<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
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 1-8736
HOMESTAKE MINING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 94-2934609
(State of Incorporation) (I.R.S. Employer
Identification No.)
650 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94108-2788
(Address of principal executive office) (Zip Code)
(415) 981-8150 HTTP://WWW.HOMESTAKE.COM
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $1.00 par value New York Stock Exchange, Inc.
Rights to Purchase Series A
Participating Cumulative
Preferred Stock New York Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
5 1/2% Convertible Subordinated Notes Due June 23, 2000
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.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $2,273,000,000 as of March 11, 1997.
The number of shares of common stock outstanding as of March 11, 1997 was
146,672,425.
<PAGE> 2
The following information, required by Part III of Form 10-K, is being
filed by amendment in accordance with Instruction G(3) to Form 10-K.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) Information with Respect to Directors.
Certain information as to the Directors of the Registrant is set forth
below. The information appearing below, and certain information regarding
beneficial ownership of securities by the Directors has been furnished by the
Directors.
CLASS I DIRECTORS TO SERVE UNTIL 1997 ANNUAL MEETING:
<TABLE>
<CAPTION>
Age at
April 15, Director
1997 Since Biographical Information
--------- -------- ------------------------
<S> <C> <C> <C>
M. Norman Andersen ......... 66 1992 Mr. Anderson is President of Norman Anderson &
Associates Ltd. (mining consultants). Mr. Anderson
was a director of Homestake Canada Inc. 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), Solv-ex Corporation (tar sands
processing), Finning Ltd. (construction
equipment sales and service), and Toronto
Dominion Bank.
Robert H. Clark, Jr. ....... 56 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).
Douglas W. Fuerstenau....... 68 1977 Mr. Fuerstenau has been a Professor of Metallurgy,
Department of Materials Science and Mineral
Engineering, University of California, Berkeley
since 1959. He was P. Malozemoff Professor of
Mineral Engineering from 1987 to 1993, professor
emeritus from 1993 to July 1994, and has been a
professor in the Graduate School since July 1994.
Berne A. Schepman........... 70 1973 Mr. Schepman has been President of Adair Company
(management consulting) since 1982 and President
of Russian Technology Group (technology
marketing) since July 1992.
</TABLE>
2
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CLASS II DIRECTORS TO SERVE UNTIL 1998 ANNUAL MEETING:
<TABLE>
<CAPTION>
Age at
April 15, Director
1997 Since Biographical Information
--------- -------- ------------------------
<S> <C> <C> <C>
Henry G. Grundstedt......... 68 1992 Mr. Grundstedt is a mining consultant. He was
Senior Vice President of Capital Guardian Trust
Company (money manager of pension and mutual
funds) from 1973 to 1991 and held other executive
positions with that firm beginning in 1972,
specializing in the mining and metals industry.
William A. Humphrey......... 70 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.
John Neerhout, Jr. ......... 66 1989 Mr. Neerhout has been the Managing Director of
Union Railways Limited (rail transportation)
since April 1997, and a director of London and
Continental Railways Ltd. since March 1997. He has
been a director of the Energy Group (UK) since
February 1997. Mr. Neerhout retired as
Executive Vice President of Bechtel Group Inc.
(engineering and construction) in October,
1996, a position he held since 1986. Mr. Neerhout
was also a director and held executive positions
with Bechtel Group Inc. and other of its
affiliated companies prior to his retirement.
Robert K. Jaedicke.......... 68 1983 Mr. Jaedicke is a Professor (emeritus) of
Accounting at Stanford University Graduate School
of Business. He has been a member of 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.
Carol A. Rae................ 51 1995 Ms. Rae has been the President and Chief Executive
Officer of Integrated Media and Marketing, LLC
(producer of educational video and multimedia
products) since 1995, and the President of MedVal
Technologies International, Inc. (manufacturer of
orthopedic splints) since 1984. She has been a member
of the Board of Directors of the U.S. Chamber of
Commerce since 1994. She was Senior Vice President
and General Manager of the Refractive Division of
Chiron Vision Corporation (manufacturer of
ophthalmic intraocular lenses) from 1993 until
1995 and since 1995 she has been Senior Vice
President of Government Affairs of the Refractive
Division of Chiron Vision Corporation. She was
President and Chief Executive Officer of Magnum
Diamond Corporation (manufacturer of surgical
instruments) from 1989 to 1995.
