<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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, 1997
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)
<TABLE>
<S> <C>
Delaware 94-2934609
(State of Incorporation) (I.R.S. Employer Identification No.)
650 California Street 94108-2788
San Francisco, California (Zip Code)
(Address of principal executive office)
(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
Securities registered pursuant to Section 12(g) of the Act:
5 1/2% Convertible Subordinated Notes Due June 23, 2000
</TABLE>
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 $1,837,860,360 as of April 23, 1998.
The number of shares of common stock outstanding as of April 23, 1998 was
146,780,900.
This amendment contains 17 pages.
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FORM 10-K/A
AMENDMENT NO. 1
The undersigned registrant hereby amends its annual report on form 10-K for the
fiscal year ended December 31, 1997 to include items 10, 11, 12 and 13 as set
forth in the pages hereto:
PART III
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.
<TABLE>
<CAPTION>
Age at
March 1, Director
1998 Since Biographical Information
-------- ---------- ------------------------
<S> <C> <C> <C>
CLASS I DIRECTORS TO SERVE UNTIL 2000 ANNUAL MEETING:
M. Norman Anderson 67 1992 Mr. Anderson is President of Norman Anderson
& Associates Ltd. (mining consultants). Mr.
Anderson was a director of Homestake Canada
Inc. ("HCI") from 1987 to 1993, and was the
Chairman of the Board of Directors of HCI
from February 1991 to July 1992, when the
Company acquired the outstanding voting
shares of HCI. He is a director of Prime
Resources Group Inc. ("Prime")(gold mining),
Solv-ex Corporation (tar sands processing),
Finning International (construction
equipment sales and service), Buenaventura
S.A. (gold and silver mining) 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). Mr. Clark is a director of FINOVA
Group Inc. (financial services).
Douglas W. Fuerstenau 69 1977 Mr. Fuerstenau has been a Professor of
Metallurgy, Department of Materials Science
and Mineral Engineering, University of
California, Berkeley from 1959 to 1992. He
was P. Malozemoff Professor of Mineral
Engineering from 1987 to 1993, and has been
a professor emeritus since 1993 and has been
a professor in the Graduate School since
July 1994.
</TABLE>
2
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<TABLE>
<CAPTION>
Age at
March 1, Director
1998 Since Biographical Information
-------- ---------- ------------------------
<S> <C> <C> <C>
Jeffrey L. Zelms 53 1997 Mr. Zelms has been the President since 1986
and the Chief Executive Officer since 1992
of the Doe Run Company (lead, zinc and
copper mining, lead fabrication and
recycling). He is a director of the Phoenix
Textile Corporation (linen supplier for the
health industry).
CLASS II DIRECTORS TO SERVE UNTIL 1998 ANNUAL MEETING:
Henry G. Grundstedt 69 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.
John Neerhout, Jr. 67 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 PLC (gas and
coal production, power generation and sales)
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 of and held
executive positions with Bechtel Group Inc.
and other of its affiliated companies prior
to his retirement.
Stuart T. Peeler 68 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
</TABLE>
3
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<TABLE>
Age at
March 1, Director
1998 Since Biographical Information
-------- ---------- ------------------------
<S> <C> <C> <C>
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 and HCI
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.
CLASS III DIRECTORS TO SERVE UNTIL 1999 ANNUAL MEETING:
Richard R. Burt 51 1997 Mr. Burt has been the Chairman of IEP
Advisors, Inc. (strategic and financial
advisory services) since June 1993. He is
also Chairman of Powerhouse Technologies,
Inc. (gaming software design) and Weirton
Steel Company (integrated steel producer).
From April 1991 to June 1993, he was a
partner in McKinsey & Company (management
consultants). Mr. Burt was the United
States Ambassador to the Federal Republic of
Germany from 1985 to 1989. He is a director
of Archer Daniels Midland Company
(processing and sales of agricultural
commodities) and Hollinger International
Inc. (publishing).
Harry M. Conger 67 1977 Mr. Conger has been Chairman of the Board of
Homestake since 1982. He was also Chief
Executive Officer from 1978 until May 1996,
and President of Homestake from 1977 to
1986. He is a director of ASA Limited
(investment company), CalMat Company,
Pacific Gas and Electric Company and Apex
Silver Mines Limited.
