<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Homestake Mining Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Homestake Mining Company
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registrations statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ---------------
1Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE> 2
HOMESTAKE MINING COMPANY
650 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94108
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 10, 1994
To the Shareholders of Homestake Mining Company:
The annual meeting of shareholders of Homestake Mining Company will be held
at the Hyatt Regency Hotel, 5 Embarcadero Center, San Francisco, California, on
Tuesday, May 10, 1994, at 11:00 a.m. local time, for the following purposes:
1. Election of five Class I Directors.
2. Approval of the appointment of Coopers & Lybrand as independent
auditors for 1994.
3. Transaction of such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 14, 1994,
as the record date for the determination of shareholders entitled to vote at the
annual meeting. Only shareholders of record at the close of business on March
14, 1994, will be entitled to vote at the meeting.
All shareholders are cordially invited to attend the meeting in person. TO
ENSURE THAT YOU ARE REPRESENTED AT THE MEETING, PLEASE FILL IN, SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, using the return envelope which
requires no postage if mailed in the United States. Your early attention to the
proxy will be greatly appreciated because it will reduce the cost your Company
incurs in obtaining voting instructions from its shareholders.
By Order of the Board of Directors
SIG
WAYNE KIRK
Secretary
March 25, 1994
<PAGE> 3
HOMESTAKE MINING COMPANY
650 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94108
March 25, 1994
PROXY STATEMENT
MAY 10, 1994 ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Homestake Mining Company ("Homestake" or
the "Company") for use at the annual meeting of shareholders of Homestake to be
held at the Hyatt Regency Hotel, 5 Embarcadero Center, San Francisco,
California, on Tuesday, May 10, 1994, at 11:00 a.m. local time, or any
postponement or adjournment thereof.
This Proxy Statement and the enclosed proxy card are first being sent to
Homestake's shareholders on or about March 25, 1994.
MATTERS TO BE CONSIDERED.
The following matters will be acted on at the annual meeting:
1. Election of five Class I Directors.
2. Approval of the appointment of Coopers & Lybrand as independent
auditors for 1994.
3. Transaction of such other business as may properly come before the
meeting.
VOTING SECURITIES AND VOTING RIGHTS.
Only shareholders of record on March 14, 1994, or their proxies, will be
entitled to vote at the annual meeting of shareholders. On March 14, 1994,
Homestake had 137,703,149 shares of common stock outstanding.
A majority of the shares of Homestake common stock outstanding must be
represented at the annual meeting in person or by proxy to constitute a quorum
for the transaction of business. Each share of common stock is entitled to one
vote on all matters other than the election of directors. In the election of
directors, each share of common stock is entitled to one vote for a nominee for
each director position. Homestake does not have cumulative voting. A
shareholders' list will be available for examination by shareholders at the
annual meeting.
VOTING PROCEDURE.
The shares represented by each properly executed proxy returned to
Homestake will be voted at the meeting as indicated on the proxy. If no
instructions are given, the persons authorized by the proxy will vote in favor
of election of the nominees named in this Proxy Statement and to approve the
appointment of Coopers & Lybrand as independent auditors for 1994. Any person
giving a proxy has the right to revoke it at any time before it is exercised (1)
by filing with the Secretary of Homestake a duly signed revocation or proxy
bearing a later date or (2) by voting in person at the meeting.
The Board of Directors is not aware of any matters other than those set
forth above which may come before the annual meeting. If any other matters are
properly presented to the meeting for action, unless contrary instructions are
given, the persons named in the enclosed form of proxy and acting thereunder
have the power to vote in accordance with their best judgment on such matters.
On voting for Class I Directors, the five nominees receiving the highest
number of votes will be elected. Approval of the appointment of independent
auditors will require the affirmative vote of a majority of the shares of
Homestake common stock represented at the meeting.
<PAGE> 4
If a proxy is marked with instructions to withhold authority to vote for
one or more director nominees or to abstain from voting on any matter, those
shares will be treated as represented at the meeting and entitled to vote in
determining whether a quorum is present. Withholding authority to vote for a
director nominee will not prevent that director nominee from being elected
except to the extent the failure to vote for the nominee results in another
nominee receiving a larger number of votes. In other matters where approval is
required by a majority of shares outstanding or represented at the meeting,
abstentions from voting on a matter will have the effect of a vote against the
matter.
If a broker indicates on a proxy that it is not voting shares on any
matter, the shares not voted will be counted for purposes of determining the
presence of a quorum at the meeting but will not be treated as represented at
the meeting or entitled to vote in respect of that matter.
SOLICITATION OF PROXIES.
The cost of solicitation of proxies will be borne by Homestake.
Solicitation of proxies may be made by officers, directors and employees of
Homestake in person, by telephone or by mail. In addition, brokers, banks and
other nominee holders will be reimbursed for expenses they incur in forwarding
proxy materials to and obtaining voting instructions from beneficial owners of
Homestake common stock. D.F. King & Co., Inc. has been engaged to assist with
proxy solicitation for a fee not to exceed $11,500 plus expenses.
PRINCIPAL HOLDERS OF HOMESTAKE COMMON STOCK.
On March 14, 1994, there were 21,830 record holders of Homestake common
stock.
As of the close of business on March 14, 1994, the only persons known to
Homestake to own beneficially five percent or more of the outstanding Homestake
common stock are:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS
----------------------------------------------------------------------------- ----------
<S> <C> <C>
Case, Pomeroy & Company, Inc.(1) 6,836,776 shares 5.00 %
529 5th Avenue,
Suite 1600
New York, NY 10017
FMR Corp.(2) 7,591,085 shares 5.52 %
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
- ------------
(1) Case, Pomeroy & Company, Inc. has the sole power to vote and to dispose of
its shares.
(2) The shares listed as beneficially owned by FMR Corp. are held (i) by FMR
Corp.'s wholly owned subsidiary, Fidelity Management & Research Company
("Fidelity"), which holds 7,074,362 shares (5.15%), and (ii) certain other
affiliated entities or funds for which FMR Corp. or an affiliate of FMR
Corp. is an investment adviser. Edward C. Johnson 3d, with family
associates, is the controlling shareholder of FMR Corp. The address of each
of Fidelity and Mr. Johnson is 82 Devonshire Street, Boston, Massachusetts
02109.
2
<PAGE> 5
The following table shows: (i) the number of shares of Homestake common
stock beneficially owned by directors and the five highest paid executive
officers, and all directors and executive officers as a group, as of February
28, 1994 (excluding shares which such persons have the right to acquire within
60 days of February 28, 1994 but do not actually own), (ii) the number of shares
of Homestake common stock which such persons have the right to acquire within 60
days of February 28, 1994 but do not actually own, and (iii) the total number of
shares of Homestake common stock which such persons own and have the right to
acquire within 60 days of February 28, 1994. The shares so shown include shares
held in Homestake's Savings Plan (determined as of December 31, 1993) for the
accounts of executive officers and share rights (determined as of February 28,
1994) granted under the Employees' Stock Option and Share Rights Plan--1988,
which entitle outside directors to receive shares on the date of ceasing to
serve as a director. Excluding the shares held by Case Pomeroy, but including
the shares which the identified persons have the right to acquire but do not
own, the shares of Homestake common stock beneficially owned by all directors
and executive officers as a group represent less than one percent of the total
number of shares of Homestake common stock outstanding.
