<PAGE> 1
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 / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
Newmont Mining Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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 transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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:
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(4) Date Filed:
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<PAGE> 2
- --------------------------------------------------------------------------------
NEWMONT MINING CORPORATION
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING
The Annual Meeting of Stockholders of NEWMONT MINING CORPORATION will be
held at 9:00 a.m. on Thursday, May 2, 1996 in the John D. Hershner Room, 1700
Lincoln Street, Denver, Colorado to:
1. Elect directors;
2. Consider and act upon a proposal to approve the Corporation's 1996
Employees Stock Plan;
3. Consider and act upon a stockholder proposal set forth in the
accompanying Proxy Statement, if introduced at the meeting, and
4. Transact such other business that may properly come before the
meeting.
Stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors
TIMOTHY J. SCHMITT
Secretary
1700 Lincoln Street
Denver, Colorado 80203
March 29, 1996
- --------------------------------------------------------------------------------
IF YOU ARE UNABLE TO ATTEND THE MEETING IN PERSON, PLEASE MARK,
SIGN AND DATE THE ACCOMPANYING PROXY CARD AND RETURN IT
PROMPTLY IN THE ACCOMPANYING ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE> 3
PROXY STATEMENT
GENERAL INFORMATION
STOCKHOLDERS ENTITLED TO VOTE. Holders of the common stock of the
Corporation of record at the close of business on March 7, 1996 are entitled to
vote at the Annual Meeting of Stockholders. As of March 7, 1996 there were
99,335,360 shares of common stock outstanding. Each share of common stock
entitles its owner to one vote. The holders of a majority of the shares entitled
to vote at the Annual Meeting of Stockholders must be present in person or
represented by proxy in order to constitute a quorum for all matters to come
before the meeting.
Votes at the Annual Meeting of Stockholders will be tabulated by two
inspectors of election who shall be appointed by the Chairman of the meeting and
who shall not be candidates for election to the Board of Directors. The
inspectors of election will treat shares of common stock represented by a
properly signed and returned proxy as present at the Annual Meeting of
Stockholders for purposes of determining a quorum, without regard to whether the
proxy is marked as casting a vote or abstaining.
Directors will be elected by a favorable vote of a plurality of the shares
of common stock present and entitled to vote, in person or by proxy, at the
Annual Meeting of Stockholders. All other matters to come before the Annual
Meeting require the approval of a majority of the votes cast on such matters.
Abstentions and broker "non-votes" as to particular matters are counted for
purposes of determining whether a quorum is present at the Annual Meeting of
Stockholders. Abstentions are counted in tabulations of the votes cast on
proposals presented to stockholders, whereas broker non-votes are not counted
for purposes of determining whether a proposal has been approved. Abstentions
have the same effect as votes against proposals presented to stockholders. A
"non-vote" occurs when a nominee holding shares for a beneficial owner votes on
one proposal, but does not vote on another proposal because the nominee does not
have discretionary voting power and has not received instructions to do so from
the beneficial owner.
PROXY SOLICITATION. The accompanying proxy is solicited by the Board of
Directors of the Corporation. This Proxy Statement is being mailed to the
stockholders on or about March 29, 1996 concurrently with the mailing of the
Corporation's 1995 Annual Report. In addition to solicitation by mail,
solicitation of proxies may be made by certain officers and regular employees of
the Corporation by mail, telephone, telegraph or personal interview. The
Corporation also has retained Georgeson & Company Inc. to aid in the
solicitation of brokers, banks and other institutional stockholders for a fee of
$8,000. All costs of the solicitation of proxies will be borne by the
Corporation. The Corporation will also reimburse brokerage firms and others for
their expenses in forwarding proxy materials to beneficial owners of the
Corporation's common stock. A stockholder who executes a proxy may revoke it by
delivering to the Secretary of the Corporation, at any time before the proxies
are voted, a written notice of revocation bearing a later date than the proxy or
attending the Annual Meeting of Stockholders and voting in person (although
attendance at the Annual Meeting of Stockholders will not in and of itself
constitute a revocation of a proxy). Written notice revoking a proxy should be
sent to the attention of the Secretary of the Corporation at 1700 Lincoln
Street, Denver, Colorado 80203. A stockholder may substitute another person in
place of those persons presently named as proxies.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS. Arthur Andersen LLP has
acted as auditors for the Corporation since 1967. The Board of Directors has
selected Arthur Andersen LLP to continue in that capacity for the current year.
In addition to audit services, Arthur Andersen LLP has regularly provided tax
consulting services to the Corporation. Representatives of Arthur Andersen LLP
will be present at the Annual Meeting of Stockholders and will be allowed to
make a statement if they wish. Additionally, they will be available to respond
to appropriate questions from stockholders during the meeting.
STOCKHOLDER PROPOSALS. To be included in the Board of Directors' Proxy
Statement for the 1997 Annual Meeting of Stockholders, stockholder proposals
must be received by the Corporation on or before November 29, 1996. Proposals
should be sent to the attention of the Secretary of the Corporation at 1700
Lincoln Street, Denver, Colorado 80203.
<PAGE> 4
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
NOMINEES. Each of the ten persons named below is a nominee for election as
a director at the Annual Meeting of Stockholders for the term of one year and
until his successor is elected and qualifies. Unless authority is withheld, the
proxies will be voted for the election of such nominees. Except for Mr. Higdon
who was elected to the Board of Directors in September 1995, all of the nominees
were elected to the Board of Directors at the last Annual Meeting of
Stockholders and are all currently serving as directors of the Corporation. If
any such nominee cannot be a candidate for election at the Annual Meeting of
Stockholders, then the proxies will be voted either for a substitute nominee
designated by the Board of Directors or for the election only of the remaining
nominees. Each of the ten nominees named below is also a director of Newmont
Gold Company ("NGC").
The following table contains a summary of the background and principal
occupations of the nominees.
<TABLE>
<CAPTION>
DIRECTOR
NOMINEE SINCE
<S> <C>
- ----------------------------------------------------------------------------------------------
RUDOLPH I. J. AGNEW (61)............................................................ 1981
Former Chairman and Chief Executive Officer of Consolidated Gold Fields PLC, a
natural resources company; Chairman, World Conservation Monitoring Centre, a
charitable organization for environmental data gathering.
Director of Newmont Gold Company, Bona Shipbuilding Ltd., LASMO PLC, International
Tool & Supply PLC, Redland PLC, Standard Chartered PLC and Star Mining
Corporation Ltd.
- ----------------------------------------------------------------------------------------------
J. P. BOLDUC (56)................................................................... 1994
Chairman and Chief Executive Officer of JPB Enterprises, Inc., a diversified
holding company with interests in the food, beverage, real estate, retail and
manufacturing industries, since March 1995; Director and President of W.R.
Grace & Co., a specialty chemical and health care company, since prior to 1991
to March 1995 and Chief Executive Officer thereof from January 1993 to March
1995.
Director of Newmont Gold Company, Brothers Gourmet Coffees, Inc., Marshall &
Ilsley, Sundstrand Corporation and Unisys Corporation.
- ----------------------------------------------------------------------------------------------
RONALD C. CAMBRE (57)............................................................... 1993
Chairman of the Corporation since January 1995, President thereof since June 1994,
Chief Executive Officer thereof since November 1993 and Vice Chairman thereof
from November 1993 to December 1994; formerly Vice President and Senior
Technical Advisor to the Office of the Chairman of Freeport-McMoRan Inc., a
natural resources company, from June 1988 to September 1993.
Chairman, President and Chief Executive Officer and Director of Newmont Gold
Company.
- ----------------------------------------------------------------------------------------------
JOSEPH P. FLANNERY (63)............................................................. 1982
Chairman, President and Chief Executive Officer of Uniroyal Holding, Inc., a
holding company, since December 1986.
Director of Newmont Gold Company, APS Holding Corporation, Arvin Industries, Inc.,
Ingersoll-Rand Company, K-Mart Corporation and The Scotts Company.
- ----------------------------------------------------------------------------------------------
LEO I. HIGDON, JR. (49)............................................................. 1995
Dean and Charles C. Abbott Professor of the Darden Graduate School of Business
Administration at the University of Virginia since October 1993; formerly Vice
Chairman of Salomon Brothers Inc and Co-head of the global investment banking
division of Salomon Brothers Inc since prior to 1991 to September 1993.
Director of Newmont Gold Company, Africare, Crompton & Knowles Corporation, CPC
International and a director and member of the Executive Committee of
Georgetown University.
- ----------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
DIRECTOR
NOMINEE SINCE
<S> <C>
- ----------------------------------------------------------------------------------------------
THOMAS A. HOLMES (72)............................................................... 1979
Retired Chairman and Chief Executive Officer of Ingersoll-Rand Company, a
manufacturer of machinery.
Director of Newmont Gold Company and W. R. Grace & Co.
- ----------------------------------------------------------------------------------------------
ROBIN A. PLUMBRIDGE (60)............................................................ 1983
Chairman of Gold Fields of South Africa Limited, a natural resources company,
Chief Executive Officer thereof from December 1980 to September 1995.
Director of Newmont Gold Company and Standard Bank Investment Corporation.
- ----------------------------------------------------------------------------------------------
MOEEN A. QURESHI (65)............................................................... 1994
Chairman and Managing Partner of Emerging Markets Partnership, a private
investment management company, since June 1992; Prime Minister of Pakistan from
July 1993 to October 1993; formerly Senior Vice President, Operations, World
Bank.
Director of Newmont Gold Company.
- ----------------------------------------------------------------------------------------------
MICHAEL K. REILLY (63).............................................................. 1994
Chairman of Zeigler Coal Holding Company, a coal producer, since 1985, Chief
Executive Officer thereof from 1983 to December 1994 and President thereof from
1983 to 1991.
Director of Newmont Gold Company.
- ----------------------------------------------------------------------------------------------
WILLIAM I. M. TURNER, JR. (67)...................................................... 1986
Chairman and Chief Executive Officer of EXSULTATE INC., a holding company, since
July 1990.
Director of Newmont Gold Company and Schroders PLC.
- ----------------------------------------------------------------------------------------------
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE FOREGOING
NOMINEES AND, UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON THE PROXY CARD TO THE
CONTRARY, THE APPOINTEES NAMED THEREON INTEND SO TO VOTE.
NGC TRANSACTION. Effective January 1, 1994, NGC acquired all of the
Corporation's operations in a transaction which included the transfer by the
Corporation to NGC of all of the Corporation's assets, except for 85,850,101
shares of common stock of NGC, and the assumption by NGC of substantially all
the liabilities of the Corporation. In addition, NGC issued to the Corporation
certain securities, including stock options exercisable for NGC common stock.
The Corporation's only assets are the remaining shares of NGC common stock held
by it, which as of March 7, 1996 represented 90.5% of NGC's outstanding common
stock, and stock options of NGC.
STOCK OWNERSHIP. As of March 7, 1996, all directors and executive officers
of the Corporation as a group beneficially owned 573,670 shares of the
Corporation's common stock, constituting in the aggregate less than 1% of the
Corporation's outstanding common stock. The nature of beneficial ownership of
all such shares is sole voting and investment power. As of March 7, 1996, all
directors and executive officers of the Corporation as a group beneficially
owned 25,251 shares of common stock of NGC, constituting in the aggregate less
than 1% of NGC's outstanding common stock. The nature of beneficial ownership of
all such shares is sole voting and investment power. The following table sets
forth the number of shares of common
3
<PAGE> 6
stock of the Corporation and the number of shares of common stock of NGC
beneficially owned by the Corporation's directors and executive officers as of
March 7, 1996:
<TABLE>
<CAPTION>
SHARES OF
NAME OF CORPORATION SHARES OF NGC
BENEFICIAL OWNER COMMON STOCK OWNED COMMON STOCK OWNED
- --------------------------------------------------------------------- ------------------ ------------------
<S> <C> <C>
Rudolph I. J. Agnew.................................................. 2,496 1,250
J. P. Bolduc......................................................... -0- 1,250
Ronald C. Cambre..................................................... 185,764(1) 7,570
Graham M. Clark, Jr.................................................. 56,287(1) 1,953
Joseph P. Flannery................................................... 2,745 1,250
Eric Hamer........................................................... 59,207(1) -0-
Leo I. Higdon, Jr.................................................... -0- 625
Thomas A. Holmes..................................................... 6,948 1,250
Lawrence T. Kurlander................................................ 56,091(1) 1,685
Wayne W. Murdy....................................................... 92,733(1) 2,343
Robin A. Plumbridge.................................................. 2,496 1,250
Moeen A. Qureshi..................................................... -0- 1,250
Michael K. Reilly.................................................... 5,000 1,250
William I. M. Turner, Jr............................................. 8,000 1,250
All directors and executive officers as a group, including those
named above (31 persons)........................................... 573,670(1) 25,251
</TABLE>
- ---------------
(1) Includes 180,972 shares, 44,931 shares, 57,410 shares, 54,291 shares, 81,001
shares and 509,389 shares which Messrs. Cambre, Clark, Hamer, Kurlander,
Murdy and all directors and executive officers as a group, respectively,
have the right to acquire on or within 60 days after March 7, 1996 by the
exercise of options granted by the Corporation.
PRINCIPAL STOCKHOLDERS. The following table sets forth the information with
respect to each person known by the Corporation to be the beneficial owner of
more than five percent of any class of the Corporation's voting securities. The
information contained herein has been taken from filings with the Securities and
Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of
1934, as amended.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF TITLE OF AMOUNT AND NATURE OF PERCENTAGE OF
BENEFICIAL OWNER CLASS BENEFICIAL OWNERSHIP CLASS
- --------------------------------------------- ------------- -------------------- -------------
<S> <C> <C> <C>
FMR Corp..................................... Common Stock 11,797,981(1) 11.90%
82 Devonshire Street Boston, MA 02109
George Soros (d/b/a Soros.................... Common Stock 8,751,077(2) 8.81%
Fund Management) 888 Seventh Avenue New York,
NY 10106
</TABLE>
- ---------------
(1) The Corporation has been advised in a Schedule 13G filing (as amended by
Amendment No. 1 thereto dated February 8, 1996), that as of January 31,
1996, Fidelity Management & Research Company ("Fidelity"), 82 Devonshire
Street, Boston, MA 02109, a wholly owned subsidiary of FMR Corp. ("FMR") and
an investment adviser registered under Section 203 of the Investment
Advisers Act of 1940, is the beneficial owner of 10,365,982 shares or 10.45%
of the outstanding common stock of the Corporation as a result of acting as
investment adviser to certain investment companies registered under Section
8 of the Investment Company Act of 1940. FMR, through its control of
Fidelity, and Edward C. Johnson 3d ("Johnson"), as the Chairman of FMR, each
has sole dispositive power with respect to the 10,365,982 shares. Neither
Johnson nor FMR has sole voting power with respect to the shares owned,
which power rests with the investment funds' Board of Trustees. Johnson owns
12.0% and Abigail P. Johnson owns 24.5% of the aggregate outstanding voting
stock of FMR. Abigail P. Johnson is a Director of FMR. Because of ownership
by members of the Johnson family and trusts for their benefit of
approximately 49% of the voting stock of FMR and an existing shareholders'
voting agreement, members of the Johnson family may be deemed, under the
Investment Company Act of 1940, to form a controlling group with respect to
FMR.
Fidelity Management Trust Company ("FMTC"), 82 Devonshire Street, Boston, MA
02109, a wholly owned subsidiary of FMR, is the beneficial owner of
1,172,315 shares or 1.18% of the outstanding common
4
<PAGE> 7
stock of the Corporation as a result of its serving as investment manager of
certain institutional accounts. Johnson and FMR, through its control of
FMTC, each has sole dispositive power over 1,172,315 shares and sole power
to vote or to direct the voting of 896,267 shares and no power to vote or to
direct the voting of 276,048 shares of common stock owned by the
institutional accounts.