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 and
President of Phelps Dodge Corporation
(mining)
</TABLE>
4
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<TABLE>
Age at
March 1, Director
1998 Since Biographical Information
-------- ---------- ------------------------
<S> <C> <C> <C>
from 1987 to 1989 and President and
Chief Operating Officer from 1985 to 1987,
and he held other executive positions with
Phelps Dodge Corporation or affiliated
corporations beginning in 1977. He is a
director of FINOVA Group Inc. (financial
services), Amphenol Corp. (manufacturer of
electronic connectors and coaxial cables),
and a trustee of Mutual Life Insurance
Company of New York.
Peter J. Neff 59 1998 Mr. Neff currently serves as a consultant to
Rhone-Poulenc Inc. (chemicals and
pharmaceuticals). He joined Rhone-Poulenc
in 1987 as President and Chief Operating
Officer and was elected Chief Executive
Officer in 1991 and served as President and
Chief Executive Officer until his retirement
in December 1997. Mr. Neff is a director of
UST Inc. (tobacco and wine manufacturer and
distributor) and Envirogen, Inc.
(environmental services).
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 1994
until 1995 and Senior Vice President of
Government Affairs of Chiron Vision from
1995 until 1997. She was President and
Chief Executive Officer of Magnum Diamond
Corporation (manufacturer of surgical
instruments) from 1989 to 1995.
</TABLE>
Information with Respect to Executive Officers.
The required information is contained in Part I of the 10-K Report, at
pages 46-48.
5
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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 1997 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 4
Statement of Changes in Beneficial Ownership for G. Robert Durham, a Director of
the Company, reporting a sale of Company shares in October 1997, was filed late
(in January 1998). No directors or executive officers reported in 1997 a
transaction that should have been reported in an earlier year, except that
Ronald D. Parker, a former Vice-President of the Company, filed in 1997 a Form 4
Statement of Changes in Beneficial Ownership, reporting an exercise of Company
stock options and the sale of the shares so acquired in 1996.
ITEM 11. EXECUTIVE COMPENSATION.
(a) Compensation of Directors.
A director of Homestake who is not an employee of Homestake 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."
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 (the "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
6
<PAGE>
defined in the 1996 Plan. For 1997, a total of 3,775 share rights were granted
under the 1996 Plan. No director was credited with more than 493 share rights
for 1997.
During 1997, 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. Effective January 1, 1997,
Prime paid directors who were employees of the Company or its subsidiaries
C$1,000 for meetings attended in person and C$750 for telephone meetings. M.
Norman Anderson, a non-employee director of the Company and Prime, received
C$21,500 in directors fees from Prime for 1997.
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.
The consulting agreement was renewed at the request of the Company 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 to him for his services as a director. Homestake also agreed to
provide Mr. Conger office facilities. For the year 1997, Mr. Conger received a
total of $151,500 in compensation ($1,500 was 1996 compensation paid to Mr.
Conger in 1997) and $20,945 in office expense reimbursement .
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 1997, the Company paid $11,844 to Mr. Peeler under the
agreement.
(b) Compensation of Executive Officers.
Summary Compensation Table
The following table discloses, for the years indicated, compensation
received by Homestake's executive officers named therein (the "Named Executive
Officers") for the fiscal years ended December 31, 1997, 1996 and 1995. Such
officers served as Chief Executive Officer or were one of the four most highly
compensated executive officers (other than the Chief Executive Officer) for the
fiscal year ended December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
--------------------------------------------- --------------------------------------------
Restricted Securities LTIP
Name and Other Annual Stock Award Underlying Payouts All Other
Principal Position Year Salary Bonus Compensation (1) ($)(2) Options (#) ($) Compensation
- ------------------------- ---- -------- -------- ---------------- ----------- ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jack E. Thompson 1997 $475,000 $142,500 $ 18,778(4) $475,950(5) 133,400 $0 $15,874(6)
President and Chief 136,810(7)
Executive Officer (3) 213,738(8)
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1996 422,452 255,000 25,212(9) 56,100 0 12,044
1995 336,000 68,000 29,146(10) 31,100 0 9,174
Gene G. Elam 1997 283,000 98,900 5,213(11) 178,125(5) 57,100 0 13,906(12)
Vice President, Finance 44,250(7)
and Chief Financial 22,501(8)
Officer 1996 272,000 95,700 24,167(13) 17,900 0 11,546
1995 261,000 41,000 8,150(14) 16,100 0 9,010
Wayne Kirk 1997 354,000 138,700 5,076(15) 223,725(5) 71,300 0 12,790(16)
Vice President, General 31,738(7)
Counsel and Corporate 15,000(8)
Secretary 1996 340,000 121,400 1,110(17) 22,300 0 10,908
1995 326,000 52,000 0 20,100 0 9,010
Gil J. Leathley 1997 223,606 76,800 19,556(19) 136,800(5) 43,600 0 14,975(20)
Senior Vice President, 14,371(7)
Operations(18) 45,000(8)
1996 208,000 71,700 18,995(21) 15,400 0 10,438
1995 198,088 30,000 49,571(22) 21,500 0 10,655
William F. Lindqvist 1997 233,000 93,800 13,615(24) 146,775(5) 47,000 0 13,926(25)
Vice President, 1996 224,000 77,300 19,731(26) 16,500 0 10,916
Exploration(23) 1995 91,667 12,000 125,525(27) 30,000 0 3,663
</TABLE>
(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) In March 1997, the Compensation Committee adopted three restricted
stock programs (described in notes 5, 7 and 8 below) for the members
of the Company's senior management as a further means of aligning
management's long term interests with the interests of the Company's
shareholders, as a means of providing additional incentives and to
encourage members of senior management to increase their ownership in
the Company and to remain with the Company.
