<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
SANTA FE PACIFIC GOLD CORPORATION
(NAME OF SUBJECT COMPANY)
HOMESTAKE MINING COMPANY
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
80217610
(CUSIP NUMBER OF CLASS OF SECURITIES)
WAYNE KIRK
VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
HOMESTAKE MINING COMPANY
650 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94108-2788
(415) 981-8150
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
With a copy to:
RICHARD HALL, ESQ.
CRAVATH, SWAINE & MOORE
WORLDWIDE PLAZA
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
(212) 474-1000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THIS AMENDMENT NO. 2 TO SOLICITATION/RECOMMENDATION STATEMENT RELATES TO A
PROPOSED EXCHANGE OFFER BY NEWMONT MINING CORPORATION DESCRIBED IN ITS
REGISTRATION STATEMENT ON FORM S-4 FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON JANUARY 7, 1997 (REGISTRATION NO. 333-19335), WHICH OFFER HAS NOT
BEEN COMMENCED. BY FILING THIS AMENDMENT NO. 2 TO SOLICITATION/RECOMMENDATION
STATEMENT, HOMESTAKE MINING COMPANY DOES NOT ADMIT THAT IT IS REQUIRED TO MAKE
THIS FILING.
<PAGE> 2
Homestake Mining Company ("Homestake") hereby amends and supplements its
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Statement")
originally filed on January 16, 1997, with respect to the proposed offer by
Newmont Mining Corporation ("Newmont") to exchange each share of Santa Fe
Pacific Gold Corporation common stock, $0.01 par value, together with the
associated preferred share purchase rights, for 0.40 of a share of Newmont
Common Stock, $1.60 par value.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
Item 6 of the Statement is hereby amended to add the following information
at the end thereof:
On December 9, 1996, Homestake gave a slide presentation to Homestake and
Santa Fe Pacific Gold Corporation ("Santa Fe") shareholders with respect to the
combination of Homestake and Santa Fe. A copy of the slide presentation is filed
as Exhibit 6 and is incorporated herein by reference. In addition, Homestake has
revised the slide from the January 15, 1997, Homestake management slide
presentation to Homestake and Santa Fe shareholders which shows complex ore
processed (1990-1995) to correct certain information in such slide. A copy of
the revised slide is filed as Exhibit 7, and is incorporated herein by
reference.
ITEM 9. MATERIALS TO BE FILED AS EXHIBITS.
Item 9 of the Statement is hereby amended to add the following Exhibit:
<TABLE>
<CAPTION>
EXHIBIT
<C> <C> <S>
6 -- Homestake management slide presentation to Homestake and Santa Fe shareholders
dated December 9, 1996.
7 -- Revised slide from the January 15, 1997, Homestake management slide presentation
to Homestake and Santa Fe shareholders.
</TABLE>
<PAGE> 3
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 2 is true, complete
and correct.
HOMESTAKE MINING COMPANY
By: /s/ WAYNE KIRK
------------------------------------
Name: Wayne Kirk
Title: Vice President,
General Counsel and
Corporate Secretary
Dated: January 29, 1997
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
<C> <C> <S>
6 -- Homestake management slide presentation to Homestake and Santa Fe shareholders
dated December 9, 1996.
7 -- Revised slide from the January 15, 1997, Homestake management slide presentation
to Homestake and Santa Fe shareholders.