</TABLE>
3
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CLASS III DIRECTORS TO SERVE UNTIL 1999 ANNUAL MEETING:
<TABLE>
<CAPTION>
Age at
April 15, Director
1997 Since Biographical Information
--------- -------- ------------------------
<S> <C> <C> <C>
Harry M. Conger ............ 66 1977 Mr. Conger has been Chairman of the Board of
Homestake since 1982. In May 1996, he retired
as Chief Executive Officer of Homestake, a
position he had held since 1978. He was also
President of Homestake from 1977 to 1986. He is
a director of ASA Limited (investment company),
CalMat Company (aggregates, asphalt, and property
development), and Pacific Gas and Electric
Company.
G. Robert Durham ........... 68 1990 In May, 1996, Mr. Durham retired as
Chairman of the Board, Chief Executive Officer
and a director of Walter Industries, Inc.
(building materials, home building, mortgage
financing and natural resources development).
He was Chief Executive Officer and a director of
Walter Industries, Inc. from June 1991, and
Chairman from October 1995, until his retirement.
He was also President from June 1991 until
October 1995. He was Chairman of the Board,
President and Chief Executive Officer of Phelps Dodge
Corporation (mining) from 1987 to 1989, President and
Chief Operating Officer from 1984 to 1987, and held
other executive offices with Phelps Dodge Corporation
or affiliated companies beginning in 1977. He is
a director of FINOVA Group Inc. (financial
services), and a trustee of Mutual Life Insurance
Company of New York.
Stuart T. Peeler ........... 67 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) and
Chieftain International Funding Corp. (financial
services).
Jack E. Thompson ........... 47 1994 Mr. Thompson has been the Chief Executive Officer
of Homestake since May 1996, and President and a
director of Homestake since August 1994. He was
Executive Vice President-Canada of Homestake and
President and Chief Executive Officer of Prime
Resources Group Inc. and Homestake Canada Inc.
from July 1992 until August 1994. He was President
of Homestake Mineral Development Company and of
North American Metals Corp. (gold mining) from
1988 until 1992.
</TABLE>
4
<PAGE> 5
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD:
Homestake's Board of Directors held 15 meetings during the calendar
year 1996.
The Board of Directors has six standing committees: Executive, Finance,
Audit, Compensation, Nominating, and Environment, Health and Safety.
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. Thompson (Chairman), Conger, Clark,
Humphrey, Peeler and Schepman. The Executive Committee held two meetings during
1996.
The Finance Committee reviews and makes recommendations to the Board of
Directors about proposed dividends, investments and financial matters, and
oversees pension and savings plan investments. The members of the Committee are
Messrs. Peeler (Chairman), Conger, Grundstedt, Humphrey, and Thompson, and Ms.
Rae. The Finance Committee held four meetings during 1996.
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. The members of the Committee are Messrs. Jaedicke (Chairman),
Anderson, Clark, and Neerhout, and Ms. Rae, all non-employee directors. The
Committee held three meetings during 1996.
The Compensation Committee evaluates and recommends to the full Board
of Directors the levels of compensation and benefits for officers and key
employees. The Compensation Committee also administers the Company's stock
option plans and its Deferred Compensation Plan and Executive Supplemental
Retirement Plan. The members of the Committee are Messrs. Schepman (Chairman),
Durham, Fuerstenau, Grudnstedt, Jaedicke and Neerhout, all non-employee
directors. The Committee held four meetings during 1996.
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.
Fuerstenau (Chairman), Anderson, Durham and Schepman, all non-employee
directors. The Nominating Committee did not meet during 1996.
The Environment, Health and Safety Committee oversees Homestake's
compliance with environmental, health and safety laws and policies. The members
are Messrs. Anderson (Chairman), Durham, Fuerstenau, Humphrey and Neerhout, and
Ms. Rae, all non-employee directors. The Environment, Health and Safety
Committee held three meetings during 1996.
