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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
July 12, 1999
Newmont Mining Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-1153 13-1806811
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
1700 Lincoln Street, Denver, Colorado 80203
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(Address of principal executive offices) (zip code)
(303) 863-7414
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On July 12th, 1999, Newmont Mining Corporation and its wholly-owned
subsidiary, Newmont Gold Company, filed with the SEC, a registration statement
on Form S-3 (the "Registration Statement") providing for the issuance by Newmont
Mining from time to time of up to $500 million aggregate offering price of
securities, consisting of common stock, preferred stock, common stock warrants,
debt securities and warrants for debt securities. The debt securities will be
fully and unconditionally guaranteed by Newmont Gold. As a result of this
guarantee by Newmont Gold of the debt securities of Newmont Mining that may be
issued from time to time, the SEC requires the inclusion in the Registration
Statement of certain condensed consolidating financial statements depicting
Newmont Mining (carrying its investment in subsidiaries under the equity
method), Newmont Gold (carrying its investment in subsidiaries under the equity
method), and any other subsidiaries of Newmont Mining (on a combined basis).
Such financial statements for the three-year period ended December 31, 1998 are
included in Item 7 below.
Also attached hereto are exhibits containing the Newmont Mining Corporation
Annual Incentive Compensation Plan (amended and restated as of January 1, 1999)
and the Employment Agreement dated as of February 1, 1999 among Newmont Mining
Corporation, Newmont Gold Company and Ronald C. Cambre.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) None.
(b) None.
(c) Exhibits
10 (a) Newmont Mining Corporation Annual Incentive Compensation Plan (amended
and restated as of January 1, 1999).
10 (b) Employment Agreement dated as of February 1, 1999 among Newmont Mining
Corporation, Newmont Gold Company and Ronald C. Cambre.
99 (a) Newmont Mining Corporation condensed consolidating financial statements
for the three years ended December 31, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
By: /s/ Timothy J. Schmitt
---------------------------
Name: Timothy J. Schmitt
Title: Vice President, Secretary
and Assistant General Counsel
Dated: July 12th, 1999
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EXHIBIT INDEX
Exhibit Number Description of Exhibits
10(a) Newmont Mining Corporation Annual Incentive Compensation Plan
(amended and restated as of January 1, 1999).
10(b) Employment Agreement dated as of February 1, 1999 among
Newmont Mining Corporation, Newmont Gold Company and Ronald C.
Cambre.
99(a) Newmont Mining Corporation condensed consolidating financial
statements for the three years ended December 31, 1998.
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Exhibit 10(a)
================================================================================
NEWMONT MINING CORPORATION
ANNUAL INCENTIVE COMPENSATION PLAN
(Effective as of January 1, 1999)
================================================================================
<PAGE>
NEWMONT MINING CORPORATION
ANNUAL INCENTIVE COMPENSATION PLAN
(Effective as of January 1, 1999)
The Board of Directors of Newmont Mining Corporation, a Delaware
corporation (the "Company"), hereby adopts the Newmont Mining Corporation Annual
Incentive Compensation Plan (the "Plan"), effective as of January 1, 1999 (the
"Effective Date").
PURPOSE
-------
The purpose of the Plan is to provide to employees of the Company and its
Affiliated Entities (defined herein) that participate in the Plan a more direct
interest in the success of the operations of the Company by rewarding their
successful efforts to maximize production, minimize production costs, expand
reserves, and develop new capital projects in an optimal manner. Employees of
the Company and participating Affiliated Entities will be rewarded in accordance
with the terms and conditions described below.
ARTICLE I
---------
DEFINITIONS
-----------
1.1 "Actual Defined Cost Per Ounce" means, with respect to a particular
-----------------------------
Unit, the cost of producing an ounce of gold during the Plan Year, as calculated
by the Company and approved by the Compensation Committee.
1.2 "Actual Earnings Per Share" means the earnings per share, before
-------------------------
extraordinary items (determined in accordance with the provisions of Accounting
Principles Board Opinion Number 30), of the Company ("Earnings Per Share") for
the relevant Plan Year, as determined by the Company and approved by the
Compensation Committee. The Actual Earnings Per Share taken into account under
the Plan for any Plan Year shall be capped at $2.00 per share.
1.3 "Actual Production" means, with respect to a particular Unit, the
-----------------
number of ounces of gold produced during the Plan Year, as calculated by the
Company and approved by the Compensation Committee.
1.4 "Affiliated Entity(ies)" means any corporation or other entity, now or
----------------------
hereafter formed, that is or shall become affiliated with the Company, either
directly or indirectly, through stock ownership, control or otherwise, as
determined by the Company, including but not limited to Newmont Gold Company, a
Delaware corporation ("NGC").
1.5 "Area of Primary Responsibility" means the Unit to which an Employee
------------------------------
has been assigned by the Company for purposes of calculating the Employee's Unit
Performance Bonus.
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1.6 "Board" means the Board of Directors of the Company.
-----
1.7 "Bonus Eligible Earnings" means the total base salary earnings of the
-----------------------
Employee during the calendar year. If an Employee is absent from work because
of a work-related injury, the Employee's "Bonus Eligible Earnings" will be
determined by his actual gross W-2 base earnings during the Plan Year. In the
case of a Terminated Eligible Employee who is Disabled, "Bonus Eligible
Earnings" will be determined by his actual gross W-2 base earnings, including
short-term disability pay received during the Plan Year, but excluding pay from
any other source. If an Employee dies during the Plan Year, the "Bonus Eligible
Earnings" for such Terminated Eligible Employee will be determined by his actual
gross W-2 base earnings. If an Employee is on active military duty during a
Plan Year, the "Bonus Eligible Earnings" will be determined by his actual gross
W-2 base earnings during the Plan Year, exclusive of any military pay. If an
Employee does not receive a W-2, his "Bonus Eligible Earnings" shall be
determined on the basis of his actual gross base earnings for the Plan Year, or
portion thereof, as shown on the payroll records of the Company or the
Participating Employer. In all cases, an Employee's "Bonus Eligible Earnings"
shall be computed before reduction for pre-tax contributions to an employee
benefit plan of the Company pursuant to Section 401(k) or Section 125 of the
Code. In the event of a Change of Control the Bonus Eligible Earnings of each
Eligible Employee shall be equal to such Employee's base salary, on an
annualized basis, as of the date immediately preceding the Change of Control
and, in the case of a Terminated Eligible Employee, such Employee's base salary
for the Plan Year through the date of termination of employment.
Notwithstanding the foregoing, the "Bonus Eligible Earnings" of an Employee
whose compensation is subject to the deduction limitation of Section 162(m) of
the Code with respect to a Plan Year shall not exceed the annualized base salary
of the Employee as in effect on the first day of such Plan Year.
1.8 "Change of Control" means:
-----------------
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Voting Securities"); provided, however,
that for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of
this Section; or
(b) Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of the Company;
provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual
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or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors of the Company; or
(c) Consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets of another entity (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, (ii) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
1.9 "Code" means the Internal Revenue Code of 1986, as amended from time
----
to time.
1.10 "Company" means Newmont Mining Corporation, and where the context
-------
requires, any Affiliated Entity that has become a Participating Employer.
1.11 "Compensation Committee" means the Compensation Committee of the
----------------------
Board.
1.12 "Consolidated Unit" means those Employees whose Area of Primary
-----------------
Responsibility is the corporate office of the Company, and those Employees
assigned to non-operational projects.
1.13 "Disability" means a condition such that the Employee has terminated
----------
employment with the Company and/or all Participating Employers with a qualifying
disability and has immediately begun receiving benefits from a long-term
disability plan of the Company or a Participating Employer.
1.14 "Employee" means a full-time, salaried employee of the Company and/or
--------
a Participating Employer, excluding temporary or leased employees. For purposes
of this Plan, an
3
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employee is any individual who provides services to the Company as a common law
employee and whose remuneration is subject to the withholding of federal income
tax pursuant to Section 3401 of the Code. An Employee shall not include any
individual (i) who provides services to the Company and/or a Participating
Employer under an agreement, contract, or any other arrangement pursuant to
which the individual is initially classified as an independent contractor by the
Company and/or a Participating Employer, or (ii) whose remuneration for services
has not been treated initially as subject to the withholding of federal income
tax pursuant to Section 3401 of the Code even if the individual is subsequently
reclassified as a common law employee as a result of a final decree of a court
of competent jurisdiction or the settlement of an administrative or judicial
proceeding.