(3) Mr. Thompson served as President and Chief Operating Officer until May
1996, when he was appointed President and Chief Executive Officer.
(4) Consists of $1,178 (financial planning) and $17,600 (directors' fees).
(5) Value at date of grant of restricted stock granted under the
Performance Based Program. Under the Performance Based Program, the
Compensation Committee grants restricted stock to members of the
senior management which vest over time and which vest depending on
achievement of performance goals over the life of the Performance
Based Stock Rights.
(6) Consists of $9,500 (matching contribution to savings plan), $2,223
(imputed income on split dollar life insurance), $2,254 (tax gross-up
related to split dollar life insurance), $838 (reimbursement for
spousal travel, expense and tax gross-up) and $1,059 (above market
component of interest paid on deferred compensation plan).
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(7) Value at date of grant of restricted stock granted under the Matching
Stock Award Program. Under the Matching Stock Award Program, the
Compensation Committee grants restricted stock to senior managers on
the basis of one restricted share for each three shares owned by the
senior managers that are "enrolled" by the senior manager. The
enrolled shares must be held for five years for the matching shares to
vest.
(8) Value at date of grant of restricted stock granted under the Bonus
Stock Program. Under the Bonus Stock Program, the Compensation
Committee provides senior managers with an opportunity to exchange a
portion of their annual cash bonuses for awards of restricted stock.
The shares awarded are equal to 150% of the cash foregone, and the
shares vest over time. The employee must continue to be employed on
the vesting dates to receive the shares. If not, the invested shares
and cash foregone are forfeited.
(9) Consists of $6,012 (financial planning) and $19,200 (directors' fees).
(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 $880 (financial planning) and $4,333 (directors' fees paid
by publicly held subsidiary).
(12) Consists of $9,500 (matching contribution to savings plan), $1,459
(imputed income on split dollar life insurance), $1,480 (tax gross-up
related to split dollar life insurance), $884 (reimbursement for
spousal travel, expense and tax gross-up) and $583 (above market
component of interest paid on deferred compensation plan).
(13) Consists of $1,620 (financial planning) and $22,547 (directors' fees
paid by publicly held subsidiary).
(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) Consists of $9,500 (matching contribution to savings plan), $1,204
(imputed income on split dollar life insurance), $1,221 (tax gross-up
related to split dollar life insurance), $768 (reimbursement for
spousal travel, expense and tax gross-up) and $97 (above market
component of interest paid on deferred compensation plan).
(17) Directors' fees paid by publicly held subsidiary.
9
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(18) Mr. Leathley served as Vice President, Canadian Operations during a
portion of 1995 and was a Canadian resident. Accordingly, a
portion of Mr. Leathley's 1995 Annual Compensation and All Other
Compensation was paid in Canadian dollars. The conversion rate used
to convert such amounts was 0.7324. Mr. Leathley became Vice
President, Operations, of Homestake in May 1995.
(19) Consists of $5,021 (financial planning), $4,535 (directors' fees paid
by publicly held subsidiary) and $10,000 (forgiveness of relocation
loan).
(20) Consists of $9,500 (matching contribution to savings plan), $1,221
(imputed income on split dollar life insurance), $1,168 (tax gross-up
related to split dollar life insurance), $823 (reimbursement for
spousal travel, expense and tax gross-up), $1,790 (above market
component of interest paid on deferred compensation plan) and $473
(interest in Canadian retirement account).
(21) Consists of $4,967 (financial planning), $563 (directors' fees paid
by publicly held subsidiary), $10,000 (forgiveness of relocation
loan) and $3,465 (tax gross-up related to relocation expenses).