Each incumbent director attended at least 75 percent of the total
number of meetings of the Board of Directors and the respective committees on
which he or she served. The aggregate average attendance at meetings of the
Board of Directors and its committees was 96.9 percent.
5
<PAGE> 6
(b) Information with Respect to Executive Officers.
The required information is contained in Part I of the 10-K Report, at
pages 39-41.
(c) Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Securities Exchange Act of 1934 and related rules
require the Company's directors and executive officers to file reports of
beneficial ownership and changes of beneficial ownership with the Securities
and Exchange Commission and with the Company. Based on its review of reports of
beneficial ownership and changes in beneficial ownership required under Section
16(a), the Company believes that during 1996 all of its directors and executive
officers timely filed all reports of beneficial ownership and changes in
beneficial ownership required under Section 16(a), except that: the Form 3
Initial Report of Ownership of Stephen A. Orr, a Vice President elected in
1996, was filed late; one Form 4 Statement of Changes in Beneficial Ownership
for Carol A. Rae, a Director of the Company, reporting a purchase of Company
shares, was filed late; and one Form 4 Statement of Changes in Beneficial
Ownership for Ronald D. Parker, a Vice President of the Company, reporting an
exercise of Company stock options and the sale of the shares so acquired, was
filed late (in 1997). No directors or executive officers reported in 1996 a
transaction that should have been reported in an earlier year.
ITEM 11. EXECUTIVE COMPENSATION.
(a) Compensation of Directors.
A director of Homestake who is not an employee of the Company or its
subsidiaries 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 are entitled
to defer compensation under the Deferred Compensation Plan described below
under "Compensation of Executive Officers -- Summary Compensation Table."
6
<PAGE> 7
The Company has adopted a Retirement Plan for Outside Directors. Under
the Plan, directors who do not have a fully vested interest under any
tax-qualified Homestake retirement plan are eligible to receive benefits. The
total retirement benefit payable is an amount equal to the annual retainer fee
payable to Outside Directors at the date of retirement (presently $16,000 per
year) multiplied by the number of years such retiring Director was an Outside
Director (i.e., not an employee of the Company or its subsidiaries). The
retirement benefit is payable in monthly installments over the number of months
the retiring Outside Director served as an Outside Director, beginning on the
later of retirement or attaining of age 70 (later of retirement or age 65 in
the case of an Outside Director who has served at least 10 years). Benefits
payable to a participant who dies prior to completion of payout are payable to
the participant's spouse.
Under the Stock Option and Share Rights Plan -- 1996 ("1996 Plan"),
automatic share rights are made available to directors who are not employees of
Homestake. For each year that the 1996 Plan is in effect, on the eighth
business day after Homestake's annual earnings for the preceding year are
released, each non-employee director on that date is granted share rights
entitling him or her to receive shares of Homestake common stock for no
consideration on the date he or she ceases to serve as a director. 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
1996 Plan. For 1996, a total of 2,791 share rights were granted under the 1996
Plan. No director was credited with more than 279 share rights for 1996.
During 1996, Prime Resources Group Inc. ("Prime"), 50.6% owned by the
Company, paid directors who were not employees of the Company or its
subsidiaries an annual retainer of C$10,000 per year and C$750 for each meeting
of the Board or any committee which they attended. Beginning in August 1996,
Prime paid directors who were employees of the Company or its subsidiaries
C$750 for each meeting of the Board they attended. Effective January 1, 1997,
the fee for meetings attended in person increased to C$1,000, but remains at
C$750 for telephone meetings. M. Norman Anderson, a non-employee director of
the Company and Prime, received C$17,500 in directors fees from Prime for 1996.
7
<PAGE> 8
In 1996, M. Norman Anderson provided special consulting services to the
Company with respect to various mining matters. For 1996, the Company paid Mr.
Anderson $12,000 for such services.
In May 1996, upon Harry M. Conger's retirement as Chief Executive
Officer of the Company, Homestake entered into a consulting agreement with Mr.