1.15 "Exploration Team" means those Employees whose Area of Primary
----------------
Responsibility is associated with the generation of reserves and who are
designated by the Company as members of such a Team.
1.16 "Key Objectives" means the key results expected by the end of the
--------------
review period for an Employee, as established and administered through the
Company's performance management system.
1.17 "Minahasa Raya Unit" means those Employees whose Area of Primary
------------------
Responsibility is the Company's Minahasa Raya operations.
1.18 "Minera Yanacocha Unit" means those Employees whose Area of Primary
---------------------
Responsibility is the Company's Minera Yanacocha operations.
1.19 "North American Unit" means those Employees whose Area of Primary
-------------------
Responsibility is the Company's North American operations.
1.20 "Participating Employer" means the Company and any Affiliated Entity
----------------------
that the Company determines shall participate in the Plan.
1.21 "Pay Grade" means those jobs sharing a common salary range, as
---------
designated by the Company. If the Pay Grade of an Employee changes during a
Plan Year, the bonus payable to such Employee shall be calculated on a pro rata
basis in accordance with the provisions of Section 6.3. Notwithstanding the
foregoing, for purposes of this Plan the Pay Grade of an Employee whose
compensation is subject to the deduction limitation of Section 162(m) of the
Code with respect to a Plan Year shall be the Pay Grade applicable to such
Employee as of the first day of such Plan Year, or such lesser Pay Grade as may
be assigned to the Employee during such Plan Year.
1.22 "Performance Distribution Guidelines" means the percent of all
-----------------------------------
salaried Employees classified in each of the Company's designated performance
categories as assigned by the Company.
1.23 "Performance Rating Category" means one of the following categories
---------------------------
used to classify the performance of Employees and Teams in accordance with the
Company's performance management system: "Exceptional," "Exceeds Expectations,"
"Meets Expectations," and "Needs Development."
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1.24 "Personal Performance Bonus" means the bonus payable to an Employee
--------------------------
based on the individual performance of such Employee, as set forth in Section
4.2.
1.25 "Personal Performance Percentage" means the percentage determined by
-------------------------------
the Company that shall apply to each Employee in accordance with Table II in
Section 4.1.
1.26 "Plan Year" means the calendar year.
---------
1.27 "Position(s)" means the defined job(s) held by an Employee during the
-----------
Plan Year.
1.28 "Retirement" means termination of employment with the Company and/or
----------
all Participating Employers by an Employee who immediately begins to receive
benefits from a defined benefit plan of the Company or a Participating Employer.
1.29 "Severance" means the termination of employment with the Company
---------
and/or all Participating Employers because of an event entitling the Employee to
benefits under the terms of the Severance Pay Plan of NGC or the Company if the
Employee immediately begins receiving benefits under the terms of the Severance
Pay Plan.
1.30 "Targeted Defined Cost Per Ounce" means the targeted cash cost of
-------------------------------
production of gold per ounce for the Plan Year, as established by the
Compensation Committee.
1.31 "Targeted Earnings Per Share" means the targeted Earnings Per Share
---------------------------
for a Plan Year (but not in excess of $2.00) as established by the Compensation
Committee.
1.32 "Targeted Production" means the targeted amount of gold to be produced
-------------------
for the Plan Year, as established by the Compensation Committee.
1.33 "Team" means the designated group of Employees to which an Employee is
----
assigned for purposes of Article V. Each Employee shall be assigned to a Team
within 30 days of the date the Employee becomes eligible for participation in
the Plan.
1.34 "Team Performance Bonus" means the bonus payable to an Employee
----------------------
designated as a member of an Exploration Team, or any other Team designated by
the Compensation Committee, based on the performance of the Team of which the
Employee is a member, as set forth in Section 5.2.
1.35 "Team Performance Percentage" means the percentage to be applied to
---------------------------
determine the Team Performance Bonus in accordance with the provisions of
Article V, which percentage shall be determined by the appropriate officer of
the Company pursuant to Section 5.1.
1.36 "Terminated Eligible Employee" means an Employee who terminates
----------------------------
employment with the Company and/or a Participating Employer during the Plan Year
on account of death, Retirement, Disability, or Severance. The Vice President
of Human Resources of the Company or NGC may, in his sole discretion, also
designate in writing other Employees who terminate employment during the Plan
Year under other circumstances as "Terminated Eligible Employees".
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1.37 "Unit" means the unit of Employees to which an Employee is assigned
----
for purposes of Article III. Each Employee shall be assigned to a Unit within
30 days of the date the Employee becomes eligible for participation in the Plan.
1.38 "Unit Performance Bonus" means, with respect to each Unit, the bonus
----------------------
payable to an Employee based on the performance of such Employee's Unit, as set
forth in Section 3.1.
1.39 "Unit Performance Percentage" means the percentage used to calculate
---------------------------
an Employee's Unit Performance Bonus, as set forth in Section 3.1, which shall
provide the basis for 70% of an Employee's Unit Performance Bonus.
1.40 "Uzbekistan Unit" means those Employees whose Area of Primary
---------------
Responsibility is the Company's Zarafshan-Newmont operations in Uzbekistan.
ARTICLE II
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ELIGIBILITY
-----------
All Employees of the Company and/or a Participating Employer are
potentially eligible to receive a bonus payment under the Plan, provided (i)
they are on the payroll of the Company and/or a Participating Employer as of the
last day of the Plan Year, or (ii) they are a Terminated Eligible Employee with
respect to such Plan Year. Employees who are on short-term disability under the
Company's short-term disability policy or not working because of a work-related
injury as of the last day of the Plan Year shall be eligible to receive a bonus
under clause (i). Notwithstanding the foregoing provisions of this Article II,
the Compensation Committee may, prior to the end of any Plan Year, exclude from
eligibility for participation under this Plan with respect to such Plan Year any
Employee or Employees, as the Compensation Committee may determine in its sole
discretion.
ARTICLE III
------------
UNIT PERFORMANCE BONUS
----------------------
3.1 Determination of Unit Performance Bonus. For each Plan Year, the Unit
---------------------------------------
Performance Percentage for each Unit will be determined on the last day of the
Plan Year pursuant to the following formula:
1 + (Actual Production - Targeted Production)
-----------------------------------------
(Targeted Production)
x 1 + (Targeted Defined Cost Per Ounce - Actual Defined Cost Per Ounce)
-----------------------------------------------------------------
(Targeted Defined Cost Per Ounce)
= Unit Performance Percentage
If the Unit Performance Percentage of a Unit is greater than 100%, the Unit
Performance Percentage is converted to a Percent of Target as set forth in the
following Schedule. If the Unit Performance
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Percentage of a Unit is greater than 100%, a Unit Performance Bonus will be
payable, with such Unit Performance Bonus equal to the sum of (y) the product of
(A) the Employee's Bonus Eligible Earnings, times (B) the applicable Target Unit
Performance Level for the Employee's Pay Grade set forth in the applicable Table
in Section 3.2 below, times (C) the applicable percentage derived from the
following Schedule, times (D) 70% and (z) the product of (E) the Employee's
Bonus Eligible Earnings, times (F) the applicable Target Unit Performance Level
for the Employee's Pay Grade set forth in the applicable Table in Section 3.2
below, times (G) the Earnings Per Share Factor (as calculated below), times (H)
30%.
Earnings Per Share Factor = 1 + (Actual EPS - Targeted EPS)
-------------------------
(Targeted EPS)
If the Earnings Per Share Factor is greater than 100%, it is converted in a
similar manner as the Unit Performance Percentage in accordance with the
Schedule below.
If the Unit Performance Percentage of a Unit is equal to or less than 100%, a
Unit Performance Bonus will be payable, with such Unit Performance Bonus equal
to the sum of (y) the product of (A) the Employee's Bonus Eligible Earnings,
times (B) the applicable Target Unit Performance Level for the Employee's Pay
Grade set forth in the applicable table in Section 3.2 below, times (C) the Unit
Performance Percentage, times (D) 70% and (z) the product of (E) the Employee's
Bonus Eligible Earnings, times (F) the applicable Target Unit Performance Level
for the Employee's Pay Grade set forth in the applicable Table in Section 3.2
below, times (G) the Earnings Per Share Factor, times (H) 30%.
