<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to ____________________
Commission File Number: 1-1153
NEWMONT MINING CORPORATION
--------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-1806811
-------- ----------
(State or other jurisdiction (I.R.S. Employer Identification No.)
incorporation or organization)
1700 Lincoln Street, Denver, Colorado 80203
------------------------------------- -----
(Address of principal executive offices) (Zip Code)
303-863-7414
------------
(Registrant's telephone number, including area code)
(Former name, address and fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
There were 167,877,221 shares of common stock outstanding on May 12, 2000.
<PAGE>
PART I - FINANCIAL INFORMATION
- -------------------------------
ITEM 1. Financial Statements
- ------------------------------
NEWMONT MINING CORPORATION AND SUBSIDIARIES
Statements of Consolidated Operations
(In thousands, except per share)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended
March 31,
-------------------
<S> <C> <C>
2000 1999
------- ---------
Sales and other income
Sales $358,510 $327,141
Dividends, interest and other 2,739 3,051
-------- --------
361,249 330,192
-------- --------
Costs and expenses
Costs applicable to sales 205,485 196,358
Depreciation, depletion and amortization 61,947 58,782
Exploration and research 13,541 11,472
General and administrative 11,989 12,619
Interest, net of capitalized interest of $463
and $4,230, respectively 20,905 18,373
Other 1,198 1,763
-------- --------
315,065 299,367
-------- --------
Operating income 46,184 30,825
Unrealized mark-to-market gain on call options 236 -
-------- --------
Pre-tax income before minority interest and equity loss 46,420 30,825
Income tax expense (6,528) (5,621)
Minority interest in income of Minera Yanacocha (25,140) (12,167)
Equity loss of affiliate (8,104) (3,093)
-------- --------
Net income $ 6,648 $ 9,944
======== ========
Other comprehensive income, net of tax
Unrealized holding gain on investment securities - 5,564
-------- --------
Comprehensive income $ 6,648 $ 15,508
======== ========
Net income per common share, basic and diluted $ 0.04 $ 0.06
======== ========
Basic weighted average shares outstanding 167,757 167,297
Diluted weighted average shares outstanding 168,332 167,303
Cash dividends declared per common share $ 0.03 $ 0.03
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
NEWMONT MINING CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
(Unaudited)
<TABLE>
March 31, December 31,
2000 1999
---------- ----------
<S> <C> <C>
Assets
Cash and cash equivalents $ 90,663 $ 55,314
Short-term investments 5,415 9,414
Accounts receivable 48,509 40,553
Inventories 334,879 322,614
Other current assets 87,846 106,158
---------- ----------
Current assets 567,312 534,053
Property, plant and mine development, net 1,935,163 1,972,348
Investment in Batu Hijau 520,271 438,318
Long-term inventory 153,735 171,206
Deferred income tax assets 212,447 197,456
Other long-term assets 48,871 70,001
---------- ----------
Total assets $3,437,799 $3,383,382
========== ==========
Liabilities
Current portion of long-term debt $ 22,632 $ 23,293
Accounts payable 35,423 38,039
Current portion of deferred income tax liabilities 22,183 29,520
Other accrued liabilities 136,142 183,021
---------- ----------
Current liabilities 216,380 273,873
Long-term debt 1,099,890 1,014,193
Reclamation and remediation liabilities 106,126 104,677
Deferred revenue from sale of future production 137,198 137,198
Fair value of written call options 82,198 82,434
Other long-term liabilities 201,484 193,002
---------- ----------
Total liabilities 1,843,276 1,805,377
---------- ----------
Contingencies (Notes 3 and 6)
Minority interest in Minera Yanacocha 136,870 126,357
---------- ----------
Stockholders' equity
Common stock 268,562 268,262
Additional paid-in capital 1,073,235 1,069,146
Retained earnings 115,856 114,240
---------- ----------
Total stockholders' equity 1,457,653 1,451,648
---------- ----------
Total liabilities and stockholders' equity $3,437,799 $3,383,382
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
NEWMONT MINING CORPORATION AND SUBSIDIARIES
Statements of Consolidated Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended
March 31,
-----------------
2000 1999
------ --------
<S> <C> <C>
Operating activities:
Net income 6,648 $ 9,944
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation, depletion and amortization 61,947 58,782
Amortization of capitalized mining costs 22,717 2,752
Undistributed earnings of affiliates 8,104 3,093
Deferred taxes (13,103) (7,232)
Minority interest, net of dividends 10,513 12,166
Other 6,255 633
(Increase) decrease in operating assets:
Accounts receivable (4,152) 1,373
Inventories 5,206 8,824
Other assets 2,529 (4,925)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses (29,331) (33,817)
Other liabilities 9,587 3,670
--------- --------
Net cash provided by operating activities 86,920 55,263
--------- --------
Investing activities:
Additions to property, plant and mine development (47,428) (37,031)
Advances to joint venture and affiliates, net (86,243) (39,747)
Other 2,364 71
--------- --------
Net cash used in investing activities (131,307) (76,707)
--------- --------
Financing activities:
Proceeds from long-term borrowings 213,000 44,000
Repayments of long-term borrowings (127,967) (24,287)
Dividends paid on common stock (5,034) (5,020)
Other (263) (289)
--------- --------
Net cash provided by financing activities 79,736 14,404
--------- --------
Net change in cash and cash equivalents 35,349 (7,040)
Cash and cash equivalents at beginning of period 55,314 79,086
--------- --------
Cash and cash equivalents at end of period $ 90,663 $ 72,046
========= ========
Supplemental information:
Interest paid, net of amounts capitalized of $463 and
$4,230, respectively $ 26,635 $ 22,997
Income taxes paid $ 22,942 $ 14,897
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
NEWMONT MINING CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Preparation of Financial Statements
--------------------------------------------
These unaudited interim consolidated financial statements of Newmont
Mining Corporation ("NMC") and its subsidiaries (collectively, the "Company")
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission. Such rules and regulations allow the
omission of certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles as long as the statements are not misleading.
In the opinion of management, all adjustments necessary for a fair
presentation of these interim statements have been included and are of a normal
recurring nature. These interim financial statements should be read in
conjunction with the financial statements of the Company included in its 1999
Annual Report on Form 10-K.
Certain prior year amounts have been reclassified to conform to the
current year presentation.
(2) Inventories
-----------
<TABLE>
<CAPTION>
At March 31, At December 31,
2000 1999
------------ ---------------
(In thousands)
<S> <C> <C>
Current:
Ore and in-process inventories $222,741 $190,576
Precious metals 33,978 52,525
Materials and supplies 78,160 78,461
Other - 1,052
-------- --------
$334,879 $322,614
======== ========
Non-current:
Ore in stockpiles $153,735 $171,206
======== ========
</TABLE>
(3) Batu Hijau
----------
The Company and Sumitomo Corporation ("Sumitomo") are partners in the
Nusa Tengarra Partnership ("NTP") that holds P.T. Newmont Nusa Tengarra
("PTNNT"), the owner of the Batu Hijau mine in Indonesia. As a result of this
ownership structure, the Company and Sumitomo have an indirect 45% and 35%
interest, respectively, in the Batu Hijau mine. The remaining 20% interest is
held by an unrelated Indonesian company. Until recouping its construction
investment, including interest, the Company recognizes 56.25% of Batu Hijau's
income. The Company accounts for its investment in Batu Hijau as an equity
investment and at March 31, 2000 and December 31, 1999, such investment was
$520.3 million and $438.3 million, respectively. Differences between 56.25% of
the partnership's net assets and the Company's investment include (i) $220
million for the fair market value adjustment recorded by the partnership (in
conjunction with the Company's initial contribution of its investment in PTNNT),
(ii) $27 million for intercompany charges, (iii) $122 million for the fair
market value adjustment recorded by the Company in conjunction with its
acquisition of the minority interest in its subsidiary, and (iv) $140 million
for contributions recorded by the Company that were classified as debt by NTP.
Certain of these amounts are amortized or depreciated on a unit-of-production
basis. The Company's investment also excludes $42 million for exploration
expenses incurred prior to the formation of NTP. The difference between 56.25%
of NTP's net income and Equity loss of affiliate result from the elimination of
intercompany interest and management fees.
Production began in the fourth quarter of 1999. Project development was
funded by $1.0 billion from third party loans and $0.83 billion from the Company
and Sumitomo. The loans are guaranteed by the Company and Sumitomo, 56.25% and
43.75%, respectively, until project completion tests are met (except for
political risk, which is born by the lenders), and will be non-recourse to the
Company and Sumitomo thereafter (except for a contingent obligation to fund its
pro rata share of an additional $125 million). Repayment of the loans of $43.5
million semi-annually will be over a 13-year period beginning the earlier of six
months after project completion or June 15, 2001, and will bear interest at
blended fixed and floating rates.
5
<PAGE>
Following is summarized financial information for NTP (in thousands):
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
---------- ----------
<S> <C> <C>
Revenues $ 87,995 $ --
Net income (loss) $ (27,422) $ (6,263)
Dividends received $ -- $ --
At March 31, At December 31,
2000 1999
---------- ----------
Current assets $ 191,885 $ 137,542
Property, plant and mine development, net $1,985,727 $1,956,515
Other assets $ 237,741 $ 190,049
Current liabilities $ 178,033 $ 207,645
Long-term debt $1,000,000 $1,000,000
Debt and related interest to partners and affiliates $ 255,582 $ 195,478
Other liabilities $ 555 $ 132
Minority interest in PTNNT $ 56,745 $ 35,455
</TABLE>
(4) Comprehensive Income
--------------------
Comprehensive income in 1999 includes an unrealized holding gain on an
investment in another mining company that was sold in the third quarter of 1999.