<TABLE>
<CAPTION>
TOTAL
NUMBER OF SHARES NUMBER
BENEFICIALLY OWNED, RIGHT TO OF SHARES
EXCLUDING RIGHT TO ACQUIRE SHARES BENEFICIALLY
NAME ACQUIRE SHARES(1) WITHIN 60 DAYS OWNED
- ----------------------------------------------- ------------------- -------------- ---------
<S> <C> <C> <C>
M. Norman Anderson............................. 2,529 5,487 8,016
Hadley Case(2)................................. 128,099 1,103 129,202
Robert H. Clark, Jr.(2)(3)..................... 55,000 1,292 56,292
Harry M. Conger(4)............................. 173,376 373,349 546,725
G. Robert Durham............................... 5,000 842 5,842
Douglas W. Fuerstenau.......................... 1,300 1,315 2,615
Henry G. Grundstedt............................ 1,000 406 1,406
William A. Humphrey............................ 61,177 110,400 171,577
Robert K. Jaedicke............................. 400 1,291 1,691
John Neerhout, Jr.............................. 1,000 905 1,905
Stuart T. Peeler............................... 5,000 1,440 6,440
Glen L. Ryland................................. 2,800 1,276 4,076
Berne A. Schepman.............................. 1,300 1,336 2,636
Peter Steen.................................... 156,324 24,154 180,478
Gene G. Elam................................... 3,983 28,525 32,508
Wayne Kirk(5).................................. 1,654 26,225 27,879
Jack E. Thompson............................... 3,418 21,500 24,918
All Directors and Executive Officers as a Group
(23 persons)................................. 615,295 739,918 1,355,213
</TABLE>
- ------------
(1) In some instances voting and investment power is shared with the spouse of
the identified person.
(2) Does not include 6,836,776 shares owned by Case, Pomeroy & Company, Inc.
Hadley Case, with family associates, is the controlling shareholder of Case,
Pomeroy. Robert H. Clark, Jr. is a son-in-law of Hadley Case.
(3) Includes 5,000 shares owned by Mr. Clark's adult children as to which Mr.
Clark has voting and dispositive power.
(4) Includes 553 shares held of record by a Savings Plan Trust for Mr. Conger's
spouse. Mr. Conger disclaims beneficial ownership of these shares.
(5) Includes 200 shares held of record by two of Mr. Kirk's children. Mr. Kirk
disclaims beneficial ownership of these shares.
Messrs. Fuerstenau, Peeler and Schepman respectively hold 2,000, 35,000,
and 35,000 common shares of Homestake Gold of Australia Limited ("HGAL"), an
81.5 percent owned subsidiary of the Company which is publicly traded in
Australia. The total HGAL shares owned by all directors and executive officers
of the Company is less than 0.02 percent of the outstanding HGAL common shares.
3
<PAGE> 6
Mr. Steen holds currently exercisable options to acquire 22,222 common
shares of Prime Resources Group Inc. ("Prime"), a 54.2 percent owned subsidiary
of the Company which is publicly traded in Canada. The shares owned by all
directors and executive officers of the Company is less than one percent of the
outstanding Prime shares.
Section 16(a) of the Securities Exchange Act of 1934 and related rules
require the Company's directors, executive officers and more than 10%
shareholders to file reports of beneficial ownership and changes in beneficial
ownership with the Securities and Exchange Commission and with the Company.
Based on its review of reports of beneficial ownership filed with the Company
and written representations of directors and executive officers, the Company
believes that with respect to transactions occurring during 1993 all of its
directors, executive officers and more than 10% shareholders timely filed all
reports of beneficial ownership required under Section 16(a). On a Form 4 report
for December 1993, Harry M. Conger reported the ownership of 553.4 shares of
Homestake common stock that were held in a trust for the sole benefit of his
wife at the time of their marriage in February 1991, and that continue to be
held in that trust for the sole benefit of his wife. The possible acquisition
and ownership by Mr. Conger of an interest in those shares was not previously
reported by Mr. Conger. Mr. Conger denies any direct or indirect interest in
those shares. On a Form 5 report filed in February 1994, Peter Steen reported
the beneficial ownership of 15,000 shares of Homestake common stock not
previously reported. Such shares were held in an escrow account for the benefit
of Mr. Steen and were distributed to Mr. Steen in June 1993 when the escrow was
dissolved. With the foregoing possible exceptions, the Company believes that no
directors, executive officers or more than 10% shareholders reported in 1993 a
transaction or ownership of shares that should have been reported in an earlier
year.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors of Homestake consists of fourteen members, divided
into three classes with staggered terms of three years each. Five Class I
Directors are to be elected at the annual meeting. The persons authorized by the
enclosed form of proxy will vote each proxy received by them for the election of
the five nominees named below unless contrary instructions are given. The term
of office for all Class I Directors will commence on election. Glen L. Ryland,
one of the five Class I Director nominees, will become age 70 prior to the
Company's 1995 annual meeting of shareholders. In accordance with the Company's
retirement policy for directors, Mr. Ryland is expected to retire as a director
immediately prior to the 1995 annual meeting of shareholders. At the time of Mr.
Ryland's resignation, it is expected that the Board of Directors will amend the
Company's by-laws to reduce the number of directors to 13, thereby eliminating
the resulting vacancy. The term of office for all other Class I Directors will
continue until the annual meeting in 1997 or until their successors are elected
and qualified.
Each nominee has consented to be named in this Proxy Statement and to serve
if elected. If any nominee should become unable to serve as a director prior to
the annual meeting, the persons authorized by the proxy will vote for the
election of a substitute nominee recommended by the Nominating Committee of the
Board of Directors in place of that nominee.
THE BOARD OF DIRECTORS OF HOMESTAKE RECOMMENDS A VOTE FOR THE ELECTION OF
THE FIVE CLASS I NOMINEES NAMED BELOW. PROXIES SOLICITED BY THE BOARD OF
DIRECTORS WILL BE VOTED FOR THE NAMED NOMINEES UNLESS INSTRUCTIONS ARE GIVEN TO
THE CONTRARY.
4
<PAGE> 7
INFORMATION CONCERNING NOMINEES FOR ELECTION AS CLASS I DIRECTORS TO SERVE UNTIL
1997 ANNUAL MEETING.
Certain information as to each nominee for election as a Class I Director
is set forth in the table below. The information appearing in the table and the
information regarding beneficial ownership of securities by such nominees
contained in this Proxy Statement has been furnished to Homestake by the
nominees.
<TABLE>
<CAPTION>
AGE AT DIRECTOR
MAY 10, 1994 SINCE BIOGRAPHICAL INFORMATION
------------ -------- --------------------------------------
<S> <C> <C> <C>
M. Norman Anderson............ 63 1992 Mr. Anderson is President of Norman
Anderson & Associates Ltd. (mining
consultants). Mr. Anderson was a
director of Homestake Canada Inc.
(formerly named International Corona
Corporation) from 1987 to 1993, and
was the Chairman of the Board of
Directors of Homestake Canada Inc.
from February 1991 to July 1992, when
the Company acquired the outstanding
voting shares of Homestake Canada Inc.
He is a director of Prime Resources
Group Inc. (gold mining), Gulf Canada
Resources (oil and gas production),
Solv-ex Corporation (processing tar
sands), Finning Ltd. (construction
equipment sales and service), and
Toronto Dominion Bank.
Robert H. Clark, Jr.*......... 53 1984 Mr. Clark has been Chief Executive
Officer since 1993, President since
1983, and a director since 1968 of
Case, Pomeroy & Company, Inc. (mining,
oil and gas, real estate). He is a
director of Putnam Trust Company
(banking). He was Executive Vice
President of Felmont Oil Corporation
from 1979 until Felmont was acquired
by Homestake in 1984.
Douglas W. Fuerstenau......... 65 1977 Mr. Fuerstenau has been P. Malozemoff
Professor of Mineral Engineering since
1987 (emeritus since January 1, 1993)
and since 1959 has been a Professor of
Metallurgy, Department of Materials
Science and Mineral Engineering,
University of California, Berkeley.
Glen L. Ryland................ 69 1983 Mr. Ryland has been President and a
director of RYCO, Inc. (management
consulting) since 1985. He was
Chairman of the Board and Chief
Executive Officer of Frontier
Holdings, Inc. (air transportation)
until 1984. He is a director of US
West, Inc. (telecommunications).
Berne A. Schepman............. 67 1973 Mr. Schepman has been President of
Adair Company (management consulting)
since 1982. He is a director of
Homestake Gold of Australia Limited.
</TABLE>
- ------------
* See "Certain Transactions with Affiliates and Indebtedness of Directors and
Officers--Shareholder Agreement with Case Pomeroy" regarding the agreement
with the Company under which Mr. Clark is entitled to be nominated as a
director. Mr. Clark is the son-in-law of Hadley Case.
5
<PAGE> 8
INFORMATION CONCERNING CONTINUING DIRECTORS.