Earnings Per Share Factor = 1 + (Actual EPS - Targeted EPS)
-------------------------
(Targeted EPS)
If the Earnings Per Share Factor is greater than 100%, it is converted in a
similar manner as the Unit Performance Percentage in accordance with the
Schedule below.
SCHEDULE
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-------------------------------------------
Unit Performance Unit Performance Bonus
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Percentage as a Percent of Target
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100 (Target) 100%
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105 125%
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110 150%
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115 175%
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120 or more 200%
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If the Unit Performance Percentage of a Unit falls between the various Unit
Performance Percentages set forth in the foregoing Schedule, then the Unit
Performance Bonus as a Percent of Target percentages set forth in the foregoing
Schedule shall be interpolated so that such percentage bears the same
relationship to the Unit Performance Bonus as a Percent of Target percentages
for the two closest Unit Performance Percentages. The Compensation Committee
may, in its sole discretion, adjust the Unit Performance Percentage of any Unit
or otherwise increase the Unit Performance Bonus otherwise payable in order to
reflect changed circumstances or such other matters as the
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Compensation Committee deems appropriate, provided that no such change shall
result in any increase in the amount of the Unit Performance Bonus payable to an
Employee whose compensation is subject to the limitation on the deductibility of
compensation pursuant to Section 162(m) of the Code. The maximum Unit
Performance Bonus that may be paid with respect to any Plan Year to an Employee
whose compensation is subject to the deduction limitation of Section 162(m) of
the Code shall be $3 million. Prior to the payment of any Unit Performance Bonus
to an Employee whose compensation is subject to the limitation imposed by
Section 162(m) of the Code, the Compensation Committee shall certify in writing
that the applicable Unit Performance Percentage has been attained and shall take
any other action required in order to qualify for the exemption from the
deduction limitation provided by Section 162(m) of the Code.
3.2 Determination of Target Unit Performance Level. An Employee's Target
----------------------------------------------
Unit Performance Level is determined by the Employee's Pay Grade pursuant to the
following Table I (Table IA for Employees designated as members of an
Exploration Team or other Team):
TABLE I
-------
Non-Team
------------------------------
Pay Target Unit
Grade Performance Level
------------------------------
203 67%
202 40%
200-201 33%
113-114 27%
111-112 20%
110 17%
109 13%
107-108 15%
105-106 10%
103-104 5%
11-102 5%
------------------------------
TABLE IA
--------
Team
------------------------------
Pay Target Unit
Grade Performance Level
------------------------------
113-203 N/A
111-112 7.500%
110 6.250%
109 5.000%
107-108 6.000%
105-106 4.125%
103-104 2.500%
11-102 2.500%
------------------------------
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3.3 Terminated Eligible Employees. Terminated Eligible Employees shall be
-----------------------------
eligible to receive a Unit Performance Bonus based upon the actual year end
Earnings Per Share Factor and the Unit Performance Percentage for the applicable
Unit calculated through the end of the calendar quarter during which the
Employee's termination of employment with the Company and/or all Participating
Employers occurred.
ARTICLE IV
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PERSONAL PERFORMANCE BONUS
--------------------------
4.1 Personal Performance Level. At the end of the Plan Year, each
--------------------------
Employee's supervisor will evaluate the Employee and rate the Employee's
Personal Performance Level. The Personal Performance Bonus for the Chief
Executive Officer of the Company or NGC shall be determined by the Compensation
Committee. In accordance with the Company's performance management system, the
supervisor will rate the degree to which the Employee met the Key Objectives
that were established for the Employee during the Plan Year. Each Employee will
be rated by the Employee's supervisor in one of the Company's Performance Rating
Categories. In conjunction with these ratings, the Company will assign a
Personal Performance Percentage for the Employee from within the applicable
ranges set forth in the following Table II. The distribution of Personal
Performance Ratings and Personal Performance Percentages will be reviewed
annually by an executive review committee for internal equity and consistency.
TABLE II
--------
----------------------------------------------------------------------
Personal Performance Percentages
Performance Rating Category (Percentage of Target
Performance Bonus Payable)
----------------------------------------------------------------------
Exceptional 151%-200%
----------------------------------------------------------------------
Exceeds Expectations 101%-150%
----------------------------------------------------------------------
Meets Expectations 26%-100%
----------------------------------------------------------------------
Needs Development 0%-25%
----------------------------------------------------------------------
4.2 Determination of Personal Performance Bonus. Subject to Section 4.3,
-------------------------------------------
an Employee's Personal Performance Bonus is calculated by multiplying (x) the
Employee's Bonus Eligible Earnings by (y) the Personal Performance Percentage
determined pursuant to Section 4.1 and (z) multiplying that product by the
applicable Target Personal Performance Level, as set forth in the following
Table III (Table IIIA for Employees designated as members of an Exploration Team
or other Team):
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TABLE III
---------
Non-Team
----------------------------------
Pay Target Personal
Grade Performance Level
----------------------------------
203 33.00%
202 20.00%
200-201 17.00%
113-114 13.00%
111-112 10.00%
110 8.00%
109 7.00%
107-108 9.00%
105-106 6.50%
103-104 4.00%
11-102 N/A
----------------------------------
TABLE IIIA
----------
Team
----------------------------------
Pay Target Personal
Grade Performance Level
----------------------------------
113-203 N/A
111-112 7.500%
110 6.250%
109 5.000%
107-108 6.000%
105-106 4.125%
103-104 2.000%
11-102 N/A
----------------------------------
4.3 Proration of Certain Bonuses. Notwithstanding any other provision in
-----------------------------
this ARTICLE IV, except as approved by the Compensation Committee prior to the
payment of Personal Performance Bonuses, or subsequently thereto by
ratification, the amount of the Personal Performance Bonuses payable to all
Employees of the Company and all Participating Employers in Pay Grades 103- 202
may not exceed the amount that would be payable to all such Employees if each of
their Personal Performance Percentages were determined to be 100%.
4.4 Terminated Eligible Employees. Terminated Eligible Employees shall be
-----------------------------
eligible to receive a Personal Performance Bonus based upon an assumed Personal
Performance Percentage of 100%.
4.5 Ineligible Employees. Employees with a Pay Grade 102 and below and
--------------------
Employees whose Personal Performance Percentage (determined pursuant to Section
4.1) is less than 25% shall not be eligible to receive a Personal Performance
Bonus.
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ARTICLE V
----------
TEAM PERFORMANCE BONUS
----------------------
5.1 Team Performance Level. This ARTICLE V shall be applicable only to
----------------------
Employees designated as members of an Exploration Team, or other Team. At the
end of the Plan Year, the Vice Presidents responsible for each Team will make an
assessment of the performance of their respective Teams. The overall Team
Performance Ratings for each Company officer responsible for one or more Teams
will be determined by the appropriate Senior Vice President or the Chief
Executive Officer of the Company or NGC. In accordance with the Company's
performance management system, such officer will rate the degree to which the
Team met the Key Objectives that were established for the Team during the Plan
Year. Each Team will be rated in one of the Company's Performance Rating
Categories. In conjunction with these ratings, each such officer will assign a
Team Performance Percentage for their respective Teams in accordance with Table
II in Section 4.1. If the Team Performance Level of a Team is less than 25%,
the Employees assigned to the Team will not receive a Team Performance Bonus.
The percentages shown in the "Target Performance Level" category specified in
the Table set forth below in Section 5.2 shall be multiplied by the Team's Team
Performance Percentage to determine the applicable percentage for calculating
the Team Performance Bonus of the Employees from each Team.
5.2 Determination of Team Performance Bonus. Subject to Section 5.4, an
---------------------------------------
Employee's Team Performance Bonus is calculated by multiplying (x) the
Employee's Bonus Eligible Earnings by (y) the Team Performance Percentage
determined pursuant to Section 5.1 and (z) multiplying that product by the
applicable Target Team Performance Level, as set forth in the following Table
IV:
TABLE IV
--------
--------------------------------
Pay Target Team
Grade Performance Level
--------------------------------
113-203 N/A
111-112 15.000%
110 12.500%
109 10.000%
107-108 12.000%
105-106 8.250%
103-104 4.500%
11-102 2.500%
--------------------------------
5.3 Terminated Eligible Employees. Terminated Eligible Employees shall be
-----------------------------
eligible to receive a Team Performance Bonus based upon the actual Team
Performance Percentage for the applicable Team calculated through the end of the
month during which the Employee's termination of employment with the Company
and/or all Participating Employers occurred.
