a director effective as of termination of
his or her employment with the Corporation. On July 26, 1988, the Board of
Directors adopted the Retirement Policy for Directors of Santa Fe Pacific
Corporation ("Retirement Policy"). An individual who is a member of the Board
and who is not an employee of the Corporation in the period immediately
preceding termination of service on the Board is eligible for benefits under the
Retirement Policy if he or she: (i) has served as a member of the Board for ten
consecutive years; (ii) has attained mandatory retirement age; or (iii) is
designated by the Compensation and Benefits Committee of the Board as eligible
for benefits. The annual benefit under this Retirement Policy is an amount equal
to the amount of the annual retainer fee for services as a Board member at the
time of termination of service and will cease upon the individual's death.

Board Committees. The Board has established Executive, Compensation and
Benefits, and Audit Committees, and a Committee on Directors. Following are
brief descriptions of the functions of its standing committees.

The Executive Committee, which did not meet in 1993, may exercise the
powers of the Board in the management of the business and affairs of the
Corporation when the Board is not in session, subject to certain limitations of
Delaware law.

The Compensation and Benefits Committee met seven times during 1993. The
functions of the committee are: to review and make recommendations to the Board
with respect to salaries and other compensation paid to officers and key
employees; to administer the Corporation's incentive compensation and stock
plans, including the selection of participating officers and employees and the
establishment of performance goals; to monitor benefits under all employee
benefit plans; to consider and make recommendations to the Board with respect to
the management organization of the Corporation; and to make recommendations to
the Board regarding the membership of the Administration and Investment
Committees of the Corporation's retirement plan and retirement trust, review the
reports of such committees, and make recommendations to the Board regarding
substantive amendments to the plan or trust. No member of the Compensation and
Benefits Committee is an employee of the Corporation or its subsidiaries.

The Audit Committee met three times during 1993. The functions of the
committee are: to recommend to the Board the engagement of an independent
accounting firm to conduct examinations of the annual consolidated financial
statements of the Corporation and its subsidiaries; to review the scope of the
independent accountant's audit and the results of the audit; and to confer with
the Corporation's internal auditors. No member of the Audit Committee is an
employee of the Corporation or its subsidiaries.

The Committee on Directors met twice during 1993. The functions of the
committee are: to receive recommendations for, review, and evaluate the
qualifications of, and select and recommend to the Board, nominees for election
as directors; and to evaluate Board committees and committee membership
assignments, evaluate compensation for directors, and make recommendations to
the Board on such matters. The Committee on Directors will consider Director
nominees recommended by stockholders. Any such recommendation, together with the
nominee's qualifications and consent to being considered as a nominee, should be
sent in writing to the Corporate Secretary of the Corporation on or before
November 30 of the year preceding the annual meeting.

Legal Proceedings. On December 17, 1992, an amended complaint was filed in
an action entitled David Rodriguez, derivatively on behalf of Santa Fe Pacific
Corporation v. John S. Reed, Robert D. Krebs, W. John Swartz, John J. Schmidt,
Joseph F. Alibrandi, Richard J. Flamson, III,

5
<PAGE> 8

George B. Munroe, Jack S. Parker, Jean Head Sisco, Arthur W. Woelfle, Robert E.
Gilmore, Michael A. Morphy, Edward F. Swift, Kathryn D. Wriston, John S.
Runnells, II, Robert H. West, Alan C. Furth, Arjay Miller, and Benjamin F.
Biaggini, Defendants, and Santa Fe Pacific Corporation, a Delaware corporation,
Nominal Defendant, in the Circuit Court of Cook County, Illinois, County
Department, Chancery Division, No. 92 CH 06618. The amended complaint asserts
purported derivative claims on behalf of the Corporation against present and
former directors of the Corporation and alleges that the defendant directors
caused the Corporation to incur liability in connection with the action brought
against the Corporation in 1985 by Energy Transportation Systems, Inc. and ETSI
Pipeline Project (the "ETSI Litigation"). The four counts of the amended
complaint allege breach of fiduciary duty and waste of corporate assets for
intentional antitrust violations, negligent failure to stop antitrust
violations, failure to timely settle the ETSI Litigation, and failure to take
appropriate action against persons who committed antitrust violations. The
amended complaint seeks damages from the individual defendants in an amount "not
less than $342 million." On December 7, 1993, the Board appointed a Litigation
Committee consisting of Directors Lindig and Roberts to consider and determine
whether or not prosecution of such claims and action is in the best interest of
the Corporation and its stockholders.

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS

To the best of the Corporation's knowledge, the following are the only
persons who own beneficially five percent or more of its common stock
outstanding:

<TABLE>
<CAPTION>
Shares
Held and
Nature of
Beneficial
Name and Address of Beneficial Owner Ownership(1) Percentage
- ----------------------------------------------------------------- ------------ ----------
<S> <C> <C>
FMR Corp......................................................... 23,718,662(2) 13.0%
Edward C. Johnson 3d
82 Devonshire Street
Boston, MA 02109
College Retirement Equities Fund................................. 14,011,996 7.6%
730 Third Avenue
New York, New York 10017
The TCW Group, Inc............................................... 10,772,984 5.8%
865 South Figueroa Street
Los Angeles, CA 90017
</TABLE>

- ------------
(1) Based on Schedule 13G filings for holdings as of December 31, 1993, under
the Securities Exchange Act of 1934 provided to the Corporation. To the
best of the Corporation's knowledge, unless otherwise indicated, the
reporting person has claimed sole voting power and sole investment power.
(2) Schedule 13G indicates that of the total shares held, the reporting persons
had sole voting power for 741,555 shares and shared voting power for no
shares, and had sole investment power for 23,718,662 shares.

SECURITY OWNERSHIP OF MANAGEMENT

The following table shows, as of March 1, 1994, the number of shares of the
Corporation's common stock and preference depositary units ("preference units")
of Santa Fe Pacific Pipeline Partners, L.P. beneficially owned by the executive
officers named in the Summary Compensation Table, and owned by all present
directors and executive officers of the Corporation as a group.