</TABLE>
<PAGE> 1
[HOMESTAKE December 9, 1996
LOGO]
[SANTA FE
LOGO]
<PAGE> 2
[HOMESTAKE THE NEW HOMESTAKE
LOGO]
- A New Leading International Gold Company
[SANTA FE
LOGO] - Asset Base, Portfolio of Growth Opportunities,
Financial Strength and Operating Skills
- Spectacular Fit and #1 Nevada Land Position
- Combination Enhances Prospects for Growth
- Potential for Valuation Rerating
<PAGE> 3
[HOMESTAKE TRANSACTION SUMMARY
LOGO]
Corporate Name: Homestake Mining Company
[SANTA FE
LOGO] Structure: Pooling of Interests/Tax-Free Exchange
Terms: 1.115:1 Fixed Exchange Ratio--No
Collar
Current Value: $17.42 per Santa Fe Share
Premium: 47% to Last Wednesday's Closing Price
Cash Flow: Accretive in 1997*
EPS: Accretive in 1997*
Cost Savings: Over $30 Million Annually
* Before one-time transaction costs
<PAGE> 4
[HOMESTAKE TRANSACTION SUMMARY
LOGO]
Board Composition: 5 Homestake, 5 Santa Fe, 2 New
[SANTA FE
LOGO] Management: Jack E. Thompson Chairman and CEO
Patrick M. James President and COO
Due Diligence: Completed
Conditions: Shareholder and Antitrust Approvals
Break Up Fee: $65 Million
Expected Closing: By Early April 1997
<PAGE> 5
[HOMESTAKE THE NEW HOMESTAKE:
LOGO] LEADING INTERNATIONAL GOLD COMPANY
[SANTA FE
LOGO] Among North American Gold Companies, New Homestake Will Rank:
#1 Gold Reserves 39.4 MM oz.
#2 Gold Production 3.2 MM oz. by 1998
#1 Nevada Land Position 1.5 MM Acres
<PAGE> 6
[HOMESTAKE HOMESTAKE MINING COMPANY
LOGO] Annual Gold Production (in Millions of Ounces)
[SANTA FE
LOGO]
Graph shows annual gold production (in millions of ounces) of Homestake during
the period 1975 to 1998 (estimated). Graph also shows annual gold production (in
millions of ounces) of Santa Fe during the period 1989 to 1998 (estimated).
Graph shows estimated annual gold production on a pro forma basis for a combined
Homestake and Santa Fe from 1989 to an estimated 3.2 million in 1998.
<PAGE> 7
[HOMESTAKE KEY FACTS
LOGO]
[SANTA FE
LOGO] - 17 Mines (8 Underground, 9 Surface)
- 10 Development Projects
- Santa Fe's 1.5 Million Acre Land Position in Nevada
- Lowest Political Risk of Any Major Gold Company
(Virtually All Reserves in U.S., Canada, Australia)
<PAGE> 8
[HOMESTAKE KEY FACTS
LOGO]
[SANTA FE
LOGO] - Homestake Paying About $125 Per Ounce of Reserves
- Also Gets 11.3 MM oz. of Mineralized Material
- Converting Half of Santa Fe's Mineralized Material to
Reserves Would Lower Price to $95 Per Ounce
- Homestake Benefits From $1 Billion in Newly Built
Santa Fe Plant Equipment
<PAGE> 9
[HOMESTAKE SYNERGIES
LOGO]
[SANTA FE
LOGO] - Achieve Over $30 Million in Annual Cost Savings
by End of 1997
- Combine and Refocus Exploration Program,
Especially in Nevada
- Leverage Complementary Technological Expertise
- Combined Exploration Budget of $65 Million
<PAGE> 10
[HOMESTAKE NEAR-TERM INITIATIVES
LOGO]
[SANTA FE
LOGO] - Close Santa Fe's Albuquerque Headquarters
- Combine U.S. Operations Base in Reno
- Focus Exploration on Strategic Land Position in
Nevada and High-Priority International Projects
- Accelerate Exploration/Development
- Optimize Development of 10 Domestic and
International Projects
<PAGE> 11
[HOMESTAKE SUCCESSFUL INTEGRATION EXPERIENCE
LOGO]
[SANTA FE
LOGO] - Detailed Plan Largely Complete;
Tough Decisions Made
- Both Companies Have Integrated Acquisitions
- Homestake/International Corona (1992)
- Santa Fe/Gold Fields Mining Co. (1993)
- Coopers & Lybrand to Advise on Integration
<PAGE> 12
[HOMESTAKE PRODUCTION COST COMPARISON
LOGO]
[SANTA FE
LOGO]
Graph compares production costs per ounce for Homestake, Santa Fe, and a
combined Homestake and Santa Fe on a pro forma basis, for the years 1994, 1995
and 1996-1998 (estimated). Graph shows a combined Homestake and Santa Fe with
noncash production costs of 60 and cash production costs of 227 in 1994;
noncash production costs of 60 and cash production costs of 238 in 1995; and
estimated noncash production costs of 71 and cash production costs of 243 for
the 1996-1998 period.