(5) Segment Information
-------------------
The Company predominantly operates in a single industry as a worldwide
corporation engaged in gold production, exploration for gold and acquisition of
gold properties. The Company has operations in the North America, Peru (Minera
Yanacocha), Indonesia (Minahasa) and Uzbekistan (Zarafshan-Newmont) and its
reportable segments are based on the geographic location of these operations.
Earnings from operations do not include general corporate expenses, interest
(except project-specific interest) or income taxes (except for equity
investments).
Financial information relating to the Company's consolidated segments is
as follows (in millions):
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 2000
------------------------------------------------------------------------------------
NORTH AMERICAN MINERA ZARAFSHAN-
OPERATIONS YANACOCHA* MINAHASA NEWMONT OTHER CONSOLIDATED
--------------------------- ---------- -------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sales $182.4 $124.0 $34.0 $18.1 $ -- $358.5
Interest income -- 1.0 -- -- 0.8 1.8
Interest expense 0.1 2.2 -- 0.5 18.1 20.9
Depreciation and amortization 35.1 16.3 5.8 2.8 1.9 61.9
Pre-tax income (loss) before
minority interest and equity loss 4.7 63.1 16.0 7.1 (44.5) 46.4
Capital expenditures 15.5 29.6 0.8 1.0 0.5 47.4
*Not reduced for minority interest
THREE MONTHS ENDED MARCH 31, 1999
------------------------------------------------------------------------------------
NORTH AMERICAN MINERA ZARAFSHAN-
OPERATIONS YANACOCHA* MINAHASA NEWMONT OTHER CONSOLIDATED
--------------------------- ---------- -------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sales $188.5 $ 97.0 $25.9 $15.7 $ -- $327.1
Interest income -- 1.2 -- -- 1.6 2.8
Interest expense 0.1 2.3 -- 0.8 15.2 18.4
Depreciation and amortization 33.1 15.8 5.8 2.8 1.3 58.8
Pre-tax income (loss) before minority
interest and equity loss 16.8 36.0 10.6 2.0 (34.6) 30.8
Capital expenditures 16.7 13.9 1.5 0.6 4.3 37.0
*Not reduced for minority interest
</TABLE>
6
<PAGE>
Financial information relating to the Company's equity investment in Batu Hijau
was as follows (in millions):
<TABLE>
<S> <C> <C>
Three Months Ended March 31, 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
Sales $ 87.9 $ --
- ----------------------------------------------------------------------------------------------------------------------------------
Interest expense 31.6 --
- ----------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization 17.6 --
- ----------------------------------------------------------------------------------------------------------------------------------
Net loss (35.0) (5.5)
- ----------------------------------------------------------------------------------------------------------------------------------
Capital expenditures 62.7 153.1
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets, at March 31 2,218.1 $1,568.8
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Equity loss of affiliated company was $8.1 million in the first quarter of
2000 (based on 56.25% of Batu Hijau's income and elimination of $6.7 million and
$4.1 million of intercompany interest and management fees, respectively, and
amortization adjustments of $0.8million) and $3.1 million in the comparable 1999
period (based on 56.25% of the Batu Hijau loss and elimination of $3.0 million
intercompany interest).
(6) Contingencies
-------------
(a) Environmental Obligations
The Company's mining and exploration activities are subject to various
federal and state laws and regulations governing the protection of the
environment.
These laws and regulations are continually changing and are generally
becoming more restrictive. The Company conducts its operations so as to protect
the public health and environment and believes its operations are in compliance
with all applicable laws and regulations. The Company has made, and expects to
make in the future, expenditures to comply with such laws and regulations, but
cannot predict the amount of such future expenditures.
Estimated future reclamation and remediation costs are based principally on
legal and regulatory requirements. At March 31, 2000 and December 31, 1999,
$69.0 million and $66.9 million, respectively, were accrued for reclamation and
remediation costs relating to currently producing mineral properties.
Certain appeals have been filed by third parties with the Department of
Interior Board of Land Appeals in conjunction with the Twin Creeks Environmental
Impact Statement. These appeals seek to impose mitigation and other conditions
on the mine operations. The Company has intervened and does not believe that
such appeals have merit. An unfavorable outcome of such appeals, however, could
result in additional conditions on operations that may have a material adverse
effect on the Company's financial position or results of operations.
In addition, the Company is involved in several matters concerning
environmental obligations associated with former mining activities. Generally,
these matters concern developing and implementing remediation plans at the
various sites involved. The Company believes that the related environmental
obligations associated with these sites are similar in nature with respect to
the development of remediation plans, their risk profile and the compliance
required to meet general environmental standards. Based upon the Company's best
estimate of its liability for these matters, $43.0 million and $43.6 million
were accrued for such obligations at March 31, 2000 and December 31, 1999,
respectively. These amounts are included in Other accrued liabilities and
Reclamation and remediation liabilities. Depending upon the ultimate resolution
of these matters, the Company believes that it is reasonably possible that the
liability for these matters could be as much as 70% greater or 20% lower than
the amount accrued at December 31, 1999. The amounts accrued for these matters
are reviewed periodically based upon facts and circumstances available at the
time. Changes in estimates are charged to Costs and expenses, Other in the
period estimates are revised.
Details about certain of the more significant sites involved are discussed
below.
Idarado Mining Company ("Idarado")-80.1% owned
----------------------------------------------
In July 1992, the Company and Idarado signed a consent decree with the
State of Colorado ("State") that was agreed to by the U.S. District Court of
Colorado to settle a lawsuit brought by the State under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), generally
referred to as the "Superfund Act." Idarado settled natural resources damages
and past and future response costs and provided habitat enhancement work. In
addition, Idarado agreed in the consent decree to undertake specified
remediation work at its former mining site in the Telluride/Ouray area of
Colorado. Remediation work at this property is substantially complete. If the
remediation does not achieve specific performance objectives defined in the
consent decree,
7
<PAGE>
the State may require Idarado to implement supplemental activities at the site,
also as defined in the consent decree. Idarado and the Company have obtained a
$5.2 million reclamation bond to secure their potential obligations under the
consent decree.
Resurrection Mining Company ("Resurrection")-100% owned
-------------------------------------------------------
The Company, Resurrection and other defendants have been named in lawsuits
filed by the State of Colorado, under the Superfund Act in 1983 and subsequently
consolidated with a lawsuit filed by the U.S. Environmental Protection Agency
("EPA") in 1986. These proceedings seek to compel the defendants to remediate
the impacts of pre-existing, historic mining activities near Leadville, Colorado
that date back to the mid-1800's, which the government agencies claim are
causing substantial environmental problems in the area.
In 1988 and 1989, the EPA issued administrative orders with respect to one
area on the site and the defendants have collectively implemented those orders
by constructing a water treatment plant, which was placed in operation in early
1992. Remaining remedial work for this area primarily consists of environmental
monitoring and maintenance activities.
The parties have entered into a consent decree with respect to the
remaining areas that apportions liabilities and responsibilities for the site
among the various parties. The EPA has approved remedial actions for selected
components of Resurrection's portion of the site, which were initiated in 1995.
The EPA has not yet selected the final remedy for the site. Accordingly, the
Company cannot yet determine the full extent or cost of its share of the
remedial action that will be required. The government agencies may also seek to
recover for damages to natural resources. In March 1999, the parties entered
into a Memorandum of Understanding ("MOU") to facilitate the settlement of
natural resources damages claims under CERCLA for the upper Arkansas River
Basin. The MOU provides a structure for evaluation of damages and possible
restoration activities that may be required if it is concluded such damages have
occurred.
Dawn Mining Company LLC ("Dawn")-51% owned
------------------------------------------
Dawn leased a currently inactive open-pit uranium mine on the Spokane
Indian Reservation in the State of Washington. The mine is subject to regulation
by agencies of the U.S. Department of Interior, the Bureau of Indian Affairs and
the Bureau of Land Management, as well as the EPA. Dawn also owns a nearby
uranium millsite facility that is subject to federal and state regulation.
In 1991, Dawn's lease was terminated. As a result, Dawn was required to
file a formal mine closure and reclamation plan. The Department of Interior has
commenced an Environmental Impact Study to analyze Dawn's proposed plan and to
consider alternate closure and reclamation plans for the mine. Dawn cannot
predict at this time what type of mine reclamation plan may be selected by the
Department of Interior. Dawn does not have sufficient funds to pay for the
reclamation plan it proposed, for any alternate plan, or for the closure of its
mill.
The Department of Interior previously notified Dawn that when the lease was
terminated, it would seek to hold Dawn and the Company (as Dawn's 51% owner)
liable for any costs incurred as a result of Dawn's failure to comply with the
lease and applicable regulations. Other government agencies have asserted that
the Company is liable for future reclamation or remediation work at the mine or
millsite. In early 1999, the EPA proposed that the mine be included on the
National Priorities List under CERCLA. The Company will vigorously contest any
claims as to its liability. The Company cannot reasonably predict the likelihood
or outcome of any future action against Dawn or the Company arising from this
matter.
In late 1999, Dawn initiated state approval for a revised mill closure plan
that, if implemented, would expedite the reclamation process at the mill. The
State of Washington is reviewing this revised plan. The currently approved clean
fill plan for the mill is secured by a $19.9 million bond that is 50% secured by
a letter of credit and is guaranteed by the Company.
(b) Additional Interest in Minera Yanacocha
The Company has an interest in Minera Yanacocha, a gold mining operation
located in Peru, that began production in 1993. Prior to 1997, that interest was
38% and was accounted for on an equity basis. Beginning in 1997, Minera
Yanacocha was consolidated into the Company's financial statements following the
acquisition of an additional 13.35% interest. The acquisition was disputed and,
in June 1998, the Peruvian Supreme Court resolved the dispute in favor of the
Company as described below.