6
<PAGE> 9

Preference units represent preference limited partnership interests in Santa Fe
Pacific Pipeline Partners, L.P. and are publicly traded on the New York Stock
Exchange. Information as to the Corporation's common stock and preference units
of Santa Fe Pacific Pipeline Partners, L.P. beneficially owned by individual
directors is set forth under "ELECTION OF DIRECTORS" and "DIRECTORS WHOSE TERMS
OF OFFICE CONTINUE" in this proxy statement.

<TABLE>
<CAPTION>
Shares Held
and Nature Preference Units
of Held and Nature
Beneficial of Beneficial
Name of Beneficial Owner Ownership(1) Ownership(1)
- ------------------------------------------------------------- ------------ ----------------
<S> <C> <C>
Robert D. Krebs.............................................. 957,395(2) --
Richard T. Zitting........................................... 66,545 3,500
Denis E. Springer............................................ 206,415(3) --
Donald G. McInnes............................................ 36,316(4) --
Steven F. Marlier............................................ 35,222(5) --
Directors and Executive Officers As a Group.................. 1,847,390(6) 10,600(7)
</TABLE>

- ------------
(1) The nature of beneficial ownership for shares or units listed is sole
voting and investment power, unless otherwise indicated in the following
notes. As of March 1, 1994, no individual director or executive officer
owned more than one percent of the outstanding common stock of the
Corporation or more than one percent of the outstanding preference units
of Santa Fe Pacific Pipeline Partners, L.P.
(2) Includes 45,708 shares of restricted stock held under the Santa Fe Pacific
Incentive Stock Compensation Plan and Santa Fe Pacific Long Term Incentive
Stock Plan, 21,269 shares through participation in the Santa Fe Pacific
Retirement and Savings Plan for Salaried Employees ("Retirement and Savings
Plan") as of December 31, 1993, and 650,473 shares which may be acquired
within 60 days upon the exercise of stock options granted under the Santa
Fe Pacific Incentive Stock Compensation Plan.
(3) Includes 18,805 shares of restricted stock held under the Santa Fe Pacific
Long Term Incentive Stock Plan, and 160,180 shares which may be acquired
within 60 days upon the exercise of stock options granted under the Santa
Fe Pacific Incentive Stock Compensation Plan.
(4) Includes 12,026 shares of restricted stock held under the Santa Fe Pacific
Long Term Incentive Stock Plan, 22,000 shares which may be acquired within
60 days upon the exercise of stock options granted under the Santa Fe
Pacific Incentive Stock Compensation Plan, and 2,290 shares through
participation in the Retirement and Savings Plan as of December 31, 1993.
(5) Includes 10,222 shares of restricted stock held under the Santa Fe Pacific
Long Term Incentive Stock Plan, and 25,000 shares which may be acquired
within 60 days upon the exercise of stock options granted under the Santa
Fe Pacific Incentive Stock Compensation Plan.
(6) Represents less than one percent of the Corporation's outstanding common
stock. Includes 166,792 shares of restricted stock held under the Santa Fe
Pacific Incentive Stock Compensation Plan and Santa Fe Pacific Long Term
Incentive Stock Plan, 47,781 shares through participation in the Retirement
and Savings Plan as of December 31, 1993, and 1,241,888 shares which may be
acquired within 60 days upon the exercise of stock options granted under
the Santa Fe Pacific Incentive Stock Compensation Plan.
(7) Represents less than one percent of outstanding preference units of Santa
Fe Pacific Pipeline Partners, L.P.

7
<PAGE> 10

EXECUTIVE COMPENSATION AND OTHER INFORMATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table summarizes, for the years indicated, the compensation
paid by the Corporation and its subsidiaries to the Chief Executive Officer and
to each of the four other most highly compensated executive officers who were
serving as executive officers of the Corporation at the end of 1993.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------------
Awards Payouts
------------------------ -------
Securities
Underlying
Annual Compensation Options/
----------------------- Restricted SARs LTIP All Other
Name and Principal Position Year Salary Bonus(1)(2) Stock(2) (Shares) Payouts Compensation(3)
- ----------------------------------- ---- -------- ----------- ---------- ---------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert D. Krebs.................... 1993 $450,000 $ 143,550 $215,325 329,834 $ 0 $ 4,000
Chairman, President and 1992 $450,000 $ 443,403 $ 30,803 0 $ 0 $ 4,000
Chief Executive Officer 1991 $450,000 $ 316,350 $213,000 0 $ 0 N/A
of the Corporation and
of Santa Fe Railway
Richard T. Zitting................. 1993 $262,200 $ 194,552 $ 0 119,182(4) $ 0 $ 4,000
President of Santa Fe 1992 $262,200 $ 75,120 $ 0 0 $ 0 $ 4,000
Pacific Gold Corporation 1991 $245,000 $ 111,485 $ 0 9,500 $ 0 N/A
(Chairman and Chief Executive
Officer of Santa Fe Pacific Gold
Corporation as of 1/27/94)
Denis E. Springer.................. 1993 $237,100 $ 81,088 $121,632 100,000 $ 0 $ 4,000
Senior Vice President and 1992 $228,000 $ 214,776 $ 0 0 $ 0 $ 4,000
Chief Financial Officer of the 1991 $215,000 $ 155,316 $ 0 0 $ 0 N/A
Corporation and of Santa Fe
Railway
Donald G. McInnes.................. 1993 $181,900 $ 91,969 $ 34,488 80,000 $ 0 $ 4,000
Senior Vice President-- 1992 $170,000 $ 156,863 $ 0 0 $ 0 $ 4,000
Intermodal Business Unit of 1991 (5) (5) (5) (5) (5) N/A
Santa Fe Railway (Senior Vice
President and Chief Operating
Officer of Santa Fe Railway as of
1/1/94)
Steven F. Marlier.................. 1993 $175,100 $ 109,017 $ 0 80,000 $ 0 $ 4,000
Senior Vice President-- 1992 $170,000 $ 147,259 $ 0 50,000 $ 0 $ 4,000
Carload Business Unit of 1991 (5) (5) (5) (5) (5) N/A
Santa Fe Railway (Senior Vice
President and Chief Marketing
Officer of Santa Fe Railway as of
1/1/94)
</TABLE>