<PAGE> 13
[HOMESTAKE HEDGING POLICY
LOGO]
- Santa Fe Has Successful Program
[SANTA FE
LOGO] - Homestake Hedging Selectively
- New Homestake Will Assess Appropriate Level
<PAGE> 14
[HOMESTAKE PRO FORMA FINANCIALS* (12 Months Through September 1996)
LOGO]
[SANTA FE
LOGO]
<TABLE>
<CAPTION>
($ Millions) Homestake Santa Fe Combined
--------- -------- --------
<S> <C> <C> <C>
Income Statement Data
Revenues $747 $334 $1,081
EBITDA 180 108 288
G&A 36 21 57
Exploration 38 30 68
Net Income 31 23 54
Balance sheet
Net Working Capital $280 $105 $385
Fixed and Other Assets 1,112 1,040 2,153
------ ------ ------
$1,392 $1,146 $2,538
------ ------ ------
Debt $185 $395 $580
Other Non-Current Liabilities 443 186 629
Shareholders' Equity 764 564 1,328
------ ------ ------
$1,392 $1,146 $2,538
------ ------ ------
Market Capitalization (12/6/96) $2,292 $2,021 $4,313
* Excludes non-recurring items
</TABLE>
<PAGE> 15
INDEXED STOCK PRICE PERFORMANCE
[HOMESTAKE
LOGO]
[SANTA FE
LOGO]
Graph compares indexed stock price performance for Homestake, Sante Fe and S&P
Gold from June 1994 to November 1996, on a percentage basis with 100% as a base.
<PAGE> 16
[HOMESTAKE ADJUSTED MARKET CAPITALIZATION (12/4/96)
LOGO]
[SANTA FE
LOGO]
Graph compares adjusted market capitalization per ounce of reserves as of
December 4, 1996, including market value of equity plus debt minus cash, for ABX
($304), BMG ($137), ECO ($82), GLD ($107), HM ($107), NEM ($183) and PDG
($269).
<PAGE> 17
[HOMESTAKE 1995 WORLDWIDE GOLD RESERVES
LOGO]
[SANTA FE
LOGO]
Graph compares 1995 worldwide gold reserves in millions of ounces for SFPG
(17.9), Placer (20.9), HMC (21.5), Newmont (28.8), Barrick (36.5) and
HMC&SFPG, on a pro forma combined basis (39.4).
<PAGE> 18
1995 WORLDWIDE GOLD PRODUCTION
[HOMESTAKE
LOGO]
[SANTA FE
LOGO]
Graph compares 1995 worldwide gold production in thousands of ounces for SFPG
(846), Placer (1,788), Newmont (1,845), HMC (1,848), HMC&SFPG, on a pro forma
combined basis (2,694) and Barrick (3,140).
<PAGE> 19
[HOMESTAKE LOW POLITICAL RISK PROFILE
LOGO]
[SANTA FE
LOGO]
Graph shows a pie chart illustrating political risk profile of a pro forma
combined Homestake and Santa Fe based on reserves and mineralized material.
Graph shows 70% in U.S., 18% in Australia, 10% in Canada and 2% other.
<PAGE> 20
[HOMESTAKE GROWTH OPPORTUNITIES
LOGO]
[SANTA FE
LOGO]
<PAGE> 21
[HOMESTAKE HOMESTAKE AND SANTA FE COMBINED OPERATIONS
LOGO]
[SANTA FE
LOGO]
Slide shows worldwide mines, exploration and development for combined operations
of Homestake and Santa Fe on a map of North America, South America, Europe,
Asia, Africa and Australia. In North America, slide shows Homestake, Hemlo,
Eskay Creek, McLaughlin, Mesquite, Twin Creeks, Pinson, Lone Tree, Mule Canyon,
Trenton Canyon, Rosebud, Ruby Hill, Round Mountain, and Marigold. Slide shows
Guyana Shield, Brazil, Chile and La Falda in South America. Slide shows Ghana in
Africa, Chelopech in Europe, Central Asia and Pokrovskoye in Asia, and KCGM in
Australia.