Fidelity International Limited ("FIL"), Pembroke Hall, 42 Crowlane,
Hamilton, Bermuda, and various foreign-based subsidiaries provide investment
advisory and management services to a number of non-U.S. investment
companies and certain institutional investors. FIL is the beneficial owner
of 259,684 shares or 0.26% of the outstanding common stock of the
Corporation. FIL has the sole voting power and sole dispositive power with
respect to 259,684 shares.
(2) The Corporation has been advised in a Schedule 13D filing (as amended from
time to time and as most recently amended by Amendment No. 5 thereto dated
February 7, 1996), that as of February 7, 1996, George Soros (in his
capacity as sole proprietor of Soros Fund Management ("SFM"), an investment
advisory firm), 888 Seventh Avenue, New York, New York 10106, may be deemed
a beneficial owner of 7,845,234 shares of the outstanding stock of the
Corporation (which represents 7.90% based on 99,270,956 shares outstanding
on February 7, 1996). The 7,845,234 shares of the Corporation's common stock
were acquired by Quota Fund N.V. ("Quota"), Quantum Partners LDC ("Quantum")
and Quasar International Partners C.V. ("Quasar") at the direction of SFM.
SFM acts as principal investment advisor to Quota, Quantum and Quasar. SFM
has the sole power to direct the voting and disposition of the 7,845,234
shares held by Quota, Quantum and Quasar.
Duquesne Capital Management, L.L.C. ("Duquesne") (successor investment
manager to Priority Investment Management Incorporated) has investment
discretion for certain clients, and Stanley F. Druckenmiller, a Managing
Director of SFM and Managing Member of, with a controlling interest in,
Duquesne, may be deemed to be the beneficial owners of 905,843 shares of the
common stock of the Corporation (which represents 0.91% based on 99,270,956
shares outstanding on February 7, 1996). Duquesne has the sole power to
direct the voting and disposition of the 905,843 shares presently held by
the Duquesne clients.
In connection with the acquisitions of the shares of the Corporation's
common stock by SFM and by Duquesne Capital Management Incorporated
("Duquesne Capital"), a predecessor entity to Duquesne, the Corporation
entered into a Standstill Agreement dated as of May 10, 1993 with George
Soros, SFM, Stanley F. Druckenmiller, Duquesne Capital, Quantum, Quasar and
Quota (collectively the "Soros Group") providing for, among other things,
certain restrictions on shareholdings by the Soros Group. The Standstill
Agreement was filed as an exhibit to the Corporation's Annual Report on Form
10-K for the year ended December 31, 1993.
DIRECTORS' FEES, COMMITTEES AND MEETINGS. Directors who are neither
officers nor employees of the Corporation, NGC or any of NGC's subsidiaries are
entitled to receive $25,000 per annum for serving as directors on the
Corporation's Board of Directors. All directors are entitled to receive an
attendance fee of $1,000 per meeting of the Board of Directors. Each director
who is neither an officer nor an employee of the Corporation, NGC or any of
NGC's subsidiaries is entitled to receive an attendance fee of $750 per meeting
of a committee of which he is a member and $1,000 per meeting in the case of the
chairman of the committee.
In addition, pursuant to NGC's Directors' Stock Award Plan, directors who
also serve on the Board of Directors of NGC and who are not employees of the
Corporation, NGC or any of NGC's subsidiaries receive 625 shares of common stock
of NGC annually on the date of their election or re-election at NGC's Annual
Meeting of Stockholders. If a person who is not an employee of the Corporation,
NGC or any of NGC's subsidiaries becomes a director in any year, after NGC's
Annual Meeting of Stockholders held in such year, such person will receive 625
shares of common stock of NGC on the effective date of such person's election as
a director of NGC. Shares awarded under the plan may not be sold, transferred,
pledged, assigned or otherwise encumbered or disposed of by the director until
the earliest of (i) the expiration of five years after the date of receipt of
such shares by the director, (ii) the date the participating person ceases to be
a director by reason of death or disability or (iii) the later (a) of the date
the participating person ceases to be a director for any reason other than death
or disability or (b) the expiration of six months after the date of receipt of
such shares by the director.
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<PAGE> 8
On retirement from the Board of Directors at any time after attaining age
65, a director who is not entitled to a pension under NGC's Pension Plan (i.e.,
a director who has not been an officer or employee of the Corporation, NGC or
any of NGC's subsidiaries) and who has served for at least ten consecutive years
as a director of the Corporation or NGC is entitled to be paid an annual sum of
$20,000 and an amount equal to the per annum fee paid to him in his capacity as
a director during his final year of service on the Board of Directors, in each
case, for life.
During 1995, the Board of Directors held six meetings and each incumbent
director attended 100% of all meetings of the Board of Directors and committees
of the Board of Directors on which he served for the period during which he was
a member except for Mr. Higdon who attended 100% of the meetings of the Board of
Directors for the period during which he was a director.
The Board of Directors has, in addition to other standing committees,
audit, compensation and nominating committees. Members of these three committees
are not, and have not been, officers or employees of the Corporation, NGC or
their subsidiaries. The members of these committees are:
<TABLE>
<CAPTION>
AUDIT COMPENSATION NOMINATING
- --------------------------- ------------------------- -------------------------
<S> <C> <C>
J. P. Bolduc Joseph P. Flannery(1) Rudolph I. J. Agnew
Robin A. Plumbridge(1) Thomas A. Holmes J. P. Bolduc
Moeen A. Qureshi Robin A. Plumbridge Joseph P. Flannery
Michael K. Reilly William I. M. Turner, Jr. Thomas A. Holmes(1)
William I. M. Turner, Jr.
</TABLE>
- ---------------
(1) Chairman
AUDIT COMMITTEE. The Audit Committee recommends independent public
accountants to act as auditors for the Corporation for consideration by the
Board of Directors, reviews the Corporation's financial statements, confers with
the independent public accountants with respect to the scope and results of
their audit of the Corporation's financial statements and their reports thereon,
reviews the Corporation's accounting policies, tax matters and internal controls
and oversees compliance by the Corporation with requirements of the Financial
Accounting Standards Board and federal regulatory agencies. The Audit Committee
also reviews non-audit services furnished to the Corporation by the independent
public accountants, primarily consultation on tax matters. Access to the Audit
Committee is given to the Corporation's Controller and Director of Internal
Audit. During 1995, the Audit Committee held three meetings.
COMPENSATION COMMITTEE. Each of the Corporation's Compensation Committee
and the Compensation Committee of NGC is responsible to its respective Board of
Directors and by extension to the stockholders of the Corporation or NGC, as the
case may be, for approving and administering the policies which govern annual
compensation and incentive programs for the Corporation's and NGC's executive
officers and other key employees. During 1995, the Compensation Committee held
three meetings.
NOMINATING COMMITTEE. The Nominating Committee's function is to propose to
the Board of Directors slates of directors to be elected at the Annual Meetings
of Stockholders (and any directors to be elected by the Board of Directors to
fill vacancies) and slates of officers to be elected by the Board of Directors.
During 1995, the Nominating Committee held three meetings. The Nominating
Committee will consider for nomination to become directors any persons
recommended by stockholders. Recommendations may be submitted to the Nominating
Committee in care of the Secretary of the Corporation at 1700 Lincoln Street,
Denver, Colorado 80203.
EXECUTIVE COMPENSATION
All executive officers of the Corporation are executive officers and
employees of NGC. All salary and other compensation and benefit costs are borne
by NGC.
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION. The following table shows
the total compensation earned or paid to the Chief Executive Officer and to each
of the Corporation's and NGC's four most
6
<PAGE> 9
highly compensated executive officers, other than the Chief Executive Officer,
for services rendered in all capacities to the Corporation, NGC and their
subsidiaries in 1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
NAME/ --------------------- STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS OPTIONS(#)(4) COMPENSATION(5)
- -------------------------------------- ---- -------- -------- ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Ronald C. Cambre 1995 $513,000(1) $332,553 $167,447(3) -0- $ 9,000
Chairman, President and 1994 514,000(1) 321,278 153,722 -0- 9,000
Chief Executive Officer 1993 80,000(1) 75,000(2) -0- 302,038 -0-
Wayne W. Murdy 1995 245,500 138,643 52,131(3) -0- 9,000
Senior Vice President 1994 223,000 108,491 47,386 -0- 9,000
and Chief Financial Officer 1993 215,000 109,930 38,832 -0- 6,450
Graham M. Clark, Jr. 1995 245,500 122,992 52,131(3) -0- 9,000
Senior Vice President 1994 223,000 95,113 34,004 -0- 9,000
and General Counsel 1993 215,000 102,814 31,969 -0- 9,000
Lawrence T. Kurlander 1995 223,333 111,895 47,416(3) -0- 9,000
Senior Vice President, 1994 161,250(6) 132,020(6) 27,794 108,583 3,225
Administration 1993 N/A N/A N/A N/A N/A
Eric Hamer(7) 1995 175,641 51,048 -0- -0- 9,000
Vice President, 1994 164,000 53,776 -0- -0- 9,000
North American Operations 1993 160,000 49,040 -0- -0- 9,000
</TABLE>
- ---------------
N/A -- Not applicable
(1) Became an executive officer on November 1, 1993. Salary in 1993 based on an
annualized base salary of $450,000 for the period from November 1, 1993
through December 31, 1993. See "Executive Agreements" below. Such amounts
also include director's fees of $13,000, $14,000 and $5,000 in 1995, 1994
and 1993, respectively.
(2) The amount of Mr. Cambre's 1993 bonus was stipulated by the terms of his
employment agreement. See "Executive Agreements" below.
(3) Value of NGC restricted stock awarded under NGC's Annual Incentive
Compensation Plan for 1995 at the election of NGC's Compensation Committee
in lieu of cash. Dividends are payable on the shares awarded. These shares
are subject to a two year vesting period and were issued in January 1996 in
the following amounts:
<TABLE>
<CAPTION>
#
------
<S> <C>
Ronald C. Cambre.................................................................... 3,090
Wayne W. Murdy...................................................................... 962
Graham M. Clark, Jr. ............................................................... 962
Lawrence T. Kurlander............................................................... 875
</TABLE>
The number of shares and value of restricted NGC stock held by the named
executive officers on December 31, 1995 was, as follows:
<TABLE>
<CAPTION>
# $
------ --------
<S> <C> <C>
Ronald C. Cambre......................................................... 4,480 196,000
Wayne W. Murdy........................................................... 1,381 60,418
Graham M. Clark, Jr. .................................................... 991 43,356
Lawrence T. Kurlander.................................................... 810 35,437
Eric Hamer............................................................... -0- -0-
</TABLE>
On December 31, 1995, none of the named executive officers held any
restricted stock of the Corporation.
(4) Represents special equity option grants, which in the case of Mr. Cambre
vest over a period of four to five years and, in the case of Mr. Kurlander
vest over a period of one to three years.
(5) The amounts shown represent NGC's contributions and credits to its
Retirement Savings Plan and nonqualified supplemental Savings Equalization
Plan for the named executive officers.
(6) Mr. Kurlander became an executive officer on April 1, 1994. Salary in 1994
based on an annualized base salary of $215,000 for the period April 1, 1994
through December 31, 1994. The bonus amount shown consists of a "sign-on"
bonus of $60,000 and a bonus under NGC's Annual Incentive Compensation Plan
of $72,020 for the period April 1, 1994 through December 31, 1994.
(7)Mr. Hamer is an elected officer of NGC only.
STOCK OPTIONS. In 1995 no grants of stock options or stock appreciation
rights under the Corporation's stock option plans were made to the named
executive officers.
7
<PAGE> 10
OPTION EXERCISES AND HOLDINGS. The following table sets forth information
with respect to the named executive officers concerning the exercise of options
in 1995 and unexercised options held at the end of 1995.
AGGREGATED OPTION EXERCISES IN 1995 AND
1995 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT 1995 IN-THE-MONEY OPTIONS
ACQUIRED YEAR-END (#) AT 1995 YEAR-END
ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald C. Cambre...................... -0- $ -0- 151,018 151,020 $ 414,719 $ 383,121
Wayne W. Murdy........................ 8,862 126,229 66,023 59,909 293,682 246,978
Graham M. Clark, Jr................... 34,633 439,674 29,954 59,909 15,800 466,549
Lawrence T. Kurlander................. -0- -0- 34,634 64,589 75,708 151,422
Eric Hamer............................ -0- -0- 58,970 35,945 479,280 279,929
</TABLE>
PENSION PLANS. The following table shows the estimated pension benefits
payable to a covered participant at normal retirement age (62 years) under NGC's
qualified defined benefit pension plan (the "Pension Plan"), as well as under
its nonqualified supplemental pension plan that provides benefits that would
otherwise be denied participants by reason of certain Internal Revenue Code
limitations on qualified plan benefits, based on remuneration that is covered
under the plans and years of service with the Corporation, NGC and their
subsidiaries.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 200,000..................................................... $ 52,500 $ 70,000 $ 87,500 $ 105,000 $ 122,500
250,000..................................................... 65,625 87,500 109,375 131,250 153,125
300,000..................................................... 78,750 105,000 131,250 157,500 183,750
350,000..................................................... 91,875 122,500 153,125 183,750 214,375
400,000..................................................... 105,000 140,000 175,000 210,000 245,000
450,000..................................................... 118,125 157,500 196,875 236,250 275,625
500,000..................................................... 131,250 175,000 218,750 262,500 306,250
550,000..................................................... 144,375 192,500 240,625 288,750 336,875
600,000..................................................... 157,500 210,000 262,500 315,000 367,500
650,000..................................................... 170,625 227,500 284,375 341,250 398,125
700,000..................................................... 183,750 245,000 306,250 367,500 428,750
750,000..................................................... 196,875 262,500 328,125 393,750 459,375
800,000..................................................... 210,000 280,000 350,000 420,000 490,000
850,000..................................................... 223,125 297,500 371,875 446,250 520,625
900,000..................................................... 236,250 315,000 393,750 472,500 551,250
950,000..................................................... 249,375 332,500 415,625 498,750 581,875
1,000,000..................................................... 262,500 350,000 437,500 525,000 612,500
1,050,000..................................................... 275,625 367,500 459,375 551,250 643,125
1,100,000..................................................... 288,750 385,000 481,250 577,500 673,750
</TABLE>
A participant's remuneration covered by the Pension Plan is his or her
average base salary and bonus, including amounts paid in the form of restricted
stock (as reported in the Summary Compensation Table) for the sixty consecutive
months in which the highest level of compensation was paid to the participant
during the last one hundred twenty months of the participant's career with the
Corporation, NGC and their subsidiaries. The approximate term of service as of
the end of 1995 for each named executive officer is: Mr. Cambre two years; Mr.
Clark 13 years; Mr. Murdy three years; Mr. Kurlander two years; Mr. Hamer 21
years. Benefits shown are computed on a straight single life annuity basis
beginning at age 62. Such amounts have not been reduced for Social Security
benefits.
8
<PAGE> 11
OFFICERS' DEATH BENEFIT PLAN AND GROUP LIFE INSURANCE PROGRAM. NGC has an
Officers' Death Benefit Plan for the benefit of the named executive officers and
other executive officers of the Corporation, NGC and certain of their
subsidiaries. The plan provides a death benefit of three times annual base
salary for an executive officer who dies while an active employee and a death
benefit of one times final annual base salary for an executive officer who dies
after retiring at or after normal retirement age. For retirement prior to normal
retirement age, the post-retirement death benefit is 30% to 100% of one times
final annual base salary, depending on the number of years to normal retirement
age. Mr. Clark is a participant in a prior plan and has a death benefit of the
greater of $770,000 or three times annual base salary while an active employee
and a post-retirement death benefit based on retirement at or after normal
retirement age of the greater of $385,000 or one times final annual base salary.
Under such prior plan, for retirement prior to normal retirement age, Mr.
Clark's post-retirement death benefit is 30% to 100% of the greater of $385,000
or one times final annual base salary depending on the number of years to normal
retirement age. Coverage under the Officers' Death Benefit Plan is offset by
group life insurance maintained for the benefit of all salaried employees of the
Corporation, NGC and certain of their subsidiaries.