5.4 Proration of Certain Team Performance Bonuses. Notwithstanding any
---------------------------------------------
other provision in this Article V, except as approved by the Compensation
Committee prior to the payment of Team Performance Bonuses, or subsequently
thereto by ratification, the amount of Team
11
<PAGE>
Performance Bonuses payable to all Employees of the Company and all
Participating Employers in Pay Grades 112 and below shall not exceed the amount
that would be payable to all such Employees if the Team Performance Percentages
applicable to all such Employees were determined to be 100%.
ARTICLE VI
----------
PAYMENT OF BONUS
----------------
6.1 Stockholder Approval Requirement. Notwithstanding any other provision
--------------------------------
herein, no portion of the Unit Performance Bonus shall be paid to an Employee
whose compensation is subject to the deduction limitation of Section 162(m) of
the Code to the extent that such payment would be non-deductible under such
provision unless and until the stockholders of the Company have approved this
Plan and the material terms of the performance goals established under this Plan
with respect to Unit Performance Bonuses in conformity with the requirements of
Section 162(m) of the Code and the regulations thereunder.
6.2 Deferral of Certain Payments. Notwithstanding the foregoing
----------------------------
provisions of this Article VI, if an Employee would receive compensation with
respect to any Plan Year, including a Unit Performance Bonus under this Plan,
that would exceed the compensation deduction limitation of Section 162(m) of the
Code and therefore be non-deductible for federal income tax purposes, the amount
of the Employee's Unit Performance Bonus for such Plan Year may be reduced by
the Compensation Committee to the extent necessary to avoid such limitation and
any such reduction shall be paid to the Employee in a subsequent year in
accordance with the provisions of this Section. In the event of any such
deferral, the amount deferred, together with interest credited as set forth
below, shall be paid to the Employee in the first calendar year during which the
deduction of such amounts shall not be subject to the limitation of Section
162(m) of the Code. The amount of the Unit Performance Bonus deferred shall be
credited to a special deferred compensation account in the name of the Employee
and such account shall be credited with interest at a rate equal to the rate of
interest announced publicly by The Chase Manhattan Bank (National Association)
from time to time as its "prime rate", with the interest rate hereunder adjusted
at such time as such "prime rate" is adjusted, from the period beginning upon
the date on which such amount otherwise would have been paid under the
provisions of this Plan through the last day of the month immediately preceding
the date of payment. Notwithstanding the foregoing, in the event of a Change of
Control, all amounts deferred in accordance with the provisions of this Section,
together with interest credited with respect to such deferred amounts, shall be
paid to the appropriate Employees as soon as practicable following the date of
the Change of Control. Determinations with respect to the deferral of Unit
Performance Bonuses hereunder shall be made by the Compensation Committee in its
sole discretion.
6.3 Pay Grade. The bonus payable to an eligible Employee who was in more
---------
than one Pay Grade during the Plan Year shall be calculated on a pro-rata basis
in accordance with the amount of time spent by such Employee in each Pay Grade
during the Plan Year. Notwithstanding the foregoing, for purposes of
determining the Unit Performance Bonus payable to an Employee whose compensation
is subject to the deduction limitation of Section 162(m) of the Code with
respect to a Plan Year, the Pay Grade of such Employee shall not be increased
during such Plan Year if any portion of such Employee's compensation would be
non-deductible under such provision.
12
<PAGE>
6.4 Multiple Teams. The bonus payable to an eligible Employee who was in
--------------
more than one Team during the Plan Year shall be calculated on a pro-rata basis
in accordance with the amount of time spent by such Employee in each Team during
the Plan Year.
6.5 Multiple Units. The bonus payable to an eligible Employee who was in
--------------
more than one Unit during the Plan Year shall be calculated on a pro-rata basis
in accordance with the amount of time spent by such Employee in each Unit during
the Plan Year. Notwithstanding the foregoing, the Unit Performance Bonus
payable to an Employee whose compensation is subject to the deduction limitation
of Section 162(m) of the Code with respect to a Plan Year and who is in more
than one Unit during the Plan Year shall not be greater than the Unit
Performance Bonus that would have been payable to such Employee if the Employee
had remained in the Unit to which the Employee was assigned on the first day of
the Plan Year if any portion of the compensation payable to such Employee would
be non-deductible under such provision.
6.6 Time and Method of Payment. The aggregate of any and all bonuses
--------------------------
payable under the Plan shall be payable to each eligible Employee and Terminated
Eligible Employee in cash as soon as practicable following the close of the Plan
Year.
6.7 Withholding Taxes. All bonuses payable hereunder shall be subject to
-----------------
the withholding of such amounts as the Company may determine is required to be
withheld pursuant to any applicable federal, state or local law or regulation.
ARTICLE VII
-----------
CHANGE OF CONTROL
-----------------
7.1 In General. In the event of a Change of Control, each eligible
----------
Employee (including Terminated Eligible Employees who terminate employment
during the Plan Year in which the Change of Control occurs) shall become
entitled to the payment of a Unit Performance Bonus, a Personal Performance
Bonus and a Team Performance Bonus in accordance with the provisions of this
Article.
7.2 Calculation of Bonuses. Upon a Change of Control, each eligible
----------------------
Employee, together with each Terminated Eligible Employee, shall become entitled
to the payment of (i) a Unit Performance Bonus calculated on the basis of a Unit
Performance Percentage equal to the greater of the actual Unit Performance
Percentage attained for the Plan Year or the applicable Target Unit Performance
Percentage for such Plan Year and an Earnings Per Share Factor of one, (ii) a
Personal Performance Bonus calculated on the basis of a Personal Performance
Percentage equal to the greater of the actual Personal Performance Percentage
for the Plan Year or the applicable Target Personal Performance Percentage for
such Plan Year, and (iii) each such Employee and Terminated Eligible Employee
who is a member of an Exploration Team, or other Team, shall be entitled to the
payment of a Team Performance Bonus based upon the greater of the actual Team
Performance Percentage for such Plan Year or the applicable Target Team
Performance Percentage for such Plan Year. If a Change of Control occurs prior
to the time that the Compensation Committee has established the Target Unit
Performance Percentage, Target Personal Performance Percentage, or Target Team
13
<PAGE>
Performance Percentage for the Plan Year, such percentages shall be based upon
the corresponding percentages for the immediately preceding Plan Year.
7.3 Payment of Bonuses. The bonuses payable in accordance with the
------------------
provisions of this Article VII shall be calculated and paid as soon as
practicable following the date of the Change of Control, but in no event later
than the sixtieth day after the date of the Change of Control. Such payments
shall be subject to the withholding of such amounts as the Company may determine
is required to be withheld pursuant to any applicable federal, state or local
law or regulation. Upon the completion of such payments, Eligible Employees and
Terminated Eligible Employees shall have no further right to the payment of any
bonus hereunder (other than any bonus payable hereunder with respect to a
previous Plan Year that has not yet been paid) and this Plan shall terminate.
ARTICLE VIII
-------------
GENERAL PROVISIONS
------------------
8.1 Administration. The Plan will be administered by the Compensation
--------------
Committee or its delegees. The Compensation Committee shall interpret the
provisions of the Plan in its full and absolute discretion. The determinations
of the Compensation Committee with respect to the Plan shall be conclusive. All
expenses of the Company in administering the Plan shall be borne by the Company.
8.2 Plan Unfunded. The Plan shall be unfunded and no trust or other
-------------
funding mechanism shall be established for the Plan. All benefits to be paid
pursuant to the Plan shall be paid by the Company from its general assets and an
Employee (or his heir or devisee) shall not have any greater rights than a
general, unsecured creditor against the Company for any benefit hereunder.
8.3 Participation in Plan by Affiliates. Any Affiliated Entity shall
-----------------------------------
become a party to this Plan and become a Participating Employer upon designation
by the Company as a Participating Employer.
8.4 Amount Payable Upon Death of Employee. If an Employee who is entitled
-------------------------------------
to payment hereunder dies before receiving full payment of the amount due, such
amount shall be paid as soon as practicable after the close of the Plan Year, in
a cash lump sum, to the beneficiary or beneficiaries designated by the Employee
to receive life insurance proceeds under the Company's life insurance plan. In
the absence of an effective beneficiary designation under said plan, any amount
payable hereunder following the death of an Employee shall be paid to the
Employee's estate.