<PAGE> 22
[HOMESTAKE COMPLEMENTARY SKILLS
LOGO]
Homestake Santa Fe
[SANTA FE ----------------------------- ------------------------------
LOGO] * Underground Mining
* Surface Mining * Surface Mining
* International Operations * Innovative Deals
* Processing * Processing
- Autoclaves - Autoclaves
- Flotation - Flotation
- Roasters
* Permitting/Development * Permitting/Development
<PAGE> 23
[HOMESTAKE
LOGO]
[SANTA FE
LOGO]
Slide shows a map of Nevada with Homestake Mines (Ruby Hill), Joint Venture
Projects (Pinson, Round Mountain and Marigold), Santa Fe Mines (Twin Creeks,
Lone Tree, Mule Canyon, Trenton Canyon and Rosebud), Ore Trends (Carlin, Battle
Mountain/Eureka and Rabbit), Other Producing Gold Mines, and unspecified Areas
of Mineral Rights Controlled by the Company.
<PAGE> 24
[HOMESTAKE
LOGO]
[SANTA FE
LOGO]
Slide shows detailed map of the area of Nevada that includes the Carlin, Rabbit
and Battle Mountain/Eureka Trends, showing Homestake and Santa Fe Mines, Areas
of Mineral Rights Controlled by the Company, Exploration Offices and Other
Producing Gold Mines.
<PAGE> 25
[HOMESTAKE
LOGO]
[SANTA FE
LOGO]
Slide shows a map of Nevada with Homestake Mines (Ruby Hill), Joint Venture
Projects (Pinson, Round Mountain and Marigold), Santa Fe Mines (Twin Creeks,
Lone Tree, Mule Canyon, Trenton Canyon and Rosebud), Ore Trends (Carlin, Battle
Mountain/Eureka and Rabbit), Other Producing Gold Mines, and unspecified Areas
of Mineral Rights Controlled by the Company.
<PAGE> 26
[HOMESTAKE INTERNATIONAL EXPLORATION
LOGO]
[SANTA FE
LOGO] - Chile
- Australia
- Guyana Shield/Brazil
- West Africa
- Central Asia
- Kazakstan
- Kyrgyz Republic
<PAGE> 27
[HOMESTAKE HOMESTAKE COMBINATION IS BEST
LOGO] FOR SANTA FE SHAREHOLDERS
[SANTA FE
LOGO]
<TABLE>
<CAPTION>
Santa Fe/Homestake
------------------
<S> <C>
Current Value to
GLD Shareholders $17.42 per share
% of Combined Equity
Owned by GLD Shareholders 50%
"Rerating" Opportunity Yes
Accretive to 1997 Cash flow Yes
Accretive to 1997 EPS Yes
Debt to Capitalization 29%
Closing April 1997
</TABLE>
<PAGE> 28
[HOMESTAKE THE NEW HOMESTAKE
LOGO]
[SANTA FE
LOGO]
- A New Leading International Gold Company
- Asset Base, Portfolio of Growth Opportunities,
Financial Strength and Operating Skills
- Spectacular Fit and #1 Nevada Land Position
- Combination Enhances Prospects for Growth
- Potential for Valuation Rerating
<PAGE> 29
[HOMESTAKE December 9, 1996
LOGO]
Statements contained in this analyst presentation which
are not historical facts are forward-looking statements
[SANTA FE as that item is defined in Private Securities Litigation
PACIFIC Reform Act of 1995. Such forward-looking statements are
GOLD subject to risks and uncertainties which could cause
CORPORATION actual results to differ materially from estimated
LOGO] results. Such risks and uncertainties are detailed in
the companies' filings with the Securities and Exchange
Commission.