In November 1993, the French government announced its intention to
privatize the mining assets of Bureau de Recherches Geologiques et Minieres, the
geological and mining bureau of the French government ("BRGM") and in September
1994, BRGM announced its intention to transfer its 24.7% interest in Minera
Yanacocha to a third party. The Company and Compania de Minas Buenaventura, S.A.
("Buenaventura"), then 38.0% and 32.3% owners of Minera Yanacocha, respectively,
filed suit in Peru to seek enforcement of their preemptive rights with respect
to the proposed BRGM transfer. In September 1996, the trial court ruled in favor
of the Company and Buenaventura and held that the preemptive rights were
triggered in November 1993, and that the value of the
8
<PAGE>
24.7% interest was $109.3 million. In June 1998, the Peruvian Supreme Court
issued a resolution upholding the decision.
In spite of the final decision of the Peruvian Supreme Court, in October
1998, BRGM, through its subsidiary Compagnie Miniere International Or S.A.
("Mine Or"), filed with the International Centre for Settlement of Investment
Disputes a request for arbitration against the Republic of Peru. The request
alleges that the decision of the Peruvian courts wrongfully deprived Mine Or of
its shares in Minera Yanacocha (which Mine Or values at approximately $560
million) and seeks restitution and damages from the Republic of Peru.
While the Company is not a party to the arbitration, it believes that Mine
Or's claims are unfounded. It is unclear at this time what effect, if any, the
arbitration might have on the Company. The Company continues to monitor this
and related arbitration and remains open to consider alternatives which could
bring these issues to conclusion.
(c) Other
The Company has forward sales contracts for 93,750 ounces of gold that
continue through December 2000, from its Minahasa property in Indonesia, at an
average price of $454 an ounce. At March 31, 2000 the fair value of these
contracts was $15.4 million.
In July 1999, the Company entered into a prepaid forward sale contract for
approximately 483,333 ounces of gold, with initial proceeds of $137.2 million,
for delivery in June 2005, 2006 and 2007. Such proceeds were recorded as
deferred revenue and will be recognized in income when the related gold is
delivered. Additional proceeds will be determined at each delivery date based
on the excess of the then existing market price (not to exceed $380 per ounce)
over $300 per ounce. The prepaid forward sale contract also included semi-
annual delivery requirements of approximately 17,950 ounces beginning June 2000
through June 2007. The Company entered into forward purchase contracts at
prices increasing from $263 per ounce in 2000 to $354 per ounce in 2007 to
coincide with these delivery commitments.
In late July and early August 1999, the Company purchased put option
contracts for 2.85 million ounces of gold, with a strike price of $270 per
ounce. This purchase was paid for by selling call options contracts for 2.35
million ounces at the strike prices noted below. Call options in 2004 and 2005
terminate if the market price is $240 per ounce or lower at any time prior to
expiration. The call option contracts are marked to market at each reporting
date and on March 31, 2000 had a fair value of $82.2 million. As of March 31,
2000, the following contracts were outstanding:
<TABLE>
<CAPTION>
Purchased Put Options Sold Call Options
- ----------------------------------------------------------------------------------------------------------------------
Ounces Price Ounces Price
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2000 783,333 $270 -- --
- ----------------------------------------------------------------------------------------------------------------------
2004 -- -- 250,000 $350
- ----------------------------------------------------------------------------------------------------------------------
2005 -- -- 250,000 $350
- ----------------------------------------------------------------------------------------------------------------------
2009 -- -- 1,000,000 $386
- ----------------------------------------------------------------------------------------------------------------------
2009 -- -- 850,000 $385
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(7) Supplementary Data
------------------
The ratio of earnings to fixed charges for the three months ended March 31,
2000 was 2.8. The Company guarantees certain third party debt; however, it has
not been and does not expect to be required to pay any amounts associated with
such debt. Therefore, related interest on such debt has not been included in the
ratio of earnings to fixed charges.
9
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations and
- -------------------------------------------------------------------------
Financial Condition
-------------------
The following provides information that management believes is relevant
to an assessment and understanding of the consolidated results of operations and
financial condition of Newmont Mining Corporation ("NMC") and its subsidiaries
(collectively, "Newmont"). The discussion should be read in conjunction with
Management's Discussion and Analysis included in Newmont's Annual Report on Form
10-K.
SUMMARY
Newmont earned $6.6 million ($0.04 per share) in the first quarter of 2000
compared with net income of $9.9 million ($0.06 per share) in the first quarter
of 1999. In the first quarter of 2000 and 1999, start-up losses related to the
Batu Hijau copper/gold mine in Indonesia and were reflected in Equity loss of
affiliate ($8.1 million, or $0.05 per share, and $3.1 million, or $0.02 per
share, respectively).
Average realized gold prices of $288 per equity ounce in the first quarter
of 2000 compared to $293 in the prior year quarter. Total cash costs per equity
ounce declined to $176 from $181, and total production costs declined $6 to $230
per equity ounce. Total equity gold production was 1,068,000 ounces compared
with 956,100 ounces in the first quarter of 2000 and 1999, respectively.
MARKET CONDITIONS AND RISKS
METAL PRICE
Changes in the market price of gold significantly effect Newmont's
profitability and cash flow. Gold prices can fluctuate widely and are affected
by numerous factors, such as demand; forward selling by producers; central bank
sales, purchases and lending; investor sentiment and production levels. The gold
price fell to a 20-year low of $253 in July 1999 and since has recovered to a
$280 per-ounce-range. Changes in the market price of copper also affect
Newmont's profitability and cash flow from its Batu Hijau mine in Indonesia.
Newmont generally sells its production at market prices, but has forward
sales contracts for 93,750 ounces for the remainder of 2000 from its Minahasa
mine in Indonesia at an average price of $454 per ounce. Following the July 1999
decline in gold spot market prices, Newmont entered into two put and call option
contracts to provide a measure of price protection. As described in Note 6 (c),
the purchase of near-term put option contracts at a strike price of $270 per
ounce was paid for by selling call option contracts for 2.35 million ounces,
with strike prices between $350 and $392 per ounce, expiring in 2004 through
2009. The call options are marked to market at each quarter-end and the
resulting gains or losses may fluctuate significantly, primarily depending upon
gold spot market prices and volatility.
FOREIGN CURRENCY
In addition to the U.S., Newmont has operations in Peru, Uzbekistan and
Indonesia. Gold produced at these operations is sold in the international
markets for U.S. dollars. The cost and debt structures at these operations are
also primarily U.S. dollar denominated. To the extent that there are
fluctuations in local currency exchange rates against the U.S. dollar, the
devaluation of a local currency is generally economically neutral or beneficial
to the operation since local salaries and supply contracts will decrease against
the U.S. dollar revenue stream.
The functional currency for Newmont's Indonesian projects is the U.S.
dollar; however, certain receivables, primarily refunds of Value Added Tax, are
rupiah-denominated. During the three months ended March 31, 2000 and 1999, $1.3
million and $1.1 million, respectively, was charged to Costs applicable to sales
to reflect the devaluation of these receivables.
10
<PAGE>
RESULTS OF OPERATIONS
PRODUCTION
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
March 31,
-------------------------
2000 1999
-------- ------
<S> <C> <C>
Equity gold production ozs. (000):
North American operations:
Nevada operations 609.4 606.7
Mesquite 30.7 41.7
La Herradura 10.3 6.7
Minera Yanacocha 222.6 173.9
Zarafshan-Newmont 63.3 54.9
Minahasa 99.7 72.2
Batu Hijau 32.0 --
-------- ------
Total 1,068.0 956.1
======== ======
Total cash costs per equity ounce:
North American operations:
Nevada $ 222 $ 209
Mesquite 205 142
La Herradura 152 195
Minera Yanacocha 88 114
Zarafshan-Newmont 118 183
Minahasa 119 130
Batu Hijau n/a n/a
Weighted average $ 176 $ 181
</TABLE>
Total cash costs include charges for mining ore and waste associated with
current period gold production, processing ore through milling and leaching
facilities, production taxes, royalties and other cash costs. Batu Hijau costs
are reported per pound of copper, with gold revenue as a by-product credit.
NORTH AMERICAN OPERATIONS
Newmont's Nevada operations are along the Carlin Trend near Elko and in the
Winnemucca Region, where the Twin Creeks and the Lone Tree Complex mines are
located.
Production in the first quarter of 2000 was 2,700 ounces more than in the
comparable 1999 period. Total cash costs increased to $222 per ounce as the mix
of refractory to oxide ores increased to 61% from 49%. Nevada production in 2000
is expected to exceed 2.7 million ounces with total cash costs under $210 per
ounce.
Production at the Mesquite mine, a heap-leach operation in southern
California, was 11,000 less than in the prior year quarter with total cash costs
per ounce of $205 compared with $142 in the first quarter of 1999. Higher costs
resulted from higher waste-to-ore ratios and the commencement of third-party
royalties in the third quarter of 1999. Production in 2000 is expected to
exceed 150,000 ounces with total cash costs below $185 per ounce.
La Herradura, a 44%-owned non-operated joint venture in Mexico, produced
10,300 equity ounces in the first quarter of 2000 at a total cash cost of $152
per ounce.
OVERSEAS OPERATIONS
Production at Minera Yanacocha in Peru increased 28% to 433,500 ounces
(222,600 equity ounces) in the first quarter of 2000 from 338,700 ounces
(173,900 equity ounces) in the same period of 1999. Higher production reflected
an increase in ore tons mined that more than offset decreased average ore
grades. Total cash costs declined to $88 per ounce from $114 per ounce in the
1999 quarter with higher production and productivity and assumption of
previously contracted mining. Estimated gold production for 2000 is expected to
reach 1,950,000 ounces (1,000,000 equity ounces) at a total cash cost below $90
per ounce.