- ------------
(1) The bonus awards for officers of Santa Fe Railway were paid pursuant to The
Atchison, Topeka and Santa Fe Railway Company Incentive Compensation Plan
("Incentive Plan"), in which salaried employees of Santa Fe Railway
participate. The Incentive Plan provides for the establishment of annual
performance goals which may include performance goals for Santa Fe Railway
and individual productivity objectives. The maximum award ranges from 10
percent to 100 percent of a participant's salary depending on business goals
achieved, and if an individual has personal performance goals, 20 percent of
the award is based upon such individual goals. A similar incentive plan is
maintained by the Gold Corporation, with a maximum award of between 20
percent and 80 percent of a participant's salary. This plan provides for
establishment of annual performance goals which may include performance
goals for the company and individual productivity objectives.
(2) Restricted stock shown for 1992 constitutes 2,250 shares granted to Mr.
Krebs effective as of January 1, 1992 under the Corporation's Incentive
Stock Compensation Plan ("Incentive Stock Plan") in lieu of a 1992 salary
increase. The restrictions on these shares lapsed December 31, 1992.
Restricted stock shown in 1991 constitutes 17,750 shares granted to Mr.
Krebs effective as of February 26, 1992 under the Incentive Stock Plan in
lieu of a portion of earned 1991 bonus under the Incentive Plan. The
restrictions on these shares lapse on a pro rata basis over a five year term
with the restrictions on the second one-fifth having lapsed on December 31,
1993. The Compensation and Benefits Committee ("Committee") has also
permitted Messrs. Krebs, Springer, McInnes, and Marlier to receive (at their
option), in lieu of up to 50 percent of their

<PAGE> 11

award under the Incentive Plan, a grant of restricted stock under the Santa
Fe Pacific Long Term Incentive Stock Plan based upon fair market value in
February, 1994 which is equal in value to 150 percent of the bonus that is
waived and which will vest in three years from the date of grant or in two
years if certain performance criteria are attained. The bonuses waived by
Messrs. Krebs, Springer, and McInnes have been excluded from the Bonus
column and the value of the restricted stock to which those individuals are
entitled is included in the restricted stock column. Messrs. Krebs,
Springer, McInnes, and Marlier own 36,920, 13,841, 10,619, and 10,222 shares
of restricted stock with a value of $816,670, $306,163, $234,892, and
$226,111, respectively, based upon a share value of $22.12 as of December
31, 1993 and pursuant to their deferral described above, Messrs. Krebs,
Springer, and McInnes were entitled to receive $215,325, $121,632, and
$34,488 in restricted stock, respectively, and received 8,788, 4,964, and
1,407 shares, respectively, in February, 1994. Dividends are paid on
restricted stock awarded by the Corporation.
(3) Includes the maximum annual contribution by the Corporation of $4,000 to the
Retirement and Savings Plan, a 401(k) plan, to match the 1993 and 1992
pre-tax election contribution made by each participant to such plan. The
amount for 1991 is not subject to the reporting requirements.
(4) Represents a phantom option award issued under the Santa Fe Pacific Gold
Corporation Phantom Stock Option Plan.
(5) This information is not reported for those years in which the named
executive was not an executive officer of the Corporation.

STOCK OPTION/SAR GRANTS

The following table sets forth information with respect to the individuals
named in the Summary Compensation Table concerning the grant of options and
stock appreciation rights during 1993.

OPTION/SAR GRANTS IN 1993 FISCAL YEAR

<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------- Potential Realizable
Number of Value at Assumed Annual
Securities % of Total Rates of Stock Price
Underlying Options/SARs Appreciation for Option
Options/SARs Granted to Exercise or Term
Granted Employees in Base Price Expiration ------------------------
Name (Shares) Fiscal Year ($/Share) Date 5% 10%
- -------------------------------- ------------ ------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Krebs(1).............. 200,000 3.44% $ 17.13 05/25/03 $2,154,593 $5,460,162
64,477 1.11% $ 17.31 12/11/00 $ 489,386 $1,154,617
41,190 0.71% $ 18.06 08/01/98 $ 209,593 $ 464,206
24,167 0.42% $ 18.06 01/01/97 $ 81,447 $ 173,219
Richard T. Zitting.............. 119,182(2) 7.58%(2) $ 7.25(2) 07/01/98 $ 238,726 $ 527,523
Denis E. Springer(1)............ 100,000 1.72% $ 17.13 05/25/03 $1,077,296 $2,730,081
Donald G. McInnes(1)............ 80,000 1.38% $ 17.13 05/25/03 $ 861,837 $2,184,065
Steven F. Marlier(1)............ 80,000 1.38% $ 17.13 05/25/03 $ 861,837 $2,184,065
</TABLE>

- ------------
(1) The option grants listed in the table with a $17.13 exercise price for
Messrs. Krebs, Springer, McInnes, and Marlier become exercisable in two
equal installments beginning May 25, 1994, and contain a reload feature. Mr.
Krebs also received three option grants in connection with his use of shares
to exercise options: the option with an exercise price of $17.31 became
exercisable on December 29, 1993, and the remaining two options, each with
exercise prices of $18.06, became exercisable on December 30, 1993. If the
stockholders' common stock increased in value using the same valuation
method set forth in the table (based on the per share gain with respect to
the Santa Fe Railway option grant with a $17.13 exercise price and the
Corporation's outstanding shares at December 31, 1993), the value of the
stockholders' equity would increase approximately $2.0 billion at 5 percent
and $5.1 billion at 10 percent.
(2) Gold Corporation maintains the Santa Fe Pacific Gold Corporation Phantom
Stock Option Plan ("Phantom Plan") in which Mr. Zitting participates.
Pursuant to the plan, Mr. Zitting received a grant of 119,182 phantom
options at an option price of $7.25 as of July 1, 1993. The options will
vest in three annual installments commencing July 1, 1994 and terminate five
years from the date of grant. The use of phantom options based upon the
value of Gold Corporation is appropriate as there is no currently traded
stock of that company. The grant price was determined by a formula designed
to approximate the market value of a share of common stock of the Gold
Corporation, and the share value will be determined under this formula for
grants prior to the issuance of a publicly-traded security in the Gold
Corporation.