<PAGE> 30
INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS
OF HOMESTAKE MINING COMPANY AND OTHER REPRESENTATIVES
OF HOMESTAKE MINING COMPANY WHO MAY COMMUNICATE WITH
HOMESTAKE AND SANTA FE PACIFIC GOLD CORPORATION SHAREHOLDERS
The following is information concerning the directors and executive
officers of Homestake Mining Company and other representatives of Homestake
("Homestake") who may communicate with Homestake and Santa Fe Pacific Gold
Corporation ("Santa Fe") shareholders with respect to (i) Homestake's planned
combination with Santa Fe pursuant to which Santa Fe will become a wholly-owned
subsidiary of Homestake and each outstanding share of Santa Fe Common Stock,
$0.01 par value, will be converted into the right to receive 1.115 shares of
Homestake Common Stock, $1.00 par value (the "Combination") and (ii) the
proposed offer by Newmont Mining Corporation ("Newmont") disclosed in the
preliminary prospectus contained in the Registration Statement on Form S-4 of
Newmont that was filed with the Securities and Exchange Commission on January 7,
1997 (Registration No. 333-19335), to exchange each outstanding share of Santa
Fe Common Stock for 0.40 of a share of Newmont Common Stock, $1.60 par value.
Newmont's proposed offer has not been commenced. Newmont's Registration
Statement states that its principal executive offices are located at 1700
Lincoln Street, Denver, Colorado 80203. Santa Fe's principal executive offices
are located at 6200 Uptown Boulevard NE, Suite 400, Albuquerque, New Mexico
87110.
DIRECTORS AND OFFICERS OF HOMESTAKE
<TABLE>
<CAPTION>
PRESENT POSITION WITH HOMESTAKE OR OTHER PRINCIPAL
NAME AND BUSINESS ADDRESS OCCUPATION OR EMPLOYMENT
- ------------------------- --------------------------------------------------
<S> <C>
M. Norman Anderson............................... Director, Homestake Mining Company; Former
N Anderson & Associates Chairman International Corona Corporation;
502-455 Granville Street Mining Industry Consultant.
Vancouver, V6C1V2
Jan P. Berger.................................... Treasurer, Homestake Mining Company.
Homestake Mining Company
650 California Street
San Francisco, CA 94108-
2788
Michael L. Carroll............................... Director of Taxes and Assistant Secretary,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788
Robert H. Clark, Jr.............................. Director, Homestake Mining Company; President and
529 Fifth Avenue Chief Executive Officer, Case, Pomeroy & Company,
Suite 1600 Inc.
New York, NY 10017
</TABLE>
<PAGE> 31
2
<TABLE>
<S> <C>
Harry M. Conger.................................. Director and Chairman of the Board,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788
G. Robert Durham................................. Director, Homestake Mining Company.
943 Seddon Cove Way
Tampa, FL 33602
Gene G. Elam..................................... Vice President, Finance and Chief Financial
Homestake Mining Company Officer, Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788
Douglas W. Fuerstenau............................ Director, Homestake Mining Company; Professor in
University of California, the Graduate School, Department of Materials
Berkeley Science and Mineral Engineering, University of
477 Evans Hall California, Berkeley.
No. 1760
Berkeley, CA 94720
Dennis B. Goldstein.............................. Corporate Counsel and Assistant Secretary,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788
Lee A. Graber.................................... Vice President, Corporate Development, Homestake
Homestake Mining Company Mining Company.
650 California Street
San Francisco, CA 94108-
2788
Henry G. Grundstedt.............................. Director, Homestake Mining Company; Former Senior
P.O. Box 105 Vice President, Capital Guardian Trust.
Umpqua, OR 97486-0105
Fred Hewett...................................... Assistant Controller, Homestake Mining Company.