EXECUTIVE AGREEMENTS. An agreement is currently in effect between the
Corporation, NGC and Mr. Cambre which provides for an annual base salary of
$500,000 beginning in 1994. The agreement provides that the Boards of Directors
of the Corporation and NGC may, at their discretion, increase Mr. Cambre's base
salary and that any such increased base salary made after January 1994
automatically becomes Mr. Cambre's minimum base salary thereafter. Mr. Cambre's
employment agreement is effective until his 62nd birthday, unless terminated
earlier as provided in the agreement. In the event Mr. Cambre's employment is
terminated without "cause" (as defined below) and without any breach by Mr.
Cambre of such agreement, he will be entitled to receive a lump sum payment
equal to twice his annual base salary for each twelve-month period in the
remaining term of his employment (which will not exceed two years).
Mr. Murdy's letter of offer of employment from NGC provides that if his
employment is terminated other than for "cause" (as defined below) before
December 31, 1997, he will be entitled to receive 35 months of his then annual
base salary plus certain other severance benefits; thereafter, he will be
entitled to 24 months of salary plus benefits.
Any benefits to which Messrs. Cambre and Murdy may be entitled from NGC's
Severance Pay Plan (as described below) reduce the benefits due under these
arrangements.
Each of the named executive officers participates in NGC's Severance Pay
Plan, amended and restated effective as of May 1, 1993 (the "Severance Pay
Plan"). Participants in the Severance Pay Plan with at least one year of service
(a) who have been continually employed by the Corporation, NGC or one of their
subsidiaries or affiliates on and after August 1, 1991 or (b) whose employment
with the Corporation, NGC or one of their subsidiaries or affiliates is
involuntarily terminated (other than for "cause" as defined below or for poor
job performance or conduct below reasonably expected standards) within 24 months
after a change in control (as defined in the Severance Pay Plan) of the
Corporation (other than those participants whose employment began on or after
May 1, 1993) are entitled to receive a minimum of the greater of (i) four weeks
of salary (as defined in the Severance Pay Plan), together with an additional
two weeks of salary for each year of service; or (ii) from nine to 78 weeks of
salary depending on the salary grade of the participant, calculated based on the
relevant participant's salary as of April 30, 1993. Each of the named executive
officers who are otherwise eligible for severance pay under clause (ii) above
would receive 78 weeks of salary. Participants whose employment began on or
after May 1, 1993 whose employment in involuntarily terminated are entitled to
receive only the amount determined as set forth in clause (i) in the previous
sentence. Under the Severance Pay Plan, the maximum severance allowance benefit
payable to a participant calculated as set forth above is 104 weeks of such
participant's salary. In addition to the amount described above, each
participant is also entitled to a lump sum payment equal to NGC's matching
contribution that would have been made under NGC's Retirement Savings Plan
calculated in accordance with the relevant provisions of the Severance Pay Plan
and any accrued and unused vacation time. Participants under the Severance Pay
Plan are also entitled to certain fringe benefits, such as coverage under NGC's
medical and dental plans and life insurance plan, as set forth in the Severance
Pay Plan.
9
<PAGE> 12
"Cause" as a basis for termination under these arrangements is generally
limited to (i) misappropriation of funds or property of the Corporation, NGC or
their subsidiaries, (ii) conviction of a felony, (iii) obtaining personal
benefit from any transaction between the Corporation, NGC or their subsidiaries
and a third party without the prior approval of such benefit by the Board of
Directors of the Corporation or of NGC or (iv) obtaining a personal profit from
the sale of the Corporation's, NGC's or their subsidiaries' trade secrets.
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Corporation is
composed entirely of directors who are neither officers nor employees of the
Corporation nor NGC. Each of the Compensation Committees of the Corporation and
NGC is responsible to its respective Board of Directors and by extension to the
stockholders of the Corporation or NGC, as the case may be, for approving and
administering the policies which govern annual compensation and incentive
programs for the Corporation's and NGC's executive officers and other key
employees. The members of the Corporation's Compensation Committee are also
directors of NGC and serve on the NGC Compensation Committee. The membership of
the two Committees is identical. The Corporation and NGC operate as a single
economic unit and all of the executive officers of the Corporation are also the
executive officers and employees of NGC. NGC pays all compensation expenses of
such employees. The following report reflects the compensation philosophy and
decisions of both Committees.
There are three elements to the Corporation's and NGC's executive
compensation program -- base salaries, annual incentives and stock options.
BASE SALARIES. The base salaries for executive officers of the Corporation
and NGC, including Mr. Cambre and the other named executive officers, fall
within salary ranges that reflect competitive base pay levels within the mining
industry as a whole for the positions they hold. The Corporation and NGC
subscribe to and participate in surveys of executive-level compensation. One of
the surveys in which the Corporation and NGC participate is devoted exclusively
to the gold mining industry and includes information about 15 companies based in
North America. This survey not only includes the four companies that comprise
the S&P Gold Index shown on the Corporation's Performance Graph below, but also
includes a number of companies which the Committees believe are more appropriate
for comparison with the Corporation and NGC for purposes of analyzing executive
compensation. Based on a review of such survey information, the Committees
believe that the base salaries of the Corporation's and NGC's executive officers
are slightly below the median salaries for comparable positions in the gold
mining industry. The Corporation and NGC participate in other surveys as well,
which cover a wide range of industries and companies. Although many of the
companies included in these broader surveys are not capable of meaningful
comparison with the Corporation and NGC, the Corporation and NGC use such
surveys to identify general trends in executive compensation.
Base salary increases are made on the basis of changes in industry levels
as well as evaluated individual contribution and the Corporation's and NGC's
performance in the prior year. The 1995 base salary increases of the named
executive officers, other than Mr. Cambre, were in line with increases in base
salaries for comparable industry positions as reflected in the gold mining
industry survey. Mr. Cambre's base salary for 1995 was determined pursuant to
his employment agreement.
ANNUAL INCENTIVES. Annual incentive awards are made pursuant to NGC's
Annual Incentive Compensation Plan (the "Plan"). The named executive officers
(and other participants at specified salary levels) are eligible to receive both
a corporate performance bonus and a personal performance bonus. Corporate
performance bonuses are paid in cash and are based upon the attainment of
production and cost-of-production goals established annually by NGC's Board of
Directors on the recommendation of its Compensation Committee. At year-end,
actual cash costs of production are adjusted to consider the effect of actual
production over or under targeted production. Such adjusted costs are then
compared with targeted costs to determine a "corporate performance percentage."
NGC must achieve a minimum percentage (designated by NGC's Board of Directors to
be 85%) before any bonuses based on corporate performance can be made to
10
<PAGE> 13
participants in the Plan. Corporate performance bonuses are incrementally
increased (or decreased) in accordance with incrementally higher (or lower)
performance percentages (with the maximum percentage being 120%). In 1995, NGC
achieved a corporate performance percentage of 98.21%. In addition, each year
NGC's Board of Directors designates a minimum average price of gold per ounce
when the corporate performance target is determined. No corporate or personal
performance bonuses under the Plan may be paid for any year in which NGC does
not realize such minimum average price of gold per ounce. In 1995 NGC met the
minimum average price of gold per ounce.
Personal performance bonuses are based upon an evaluation of a
participant's personal contribution to the Corporation and NGC and are also
typically paid in cash. However, 1995 personal performance bonuses to the named
executive officers, except Mr. Hamer, were paid partly in cash and partly in the
form of restricted shares of NGC's common stock, subject to two-year vesting
provisions. The restricted stock component of the Plan is intended to align the
interests and motivation of such recipients with the interests of the
Corporation's and NGC's stockholders. It is believed that such ownership will
positively influence long-term decision making since awards for current
performance will be impacted by future stock prices. In 1995, personal
performance awards to the named executive officers and other Plan participants
were based on certain subjective factors such as the individual skills,
experience and accomplishments of the relevant executive officer, as well as
such executive officers' contributions to the positive economic results realized
by the Corporation, together with its continued global expansion, during 1995.
The Committees did not use any fixed weighting of such factors in determining
personal performance bonuses.
Participants in the Plan are assigned target awards as a percentage of
their base salary. Target awards increase at higher management levels, to 105%
of base salary in the case of Mr. Cambre. The weighting of corporate performance
and personal performance factors varies by participant, and in the case of Mr.
Cambre was approximately one-third corporate performance and two-thirds personal
performance.
In light of the Corporation's performance in 1995, the Committees
determined that in general the sum of an individual's base salary and his or her
target annual incentive award should approach the 75th percentile for comparable
positions in the gold mining industry as set forth in the executive-level
compensation surveys described above.
The Chief Executive Officer's 1995 corporate performance bonus was based on
the corporate performance percentage described above, while his 1995 personal
performance bonus was based on his individual accomplishments as well as his
contributions to the overall results of the Corporation and NGC. Mr. Cambre's
total 1995 cash and restricted stock bonus of $500,000 was equal to 100% of his
1995 base salary. Mr. Cambre's corporate performance bonus of $152,768 (31% of
such total award) was based on a corporate performance percentage of 98.21% as
described above. His personal performance bonus of $347,232 (69% of such total
award) was based on Mr. Cambre's personal performance evaluation. In making this
decision, the Committees considered Mr. Cambre's vision and leadership which
enabled the Corporation to achieve the following positive results and
developments in 1995:
- income before taxes exceeded target, notwithstanding start-up delays of a
production facility at NGC's Carlin mine and at Zarafshan-Newmont in
Uzbekistan;
- earnings, excluding non-recurring items, increased 16% from 1994 on an
only 11% increase in gold production during that same period, while cash
costs per equity ounce for 1995 rose only 3.5%;
- operations and gold production commenced at Zarafshan-Newmont in
Uzbekistan;
- successful gold production continued at Minera Yanacocha in Peru together
with an ongoing stable relationship with the community;
- the price of the Corporation's common stock, compared to that of its
competitors, increased overall in 1995 reflecting the sustained
confidence of the investment community in the Corporation and
- numerous significant additions were made to the Corporation's strategic
management team.
11
<PAGE> 14
STOCK OPTIONS. The third element of executive compensation, stock options,
is long-term in nature. In 1992, the Corporation's Compensation Committee, which
is also responsible for administering the Corporation's stock option plans,
suspended its practice of making semi-annual stock option grants to Messrs.
Clark and Hamer. Instead, the Committee awarded special equity option grants to
these executives. In addition, Messrs. Cambre, Murdy and Kurlander were also
awarded special equity option grants in November 1993, December 1992 and
November 1994, respectively, when they joined, or shortly after they joined, the
Corporation and NGC. This form of award was based upon recommendations contained
in a study undertaken for the Corporation's Compensation Committee by an
independent compensation consultant which had been asked to design an option
program which would align the financial interests of its senior-most executives
more closely with those of the stockholders of the Corporation and of NGC.
The special equity option awards are stock options with special pricing
features. With respect to half of these special grants the options are not
exercisable unless the Corporation's common stock price equals or exceeds 125%
of the exercise price on the day prior to exercise. With respect to the other
half of the special grants, the exercise prices are set at successively higher
levels above the value of the Corporation's common stock on the grant date.
Individuals must own and place on deposit with the Corporation a number of
shares equal to 2% of the shares covered by the options they were granted. The
purpose of the deposited shares is to evidence a commitment to ownership and
risk on the part of the executive in exchange for the leveraged opportunity to
participate in the growth in share value represented by the options. The shares
come off deposit when an option is exercised or expires. If the required number
of shares are not placed on deposit, or if they are taken off deposit early, the
option is proportionately reduced.
POLICIES WITH RESPECT TO TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Under
the Revenue Reconciliation Act of 1993, Section 162 of the Internal Revenue Code
was amended to eliminate, with certain exceptions, the deduction for certain
compensation in excess of $1 million to any named executive officer, including
the Chief Executive Officer. The Committees believe that the Corporation's stock
plans comply with the exceptions to this limitation. It is possible that
payments made from time to time under NGC's Annual Incentive Compensation Plan
could constitute non-deductible compensation expenses. Altering such Plan to
assure full deductibility of compensation, however, could inhibit the
Committees' ability to adjust performance criteria as they deem appropriate.
Because the Committees do not currently anticipate any significant increase in
tax liability to the Corporation or NGC as a result of the Section 162
amendments, the Committees have not altered their approach to setting incentive
compensation in response to such amendments. Should the compensation levels of
the Chief Executive Officer or any of the other named executive officers
materially affect the Corporation's or NGC's tax position in the future, the
Committees will consider establishing performance criteria that will allow the
Corporation and NGC to avail themselves of all appropriate tax deductions.
SUMMARY. The Committees believe that the combination of competitive base
salaries, potentially significant performance-based annual incentives paid
partially in restricted stock and a highly leveraged equity incentive
represented by premium-priced options combined with an ownership commitment,
represents a highly motivational and effective senior executive compensation
program that works to attract and retain talented executives and strongly aligns
the interests of senior management with those of the stockholders of the
Corporation and of NGC in achieving above average long-term returns on
investment.
Submitted by the Compensation Committee of the Corporation's Board of
Directors:
<TABLE>
<S> <C>
Joseph P. Flannery, Chairman Robin A. Plumbridge
Thomas A. Holmes William I. M. Turner, Jr.
</TABLE>
12
<PAGE> 15
FIVE-YEAR STOCKHOLDER RETURN COMPARISON
The following graph assumes $100 investment on December 31, 1990 in the
Corporation's common stock, the S&P 500 Index and the S&P Gold Index.
CUMULATIVE VALUE OF A $100 INVESTMENT
ASSUMING REINVESTMENT OF DIVIDENDS
<TABLE>
<CAPTION>
Newmont
Measurement Period Mining S&P 500 S&P Gold
(Fiscal Year Covered) Corporation Index Index*
<S> <C> <C> <C>
1990 100 100 100
1991 100 130 81
1992 104 140 76
1993 147 155 139
1994 115 157 112
1995 147 215 126
</TABLE>
* Echo Bay Mines Ltd., Homestake Mining Company, Newmont Mining Corporation and
Placer Dome, Inc.
13
<PAGE> 16
PROPOSAL NO. 2 -- APPROVAL OF THE CORPORATION'S
1996 EMPLOYEES STOCK PLAN
The Corporation's 1996 Employees Stock Plan (the "1996 Plan") was adopted
by the Board of Directors on March 20, 1996, subject to approval by the holders
of a majority of the outstanding shares of common stock represented at the
Annual Meeting of Stockholders on May 2, 1996.
The Corporation's 1992 Key Employees Stock Plan (the "1992 Plan") will
terminate on May 7, 2002. As of March 7, 1996, only 498,351 shares of the
Corporation's common stock remain available for the granting of options or other
awards under the 1992 Plan. The Board of Directors believes that the
Corporation's 1982 Key Employees Stock Option Plan, 1987 Key Employees Stock
Option Plan and the 1992 Plan (the "Predecessor Plans") contributed
significantly to the success of the Corporation by enabling the Corporation to
attract and retain upper management personnel of outstanding ability.
Accordingly, the Board has adopted, subject to the requisite approval by the
stockholders, the 1996 Plan which would permit the committee administering the
plan to grant (a) incentive stock options ("ISOs") within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), (b) stock
options not intended to qualify as incentive stock options ("NQOs"), (c) stock
appreciation rights ("SARs") in conjunction with the granting of stock options,
(d) restricted stock, (e) bonuses or other compensation payable in stock and (f)
other stock-based awards.
The Board recommends that the stockholders of the Corporation approve the
1996 Plan. The full text of the 1996 Plan appears in Exhibit A to this Proxy
Statement and should be referred to for a complete description of its
provisions. The principal features of the 1996 Plan are summarized below, but
this summary is qualified in its entirety by reference to the complete text of
the 1996 Plan.
SUMMARY. The 1996 Plan would permit the issuance of options and other
awards covering in the aggregate up to 3,000,000 shares of the common stock of
the Corporation, plus an additional number of shares on January 1 of each
calendar year for the term of the 1996 Plan equal to one percent of the
Corporation's outstanding common stock on the immediately preceding December 31.