Conger under which he would act as a consultant to the Board and the Chief
Executive Officer of Homestake for one year, subject to renewal for an
additional year. Mr. Conger agreed to provide at least 500 hours of consulting
services, including continuing to act as a director and non-Executive Chairman
of the Board. Mr. Conger is paid a total of $150,000 per year, which is in lieu
of any other payments, including directors fees that would otherwise be
payable. Homestake also agreed to provide office facilities at a cost of up to
$1,500 per month. For the year 1996, Mr. Conger received a total of $112,500 in
compensation and $12,114 in office expense reimbursement under the consulting
agreement. The consulting agreement has been renewed at the request of the
Company for an additional year.
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 at will. Mr. Humphrey
receives compensation at a rate of $1,000 for each day of service under the
agreement. No compensation was paid to Mr. Humphrey under the agreement during
1996.
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 1996, the Company paid $17,062 to Mr. Peeler under
the agreement.
8
<PAGE> 9
(b) Compensation of Executive Officers.
Summary Compensation Table
The following table discloses, for the years indicated, compensation
received by Homestake's executive officers named therein (the "Homestake Named
Executive Officers") for the fiscal years ended December 31, 1996, 1995 and
1994. Such officers served as Chief Executive Officer or were one of the four
most highly compensated executive officers (other than the Chief Executive
Officer) for the fiscal year ended December 31, 1996. Harry M. Conger retired in
May 1996 as the Chief Executive Officer of Homestake. He continued as the
non-executive Chairman of the Board of Directors following his retirement.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ----------------------
-------------------------------
OTHER AWARDS
ANNUAL ---------- PAYOUTS
COMPEN- SECURITIES -------
NAME AND SATION UNDERLYING LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (1) OPTIONS(#) PAYOUTS COMPENSATION
- ------------------------- ----- --------- -------- ------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Harry M. Conger 1996 $ 202,500 $ 0 $32,243(3) 66,400 $ 0 $212,252(4)
Chairman of the 1995 517,500 105,000 66,953(5) 59,900 0 9,000
Board(2) 1994 500,000 225,000 14,900(6) 49,200 0 6,750
Jack E. Thompson 1996 422,452 225,000 25,212(8) 56,100 0 12,044(9)
President and Chief 1995 336,000 68,000 29,146(10) 31,100 0 9,174
Executive Officer(7) 1994 263,575 146,250 157,438(11) 29,700 0 6,750
Gene G. Elam 1996 272,000 95,700 24,167(12) 17,900 0 11,546(13)
Vice President, 1995 261,000 41,000 8,150(14) 16,100 0 9,010
Finance and Chief 1994 252,000 88,200 8,100(15) 13,200 0 6,750
Financial Officer
Wayne Kirk 1996 340,000 121,400 1,110(16) 22,300 0 10,908(17)
Vice President, 1995 326,000 52,000 0 20,100 0 9,010
General Counsel 1994 315,000 110,250 0 16,500 0 6,750
and Corporate Secretary
Gil J. Leathley 1996 208,000 71,700 18,995(19) 15,400 0 10,438(20)
Vice President, 1995 198,088 30,000 49,571(21) 21,500 0 10,655
Operations(18) 1994 171,740 55,600 692(22) 9,700 0 9,623
William F. Lindqvist 1996 224,000 77,300 19,731(24) 16,500 0 10,916(25)
Vice President, 1995 91,667 12,000 125,525(26) 30,000 0 3,663
Exploration(23) 1994 n/a n/a n/a n/a n/a n/a
</TABLE>
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(1) In accordance with the rules of the Commission, Homestake 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) Mr. Conger also served as Chief Executive Officer until May 1996.
(3) Consists of $23,543 (financial planning) and $8,700 (directors fees).
(4) Consists of $51,241 (accrued vacation paid on retirement), $3,375 (matching
contribution to savings plan), $10,745 (imputed income on split dollar life
insurance), $9,434 (tax gross-up related to split dollar life insurance),
$12,843 (reimbursement for spousal travel expense and related tax
gross-up), $112,500 (consulting fees following retirement) and $12,114
(office expense reimbursement).
(5) Consists of $49,453 (financial planning) and $17,500 (directors' fees).
(6) Directors' fees.