9
<PAGE> 12

OPTION/SAR EXERCISES AND HOLDINGS

The following table sets forth information with respect to the individuals
named in the Summary Compensation Table concerning their exercise of stock
options or SARs during 1993 and unexercised stock options and SARs held as of
the end of 1993.

AGGREGATED 1993 STOCK OPTION/SAR EXERCISES AND YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
Number of Value of Unexercised
Securities Underlying In-the-Money
Unexercised Options/SARs Options/SARs at
Aggregate at Year End (Shares) Year End(1)(2)
Shares Acquired Value ---------------------------- ----------------------------
Name On Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- --------------------- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Krebs...... 173,333 $1,884,563 650,472 200,000 $ 7,445,866 $ 998,000
78,980 $ 682,585
83,145 $1,065,294
Richard T. Zitting... 113,329 $1,026,228 0 3,267 $ 0 $ 51,423
0(3) 119,182(3) $ 0 $ 153,745(3)
Denis E. Springer.... 55,333 $ 650,439 160,180 100,000 $ 2,116,734 $ 499,000
5,891 $ 75,869
Donald G. McInnes.... 5,000 $ 54,245 22,000 80,000 $ 344,960 $ 399,200
27,800 $ 278,156
Steven F. Marlier.... 25,000 $ 131,125 0 105,000 $ 0 $ 642,700
</TABLE>

- ------------
(1) Dollar values are calculated by determining the difference between the fair
market value of the securities underlying the options or SARs and the
exercise or base price of the options or SARs at exercise or at year-end
($22.12), as applicable.

(2) Options or SARs are in-the-money if the fair market value of the underlying
securities exceeds the exercise or base price of the option or SAR.

(3) Dollar values of phantom options awarded under the Phantom Plan are
calculated by determining the difference between the year end value of a
phantom unit calculated pursuant to a formula designed to approximate the
value of a share of the Gold Corporation and the exercise or base price.

LONG TERM INCENTIVE PLAN

On January 26, 1993, the Board of Directors adopted the Santa Fe Pacific
Long Term Incentive Stock Plan ("Stock Plan") which was approved by the
stockholders at the 1993 Annual Meeting of Stockholders. Messrs. Krebs,
Springer, McInnes, and Marlier participate in the Stock Plan and pursuant to the
plan, Messrs. Krebs, Springer, McInnes, and Marlier received grants of
restricted stock subject to a Performance Period. The award will vest ratably
beginning on January 1, 1996, over a three to five year period, if the
performance criteria based upon return on invested capital over such period are
satisfied. Dividends are paid on this restricted stock.

The following table sets forth information with respect to the individuals
named in the Summary Compensation Table concerning the grant of long term
incentive awards.

LONG TERM INCENTIVE PLANS -- 1993 AWARDS

<TABLE>
<CAPTION>
Estimated Future Payouts under Non-Stock Price-Based Plans
------------------------------------------------------------
Number of
Shares,
Units, Threshold Maximum
or Performance Number of Number of
Name Other Rights Period Shares Shares
- ------------------------------------- ------------- ----------------- --------- ---------
<S> <C> <C> <C> <C>
Robert D. Krebs...................... 26,270 01/01/93-12/31/97 6,567 26,270
Denis E. Springer.................... 13,841 01/01/93-12/31/97 3,460 13,841
Donald G. McInnes.................... 10,619 01/01/93-12/31/97 2,654 10,619
Steven F. Marlier.................... 10,222 01/01/93-12/31/97 2,555 10,222
</TABLE>

10
<PAGE> 13

PENSION PLANS

The following table shows the estimated pension benefits payable to a
covered participant at normal retirement age (age 65) under the Santa Fe Pacific
Retirement Plan ("Retirement Plan"), as well as nonqualified supplemental
pension plans that provide benefits that would otherwise be denied participants
by reason of certain Internal Revenue Code limitations on qualified plan
benefits, based generally upon compensation that is covered under the plans and
upon years of service with the Corporation and its subsidiaries.

In light of the portion of his earned 1991 bonus under the Incentive Plan
that Mr. Krebs agreed to forego, the Board entered into a supplemental
retirement agreement with Mr. Krebs to provide that the bonus amount of $213,165
that he forfeited would be included for purposes of his retirement calculation
as a supplemental benefit.

PENSION PLAN TABLE

Average Years of Service
Yearly -------------------------------------------------------------------------
Compensation 10 15 20 25 30 35
- ------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 250,000 $ 40,000 $ 60,000 $ 80,000 $ 99,000 $119,000 $139,000
$ 400,000 $ 64,000 $ 96,000 $128,000 $160,000 $191,000 $220,000
$ 600,000 $ 96,000 $143,000 $192,000 $239,000 $287,000 $335,000
$ 800,000 $128,000 $192,000 $255,000 $319,000 $383,000 $447,000
$1,000,000 $160,000 $240,000 $320,000 $400,000 $480,000 $560,000
</TABLE>

A participant's average yearly compensation under the Corporation's pension
plans is based upon his or her average base salary and cash bonus earned for the
60 consecutive months during the last 120 months of service for which such
average is the highest or, in the case of a participant who has been employed
for less than five years, the period of his or her employment with the
Corporation and its subsidiaries. The estimated years of service for Mr. Krebs,
Mr. Zitting, Mr. Springer, Mr. McInnes, and Mr. Marlier are 28, 15, 11, 24, and
2, respectively. Benefit figures shown above are annual amounts payable based on
a straight life annuity under the Corporation's benefit formula without regard
to any Railroad Retirement, Social Security, or other offsets, assuming normal
retirement by the participant without a joint survivorship provision. The
Retirement Plan alternatively provides for joint survivorship options. For
purposes of the Pension Plan, covered compensation in 1993 for Mr. Krebs, Mr.
Zitting, Mr. Springer, Mr. McInnes, and Mr. Marlier was $712,800, $456,779,
$389,792, $296,631, and $284,222, respectively.

EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS

The Corporation has approved severance agreements ("Severance Agreements")
for certain key executive officers of the Corporation including Messrs.
Springer, McInnes, and Marlier. The Severance Agreements are intended to
encourage such employees to remain in the employ of the Corporation during
periods of uncertainty in the event the Corporation undergoes a change in
control. A "change in control of the Corporation" is generally defined to occur
if: (a) any "person" becomes the beneficial owner of securities representing 25%
or more of the voting power of the Corporation's or Santa Fe Railway's
outstanding securities; or (b) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Corporation cease to constitute at least a majority of the
Board; or (c) the Corporation's stockholders approve a merger or consolidation
of the Corporation or Santa Fe Railway with another corporation; or (d) the
Corporation's or Santa Fe Railway's stockholders approve a plan of complete
liquidation or an agreement for the sale or disposition by the Corporation or
Santa Fe Railway of all or substantially all of their assets, respectively. Each
Severance Agreement provides for the payment of severance benefits to the
employee if his or her employment is terminated during

11
<PAGE> 14

the term of the Severance Agreement following such an event either by the
Corporation other than for "Cause" or by the employee for "Good Reason," as
those terms are defined therein.

The term of the Severance Agreements extends to December 31, 1994, and is
automatically extended for additional one-year periods unless, by September 30
of any year, the Corporation gives notice that the Severance Agreements will not
be extended for the following year. The Severance Agreements, however, are
automatically extended for a period of 36 months following a "change in control
of the Corporation."

The Severance Agreements for Messrs. Springer, McInnes, and Marlier provide
for: (a) lump sum payment equal to two years' base salary, or if higher, the
base salary paid in the last twenty-four months, or in lieu thereof, the
benefits provided under a subsidiary's severance program (as described below),
and two times the maximum bonus payment as if all performance objectives have
been met in full with an additional sum so that such benefits are payable on an
after-tax basis; (b) a lapse of restrictions on any outstanding restricted stock
grants and full payout of related Performance Units; (c) a cash payment for each
outstanding option equal to the amount by which either (i) the fair market value
of a share of common stock on the date of termination or, in the case of
Non-Qualified Stock Options, the highest quoted per share price during the
sixty-day period commencing on the date of termination, or (ii) the price paid
in connection with any "change in control of the Corporation," whichever is
higher, exceeds the fair market value of a share of common stock on the date of
grant; (d) legal fees and expenses relating to claims under the Severance
Agreements; and (e) life, disability, and health benefits for a period of up to
twenty-four months. The payments provided in clauses (a), (b), and (c) above are
payable pursuant to the Severance Agreements and are further limited to the
extent that the value thereof, when aggregated with other benefits or payments,
would exceed (i) three times the "base amount" as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), the base amount
approximating the average of five years' compensation preceding a "change in
control of the Corporation," plus (ii) the value of all health and life
insurance benefits, and (iii) the earned portion of any award or benefit
previously granted.

Mr. Zitting has entered into a severance agreement with the Gold
Corporation extending to June 25, 1995 as a result of the asset exchange with
Hanson Natural Resources Company which extended his agreement. The agreement
will be renewed annually unless terminated by the Board of Directors of the Gold
Corporation. In the event that Mr. Zitting is terminated by the Gold Corporation
without cause or is constructively terminated following a change of control of
Gold Corporation or the Corporation (the definition of which is similar to that
used in the Corporation's Severance Agreements), he will be entitled to (i) two
times base pay, (ii) a bonus payout as if all objectives were met, (iii) cash
value of all outstanding stock awards, (iv) continuation of life insurance and
medical benefits, and (v) outplacement.

Santa Fe Railway and the Corporation's subsidiaries maintain severance
programs for all full-time salaried employees, including the executive officers
named in the Summary Compensation Table, who are terminated by their respective
companies other than for Cause as defined in the severance programs. A
participant is generally entitled to an amount up to one year's pay based upon a
participant's age, length of service, and current salary, or in certain
circumstances, supplemental payments provided that the aggregate does not exceed
two years' pay. The program further provides that in the event of a change in
control (which is similar to the definition used in the Severance Agreements),
the program will be maintained for a twenty-four month period. Benefits under
these programs will not be paid if a participant received payments under a
Severance Agreement.

The Corporation and its subsidiaries have similar change in control
provisions in certain of the incentive plans. In the event of a change in
control, Santa Fe Railway would be contractually bound to maintain the Incentive
Plan and its administrative committee throughout the year in which the change in
control occurred.

12
<PAGE> 15

The Corporation's Stock Plan also has a change in control provision similar
to that discussed above except that it does not encompass changes in ownership
of Santa Fe Railway common stock or, in certain circumstances, assets. In the
event of a change in control, all awards of options and SARs become immediately
exercisable and all restrictions on restricted stock lapse except as limited by
individual agreement.

The Retirement Plan has a similar change in control provision that
restricts the use of excess plan assets for purposes other than the payment of
participant benefits.