The 1996 Plan shall become effective on May 2, 1996, if a majority of the shares
present and voting at the Annual Meeting of Stockholders are voted in favor of
it. The options and other awards may be issued under the 1996 Plan on or prior
to May 2, 2006, to employees of the Corporation and its subsidiaries and
affiliates designated by the Committee. Persons who serve only as directors, as
well as members of the Corporation's Compensation Committee (the "Committee"),
are not eligible to participate in the 1996 Plan.
ADMINISTRATION. The Committee, which shall consist of at least three
persons selected by the Board from among its members, will administer the 1996
Plan. Members of the Committee must be "outside directors," within the meaning
of Section 162(m) of the Code, and "disinterested persons" or "non-employee
directors," as applicable, within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (but only to the extent
necessary for the 1996 Plan and awards thereunder to satisfy the requirements of
such rule). The Committee will select the participants from the eligible
employees and determine the provisions of the options and other awards to be
granted, including the timing thereof and the number of shares under each option
and other award. The terms of any options or other awards under the 1996 Plan
need not be uniform as to all grants and recipients thereof. Each option or
other award under the 1996 Plan shall be evidenced by an award agreement, which
shall be executed by the Corporation and the recipient thereof, unless the
agreement provides otherwise. The Committee shall have the authority to
prescribe the form, and, subject to the terms of the 1996 Plan, determine the
content of all such award agreements. The Committee may establish, amend, waive
and rescind rules, regulations and guidelines for the administration of the 1996
Plan. The Committee is responsible for interpreting the 1996 Plan and the
options and other awards granted thereunder. The 1996 Plan also grants to the
Committee, among other powers, the authority to accelerate the exercisability of
any outstanding option or award or the termination of restrictions applicable to
any outstanding restricted stock when such acceleration or termination would be
in the Corporation's best interest and to establish performance goals applicable
to any awards under the 1996 Plan and certify whether and to what extent any
such goals have been met. Decisions and actions of the Committee shall be final
and conclusive on all persons having or claiming to have any right or interest
in or under the 1996 Plan. The 1996 Plan authorizes the Committee to delegate
the administration of the plan, other than the
14
<PAGE> 17
authority to grant awards under the Plan and subject to certain other
limitations, and the 1996 Plan permits the Board to exercise the Committee's
powers under the plan, other than with respect to matters required by law to be
determined in the discretion of the Committee. Currently, it is expected that
the Committee will consist of Messrs. Flannery, Holmes, Plumbridge and Turner
(the incumbent Compensation Committee), each of whom is an outside director and
each of whom is a member of the Committee administering the Predecessor Plans.
SHARES SUBJECT TO THE PLAN; LIMITATIONS ON GRANTS OF OPTIONS AND OTHER
AWARDS. A total of 3,000,000 shares of the common stock of the Corporation (of
which no more than 600,000 may be issued as restricted stock), plus an
additional number of shares on January 1 of each calendar year for the duration
of the 1996 Plan equal to one percent of the number of shares of the
Corporation's common stock outstanding on the immediately preceding December 31
(provided that no more than twenty percent of such additional annual shares may
be awarded as restricted stock), may be optioned or awarded under the 1996 Plan,
subject to the provisions regarding changes in capital described below. The 1996
Plan provides that no more than 7,500,000 shares of the Corporation's common
stock may be awarded with respect to ISOs for the duration of the Plan. The
shares of common stock may be either authorized and unissued shares (which will
not be subject to preemptive rights) or previously issued shares acquired by the
Corporation or a subsidiary of the Corporation. On termination or expiration of
an unexercised option, SAR or other stock-based award, in whole or in part, the
number of shares of common stock subject to such unexercised option or other
award shall become available again for grant under the 1996 Plan. Any shares of
restricted stock forfeited as hereinafter described shall become available for
grant under the 1996 Plan, provided that the recipient thereof has not realized
any benefits of ownership from such shares.
No more than 500,000 shares of the Corporation's common stock (subject to
adjustment for certain changes in capital) may be subject to each of the
following types of awards granted to a participant under the 1996 Plan in any
twelve-month period: options (including any related SARs), awards of
performance-based restricted stock and performance-based other stock-based
awards.
PARTICIPATION. Options and other awards are to be granted by the Committee
only to employees of the Corporation, its subsidiaries and any of its other
affiliates designated by the Committee, including officers who may also be
directors, but excluding non-employee directors and members of the Committee.
Approximately 300 participants, including all current executive officers of the
Corporation (22 in number, of whom one person, the Corporation's Chairman,
President and Chief Executive Officer, is also a director), will be eligible to
receive options and other awards under the 1996 Plan if approved by the
stockholders.
No determination has been made at this time with respect to the identity of
persons who may be selected to receive options or other awards under the 1996
Plan.
TERMS OF OPTIONS. Option Price. The option exercise price per share of
Corporation common stock shall be determined by the Committee, but shall not be
less than 100% of the fair market value of a share of such stock on the date the
option is granted. The 1996 Plan generally defines "fair market value" as the
average of the high and low sales prices of the Corporation's common stock on
the relevant date as reported for New York Stock Exchange issues in The Wall
Street Journal, unless, under certain circumstances, the Committee determines
that some other reasonable valuation method shall be used. Such fair market
value on March 7, 1996, was $53.625.
Payment. The option price is payable in any manner permitted by applicable
law and prescribed by the Committee, including, in the Committee's discretion,
in accordance with a "cashless exercise" program that it may establish. Any cash
proceeds received by the Corporation on the exercise of options will constitute
general funds of the Corporation.
Exercise of Options. The Committee is empowered at the time of grant to
determine the date or dates on which options will become exercisable and such
will be stated in the award agreement. At the time of grant, the Committee shall
fix a period not in excess of ten years during which the option may be exercised
and the events which will cause earlier termination of the option. No optionee
or other person shall become the beneficial owner, nor have any rights of a
holder of shares of the Corporation's common stock subject to the
15
<PAGE> 18
option until the optionee has exercised such option in accordance with the
applicable award agreement and the 1996 Plan. The 1996 Plan permits optionees to
exercise their options with shares in immediately successive transactions. An
optionee can use option shares received from the exercise of a portion of his or
her option to pay the option price on the next exercise. At the conclusion of
such transactions the additional shares held by the optionee will be equal in
value to the excess of the fair market value of the shares over the total
exercise price for such shares, similar to the result of exercising SARs for
stock, as described below. Options shall terminate upon termination of an
optionee's employment; however, the Committee may determine that an option may
be exercised prior to the option's termination date following such termination
of employment to the extent provided in the applicable award agreement.
TERMS OF SARS. SARs may be granted to a participant at the time that he or
she is granted stock options under the 1996 Plan (or, in the case of SARs
granted with NQOs, at any time thereafter, during the term of such NQOs). Upon
exercising a SAR, the holder thereof is entitled to receive the excess of the
fair market value of the stock for which the SAR is exercised over the exercise
price of the related option. Such amount is payable in stock or in cash or in a
combination of each at the discretion of the Committee, as stated in the
applicable award agreement. A SAR shall be exercisable to the extent its related
stock option is exercisable. A stock option shall no longer be exercisable to
the extent that the holder thereof exercises any related SAR. Likewise, a SAR
shall not be exercisable to the extent of the exercise or expiration of the
related stock option.
AWARDS OF RESTRICTED STOCK. At the time of awards of restricted stock, the
Committee will specify time periods, vesting and earn-out provisions (which may
be dependent on continued employment), and/or specified performance goals prior
to the expiration, satisfaction or achievement of which the shares of restricted
stock may not be sold, pledged or otherwise transferred. While restricted, the
shares of restricted stock would be registered in the participant's name but any
stock certificates for such shares would be held by the Corporation. The
participant would receive dividends (except that dividends paid in common stock
of the Corporation or other property shall be subject to the same restrictions
as the restricted stock) and have voting and all other rights of a stockholder
during the restricted period.
When the shares vest, they shall be delivered to the participant free of
restrictions. Upon termination of employment, the restricted shares shall vest
or be forfeited in accordance with the terms of the employee's restricted stock
award agreement. However, the Committee may in its discretion waive any
forfeitures for whatever reason the Committee considers to be in the interests
of the Corporation. Any shares subject to specified performance criteria shall
also be forfeited upon failure to meet such criteria to the extent set forth in
the restricted stock award agreement.
OTHER STOCK-BASED AWARDS. The Committee may grant to participants under the
1996 Plan other stock-based awards, which are valued in whole or in part by
reference to, or otherwise based on common stock of the Corporation. The form of
any other stock-based awards granted under the 1996 Plan shall be determined in
the discretion of the Committee, and may include, for example, deferred stock,
performance shares, performance units and/or convertible debentures. The
Committee shall also have the discretion to determine the terms, conditions,
restrictions and/or limitations, consistent with the 1996 Plan, applicable to
any other stock-based awards granted under the plan. The 1996 Plan gives the
Committee the discretion, under certain circumstances, to waive any such
limitations or requirements and to modify or accelerate the exercisability or
other terms and conditions of any other stock-based award. Unless the Committee
determines otherwise, an other stock-based award shall include an entitlement to
receive dividend equivalents based on dividends paid with respect to the
Corporation's common stock covered by such award. Any dividend equivalents shall
be converted to cash or additional shares of the Corporation's common stock at
such time and in such manner and subject to such limitations as may be
determined by the Committee.
BONUSES OR OTHER COMPENSATION PAYABLE IN STOCK. In lieu of cash bonuses or
other compensation otherwise payable to employees under the Corporation's or
applicable subsidiary's compensation practices, the Committee may determine that
such bonuses or other compensation shall be payable in common stock of the
Corporation or partly in such stock and partly in cash. Any such shares shall be
subject to such terms as the Committee may determine in its discretion.
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<PAGE> 19
FORFEITURE PROVISIONS. To the extent provided in the applicable award
agreement, (1) a participant who exercises an option or a SAR and within six
months thereafter leaves employment with the Corporation or its subsidiary
(other than for certain reasons) shall be required to repay to the Corporation
the gain he or she realized upon such exercise (however, no such repayment shall
be required to the extent that the fair market value of stock acquired upon
exercise of an option shall, as of the date of such termination of employment,
have declined below the option exercise price previously paid by the participant
and he or she has not previously disposed of such stock) and (2) if a
participant engages in any activity in competition with the business of, or
inimical, contrary or harmful to the interests of, the Corporation or its
subsidiaries, as determined by the Committee in its discretion, at any time
prior to the exercise, expiration or termination of any option or other award or
the restrictions applicable to any restricted stock granted to the participant
under the 1996 Plan, or within three years after such participant leaves
employment with the Corporation or its subsidiary (other than for certain
reasons) or exercises an option or a SAR, then any outstanding options or other
awards granted to such participant shall thereupon terminate, any restricted
stock awarded to such participant shall be forfeited, any unpaid dividend
equivalents shall not be paid to such participant and any gain realized by such
participant upon the exercise of an option or SAR within such prior three-year
period shall be repayable by the participant to the Corporation. The Committee
has discretionary authority under the 1996 Plan to release any participant from
any or all obligations that he or she owes to the Corporation pursuant to these
provisions of the 1996 Plan and/or to waive, in whole or in part, any such
forfeiture if the Committee determines that such action is in the best interests
of the Corporation.
CHANGES IN CAPITAL. Appropriate adjustments in the number and class of
shares available under the 1996 Plan, the number, class and price of shares
subject to outstanding option, SAR and other stock-based award grants and the
number and class of shares under awards of restricted stock will be made by the
Committee upon any changes in the outstanding shares of common stock resulting
from any subdivision or consolidation of shares, the payment of a stock dividend
on the common stock, recapitalization, reorganization, liquidation, merger or
consolidation (whether or not the Corporation is the surviving corporation) or
other similar changes in the Corporation's corporate structure or
capitalization. Except as otherwise specifically provided in the applicable
award agreement, in the event of the approval by the stockholders of the
Corporation of a merger, consolidation, combination, reorganization or other
transaction resulting in less than 50% of the combined voting power of the
successor entity being owned by former stockholders of the Corporation, the
liquidation or dissolution of the Corporation or the sale or other disposition
of all or substantially all of its assets or business; a tender or exchange
offer which, if successful, would put 50% or more of the shares of the
Corporation's common stock in control of the offeror or a lesser percentage
which the Committee determines may materially adversely affect the market value
of the shares of the Corporation's common stock after such offer; the purchase
by any person or group, directly or indirectly, of 20% or more of the combined
voting power of the Corporation's outstanding securities (or right to acquire
such ownership); or during any period of two consecutive years individuals who
at the beginning of such period constituted the Board of Directors cease for any
reason to constitute at least a majority thereof, unless the election or
nomination of each new director was approved by at least two-thirds of the
directors then remaining in office from the beginning of such period (other than
a sale or other disposition to or for the benefit of, or any beneficial
ownership or offer by or on behalf of the Corporation, its subsidiary and/or any
employee benefit plan of either), then, unless the Committee determines
otherwise (i) all restrictions on outstanding awards of restricted stock shall
be immediately canceled, (ii) all outstanding options, SARs and/or other
stock-based awards shall become immediately exercisable in full without regard
to the terms of the 1996 Plan or the terms of any such options or other awards
and (iii) all such options and other awards shall immediately become fully
vested and nonforfeitable. Upon the occurrence of any event described in the
preceding sentence, the Committee may, in its discretion, (i) make adjustments
to options, SARs and/or other stock-based awards, under the 1996 Plan to
substitute shares or other securities of the surviving corporation or another
corporation that is a party to the transaction having approximately the same
value as the shares of the Corporation's common stock covered by the options,
SARs and/or other stock-based awards, (ii) cancel or waive any payment owed by,
or any forfeiture imposed on a participant pursuant to the forfeiture provisions
of the 1996 Plan (as described above), and/or (iii) determine that any
outstanding stock options, SARs and/or other stock-based awards shall be
cashed-out based on the greater of (A) the highest market value of the
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<PAGE> 20
Corporation's common stock subject to such option or other award over the 30
trading days prior to such transaction and (B) the value of the consideration
that would be received in such transaction for common stock of the Corporation,
less the aggregate exercise price of such option or other award (if any).
TRANSFERABILITY OF OPTIONS AND OTHER AWARDS. During the lifetime of a
recipient of an option or other award under the 1996 Plan, such option or other
award shall only be exercisable by such recipient or, if an award agreement
(other than with respect to an ISO) so provides, his or her alternate payee
pursuant to a qualified domestic relations order (a "QDRO"). Options or other
awards shall not be transferable except by will or the laws of descent and
distribution or pursuant to such a QDRO or to the designated beneficiary of a
deceased participant, in accordance with the applicable award agreement.
Notwithstanding the foregoing, an award agreement under the 1996 Plan may, in
the Committee's discretion, permit the recipient of an option, other than an
ISO, or other award to transfer such option or award, together with any exercise
rights of such recipient.
TAX WITHHOLDING OBLIGATIONS. If any tax withholding obligations arise under
applicable law with respect to any option or award under the 1996 Plan, the plan
provides that the participant shall pay, or make other arrangements satisfactory
to the Corporation to pay, in cash any such taxes at the time the income with
respect to such option or award is first includible in the participant's taxable
income, or, if the participant elects to be taxed earlier with respect to an
award, the date of such election. The 1996 Plan gives the Committee discretion
to permit a participant to elect withholding of common stock of the Corporation
otherwise deliverable to such participant or to tender pre-owned common stock of
the Corporation, acquired more than six months prior to such tender, in full or
partial satisfaction of such tax obligations under procedures approved by the
Committee.