(7) Mr. Thompson served as President and Chief Operating Officer until May
1996, when he was appointed President and Chief Executive Officer.
(8) Consists of $6,012 (financial planning) and $19,200 (directors' fees).
9
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(9) Consists of $9,000 (matching contribution to savings plan), $1,422 (imputed
income on split dollar life insurance), $1,248 (tax gross-up related to
split dollar life insurance) and $374 (above market component of interest
paid on deferred compensation plan).
(10) Consists of $17,500 (directors' fees), $11,030 (financial planning) and
$616 (tax gross-up for payment made in connection with the sale of Mr.
Thompson's Canadian residence in 1994).
(11) Consists of $53,844 (cost-of-living adjustment in connection with Mr.
Thompson's foreign assignment), $47,700 (payment to Mr. Thompson in
connection with sale of residence in Canada), $45,131 (tax gross-up for
payment made in connection with sale of residence), $7,263 (financial
planning) and $3,500 (directors' fees). In connection with his appointment
as President, Mr. Thompson relocated from Canada to the San Francisco,
California area.
(12) Consists of $1,620 (financial planning) and $22,547 (directors' fees paid
by subsidiaries).
(13) Consists of $9,000 (matching contributions to savings plan), $1,297
(imputed income on split dollar life insurance), $1,138 (tax gross-up
related to split dollar life insurance) and $111 (above market component of
interest paid on deferred compensation plan).
(14) Consists of $7,200 (directors' fees paid by publicly held subsidiary) and
$950 (financial planning).
(15) Directors' fees paid by publicly held subsidiary.
(16) Directors' fees paid by publicly held subsidiary.
(17) Consists of $9,000 (matching contribution to savings plan), $995 (imputed
income on split dollar life insurance), $873 (tax gross-up related to split
dollar life insurance), and $40 (above market component of interest paid on
deferred compensation plan).
(18) Mr. Leathley served as Vice President, Canadian Operations during a portion
of 1995, and during all of 1994, and was resident in Vancouver.
Accordingly, a portion of Mr. Leathley's Annual Compensation and All Other
Compensation was paid in Canadian dollars during such time periods. The
following conversion rates were used to convert such amounts: 1995-0.7324
and 1994-0.7128. Mr. Leathley became Vice President, Operations, of
Homestake in May 1995.
(19) Consists of $4,967 (financial planning), $563 (directors' fees paid by
publicly held subsidiary), $10,000 (forgiveness of relocation expenses) and
$3,465 (tax gross-up related to loan forgiveness).
(20) Consists of $9,000 (matching contribution to savings plan), $248
(reimbursement for spousal travel expense and related tax gross-up), $619
(above market component of interest paid on deferred compensation plan),
and $571 (interest on Canadian retirement account).
(21) Consists of $717 (premiums paid on life and accidental death and
dismemberment policy), $39,600 (relocation expenses paid by or on behalf of
Mr. Leathley) and $9,254 (tax gross-up for relocation expenses). In
connection with his appointment as Vice President, Operations, Mr. Leathley
relocated from Canada to the San Francisco area.
(22) Premiums paid on life and accidental death and dismemberment policy.
(23) Mr. Lindqvist became an employee of Homestake on June 30, 1995.
(24) Consists of $6,497 (financial planning), $10,000 (forgiveness of relocation
expense) and $3,234 (tax gross-up related to loan forgiveness).
(25) Consists of $9,000 (matching contribution to savings plan), $721 (imputed
income on split dollar life insurance), $633 (tax gross-up related to split
dollar life insurance), and $562 (above market component of interest paid
on deferred compensation plan).
(26) Consists of $91,394 (relocation expenses for move from Australia to San
Francisco, California area) and $34,131 (tax gross-up related to relocation
expenses).
Under the Company's Deferred Compensation 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 $2,000 nor more than 100 percent of compensation. Amounts
deferred are credited with interest in an amount equivalent to 120% of (i) the
monthly Moody's Corporate Bond Yield Average as published by Moody's Investors
Service, Inc. and (ii) such additional amount as the Compensation Committee
determines to be appropriate.