8.5 Right of Offset. To the extent permitted by applicable law, the
---------------
Company may, in its sole discretion, apply any bonus payments otherwise due and
payable under this Plan against any Employee loans outstanding to the Company or
other debts of the Employee to the Company.
8.6 Amendments, Termination, Etc. The Board, upon the recommendation of
----------------------------
the Compensation Committee, may at any time amend, modify, suspend or terminate
the Plan.
14
<PAGE>
8.7 Payments Due Minors or Incapacitated Persons. If any person entitled
--------------------------------------------
to a payment under the Plan is a minor, or if the Compensation Committee
determines that any such person is incapacitated by reason of physical or mental
disability, whether or not legally adjudicated as an incompetent, the
Compensation Committee shall have the power to cause the payment becoming due to
such person to be made to another for his benefit, without responsibility of the
Compensation Committee, the Company, or any other person or entity to see to the
application of such payment. Payments made pursuant to such power shall operate
as a complete discharge of the Compensation Committee, the Plan and the Company.
8.8 Section Headings. The Section headings are included herein only for
----------------
convenience, and they shall have no effect on the interpretation of the Plan.
8.9 Severability. If any article, section, subsection or specific
------------
provision is found to be illegal or invalid for any reason, such illegality or
invalidity shall not affect the remaining provisions of the Plan, and the Plan
shall be construed and enforced as if such illegal and invalid provision had
never been set forth in the Plan.
8.10 No Right to Employment. The establishment of this Plan shall not be
----------------------
deemed to confer upon any person any legal right to be employed by, or to be
retained in the employ of, the Company or any Affiliated Entity, or to give any
Employee or any person any right to receive any payment whatsoever, except as
provided under this Plan. All Employees shall remain subject to discharge from
employment to the same extent as if this Plan had never been adopted.
8.11 Transferability. Any bonus payable hereunder is personal to the
---------------
Employee and may not be sold, exchanged, transferred, pledged, assigned or
otherwise disposed of except by will or by the laws of descent and distribution.
8.12 Successors. This Plan shall be binding upon and inure to the benefit
----------
of the Company, the Participating Employers and the Employees and their
respective heirs, representatives and successors.
8.13 Governing Law. The Plan and all agreements hereunder shall be
-------------
construed in accordance with and governed by the laws of the State of Colorado,
unless superseded by federal law.
Adopted as of January 1, 1999.
NEWMONT MINING CORPORATION
By: /s/ Timothy J. Schmitt
----------------------
15
<PAGE>
Exhibit 10(b)
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT by and between Newmont Mining Corporation, a Delaware corporation
(the "Company"), Newmont Gold Company, a Delaware corporation ("Newmont Gold"),
and Ronald C. Cambre (the "Executive"), dated as of the 1st day of February,
1999.
The Board of Directors of the Company (the "Board"), has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Company and Newmont Gold
entered into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date" shall mean the first
-------------------
date during the Change of Control Period (as defined in Section 1(b)) on which a
Change of Control (as defined in Section 2) occurs. Anything in this Agreement
to the contrary notwithstanding, if a Change of Control occurs and if the
Executive's employment with the Company is terminated prior to the date on which
the Change of Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change of Control or
(ii) otherwise arose in connection with or anticipation of a Change of Control,
then for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.
(b) The "Change of Control Period" shall mean the period commencing on the
date hereof and ending on the third anniversary of the date hereof; provided,
however, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the "Renewal Date"), unless previously
terminated, the Change of Control Period shall be automatically extended so as
to terminate three years from such Renewal Date, unless at least 60 days prior
to the Renewal Date the Company shall give notice to the Executive that the
Change of Control Period shall not be so extended.
2. Change of Control. For the purpose of this Agreement, a "Change of
-----------------
Control" shall mean:
<PAGE>
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company or
the acquisition of assets of another corporation (a "Business Combination"), in
each case, unless, following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of the
2
<PAGE>
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
3. Employment Period. The Company hereby agrees to continue the
-----------------
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the third anniversary of
such date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During the
-------------------
Employment Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 120-day period
immediately preceding the Effective Date and (B) the Executive's services shall
be performed at the location where the Executive was employed immediately
preceding the Effective Date or any office or location less than 35 miles from
such location.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.
(b) Compensation. (i) Base Salary. During the Employment Period, the
------------ -----------
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the 12-month period immediately preceding the month in
which the Effective Date occurs. During the Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter at least
annually. Any increase in Annual Base Salary
3
<PAGE>
shall not serve to limit or reduce any other obligation to the Executive under
this Agreement. Annual Base Salary shall not be reduced after any such increase
and the term Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased. As used in this Agreement, the term
"affiliated companies" shall include any company controlled by, controlling or
under common control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, the Executive
------------
shall be awarded, for each fiscal year ending during the Employment Period, an
annual bonus (the "Annual Bonus") in cash at least equal to the Executive's
aggregate highest bonus under the Company's Annual Incentive Compensation Plan
and Newmont Gold's Intermediate Term Incentive Compensation Plan, or any
successor or replacement plans, for the last three full fiscal years prior to
the Effective Date (annualized in the event that the Executive was not employed
by the Company for the whole of such fiscal year) (the "Recent Annual Bonus").
Each such Annual Bonus shall be paid no later than the end of the third month of
the fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of such Annual
Bonus.
(iii) Incentive, Savings and Retirement Plans. During the Employment
---------------------------------------
Period, the Executive shall be entitled to participate in all incentive, savings
and retirement plans, practices, policies and programs applicable generally to
other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during the
120-day period immediately preceding the Effective Date or if more favorable to
the Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies. In addition
to the pension benefits to be provided the Executive under the Pension Plan of
Newmont Gold and the Salaried Retirement Savings Plan of Newmont Gold, and in
lieu of any benefits to the Executive pursuant to the Pension Equalization Plan
of Newmont Gold, the Executive shall receive in a lump-sum amount a non-
qualified retirement benefit, payable within 30 days of the Executive's Date of
Termination, equal to the following dollar amounts depending upon the
Executive's Date of Termination (the "Pension Supplement"):
4
<PAGE>
Date of Lump Sum
Termination Amount
----------- --------
10/1/99 $2,500,163
10/1/00 $3,048,580
10/1/01 $3,511,418
10/1/02 $3,991,761
10/1/03 $4,488,424
10/1/04 $5,003,044
10/1/05 $5,534,682
10/1/06 $6,076,770
10/1/07 $6,632,973
10/1/08 $7,194,834
The actual lump-sum amount that the Executive will receive shall be
determined by a straight-line interpolation method depending upon the month in
which the Executive's Date of Termination occurs. For instance, if the
Executive's Date of Termination is May 5, 2000, he would receive the lump-sum
amount for October 1, 1999 ($2,500,163) plus the difference between the lump-sum
amount for October 1, 2000 ($3,048,580) and the lump-sum amount for October 1,
1999 ($2,500,163) divided by twelve ($45,701) and multiplied by the number of
full months that elapsed between the Executive's Date of Termination and the
previous October 1 (7 months x $45,701 = $319,910). Therefore, if the
Executive's Date of Termination is May 5, 2000, he would receive $2,820,073
($2,500,163 + $319,910).
(iv) Welfare Benefit Plans. During the Employment Period, the
---------------------
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with benefits
which are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.
(v) Expenses. During the Employment Period, the Executive shall be
--------
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
5
<PAGE>
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the Executive
---------------
shall be entitled to fringe benefits, including, without limitation, tax and
financial planning services, payment of club dues, and, if applicable, use of an
automobile and payment of related expenses, in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.
(vii) Office and Support Staff. During the Employment Period, the
------------------------
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and its affiliated companies at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.
(viii) Vacation. During the Employment Period, the Executive shall
--------
be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.
5. Termination of Employment. (a) Death or Disability. The
------------------------- -------------------
Executive's employment shall terminate automatically upon the Executive's death
during the Employment Period. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment Period (pursuant
to the definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 12(b) of this Agreement of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the absence of the Executive
from the Executive's duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive's
legal representative.
(b) Cause. The Company may terminate the Executive's employment during
-----
the Employment Period for Cause. For purposes of this Agreement, "Cause" shall
mean:
6
<PAGE>
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to the
Executive by the Board of the Company which specifically identifies the manner
in which the Board believes that the Executive has not substantially performed
the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered "willful" unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of
employment of the Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive is guilty of
the conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.