In the first quarter of 2000, production from Zarafshan-Newmont, a
50%-owned joint venture in the Central Asian Republic of Uzbekistan, increased
15% from the first quarter of 1999, primarily from improved recoveries of gold
from leach ore. Total cash costs per ounce of $118 in the first quarter of 2000
were significantly below those in the same 1999 period when recoveries were
lower. Production in 2000 is expected to exceed 200,000 equity ounces with total
cash costs below $140 per ounce.
11
<PAGE>
In Indonesia, at Newmont's 80%-owned Minahasa property, production
increased 38% in the three months ended March 31, 2000 over the comparable 1999
quarter with higher mill ore grades and recovery rates and with the commencement
of leach operations in the third quarter of 1999. Total cash costs per ounce
declined 8% as a result of improved productivity and efficiency. Production is
expected to exceed 360,000 ounces in 2000 with total cash costs below $125 per
ounce.
The Batu Hijau mine in Indonesia, that commenced production in the fourth
quarter of 1999, produced 107.6 million pounds of copper (60.5 million equity
pounds) and 59,300 ounces of gold (32,000 equity ounces) during the first three
months of 2000. Copper sales totaled 110.1 million pounds (61.9 million equity
pounds) at a total cash cost of $0.65 per pound, after gold sales credits.
Production in 2000 is expected to reach 540 million pounds of copper (300
million equity pounds) at a cash cost under $0.55 per pound, with gold
production at 325,000 ounces (180,000 equity ounces).
FINANCIAL RESULTS
Consolidated sales include 100% of Minera Yanacocha production and Newmont
equity production elsewhere, except for Batu Hijau, which is accounted for as an
equity investment. The increase in consolidated sales revenue in the first
quarter of 2000 from the comparable 1999 period resulted from higher production,
slightly offset by lower average realized gold prices received as shown in the
following table:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
2000 1999
-------- --------
<S> <C> <C>
Consolidated sales (in millions) $ 358.5 $ 327.1
Consolidated production ozs. (000) 1,246.9 1,120.9
Average price realized per consolidated ounce $ 288 $ 292
Average spot price received per ounce $ 283 $ 287
Three Months Ended
March 31,
------------------
2000 vs. 1999
------------------
Increase in consolidated sales due to (in millions):
Consolidated production $ 38.0
Average gold price received ( 6.6)
--------
Total $ 31.4
========
</TABLE>
Costs applicable to sales include total cash costs and provisions for
estimated final reclamation expenses related to consolidated production.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
2000 1999
------ ------
<S> <C> <C>
Costs applicable to sales (in millions)
North American operations:
Nevada $136.8 $128.1
Mesquite 6.3 5.9
La Herradura 1.6 1.3
Minera Yanacocha 41.1 41.5
Zarafshan-Newmont 7.6 10.1
Minahasa 12.1 9.5
------ ------
Total $205.5 $196.4
====== ======
</TABLE>
Depreciation, depletion and amortization
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
2000 1999
-------- -------
<S> <C> <C>
Depreciation, depletion and amortization (in millions):
North American operations:
Nevada operations $31.8 $30.9
Mesquite 2.7 1.8
La Herradura 0.6 0.4
Minera Yanacocha 16.3 15.8
Zarafshan-Newmont 2.8 2.8
Minahasa 5.8 5.8
Other 1.9 1.3
----- -----
Total $61.9 $58.8
===== =====
</TABLE>
12
<PAGE>
Interest expense, net of capitalized interest was $20.9 million for the
three months ended March 31, 2000, and $18.4 million for the same period in
1999. The 2000 increase reflected a lower proportion of capitalized interest
associated with the Newmont's investment in Batu Hijau.
Income tax expense in the first quarter of 2000 and 1999 was $6.5 million
at an effective rate of 14% and $5.6 million at an effective rate of 18%,
respectively. The effective tax rate in the 2000 period primarily reflected
increased percentage depletion benefits than in the comparable 1999 period.
Equity in loss of affiliate of $8.1 million and $3.1 million for the three
months ended March 31, 2000 and 1999, respectively, related to start-up losses
at Batu Hijau.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of 2000, cash flow from operations ($86.9 million)
and net borrowings ($85.0 million) funded capital expenditures ($47.4 million),
net advances to joint ventures and affiliates ($86.2 million) and dividends
($5.0 million). Newmont expects that operating cash flows for the 2000 year will
fund capital expenditures, advances to affiliates, dividends and consolidated
debt reduction, assuming gold price realizations comparable to those in the
first quarter of 2000.
INVESTING ACTIVITIES AND CAPITAL EXPENDITURES
Capital expenditures were as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
<S> <C> <C>
2000 1999
----- -----
Capital expenditures (in millions):
North American operations $15.5 $16.7
Overseas operations 31.4 16.0
Other projects and capitalized interest 0.5 4.3
----- -----
Total $47.4 $37.0
===== =====
</TABLE>
Expenditures for U.S. operations during the first quarter of 2000 primarily
related to activities in Nevada for deferred mine development ($4.9 million),
capitalized mining costs ($3.1 million) and underground equipment ($1.5
million). Overseas capital expenditures were primarily at Minera Yanacocha
($29.6 million) for development of the La Quinua project and other ongoing
expansion work. Capital expenditures in the 1999 period were primarily for
Nevada and Minera Yanacocha leach pad expansion projects and Nevada capitalized
mining.
Batu Hijau
Newmont has an indirect 45% interest in the Batu Hijau mine in Indonesia,
accounted for on an equity basis. Until recouping the bulk of its investment,
Newmont recognizes 56.25% of Batu Hijau's income. At March 31, 2000 and
December 31, 1999, Newmont's investment was $520.3 million and $438.3 million,
respectively. Funding of $91.8 million in the first quarter of 2000 was
included in Advances to joint ventures and affiliates for ongoing capital
expenditures and working capital requirements during the production ramp-up
period.
Construction of the mine, completed in the fourth quarter of 1999, was
funded through third party project loans of $1.0 billion and partner
contributions of $0.83 billion. The loans are guaranteed by Newmont and its
partner, Sumitomo Corporation ("Sumitomo"), 56.25% and 46.75%, respectively,
until project completion tests are met, and will be non-recourse thereafter
(except for a $125 million contingent support facility that Newmont and Sumitomo
will provide on a pro rata basis). Newmont expects that project completion tests
will be met during 2000. The lenders carry all political risk on their
investment. Debt repayments of $43.5 million semi-annually will begin the
earlier of six months after project completion or June 15, 2001.
FINANCING ACTIVITIES
During the first quarter of 2000, net borrowings of $90 million were made
under the $1.0 billion credit facility, with $300.0 million outstanding at March
31, 2000, and repayments of $5.0 million occurred under project financings for
Minera Yanacocha.
13
<PAGE>
DEVELOPMENTS IN INDONESIA
Newmont operates the Minahasa mine on the island of Sulawesi and the Batu
Hijau mine on the island of Sumbawa. Both are in remote locations and have been
largely unaffected by civil unrest coinciding with the recent period of
political and social change in Indonesia. Both mines operate under Contracts of
Work issued by the central government. Indonesia's new government has publicly
expressed its intention to uphold existing Contracts of Work.
On January 22, 2000, a regional court, the Tandano District Court, issued a
provisional judgment to shut down the Minahasa mine pending the outcome of a
court case submitted by a regional official involving the application of taxes
on overburden, or sand, gravel and rock lying over the ore body. The Indonesian
Ministry of Mines and Energy confirmed that taxes on overburden are not
applicable to the operation. However, on April 8, 2000, the District Court
issued an enforcement order for the closure of the mine by April 16, 2000. On
April 13, the chief justice of the Indonesian Supreme Court directed the Tondano
District Court to postpone enforcement of it closure order. On April 19, 2000,
a settlement was reached. The regional authority agreed that the taxes were not
applicable to overburden and withdrew its claims and the Minahasa operation
agreed to pay approximately $500,000 related to materials used to build a local
road as part of its community development program.
OTHER
All of Newmont Mining Corporation's ("the Corporation") business is
conducted through, and assets and liabilities are held by, Newmont Gold Company,
a wholly owned subsidiary of the Corporation. Management believes that the
holding company structure has served its purpose and that the continued
existence of the holding company complicates the corporate organization and adds
to overhead expense. As a result, the Corporation proposed to merge the
Corporation with and into Newmont Gold Company. Such proposal was submitted to
the Corporation's stockholders at its Annual Meeting held on May 4, 2000. The
proposal was approved and it is anticipated that such merger will be completed
by May 16, 2000.
As a result of the merger, the holding company will no longer exist and
Newmont Gold Company will be owned directly by the current stockholders of the
Corporation. After the merger Newmont Gold Company will become a publicly held
company and will change its name to "Newmont Mining Corporation" and continue to
be a Delaware corporation. Newmont Gold Company will have the same consolidated
assets, liabilities and stockholders' equity as the Corporation.
SAFE HARBOR STATEMENT
The foregoing discussion and analysis, as well as certain information
contained elsewhere in this Quarterly Report, contain "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and are intended to be covered by the safe harbor created
thereby. Such forward-looking statements include, without limitation, (i)
estimates of future gold production for specific operations and on a
consolidated basis, (ii) estimates of future production costs and other expenses
for specific operations and on a consolidated basis, (iii) estimates of future
capital expenditures and other cash needs for specific operations and on a
consolidated basis and expectations as to the funding thereof, (iv) estimates of
future costs and other liabilities for certain environmental matters and (v)
estimates of reserves.