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Homestake Option Grants
The following table sets forth certain information with respect to options
to acquire common stock that were granted during 1996 to each Homestake Named
Executive Officer under Homestake's stock option plans.
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
NO. OF OPTIONS EXERCISE ANNUAL RATES OF STOCK
SECURITIES GRANTED TO OR PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES BASE OPTION TERM
OPTIONS IN FISCAL PRICE EXPIRATION -----------------------------
NAME GRANTED(1) YEAR ($/SH) DATE 5%(2) 10%(2)
- ------------------------------- ---------- -------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Harry M. Conger 66,400 14.27 $ 19.125 Feb. 27, 2006 $ 812,153.11 $2,045,421.61
Jack E. Thompson 46,100 9.91 19.125 Feb. 27, 2006 563,859.31 1,420,089.40
10,000(3) 2.15 19.725 May 28, 2006 127,510.87 319,877.40
Gene G. Elam 17,900 3.85 19.125 Feb. 27, 2006 218,938.87 551,401.31
Wayne Kirk 22,300 4.80 19.125 Feb. 27, 2006 272,756.24 686,941.29
Gil J. Leathley 15,400 3.31 19.125 Feb. 27, 2006 188,360.81 474,389.95
William F. Lindqvist 16,500 3.55 19.125 Feb. 27, 2006 201,815.16 508,274.95
</TABLE>
- ------------
(1) Granted at fair market value. Granted on February 27, 1996 (except as
otherwise noted), 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) Granted on May 28, 1996.
Homestake Option Exercises and Fiscal Year-End Values
The following table sets forth certain information with respect to options
exercised during 1996 by each Homestake Named Executive Officer.
AGGREGATED OPTION EXERCISES IN 1996
AND OPTION VALUES AT 1996 YEAR END
<TABLE>
<CAPTION>
NO. OF
SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NO. OF AT YEAR END AT YEAR END
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- --------------------------------------------- -------- ------------------- --------------------
<S> <C> <C> <C> <C>
Harry M. Conger 31,816 $234,643 596,800/0 $ 196,263/$0
Jack E. Thompson 9,550 73,279 82,950/101,325 39,848/14,629
Gene G. Elam 0 0 78,700/42,750 53,008/12,813
Wayne Kirk 8,250 67,634 50,350/53,500 47,966/16,341
Gil J. Leathley 8,750 57,359 33,517/41,000 17,691/9,597
William F. Lindqvist 0 0 61,300/31,500 0/0
</TABLE>
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 Stock with an aggregate market value at the time of delivery
of the note at least equal to the principal amount of the note. In 1996, no
optionee under Homestake stock option plans had indebtedness to Homestake in
respect of stock options.
11
<PAGE> 12
Homestake Retirement Plan
In general, all full-time, non-union U.S. employees of Homestake
(approximately 615 persons) participate in the Homestake Retirement Plan, a
noncontributory defined benefit plan ("Homestake Retirement Plan").
Under the Homestake 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
Homestake Retirement Plan is 65. Early retirement, with reduced benefits, is
permitted after age 55 with five years of service. The Homestake 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 (salary and bonus), 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
Homestake 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 Homestake 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 ("Homestake 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 Homestake Retirement Plan and the Homestake SRP, the years
of service as of December 31, 1996, for Messrs. Elam, Kirk, Leathley, Lindqvist
and Thompson are 6 years, 4 years, 10 years, 4 years and 15 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>
Homestake Supplemental Retirement Plan
The Internal Revenue Code of 1986 ("Code") imposes a maximum limit on
annual retirement benefits payable under qualified retirement plans. For 1996,
that annual limit was $120,000. In addition, the Code limits the amount of
annual compensation that may be considered under qualified retirement plans. In
1996, that annual limit was $150,000. Under the Homestake 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 Homestake
Retirement Plan and the maximum amount permitted to be paid under the Employee
Retirement Income Security Act of 1974 ("ERISA") and the Code. The Homestake SRP
is funded by Homestake contributions into a "rabbi trust." All of the officers
identified in the Summary Compensation Table are participants in the Homestake
SRP.