(c) Good Reason. The Executive's employment may be terminated by the
-----------
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean:
(i) the assignment to the Executive of any duties inconsistent in any
respect with the Executive's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Section 4(a) of this Agreement, or any other action by the Company which
results in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the provisions of
Section 4(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any office
or location other than as provided in Section 4(a)(i)(B) hereof or the Company's
requiring the Executive to travel on Company business to a substantially greater
extent than required immediately prior to the Effective Date;
7
<PAGE>
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of
"Good Reason" made by the Executive shall be conclusive. Anything in this
Agreement to the contrary notwithstanding, a termination by the Executive for
any reason during the 30-day period immediately following the first anniversary
of the Effective Date shall be deemed to be a termination for Good Reason for
all purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause,
---------------------
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than 30
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
-------------------
Executive's employment is terminated by the Company for Cause, or by the
Executive with or without Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
6. Obligations of the Company upon Termination. (a) Good Reason;
------------------------------------------- -----------
Other Than for Cause, Death or Disability. If, during the Employment Period,
- -----------------------------------------
the Company shall terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
8
<PAGE>
A. the sum of (1) the Executive's Annual Base Salary through
the Date of Termination to the extent not theretofore paid, (2) the
product of (x) the higher of (I) the Recent Annual Bonus and (II) the
Annual Bonus paid or payable, including any bonus or portion thereof
which has been earned but deferred (and annualized for any fiscal year
consisting of less than twelve full months or during which the Executive
was employed for less than twelve full months), for the most recently
completed fiscal year during the Employment Period, if any (such higher
amount being referred to as the "Highest Annual Bonus") and (y) a
fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of
which is 365 and (3) any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon) and
any accrued vacation pay, in each case to the extent not theretofore
paid (the sum of the amounts described in clauses (1), (2), and (3)
shall be hereinafter referred to as the "Accrued Obligations");
B. the amount equal to the product of (1) three and (2) the
sum of (x) the Executive's Annual Base Salary and (y) the Highest
Annual Bonus; and
C. an amount equal to the Pension Supplement, calculated as
if the Executive's Date of Termination were on the third anniversary of
the Executive's actual Date of Termination (i.e., add three additional
years to the Executive's Date of Termination for purposes of the lump
sum amount calculation in Section 4(b)(iii) of this Agreement).
(ii) for three years after the Executive's Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to the Executive and/or
the Executive's family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described in
Section 4(b)(iv) of this Agreement if the Executive's employment had not been
terminated or, if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the Company and its
affiliated companies and their families, provided, however, that if the
Executive becomes reemployed with another employer and is eligible to receive
medical or other welfare benefits under another employer provided plan, the
medical and other welfare benefits described herein shall be secondary to those
provided under such other plan during such applicable period of eligibility. For
purposes of determining eligibility (but not the time of commencement of
benefits) of the Executive for retiree benefits pursuant to such plans,
practices, programs and policies, the Executive shall be considered to have
remained employed until three years after the Date of Termination and to have
retired on the last day of such period;
9
<PAGE>
(iii) the Company shall, at its sole expense as incurred, provide the
Executive with outplacement services the scope and provider of which shall be
consistent with the Company's practices during the one-year period immediately
preceding the Effective Date; and
(iv) to the extent not theretofore paid or provided, the Company shall
timely pay or provide (or cause to be paid or provided) to the Executive any
other amounts or benefits required to be paid or provided or which the Executive
is eligible to receive under any plan, program, policy or practice or contract
or agreement of the Company and its affiliated companies (such other amounts and
benefits shall be hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by reason of
-----
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations, the Pension
Supplement (payable to the Executive's surviving spouse, estate or
beneficiaries, as applicable, in an amount equal to the lump sum amount
calculation in Section 4(b)(iii) of this Agreement) and the timely payment or
provision of Other Benefits. Accrued Obligations and the Pension Supplement
shall be paid to the Executive's estate or beneficiary (or surviving spouse), as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 6(b) shall include, without limitation, and the
Executive's estate and/or beneficiaries shall be entitled to receive, benefits
at least equal to the most favorable benefits provided by the Company and
affiliated companies to the estates and beneficiaries of peer executives of the
Company and such affiliated companies under such plans, programs, practices and
policies relating to death benefits, if any, as in effect with respect to other
peer executives and their beneficiaries at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive's estate and/or the Executive's beneficiaries, as in effect on the
date of the Executive's death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries.
(c) Disability. If the Executive's employment is terminated by
----------
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations, the Pension Supplement and the timely
payment or provision of Other Benefits. Accrued Obligations and the Pension
Supplement shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination. With respect to the provision of Other Benefits, the
term Other Benefits as utilized in this Section 6(c) shall include, and the
Executive shall be entitled after the Disability Effective Date to receive,
disability and other benefits at least equal to the most favorable of those
generally provided by the Company and its affiliated companies to disabled
executives and/or their families in accordance with such plans, programs,
practices and policies relating to disability, if any, as in effect generally
with respect to other peer executives and their families at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive and/or the Executive's family, as in effect at any time thereafter
generally with respect to other peer executives of the Company and its
affiliated companies and their families.
10
<PAGE>
(d) Cause; Other than for Good Reason. If the Executive's employment
---------------------------------
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (x) his Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other Benefits (including the Pension Supplement), in each
case to the extent theretofore unpaid. If the Executive voluntarily terminates
employment during the Employment Period, excluding a termination for Good
Reason, this Agreement shall terminate without further obligations to the
Executive, other than for Accrued Obligations, the Pension Supplement and the
timely payment or provision of Other Benefits. In such case, all Accrued
Obligations and the Pension Supplement shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
-------------------------
or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor, subject to Section
12(f), shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
8. Full Settlement. The Company's obligation to make the payments
---------------
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code").
9. Certain Additional Payments by the Company.
------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company or its affiliates to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined
11
<PAGE>
without regard to any additional payments required under this Section 9) (a
"Payment") would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section 9(a), if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Payments do not exceed 110% of the greatest
amount (the "Safe Harbor Amount") that could be paid to the Executive such that
the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the amounts payable under this
Agreement shall be reduced so that the Payments, in the aggregate, are reduced
to the Safe Harbor Amount. The reduction of the amounts payable hereunder, if
applicable, shall be made by first reducing the payments under Section
6(a)(i)(B), unless an alternative method of reduction is elected by the
Executive. For purposes of reducing the Payments to the Safe Harbor Amount, only
amounts payable under this Agreement (and no other Payments) shall be reduced.
If the reduction of the amount payable under this Agreement would not result in
a reduction of the Payments to the Safe Harbor Amount, no amounts payable under
this Agreement shall be reduced pursuant to this Section 9(a).
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by a nationally
recognized certified public accounting firm designated by the Executive (the
"Accounting Firm") which shall provide detailed supporting calculations both to
the Company and the Executive within 15 business days of the receipt of notice
from the Executive that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Executive shall appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 9(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine
12
<PAGE>
the amount of the Underpayment that has occurred and any such Underpayment shall
be promptly paid by the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to
such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of
13
<PAGE>
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
10. Confidential Information. The Executive shall hold in a fiduciary
------------------------
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive and
----------
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such
14
<PAGE>
succession had taken place. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Colorado, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
-------------------
At the last address on the Company's records
If to the Company:
-----------------
Newmont Mining Corporation
1700 Lincoln Street
Denver, CO 80203
Attention: Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
(f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company,
15
<PAGE>
the employment of the Executive by the Company is "at will" and, subject to
Section 1(a) hereof, prior to the Effective Date, the Executive's employment may
be terminated by either the Executive or the Company at any time prior to the
Effective Date, in which case the Executive shall have no further rights under
this Agreement. From and after the Effective Date, this Agreement shall
supersede any other agreement between the parties with respect to the subject
matter hereof. The Executive shall have no rights to severance benefits under
any severance plan or policy of the Company in connection with any termination
of employment during the Employment Period.
(g) For purposes of this Agreement, employment of the Executive with
Newmont Gold shall be treated as employment with the Company.
(h) Newmont Gold shall be jointly and severally liable with the
Company for any liabilities to the Executive under this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
and Newmont Gold have caused these presents to be executed in its name on its
behalf, all as of the day and year first above written.
