<PAGE>
================================================================================
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 [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
HOMESTAKE MINING COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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 transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] 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 registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
HOMESTAKE MINING COMPANY
650 California Street
San Francisco, California 94108
----------------
Notice of Annual Meeting of Stockholders
Date: May 11, 1999
Time: 11:00 a.m.
Location: Colonial Room
Westin St. Francis Hotel
335 Powell Street
San Francisco, California
To the Holders of Homestake Mining Company Common Stock:
To the Holders of Homestake Canada Inc. Exchangeable Shares:
You are cordially invited to attend Homestake's 1999 Annual Meeting of
Stockholders. At the Annual Meeting, we will report on matters of current
interest to our Stockholders. In addition, we will ask you to:
.elect four Class III directors;
.appoint PricewaterhouseCoopers LLP as our auditors for 1999; and
.consider and vote on any other business that properly comes before the
meeting.
If you were a record holder of Homestake Common Stock or Homestake Canada
Inc. Exchangeable Shares at the close of business on March 15, 1999, you have
the right to vote at the meeting.
I look forward to seeing you on May 11.
Sincerely,
/s/ Jack E. Thompson
Jack E. Thompson
Chairman, President and Chief
Executive Officer
March 25, 1999
Your vote is important. Whether you plan to attend or not, please sign, date
and
return the enclosed proxy card or voting instruction form in the envelope
provided.
If you prefer to vote in person at the meeting, you may do so.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Voting at the Annual Meeting.............................................. 1
Who is Entitled to Vote at the Annual Meeting........................... 1
Voting your Shares...................................................... 1
Revoking your Proxy or Voting Instructions.............................. 2
Votes Required to Approve the Proposals................................. 3
Failure of Holders of HCI Exchangeable Shares to Give Instructions to
Montreal Trust......................................................... 3
Quorum Requirement...................................................... 3
Solicitation Costs...................................................... 3
Share Ownership Information............................................... 4
Ownership Guidelines.................................................... 4
Share Ownership by Homestake Directors and Executives................... 4
Significant Stockholders................................................ 5
Proposal No. 1--Election of Four Directors................................ 6
Information about the Homestake Board..................................... 6
Directors Nominated This Year for Class III Director Terms Expiring in
2002................................................................... 6
Continuing Class I Directors to Serve Until the 2000 Annual Meeting..... 7
Continuing Class II Directors to Serve Until the 2001 Annual Meeting.... 8
Board Meetings and Committees........................................... 8
Committee Membership Roster............................................. 9
Director Compensation................................................... 10
Executive Compensation.................................................... 12
Summary Compensation Table.............................................. 12
Stock Option Plans...................................................... 14
Retirement Programs..................................................... 15
Severance Agreements.................................................... 16
Performance Graph......................................................... 17
Compensation Committee Report............................................. 18
Certain Related Party Transactions........................................ 22
Agreement With Case Pomeroy............................................. 22
Transactions With Case Pomeroy.......................................... 22
Proposal No. 2--Appointment of PricewaterhouseCoopers LLP................. 22
Other Information......................................................... 23
Section 16(a) Beneficial Ownership Reporting Compliance................. 23
Stockholder Proposals................................................... 23
</TABLE>
<PAGE>
PROXY STATEMENT
for the
HOMESTAKE MINING COMPANY
1999 ANNUAL MEETING OF STOCKHOLDERS
March 25, 1999
The Homestake Board of Directors is soliciting your proxy to vote at the
1999 Annual Meeting of Stockholders. We have sent you:
. This Proxy Statement, which summarizes information you need to know to
vote at the Annual Meeting;
. If you are a holder of Homestake Common Stock, a proxy card, which you
can use to vote your shares of Homestake Common Stock;
. If you are a holder of Homestake Canada Inc. (HCI) Exchangeable Shares,
a voting instruction form, which you can use to give voting instructions
to the Trustee holding the Special Voting Stock that indirectly permits
you to vote at the Annual Meeting; and
. Our 1998 Annual Report, which includes our financial statements and
other important information about Homestake.