Certain information as to each director who will continue in office is set
forth in the following tables. The information appearing in the tables and the
information regarding beneficial ownership of securities by such directors
contained in this Proxy Statement has been furnished to Homestake by the
directors.
CLASS II DIRECTORS TO SERVE UNTIL 1995 ANNUAL MEETING:
<TABLE>
<CAPTION>
AGE AT DIRECTOR
MAY 10, 1994 SINCE BIOGRAPHICAL INFORMATION
------------ -------- --------------------------------------
<S> <C> <C> <C>
Henry G. Grundstedt........... 65 1992 Mr. Grundstedt is a mining consultant.
He was Executive Vice President of
Capital Guardian Trust Company (money
manager of pension and mutual funds)
from 1985 to 1991 and held other
executive positions with that firm
beginning in 1972, specializing in the
mining and metals industry.
William A. Humphrey........... 67 1982 Mr. Humphrey has been a mining
consultant since March 1993. He has
been Vice Chairman of Homestake since
July 1992, was President and Chief
Operating Officer of Homestake from
April 1991 to July 1992, and was an
Executive Vice President of Homestake
from 1981 to April 1991. He is a
director of Homestake Gold of
Australia Limited.
John Neerhout, Jr............. 63 1989 Mr. Neerhout has been Executive Vice
President of Bechtel Group Inc.
(engineering and construction) since
1986. He is a director and holds
executive positions with Bechtel Group
Inc. and other of its affiliated
companies. He is a director of
Eurotunnel Plc. (transportation).
Stuart T. Peeler.............. 64 1981 Mr. Peeler has been a petroleum
industry consultant since 1989. From
1982 until
1988 he was Chairman of the Board and
Chief Executive Officer of Statex
Petroleum, Inc. He is a director of
CalMat Company (aggregates, asphalt,
and property development), Chieftain
International, Inc. (oil and gas
exploration and production), Chieftain
International Funding Corp. (financial
services), and Homestake Gold of
Australia Limited.
Peter Steen................... 63 1992 Mr. Steen has been President and Chief
Operating Officer of Homestake since
July 1992. Mr. Steen has been a
director of Homestake Canada Inc.
since 1985 and was the President and
Chief Executive Officer of Homestake
Canada Inc. from April 1985 to
September 1992. He is a director of
Poco Petroleums Ltd. (oil and gas
production), and Prime Resources Group
Inc. (gold mining).
</TABLE>
6
<PAGE> 9
CLASS III DIRECTORS TO SERVE UNTIL 1996 ANNUAL MEETING:
<TABLE>
<CAPTION>
AGE AT DIRECTOR
MAY 10, 1994 SINCE BIOGRAPHICAL INFORMATION
------------ -------- --------------------------------------
<S> <C> <C> <C>
Hadley Case*.................. 85 1984 Mr. Case has been Chairman of the
Board of Case, Pomeroy & Company, Inc.
(mining, oil and gas, real estate)
since 1979, was Chief Executive
Officer from 1983 to 1993 and was
President from 1941 to 1983. He served
as Chairman of the Board and Chief
Executive Officer of Felmont Oil
Corporation from 1952 until Felmont
was acquired by Homestake in 1984.
Harry M. Conger............... 63 1977 Mr. Conger has been Chairman of the
Board of Homestake since 1982 and
Chief Executive Officer since 1978. He
was also President of Homestake from
1977 to 1986. He is a director of ASA
Limited (investment company), Baker
Hughes Incorporated (oil service and
equipment manufacturing), CalMat
Company (aggregates, asphalt, and
property development), and Pacific Gas
and Electric Company.
G. Robert Durham.............. 65 1990 Mr. Durham has been President and
Chief Executive Officer and a director
of Walter Industries, Inc. (building
materials, home building, mortgage
financing and natural resource
development) since June 1991. He was
Chairman of the Board and President of
Phelps Dodge Corporation (mining) from
1987 to 1989, President and Chief
Operating Officer from 1985 to 1987,
and held other executive positions
with Phelps Dodge Corporation or
affiliated corporations beginning in
1977. He is a director of Atlantic
Gulf Communities Corporation (planned
community development), a director of
GFC Financial Corporation (financial
services), and a trustee of Mutual
Life Insurance Company of New York.
Robert K. Jaedicke............ 65 1983 Mr. Jaedicke is a Professor (emeritus)
of Accounting at Stanford University
Graduate School of Business. He has
been on the Stanford faculty since
1961 and was Dean of the Graduate
School of Business from 1983 to 1990.
He is a director of Boise Cascade
Corporation (forest products and
paper), California Water Service
Company, Enron Corp. (natural gas and
liquid fuels), GenCorp (aerospace,
auto, polymer products), State Farm
Insurance Companies, and Wells Fargo &
Company and Wells Fargo Bank, N.A.
</TABLE>
- ------------
* See "Certain Transactions with Affiliates and Indebtedness of Directors and
Officers--Shareholder Agreement with Case Pomeroy" regarding the agreement
with the Company under which Mr. Case is entitled to be nominated as a
director. Mr. Case is the father-in-law of Robert H. Clark, Jr. So long as the
agreement is in effect, Mr. Case is not subject to the Company's retirement
policy for directors.
7
<PAGE> 10
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD.
Homestake's Board of Directors held 14 meetings during calendar year 1993.
The Board of Directors has five standing committees: Executive, Finance,
Audit, Compensation and Nominating.
The Executive Committee has authority to exercise most of the powers of the
Board of Directors. It is intended to function on a standby basis. The members
of the Committee are Messrs. Case, Conger (Chairman), Humphrey, Peeler, Schepman
and Steen. The Executive Committee held one meeting during 1993.
The Finance Committee reviews and makes recommendations to the Board of
Directors about proposed dividends, investments and financial matters. The
members of the Committee are Messrs. Clark, Conger, Grundstedt, Humphrey, Peeler
(Chairman), Ryland and Steen. The Finance Committee held four meetings during
1993.
The Audit Committee recommends to the Board of Directors appointment of the
firm of independent auditors to examine and report to shareholders on the
consolidated financial statements of Homestake, and receives and considers the
reports of the auditors. The Committee also oversees Homestake's internal
auditing and compliance with the Company's environmental policies and
environmental laws. The members of the Committee are Messrs. Anderson, Clark,
Jaedicke (Chairman), Neerhout and Ryland, all non-employee directors. The
Committee held three meetings during 1993.
The Compensation Committee evaluates and recommends to the full Board of
Directors the levels of executive compensation and benefits. The Compensation
Committee also administers the Company's stock option plans. The members of the
Committee are Messrs. Durham, Fuerstenau, Grundstedt, Jaedicke, Neerhout and
Schepman (Chairman), all non-employee directors. The Committee held four
meetings during 1993.
The Nominating Committee reviews and evaluates candidates for director,
including nominees recommended by shareholders, and makes recommendations on
candidates to the Board of Directors. Applications and communications relating
to candidates for director may be sent to the Secretary of Homestake at the
corporate offices in San Francisco. The members of the Committee are Messrs.
Anderson, Case, Durham, Fuerstenau (Chairman), Ryland and Schepman, all
non-employee directors. The Nominating Committee did not meet during 1993.
Each director attended at least 75 percent of the total number of meetings
of the Board of Directors and the respective committees on which he served. The
aggregate average attendance at meetings of the Board of Directors and its
committees was 94.8 percent.
COMPENSATION OF DIRECTORS.
A director of Homestake who is not an employee of Homestake receives an
annual retainer fee of $16,000 and each chairman of a committee of the Board of
Directors who is not an employee of Homestake receives an additional annual
retainer of $2,000. All directors, including employee directors, receive
attendance fees of $900 for each meeting of the Board of Directors and $800 for
each committee meeting. Directors who are non-residents of the State of
California also receive an additional amount equal to 13% of their retainers and
fees for meetings held in the State of California in order to compensate them
for possible double taxation of such amounts by the State of California and
their states or provinces of residence. Directors are entitled to defer
compensation under the Deferred Income Plan described below under "Compensation
of Executive Officers--Summary Compensation Table."