/s/ Ronald C. Cambre
--------------------------------
Ronald C. Cambre
NEWMONT MINING CORPORATION
By: /s/ Timothy J. Schmitt
---------------------------------
Timothy J. Schmitt
Vice President and Secretary
NEWMONT GOLD COMPANY
By: /s/ Timothy J. Schmitt
---------------------------------
Timothy J. Schmitt
Vice President and Secretary
16
<PAGE>
EXHIBIT 99(a)
The following condensed consolidating financial statements of Newmont Mining
Corporation should be read in conjunction with the consolidated financial
statements and the notes thereto included in it's Annual Report on Form 10-K for
the year ended December 31, 1998.
<TABLE>
<CAPTION>
Newmont Newmont Newmont
Consolidating Statement of Operations Mining Gold Other Elimi- Mining Corp.
(In millions) Corp. Company Subsidiaries nations Consolidated
---------- ----------- --------------- --------- -------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1998
Sales and other income
Sales $ - $ 483.0 $ 970.9 $ $ 1,453.9
Dividends, interest and other - intercompany - 24.8 - (24.8) -
Dividends, interest and other - 10.2 11.8 (1.0) 21.0
---------- ----------- ------------- --------- ------------
- 518.0 982.7 (25.8) 1,474.9
---------- ----------- ------------- --------- ------------
Costs and expenses
Costs applicable to sales - 366.9 459.0 (1.0) 824.9
Depreciation, depletion and amortization - 90.2 198.9 289.1
Exploration and research - 15.3 53.1 68.4
General and administrative - 47.7 2.0 49.7
Interest expense - intercompany - - 24.8 (24.8) 0.0
Interest, net of capitalized interest - 47.6 31.2 78.8
Write-down of assets - 111.3 503.6 614.9
Other - 5.0 6.0 11.0
---------- ----------- ------------- --------- ------------
- 684.0 1,278.6 (25.8) 1,936.8
---------- ----------- ------------- --------- ------------
Pre-tax loss before minority interest, equity
loss and cumulative effect of a change in
accounting principle - (166.0) (295.9) - (461.9)
Income tax benefit - 80.2 100.7 - 180.9
Minority interest in income of Minera Yanacocha - - (66.2) - (66.2)
Minority interest in income of Newmont Gold Company (4.1) - - - (4.1)
Equity in loss of subsidiaries (391.5) (306.5) - 698.0 0.0
Equity in loss of affiliate - - (9.2) - (9.2)
---------- ----------- ------------- --------- ------------
Net loss before cumulative effect of a
change in accounting principle (395.6) (392.3) (270.6) 698.0 (360.5)
Cumulative effect of a change in accounting principle 2.2 0.8 (35.9) - (32.9)
---------- ----------- ------------- --------- ------------
Net loss $ (393.4) $ (391.5) $ (306.5) $ 698.0 $ (393.4)
========== =========== ============= ========= ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Newmont Newmont Newmont
Consolidating Statement of Operations Mining Gold Other Elimi- Mining Corp.
(In millions) Corp. Company Subsidiaries nations Consolidated
--------- --------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1997
Sales and other income
Sales $ - $ 609.6 $ 963.1 $ - $ 1,572.7
Dividends, interest and other - intercompany - 8.8 - (8.8) -
Dividends, interest and other - 12.7 46.4 (3.8) 55.3
--------- --------- ---------- ---------- -----------
- 631.1 1,009.5 (12.6) 1,628.0
--------- --------- ---------- ---------- -----------
Costs and expenses
Costs applicable to sales - 375.1 419.2 (3.8) 790.5
Depreciation, depletion and amortization - 94.9 170.9 265.8
Exploration and research - 19.2 79.2 98.4
General and administrative - 56.9 9.5 66.4
Interest expense - intercompany - - 8.8 (8.8) 0.0
Interest, net of capitalized interest - 43.2 33.9 77.1
Merger and related expenses - 29.3 133.4 162.7
Write-down of assets - 9.5 - 9.5
Other - (0.1) 25.8 25.7
--------- --------- ---------- ---------- -----------
- 628.0 880.7 (12.6) 1,496.1
--------- --------- ---------- ---------- -----------
Pre-tax income before minority interest and
equity income - 3.1 128.8 - 131.9
Income tax benefit - 7.9 7.9
Minority interest in income of Minera Yanacocha - - (66.9) (66.9)
Minority interest in income of Newmont Gold Company (4.5) - - (4.5)
Equity in income of subsidiaries 72.9 61.9 - (134.8) 0.0
--------- --------- ---------- ---------- -----------
Net income $ 68.4 $ 72.9 $ 61.9 $ (134.8) $ 68.4
========= ========= ========== ========== ===========
Year Ended December 31, 1996
Sales and other income
Sales $ - $ 657.9 $ 447.8 $ - $ 1,105.7
Dividends, interest and other - intercompany - 6.1 - (6.1) -
Dividends, interest and other - 17.8 16.3 (4.6) 29.5
--------- --------- ---------- ---------- -----------
- 681.8 464.1 (10.7) 1,135.2
--------- --------- ---------- ---------- -----------
Costs and expenses
Costs applicable to sales - 415.3 241.6 (4.6) 652.3
Depreciation, depletion and amortization - 104.3 99.8 204.1
Exploration and research - 7.2 85.7 92.9
General and administrative - 43.4 19.7 2.6 65.7
Interest expense - intercompany - - 6.1 (6.1) -
Interest, net of capitalized interest - 34.0 24.6 58.6
Other - 4.2 18.3 22.5
--------- --------- ---------- ---------- -----------
- 608.4 495.8 (8.1) 1,096.1
--------- --------- ---------- ---------- -----------
Pre-tax income (loss) before minority interest and
equity income - 73.4 (31.7) (2.6) 39.1
Income tax benefit - 3.0 12.9 15.9
Minority interest in income of Newmont Gold Company (6.6) - - - (6.6)
Equity in income of subsidiaries 105.2 31.4 - (136.6) -
Equity in income of affiliate - - 50.2 - 50.2
--------- --------- ---------- ---------- -----------
Net income $ 98.6 $ 107.8 $ 31.4 $ (139.2) $ 98.6
========= ========= ========== ========== ===========
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Newmont Newmont Newmont
Consolidating Balance Sheets Mining Gold Other Elimi- Mining Corp.