Trust Agreement. The Corporation maintains a trust agreement ("Trust
Agreement") to set aside funds necessary to satisfy the Corporation's
obligations to present and former executives and directors under deferred
compensation programs and agreements, retirement commitments, certain consulting
agreements, and supplemental retirement plans. In 1988, the Trust Agreement was
amended to provide for permanent funding of benefits under the supplemental
retirement plans and the Retirement Policy for Directors of Santa Fe Pacific
Corporation on a present value basis, and to further provide for a split-dollar
life insurance plan ("Split-dollar Plan") for certain key employees including
Mr. Krebs and one executive officer. The Split-dollar Plan provides for the
purchase of life insurance policies covering key employees, and for the payment
to each covered employee's beneficiary of a portion of the death benefit payable
under such employee's life insurance policy, with the remaining value in each
policy to be used to fund the other obligations of the trust established under
the Trust Agreement. The trust retains all rights to any cash values of the
policies and the executive officers pay the cost of term coverage. In the event
of a "change in control of the Corporation" as defined in the Severance
Agreements, the Trust Agreement provides for the payment of amounts which may
become due, subject only to the claims of general creditors of the Corporation
in the event that the Corporation became bankrupt or insolvent.

COMPENSATION AND BENEFITS COMMITTEE REPORT ON EXECUTIVE COMPENSATION.

The Compensation and Benefits Committee (the "Committee") of the Board of
Directors is composed entirely of outside directors, none of whom are employees
or former employees of the Corporation or its subsidiaries. The Committee is
responsible for the overall executive compensation strategy of the Corporation,
the on-going monitoring of the strategy's implementation, and recommendations to
the Board to implement such strategies.

Executive Officers Compensation Policy. The Committee's executive
compensation policy has four overall objectives: (1) to align the interests of
its executive officers with that of the Corporation's stockholders; (2) to link
compensation to the performance of the Corporation, as well as to the individual
contribution of each officer; (3) to emphasize variable as opposed to fixed
compensation; and (4) to compensate executives at a level which is competitive
in the marketplace so that the Corporation can continue to attract, motivate,
and retain executives with outstanding abilities.

Management of Annual Compensation. The Committee's executive compensation
strategy encompasses conservatively managing fixed compensation and emphasizing
variable, results-oriented compensation, while ensuring that it offers a
competitive total compensation package to executives. The Committee monitors
total remuneration data on an annual basis to ensure that the Corporation is
appropriately aligned with the market for executive talent. Base salaries for
all executives and for all other salaried employees are based upon salary ranges
which are conservatively established for each position. Salary ranges are
determined through annual competitive salary surveys. In addition, each
employee's salary is based on an annual assessment of his or her performance.

Since 1987, the Corporation has undergone a major restructuring and has
divested many subsidiaries and lines of business. In connection with a major
restructuring of Santa Fe Railway in 1990, Santa Fe Railway implemented a
revised compensation program under which exempt, salaried employees were subject
to pay reductions ranging from four percent to ten percent of compensation in
September 1990, and Mr. Krebs' base pay was reduced by twenty-five percent.

13
<PAGE> 16

During 1993, Hay Management Consultants was retained to conduct a study to
compare the compensation levels of the Corporation with those of corporations of
comparable size and revenues, and with a comparable employee base. The Hay data
bases for general industry, transportation companies, and railroad companies of
like size and revenues (which includes companies in the Dow Jones Transportation
Average), were the basis for comparing compensation levels with respect to
executives employed at Santa Fe Railway. The Hay data bases of minerals
companies of like size and revenues, as well as general industry, were the basis
for comparing compensation levels with respect to executives employed at Gold
Corporation. Based upon the study, it was determined that the Corporation is at
the moderate to low end of total compensation for all executive employees. For
1994, base executive salaries and benefits have been set at moderately
competitive levels and total compensation is tied directly to performance
levels. Thus, executive compensation remains largely variable and should
fluctuate with the performance of the Corporation and stockholder value.

Performance-Based Executive Compensation Plans. The Committee seeks to tie
compensation to corporate performance and individual performance through
incentive plans maintained by the Corporation's operating units. Officers of the
Corporation and officers and salaried employees of Santa Fe Railway participate
in The Atchison, Topeka and Santa Fe Railway Company Incentive Compensation Plan
(the "Incentive Plan"). The Incentive Plan provides for the establishment of
annual performance goals which may include performance goals for Santa Fe
Railway and individual productivity objectives. Under the Incentive Plan, awards
to executive officers are weighted 80 percent upon the achievement of targeted
growth in Net Revenue from Operations and 20 percent upon the achievement of
individual productivity objectives which are derived from the Corporation's and
Santa Fe Railway's key strategic objectives during each calendar year. A
participant's compensation depends on the goals achieved, with the maximum
eligibility award during 1993 being an amount between 10 percent and 100 percent
of a participant's salary. A similar incentive plan is maintained by the Gold
Corporation, with a maximum award of between 20 percent and 80 percent of a
participant's salary. This plan provides for establishment of annual performance
goals which may include performance goals for the company and individual
productivity objectives.

In 1993, the Committee adopted a new incentive and retention program
("Exchange Program") in connection with the Incentive Plan whereby each
executive officer and other key employees were given the opportunity to exchange
up to 50 percent of the amount that would otherwise have been payable in cash to
such officer or employee as an annual incentive bonus for an award of restricted
stock. The number of shares of stock subject to such an award is determined
using the following formula:

(i) 1.5 times;

(ii) the quotient of:

(a) the amount of bonus foregone divided by

(b) the fair market value of a share of the Corporation's common
stock at the date of grant.

The Committee determined that providing participants with shares of common stock
having an initial 50 percent premium above the amount of cash that would
otherwise be payable was necessary and appropriate to encourage stock ownership
by executive officers and other key employees.

Shares of restricted stock awarded under the Exchange Program generally
vest on the third anniversary of the award, except that all of such shares will
become vested upon the occurrence of certain events (such as achievement of
certain performance goals based upon return on invested capital, death or a
change of control) and that a pro rata portion of such shares will vest upon the
occurrence of certain other events (such as retirement or an involuntary
termination of employment without cause).