Under the Employees' Stock Option and Share Rights Plan--1988 ("1988
Plan"), certain automatic share rights are made available to directors who are
not employees of Homestake. For each year that the 1988 Plan is in effect, on
the eighth business day following the day on which Homestake's annual earnings
for the preceding year are released, each non-employee director on that date is
granted share rights entitling him to receive shares of Homestake common stock
for no consideration on the date he ceases to serve as a director.
8
<PAGE> 11
The number of shares covered by each annual share right grant is calculated by
dividing 10 percent of the compensation received for services as a director of
Homestake for the preceding calendar year by the average fair market value of
one share of Homestake common stock for the third through the seventh business
days following release of Homestake's earnings for the preceding calendar year.
Share rights are cancelled if an individual ceases to serve as a director within
three years from the date of grant, other than by reason of death, disability,
retirement at mandatory retirement age for directors, or termination within one
year following a change of control as defined in the 1988 Plan. For 1993, a
total of 1,921 share rights were granted under the 1988 Plan. No director was
credited with more than 176 share rights for 1993.
A director of HGAL who is not an employee of Homestake or HGAL receives an
annual retainer fee of A$25,000. All directors, including employee directors,
receive attendance fees of $1,800 for each meeting held in Australia and $900
for each meeting held in the United States. Messrs. Humphrey, Peeler and
Schepman are non-employee directors of HGAL, and Gene G. Elam is an employee
director.
A director of Prime who is not an employee of Homestake or Prime receives
an annual retainer of C$5,000 and attendance fees of C$500 for each board or
committee meeting. M. Norman Anderson is a non-employee director of Prime.
Under a consulting agreement with Hadley Case, Homestake Sulphur Company (a
wholly-owned subsidiary of the Company) pays Mr. Case an annual retainer of
$30,000, up to a maximum of $300,000. If Mr. Case dies or becomes disabled at
any time, Homestake Sulphur will continue making payments to him or his
designated beneficiary until a total of $300,000 has been paid. A total of
$285,000 has been paid under this agreement through December 31, 1993.
In July 1992, Homestake entered into a consulting agreement with Stuart T.
Peeler under which Mr. Peeler provides advisory services to the Company with
respect to its investment in the Main Pass 299 oil and sulphur project in the
Gulf of Mexico. The agreement is terminable by either party on 30 days' notice.
Mr. Peeler receives compensation at a rate of $1,000 for each day of service
under the agreement. For 1993, the Company paid $24,906 to Mr. Peeler under the
agreement.
In March 1993, Homestake entered into a consulting agreement with William
A. Humphrey under which Mr. Humphrey provides advisory services to the Company
with respect to various mining matters, principally involving Latin America. The
agreement is terminable by either party on 30 days' notice. Mr. Humphrey
receives compensation at a rate of $1,000 for each day of service under the
agreement. For 1993, the Company paid $17,000 to Mr. Humphrey under the
agreement.
See "Certain Transactions with Affiliates and Indebtedness of Directors and
Officers--Transaction with M. Norman Anderson" for information with respect to
amounts paid to Mr. Anderson in connection with the close-out of Mr. Anderson's
deferred payment right with Homestake Canada Inc.
9
<PAGE> 12
COMPENSATION OF EXECUTIVE OFFICERS.
Summary Compensation Table
The following table sets forth summary information regarding compensation
paid by Homestake and its subsidiaries for the years ended December 31, 1993,
1992 and 1991 to the chief executive officer and the other four highest
compensated executive officers of Homestake for 1993:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION --------------------
---------------------------------
OTHER AWARDS PAYOUTS
ANNUAL ---------- -------
COMPEN- SECURITIES LTIP ALL OTHER
NAME AND SATION UNDERLYING PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1) OPTIONS(#) ($) ($)(2)
- ------------------------ ----- --------- -------- -------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Harry M. Conger 1993 $465,000 $210,000 $ 17,500(3) 91,500 0 $ 10,500(4)
Chairman of the 1992 465,000 0 17,400(3) 61,000 0 15,984(5)
Board and Chief 1991 465,000 0 -- 53,800 $75,990 --
Executive Officer
Gene G. Elam 1993 235,000 83,000 900(6) 24,700 0 9,156(7)
Vice President, 1992 235,000 0 -- 37,400 0 14,658(8)
Finance and Chief 1991 210,000 0 -- 13,000 0 --
Financial Officer
Wayne Kirk 1993 300,000 105,000 -- 31,500 0 9,474(9)
Vice President, 1992 120,000 (10) 0 -- 35,000 0 217(11)
General Counsel 1991 -- -- -- -- -- --
and Corporate Secretary
Peter Steen 1993 385,000 175,000 98,750(12) 65,700 0 74,771(13)
President and 1992 164,983 (14) 0 29,801(15) 0 0 67,306(16)
Chief Operating 1991 -- -- -- -- -- --
Officer
Jack E. Thompson 1993 215,000 75,300 104,810(17) 28,200 0 8,619(18)
Executive Vice 1992 177,082 0 116,903(19) 55,500 0 10,966(20)
President 1991 150,000 (21) 0 -- 9,300 0 --
</TABLE>
- ------------
(1) In accordance with the rules of the Securities and Exchange Commission (the
"SEC"), the Company is not required to report "Other Annual Compensation"
for 1991. The Company is not required to report the value of personal
benefits for any year unless the aggregate dollar value exceeds the lesser
of 10 percent of the executive officer's salary and bonus or $50,000.
(2) In accordance with SEC rules, the Company is not required to report "All
Other Compensation" for 1991.
(3) Directors' fees.
(4) Consists of $8,254 (matching contribution to Savings Plan) and $2,246
(imputed income based on value of life insurance provided by the Company).
(5) Consists of $13,738 (matching contribution to Savings Plan) and $2,246
(imputed income based on value of life insurance provided by the Company).
(6) HGAL directors' fees.
(7) Consists of $7,810 (matching contribution to Savings Plan), $926 (imputed
income based on value of life insurance provided by the Company), and $420
(payment to reflect amount of matching contribution that would have been
made to Savings Plan had income not been deferred).
(8) Consists of $13,392 (matching contribution to Savings Plan), $926 (imputed
income based on value of life insurance provided by the Company), and $340
(payment to reflect amount of matching contribution that would have been
made to Savings Plan had income not been deferred).
(9) Consists of $8,254 (matching contribution to Savings Plan) and $1,220
(imputed income based on value of life insurance provided by the Company).
(10) Mr. Kirk joined the Company as Vice President, General Counsel and
Secretary in September 1992.
(11) Imputed income based on the value of life insurance provided by the
Company.
10
<PAGE> 13
(12) Consists of $44,340 (relocation expenses paid to or on behalf of Mr.
Steen), $36,910 (tax gross-up for relocation expenses), and $17,500
(directors' fees)).
(13) Consists of $7,448 (matching contribution to Savings Plan), $2,196 (imputed
income based on value of life insurance provided by the Company), $2,468
(premiums paid on life insurance policy purchased by International Corona
Corporation (now Homestake Canada Inc.)), and $62,659 (imputed interest on
interest-free loans from Homestake Canada Inc.).
(14) Mr. Steen became President and Chief Operating Officer of Homestake in July
1992 when International Corona Corporation was acquired by the Company.
(15) Consists of $16,893 (relocation expenses paid to or on behalf of Mr.
Steen), $6,808 (tax gross-up for relocation expenses) and $6,100
(directors' fees).
(16) Consists of $732 (imputed income based on value of life insurance provided
by the Company), $11,203 (premiums paid on life insurance policy purchased
by Homestake Canada Inc.), and $55,371 (imputed interest on interest-free
loans from Homestake Canada Inc.)
(17) Consists of $92,600 (cost-of-living adjustment in connection with Mr.
Thompson's foreign assignment), $9,000 (forgiveness of prior relocation
loan) and $3,210 (tax return preparation).
(18) Consists of $7,532 (matching contribution to Savings Plan) and $1,087
(imputed income based on value of life insurance provided by the Company).
(19) Consists of $60,432 (relocation expenses paid to or on behalf of Mr.
Thompson), $29,167 (cost-of-living adjustment in connection with Mr.
Thompson's foreign assignment), $15,614 (tax gross-up for relocation
expenses), $9,000 (forgiveness of prior relocation loan), $2,180 (financial
planning), and $510 (tax return preparation).