Where Newmont expresses an expectation or belief as to future events or
results, such expectation or belief is expressed in good faith and believed to
have a reasonable basis. However, such forward-looking statements are subject to
risks, uncertainties and other factors, which could cause actual results to
differ materially from such forward-looking statements. Important factors that
could cause actual results to differ materially from such forward-looking
statements ("cautionary statements") are disclosed under "Risk Factors" in the
Newmont Annual Report on Form 10-K for the year ended December 31, 1999, as well
as other filings with the Securities and Exchange Commission. Many of these
factors are beyond Newmont's ability to control or predict. Readers are
cautioned not to put undue reliance on forward-looking statements.
All subsequent written and oral forward-looking statements attributable to
Newmont or to persons acting on its behalf are expressly qualified in their
entirety by the cautionary statements. Newmont disclaims any intent or
obligation to update publicly any forward-looking statements set forth in this
Report, whether as a result of new information, future events or otherwise.
14
<PAGE>
PART II - OTHER INFORMATION
- ----------------------------
ITEM 4. Submission Of Matters To A Vote Of Security Holders
------------------------------------------------------------
Registrant's annual meeting of stockholders was held on May 4, 2000.
All thirteen directors nominated to serve as directors of Registrant were
elected. The vote was as follows:
<TABLE>
<CAPTION>
Nominee Votes Withheld
<S> <C> <C>
V. A. Calarco 142,693,325 1,015,244
R. C. Cambre 142,771,221 937,348
J. T. Curry, Jr. 142,774,976 933,593
J. P. Flannery 142,730,452 978,117
L. I. Higdon, Jr. 138,680,761 5,027,808
R. J. Miller 142,737,267 971,302
W. W. Murdy 142,791,147 917,422
R. A. Plumbridge 142,769,962 938,607
R. H. Quenon 142,767,161 941,408
M. A. Qureshi 142,752,735 955,834
M. K. Reilly 142,780,006 928,563
J. V. Taranik 142,770,750 937,819
W. I. M. Turner, Jr. 142,737,400 971,169
</TABLE>
The proposal to eliminate Registrant as a holding company was approved by
85.1% of Registrant's outstanding shares. The vote was as follows:
For: 142,732,976
Against: 351,265
Abstain: 624,328
Not voting: 24,081,052
-----------
167,789,621
===========
Registrant's 2000 Non-Employee Directors Stock Plan was approved by 72.3%
of the votes cast (including abstentions, but excluding shares not voted). The
vote was as follows:
For: 103,899,259
Against: 38,915,766
Abstain: 893,544
Not voting: 24,081,052
-----------
167,789,621
===========
The stockholder proposal that Registrant's stockholders request
Registrant's Board of Directors to allow stockholders to call special meetings
was rejected by 59% of the votes cast (including abstentions, but excluding
shares not voted). The vote was as follows:
For: 47,569,092
Against: 66,677,236
Abstain: 1,758,539
Not voting: 51,784,754
----------
167,789,621
===========
ITEM 6. Exhibits and Reports on Form 8-K
-------------------------------------------
(a) The exhibits to this report are listed in the Exhibit Index on Page 18
hereof.
15
<PAGE>
(b) Reports filed on Form 8-K during the quarter ended March 31, 2000:
None.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEWMONT MINING CORPORATION
(Registrant)
Date: May 15, 2000 /s/ BRUCE D. HANSEN
-------------------
Bruce D. Hansen
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: May 15, 2000 /s/ LINDA K. WHEELER
--------------------
Linda K. Wheeler
Vice President and Controller
(Principal Accounting Officer)
17
<PAGE>
Newmont Mining Corporation
EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C>
Exhibit Number Description
-------------- ------------------------------------------------------------------
10(a) - First Amendment to Newmont Mining corporation's Annual Incentive
Compensation Plan (Effective as of January 1, 1999).
10(b) - Newmont Mining Corporation 2000 Non-Employee Directors Stock Plan.
12 - Statement re Computation of Ratio of Earnings to Fixed Charges.
27 - Financial Data Schedule.
</TABLE>
18
<PAGE>
Exhibit 10(a)
FIRST AMENDMENT
TO
NEWMONT MINING CORPORATION
ANNUAL INCENTIVE COMPENSATION PLAN
(Effective as of January 1, 1999)
THIS FIRST AMENDMENT to the Newmont Mining Corporation Annual Incentive
Compensation Plan (effective as of January 1, 1999) (the "Plan") is effective as
of January 1, 1999.
RECITALS
--------
1. Effective as of January 1, 1999, Newmont Mining Corporation
(the"Corporation") adopted the Plan.
2. Pursuant to Section 8.6 of the Plan, the Board of Directors of the
Corporation reserved the right to amend the Plan at any time, upon the
recommendation of the Compensation Committee.
3. Upon the recommendation of the Compensation Committee, the Board has
authorized the amendment of the Plan, effective as of January 1, 1999, as set
forth below.
AMENDMENT
---------
1. Section 3.1 of the Plan is hereby amended by the addition thereto, at
the end, of the following new paragraph:
"Notwithstanding the foregoing provisions of this Section 6.1, for purposes
of computing the Unit Performance Bonus for Participants assigned to the
Consolidated Unit, 90% of the Unit Performance Percentage shall be based
upon the performance results of the Company's operations other than Batu
Hijau, resulting in the use of 63% in place of 70% in the above formula and
10% of the Unit Performance Percentage shall be based upon the performance
results for Batu Hijau. In order to reflect the Batu Hijau 1999 results,
based upon the economic benefit/detriment of actual versus targeted
capital, costs and production factors set forth on the attached Exhibit A,
7% of the Unit Performance Bonus for such Participants shall be based upon
the factors set forth on Exhibit A."
IN WITNESS WHEREOF, this First Amendment has been executed this 3rd day of
May, 2000, to be effective as of January 1, 1999.
NEWMONT MINING CORPORATION
ATTEST:
/s/ Janet K. Buda By: /s/ T. J. Schmitt
- ----------------- ------------------
Vice President
<PAGE>
EXHIBIT 10B
NEWMONT MINING CORPORATION
2000 NON-EMPLOYEE DIRECTORS
STOCK PLAN
1. Purposes. The purposes of the Newmont Mining Corporation 2000 Non-
Employee Directors Stock Plan are to provide Non-Employee Directors an
opportunity to acquire Common Stock, thereby promoting the long-term success
of the Company by maintaining the ability of the Company to attract and retain
the services of experienced and highly qualified individuals to serve as
outside directors on the Company's Board of Directors, providing incentives
for Non-Employee Directors' performance of services, aligning Non-Employee
Director interests with those of the Company's stockholders and linking Non-
Employee Director compensation to Company performance.
2. Definitions. As used in the Plan, the following capitalized terms shall
have the meanings set forth below:
"Affiliate"--(i) any corporation or limited liability company, other
than the Company, in an unbroken chain of corporations or limited liability
companies ending with the Company if each corporation or limited liability
company owns stock or membership interests (as applicable) possessing more
than fifty percent of the total combined voting power of all classes of
stock in one of the other corporations or limited liability companies in
such chain; (ii) any corporation, trade or business (including, without
limitation, a partnership or limited liability company) which is more than
fifty percent controlled (whether by ownership of stock, assets or an
equivalent ownership interest or voting interest) by the Company or one of
its other Affiliates; or (iii) any other entity, approved by the Board as
an Affiliate under the Plan, in which the Company or any of its other
Affiliates has a material equity interest.
"Agreement"--a written stock option award agreement evidencing an
Option, as described in Section 3(c).
"Annual Meeting"--the annual meeting of stockholders of the Company.
"Board"--the Board of Directors of the Company.
"Change of Control"--the occurrence of any of the following events:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of 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 (x) the
then outstanding shares of Common Stock (the "Outstanding Company Common
Stock") or (y) 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 (i), the following
acquisitions shall not constitute a Change of Control: (A) any
acquisition directly from the Company, (B) any acquisition by the
Company, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (D) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A), (B) and (C)
of subsection (iii) below; or
(ii) Individuals who, as of the effective date of the Plan,
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 effective date of the
Plan 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
<PAGE>
(iii) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of
the Company or an acquisition of assets of another corporation (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) 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, (B) 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 (C) 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
(iv) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
"Code"--the Internal Revenue Code of 1986, as it may be amended from
time to time, including regulations and rules thereunder and successor
provisions and regulations and rules thereto.
"Common Stock"--the $1.60 par value common stock of the Company.
"Company"--Newmont Mining Corporation, a Delaware corporation, or any
successor entity.
"Determined Amount"--an amount (rounded down to the nearest whole share)
equal to (a) $25,000 divided by (b) the Fair Market Value of a share of
Common Stock on the applicable Determination Date. The term "Determination
Date" shall mean (i) in the case of a person who is elected a director of
the Company at an Annual Meeting, the day of such Annual Meeting and (ii)
in the case of a person who is elected a director of the Company in any
year after the Annual Meeting, the effective date of such person's election
as a director of the Company.
"Eligible Transferee"--the meaning given such term in Section 7(d)
hereof.
"Exchange Act"--the Securities Exchange Act of 1934, as it may be
amended from time to time.
"Fair Market Value" of a share of Common Stock as of a given date shall
be the average of the high and low sales prices for a share of Common Stock
as reported for New York Stock Exchange issues in The Wall Street Journal
for such date; provided, however, that if there is no sale of shares of
Common Stock reported in The Wall Street Journal on such date, such fair
market value shall be the average between the bid and asked prices for a
share of Common Stock reported in The Wall Street Journal at the close of
trading on such date; provided further, however, that if no such prices are
reported for such day, the most recent day for which such prices are
available shall be used. In the event that the method for determining the
fair market value of a share of Common Stock provided for in the previous
sentence shall not be practicable, then such fair market value shall be
determined by such other reasonable valuation method as the Board shall, in
its discretion, select and apply in good faith as of the given date.