(In millions) Corp. Company Subsidiaries nations Consolidated
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
At December 31, 1998
Cash and cash equivalents $ - $ 21.6 $ 57.5 $ - $ 79.1
Short-term investments - 11.8 11.8
Accounts receivable 445.6 30.0 (423.6) 52.0
Inventories 122.1 158.3 280.4
Other current assets 33.0 56.8 89.8
------------ ----------- ------------ ----------- ------------
Current assets - 622.3 314.4 (423.6) 513.1
------------ ----------- ------------ ----------- ------------
Property, plant and mine development, net 856.5 1,192.2 2,048.7
Investment in subsidiaries 1,444.6 2,817.9 - (4,262.5) -
Investment in Batu Hijau - - 277.2 277.2
Long-term inventory - 143.3 16.4 159.7
Other long-term assets - 119.5 2,094.8 (2,026.3) 188.0
------------ ----------- ------------ ----------- ------------
Total assets $1,444.6 $4,559.5 $3,895.0 $(6,712.4) $3,186.7
============ =========== ============ =========== ============
Liabilities
Current portion of long-term debt $ - $ 17.8 $ 29.8 $ - $ 47.6
Accounts payable 5.1 17.2 439.2 (423.6) 37.9
Other accrued liabilities - 57.2 69.6 126.8
------------ ----------- ------------ ----------- ------------
Current liabilities 5.1 92.2 538.6 (423.6) 212.3
------------ ----------- ------------ ----------- ------------
Long-term debt 902.5 298.6 1,201.1
Reclamation and remediation liabilities 26.3 68.5 94.8
Other long-term liabilities 2,093.9 78.6 (2,026.3) 146.2
------------ ----------- ------------ ----------- ------------
Total liabilities 5.1 3,114.9 984.3 (2,449.9) 1,654.4
------------ ----------- ------------ ----------- ------------
Minority interest - - 92.8 - 92.8
------------ ----------- ------------ ----------- ------------
Stockholders' Equity
Common stock 267.5 56.5 (56.5) 267.5
Additional paid-in capital 1,060.8 592.1 2,154.3 (2,746.4) 1,060.8
Retained earnings 111.2 852.5 607.1 (1,459.6) 111.2
------------ ----------- ------------ ----------- ------------
Total stockholders' equity 1,439.5 1,444.6 2,817.9 (4,262.5) 1,439.5
------------ ----------- ------------ ----------- ------------
Total liabilities and stockholders' equity $ 1,444.6 $ 4,559.5 $ 3,895.0 $ (6,712.4) $ 3,186.7
============ =========== ============ =========== ============
At December 31, 1997
Cash and cash equivalents $ - $ 85.2 $ 61.0 $ - $ 146.2
Short-term investments - 12.8 12.8
Accounts receivable 573.1 38.0 (558.7) 52.4
Inventories 121.9 217.7 339.6
Other current assets 48.5 41.9 90.4
------------ ----------- ------------ ----------- ------------
Current assets - 828.7 371.4 (558.7) 641.4
------------ ----------- ------------ ----------- ------------
Property, plant and mine development, net 953.5 1,645.3 2,598.8
Investment in subsidiaries 1,697.1 78.8 (5.7) (1,770.2) -
Investment in Batu Hijau - - 76.9 76.9
Long-term inventory - 150.9 23.5 174.4
Other long-term assets - 685.7 82.0 (645.2) 122.5
------------ ----------- ------------ ----------- ------------
Total assets $ 1,697.1 $ 2,697.6 $ 2,193.4 $ (2,974.1) $ 3,614.0
============ =========== ============ =========== ============
Liabilities
Current portion of long-term debt $ - $ $ 43.3 $ - $ 43.3
Short-term debt 25.8 25.8
Accounts payable 36.1 486.6 (439.6) 83.1
Other accrued liabilities 80.8 161.6 242.4
------------ ----------- ------------ ----------- ------------
Current liabilities - 116.9 717.3 (439.6) 394.6
------------ ----------- ------------ ----------- ------------
Long-term debt 857.1 322.3 1,179.4
Reclamation and remediation liabilities 26.5 62.1 88.6
Other long-term liabilities - 950.6 (758.6) 192.0
------------ ----------- ------------ ----------- ------------
Total liabilities - 1,000.5 2,052.3 (1,198.2) 1,854.6
------------ ----------- ------------ ----------- ------------
Minority interest 106.0 - 62.3 - 168.3
------------ ----------- ------------ ----------- ------------
Stockholders' Equity
Common stock 250.4 1.1 6.3 (7.4) 250.4
Additional paid-in capital 817.0 436.9 1,796.9 (2,233.8) 817.0
Retained earnings 523.7 1,259.1 (1,724.4) 465.3 523.7
------------ ----------- ------------ ----------- ------------
Total stockholders' equity 1,591.1 1,697.1 78.8 (1,775.9) 1,591.1
------------ ----------- ------------ ----------- ------------
Total liabilities and stockholders' equity $ 1,697.1 $ 2,697.6 $ 2,193.4 $ (2,974.1) $ 3,614.0
============ =========== ============ =========== ============
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Newmont Newmont Newmont
Statements of Consolidating Cash Flows Mining Gold Other Elimi- Mining Corp.
(In millions ) Corp. Company Subsidiaries nations Consolidated
----------- ----------- -------------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1998
Operating activities
Net loss $ (393.4) $ (391.5) $ (306.5) $ 698.0 $ (393.4)
Adjustments to reconcile net loss to net -
cash provided by operating activities 407.1 537.9 582.7 (713.0) 814.7
Change in working capital 5.1 (196.8) 143.9 - (47.8)
----------- ----------- -------------- ----------- ----------------
Net cash provided by (used for) operating activities 18.8 (50.4) 420.1 (15.0) 373.5
----------- ----------- -------------- ----------- ----------------
Investing activities
Additions to property, plant and mine development (61.3) (154.7) (216.0)
Investments in affiliates and Other - (204.8) (204.8)
----------- ----------- -------------- ----------- ----------------
Net cash used for investing activities - (61.3) (359.5) - (420.8)
----------- ----------- -------------- ----------- ----------------
Financing activities
Net borrowings (repayments) - 63.2 (63.0) - 0.2
Dividends paid (19.1) (15.0) - 15.0 (19.1)
Other 0.3 - (1.2) - (0.9)
----------- ----------- -------------- ----------- ----------------
Net cash provided by (used for) financing activities (18.8) 48.2 (64.2) 15.0 (19.8)
----------- ----------- -------------- ----------- ----------------
Net decrease in cash and cash equivalents 0.0 (63.5) (3.6) 0.0 (67.1)
Cash and cash equivalents at beginning of period - 85.1 61.1 - 146.2
----------- ----------- -------------- ----------- ----------------
Cash and cash equivalents at end of period $ - $ 21.6 $ 57.5 $ - $ 79.1
=========== =========== ============== =========== ================
</TABLE>
<TABLE>
<CAPTION>
Newmont Newmont Newmont
Mining Gold Other Elimi- Mining Corp.
Corp. Company Subsidiaries nations Consolidated
---------- --------- -------------- --------- -------------
Year Ended December 31, 1997
Operating activities
<S> <C> <C> <C> <C> <C>
Net income $ 68.4 $ 72.9 $ 61.9 $ (134.8) $ 68.4
Adjustments to reconcile net income to net -
cash provided by operating activities (13.9) 45.1 217.3 76.6 325.1
Change in working capital - (401.1) 291.4 - (109.7)
---------- --------- -------------- --------- -------------
Net cash provided by (used for) operating activities 54.5 (283.1) 570.6 (58.2) 283.8
---------- --------- -------------- --------- -------------
Investing activities
Additions to property, plant and mine development - (78.8) (336.3) - (415.1)
Investments in affiliates and Other (12.6) - (10.0) 12.6 (10.0)
---------- --------- -------------- --------- -------------
Net cash used for investing activities (12.6) (78.8) (346.3) 12.6 (425.1)
---------- --------- -------------- --------- -------------
Financing activities
Net borrowings (repayments) - 316.0 (210.8) - 105.2
Dividends paid (54.5) (58.2) - 58.2 (54.5)
Other 12.6 12.6 (2.8) (12.6) 9.8
---------- --------- -------------- --------- -------------
Net cash provided by (used for) financing activities (41.9) 270.4 (213.6) 45.6 60.5
---------- --------- -------------- --------- -------------
Net increase (decrease) in cash and cash equivalents 0.0 (91.5) 10.7 0.0 (80.8)
Cash and cash equivalents at beginning of period - 176.7 50.3 - 227.0
---------- --------- -------------- --------- -------------
Cash and cash equivalents at end of period $ - $ 85.2 $ 61.0 $ - $ 146.2
========== ========= ============== ========= =============
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Newmont Newmont Newmont
Statements of Consolidating Cash Flows Mining Gold Other Elimi- Mining Corp.
(In millions) Corp. Company Subsidiaries nations Consolidated
----------- ----------- -------------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1996
Operating activities
Net income $ 98.6 $ 107.8 $ 31.4 $ (139.2) $ 98.6
Adjustments to reconcile net income to net -
cash provided by operating activities (44.3) 53.8 84.9 79.9 174.3
Change in working capital - (88.9) 23.6 - (65.3)
----------- ----------- -------------- ----------- ----------------
Net cash provided by operating activities 54.3 72.7 139.9 (59.3) 207.6
----------- ----------- -------------- ----------- ----------------
Investing activities
Additions to property, plant and mine development - (158.3) (389.4) (547.7)
Investments in affiliates and Other (265.4) - (6.1) 265.4 (6.1)
----------- ----------- -------------- ----------- ----------------
Net cash used for investing activities (265.4) (158.3) (395.5) 265.4 (553.8)
----------- ----------- -------------- ----------- ----------------
Financing activities
Net borrowings - - 267.4 - 267.4
Dividends paid (54.3) (52.7) (6.6) 59.3 (54.3)
Proceeds from issuance of common stock and Other 265.4 265.4 (0.3) (265.4) 265.1
----------- ----------- -------------- ----------- ----------------
Net cash provided by financing activities 211.1 212.7 260.5 (206.1) 478.2
----------- ----------- -------------- ----------- ----------------
Net increase in cash and cash equivalents 0.0 127.1 4.9 0.0 132.0
Cash and cash equivalents at beginning of period - 49.6 45.4 - 95.0
----------- ----------- -------------- ----------- ----------------
Cash and cash equivalents at end of period $ - $ 176.7 $ 50.3 $ - $ 227.0
=========== =========== ============== =========== ================
</TABLE>
5