(20) Consists of $10,630 (matching contribution to Savings Plan) and $336
(imputed income based on value of life insurance provided by the Company).
(21) Mr. Thompson became an executive officer during 1991. All salary paid
during 1991, including salary paid to Mr. Thompson before he became an
executive officer, is included.
Under the Company's Deferred Income Plan, directors, officers and other key
employees selected by the Compensation Committee are permitted to defer income.
Under the plan, participants may elect to defer each year an amount not less
than $2,500 nor more than 100 percent of compensation. Amounts deferred are
credited with interest in an amount equivalent to the monthly Moody's Corporate
Bond Yield Average as published by Moody's Investors Service, Inc.
Agreements with Certain Executives
By an agreement between Harry M. Conger and Homestake dated July 16, 1982,
as amended February 23, 1990 ("Conger Agreement"), Mr. Conger will receive upon
retirement, for life, monthly compensation equal to 55 percent of the average of
his 36 consecutive months of highest compensation less one-half of his Social
Security benefits. On Mr. Conger's death before retirement (or for the remaining
portion of a ten-year period from the date of his retirement if his death occurs
after retirement), his surviving spouse will receive monthly for ten years the
amounts Mr. Conger would have received had he survived and thereafter 50 percent
of such amounts for her life. Under certain circumstances, retirement benefits
payable to Mr. Conger before age 65 will be suspended if he serves as a senior
executive of another enterprise with annual sales of over $100 million in the
preceding year other than following a merger or takeover of Homestake. A merger
or takeover is defined in the Conger Agreement as any of the following events:
(i) Homestake is a party to a merger or combination under the terms of which
less than 75 percent of the shares in the resulting company are owned by the
shareholders of Homestake immediately preceding such event; (ii) at least 75
percent in fair market value of Homestake's assets are sold, or (iii) at least
25 percent in voting power in election of directors of Homestake's capital stock
is acquired by any one person or group as that term is used in Rule 13d-5 under
the Securities Exchange Act of 1934. On termination of Mr. Conger's employment
with Homestake, all unexercised stock options become immediately exercisable and
may be surrendered to Homestake in exchange for a cash payment equal to the
excess of the market price over the option price. Mr. Conger is not entitled to
benefits if his employment is terminated for material acts of willful misconduct
or gross negligence.
11
<PAGE> 14
Homestake has severance agreements with Messrs. Elam, Kirk, Steen and
Thompson under which they are entitled to benefits in the event of a merger or
takeover (defined as in the Conger Agreement). Entitlement to benefits arises if
within three years of a merger or takeover, the executive's employment is
terminated or if he elects to terminate his employment following (i) a reduction
in salary or other benefits, (ii) a change in location of employment, (iii) a
change in position, duties, responsibilities or status inconsistent with the
executive's prior position or (iv) a reduction in responsibilities, titles, or
offices as in effect immediately before such merger or takeover. Benefits
payable under the agreements consist of (i) a lump sum cash payment equal to two
times the highest annual salary and bonus, including deferred compensation,
during the three-year period preceding termination, (ii) continuation of
participation in insurance and certain other fringe benefits for two years, and
(iii) relocation assistance to the extent not provided by another employer.
Benefits payable under the agreements are in lieu of any severance benefits
under Homestake's general severance policy. In July and August 1992, Homestake
acquired the outstanding voting securities of Homestake Canada Inc. (formerly
named International Corona Corporation). The acquisition is deemed to be a
"merger" for the purposes of the severance agreements held by Messrs. Elam and
Thompson. See "Retirement Plans -- Executive Supplemental Retirement Plan" below
for additional information as to an agreement with Mr. Steen regarding
retirement benefits.
STOCK OPTION PLANS.
Options Granted
The following table sets forth certain information with respect to options
granted during 1993 to each named executive officer under the 1988 Plan.
OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
% OF
TOTAL POTENTIAL REALIZABLE
NO. OF OPTIONS VALUE AT ASSUMED
SECURITIES GRANTED EXERCISE ANNUAL RATES OF STOCK
UNDERLYING TO OR PRICE APPRECIATION FOR
OPTIONS EMPLOYEES BASE OPTION TERM
GRANTED IN FISCAL PRICE EXPIRATION -----------------------
NAME (#)(1) YEAR ($/SH) DATE 5%(2) 10%(2)
- --------------------------------------------- --------- -------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Harry M. Conger 91,500 17.8% $12.175 3/2/03 $ 701,828 $1,771,280
Gene G. Elam 24,700 4.8 12.175 3/2/03 189,455 478,149
Wayne Kirk 31,500 6.1 12.175 3/2/03 241,613 609,785
Peter Steen 65,700 12.8 12.175 3/2/03 503,935 1,271,837
Jack E. Thompson 28,200 5.5 12.175 3/2/03 216,301 545,903
</TABLE>
- ------------
(1) Granted at fair market value on March 2, 1993 and vest in 25 percent
increments on the first through fourth anniversaries of the grant date.
Vesting of options is accelerated in specified circumstances, including upon
certain reorganizations and the commencement of certain tender offers.
(2) Compounded annually.
(3) During 1993, options held by Peter Steen to acquire common shares of
International Corona Corporation were converted into options to acquire
shares of Homestake common stock. See "Conversion of International Corona
Corporation Options to Homestake Options" below.
12
<PAGE> 15
Options Exercised
The following table sets forth certain information with respect to options
exercised during 1993 by each named executive officer.
AGGREGATED OPTION EXERCISES IN 1993
AND OPTION VALUES AT 1993 YEAR END
<TABLE>
<CAPTION>
NO. OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
VALUE AT YEAR END (#) AT YEAR END ($)
SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------- ----------- --------------- ---------------------
<S> <C> <C> <C> <C>
Harry M. Conger 0 0 311,824/174,100 $2,158,089/$1,362,485
Gene G. Elam 15,850 $ 116,656 15,000/59,250 29,063/493,559
Wayne Kirk 400 2,350 23,350/42,750 208,931/407,081
Peter Steen 0 0 7,729/73,429(1) 22,575/668,078(1)
Jack E. Thompson 27,550 165,941 15,315/76,225 70,344/643,828
</TABLE>
- ------------
(1) Includes options to acquire shares of Homestake common stock that were
acquired pursuant to the conversion of options to acquire International
Corona Corporation common shares. See "Conversion of International Corona
Corporation Options to Homestake Options" below.
Homestake's stock option plans permit optionees designated by the
Compensation Committee to pay part of the option price by delivering to
Homestake a promissory note. Each note bears interest and is secured by a pledge
of Homestake common shares with an aggregate market value at the time of
delivery of the note at least equal to the principal amount of the note. In
1993, no optionee under Homestake stock option plans had indebtedness in excess
of $60,000 to the Company in respect of stock options.
Conversion of International Corona Corporation Options to Homestake Options
Following the Company's acquisition of the outstanding voting shares of
International Corona Corporation (since renamed Homestake Canada Inc.),
unexercised Corona stock options continued to be outstanding and immediately
exercisable. In addition, there continued in existence deferred payment rights
with respect to Corona common shares, under which selected option holders who
had previously exercised options were entitled to defer payment for and receipt
of the shares until the market price for the shares equaled the exercise price.
A limited number of holders of deferred payment rights also had agreements with
Corona under which those holders were entitled, in the event of termination of
their employment with Corona, to close out their deferred payment rights by
electing to pay for the shares and to receive a payment from Corona in the
amount by which the exercise price under the deferred payment right exceeded the
market price of the Corona shares subject to the deferred payment right, plus an
additional amount sufficient to pay all income taxes associated with that
payment. During 1993, the Company offered to all holders of Corona options and
deferred payment rights the opportunity to substitute Homestake common stock for
the Corona common shares at the same ratio of Homestake common stock offered to
holders of Corona common shares in the acquisition of Corona (0.35 Homestake
common shares for one Corona common share), with a corresponding adjustment in
the option or deferred payment price, converted from Canadian to United States
dollars. By acceptance of the offer, Peter Steen's options for 22,083 Corona
common shares became options for 5,250 Homestake shares at an exercise price of
$17.70 (expiring October 31, 2001) and options for 2,479 Homestake shares at an
exercise price of $42.768 (expiring December 9, 1997). Also by acceptance of the
offer, M. Norman Anderson's options for 15,000 Corona common shares became
options for 5,250 Homestake shares at an exercise price of $17.70 (expiring
October 31, 2001). See "Certain Transactions with Affiliates and Indebtedness of
Directors and Officers--Transaction with M. Norman Anderson" for information
with respect to the close out of Mr. Anderson's deferred payment right with
Corona.