This will be our first annual meeting after our recent acquisition of the
minority interest in Prime Resources Group Inc., and we welcome our new
stockholders.
VOTING AT THE ANNUAL MEETING
Who is Entitled to Vote at the Annual Meeting
The "record date" for the Annual Meeting is March 15, 1999. If you held
Homestake Common Stock or HCI Exchangeable Shares in your name at the close of
business on March 15, 1999, you are entitled to vote at the Annual Meeting. On
March 15, 1999, there were outstanding 231,099,814 shares of Homestake Common
Stock and 8,099,210 HCI Exchangeable Shares, for a total of 239,199,024 shares
entitled to vote at the Annual Meeting. If you owned Homestake Common Stock or
HCI Exchangeable Shares at March 15, 1999, but they are in the name of a
broker, bank or other nominee, that broker, bank or other nominee has to vote
the shares unless you get a proxy from them.
Voting your Shares
Homestake Common Stock
Each share of Homestake Common Stock that you own in your name entitles you
to one vote. Your proxy card indicates the number of shares of Homestake
Common Stock that you own.
There are two ways to vote your shares of Homestake Common Stock on
proposals at the Annual Meeting:
. You can vote by signing and returning the enclosed proxy card. If you
vote by proxy card, your "proxy" (one of the individuals named on the
proxy card) will vote your shares as you instruct on the proxy card. If
you don't give instructions on how to vote your shares, your shares will
be voted as recommended by the Homestake Board as follows:
.""FOR'' the election of the four director nominees; and
.""FOR'' the appointment of PricewaterhouseCoopers LLP as independent
auditors for 1999.
. You can attend the Annual Meeting and vote in person. We will give you a
ballot when you arrive. However, if your shares are held in the name of
your broker, bank or another nominee, you must get a proxy from the
broker, bank or other nominee. That's the only way we can be sure that
the broker, bank or other nominee has not already voted your shares.
1
<PAGE>
HCI Exchangeable Shares
Each HCI Exchangeable Share that you own in your name entitles you to one
vote. Your voting instruction form indicates the number of HCI Exchangeable
Shares that you own.
There are two ways to vote your HCI Exchangeable Shares:
. You can vote by signing and returning the enclosed voting instruction
form. The voting instruction form permits you to instruct Montreal Trust
Company of Canada to vote your HCI Exchangeable Shares. Montreal Trust
serves as the trustee under the Voting, Support and Exchange Trust
Agreement that Homestake, HCI and Montreal Trust entered into when HCI
Exchangeable Shares were first issued. You also can use your voting
instruction form to name a proxy. Your voting instruction form permits
you to name the persons designated by Homestake as your proxies, or you
can designate another proxy, including yourself. The Trustee must
receive your voting instructions by Friday, May 7, 1999.
. You can attend the Annual Meeting and vote in person. We will give you a
ballot when you arrive. However, if your HCI Exchangeable Shares are
held in the name of your broker, bank or another nominee, you must get a
proxy from the broker, bank or other nominee. That's the only way we can
be sure that the broker, bank or other nominee has not already
instructed Montreal Trust to vote your shares.
If any matter is presented in addition to election of directors and
appointment of independent auditors, your proxies (if they are the persons
designated by Homestake) will vote based on their best judgment. If you gave
voting instructions to Montreal Trust to vote your HCI Exchangeable Shares,
Montreal Trust has advised Homestake that it will vote on any such additional
matters as recommended by Homestake's management. When this Proxy Statement
went to press, we were not aware of any matters to be considered at the Annual
Meeting other than the election of directors and the appointment of
independent auditors.
Revoking your Proxy or Voting Instructions
Revoking your Proxy for Homestake Common Stock
If you give a proxy, you may revoke it at any time before it is exercised by
doing any one of the following:
. You may send another proxy card with a later date.
. You may notify Wayne Kirk, Homestake's Secretary, in writing before the
Annual Meeting that you have revoked your proxy.
. You may vote in person at the Annual Meeting.