14
<PAGE> 17

The Committee approved the Program to achieve two objectives. First, the
Committee believed that the amount of the Corporation's common stock owned by
executive officers should be increased to align further the economic interests
of management with those of stockholders. Second, the Committee believed it was
necessary to enhance the retentive effect of its compensation practices through
an award that provided an incentive to enhance stockholder value and to remain
in the Corporation's employ.

Gold Corporation maintains an annual incentive program similar to the
Railway Incentive Plan. The performance measures used by Gold are the
achievement of targeted growth in Operating Income and the achievement of
individual productivity objectives which are derived from Gold Corporation's
strategic objectives.

In light of recent federal tax law changes disallowing the deductibility of
certain executive compensation in excess of $1 million, unless it is
performance-based, the Committee has undertaken to review the impact of these
changes upon the Corporation. The tax law changes apply to compensation in
excess of $1 million paid to the chief executive and the other four highest
compensated officers of publicly held corporations. In 1994, it is expected that
no officer of the Corporation will earn compensation in excess of $1 million
that is not performance-based.

Long-Term Incentive Plans. To encourage ownership in the Corporation and
alignment of executives' interests with those of stockholders, the Corporation
implemented in 1993 a new Long Term Incentive Stock Plan (the "Stock Plan"). By
providing long-term incentives which comprise a substantial portion of an
executive's total compensation in the form of equity-based compensation, the
Stock Plan encourages executive performance that should lead to enhanced stock
performance. In determining amounts awarded, the Committee took into account
current total compensation levels compared to competitive levels. Option grants,
which become exercisable over a number of years, and restricted stock grants,
with restrictions which lapse over a number of years upon achievement of
specified performance goals, have been made under the Stock Plan to encourage
executives to stay with the Corporation and to identify with the long-term
interests of the Corporation and its stockholders.

Option grants under the Stock Plan were awarded on May 25, 1993, to four
Santa Fe Railway executive officers named in the Summary Compensation Table, and
option grants were awarded in 1993 to all other salaried employees of the
Corporation, for a total of 5,814,770 shares.

Restricted stock grants under the Stock Plan were awarded on May 25, 1993,
to four Santa Fe Railway executive officers named in the Summary Compensation
Table, and restricted stock grants were awarded in 1993 to 134 other senior
management employees, for a total of 777,422 shares in 1993. All of these grants
were performance-based, with vesting to occur upon achievement of return on
invested capital performance goals.

A performance-based phantom option grant based upon an estimated value of
Gold Corporation was awarded on July 1, 1993 to Mr. Zitting, named in the
Summary Compensation Table.

The Corporation has also adopted ownership goals for the four named
executives of Santa Fe Railway and senior managers of that company that are
equal to one to five times an individual's base pay. Mr. Krebs has a share
ownership goal of five times pay, and Messrs. Springer, McInnes, and Marlier
have share ownership goals of two times pay, to be achieved over a three-year
time period.

The 1993 Compensation of the Chief Executive Officer. The factors upon
which Mr. Krebs' 1993 compensation was based are the same as described above for
all executive officers pursuant to the Corporation's executive compensation
strategy. Mr. Krebs is eligible to participate in the same compensation plans
maintained by the Corporation and Santa Fe Railway that are available to other
executive officers of the Corporation as described above. The annual incentive
reported as earned in 1993 by Mr. Krebs in the Summary Compensation Table was
predominantly based on the achievement of targeted growth in Santa Fe Railway's
Net Revenue from Operations from the

15
<PAGE> 18

Corporation's 1993 profit plan. The growth in Net Revenue from Operations
increased approximately ten percent in 1993 from 1992 after adjustment for
special items. A lesser proportion of Mr. Krebs' 1993 bonus was based on his
achievement of personal goals as determined by the Committee, derived from key
long term and short term business strategies. These business strategies included
confidential corporate strategy development, safety, service levels, and
organizational effectiveness.

In order to link compensation paid to Mr. Krebs to the Corporation's stock
performance and to provide him with an incentive for further growth in the
Corporation's total return to stockholders, a restricted stock grant with a five
year performance period was made in 1993 under the Stock Plan. In addition, to
encourage his stock ownership, Mr. Krebs was eligible to participate in the
Exchange Program described above. Mr. Krebs is also entitled to receive option
grants equal to shares used to pay an option purchase price.

Compensation and Benefits Committee:

Joseph F. Alibrandi, Chairman
Bill M. Lindig
Michael A. Morphy
Jean Head Sisco
Robert H. West

16
<PAGE> 19

PERFORMANCE GRAPH.

The following graph depicts a five year comparison of cumulative total
stockholder returns, assuming reinvestment of dividends1, for the Corporation,
the Standard & Poor's 500 Stock Index ("S&P 500"), and the Dow Jones
Transportation Average ("DJTA")2. The Corporation is included within both the
S&P 500 and the DJTA indices. The graph assumes that $100 was invested on
December 31, 1988, in the Corporation's common stock, the S&P 500, and the DJTA.

<TABLE>
<CAPTION>
Measurement Period Santa Fe
(Fiscal Year Covered) Pacific S&P 500 DJTA
<S> <C> <C> <C>
1988 100 100 100
1989 108 132 123
1990 84 128 94
1991 185 166 148
1992 171 179 160
1993 297 198 201
</TABLE>

- ------------
(1) With respect to an investor in the Corporation's common stock (which trades
on the New York, Chicago, and Pacific Stock Exchanges under "SFX"), this
analysis assumes that cash dividends were reinvested in additional shares of
SFX on the date the dividends were paid. Other distributions to stockholders
were included as follows:

(a) On December 4, 1990, the Corporation distributed its approximate
80 percent stock ownership in each of Catellus Development
Corporation ("Catellus") and Santa Fe Energy Resources, Inc.
("Energy") to its stockholders on a pro rata basis. Each SFX
stockholder received one share of Catellus stock for each four
shares of SFX owned and one share of Energy stock for each
3.317247 shares of SFX owned. For this analysis, it is assumed
that the investor sold these shares on December 4, 1990 for the
closing "when-issued" New York Stock Exchange ("NYSE") price on
such date and used the proceeds to purchase additional shares of
SFX at the closing "when-issued" price.