13
<PAGE> 16
RETIREMENT PLANS.
Retirement Plan
All full-time salaried employees of Homestake (approximately 500 persons)
participate in the Homestake Retirement Plan, a noncontributory defined benefit
plan ("Retirement Plan").
Under the Retirement Plan, participants accrue benefits at the rate of two
percent per year of service during the first 25 years and one-half percent for
each year of service thereafter. Normal retirement age under the Retirement Plan
is 65. Early retirement, with reduced benefits, is permitted after age 55 with
five years of service. The Retirement Plan is integrated with Social Security.
For a participant who retires at age 65 with 25 years of service, the monthly
benefit payable will be 50 percent of the average monthly compensation during
the 60 consecutive months of highest compensation (less one-half of the
participant's Social Security benefits). Benefits paid upon retirement are
subject to a cost-of-living increase, up to a maximum of three percent per year.
Vesting requires five years of service. Homestake makes annual actuarially
determined contributions to the Retirement Plan to provide the benefits to
retirees. Funding contributions are not segregated as to individual employees.
The following table shows selected estimated annual benefits payable upon
retirement at age 65 under the Retirement Plan for persons having specified
years of service and the indicated remuneration. The table includes amounts that
may be payable under the Supplemental Retirement Plan described below ("SRP").
Amounts shown are calculated on a straight life annuity basis and are shown
before deduction for one-half of Social Security benefits. For purposes of the
Retirement Plan and the SRP, the years of service as of December 31, 1993 for
Messrs. Conger, Elam, Kirk, Steen and Thompson are 18 years, 3 years, 1 year, 8
years and 12 years, respectively. For purposes of these plans, earnings include
salary and bonus but exclude directors' fees and other benefits that are
included in the Summary Compensation Table.
YEARS OF SERVICE
<TABLE>
<CAPTION>
AVERAGE
ANNUAL EARNINGS
(60 CONSECUTIVE
HIGHEST MONTHS) 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- --------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000 $ 30,000 $ 45,000 $ 60,000 $ 75,000 $ 78,750 $ 82,500
200,000 40,000 60,000 80,000 100,000 105,000 110,000
250,000 50,000 75,000 100,000 125,000 131,250 137,500
300,000 60,000 90,000 120,000 150,000 157,500 165,000
350,000 70,000 105,000 140,000 175,000 183,750 192,500
400,000 80,000 120,000 160,000 200,000 210,000 220,000
450,000 90,000 135,000 180,000 225,000 236,250 247,500
500,000 100,000 150,000 200,000 250,000 262,500 275,000
550,000 110,000 165,000 220,000 275,000 288,750 302,500
600,000 120,000 180,000 240,000 300,000 315,000 330,000
</TABLE>
Supplemental Retirement Plan
The Employee and Retirement Income Security Act of 1974 ("ERISA") imposes a
maximum limit on annual retirement benefits payable under retirement plans. For
1993, that annual limit was $115,641. In addition, the Tax Reform Act of 1986
("1986 Act") limits the amount of annual compensation that may be considered
under qualified retirement plans. In 1993, that annual limit was $235,840. Under
the SRP, executive officers and key employees selected by the Compensation
Committee will be entitled to a supplemental retirement benefit equal to the
difference between the full amount of their pension benefits determined under
the Retirement Plan and the maximum amount permitted to be paid under ERISA and
the 1986 Act. All of the officers identified in the Summary Compensation Table
are participants in the SRP.
14
<PAGE> 17
Executive Supplemental Retirement Plan
Homestake has established an Executive Supplemental Retirement Plan
("Supplemental Plan") for executive officers and key employees selected by the
Compensation Committee. Under the Supplemental Plan, participants accrue
benefits under the following formula. Service credit is determined by
multiplying 3 2/3 percent by years of service, up to a maximum of 15 years.
Service credit is then multiplied by average monthly compensation during the 36
consecutive months of highest compensation to determine a monthly retirement
benefit. The monthly benefit is reduced by one-half of Social Security benefits
and by benefits payable under all other Homestake retirement plans and those of
prior employers. Retirement is permitted at age 62 after 10 years of service,
although a participant who has attained age 60 and 10 years of service may elect
early retirement and receive a reduced benefit if approved by the Compensation
Committee. The Supplemental Plan is unfunded. The following table shows selected
estimated annual benefits payable under the Supplemental Plan, calculated on a
straight life annuity basis, assuming retirement at age 62, to persons having
specified years of service and the indicated average earnings before reductions
for integration with Social Security and also before reduction for other
Homestake retirement plans or those of prior employers. Payments under the
Supplemental Plan are not limited by ERISA or the 1986 Act. All of the officers
identified in the Summary Compensation Table are participants in the
Supplemental Plan. For purposes of the Supplemental Plan, the years of service
as of December 31, 1993 for Messrs. Conger, Elam, Kirk, Steen and Thompson are
15 years, 7 years, 1 year, 8 years and 12 years, respectively.
YEARS OF SERVICE
<TABLE>
<CAPTION>
AVERAGE
ANNUAL EARNINGS
(36 CONSECUTIVE
HIGHEST MONTHS) 10 YEARS 13 YEARS 15 YEARS
- --------------- -------- -------- --------
<S> <C> <C> <C>
$ 150,000 $ 55,000 $ 71,500 $ 82,500
200,000 73,333 95,334 110,000
250,000 91,667 119,167 137,500
300,000 110,000 143,000 165,000
350,000 128,333 166,835 193,500
400,000 146,668 190,668 220,000
450,000 165,000 214,500 247,500
500,000 183,333 238,335 275,000
550,000 201,667 262,169 302,500
600,000 220,000 286,002 330,000
</TABLE>
In partial consideration for Mr. Steen agreeing to terminate his employment
agreement with International Corona Corporation and foregoing certain rights
under that agreement, in 1993 the Company entered into an agreement with Mr.
Steen pursuant to which Mr. Steen is entitled to receive a minimum annual
retirement benefit under the Supplemental Plan equal to $80,000 per year
(subject to the reductions described above), regardless of whether he retires
prior to having 10 years of service under the Supplemental Plan.
15
<PAGE> 18
PERFORMANCE GRAPH.
Set forth below is a line graph comparing the cumulative total shareholder
return on Homestake common stock for the five years ended December 31, 1993,
based on the market price of the Homestake common stock and assuming
reinvestment of dividends, with the cumulative total return of companies on the
Standard & Poor's 500 Index and Standard & Poor's Gold Index.
THE FOLLOWING PERFORMANCE GRAPH SHALL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE INTO ANY FILING BY HOMESTAKE UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES EXCHANGE ACT OF 1934.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Homestake S & P 500 S & P GOLD
<S> <C> <C> <C>
1988 100 100 100
1989 154 132 145
1990 156 128 128
1991 132 166 104
1992 92 179 97
1993 185 197 178
</TABLE>
- ------------
* $100 invested on December 31, 1988 in stock or index, including reinvestment
of dividends. Fiscal years ending December 31.
16
<PAGE> 19
COMPENSATION COMMITTEE REPORT*
The Compensation Committee is responsible for administering the policies
that govern executive compensation. The Compensation Committee evaluates the
performance of management and recommends to the full Board of Directors the
compensation level for all officers and key employees. The Committee also
administers the Company's stock option plans and determines the amount of stock
options granted to officers and key employees. The Committee is comprised of six
non-employee directors.
The Company's executive compensation program has the following objectives:
- Attract and retain key executives critical to the long-term success
of the Company.
- Reward performance that benefits the shareholders.