Revoking your Voting Instructions for HCI Exchangeable Shares
If you give voting instructions to Montreal Trust or appoint a proxy, you
may revoke the voting instructions or the proxy at any time before the shares
are voted by doing any one of the following:
. You may send another voting instruction form with a later date to
Montreal Trust.
. You may notify Wayne Kirk, Homestake's Secretary, in writing before the
Annual Meeting that you have revoked your voting instruction or proxy.
. You may vote in person at the Annual Meeting by appointing yourself as
proxy for your HCI Exchangeable Shares.
2
<PAGE>
Votes Required to Approve the Proposals
The Homestake Common Stock and the HCI Exchangeable Shares vote together as
a single class. In the rest of this Proxy Statement, we use the term "Shares"
to refer to both the Homestake Common Stock and the HCI Exchangeable Shares,
and we use the term "Stockholders" to refer to holders of Homestake Common
Stock and holders of HCI Exchangeable Shares.
Election of Directors. Directors are elected by a plurality vote of Shares.
This means that the four nominees receiving the highest number of votes will
be elected, even if none receives a majority of the votes cast.
Appointment of Independent Auditors. The appointment of
PricewaterhouseCoopers LLP as our independent auditors for 1999 must be
approved by a majority of the Shares present at the Annual Meeting.
Other Proposals. If any other proposals are presented at the Annual Meeting
and are in order for voting, the number of votes required for approval will
depend on the nature of the proposal. Under the Delaware law and New York
Stock Exchange rules that regulate voting at our Stockholder Meetings,
generally the number of votes required to approve a matter is a majority of
the Shares represented at the Meeting or a majority of all Shares entitled to
vote at the Meeting.
Broker Votes, Non-Votes and Abstentions. If your broker holds your Shares in
its name and you do not give the broker voting instructions, under the rules
of the New York Stock Exchange, your broker may, but is not required to, vote
your Shares on the two proposals presented at the Annual Meeting. If you do
not give your broker voting instructions and the broker does not vote your
Shares, this is referred to as a "broker non-vote." Abstentions or broker non-
votes have no effect on the election of directors. Abstentions or broker non-
votes on the proposal to appoint PricewaterhouseCoopers LLP as independent
auditors have the same effect as a vote "against" the proposal.
Failure of Holders of HCI Exchangeable Shares to Give Instructions to Montreal
Trust.
If you hold HCI Exchangeable Shares and you do not give voting instructions
to Montreal Trust or appoint another person as your proxy, Montreal Trust will
NOT vote your HCI Exchangeable Shares.
Quorum Requirement
A quorum of Shares is necessary to hold a valid meeting. If holders of at
least a majority of the Shares outstanding are present or represented at the
Annual Meeting, a quorum will exist. Abstentions and broker non-votes are
counted as present for establishing a quorum.
Solicitation Costs
We are soliciting proxies and voting instructions on behalf of Homestake's
Board of Directors. This solicitation is being made by mail but also may be
made by telephone or in person. We have hired D.F. King & Co., Inc. to assist
in the solicitation process. We will pay D.F. King $12,000, plus expenses.
We will ask banks, brokers and other institutions, nominees and fiduciaries
to forward our proxy materials to their principals and to obtain their
authority to execute proxies and voting instructions. We will reimburse them
for expenses.
3
<PAGE>
SHARE OWNERSHIP INFORMATION
Ownership Guidelines
Executives. In 1997, the Board of Directors established stock ownership
guidelines for Company executives. The executives are encouraged, but not
required, to meet the guidelines within five to seven years. The guideline for
the Chief Executive Officer is ownership of Shares having a value
approximately equal to three times base salary and for vice presidents the
guidelines are either one or two times base salary, depending on the vice
president's level of seniority and responsibility.
Directors. Outside directors (that is, directors who are not employed by
Homestake or any of our subsidiaries) are expected to own Shares having a
value approximately equal to three times the annual retainer paid to outside
directors. The annual retainer for 1999 is $16,000, so the expected level of
ownership is Shares worth approximately $48,000. We expect current outside
directors to achieve this level of stock ownership by the end of 2003. An
outside directors who later joins the Board will be expected to achieve this
level of stock ownership within five years of the date he or she becomes a
board member.