12
<PAGE> 13
Homestake Executive Supplemental Retirement Plan
Homestake has established the Homestake ESRP for executive officers and key
employees selected by the Compensation Committee. Under the Homestake ESRP,
participants accrue benefits under the following formula. Service credit is
determined by multiplying 4 1/3 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 (salary and bonus) to
determine a monthly retirement benefit. The monthly benefit is reduced by
benefits payable under all other Homestake retirement plans and, commencing at
age 65, by one-half of Social Security and comparable foreign social security
plan benefits. Retirement is permitted at age 62 after 10 continuous years of
service, although a participant who has attained age 55 and 10 years of service
may elect early retirement and receive a reduced benefit if approved by the
Compensation Committee. The Homestake ESRP is funded by Homestake contributions
into a "rabbi trust." The following table shows selected estimated annual
benefits payable under the Homestake ESRP, 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 comparable foreign plans, and also before reduction for
other Homestake retirement plans (except the Homestake Mining Company Savings
Plan). Payments under the Homestake ESRP are not limited by ERISA or the Code.
All of the officers identified in the Homestake Summary Compensation Table are
participants in the Homestake ESRP. For purposes of the Homestake ESRP, the
years of service as of December 31, 1996, for Messrs. Elam, Kirk, Leathley and
Thompson are 10 years, 4 years, 10 years and 15 years, respectively. Mr.
Lindqvist was previously employed by Homestake and following Homestake's 1992
acquisition of International Corona, Mr. Lindqvist was fully vested in his
benefits under the Homestake ESRP with 15 years of deemed service. In connection
with his reemployment by Homestake in 1995, Homestake agreed to recalculate Mr.
Lindqvist's Homestake ESRP benefits based on the 36 consecutive months of
highest compensation following the date of reemployment, subject however to his
completing five years of service from the date of reemployment, unless his
employment is terminated by Homestake for reasons other than cause.
YEARS OF SERVICE
<TABLE>
<CAPTION>
AVERAGE
ANNUAL EARNINGS
(36 CONSECUTIVE
HIGHEST MONTHS) 10 YEARS 13 YEARS 15 YEARS
- --------------- -------- -------- --------
<S> <C> <C> <C>
$ 150,000 $ 65,000 $ 84,500 $ 97,500
200,000 86,667 112,667 130,000
250,000 108,333 140,833 162,500
300,000 130,000 169,000 195,000
350,000 151,667 197,167 227,500
400,000 173,333 225,333 260,000
450,000 195,000 253,500 292,500
500,000 216,667 281,667 325,000
550,000 238,333 309,833 357,500
600,000 260,000 338,000 390,000
</TABLE>
Homestake Severance Agreements
13
<PAGE> 14
Homestake has severance agreements with Messrs. Elam, Kirk, Leathley,
Lindquist and Thompson under which they are entitled to benefits in the event
of a change of control followed by certain events. A change of control is
defined 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 of 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. Entitlement to benefits arises if within three years
following such a change of control, the executive's employment is terminated
(other than for cause) or if he elects to terminate his employment following
(i) a reduction in salary or certain 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
change of control. 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, (iii) full vesting in the Company's Executive
Supplemental Retirement Plan described above under "Retirement Plans," (iv)
continued vesting of stock options, and (v) 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.
Under an agreement between Harry M. Conger and Homestake that was in
effect at the time of his retirement in May 1996, Mr. Conger will receive, for
life, monthly compensation equal to 65% of the average of his 36 consecutive
months of highest compensation prior to retirement, less one-half of his Social
Security benefits ($36,969 per month). Following Mr. Conger's death, his
spouse is entitled to receive the monthly benefit he would otherwise have been
entitled to receive until the 10th anniversary of his retirement, and
thereafter 50% of that amount until her death. Also on his retirement, all of
Mr. Conger's stock options vested and became immediately exercisable and, at his
election, may be surrendered to Homestake in exchange for a cash payment equal
to the excess of the market price of Homestake shares over the option price at
the date of retirement.
14
<PAGE> 15
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security Ownership of Certain Beneficial Owners.
As of March 31, 1997, no person known to Homestake was known to own 5%
or more of the outstanding Homestake Common Stock.