AMENDMENT AND TERMINATION OF THE 1996 PLAN. The Board may, from time to
time, amend, alter, suspend or terminate the 1996 Plan. However, without
approval of the stockholders (to the extent required), the Board may not (1)
increase the maximum number of shares of common stock of the Corporation which
may be sold or awarded under the 1996 Plan, except as described above, (2)
decrease the minimum option exercise price requirements of the 1996 Plan except
as described above, (3) change the class of persons eligible to receive options
or other awards under the 1996 Plan or (4) extend the duration of the 1996 Plan
or the period during which options may be exercised. The Committee may also
amend outstanding options, SARs, restricted stock awards or other stock-based
awards. No such amendment or termination of the 1996 Plan or amendment of
outstanding options or other awards may impair the previously accrued rights of
any holder of an outstanding option or other award without his or her written
consent.
Notwithstanding the foregoing, the Board may amend the 1996 Plan and the
Committee may amend or specify additional terms, conditions and restrictions
with respect to any option or other award under the 1996 Plan, either
retroactively or prospectively, and without the consent of the participant, so
as to preserve or come within any exemptions from liability under Section 16(b)
of the Exchange Act and/or so that any option or other award shall be exempt
from the deductibility limitations of Section 162(m) of the Code or as necessary
or appropriate to ensure compliance with other applicable laws.
AWARDS UNDER THE 1992 PLAN. Subject to approval of the 1996 Plan by the
Corporation's stockholders, the 1996 Plan shall apply to and govern existing and
subsequent awards under the Predecessor Plans (other than ISOs outstanding under
the Predecessor Plans on the effective date of the 1996 Plan). Unless the
Committee determines otherwise or the applicable holder properly refuses to
consent, existing and subsequent awards under the Predecessor Plans shall be
deemed amended to provide any additional rights applicable to options and other
awards under the 1996 Plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The tax consequences applicable to
the Corporation and a participant in connection with an ISO, NQO, SAR,
restricted stock award or other stock-based award granted to a participant, or
bonuses or other compensation paid in stock under the 1996 Plan are complex and
depend, in large part, on the surrounding facts and circumstances. The following
brief summary of certain significant United States Federal income tax
consequences, under existing law, of the 1996 Plan is not intended to be
exhaustive and, among other things, does not describe state, local or foreign
tax consequences.
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Under the Code, the grant of stock options does not result in taxable
income to the optionees or any tax deduction to the Corporation. However, the
transfer of common stock of the Corporation to optionees upon exercise of their
options may or may not give rise to taxable income to the optionees and tax
deductions to the Corporation, depending upon whether or not the options are
ISOs or NQOs.
In general, a participant will not recognize any income upon the exercise
of an ISO, and the Corporation will not be entitled to a tax deduction on
account of such exercise. However, a participant could be subject to the
alternative minimum tax upon exercise. If the Code requirements relating to the
holding periods for stock acquired on exercise of an ISO have been satisfied, a
participant who acquires Corporation common stock upon the exercise of his or
her ISO will recognize any gain or loss realized upon the sale of such stock as
long-term capital gain or loss, but the Corporation will not be entitled to any
tax deduction on account of such sale. If such holding period requirements are
not satisfied with respect to such stock acquired on exercise of an ISO, the
sale of the stock so acquired will result in ordinary income being recognized by
the participant in an amount equal to the excess, with certain adjustments, of
the fair market value of the underlying stock on the date of exercise over the
option price and the Corporation will be entitled to a tax deduction in the same
amount. Any additional gain realized by such participant on such a sale of his
or her stock will be capital gain. If the total amount realized upon such a sale
is less than the exercise price of the ISO, the difference will be a capital
loss to such participant.
In the case of a NQO, a participant generally will recognize ordinary
income upon the exercise of such option in an amount equal to the excess of the
fair market value of the underlying stock on the date of exercise over the
option price, and the Corporation will be entitled to a tax deduction in the
same amount. Such participant will recognize as capital gain or loss any profit
or loss realized on the sale or exchange of any such shares disposed of or sold.
The granting of SARs does not produce taxable income under the Code to the
participant or a tax deduction to the Corporation. Upon exercise of a SAR, the
amount of any cash the participant receives and the fair market value as of the
exercise date of any stock received are generally taxable to the participant as
ordinary income and deductible by the Corporation.
A participant generally will not recognize any income for Federal income
tax purposes upon the award of restricted stock which is not transferable and is
subject to a substantial risk of forfeiture. Dividends paid with respect to
restricted stock prior to the lapse of restrictions applicable to such stock
will be taxable as compensation income to the employee. Generally, an employee
will recognize compensation income at the first time such stock becomes
transferable or no longer subject to a substantial risk of forfeiture, in an
amount equal to the fair market value of such shares of the Corporation's common
stock on the date the restrictions lapse. However, a participant may elect to
recognize compensation income upon the grant of restricted stock based on the
fair market value of the shares of common stock of the Corporation subject to
such award on the date of such award. If a participant makes such an election,
dividends paid with respect to such restricted shares will not be treated as
compensation, but rather as dividend income, and the participant will not
recognize additional income when the restrictions applicable to such restricted
stock lapse. Assuming compliance with the applicable withholding requirements,
the Corporation will be entitled to a tax deduction equal to the amount of
ordinary income recognized by a participant in connection with his or her
restricted stock award in the Corporation's taxable year in which such
participant recognizes such income.
The payment of bonuses or other compensation in common stock of the
Corporation is generally immediately taxable to the employee and deductible by
the Corporation; however, to the extent that such stock is not transferable and
subject to a substantial risk of forfeiture, the tax consequences to the
employee and the Corporation will be similar to the tax consequences of awards
of restricted stock, described above.
Under Section 162(m) of the Code, the Corporation may be limited as to
Federal income tax deductions to the extent that total annual compensation in
excess of $1 million is paid to the chief executive officer of the Corporation
or any one of the other four highest paid executive officers who are employed by
the Corporation on the last day of the taxable year. However, certain
"performance-based compensation" the material terms of which are disclosed to
and approved by the Corporation's stockholders is not subject to this limitation
on deductibility. The Corporation has structured the stock option and SAR
portions of the 1996 Plan with the
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intention that compensation resulting therefrom would be qualified
performance-based compensation and would be deductible without regard to the
limitations otherwise imposed by Section 162(m) of the Code. The 1996 Plan
allows the Committee discretion to award restricted stock and other stock-based
awards that are intended to be qualified performance-based compensation. Bonuses
and other compensation payable in stock under the 1996 Plan are not intended to
qualify as performance-based compensation.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
FOREGOING PROPOSAL AND, UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON THE PROXY
CARD TO THE CONTRARY, THE APPOINTEES NAMED THEREON INTEND SO TO VOTE.
PROPOSAL NO. 3 -- STOCKHOLDER PROPOSAL
The Corporation has been advised that the following resolution and
statement in support thereof may be presented by or on behalf a beneficial owner
of shares of the Corporation's common stock at the Annual Meeting of
Stockholders. The name and address of such beneficial owner, together with the
number of shares of common stock held by such beneficial owner, will be
furnished by the Securities and Exchange Commission, 450 5th Street, N. W.,
Washington, D. C. 20549, or by the Corporation, to any person, orally or in
writing as requested, promptly upon the receipt of such request.
"WHEREAS WE BELIEVE: responsible implementation of a sound, credible
environmental policy increases long-term shareholder value by raising
efficiency, decreasing clean-up costs, reducing litigation, and enhancing public
image and product attractiveness;
"Adherence to public standards for environmental performance gives a company
greater public credibility than following standards created by industry alone.
For maximum credibility and usefulness, such standards should reflect what
investors and other stakeholders want to know about the environmental records of
their companies;
"Companies are increasingly being expected by investors to do meaningful,
regular, comprehensive and impartial environmental reports. These help investors
and the public to understand environmental progress and problems. Uniform
standards for environmental reports permit comparisons of performance over time.
They also attract new capital from investors seeking investments which are
environmentally responsible and responsive and which minimize risk of
environmental liability.
"The Coalition for Environmental Responsible Economics (CERES) -- which
comprises shareholders of this company, public interest representatives, and
environmental experts -- consulted with corporations to produce the CERES
Principles as comprehensive public standards for both environmental performance
and reporting. Over 90 companies, including Sun (Oil), General Motors, H. B.
Fuller, and Polaroid, have endorsed these principles to demonstrate their
commitment to public environmental accountability. Fortune 500 endorsers say
that benefits of working with CERES are public credibility; "value-added" for
the company's environmental initiatives; and advancement for the company's own
environmental program.
"In endorsing the CERES Principles, a company commits to work toward:
<TABLE>
<S> <C>
1. Protection of the biosphere 6. Safe products and services
2. Sustainable natural resource use 7. Environmental restoration
3. Waste reduction and disposal 8. Informing the public
4. Energy conservation 9. Management commitment
5. Risk reduction 10. Audits and reports
</TABLE>
"(Full text of the CERES Principles and accompanying CERES Report Form
obtainable from: CERES, 711 Atlantic Avenue, Boston, MA 02110; Tel:
617-451-0927).
"RESOLVED: Shareholders request the Corporation to prepare a report (at
reasonable cost and omitting proprietary information) describing
Corporation programs, progress and future plans relative
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<PAGE> 23
to the environment and the CERES Principles, and using the standard
CERES Report Form as a guide."
SUPPORTING STATEMENT
"Many investors support this resolution. Those sponsoring it have portfolios
totaling $75 billion. Others voting FOR it bring shareholder votes to 20-30% at
some companies. The number of public pension funds and foundations supporting
this resolution increases every year. The objectives are: standards for
environmental performance and disclosure; methods for measuring progress toward
these goals; and a format for public report of progress. We believe this is
comparable to the European Community regulation for voluntary participation in
verified and publicly-reported eco-management and auditing, and fully compatible
with ISO 14000 certification.
"An annual environmental report in the format of the CERES Report would not
duplicate -- but rather complement -- the Corporation's own environmental
reporting.
"Shareholders are asked to vote FOR this resolution to ensure that our
Corporation's environmental policies and reports are publicly scrutinized and
adhere to standards upheld by management and stakeholders alike."
POSITION OF THE BOARD OF DIRECTORS
This proposal is similar to one that was defeated at several of the
Corporation's recent Annual Meetings of Stockholders, including the 1994 and
1995 Annual Meetings at which approximately 79% and 92%, respectively, of the
votes cast (excluding abstentions and broker non-votes) voted against it, and
the Board of Directors continues to oppose this proposal.
The Board of Directors is in sympathy with the objectives of the proponents
of the CERES principles proposal, and considers it vital to the interests of the
stockholders that the Corporation be fully committed to a policy of strict
compliance with federal and state environmental laws and regulations. The Board
of Directors strongly supports the spirit of these laws and regulations, and
takes the position that the Corporation should meet or exceed all environmental
legal requirements.
The Corporation's operations are subject to a comprehensive body of state
and federal environmental laws and regulations and the Corporation has an
effective organization and compliance program in place to ensure that these
environmental requirements are met. Information relating to the Corporation's
liabilities under, and compliance with, environmental laws is disclosed in the
Corporation's annual report on Form 10-K, and in the notes to the financial
statements that are included therein, which has been distributed to
stockholders.
The Corporation's operations in Nevada already are subject to specific
environmental laws and regulations that fill more than 8,000 pages and contain
an estimated 3. 5 million words, all of which govern the Corporation's actions.
Fines for failure to comply with these laws and regulations range up to $25,000
per day per violation. Compliance with such laws and regulations, which have
been devised by well ordered legislative and regulatory processes, would not,
however, satisfy the language of the CERES principles. The Board of Directors
believes that the CERES principles, and the private regulatory scheme they
envision, are both environmentally unnecessary and economically harmful if
adopted and literally applied by a mining company such as the Corporation.
Unlike the vast body of applicable environmental laws and regulations which
demand specific and quantifiable performance by the Corporation and other mining
companies, the CERES principles are a vague and imprecise description of the
environmental values sought to be achieved and the environmental negatives
sought to be avoided.
The Board of Directors believes that the elected members of Congress and
state legislatures, and the environmental protection agencies they have
established, are more responsible and better equipped to reconcile the various
public interests that are inherent in environmental regulation than is a private
special
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<PAGE> 24
interest group, however well intentioned, that cannot be held accountable for
the effects -- economic and otherwise -- of its attempted influence.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "AGAINST" THE
FOREGOING PROPOSAL AND, UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON THE PROXY
CARD TO THE CONTRARY, THE APPOINTEES NAMED THEREON INTEND SO TO VOTE.
OTHER MATTERS
The Board of Directors does not intend to bring other matters before the
Annual Meeting of Stockholders except items incident to the conduct of the
meeting. However, on all matters properly brought before the meeting by the
Board of Directors or by others, the persons named as proxies in the
accompanying proxy, or their substitutes, will vote in accordance with their
best judgment.
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EXHIBIT A
NEWMONT MINING CORPORATION
1996 EMPLOYEES STOCK PLAN
1. Purposes. The purposes of the Newmont Mining Corporation 1996 Employees
Stock Plan are:
(a) To further the growth, development and success of the Company and
its Subsidiaries by enabling employees of the Company and its Subsidiaries
to acquire a continuing equity interest in the Company, thereby increasing
their personal interests in such growth, development and success and
motivating such employees to exert their best efforts on behalf of the
Company and its Subsidiaries; and
(b) To maintain the ability of the Company and its Subsidiaries to
attract and retain employees of outstanding ability by offering them an
opportunity to acquire a continuing equity interest in the Company and its
Subsidiaries which will reflect the growth, development and success of the
Company and its Subsidiaries.
Toward these objectives, the Committee may grant Options, Stock Appreciation
Rights, or Other Stock-Based Awards or award Restricted Stock to such employees
or pay such employees' bonuses (if any) or other compensation in Common Stock or
award or grant any combination thereof, all pursuant to the terms and conditions
of the Plan (each, an "Award").
2. Definitions. As used in the Plan, the following capitalized terms shall
have the meanings set forth below:
(a) "ADDITIONAL ANNUAL INCREMENT" -- a number of shares of Common
Stock equal to one percent of the number of shares of Common Stock
outstanding on December 31 of the immediately preceding year.
(b) "AGREEMENT" -- an option or award agreement evidencing an Award.
(c) "AWARD" -- an Option, SAR, Other Stock-Based Award or Restricted
Stock granted or awarded, or bonus or other compensation of an employee
paid in Common Stock, pursuant to the terms and conditions of the Plan.
(d) "AWARD GAIN" -- the gain represented by the product of the excess
of the Fair Market Value of the Common Stock on the date of exercise of an
Option or SAR over the exercise price of such Option or SAR multiplied by
the number of shares of Common Stock subject to such Option or SAR, or
portion thereof, exercised, without regard to any subsequent decrease or
increase in the Fair Market Value of the Common Stock.
(e) "AWARD LIMIT" -- 500,000 shares of Common Stock (as adjusted in
accordance with Section 15).
(f) "BOARD" -- the Board of Directors of the Company.
(g) "CEO" -- the Chief Executive Officer of the Company.
(h) "CODE" -- the Internal Revenue Code of 1986, as it may be amended
from time to time, including regulations and rules thereunder and successor
provisions and regulations and rules thereto.
(i) "COMMITTEE" -- the Compensation Committee of the Board, or such
other Board committee as may be designated by the Board to administer the
Plan.
(j) "COMMON STOCK" -- the $1.60 par value common stock of the Company.
(k) "COMPANY" -- Newmont Mining Corporation, a Delaware corporation,
or any successor entity.
(l) "DIVIDEND EQUIVALENTS" -- the equivalent value (in cash or Common
Stock) of dividends paid on Common Stock subject to Other Stock-Based
Awards granted under Section 9.
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<PAGE> 26
(m) "EXCHANGE ACT" -- the Securities Exchange Act of 1934, as it may
be amended from time to time.