Homestake Mining Company
650 California Street
San Francisco, CA 94108-
2788
William A. Humphrey.............................. Director, Vice Chairman of the Board, Former
Homestake Mining Company President and Chief Operating Officer, Homestake
650 California Street Mining Company.
San Francisco, CA 94108-
2788
Robert K. Jaedicke.............................. Director, Homestake Mining Company; Professor
Graduate School of Business (Emeritus) of Accounting Graduate School of
Stanford University Business, Stanford University.
Stanford, CA 94305-5015
Wayne Kirk....................................... Vice President, General Counsel and Corporate
Homestake Mining Company Secretary, Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788
</TABLE>
<PAGE> 32
3
<TABLE>
<S> <C>
Gillyeard J. Leathley............................ Vice President, Operations, Homestake Mining
Homestake Mining Company Company.
650 California Street
San Francisco, CA 94108-
2788
William F. Lindqvist............................. Vice President, Exploration, Homestake Mining
Homestake Mining Company Company.
650 California Street
San Francisco, CA 94108-
2788
John Neerhout, Jr................................ Director, Homestake Mining Company.
15 Peninsula Road
Belvedere, CA 94920
Ronald D. Parker................................. Vice President, Canada, Homestake Mining Company.
1000-700 W. Pender Street
Vancouver, BC V6C 168
CANADA
David W. Peat.................................... Vice President and Controller, Homestake Mining
Homestake Mining Company Company.
650 California Street
San Francisco, CA 94108-
2788
Stuart T. Peeler................................. Director, Homestake Mining Company; Petroleum
Casa Codorniz Industry Consultant.
POB 35852
Tucson, AZ 85740
Carol A. Rae..................................... Director, Homestake Mining Company; Former
HC 89 - Box 188A President and Chief Executive Officer, Magnum
Hermosa, SD 57744 Diamond Corporation.
Berne A. Schepman................................ Director, Homestake Mining Company; President, The
The Adair Company Adair Company.
1670 South Amphlett Blvd.
Suite 214
San Mateo, CA 94402
Richard A. Tastula............................... Vice President, Australia, Homestake Mining
9th Floor Company.
2 Mill Street
Perth, WA 6000
Jack E. Thompson................................. Director, President and Chief Executive Officer,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788
Thomas H. Wong................................... Assistant Treasurer and Assistant Secretary,
Homestake Mining Company Homestake Mining Company.
650 California Street
San Francisco, CA 94108-
2788
</TABLE>
On November 17, 1996, Homestake and Santa Fe entered into a
confidentiality agreement pursuant to which, among other things, each party
agreed to protect the confidential and
<PAGE> 33
4
proprietary information and data provided to each other in connection with the
evaluation of one or more business transactions. On December 8, 1996, Homestake,
Santa Fe and HMGLD Corp, a wholly-owned subsidiary of Homestake, entered into an
Agreement and Plan of Merger pursuant to which the Combination will be
consummated. On January 9, 1997, Homestake purchased 100 shares of Santa Fe
common stock. In addition, the following individuals named above own the
following shares of Santa Fe common stock, all of which has been owned by such
individuals for more than 60 days: Mr. Peeler - 10,300 shares; Mr. Elam - 2,000
shares; and Mr. Graber - 1,000 shares.
At the effective time (the "Effective Time") of the Combination, five
members of the Homestake Board will continue as directors of Homestake. The
other eight members of the Homestake Board will voluntarily resign as directors
of Homestake. The Agreement provides that at the Effective Time, Mr. Thompson
will become Homestake's Chairman of the Board and Chief Executive Officer.
A total of ten Homestake management personnel, including Messrs.
Thompson, Elam, Kirk, Leathley and Lindqvist, have severance agreements with
Homestake under which they are entitled to receive benefits in the event of a
change of control followed by certain events. The Combination is a change of
control for purposes of these severance agreements. Under the severance
agreements, entitlement to benefits arises if, within three years following the
consummation of the Combination, such person's employment is terminated or such
person elects to terminate his employment following (i) a reduction in salary or
certain benefits, (ii) a change in location of employment, (iii) a change in
position, duties, responsibilities or status inconsistent with such person's
prior position, or (iv) a reduction in responsibilities, title or office as in
effect just before the consummation of the Combination. Benefits consist of (i)
a lump sum payment equal to two times such person's highest annual salary and
bonus (including deferred compensation) during the three years prior to
termination, (ii) continuation of participation in insurance and certain other
fringe benefits for two years, (iii) continued vesting of stock options, and
(iv) relocation assistance. Such benefits are in lieu of severance benefits
otherwise payable under Homestake's general severance policy.