"Immediate Family Member"--of a Participant means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-
law, father-in-law, son-in-law, sister-in-law, or brother-in-law, including
adoptive relationships, of such Participant who shares the same household
with the Participant.
2
<PAGE>
"Non-Employee Director"--the meaning given such term in Section 5.
"Notice"--written notice actually received by the Company at its offices
on the day of such receipt, if received on or before 1:30 p.m., Denver time
(or such other location of the Company's principal executive offices), on a
day when the Company's offices are open for business, or, if received after
such time, such notice shall be deemed received on the next such day, which
notice may be delivered in person to the Company's Payroll Department or
sent by facsimile to the Company, or sent by certified or registered mail
or overnight courier, prepaid, addressed to the attention of the Company's
Payroll Department at 1700 Lincoln Street, Denver, Colorado 80203 (or such
other location of the Company's principal executive offices).
"Option"--a right to purchase Common Stock granted to an Optionee under
the Plan in accordance with the terms and conditions set forth in Section
6.
"Optionee"--a Non-Employee Director who has been selected, pursuant to
Section 3(b), to participate in the Plan and who holds an Option granted to
such individual under the Plan in accordance with the terms and conditions
set forth in Section 6.
"Participant"--a Non-Employee Director who is an Optionee or who holds a
Stock Award received under the Plan in accordance with the terms and
conditions set forth in Section 7.
"Plan"--this Newmont Mining Corporation 2000 Non-Employee Directors
Stock Plan.
"Rule 16b-3"--Rule 16b-3 under the Exchange Act, as such rule may be
amended from time to time.
"SEC"--the Securities and Exchange Commission.
"Securities Act"--the Securities Act of 1933, as it may be amended from
time to time, including the regulations and rules promulgated thereunder
and successor provisions and regulations and rules thereto.
"Stock Award"--an award of Common Stock received by a Non-Employee
Director under the Plan in accordance with the terms and conditions set
forth in Section 7.
3. Administration of the Plan. (a) The Board shall have exclusive authority
to operate, manage and administer the Plan in accordance with its terms and
conditions.
(b) Without limiting the generality of paragraph (a) of this Section 3, the
Board shall have the exclusive right and discretionary authority to: (i)
interpret the Plan and the Agreements; (ii) determine eligibility for
participation in the Plan; (iii) select, from time to time, from among those
eligible, the Non-Employee Directors to whom Options shall be granted under
the Plan; (iv) determine the number of shares of Common Stock to be included
in any Option and the periods for which Options will be outstanding; (v)
establish, amend, waive and/or rescind rules and regulations and
administrative guidelines for carrying out the Plan; (vi) accelerate the
exercisability or vesting of any Option or Stock Award when such acceleration
would be in the best interest of the Company; (vii) grant waivers of terms,
conditions, restrictions and limitations under the Plan or applicable to any
Option or Stock Award; (viii) correct any errors, supply any omissions or
reconcile any inconsistencies in the Plan and/or any Agreement or any other
instrument relating to any Option or Stock Award; (ix) to the extent permitted
by the Plan, amend or adjust the terms and conditions of any outstanding
Option or Stock Award and/or adjust the number and/or class of shares of
Common Stock subject to any outstanding Option or Stock Award; (x) at any time
and from time to time after the granting of an Option or Stock Award, specify
such additional terms, conditions and restrictions with respect to any such
Option or Stock Award as may be deemed necessary or appropriate to ensure
compliance with any and all applicable laws, rules and/or regulations,
including, but not limited to, (A) terms, restrictions and conditions for
compliance with Federal, state and foreign securities laws, (B) methods of
withholding or providing for the payment of required taxes and (C)
restrictions regarding an Optionee's ability to exercise Options under any
"cashless exercise" program established by the Board or using previously
purchased shares of Common Stock; and (xi) take any and all such other action
it deems necessary or advisable for the proper operation and/or administration
of the Plan. The Board shall have full discretionary authority in all matters
related to the discharge of its responsibilities and the exercise of its
authority under the Plan. Decisions and actions by the Board with respect to
the Plan and any Agreement shall be final, conclusive
3
<PAGE>
and binding on all persons having or claiming to have any right or interest in
or under the Plan and/or any Agreement. Options need not be uniform as to all
grants and recipients thereof.
(c) Each Option shall be evidenced by an Agreement, which shall be executed
by the Company and the Optionee to whom such Option has been granted, unless
the Agreement provides otherwise; however, two or more Options granted to a
single Optionee may be combined in a single Agreement. An Agreement shall not
be a precondition to the granting of an Option; however, no person shall have
any rights under any Option unless and until the Optionee to whom the Option
shall have been granted (i) shall have executed and delivered to the Company
an Agreement or other instrument evidencing the Option, unless such Agreement
provides otherwise, and (ii) has otherwise complied with the applicable terms
and conditions of the Option. The Board shall prescribe the form of all
Agreements, and, subject to the terms and conditions of the Plan, shall
determine the content of all Agreements. Any Agreement may be supplemented or
amended in writing from time to time as approved by the Board; provided that
the terms and conditions of any such Agreement as supplemented or amended are
not inconsistent with the provisions of the Plan.
(d) The Board may, in its discretion, allocate to any Non-Employee Director
or committee of Non-Employee Directors all or any portion of the Board's
responsibilities under this Section 3; provided, however, that no such
allocation by the Board shall be made if such allocation would not be
permitted under any applicable law, rule or regulation, or with respect to the
administration of the Plan as it affects such Non-Employee Director or Non-
Employee Directors and, provided further, however, the Board may not allocate
its authority to grant Options or correct errors, omissions or inconsistencies
in the Plan or any Agreement. All authority allocated by the Board under this
paragraph (d) of this Section 3 shall be exercised in accordance with the
terms and conditions of the Plan and any rules, regulations or administrative
guidelines that may from time to time be established by the Board, and any
such allocation may be revoked by the Board at any time.
4. Shares of Stock Subject to the Plan. (a) The shares of stock subject to
Options and Stock Awards granted under the Plan shall be shares of Common
Stock. Such shares of Common Stock subject to the Plan may be either
authorized and unissued shares (which will not be subject to preemptive
rights) or previously issued shares acquired by the Company or any Affiliate.
The total number of shares of Common Stock that may be delivered pursuant to
any Options and Stock Awards under the Plan is 400,000.
(b) Notwithstanding any of the foregoing limitations set forth in this
Section 4, the number of shares of Common Stock specified in this Section 4
shall be adjusted as provided in Section 11.
(c) Any shares of Common Stock subject to an Option which for any reason
expires or is terminated without having been fully exercised may again be
granted pursuant to an Option or Stock Award under the Plan, subject to the
limitations of this Section 4. If the Option exercise price of any Option is
satisfied by tendering shares of Common Stock to the Company (by either actual
delivery or attestation), only the number of shares of Common Stock issued net
of the shares of Common Stock tendered shall be deemed delivered for purposes
of determining the maximum number of shares available for delivery under the
Plan.
5. Eligibility. Each member of the Board shall be eligible to become an
Optionee and receive Options, and receive Stock Awards, all in accordance with
the terms and conditions of the Plan, provided that, as of the date of
granting of an Option or Stock Award, he or she is (a) not an employee of the
Company or an Affiliate and (b) not otherwise eligible for selection to
participate in any plan of the Company or any Affiliate that entitles a
participant therein to acquire securities or derivative securities of the
Company, other than any plan in which only directors described in clause (a)
are eligible to participate (any such eligible member of the Board, a "Non-
Employee Director").
6. Terms and Conditions of Stock Options. All Options to purchase Common
Stock granted under the Plan shall be nonstatutory stock options not intended
to qualify as "incentive stock options" within the meaning of Section 422 of
the Code or any successor or similar Code provision. Each Option shall be
subject to all the applicable provisions of the Plan, including the following
terms and conditions, and to such other terms and
4
<PAGE>
conditions not inconsistent therewith as the Board shall determine and which
are set forth in the applicable Agreement.
(a) The option exercise price per share of shares of Common Stock
subject to each Option shall be determined by the Board and stated in the
Agreement.
(b) Each Option shall be exercisable in whole or in such installments,
at such times and under such conditions as may be determined by the Board
in its discretion and stated in the Agreement, and, in any event, over a
period of time ending not later than ten years from the date such Option
was granted.
(c) An Option shall not be exercisable with respect to a fractional
share of Common Stock or the lesser of fifty shares or the full number of
shares of Common Stock then subject to the Option. No fractional shares of
Common Stock shall be issued upon the exercise of an Option.
(d) Each Option may be exercised by giving Notice to the Company
specifying the number of shares of Common Stock to be purchased, which
shall be accompanied by payment in full including applicable taxes, if any,
in accordance with Section 10. Payment shall be in any manner permitted by
applicable law and prescribed by the Board, in its discretion, and set
forth in the Agreement, including, in the Board's discretion, payment in
accordance with a "cashless exercise" program established by the Board.
(e) No Optionee or other person shall become the beneficial owner of any
shares of Common Stock subject to an Option, nor have any rights to
dividends or other rights of a shareholder with respect to any such shares,
until he or she has exercised his or her Option in accordance with the
provisions of the Plan and the applicable Agreement.
(f) An Option may be exercised only if at all times during the period
beginning with the date of the granting of the Option and ending on the
date of such exercise, the Optionee was a Non-Employee Director.
Notwithstanding the above, the Board may determine in its discretion that
an Optionee's Option may be exercised following termination of such
continuous service by such Optionee as a Non-Employee Director, whether or
not exercisable at the time of such termination, to the extent provided in
the applicable Agreement or otherwise.