(n) "FAIR MARKET VALUE" of a share of Common Stock as of a given date
shall be the average of the high and low sales prices for a share of Common
Stock as reported for New York Stock Exchange issues in The Wall Street
Journal for such date; provided, however, that if there is no sale of
shares of Common Stock reported in The Wall Street Journal on such date,
such fair market value shall be the average between the bid and asked
prices for a share of Common Stock reported in The Wall Street Journal at
the close of trading on such date; provided further, however, that if no
such prices are reported for such day, the most recent day for which such
prices are available shall be used. In the event that the method for
determining the fair market value of a share of Common Stock provided for
in the previous sentence shall not be practicable, then such fair market
value shall be determined by such other reasonable valuation method as the
Committee shall, in its discretion, select and apply in good faith as of
the given date; provided, however, that for purposes of paragraph (a) of
Section 6, such fair market value shall be determined subject to Section
422(c)(7) of the Code.
(o) "ISO" OR "INCENTIVE STOCK OPTION" -- an option to purchase Common
Stock granted to a Participant under the Plan in accordance with the terms
and conditions set forth in Section 6 and which conforms to the applicable
provisions of Section 422 of the Code.
(p) "NOTICE" -- written notice actually received by the Company at its
offices on the day of such receipt, if received on or before 1:30 p.m.,
Denver time, on a day when the Company's offices are open for business, or,
if received after such time, such notice shall be deemed received on the
next such day, which notice may be delivered in person to the Company's
Payroll Department or sent by facsimile to the Company, or sent by
certified or registered mail or overnight courier, prepaid, addressed to
the Company at 1700 Lincoln Street, Denver, Colorado 80203, Attention:
Payroll Department.
(q) "OPTION" -- an option to purchase Common Stock granted to a
Participant under the Plan in accordance with the terms and conditions set
forth in Section 6. Options may be either ISOs or stock options other than
ISOs.
(r) "OPTIONEE" -- a Participant who has been granted an Option under
the Plan in accordance with the terms and conditions set forth in Section
6.
(s) "OTHER STOCK-BASED AWARDS" -- Awards granted to Participants under
the Plan in accordance with the terms and conditions set forth in Section
10.
(t) "PARTICIPANT" -- any employee of the Company or its Subsidiaries
selected to participate in the Plan pursuant to Section 3.
(u) "PERFORMANCE CRITERIA" -- earnings, increases in production,
reductions in costs of production and reserve replacement.
(v) "PLAN" -- this Newmont Mining Corporation 1996 Employees Stock
Plan.
(w) "PREDECESSOR PLANS" -- the Company's Amended and Restated 1992 Key
Employees Stock Plan and the Company's Amended and Restated 1987 Key
Employees Stock Option Plan.
(x) "RESTRICTED STOCK" -- Common Stock awarded under the Plan in
accordance with the terms and conditions set forth in Section 8.
(y) "RESTRICTION PERIOD" -- a time period, which may or may not be
based upon the achievement of particular performance goals and/or the
satisfaction of vesting or earnout provisions (which may be dependent on
the continued employment of the recipient) applicable to, and established
or specified by the Committee at the time of, each award of Restricted
Stock.
(z) "RULE 16B-3" -- Rule 16b-3 under the Exchange Act, as such rule
may be amended from time to time.
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(aa) "SAR" -- a stock appreciation right granted to a Participant
under the Plan and in accordance with the terms and conditions of Section
7.
(bb) "SEC" shall mean the Securities and Exchange Commission.
(cc) "SUBSIDIARY" shall mean (i) any present or future corporation
which is or would be a "subsidiary corporation" of the Company as the term
is defined in Section 424(f) of the Code and (ii) any unincorporated entity
in which the Company and/or one or more of its "subsidiary corporations"
(as defined in Section 424(f) of the Code) presently or in the future own
an aggregate profits interest of fifty percent (50%) or more, which the
Committee in its discretion determines will be a "Subsidiary" for purposes
of the Plan.
3. Administration of the Plan. (a) The Committee shall have exclusive
authority to operate, manage and administer the Plan in accordance with its
terms and conditions. Notwithstanding the foregoing, in its absolute discretion,
the Board may at any time and from time to time exercise any and all rights,
duties and responsibilities of the Committee under the Plan, including, but not
limited to, establishing procedures to be followed by the Committee, but
excluding matters which under Rule 16b-3 or Section 162(m) of the Code are
required to be determined in the discretion of the Committee.
(b) The Committee shall be appointed from time to time by the Board, and
the Committee shall consist of not less than three members of the Board, each of
whom is an "outside director" within the meaning of Section 162(m) of the Code
and, to the extent necessary for the Plan and/or Awards thereunder to satisfy
the requirements and conditions of Rule 16b-3, a "disinterested person," as
defined by Rule 16b-3 (or a "non-employee director" under Rule 16b-3 as proposed
to be amended by the SEC, if such amendments are finally adopted by the SEC
substantially as proposed); provided, however, that if one or more of the
members of the Committee does not qualify as such an "outside director" or a
"disinterested person" (or a "non-employee director," if applicable) at the time
any Award is granted, such Award nevertheless shall be deemed to be properly
authorized and issued under the Plan and shall remain in full force and effect
subject to the other terms and conditions contained in the Plan and the relevant
Agreement.
(c) Without limiting the generality of paragraph (a) of this Section 3, the
Committee shall have the exclusive right and discretionary authority to: (i)
interpret the Plan and the Agreements; (ii) determine eligibility for
participation in the Plan and the amount of Awards payable under the Plan; (iii)
select, from time to time, from amongst those eligible, the employees to whom
Awards shall be granted under the Plan, which selection may be based upon
information furnished to the Committee by the Company's management; (iv)
determine whether an Award shall take the form of an ISO, Option other than an
ISO, SAR, Restricted Stock, bonuses or other compensation payable in Common
Stock, Other Stock-Based Award (and, if so, the form thereof) or any combination
thereof; (v) determine the number of shares of Common Stock to be included in
any Award or to which any Award shall otherwise relate and the periods for which
Awards will be outstanding; (vi) establish, amend, waive and/or rescind rules
and regulations and administrative guidelines for carrying out the Plan; (vii)
to the extent permitted under the Plan and the applicable Agreement, accelerate
the exercisability or the termination of any Restriction Period with respect to
any Award when such acceleration and/or termination would be in the best
interest of the Company; (viii) to the extent permitted under the Plan and the
applicable Agreement, grant waivers of Plan terms, conditions, restrictions and
limitations; (ix) correct any errors, supply any omissions or reconcile any
inconsistencies in the Plan and/or any Agreement or any other instrument
relating to any Award; (x) to the extent permitted by the Plan, amend or adjust
the terms and conditions of any outstanding Award and/or adjust the number
and/or class of shares of Common Stock subject to any outstanding Award; (xi) in
accordance with the Plan, establish and administer any performance goals in
connection with any Awards, including the Performance Criteria to which such
performance goals relate and the applicable measurement periods, and certify
whether, and to what extent, any such performance goals have been met; (xii) at
any time and from time to time after the granting of an Award, specify such
additional terms, conditions and restrictions with respect to any ISO, Option
other than an ISO, SAR, Other Stock-Based Award, Restricted Stock and/or bonuses
or other compensation payable in Common Stock as may be deemed necessary or
appropriate to ensure compliance with any and all applicable laws, including,
but not limited to, (A) terms, restrictions and conditions for
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compliance with Federal and state securities laws, (B) methods of withholding or
providing for the payment of required taxes and (C) restrictions regarding a
Participant's ability to exercise Awards under a "cashless exercise" program
established by the Committee; and (xiii) take any and all such other action it
deems necessary or advisable for the proper operation and/or administration of
the Plan. The Committee shall have full discretionary authority in all matters
related to the discharge of its responsibilities and the exercise of its
authority under the Plan. Decisions and actions by the Committee with respect to
the Plan and any Agreement shall be final, conclusive and binding on all persons
having or claiming to have any right or interest in or under the Plan and/or any
Agreement. Awards, including Awards under the same section of the Plan, need not
be uniform as to all grants and recipients thereof.
(d) Each Award shall be evidenced by an Agreement, which shall be executed
by the Company and the Participant to whom such Award has been granted, unless
the Agreement provides otherwise; however, two or more Awards to a single
Participant may be combined in a single Agreement. An Agreement shall not be a
precondition to the granting of an Award; however, no person shall have any
rights under any Award unless and until the Participant to whom the Award shall
have been granted (i) shall have executed and delivered to the Company an
Agreement or other instrument evidencing the Award, unless such Agreement
provides otherwise, and (ii) has otherwise complied with the applicable terms
and conditions of the Award. The Committee shall prescribe the form of all
Agreements, and, subject to the terms and conditions of the Plan, shall
determine the content of all Agreements. Any Agreement may be supplemented or
amended in writing from time to time as approved by the Committee; provided that
the terms and conditions of any such Agreement as supplemented or amended are
not inconsistent with the provisions of the Plan.
(e) A majority of the members of the entire Committee shall constitute a
quorum and the actions of a majority of the members of the Committee in
attendance at a meeting at which a quorum is present, or actions by a written
instrument signed by all members of the Committee, shall be the actions of the
Committee.
(f) The Committee may, in its discretion, delegate to the CEO, any Senior
Vice President of the Company or the Secretary of the Company the
"administration" of the Plan under this Section 3; provided, however, that no
such delegation by the Committee shall be made if such delegation would not be
permitted under applicable law or with respect to the administration of the Plan
as it affects the CEO or the President or Secretary of the Company or any Senior
Vice President of the Company, and, provided further, however, the Committee may
not delegate its authority to grant awards or correct errors, omissions or
inconsistencies in the Plan. All authority delegated by the Committee under this
paragraph (f) of this Section 3 shall be exercised in accordance with the terms
and conditions of the Plan and any rules, regulations or administrative
guidelines that may from time to time be established by the Committee, and any
delegee of such authority shall periodically report to the Committee concerning
the performance or discharge of the matters delegated to such individual.
4. Shares of Stock Subject to the Plan. (a) The shares of stock subject to
Awards granted under the Plan shall be shares of Common Stock. Such shares of
Common Stock subject to the Plan may be either authorized and unissued shares
(which will not be subject to preemptive rights) or previously issued shares
acquired by the Company or any Subsidiary. The total number of shares of Common
Stock that may be delivered pursuant to any Awards under the Plan is 3,000,000
plus an additional number of shares on January 1 of each calendar year
(beginning with calendar year 1997) during the duration of the Plan equal to the
Additional Annual Increment, of which 600,000 shares of Common Stock plus an
additional amount of shares of Common Stock each calendar year equal to twenty
percent of the Additional Annual Increment with respect to such year may be
awarded as Restricted Stock and no more than 7,500,000 shares of Common Stock
may be awarded in the aggregate with respect to ISOs for the duration of the
Plan. The exercise of a SAR, whether paid in cash or Common Stock, shall be
deemed to be an issuance of Common Stock for purposes of determining the number
of shares delivered under the Plan.
(b) Notwithstanding any of the foregoing limitations set forth in this
Section 4, the numbers of shares of Common Stock specified in this Section 4
shall be adjusted as provided in Section 15.
(c) Any shares of Common Stock subject to an Option or SAR or Other
Stock-Based Award which for any reason expires or is terminated without having
been fully exercised and any Restricted Stock which is
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forfeited may again be granted pursuant to an Award under the Plan, subject to
the limitations of this Section 4; provided, however, that forfeited shares of
Common Stock shall not be available for further Awards if the recipient thereof
has realized any benefits of ownership from such shares.
5. Eligibility. Employees of the Company and its Subsidiaries (but
excluding members of the Committee as well as non-employee directors) shall be
eligible to become Participants and receive Awards under the Plan.
6. Terms and Conditions of Stock Options. All Options to purchase Common
Stock granted under the Plan shall be either ISOs or Options other than ISOs.
Each Option shall be subject to all the applicable provisions of the Plan,
including the following terms and conditions, and to such other terms and
conditions not inconsistent therewith as the Committee shall determine and which
are set forth in the applicable Agreement.
(a) The option exercise price per share of shares of Common Stock
subject to each Option shall be determined by the Committee and stated in
the Agreement; provided, however, that, subject to paragraph (g)(C) of this
Section 6, such price shall not be less than 100% of the Fair Market Value
of a share of Common Stock at the time that the Option is granted.
(b) Each Option shall be exercisable in whole or in such installments,
at such times and under such conditions as may be determined by the
Committee in its discretion and stated in the Agreement, and, in any event,
over a period of time ending not later than ten years from the date such
Option was granted, subject to paragraph (g)(C) of this Section 6.
(c) An Option shall not be exercisable with respect to a fractional
share of Common Stock or the lesser of fifty shares or the full number of
shares of Common Stock then subject to the Option. No fractional shares of
Common Stock shall be issued upon the exercise of an Option.
(d) Each Option may be exercised by giving Notice to the Company
specifying the number of shares of Common Stock to be purchased, which
shall be accompanied by payment in full including applicable taxes, if any,
in accordance with Section 14. Payment shall be in any manner permitted by
applicable law and prescribed by the Committee, in its discretion, and set
forth in the Agreement, including, in the Committee's discretion, payment
in accordance with a "cashless exercise" program established by the
Committee.
(e) No Optionee or other person shall become the beneficial owner of
any shares of Common Stock subject to an Option, nor have any rights to
dividends or other rights of a shareholder with respect to any such shares
until he or she has exercised his or her Option in accordance with the
provisions of the Plan and the applicable Agreement.
(f) An Option may be exercised only if at all times during the period
beginning with the date of the granting of the Option and ending on the
date of such exercise, the Optionee was an employee of either the Company
or of a Subsidiary or of another corporation referred to in Section
421(a)(2) of the Code. Notwithstanding the above, the Committee may
determine in its discretion that an Option may be exercised following
termination of such continuous employment, whether or not exercisable at
such time, to the extent provided in the applicable Agreement.
(g)(A) Each Agreement relating to an Option shall state whether such
Option will or will not be treated as an ISO. No ISO shall be granted
unless such Option, when granted, qualifies as an "incentive stock option"
under Section 422 of the Code. Any ISO granted under the Plan shall contain
such terms and conditions, consistent with the Plan, as the Committee may
determine to be necessary to qualify such Option as an "incentive stock
option" under Section 422 of the Code. Any ISO granted under the Plan may
be modified by the Committee to disqualify such Option from treatment as an
"incentive stock option" under Section 422 of the Code.
(B) Notwithstanding any intent to grant ISOs, an Option granted under
the Plan will not be considered an ISO to the extent that it, together with
any other "incentive stock options" (within the meaning of Section 422 of
the Code, but without regard to subsection (d) of such Section) under the
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Plan or any other incentive stock option plans of the Company and any
Subsidiary, are exercisable for the first time by any Optionee during any
calendar year with respect to Common Stock having an aggregate Fair Market
Value in excess of $100,000 (or such other limit as may be required by the
Code) as of the time the Option with respect to such Common Stock is
granted. The rule set forth in the preceding sentence shall be applied by
taking Options into account in the order in which they were granted.
(C) No ISO shall be granted to a Participant who owns (within the
meaning of Section 424(d) of the Code), at the time the Option is granted,
more than 10% of the total combined voting power of all classes of stock of
the Company or a Subsidiary. This restriction does not apply if at the time
such ISO is granted the Option exercise price per share of Common Stock
subject to the Option is at least 110% of the Fair Market Value of a share
of Common Stock on the date such ISO is granted, and the ISO by its terms
is not exercisable after the expiration of five years from such date of
grant.
(h) Notwithstanding any other provision contained in the Plan to the
contrary, the maximum number of shares of Common Stock which may be subject
to Options granted under the Plan to any Participant in any twelve-month
period shall not exceed the Award Limit. To the extent required by Section
162(m) of the Code, shares of Common Stock subject to Options which are
cancelled shall continue to be counted against the Award Limit and if,
after the grant of an Option, the price of shares subject to such Option is
reduced and the transaction is treated as a cancellation of the Option and
a grant of a new Option, both the Option deemed to be canceled and the
Option deemed to be granted shall be counted against the Award Limit.
7. Terms and Conditions of SARs. Any SAR granted by the Committee under
the Plan shall be granted in conjunction with all or part of an Option granted
under the Plan. Each SAR shall be subject to all the applicable provisions of
the Plan, including the following terms and conditions, and to such other terms
and conditions not inconsistent therewith as the Committee shall determine and
which are set forth in the applicable Agreement.