The same ten management personnel are also participants in Homestake's
Executive Supplemental Retirement Plan (the "Homestake ESRP"). The Homestake
ESRP provides that participating employees accrue retirement benefits at the
rate of 4 1/3% times years of service up to a maximum of 15 years. Service
credit is then multiplied by average monthly compensation during the 36
consecutive months of highest compensation (salary and bonus) to determine a
monthly retirement benefit. Benefits are payable on
<PAGE> 34
5
retirement at age 62 after 10 continuous years of service, with provision for
early retirement between ages 55 and 62. Within two years following the
Combination, if any participant's employment is terminated by Homestake or by
the participant for any reason, such participant will fully vest in the maximum
benefits payable under the Homestake ESRP to the extent such participant is not
already fully vested, and will be entitled to commence receiving such benefits
at age 55. Benefits payable under the Homestake ESRP are reduced to the extent
of retirement benefits otherwise payable under any other Homestake retirement
plan (except the Homestake Mining Company Savings Plan).
Homestake has a deferred compensation plan under which 23 eligible
employees and the directors are entitled to defer receipt of compensation.
Deferred compensation earns interest at rates determined under the plan, with a
higher rate equal to 120% of the regular rate (the "Preferred Rate") for persons
who have been participants for more than five years. Under the deferred
compensation plan, following the Combination, all deferred compensation will
earn interest at the Preferred Rate.
<PAGE> 35
6
OTHER REPRESENTATIVES OF HOMESTAKE WHO MAY COMMUNICATE
WITH HOMESTAKE AND SANTA FE SHAREHOLDERS
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
NAME AND BUSINESS ADDRESS OCCUPATION OR EMPLOYMENT
- ------------------------- ------------------------
<S> <C>
Robert A. Pilkington......................................... Managing Director
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, NY 10022
</TABLE>
Homestake has retained Dillon, Read & Co. Inc. ("Dillon Read") to act
as its financial advisor in connection with the Combination and related matters.
Pursuant to an engagement letter dated as of November 21, 1996, between
Homestake and Dillon Read, Homestake has agreed to pay Dillon Read a fee of
0.33% of the equity consideration in the Combination, subject to a maximum fee
of $6,500,000, for services provided in connection with the Combination. Of this
amount, $2,250,000 was paid upon the announcement by Homestake of the execution
of the Agreement; the payment of the balance is contingent upon the consummation
of the merger. Homestake has also agreed to reimburse Dillon Read for the
expenses reasonably incurred by it in connection with its engagement (including
reasonable counsel fees) and to indemnify Dillon Read and its officers,
directors, employees, agents and controlling persons against certain expenses,
losses, claims, damages or liabilities in connection with its services,
including those arising under the federal securities laws.
This information is being furnished by Homestake to Homestake and
Santa Fe shareholders pursuant to Rule 14a-12 under the Securities Exchange Act
of 1934, as amended, in response to the proposed Newmont exchange offer and
Newmont's proposed solicitation of proxies. This information is not being
furnished by Santa Fe or its Board of Directors.
<PAGE> 1
<TABLE>
<S> <C>
[HOMESTAKE COMPLEX ORE PROCESSED (1990-1995)
LOGO]
[SANTA FE Graph compares Homestake and Newmont tons of complex ore processed for 1990
LOGO] to 1995. Graph shows Homestake having processed 14.3 million tons of
complex ore by autoclave and 28.0 million tons by roasting during such
period. Graph shows Newmont having processed 0 tons of complex ore by
autoclave and 2.1 million tons by roasting during such period. Graph shows
Homestake autoclave and roaster experience processing 20 times the amount
of ore as Newmont.
</TABLE>