The basic compensation program consists of both cash and long-term,
equity-based compensation. In addition, executives may participate in the
Company's Retirement Plan, the Supplemental Retirement Plan, and the Executive
Supplemental Retirement Plan (described elsewhere in this Proxy Statement), and
the Company's Savings Plan, which is generally available to all salaried
employees and which provides for Company matching contributions with employee
contributions. Executives may also defer income under the Deferred Income Plan.
Annual cash compensation consists primarily of a base salary and an annual
bonus under the Company's Bonus Plan. In order to emphasize performance and
success, the Company's policy is to pay base salaries that are generally
competitive with the median of base salaries paid by comparable companies, and
to reward performance by paying bonuses when the Company is profitable and when
individual performance or other extraordinary circumstances warrant special
recognition. The Compensation Committee determines and recommends to the Board
of Directors a base salary for each of the key executive officers, based upon
individual performance, responsibility and competitive factors, including
compensation in the mining industry. To that end, the Company, under the
direction of the Compensation Committee, conducts an annual survey of salary
increases nationally and also by companies believed to be comparable to the
Company (Amax Gold, American Barrick, Battle Mountain Gold, BHP Gold, Cypress
Minerals, Echo Bay Mining, Hecla Mining, Newmont, Pegasus Gold, Placer Dome and
Santa Fe Minerals), and the Compensation Committee uses that information in
recommending base salary levels.
Although the Compensation Committee gives some consideration to
profitability in determining base salaries, substantial weight is given to
profitability as well as individual performance and level of responsibility in
determining whether to recommend annual bonuses and the amount of bonuses. Under
the Bonus Plan, each executive officer is assigned a target bonus amount at the
beginning of each year based on a subjective evaluation of each person's level
of responsibility and potential contribution to the Company. At the end of each
year, the Compensation Committee evaluates Company profitability and individual
officer performance and applies a multiplier which has both a profitability
component and an individual performance component. The dollar amount of the
bonus as so calculated is equal to the target bonus amount times the
profitability multiplier and times the individual performance multiplier. The
Compensation Committee then recommends the bonuses for approval by the Board of
Directors. For the year 1993, the Compensation Committee adopted as a
profitability multiplier 50% for estimated net income of $30 million, increasing
to 100% for estimated net income of $50 million.
Long-term, equity-based compensation is provided through the grant of stock
options. The purpose is to provide key employees with an incentive to continue
as employees of the Company over a long term and to align their long-range
interests with those of the shareholders by providing the opportunity to have a
stake in the Company. The Compensation Committee reviews and approves stock
option awards to executive officers and other key employees of the Company and
its subsidiaries. The number of options awarded annually is generally based on a
formula. For each optionee an annual target gain is established based on salary
and a
- ---------------
* The Compensation Committee Report shall not be deemed to be incorporated
by reference in any filings of the Company under the Securities Act of 1933 or
the Securities Exchange Act of 1934.
17
<PAGE> 20
subjective evaluation of the perceived impact that the optionee may have on the
Company's success through performance of his or her responsibilities. A number
of options are granted which, assuming an appreciation of 12 percent per year
over five years, will give an amount of appreciation equal to the target gain.
The Compensation Committee does not consider the number of outstanding options
in determining annual option awards. The Compensation Committee has the
authority to determine the recipients of stock option awards, the terms of
options, and the number of shares subject to options. Stock options generally
vest over a four year period and have a 10 year term. Based on an independent
survey commissioned by the Company, as of September 1992 the value of
Homestake's long-term incentive grants have generally been equal to or somewhat
below those of comparable mining companies.
Chief Executive Officer. Evaluation of the Chief Executive Officer's
compensation is conducted by the Compensation Committee without the Chief
Executive Officer being present. In November 1992, after reviewing the proposed
levels of 1993 compensation for other mining company executives and also
considering the Company's 1991 and 1992 performance, the Compensation Committee
determined that it would be appropriate for the 1993 base salary for the Chief
Executive Officer to be set at the same base rate in effect at the end of 1991
and 1992 ($465,000), and that recommendation was accepted by the Board of
Directors. The Compensation Committee also recommended a target bonus equal to
45% of base salary. In November 1993, after considering the Company's estimated
profit performance and evaluating the individual performance of Mr. Conger, the
Committee recommended a 1993 bonus equal to 100% of the target bonus, and that
recommendation was accepted by the Board of Directors.
Other Executive Officers. In November 1992, after reviewing the proposed
levels of 1993 compensation for other mining company executives and also
considering the Company's 1992 performance, the Compensation Committee
determined that it would be appropriate for the 1993 base salary for all
executive officers to be set at the same base rate in effect at the end of 1992,
and that recommendation was accepted by the Board of Directors. The Compensation
Committee also recommended target bonuses ranging from 20% to 45% of base
salary. In November 1993, after considering the Company's estimated profit
performance and evaluating the individual performances of the executive
officers, the Committee recommended 1993 bonuses equal to 100% of the target
bonuses for such officers, and that recommendation was accepted by the Board of
Directors.
Limitation on Deductibility of Compensation. Section 162(m) of the
Internal Revenue Code limits the deductibility of compensation of the Chief
Executive Officer and four other highest paid executive officers to $1,000,000
per year (subject to certain exceptions). None of the Company's officers receive
annual compensation in excess of the maximum deductible amount. If, because of
competitive factors and individual performance, the Compensation Committee
should determine that it was appropriate to pay one or more executive officers
in excess of annual maximum deductible amount, the Compensation Committee would
expect to recommend such compensation.
March 14, 1994
COMPENSATION COMMITTEE
G. ROBERT DURHAM
DOUGLAS W. FUERSTENAU
HENRY G. GRUNDSTEDT
ROBERT K. JAEDICKE
JOHN NEERHOUT, JR.
BERNE A. SCHEPMAN, Chairman
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CERTAIN TRANSACTIONS WITH AFFILIATES AND
INDEBTEDNESS OF DIRECTORS AND OFFICERS
SHAREHOLDER AGREEMENT WITH CASE POMEROY.
In connection with Homestake's acquisition of Felmont Oil Corporation in
1984, Homestake, Case Pomeroy & Company, Inc., and Hadley Case entered into a
Shareholder Agreement, which agreement was amended in 1989, and further amended
on March 27, 1992. Mr. Case, with family associates including Robert H. Clark,
Jr., is the controlling shareholder of Case Pomeroy. See "Principal Holders of
Homestake Common Stock." The Shareholder Agreement provides that neither Case
Pomeroy nor Mr. Case nor persons controlled by them will acquire additional
Homestake shares without prior written consent of Homestake if the effect would
be to increase the voting power represented by their holdings of Homestake
shares on January 1, 1989. The Shareholder Agreement grants to Homestake certain
rights of first refusal in the event Case Pomeroy or Mr. Case elects to sell
Homestake shares other than (a) to Homestake or persons approved by Homestake,
(b) to Mr. Case or wholly-owned subsidiaries of Case Pomeroy (who, if they are
to receive more than two percent of the outstanding Homestake voting shares,
must agree to be bound by the terms of the Shareholder Agreement), (c) in
underwritten public offerings registered under the Securities Act of 1933
("Securities Act"), (d) in transactions complying with the volume limitations of
Rule 144 under the Securities Act, (e) to persons who would not hold one percent
or more of the outstanding Homestake voting shares or, (f) pursuant to a tender
or exchange offer.
Until the Shareholder Agreement terminates, Homestake has agreed that so
long as Mr. Case and Mr. Clark are able to serve as directors of Homestake, Case
Pomeroy is entitled to designate Mr. Case and Mr. Clark as nominees. If both Mr.
Case and Mr. Clark are unable to serve or cease to serve as directors of
Homestake for any reason, Case Pomeroy is entitled to designate one person,
approved by Homestake, to fill the vacancy until such other nominee is elected
and qualified. Except as discussed below, most provisions of the Shareholder
Agreement will terminate on the earlier of December 31, 1996, or the date on
which Case Pomeroy, Mr. Case and all persons controlled by either of them cease
to own, in the aggregate, securities having at least three percent of the voting
power of Homestake.