7. Stock Awards. (a) On the first business day following the date of the
Annual Meeting in each year, commencing in 2000, each Non-Employee Director
who is elected or re-elected as a director of the Company at such Annual
Meeting shall receive, for service as a director of the Company previously
rendered and to be rendered during the year in which such Annual Meeting is
held, shares of Common Stock in the Determined Amount. If a person is elected
a director of the Company in any calendar year after the Annual Meeting held
in such calendar year, and qualifies as a Non-Employee Director, then such
person shall receive on the first business day following the effective date of
such person's election as a Non-Employee Director, for service as a director
of the Company to be rendered during such year, shares of Common Stock in the
Determined Amount. For avoidance of doubt, in no event shall any person be
entitled to receive more than one stock award during a single calendar year.
(b) A Non-Employee Director may forego any Stock Award under the Plan for
any year by giving irrevocable Notice to such effect to the Company on or
before December 31 of the immediately preceding year or, in the case of a
Stock Award to be made to a person on the effective date of such person's
initial election as a Non-Employee Director of the Company, on or prior to
such effective date.
(c) A Non-Employee Director shall not be required to make any payment for
any Stock Award granted under the Plan.
(d) Subject to the remainder of this paragraph (d) of this Section 7, a
Participant who receives a Stock Award shall have full beneficial ownership
of, and rights and privileges of a shareholder as to awarded shares, including
the right to vote and the right to receive dividends. The shares of Common
Stock comprising a Stock Award received by a Participant pursuant to the Plan
may not be sold, transferred, pledged, assigned or otherwise encumbered or
disposed of by such Participant until the earliest of (i) the expiration of
five years after the date of the receipt of such shares by such Participant,
(ii) the date such Participant ceases to be a director of the Company by
reason of death or disability (as determined, for purposes of this Section 7,
by the remaining members of the Board in good faith), or (iii) the later of
(x) the date such Participant ceases to be a director of
5
<PAGE>
the Company for any reason other than death or disability or (y) the
expiration of six months after the date of the receipt of such shares by such
Participant; provided, however, a Participant (1) may sell, transfer or assign
shares of Common Stock received by such Participant under a Stock Award to
Immediate Family Members of such Participant, or a trust, partnership, limited
liability company, corporation (including a personal holding company) or
similar vehicle established solely for the benefit of, or the partners,
members or shareholders of which are solely, the Participant and/or any such
Immediate Family Members (an "Eligible Transferee") or (2) may direct the
Company, by Notice to the Company prior to the date of issuance of any shares
of Common Stock that such Participant is entitled to receive pursuant to the
Plan, to issue such shares in the name of, and to deliver such shares to, an
Eligible Transferee of such Participant, provided that, in the case of clause
(1) or (2), the foregoing restrictions on transfer shall apply to such
Eligible Transferee.
8. Annual Retainers or Other Awards Payable in Options. The Board, in its
discretion, may determine that all or part of the annual retainers or other
awards, including, without limitation, Stock Awards, otherwise payable to Non-
Employee Directors under the Company's compensation practices for Non-Employee
Directors shall be payable in Options. Such Options shall be subject to such
terms as the Board may, in its discretion, determine, and shall be in
consideration of services previously performed and/or as an incentive toward
future services.
9. Rights of Non-Employee Directors and Other Persons. (a) No person shall
have any rights or claims under the Plan except in accordance with the
provisions of the Plan and the applicable Agreement.
(b) Nothing contained in the Plan or in any Agreement shall be deemed to
give any Non-Employee Director the right to be retained in the service of the
Company or any Affiliate nor restrict in any way the right of the Company or
any Affiliate to terminate any Non-Employee Director's service with the
Company or any Affiliate at any time with or without cause.
(c) The adoption of the Plan shall not be deemed to give any Non-Employee
Director or any other person any right to be selected as an Optionee or to be
granted an Option.
(d) Except pursuant to Section 7, nothing contained in the Plan or in any
Agreement shall be deemed to give any Non-Employee Directors the right to
receive any bonus, whether payable in cash or in Common Stock, or in any
combination thereof, from the Company, nor be construed as limiting in any way
the right of the Company to determine, in its sole discretion, whether or not
it shall pay any Non-Employee Directors bonuses, and, if so paid, the amount
thereof and the manner of such payment.
10. Tax Withholding Obligations. (a) The Company is authorized to take
whatever actions are necessary and proper to satisfy all obligations of
Participants for the payment of all Federal, state, local and foreign taxes in
connection with any Options or Stock Awards (including, but not limited to,
actions pursuant to the following paragraph (b) of this Section 10).
(b) Each Participant shall (and in no event shall Common Stock be delivered
to such Participant with respect to an Option or Stock Award until), no later
than the date as of which the value of the Option or Stock Award first becomes
includible in the gross income of the Participant for income tax purposes, pay
to the Company in cash, or make arrangements satisfactory to the Company, as
determined in the Board's discretion, regarding payment to the Company of, any
taxes of any kind required by law to be withheld with respect to the Common
Stock subject to such Option or Stock Award, and the Company and any Affiliate
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to such Participant.
Notwithstanding the above, the Board may, in its discretion and pursuant to
procedures approved by the Board, permit a Participant to (i) elect
withholding by the Company of Common Stock otherwise deliverable to such
Participant pursuant to such Option or Stock Award (provided, however, that
the amount of any Common Stock so withheld shall not exceed the amount
necessary to satisfy required Federal, state, local and foreign withholding
tax obligations using the minimum statutory rate) and/or (ii) tender to the
Company Common Stock owned by such Participant (or by such Participant and his
or her spouse jointly) and acquired more than six months prior to such tender
in full or partial satisfaction of such tax obligations, based, in each case,
on the Fair Market Value of the Common Stock on the payment date as determined
by the Board.
6
<PAGE>
11. Changes in Capital. (a) The existence of the Plan and any Options or
Stock Awards granted hereunder shall not affect in any way the right or power
of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company
or an Affiliate, any issue of debt, preferred or prior preference stock ahead
of or affecting the Common Stock, the authorization or issuance of additional
shares of Common Stock, the dissolution or liquidation of the Company or any
Affiliate, any sale or transfer of all or part of its assets or business or
any other corporate act or proceeding.
(b)(i) Upon changes in the outstanding Common Stock (or other change in
corporate capitalization) by reason of a stock dividend, stock split, reverse
split, subdivision, recapitalization, merger, consolidation (whether or not
the Company is a surviving corporation), an extraordinary dividend, "spin-off"
or distribution payable in cash or property, combination or exchange of
shares, separation, reorganization or liquidation, or issuance by the Company
of shares of its capital stock without receipt of full consideration therefor,
or rights or securities exercisable, convertible or exchangeable for shares of
such capital stock, the aggregate number, class and kind of shares of stock
available under the Plan as to which Options and Stock Awards may be granted,
and the number, class and kind of shares under each outstanding Option and
Stock Award and the option exercise price per share applicable to such Options
shall be correspondingly adjusted by the Board in its discretion to preserve
the benefits or potential benefits intended to be made available under the
Plan or with respect to any outstanding Options or Stock Awards or otherwise
necessary to reflect any such change.
(ii) Fractional shares of Common Stock resulting from any adjustment in
Options pursuant to Section 11(b)(i) shall be aggregated until, and eliminated
at, the time of exercise of the affected Options. Fractional shares of Common
Stock resulting from any adjustment in Stock Awards pursuant to Section
11(b)(i) shall be eliminated from a Stock Award at the time of adjustment.
Notice of any adjustment shall be given by the Board to each Participant whose
Option or Stock Award has been adjusted and such adjustment (whether or not
such Notice is given) shall be effective and binding for all purposes of the
Plan.
(c) In the event of a Change of Control, except as otherwise provided in
the Agreement specifically with respect to a Change of Control: (1) the time
of exercise of Options which are outstanding shall be accelerated so that such
Options become immediately exercisable in full without regard to any
limitations of time or amount otherwise contained in the Plan or the
applicable Agreements and, in the event an Optionee terminates service on the
Board for any reason during the one year period following a Change of Control,
all exercisable Options held by such Optionee (or such Optionee's transferee)
shall remain exercisable until the first to occur of the first anniversary of
the Optionee's termination of service or the expiration of the initial Option
term, or until such later date otherwise provided by the Board or in the
applicable Agreement, (2) all outstanding Options shall immediately become
fully vested and nonforfeitable and (3) all restrictions on transfer, sale,
assignment, pledge or other disposition applicable to any shares of Common
Stock covered by a Stock Award shall immediately lapse. Upon the occurrence of
a Change of Control, the Board may, in its discretion, determine (A) that
Options shall be adjusted and make such adjustments by substituting for Common
Stock subject to such Options, stock or other securities of the surviving
corporation or any successor corporation to the Company, or any parent or
subsidiary thereof, or that may be issuable by another corporation that is a
party to the transaction, if such stock or other securities are publicly
traded, in which event the aggregate exercise price shall remain the same and
the amount of shares or other securities subject to such Option shall be the
amount of shares or other securities which could have been purchased on the
closing date or expiration date of such transaction with the proceeds which
would have been received by the Optionee if the Option had been exercised in
full prior to such transaction or expiration date and the Optionee exchanged
all of such shares in the transaction, and/or (B) that any outstanding Options
shall be converted into a right to receive in cash, as soon as practicable
following the Change of Control, an amount equal to the greater of (x) the
highest value of the consideration to be received in connection with such
transaction for one share of Common Stock and (y) the highest market trading
price of a share of the Common Stock reported in The Wall Street Journal
during the 30 consecutive trading days prior to the Change of Control, less
the per share exercise price of such Option, multiplied by the number of
shares of Common Stock subject to such Option. No Participant shall have any
right to prevent the consummation of any transaction affecting the number of
shares available to such Participant. Any actions or determinations of the
Board under
7
<PAGE>
this paragraph (b) of Section 11 need not be uniform as to all outstanding
Options and Stock Awards, nor treat all Participants identically.