(b) In January 1991, the Board voted to redeem rights issued under its
stockholder rights plan by means of a share distribution. Holders
received an amount of SFX equal to $0.05 per right on March 15,
1991. For this analysis, it is assumed that each investor received
.006557 additional shares for each share of SFX owned based on the
NYSE closing price for SFX on March 15, 1991.

(2) Stock price performance shown on this graph is not necessarily indicative of
future price performance. The initial point selected for comparison of
investment performance, which for this year is December 31, 1988, as
required by Securities and Exchange Commission rules, is also a factor that
will affect total stockholder return over any given period of time.

17
<PAGE> 20

INDEPENDENT PUBLIC ACCOUNTANTS

Price Waterhouse served as the independent public accountant for the
Corporation in 1993. The Corporation's independent public accountant for 1994
will be selected by the Board at a regular Board meeting to be held in 1994.
Representatives of Price Waterhouse will be present at the annual meeting with
the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.

OTHER BUSINESS

The Board knows of no business that will come before the meeting except
that indicated above. However, if any other matters are properly brought before
the meeting, it is intended that the persons acting under the proxy will vote
thereunder in accordance with their best judgment.

COST OF PROXY SOLICITATION

The cost of preparing, assembling, and mailing this proxy material will be
borne by the Corporation. In addition to solicitation by mail, solicitations may
be made by regular employees of the Corporation or by paid solicitors in person
or by telephone, telecopy, or telegraph. Arrangements may be made with brokerage
houses, custodians, nominees, and fiduciaries to send proxy material to their
principals and the Corporation will reimburse them for their expense in so
doing.

STOCKHOLDER PROPOSALS

In accordance with the proxy rules of the Securities and Exchange
Commission, proposals by stockholders to be considered for inclusion in the
proxy material solicited by the Corporation for the 1995 annual meeting must be
received at the Corporation's executive offices no later than November 15, 1994.
To be eligible for inclusion, a proposal must also comply with all applicable
provisions of Regulation 14A under the Securities Exchange Act of 1934.

By order of the Board of Directors.
MARSHA K. MORGAN
Corporate Secretary
March 9, 1994

18
<PAGE> 21

DIRECTIONS TO
SANTA FE PACIFIC CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
HYATT REGENCY--WOODFIELD
1800 EAST GOLF ROAD
SCHAUMBURG, ILLINOIS
(708) 605-1234

FROM CHICAGO OR O'HARE AIRPORT

Proceed west on Interstate 90 to Illinois 53 exit south. Proceed south on
Illinois 53 to the exit for Higgins/Golf Road, following the access road (stay
in the left lane) to the first stoplight (Woodfield Road). Turn left (going
under the expressway) and then left again to go north on the opposite access
road to reach Golf Road (Illinois 58) (north access road ends at Golf Road).
Turn left onto Golf Road and go approximately two blocks to turn right into the
Hyatt entrance. Immediately west of the Hyatt is an access road to the large
parking lot at the rear of the hotel.

FROM INTERSTATE 290/NORTH 53

Proceed north on Illinois 53/Interstate 290 to the Higgins/Golf Road exit.
Proceed north on the access road past stoplights at Higgins Road and Woodfield
Road to Golf Road (Illinois 58) (north access road ends at Golf Road). Turn left
onto Golf Road and go approximately two blocks to turn right into the Hyatt
entrance. Immediately west of the Hyatt is an access road to the large parking
lot at the rear of the hotel.

[MAP TO COME]
<PAGE> 22
Difference Letter

The following graphic material cannot be transmitted pursuant to EDGAR:

1. The cover page has a blue logo printed above the Company name.

2. The back cover page has a map printed in blue and black which shows
directions to the Annual Meeting site.

<PAGE> 23
SANTA FE PACIFIC CORPORATION
1700 EAST GOLF ROAD, SCHAUMBURG, IL 60173
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Michael A. Morphy, Jean Head Sisco,
P and Edward F. Swift, and each of them, proxy for the undersigned, with
R power of substitution, to vote as specified herein, all Common Stock
O held by the undersigned, with the same force and effect as the
X undersigned would be entitled to vote if personally present, at the
Y annual meeting of stockholders of the Company to be held in The Hyatt
Regency-Woodfield, 1800 East Golf Road, Schaumburg, IL, on Tuesday,
April 26, 1994, at 10:00 A.M. and at any adjournment or postponement
thereof.

Election of Directors - Nominees are:

Bill M. Lindig
Roy S. Roberts
John S. Runnells II
Robert H. West

You are encouraged to specify your choices by marking the appropriate
box, SEE REVERSE SIDE, but you need not mark any box if you wish to
vote in accordance with the Board of Directors' recommendation. The
Proxy Committee cannot vote your shares unless you sign and return
this card.

PLEASE SIGN ON REVERSE SIDE

<PAGE> 24
Please mark your |
X votes as in this | 8664
example. |______
This proxy, when properly executed, will be voted in the
manner directed herein. If no directions are made, this
proxy will be voted "FOR" the Nominees for Director.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR all Nominees.
- --------------------------------------------------------------------------------
Election of Directors FOR WITHHELD NOMINEES FOR DIRECTOR:
"FOR" all nominees / / / / If marked, vote Bill M. Lindig
(except as is withheld from Roy S. Roberts
marked to the all nominees John S. Runnells II
contrary below) listed Robert H. West

To withhold authority to vote for any individual nominee, write the name of the
nominee(s) in the space provided below

______________________________________

- --------------------------------------------------------------------------------

In their discretion, the proxies are authorized to vote upon
such other business as is properly brought before the
meeting.

Please sign exactly as name appears hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please give
full title as such.

_______________________________________________

_______________________________________________
SIGNATURE(S) DATE