(22) 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.
(23) Mr. Lindqvist became an employee of Homestake on June 30, 1995.
(24) Consists of $3,615 (financial planning) and $10,000 (forgiveness of
relocation loan).
(25) Consists of $9,500 (matching contribution to savings plan), $881
(imputed income on split dollar life insurance), $973 (tax gross-up
related to split dollar life insurance) and $2,572 (above market
component of interest paid on deferred compensation plan).
(26) Consists of $6,497 (financial planning), $10,000 (forgiveness of
relocation loan) and $3,234 (tax gross-up related to relocation
expenses).
(27) Consists of $91,394 (relocation expenses for move from Australia to
the San Francisco 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 Company's Deferred Compensation Plan, participants may
elect to defer each year an amount not
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less than $2,000 nor more than 100 percent of compensation. Amounts deferred are
credited with interest in an amount equivalent to 120% of (i) the monthly
Moody's Corporate Bond Yield Average as published by Moody's Investors Service,
Inc. and (ii) such additional amount as the Compensation Committee determines to
be appropriate.
Stock Option Plans.
Options Granted.
The following table sets forth certain information with respect to options
to acquire common stock that were granted during 1997 to each Named Executive
Officer under Homestake's stock option plans.
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
% of Total
No. of Options Potential Realizable
Securities Granted to Exercise Value at Assumed
Underlying Employees or Base Annual Rates of Stock
Options in Fiscal Price Expiration Price for Option Term
Name Granted (1) Year ($/Sh) Date 5%(2) 10%(2)
---- ----------- ---------- -------- ---------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Jack E. Thompson 64,500 8.12% $15.225 Feb. 19, 2007 $672,740 $1,652,905
68,900 8.68 14.900 April 4, 2007 621,780 1,598,176
Gene G. Elam 20,500 2.58 15.225 Feb. 19, 2007 213,816 525,342
36,600 4.61 14.900 April 4, 2007 330,292 848,958
Wayne Kirk 25,600 3.22 15.225 Feb. 19, 2007 267,010 656,037
45,700 5.75 14.900 April 4, 2007 412,414 1,060,039
Gil J. Leathley 17,600 2.22 15.225 Feb. 19, 2007 183,569 451,025
26,000 3.27 14.900 April 4, 2007 234,634 603,085
William F. Lindqvist 19,000 2.39 15.225 Feb. 19, 2007 198,172 486,902
28,000 3.53 14.900 April 4, 2007 252,683 649,477
</TABLE>
(1) Granted at fair market value. Granted on February 19, 1997 and April 4,
1997 and vesting 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.
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Option Exercises and Year-End Values:
The following table sets forth certain information with respect to options
exercised during 1997 by each Named Executive Officer.
AGGREGATED OPTION EXERCISES IN 1997
AND OPTION VALUES AT 1997 YEAR END
<TABLE>
<CAPTION>
No. of Securities
Underlying Value of Unexercised
Unexercised Options In-the-Money Options
No. of Shares at Fiscal Year-End at Fiscal Year-End
Acquired Exercisable/ Exercisable/
Name on Exercise Unexercisable Unexercisable
- --------------------------- ---------------------- ---------------------- ---------------------
<S> <C> <C> <C>
Jack E. Thompson 0 119,225/198,450 $0/0
Gene G. Elam 0 96,675/81,875 0/0
Wayne Kirk 0 72,950/102,200 0/0
Gil J. Leathley 0 39,875/68,325 0/0
William F. Lindqvist 0 70,425/69,375 0/0
</TABLE>
Retirement Programs.
Homestake Retirement Plan.
In general, all full-time, non-union U.S. employees of Homestake
(approximately 476 persons at December 31, 1997) participate in the Homestake
Retirement Plan, a noncontributory defined benefit plan (the "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 (the "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, 1997, for Messrs. Elam, Kirk, Leathley,
Lindqvist and Thompson are 7 years, 5 years, 11 years, 5 years and 16 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.
12
<PAGE>
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 (the "Code") imposes a maximum limit on
annual retirement benefits payable under qualified retirement plans. For 1997,
that annual limit was $125,000. In addition, the Code limits the amount of
annual compensation that may be considered under qualified retirement plans. In
1997, that annual limit was $160,000. 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.
Homestake Executive Supplemental Retirement Plan.
Homestake has established the Homestake Executive Supplemental Retirement
Plan (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% 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
13
<PAGE>
December 31, 1997, for Messrs. Elam, Kirk, Leathley and Thompson are 11 years, 5
years, 11 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>
Severance Agreements.