Notwithstanding the foregoing adjustments, in no event may any Option be
exercised after ten years from the date it was originally granted.
12. Miscellaneous Provisions. (a) The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the issuance of shares upon exercise of
any Option. Proceeds from the sale of shares of Common Stock pursuant to
Options granted under the Plan shall constitute general funds of the Company.
The expenses of the Plan shall be borne by the Company.
(b) Except as otherwise provided in this paragraph (b) of Section 12, an
Option by its terms shall be personal and may not be sold, transferred,
pledged, assigned, encumbered or otherwise alienated or hypothecated otherwise
than by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of an Optionee only by him or her. The
foregoing to the contrary notwithstanding, at the Board's discretion, an
Agreement may permit the receipt or exercise of an Optionee's Option (or any
portion thereof) after his or her death by the beneficiary most recently named
by such Optionee in a written designation thereof filed with the Company, or,
in lieu of any such surviving beneficiary, by the legal representatives of
such Optionee's estate and/or an Option to be transferred by an Optionee
during his or her lifetime to such Optionee's alternate payee pursuant to a
qualified domestic relations order, as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules and
regulations thereunder. In the event any Option is exercised by the executors,
administrators, heirs or distributees of the estate of a deceased Optionee, or
such an Optionee's beneficiary or transferee, pursuant to the terms and
conditions of the Plan and the applicable Agreement, the Company shall be
under no obligation to issue Common Stock thereunder unless and until the
Company is satisfied, as determined in the discretion of the Board, that the
person or persons exercising such Option are the duly appointed legal
representative of the deceased Optionee's estate or the proper legatees or
distributees thereof or the named beneficiary or valid transferee, as the case
may be, of such Optionee. Further notwithstanding the foregoing to the
contrary, at the Board's discretion, an Agreement may permit the transfer of
an Option by the recipient thereof, subject to such terms, conditions and
limitations prescribed by the Board, and the applicable transferee of such
Option shall be treated under the Plan and the applicable Agreement as the
Optionee for purposes of any exercise of such Option.
(c) If at any time the Board shall determine, in its discretion, that the
listing, registration and/or qualification of shares of Common Stock upon any
national securities exchange or under any state, Federal or foreign law, or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
shares of Common Stock hereunder, no Option or Stock Award may be exercised or
paid in whole or in part unless and until such listing, registration,
qualification, consent and/or approval shall have been effected or obtained,
or otherwise provided for, free of any conditions not acceptable to the Board.
(d) The Board may require each person receiving Common Stock in connection
with any Option or Stock Award under the Plan to represent and agree with the
Company in writing that such person is acquiring the shares for investment and
not with a view to, or for sale in connection with, the distribution of any
part thereof. In addition, the shares of Common Stock received by a
Participant pursuant to the Plan may not be sold, transferred, pledged,
assigned or otherwise encumbered or disposed of except pursuant to an
available exemption from the registration requirements of the Securities Act.
Certificates for shares delivered under the Plan may include any legend which
the Company deems appropriate to reflect any or all of the foregoing
restrictions on transfers, together with the restrictions on transfer set
forth in Section 7(d), if applicable.
(e) By accepting any benefit under the Plan, each Participant and each
person claiming under or through such Participant shall be conclusively deemed
to have indicated their acceptance and ratification of, and consent to, all of
the terms and conditions of the Plan and any action taken under the Plan by
the Company or the Board.
(f) Neither the adoption of the Plan nor anything contained herein shall
affect any other compensation or incentive plans or arrangements of the
Company or any Affiliate, or prevent or limit the right of the Company or
8
<PAGE>
any Affiliate to establish any other forms of incentives or compensation for
their directors, or grant or assume options or other rights otherwise than
under the Plan.
(g) In the discretion of the Board, a Participant may elect irrevocably (at
a time and in a manner determined by the Board) prior to exercising an Option
or receiving a Stock Award that delivery of shares of Common Stock upon
exercise of such Option or receipt of such Stock Award shall be deferred until
a future date and/or the occurrence of a future event or events, specified in
such election. Upon the exercise of any such Option or receipt of such Stock
Award and until the delivery of any deferred shares, the number of shares
otherwise issuable to the Participant shall be credited to a memorandum
account in the records of the Company or its designee and any dividends or
other distributions payable on such shares shall be deemed reinvested in
additional shares of Common Stock, in a manner determined by the Board, until
all shares of Common Stock credited to such Participant's memorandum account
shall become issuable pursuant to the Participant's election.
(h) The Plan shall be governed by and construed in accordance with the laws
of the State of Delaware, except as superseded by applicable Federal law.
(i) The words "Section," "subsection" and "paragraph" herein shall refer to
provisions of the Plan, unless expressly indicated otherwise. Wherever any
words are used in the Plan or any Agreement in the masculine gender they shall
be construed as though they were also used in the feminine gender in all cases
where they would so apply, and wherever any words are used herein in the
singular form they shall be construed as though they were also used in the
plural form in all cases where they would so apply.
13. Limits of Liability. (a) Any liability of the Company or an Affiliate
to any Participant with respect to any Option or Stock Award shall be based
solely upon contractual obligations created by the Plan and any applicable
Agreement.
(b) Neither the Company nor an Affiliate nor any member of the Board, nor
any other person participating in any determination of any question under the
Plan, or in the interpretation, administration or application of the Plan,
shall have any liability, in the absence of bad faith, to any party for any
action taken or not taken in connection with the Plan, except as may expressly
be provided by statute.
14. Limitations Applicable to Options Subject to Section 16. Unless stated
otherwise in the Agreement, notwithstanding any other provision of the Plan,
any Option or Stock Award granted to a Non-Employee Director who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional
limitations set forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including Rule 16b-3 as it may be amended from time to time)
that are requirements for the application of such exemptive rule, and the Plan
and the applicable Agreement shall be deemed amended to the extent necessary
to conform to such limitations.
15. Amendments and Termination. The Board may, at any time and with or
without prior notice, amend, alter, suspend, or terminate the Plan; provided,
however, that no such amendment, alteration, suspension, or termination shall
be made which would materially adversely affect an outstanding Option or Stock
Award theretofore granted without the written consent of the holder of such
Option or Stock Award or which, without first obtaining approval of the
stockholders of the Company, would, except as is provided in Section 11(b),
increase the maximum number of shares of Common Stock that may be sold or
awarded under the Plan. The Board may amend the terms of any Option or Stock
Award theretofore granted, including any Agreement, retroactively or
prospectively, but no such amendment shall materially adversely affect an
outstanding Option or Stock Award without the written consent of the holder of
such Option or Stock Award. Notwithstanding the foregoing, the Board may amend
the Plan and/or any Option or Stock Award, including any Agreement, either
retroactively or prospectively, and without the consent of the applicable
Participant, so as to preserve or come within any exemptions from liability
under Section 16(b) of the Exchange Act, pursuant to the rules and releases
promulgated by the SEC (including Rule 16b-3).
16. Duration. The Plan shall become effective, after the Plan is adopted by
the Board, as of the date on which it is approved by the holders of a majority
of the outstanding Common Stock which is present and voted
9
<PAGE>
at an Annual Meeting. The Plan shall terminate upon the earliest to occur of
(a) the effective date of a resolution adopted by the Board terminating the
Plan or (b) ten years from the date the Plan is approved by the Company's
shareholders. No Option or Stock Award may be granted under the Plan after the
earliest of (a) and (b) of this Section 16 to occur; however, Options
theretofore granted may extend beyond such date.
No such termination of the Plan shall materially adversely affect the
rights of any Participant hereunder and all Options and Stock Awards
previously granted hereunder shall continue in force and in operation after
the termination of the Plan, except as they may be otherwise terminated in
accordance with the terms of the Plan or any applicable Agreement.
10
<PAGE>
Exhibit 12
NEWMONT MINING CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Amounts in thousands except ratio)
(Unaudited)
Three Months Ended
March 31, 2000
-------------------
Earnings:
Income before income taxes $21,280
Adjustments:
Net interest expense (1) 20,905
Amortization of capitalized interest 1,591
Portion of rental expense representative of interest 516
Undistributed loss of affiliate (8,104)
Minority interest 25,140
-------
$61,328
=======
Fixed Charges:
Net interest expense (1) $20,905
Capitalized interest 463
Portion of rental expense representative of interest 516
-------
$21,884
=======
Ratio of earnings to fixed charges 2.8
=======
(1) Includes interest expense of majority-owned subsidiaries and
amortization of debt issuance costs.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 90,633
<SECURITIES> 5,415
<RECEIVABLES> 48,509
<ALLOWANCES> 0
<INVENTORY> 334,879
<CURRENT-ASSETS> 567,312
<PP&E> 3,766,092
<DEPRECIATION> 1,830,929
<TOTAL-ASSETS> 3,437,799
<CURRENT-LIABILITIES> 216,380
<BONDS> 1,099,890
0
0
<COMMON> 268,562
<OTHER-SE> 1,189,091
<TOTAL-LIABILITY-AND-EQUITY> 3,437,799
<SALES> 358,510
<TOTAL-REVENUES> 361,485
<CGS> 205,485
<TOTAL-COSTS> 267,432
<OTHER-EXPENSES> 59,973
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,905
<INCOME-PRETAX> 46,420
<INCOME-TAX> 6,528
<INCOME-CONTINUING> 6,648
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,648
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