(b) Security Ownership of Management.
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 March 31,
1997 (excluding shares which such persons have the right to acquire within 60
days of March 31, 1997, 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 March 31, 1997, 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 March 31, 1997. The shares so shown include shares
held in Homestake's Savings Plan for the accounts of executive officers and
directors share rights granted under the Homestake Employees' Stock Option and
Share Rights Plan--1988 and under the Homestake Stock Option and Share Rights
Plan--1996, which entitle outside directors to receive shares on the date of
ceasing to serve as a director. Including the shares held by Case, Pomeroy &
Company, Inc. (described in footnote 2 below) and 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, nominees and
executive officers as a group represent approximately 5.52 percent of the total
number of shares of Homestake Common Stock outstanding.
<TABLE>
<CAPTION>
NUMBER OF SHARES RIGHT TO
BENEFICIALLY OWNED ACQUIRE SHARES TOTAL
AS OF WITHIN NUMBER
MARCH 31, 1997, 60 DAYS OF OF SHARES
EXCLUDING RIGHT TO MARCH 31, BENEFICIALLY
NAME ACQUIRE SHARES(1) 1997 OWNED
- ----------------------------------------------- ------------------ ------------------ ----------
<S> <C> <C> <C>
M. Norman Anderson............................. 2,529 6,193 8,722
Robert H. Clark, Jr.(2)........................ 6,456,776 1,961 6,458,737
Harry M. Conger(3)............................. 176,027 549,725 721,752
G. Robert Durham............................... 5,000 1,536 6,536
Douglas W. Fuerstenau.......................... 1,478 1,972 3,450
Henry G. Grundstedt............................ 1,000 1,105 2,105
William A. Humphrey............................ 61,230 111,187 172,417
Robert K. Jaedicke............................. 400 1,936 2,336
John Neerhout, Jr. ............................ 1,000 1,506 2,506
Stuart T. Peeler............................... 10,000 2,124 12,124
Carol A. Rae................................... 500 383 883
Berne A. Schepman.............................. 3,524 1,993 5,517
Jack E. Thompson............................... 25,951 115,475 141,426
Gene G. Elam................................... 9,268 96,675 105,943
Wayne Kirk(4).................................. 6,510 72,950 79,460
Gil J. Leathley................................ 2,829 49,792 52,621
William F. Lindqvist........................... 0 65,425 65,425
All Directors and Executive Officers as a Group
(25 persons)................................. 6,786,650 1,321,018 8,107,668
</TABLE>
- ------------
(1) In some instances voting and investment power is shared with the spouse of
the identified person.
(2) Includes 21,000 shares owned by Mr. Clark's spouse. Also includes 6,411,776
shares owned by Case, Pomeroy & Company, Inc. Mr. Clark is the President and
Chief Executive Officer and, with family members, is a controlling
shareholder of Case Pomeroy.
(3) Includes 447 shares held of record by a Savings Plan Trust for Mr. Conger's
spouse. Mr. Conger disclaims beneficial ownership of these shares.
(4) Includes 410 shares held of record by two of Mr. Kirk's children. Mr. Kirk
disclaims beneficial ownership of these shares.
<PAGE> 16
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) Agreement with Case Pomeroy.
In connection with Homestake's acquisition of Felmont Oil Corporation
(now Homestake Sulphur Company) in 1984, Homestake, Case, Pomeroy & Company,
Inc. entered into an Agreement, which agreement was amended in 1989, and
further amended on March 27, 1992. Mr. Robert H. Clark, Jr., a director of
Homestake, together with family members, is a controlling shareholder of Case
Pomeroy. 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 50 percent undivided interest and the manager of the
mine. The 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 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 budgets and work
programs carried out by the manager of the Round Mountain mine.
(b) Transactions with Case Pomeroy.
Under a 1985 agreement, Case Pomeroy transferred to Homestake all of
Case Pomeroy's interest 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.
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment No. 1 on Form 10-K/A to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: April 25, 1997 HOMESTAKE MINING COMPANY
By /s/ Wayne Kirk
--------------------
Wayne Kirk
Vice President, General Counsel
and Corporate Secretary