Each of Homestake and Case Pomeroy indirectly owns a 25 percent undivided
co-tenancy interest in the Round Mountain mine in Nye County, Nevada, under the
terms of an Operating Agreement with Round Mountain Gold Corporation, the owner
of a 50 percent undivided interest and the manager of the mine. The Shareholder
Agreement provides that whenever any action is to be taken pursuant to the
Operating Agreement that requires consent or approval of a majority of the
co-tenancy interests, Case Pomeroy and Homestake will cause their respective
subsidiaries to agree to take such action as they agree upon in advance. The
Shareholder Agreement also provides that neither Case Pomeroy, nor Homestake,
nor their respective subsidiaries will, directly or indirectly, transfer any
interest in the Round Mountain mine without the approval of the other. Approval
of a majority of the co-tenancy interests is required for most budgets and work
programs carried out by the manager of the Round Mountain mine.
TRANSACTIONS WITH CASE POMEROY.
Under a 1985 agreement, Case Pomeroy transferred to Homestake all of Case
Pomeroy's interests in certain unpatented mining claims and other mineral
properties in the United States and Canada previously jointly owned by Case
Pomeroy and Homestake Sulphur. Case Pomeroy reserved a 2.5 percent net smelter
return royalty interest in each property transferred, as well as an option to
convert all or part of the reserved royalty into a 40 percent participating
interest in the property if commercial production appears feasible. No royalties
have been paid. The transferee has no obligation to explore, develop or make any
expenditures on any property transferred and may drop any property at any time
after first offering to quitclaim it to Case Pomeroy.
INDEBTEDNESS OF DIRECTORS AND OFFICERS.
Prior to the Company's acquisition of control of International Corona
Corporation, Corona loaned to Peter Steen C$1,865,469 for use in purchasing
Corona common shares, which amount accrued interest in the total amount of
C$29,050 until January 1, 1991, after which it was non-interest bearing. The
maximum amount outstanding during 1993 on this loan was C$1,873,816. Mr. Steen
paid the outstanding principal and
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interest in full in July 1993. Corona also loaned Mr. Steen C$330,000 for the
purpose of purchasing a house. The loan was non-interest bearing. The maximum
principal amount outstanding during 1993 was C$41,342. The loan was repaid in
full in May 1993.
Prior to the Company's acquisition of control of Corona, Corona made a loan
to Gillyeard J. Leathley (now a Vice President of the Company), in the amount of
C$200,000 for the purpose of purchasing a home. The loan was non-interest
bearing. The maximum principal amount outstanding during 1993 on this loan was
C$140,000. The loan was repaid in full in December 1993.
TRANSACTION WITH M. NORMAN ANDERSON.
At the time of the Company's acquisition of International Corona
Corporation, Mr. Anderson had a deferred payment right with Corona with respect
to 159,543 Corona common shares. See "Compensation of Executive
Officers--Conversion of International Corona Corporation Options to Homestake
Options" above. That deferred payment right included the right to close out the
deferred payment right by electing to pay for the Corona common shares and to
receive a payment from Corona in an amount by which the exercise price under the
deferred payment right exceeded the market price of the Corona common shares
subject to the deferred payment right, plus an additional amount sufficient to
pay all income taxes associated with the close-out (the "close-out payment"). At
the time of the Company's acquisition of Corona, Mr. Anderson ceased to be an
employee of Corona and thereby became entitled at any time to close out his
deferred payment right and to receive a close-out payment. In November 1993, Mr.
Anderson elected to close out his deferred payment right. In connection with
that close-out, the Company, Homestake Canada Inc. and Mr. Anderson agreed to
substitute 55,840 Homestake common shares for the 159,543 Corona common shares
under the agreement (ratio of 0.35 Homestake common shares for one Corona common
share). Mr. Anderson purchased the resultant 55,840 Homestake common shares for
C$1,850,000 and, based on the market value of the Homestake common shares at the
time of the purchase (C$1,454,623), Mr. Anderson received a close-out payment
from Homestake Canada Inc. of C$790,754.
PROPOSAL NO. 2
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, on the recommendation of the Audit Committee, has
engaged the firm of Coopers & Lybrand as independent auditors to audit and
report to the shareholders on the financial statements of Homestake for the year
1994. Representatives of the firm are expected to be present at the annual
meeting and will have the opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions. Although
shareholder approval of the engagement is not required by law, the Board of
Directors desires to solicit such approval. If the appointment of Coopers &
Lybrand is not approved by a majority of the shares represented at the meeting,
the Board of Directors will consider the appointment of other independent
auditors for 1994.
On March 3, 1993, pursuant to the recommendation of the Audit Committee,
the Company terminated Deloitte & Touche as independent accountants for the
Company and its subsidiaries upon completion of their 1992 audit engagement.
Deloitte & Touche's reports on the financial statements of the Company for 1991
and 1992 did not contain an adverse opinion or a disclaimer of opinion and the
reports were not qualified or modified as to uncertainty, audit scope, or
accounting principles. During 1991 and 1992 and the interim period through the
date of termination, there were no disagreements with Deloitte & Touche on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to the satisfaction of
Deloitte & Touche would have caused Deloitte & Touche to make a reference to the
subject matter of the disagreement in connection with its reports. During 1991
and 1992 and the interim period through the date of termination, there did not
occur any kind of event listed in paragraphs (a)(1)(v)(A) through (D) of SEC
Regulation S-K, Item 304.
THE BOARD OF DIRECTORS OF HOMESTAKE UNANIMOUSLY RECOMMENDS A VOTE FOR THE
APPROVAL OF APPOINTMENT OF COOPERS & LYBRAND AS INDEPENDENT AUDITORS FOR THE
YEAR 1994. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED FOR THIS
PROPOSAL UNLESS A VOTE AGAINST THIS PROPOSAL OR ABSTENTION IS SPECIFICALLY
INDICATED.
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SHAREHOLDER PROPOSALS
To be considered for inclusion in the Proxy Statement for the 1995 annual
meeting, proposals of shareholders must be received by Homestake no later than
November 25, 1994. Such proposals should be directed to the Secretary of
Homestake.
By Order of the Board of Directors
[SIG]
WAYNE KIRK
Secretary
San Francisco, California
March 25, 1994
(LOGO)
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PROXY
HOMESTAKE MINING COMPANY
650 California Street
San Francisco, California 94108
ANNUAL MEETING OF SHAREHOLDERS - MAY 10, 1994
This Proxy is Solicited on Behalf of the Board of Directors
PROXY - The undersigned hereby appoints HARRY M. CONGER, PETER STEEN and WAYNE
KIRK as proxies, each with the power to appoint a substitute, and hereby
authorizes a majority (or if only one, then that one) of them to represent and
to vote, as designated on the reverse side, all shares of common stock of
Homestake Mining Company held of record by the undersigned on March 14, 1994 at
the Annual Meeting of Shareholders, or any postponement or adjournment thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
/X/ Please mark votes as in this example.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED FOR ITEMS NUMBER 1 AND 2.
1. Election of the five Class 1 Directors (term of three years)
Nominees: M. Norman Anderson, Robert H. Clark, Jr., Douglas W. Fuerstenau,
Glen L. Ryland and Berne A. Schepman.
/ / FOR / / WITHHELD
___________________________________________________________________________
Instruction: To withhold authority to vote for one or more nominees, print
name(s) of nominee(s) on line above.
2. APPOINTMENT OF COOPERS & LYBRAND AS INDEPENDENT AUDITORS FOR 1994.
/ / FOR / / AGAINST / / ABSTAIN
/X/ MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
BY EXECUTION OF THIS PROXY THE UNDERSIGNED HEREBY AUTHORIZES SUCH PROXIES OR
THEIR SUBSTITUTES TO VOTE IN THEIR DISCRETION ON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
(THIS PROXY SHOULD BE MARKED, DATED, SIGNED BY THE SHAREHOLDER(S) EXACTLY AS
HIS OR HER NAME APPEARS HEREON, AND RETURNED PROMPTLY IN THE ENCLOSED ENVELOPE.
PERSONS SIGNING IN A FIDUCIARY CAPACITY SHOULD SO INDICATE. IF SHARES ARE HELD
BY JOINT TENANTS OR AS COMMUNITY PROPERTY, BOTH SHOULD SIGN.)
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SIGNATURE: _____________________________ DATE __________________
SIGNATURE: _____________________________ DATE __________________
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