Homestake has severance agreements with Messrs. Elam, Kirk, Leathley,
Lindqvist 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% of the shares in the
resulting company are owned by the shareholders of Homestake immediately
preceding such event; (ii) at least 75% of fair market value of Homestake's
assets are sold; or (iii) at least 25% 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.
14
<PAGE>
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Ownership of Common Stock by Homestake's Management
The following table shows: (i) the number of shares of Homestake Common
Stock owned by directors and the five highest paid executive officers, and all
directors and executive officers as a group, as of April 1, 1998, (ii) the
number of shares of Homestake Common Stock which such persons have the right to
acquire within 60 days of April 1, 1998, 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 April 1, 1998. The shares so shown
include shares held in Homestake's Savings Plan for the accounts of executive
officers and directors share rights granted under Homestake's Stock Option and
Share Rights Plan - 1988 and 1996, which entitle Outside Directors to receive
shares on the date of ceasing to serve as a director. Other than Mr. Clark (see
footnote 2 below), no director or executive officer beneficially owns greater
than 1 percent of the total number of shares of Homestake Common Stock
outstanding. The shares of Homestake Common Stock beneficially owned by all
directors and executive officers as a group represent approximately 5.5% of the
146,778,475 shares of Homestake Common Stock outstanding as of April 1, 1998,
which includes 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.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned Right to
as of April 1, Acquire Shares Total Number
1998, Excluding Within 60 Days of Shares
Right to Acquire of Beneficially
Name Shares April 1, 1998 Owned
---- ------------------ --------------- -------------
<S> <C> <C> <C>
M. Norman Anderson................... 2,529 6,686 9,215
Richard R. Burt...................... 0 84 84
Robert H. Clark, Jr(2)............... 6,448,776 2,334 6,451,110
Harry M. Conger(3)................... 176,223 497,056 673,279
G. Robert Durham..................... 10,000 1,943 11,943
Douglas W. Fuerstenau................ 1,478 2,367 3,845
Henry G. Grundstedt.................. 1,000 1,497 2,497
John Neerhout, Jr.................... 1,000 1,889 2,889
Peter J. Neff........................ 0 0 0
Stuart T. Peeler(4).................. 10,000 2,503 12,503
Carol A. Rae......................... 500 810 1,310
Jack E. Thompson..................... 51,830 178,050 229,880
Jeffrey L. Zelms..................... 50 131 181
Gene G. Elam......................... 11,683 122,750 134,433
Wayne Kirk(5)........................ 8,360 105,500 113,860
Gil J. Leathley...................... 3,413 72,342 75,755
William F. Lindqvist................. 244 86,300 86,544
All Directors and Executive
Officers as a Group (24 persons)..... 6,753,444 1,343,146 8,096,590
</TABLE>
- ---------------------
(1) In some instances voting and investment power is shared with the spouse of
the identified person.
(2) Includes 13,000 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
principal shareholder of Case, Pomeroy & Company, Inc. The shares
beneficially owned by Mr. Clark represent approximately 4.4 percent of the
146,778,475 shares of Homestake Common Stock outstanding as of April 1,
1998.
15
<PAGE>
(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 3,200 shares owned by a corporation of which Mr. Peeler is the
sole shareholder.
(5) Includes 414 shares held of record by two of Mr. Kirk's children. Mr. Kirk
disclaims beneficial ownership of these shares.
Security Ownership of Certain Beneficial Owners of Homestake
As of April 1, 1998, the only person known to Homestake to own beneficially
five percent or more of the Homestake Common Stock outstanding was:
<TABLE>
<CAPTION>
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership(1) Percent of Class
------------------- ----------------------- ----------------
<S> <C> <C>
August von Finck........................... 10,510,000 7.16%
Pacellistrasse 4
80333 Munich, Germany
</TABLE>
- -----------------------
(1) The amount and nature of Mr. von Finck's beneficial ownership is based upon
information provided to Homestake pursuant to a Schedule 13D filed on
behalf of Mr. von Finck on March 10, 1998.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Agreement with Case Pomeroy.
In connection with Homestake's acquisition of Felmont Oil Corporation (now
Homestake Sulphur Company) in 1984, Homestake and Case, Pomeroy & Company, Inc.
("Case Pomeroy") 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.
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.
16
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
HOMESTAKE MINING COMPANY
By: /s/ David W. Peat
----------------------
David W. Peat
Vice President and Controller
DATE: April 30, 1998 (Principal Accounting Officer)
17