(a) The Committee may grant a SAR with respect to an Option which is
not an ISO, either at the time such Option is granted or at any subsequent
time during the term of such Option, or with respect to an ISO, only at the
time such ISO is granted. A SAR shall entitle the grantee thereof to elect,
in the manner described below and as set forth in the applicable Agreement,
in lieu of exercising his or her related Option, for all or a portion of
the shares of Common Stock covered by such Option, to surrender such Option
with respect to any or all of such shares and to receive from the Company a
payment, such payment shall have a value equal to the amount by which (A)
the Fair Market Value of a share of Common Stock on the date of such
election, multiplied by the number of shares of Common Stock as to which
the grantee shall have made such election, exceeds (B) the exercise price
stated in such Option multiplied by such number of shares. A SAR shall be
exercisable only to the extent and at the time the related Option is
exercisable. The SAR shall terminate and shall no longer be exercisable
upon the expiration or exercise of the related Option. An Option with
respect to which an Optionee has elected to exercise a SAR, as described
above, shall, to the extent of the shares covered by such exercise, be
canceled automatically and surrendered to the Company. Such Option shall
thereafter remain exercisable according to its terms only with respect to
the number of shares of Common Stock as to which it would otherwise be
exercisable, less the number of such shares with respect to which such SAR
has been so exercised.
(b) The Company may, in the discretion of the Committee, as set forth
in the Agreement, make payment on a properly exercised SAR; (i) in cash
equal to the excess of the amount described in clause (A) over the amount
described in clause (B) of paragraph 7(a) above; or (ii) in the nearest
whole number of shares of Common Stock having an aggregate Fair Market
Value on the date of exercise of the SAR which is not greater than the cash
amount calculated in clause 7(b)(i) above; or (iii) in a combination of the
manners described in clauses 7(b)(i) and (ii) above.
(c) An election to exercise SARs shall be deemed to have been made on
the date of Notice of such election to the Company.
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(d) Notwithstanding any other provision contained in the Plan to the
contrary, the maximum number of shares of Common Stock for which SARs may
be granted under the Plan to any Participant in any twelve-month period
shall not exceed the Award Limit. To the extent required by Section 162(m)
of the Code, shares of Common Stock subject to SARs which are cancelled
continue to be counted against the Award Limit and if, after the grant of a
SAR, the price of shares subject to such SAR is reduced and the transaction
is treated as a cancellation of the SAR and a grant of a new SAR, both the
SAR deemed to be canceled and the SAR deemed to be granted shall be counted
against the Award Limit.
8. Terms and Conditions of Restricted Stock Awards. All awards of
Restricted Stock under the Plan shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions, and to
such other terms and conditions not inconsistent therewith, as the Committee
shall determine and which are set forth in the applicable Agreement.
(a) Awards of Restricted Stock may be in addition to or in lieu of any
other types of Awards granted under the Plan.
(b)(i) During the Restriction Period stated in the Agreement, the
recipient shall not be permitted to sell, transfer, pledge, assign,
encumber or otherwise dispose of the shares of Restricted Stock. Any
attempt by such recipient to do so shall constitute the immediate and
automatic forfeiture of such Award.
(ii) An award of Restricted Stock with a Restriction Period based upon
the attainment of particular performance goals established by the
Committee, which performance goals are determined over a measurement period
or periods established by the Committee and relate to one or more
Performance Criteria, as determined by the Committee, in its discretion, is
intended to qualify as "other performance-based compensation," as used in
Code Section 162(m)(4)(c). The maximum number of shares of Restricted Stock
intended to qualify as "other performance-based compensation," as used in
Code Section 162(m)(4)(C), that may be awarded to a Participant in any
twelve-month period shall not exceed the Award Limit.
(c) Except as otherwise provided in this paragraph (c) of Section 8,
shares of Restricted Stock shall be forfeited and revert to the Company
upon termination for any reason of the recipient's employment with the
Company or a Subsidiary and/or the failure to meet any performance goals to
the extent set forth in the Agreement. Notwithstanding the foregoing, upon
any such termination of employment during the Restriction Period, shares of
Restricted Stock shall become free of all or part of the restrictions
applicable thereto to the extent that: the Agreement, as determined by the
Committee in its discretion on the award date, provides for lapse of such
restrictions upon such termination of employment or the Committee in its
discretion determines to waive forfeiture of such shares of Restricted
Stock for whatever reason the Committee considers to be in the interests of
the Company; provided, however, to the extent that subparagraph (b)(ii) of
this Section 8 is intended to apply to shares of Restricted Stock, in no
event shall restrictions applicable thereto be subject to lapse prior to
the end of the Restriction Period for any reason other than the death or
disability of the recipient or change of control or ownership of the
Company.
(d) Each recipient of shares of Restricted Stock hereunder may, but
need not, be issued one or more stock certificates in respect of such
shares of Restricted Stock. Any such stock certificates for shares of
Restricted Stock shall be registered in the name of the recipient but shall
either be appropriately legended and returned to the Company by the
recipient, together with a stock power, endorsed in blank by the recipient,
or delivered to and held by the Secretary of the Company.
(e) The recipient of shares of Restricted Stock shall be entitled to
vote shares of Restricted Stock, and shall be entitled to all dividends
paid thereon, except that dividends paid in Common Stock or other property
shall be subject to the same restrictions. To the extent that the Committee
so determines, and sets forth in the Agreement, in the event of any
adjustment as provided in Section 15, any new or additional shares or
securities received by a recipient of Restricted Stock shall be subject to
the same terms and conditions as relate to the original shares of
Restricted Stock.
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(f) Restricted Stock shall become free of the foregoing restrictions
upon the expiration of the applicable Restriction Period and the Company
shall, subject to paragraph (c) of Section 15, then deliver Common Stock
certificates evidencing such stock to the Participant.
9. Terms and Conditions of Other Stock-Based Awards. The Committee may
grant to Participants Awards under the Plan that are valued in whole or in part
by reference to, or otherwise based on Common Stock ("Other Stock-Based
Awards"). The provisions of Other Stock-Based Awards need not be the same with
respect to each recipient or each Award. The Committee, in its discretion, may
grant Other Stock-Based Awards as it deems appropriate, including, by way of
example and not in limitation, (i) to take advantage of the compensation
practices or tax laws or accounting rules applicable at the time of grant of
such an Award, even if such practices, laws and/or rules are different from
those in effect on the effective date of the Plan, (ii) to reflect the financial
situation of the Company from time to time or (iii) to conform to and comply
with tax, securities or other law or regulations in jurisdictions outside the
United States. Other Stock-Based Awards shall take such form as the Committee,
in its discretion, from time to time, determines, including, by way of example,
and not in limitation, deferred stock, performance shares, performance units and
convertible debentures. All Other Stock-Based Awards under the Plan shall be
subject to all the applicable provisions of the Plan, including the following
terms and conditions, and to such other terms, conditions, restrictions and/or
limitations, if any, not inconsistent with the Plan, as the Committee shall
determine, in its discretion, and which are set forth in the applicable
Agreement.
(a) Unless the Committee determines otherwise, the recipient of an
Other Stock-Based Award shall be entitled to receive Dividend Equivalents
based on the dividends declared with respect to the number of shares of
Common Stock covered by such Award during the period between the date such
Award is granted and the date such Award is exercised, vests or expires, as
determined by the Committee. Such Dividend Equivalents shall be converted
to cash or additional shares of Common Stock by such formula and at such
time and subject to such limitations as may be determined by the Committee.
(b) An Other Stock-Based Award, and any Common Stock covered by such
Award, may be forfeited to the extent determined by the Committee, in its
discretion, and as provided in the Agreement.
(c) All Other Stock-Based Awards, and any Common Stock covered
thereby, shall be forfeited upon termination of the recipient's employment
with the Company or a Subsidiary. Notwithstanding the foregoing, if any
such recipient's employment is terminated for any reason specified by the
Committee in its discretion and set forth in the Agreement, any or all
remaining limitations, restrictions or requirements imposed pursuant to the
Plan or in the Agreement with respect to such recipient's Other Stock-Based
Award shall be waived provided, however, that, in the case of any Other
Stock-Based Award to which paragraph (d) of this Section 10 applies, no
such waiver shall be available other than in the case of death or
disability of the recipient or a change of control or ownership of the
Company. The Committee may, in its discretion, otherwise modify or
accelerate the exercisability or other terms and conditions of any Other
Stock-Based Award, to the extent that any such modification or acceleration
is (i) permitted under, and not inconsistent with, the Plan and (ii) in the
best interests of the Company and, provided, that, paragraph (d) of this
Section 10 is not applicable to such Other Stock-Based Award.
(d) An Other Stock-Based Award based in whole or in part upon the
attainment of particular performance goals established by the Committee is
intended to qualify as "other performance-based compensation," as used in
Code Section 162(m)(4)(C). Such performance goals shall be determined over
a measurement period or periods established by the Committee and shall
relate to one or more Performance Criteria, as determined by the Committee,
in its discretion. The maximum number of shares of Common Stock that may be
awarded to a Participant subject to an Other Stock-Based Award in any
twelve-month period shall not exceed the Award Limit.
10. Bonuses or Other Compensation Payable in Stock. In lieu of cash
bonuses or other compensation otherwise payable under the Company's or
applicable Subsidiary's compensation practices to employees who are eligible to
participate in the Plan, the Committee, in its discretion, may determine that
such bonuses or other compensation shall be payable in Common Stock, or partly
in Common Stock and partly in cash. Such
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bonuses or other compensation shall be in consideration of services previously
performed and as an incentive toward future services and shall consist of shares
of Common Stock subject to such terms as the Committee may determine in its
discretion.
11. Forfeiture. Notwithstanding any other provisions of the Plan to the
contrary:
(a) To the extent provided in the Agreement, if a Participant shall
exercise an Option or a SAR, or any portion thereof, and leave the
employment of the Company or a Subsidiary within six months after such
exercise for any reason other than death, permanent disability, retirement
under a retirement plan of the Company and/or a Subsidiary or termination
of employment with the written consent of the Company or such Subsidiary
(as applicable), then any Award Gain realized by such Participant as the
result of such exercise shall be paid by such Participant to the Company;
provided, however, that no Award Gain otherwise payable by a Participant to
the Company with respect to the exercise of an Option pursuant to this
paragraph (a) of Section 11 shall be so payable to the extent that the Fair
Market Value of the Common Stock, as of the date such Participant's
employment by the Company or the Subsidiary terminates, is less than the
Option exercise price previously paid by such Participant and such
Participant has not, on or before such date, sold or otherwise disposed of
the Common Stock received upon the exercise of such Option.
(b) To the extent provided in the Agreement, if at any time prior to
the latest to occur of: (x) the termination or exercise of an Option or a
SAR or an Other Stock-Based Award or the expiration of the Restriction
Period applicable to Restricted Stock granted to a Participant, (y) three
years after a Participant leaves employment with the Company or a
Subsidiary for any reason other than death or permanent disability, or (z)
three years after a Participant exercises an Option or a SAR, or any
portion thereof, such Participant engages directly or indirectly in any
manner or capacity in any activity in competition with the business
conducted by the Company or a Subsidiary (as determined by the Committee in
its discretion) or inimical, contrary or harmful to the interests of the
Company or a Subsidiary (as determined by the Committee in its discretion)
then (1) any Option, SAR or Other Stock-Based Award granted to such
Participant shall terminate upon the date on which such Participant enters
into such activity to the extent that such Option, SAR or Other Stock-Based
Award was not previously exercised or terminated in accordance with the
other provisions of the Plan or the Agreement as of such date, (2) any
Award Gain realized by such Participant as the result of an exercise
referred to in clause (z) above shall be paid by such Participant to the
Company, (3) any Restricted Stock awarded to such Participant with respect
to which the Restriction Period has not expired as of such date shall be
forfeited and revert to the Company and (4) any unpaid Dividend Equivalents
as of such date, shall be forfeited and shall not be paid to such
Participant.
(c) A Participant shall satisfy any obligation he or she owes to the
Company under the foregoing paragraphs (a) and (b) of this Section 11
promptly after the accrual thereof by payment in cash to the Company;
however, in lieu thereof, the Company may elect to deduct the unpaid amount
of any such obligation owed by such Participant to the Company from any
payment of any kind otherwise due to such Participant, including, but not
limited to, wages or other compensation, fringe benefits or vacation pay.
(d) The Committee may release a Participant from any or all
obligations that he or she owes to the Company pursuant to this Section 11,
and/or waive, in whole or in part, the application of this Section 11 to a
Participant if the Committee determines, in its discretion, that such
action is in the best interests of the Company.
12. Transfer, Leave of Absence. For purposes of the Plan, a transfer of an
employee from the Company to a Subsidiary or an affiliate of the Company,
whether or not incorporated, or vice versa, or from one Subsidiary or affiliate
of the Company to another, and a leave of absence, duly authorized in writing by
the Company or a Subsidiary or affiliate of the Company, shall not be deemed a
termination of employment of the employee.
13. Rights of Employees and Other Persons. (a) No person shall have any
rights or claims under the Plan except in accordance with the provisions of the
Plan and the applicable Agreement.
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(b) Nothing contained in the Plan or in any Agreement shall be deemed to
give any employee the right to be retained in the service of the Company or its
Subsidiaries nor restrict in any way the right of the Company or any Subsidiary
to terminate any employee's employment at any time with or without cause.
(c) The adoption of the Plan shall not be deemed to give any employee of
the Company or any Subsidiary or any other person any right to be selected as a
Participant or to be granted an Award.
(d) Nothing contained in the Plan or in any Agreement shall be deemed to
give any employee the right to receive any bonus, whether payable in cash or in
Common Stock, or in any combination thereof, from the Company, nor be construed
as limiting in any way the right of the Company to determine, in its sole
discretion, whether or not it shall pay any employee bonuses, and, if so paid,
the amount thereof and the manner of such payment.
14. Tax Withholding Obligations. (a) The Company and/or any Subsidiary are
authorized to take whatever actions are necessary and proper to satisfy all
obligations of Participants for the payment of all Federal, state, local and
foreign taxes in connection with any Awards (including, but not limited to,
actions pursuant to the following paragraphs (b) and (c) of this Section 14).
(b) If any Participant properly elects, within the period permitted under
Section 83 of the Code after the date on which property subject to an Award is
transferred to such Participant to include in gross income for Federal income
tax purposes an amount equal to the Fair Market Value (on the date of transfer)
of the Common Stock subject to such Award, such Participant shall pay, or make
arrangements satisfactory to the Company, as determined in the Committee's
discretion, to pay to the Company, at the time of such election, any Federal,
state or local taxes required to be withheld with respect to such Award. If any
such Participant shall fail to make such tax payments as are required, the
Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to
such Participant.
(c) Any Participant who does not or cannot make the election described in
paragraph (a) of this Section 14 with respect to an Award shall (and in no event
shall Common Stock be delivered to such Participant with respect to such Award
until), no later than the date as of which the value of the Award first becomes
includible in the gross income of the Participant for income tax purposes, pay
to the Company in cash, or make arrangements satisfactory to the Company, as
determined in the Committee's discretion, regarding payment to the Company of,
any taxes of any kind required by law to be withheld with respect to the Common
Stock or other property subject to such Award, and the Company and any
Subsidiary shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to such Participant.
Notwithstanding the above, the Committee may, in its discretion and pursuant to
procedures approved by the Committee, permit the Participant to (i) elect
withholding by the Company of Common Stock otherwise deliverable to such
Participant pursuant to such Award (provided, however, that the amount of any
Common Stock so withheld shall not exceed the minimum required withholding
obligation taking into account the Participant's effective tax rate and all
applicable Federal, state, local and foreign taxes) and/or (ii) tender to the
Company Common Stock owned by such Participant (or by such Participant and his
or her spouse jointly) and acquired more than six months prior to such tender in
full or partial satisfaction of such tax obligations.
15. Changes in Capital. (a) Upon changes in the outstanding Common Stock
by reason of a stock dividend, stock split, reverse split, subdivision,
recapitalization, merger, consolidation (whether or not the Company is a
surviving corporation), an extraordinary dividend payable in cash or property,
combination or exchange of shares, separation, reorganization or liquidation,
the aggregate number and class of shares available under the Plan as to which
Awards may be granted, the number and class of shares under (i) each Option and
the option price per share, (ii) each SAR and the exercise price thereof, (iii)
each Other Stock-Based Award and the exercise price (or equivalent, if
applicable) thereof and (iv) each award of Restricted Stock shall, in each case,
be correspondingly adjusted by the Committee. Such adjustments shall be made in
the case of any outstanding Options and/or SARs without change in the total
price applicable to such Options and SARs.
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<PAGE> 35
(b) Except as otherwise specifically provided in the Agreement, in the
event (i) of the approval by the shareholders of the Company of a merger,
consolidation, combination, reorganization or other transaction resulting in
less than fifty percent of the combined voting power of the surviving or
resulting entity being owned by the former shareholders of the Company, the
liquidation or dissolution of the Company or the sale or other disposition of
all or substantially all of the assets or business of the Company; (ii) that an
offer is made to the holders of Common Stock to sell or exchange such Common
Stock for cash, securities or stock of another corporation and such offer, if
accepted, would result in the offeror becoming the owner of (A) at least fifty
percent of the then outstanding Common Stock or (B) such lesser percentage of
the outstanding Common Stock which the Committee in its discretion determines
may materially adversely affect the market value of the Common Stock after such
transaction; (iii) any person or group of persons (within the meaning of
Sections 13(d) and 14(d) of the Exchange Act) directly or indirectly purchases
or otherwise becomes the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) or has the right to acquire such beneficial ownership
(whether or not such right is exercisable immediately, with the passage of time,
or subject to any condition), other than from the Company, of twenty percent or
more of the combined voting power of the Company's then outstanding securities;
or (iv) during any period of two consecutive years individuals who at the
beginning of such period constituted the Board cease for any reason to
constitute at least a majority thereof, unless the election, or nomination for
the election by the shareholders of the Company, of each new director was
approved by at least two-thirds of the directors then still in office who were
directors at the beginning of the period (other than, in the case of clauses
(i), (ii) and (iii) above, a sale or other disposition to or for the benefit of,
or any beneficial ownership or offer by or on behalf of the Company or a
Subsidiary or any employee benefit plan (or related trust) of the Company or a
Subsidiary, or any group comprised solely of such entities): (1) all
restrictions on Restricted Stock previously awarded to Participants under the
Plan shall (unless the Committee determines otherwise) be immediately cancelled
and the Restriction Periods applicable thereto shall immediately terminate,
without regard to any contrary provisions contained in the Plan or the
applicable Agreements and (2) the time of exercise of Options, SARs and/or Other
Stock-Based Awards which are outstanding shall (unless the Committee determines
otherwise) be accelerated so that such Awards become immediately exercisable in
full without regard to any limitations of time or amount otherwise contained in
the Plan or the applicable Agreements and (3) all such Awards shall (unless the
Committee determines otherwise) immediately become fully vested and
nonforfeitable. Upon the occurrence of any event described in the preceding
sentence, the Committee may, in its discretion, determine (A) that Options, SARs
and/or Other Stock-Based Awards shall be adjusted and make such adjustments by
substituting for Common Stock subject to such Options, SARs and/or Other
Stock-Based Awards stock or other securities of any successor corporation to the
Company or that may be issuable by another corporation that is a party to the
transaction if such stock or other securities are publicly traded, in which
event the aggregate exercise price (as applicable) shall remain the same and the
amount of shares or other securities subject to option or other rights under an
Award shall be the amount of shares or other securities which could have been
purchased on the closing date or expiration date of such transaction with the
proceeds which would have been received by the Participant if the Option, SAR
and/or Other Stock-Based Award had been exercised in full prior to such
transaction or expiration date and the Participant exchanged all of such shares
in the transaction, (B) to cancel or waive any payment owed by, or forfeiture
imposed on a Participant pursuant to Section 11, and/or (C) that any outstanding
Options, SARs and/or Other Stock-Based Awards shall, in each case, be converted
into a right to receive in cash, as soon as practicable following the closing
date or expiration date of the transaction or offer, an amount equal to the
greater of (x) the highest value of the consideration to be received in
connection with such transaction for one share of Common Stock and (y) the
highest market trading price of a share of the Common Stock reported in The Wall
Street Journal during the 30 consecutive trading days prior to the closing date
or expiration date of such transaction, less, in the case of an Award
prescribing an exercise price, the per share exercise price of such Award,
multiplied by the number of shares of Common Stock subject to such Award. No
Participant shall have any right to prevent the consummation of any of the
foregoing acts affecting the number of shares available to such Participant. Any
actions or determinations of the Committee under this paragraph (b) of Section
15 need not be uniform as to all outstanding Awards, nor treat all Participants
identically. Notwithstanding the foregoing adjustments, in no event may any
Option be exercised after ten years from the date it was originally granted and
any changes to ISOs shall, unless the Committee determines otherwise, only be
effective to the extent such adjustments or
A-11
<PAGE> 36
changes do not cause a "modification" (within the meaning of Section 424(h)(3)
of the Code) of such ISOs or adversely affect the tax status of such ISOs.
16. Miscellaneous Provisions. (a) The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the issuance of shares or the payment of
cash upon exercise or payment of any Award. Proceeds from the sale of shares of
Common Stock pursuant to Options granted under the Plan shall constitute general
funds of the Company. The expenses of the Plan shall be borne by the Company.
(b) Except as otherwise provided in this paragraph (b) of Section 16, an
Award by its terms shall be personal and may not be sold, transferred, pledged,
assigned, encumbered or otherwise alienated or hypothecated otherwise than by
will or by the laws of descent and distribution and shall be exercisable during
the lifetime of a Participant only by him or her. The foregoing to the contrary
notwithstanding, at the Committee's discretion, an Agreement may permit the
receipt or exercise of a Participant's Award (or any portion thereof) after his
or her death by the beneficiary most recently named by such Participant in a
written designation thereof filed with the Company, or, in lieu of any such
surviving beneficiary, by the legal representatives of such Participant's estate
and/or an Award other than an ISO to be transferred by a Participant during his
or her lifetime to such Participant's alternate payee pursuant to a qualified
domestic relations order, as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules and regulations
thereunder. In the event any Award is exercised by the executors,
administrators, heirs or distributees of the estate of a deceased Participant,
or such a Participant's beneficiary, pursuant to the terms and conditions of the
Plan and the applicable Agreement, the Company shall be under no obligation to
issue Common Stock thereunder unless and until the Company is satisfied, as
determined in the discretion of the Committee, that the person or persons
exercising such Award are the duly appointed legal representative of the
deceased Participant's estate or the proper legatees or distributees thereof or
the named beneficiary of such Participant. Further notwithstanding the foregoing
to the contrary, at the Committee's discretion, an Agreement may permit the
transfer of an Award other than an ISO by the recipient thereof, subject to such
terms, conditions and limitations prescribed by the Committee, and the
applicable transferee of such Award shall be treated under the Plan and the
applicable Agreement as the Participant for purposes of any exercise of such
Award.
(c) It is understood that the Committee may, at any time and from time to
time after the granting of an Award, specify such additional terms, conditions
and restrictions with respect to such Award as may be deemed necessary or
appropriate to ensure compliance with any and all applicable laws, including,
but not limited to, (i) terms, restrictions and conditions for compliance with
Federal and state securities laws, (ii) methods of withholding or providing for
the payment of required taxes and (iii) restrictions regarding a Participant's
ability to exercise Awards under a "cashless exercise" program established by
the Committee.
(d) If at any time the Committee shall determine, in its discretion, that
the listing, registration and/or qualification of shares of Common Stock upon
any national securities exchange or under any state or Federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
shares of Common Stock hereunder, no Option, SAR or Other Stock-Based Award may
be exercised or Restricted Stock or bonus or other compensation payable in
Common Stock may be transferred in whole or in part unless and until such
listing, registration, qualification, consent and/or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Committee.
(e) The Committee may require each person receiving Common Stock in
connection with any Award under the Plan to represent and agree with the Company
in writing that such person is acquiring the shares for investment without a
view to the distribution thereof.
(f) By accepting any benefit under the Plan, each Participant and each
person claiming under or through such Participant shall be conclusively deemed
to have indicated their acceptance and ratification of, and consent to, all of
the terms and conditions of the Plan and any action taken under the Plan by the
Committee, the Company or the Board.
A-12
<PAGE> 37
(g) Except with respect to "incentive stock options" (as defined in Section
422 of the Code) granted under the Predecessor Plans and outstanding on the
effective date of the Plan, subject to approval of the Plan by the Company's
shareholders, in accordance with Section 20, the provisions of the Plan shall
apply to and govern existing and subsequent awards under the Predecessor Plans
and, unless otherwise determined by the Committee, existing and subsequent
awards under the Predecessor Plans shall be deemed to be amended to provide any
additional rights applicable to Awards hereunder, subject to the right of any
affected participant in either of the Predecessor Plans to refuse to consent to
such amendment pursuant to the terms and conditions of the applicable
Predecessor Plan and the applicable option or award agreement between the
Company and such participant.
(h) Neither the adoption of the Plan nor anything contained herein shall
affect any other compensation or incentive plans or arrangements of the Company
or any Subsidiary (other than the Predecessor Plans, as provided in paragraph
(g) of this Section 16), or prevent or limit the right of the Company or any
Subsidiary to establish any other forms of incentives or compensation for their
employees or consultants or directors, or grant or assume options or other
rights otherwise than under the Plan.
(i) The Plan shall be governed by and construed in accordance with the laws
of the State of Delaware, except as superseded by applicable Federal law.
17. Limits of Liability. (a) Any liability of the Company or a Subsidiary
to any Participant with respect to any Award shall be based solely upon
contractual obligations created by the Plan and the Agreement.
(b) Neither the Company nor a Subsidiary nor any member of the Committee or
the Board, nor any other person participating in any determination of any
question under the Plan, or in the interpretation, administration or application
of the Plan, shall have any liability, in the absence of bad faith, to any party
for any action taken or not taken in connection with the Plan, except as may
expressly be provided by statute.
18. Limitations Applicable to Certain Awards Subject to Section 16 and Code
Section 162(m). Unless stated otherwise in the Agreement, notwithstanding any
other provision of the Plan, any Award granted to an executive or officer of the
Company who is then subject to Section 16 of the Exchange Act, shall be subject
to any additional limitations set forth in any applicable exemptive rule under
Section 16 of the Exchange Act (including Rule 16b-3 as it may be amended from
time to time) that are requirements for the application of such exemptive rule,
and the Plan shall be deemed amended to the extent necessary to conform to such
limitations. Furthermore, unless stated otherwise in the Agreement,
notwithstanding any other provision of the Plan, any Award granted to an officer
or executive of the Company intended to qualify as "other performance-based
compensation" as described in Section 162(m)(4)(C) of the Code shall be subject
to any additional limitations set forth in Section 162(m) of the Code (including
any amendment to Section 162(m) of the Code) or any regulations or rulings
issued thereunder that are requirements for qualification as "other
performance-based compensation" as described in Section 162(m)(4)(C) of the
Code, and the Plan shall be deemed amended to the extent necessary to conform to
such requirements.
19. Amendments and Termination. The Board may, at any time and with or
without prior notice, amend, alter, suspend, or terminate the Plan; provided,
however, no amendment, alteration, suspension, or termination shall be made
which would impair the previously accrued rights of any holder of an Award
theretofore granted without his or her written consent or which, without first
obtaining approval of the stockholders of the Company (where such approval is
necessary to satisfy (i) the then-applicable requirements of Rule 16b-3, (ii)
any requirements under the Code relating to ISOs or for exemption from Section
162(m) of the Code, or (iii) applicable state law), would:
(a) except as is provided in Sections 4(a) and 15, increase the
maximum number of shares of Common Stock which may be sold or awarded under
the Plan;
(b) except as is provided in Section 15, decrease the minimum option
exercise price requirements of Section 6(a);
(c) change the class of persons eligible to receive Awards under the
Plan; or
A-13
<PAGE> 38
(d) extend the duration of the Plan or the period during which Options
may be exercised under Section 6(b).
The Committee may amend the terms of any Award theretofore granted,
including any Agreement, retroactively or prospectively, but no such amendment
shall impair the previously accrued rights of any Participant without his or her
written consent. Notwithstanding the foregoing, the Board may amend the Plan and
the Committee may amend any Award, including any Agreement, either retroactively
or prospectively, and without the consent of the applicable Participant, so as
to preserve or come within any exemptions from liability under Section 16(b) of
the Exchange Act, pursuant to the rules and releases promulgated by the SEC
(including Rule 16b-3) and/or so that any Award granted to an officer or
executive of the Company shall qualify as "other performance-based compensation"
as described in Section 162(m)(4)(C) of the Code.
20. Duration. The Plan shall become effective as of the date on which it
is approved by the holders of a majority of the Company's outstanding Common
Stock which is present and voted at a meeting, which approval must occur within
the period ending twelve months after the date the Plan is adopted by the Board.
The Plan shall terminate upon the earliest to occur of (a) the effective date of
a resolution adopted by the Board terminating the Plan or (b) ten years from the
date the Plan is approved by the Company's shareholders. No Award may be granted
under the Plan after the earliest of (a) and (b) of this Section 20 to occur;
however, Awards theretofore granted may extend beyond such date.
No such termination of the Plan shall affect the rights of any Participant
hereunder and all Awards previously granted hereunder shall continue in force
and in operation after the termination of the Plan, except as they may be
otherwise terminated in accordance with the terms of the Plan or the Agreement.
A-14
<PAGE> 39
PROXY
NEWMONT MINING CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 2, 1996
THIS PROXY IS SOLICITED ON BEHALF OF NEWMONT MINING
CORPORATION'S BOARD OF DIRECTORS
The undersigned hereby appoints Graham M. Clark, Jr., Wayne W. Murdy and
Timothy J. Schmitt, and each or any of them as proxies, with full power of
substitution and revocation, to represent the undersigned and to vote all
shares of the common stock of Newmont Mining Corporation which the undersigned
is entitled to vote at the Annual Meeting of Stockholders of the Corporation to
be held at 9:00 a.m., local time, on Thursday, May 2, 1996 in the John D.
Hershner Room, 1700 Lincoln Street, Denver, Colorado, and any adjournments
thereof, upon the matters listed on the reverse side hereof. The proxies
appointed hereby may act by a majority of said proxies present at the meeting
(or if only one is present, by that one).
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 PROXIES CANNOT VOTE YOUR SHARES
UNLESS YOU SIGN AND RETURN THIS CARD.
(Continued and to be signed on other side)
FOLD AND DETACH HERE
<PAGE> 40
Please mark
your votes as /X/
indicated in
this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 1.
Item 1 -- ELECTION OF DIRECTORS
Nominees: R.I.J. Agnew, J.P. Bolduc,
R.C. Cambre, J.P. Flannery, L.I. Higdon, Jr.,
T.A. Holmes, R.A. Plumbridge, M.A. Qureshi,
M.K. Reilly and W.I.M. Turner, Jr.
WITHHELD FOR ALL
FOR FOR ALL EXCEPT
/ / / / / /
FOR ALL EXCEPT NOMINEES WRITTEN IN THE SPACE PROVIDED BELOW.
------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 2.
Item 2 -- 1996 Employees Stock Plan
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 3.
Item 3 -- Stockholder Proposal
FOR AGAINST ABSTAIN
/ / / / / /
Signature(s) Date
----------------------------------------------- --------------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
FOLD AND DETACH HERE
IMPORTANT: PLEASE VOTE, DATE AND SIGN YOUR
PROXY AND RETURN IT IN THE ENVELOPE PROVIDED.