Share Ownership by Homestake Directors and Executives
The following table shows the number of Shares beneficially owned by
Homestake's directors, its five highest paid executives, and all of its
directors and executives as a group at March 1, 1999. It also shows the number
of shares those directors and executives have a right to acquire on or before
May 1, 1999.
Other than Robert H. Clark, Jr. (see note 2 below), no director or executive
beneficially owns more than one percent of the 239,199,024 Shares outstanding
on March 15, 1999. All directors and executives together beneficially own, and
have the right to acquire on or before May 1, 1999, approximately 3.36% of the
Shares outstanding. This percentage includes Shares held by Case, Pomeroy &
Company, Inc.
<TABLE>
<CAPTION>
Total Beneficially
Beneficially Right to Owned and Right
Name Owned Shares Acquire Shares to Acquire Shares
- ---- ------------ -------------- ------------------
<S> <C> <C> <C>
Gerhard Ammann................. 3,438 0 3,438
M. Norman Anderson(1).......... 4,228 5,914 10,142
Richard R. Burt................ 219 0 219
Robert H. Clark, Jr.(2)........ 6,448,995 1,736 6,450,731
G. Robert Durham............... 10,438 1,295 11,733
Douglas W. Fuerstenau.......... 1,697 1,728 3,425
Paul McClintock(3)............. 8,809 0 8,809
John Neerhout, Jr.............. 3,438 1,254 4,692
Peter J. Neff.................. 2,238 0 2,238
Stuart T. Peeler(4)............ 10,219 1,885 12,104
Carol A. Rae................... 719 363 1,082
Jack E. Thompson............... 82,572 297,525 380,097
Jeffrey L. Zelms............... 488 0 488
Gene G. Elam(5)................ 23,021 162,475 185,496
Wayne Kirk(6).................. 22,682 167,445 190,127
Gillyeard J. Leathley.......... 12,959 104,725 117,684
William F. Lindqvist........... 12,082 129,350 141,432
All directors and executives as
a group (25 persons).......... 6,719,543 1,325,470 8,045,013
</TABLE>
4
<PAGE>
- --------
(1) Beneficially owned Shares includes 219 Shares owned by a wholly-owned
company and 1,480 HCI Exchangeable Shares.
(2) Beneficially owned Shares includes 13,000 Shares owned by Mr. Clark's
spouse and 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. The Shares owned by
Mr. Clark, including the Shares owned by Case Pomeroy, represent
approximately 2.7% of the Shares outstanding as of March 1, 1999.
(3) Includes Shares owned by a wholly-owned company and a partly-owned
company.
(4) Beneficially owned Shares includes Shares owned by a wholly-owned company.
(5) Mr. Elam retired on February 12, 1999. Amounts shown are as of February
12, 1999.
(6) Beneficially owned Shares includes 417 Shares held of record by two of Mr.
Kirk's children. Mr. Kirk disclaims beneficial ownership of these Shares.
Significant Stockholders
We have two Stockholders that beneficially own five percent or more of the
239,199,024 Shares outstanding as of March 15, 1999.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent of
of Beneficial Owner Owned Beneficially Class
- ------------------- ------------------ ----------
<S> <C> <C>
August Von Finck(1)............................. 30,000,000(1) 12.54%(1)
Pacellistrasse 4
80333 Munich, Germany
Malaysia Mining Corporation Berhad.............. 18,167,361 7.60%
32nd Floor, Menara PNB
201A Jalan Tun Razak
50400 Kuala Lumpur
Malaysia
</TABLE>
- --------
(1) Of the Shares shown, August Von Finck owns 21,000,000 Shares and three
adult children of August Von Finck each owns 3,000,000 Shares. Each of
August Von Finck and the three adult children disclaims beneficial
ownership of the Shares held by the others.
The information that appears in this table comes from reports filed with the
United States Securities and Exchange Commission by Mr. Von Finck and members
of his family and from information provided by Malaysia Mining.
5
<PAGE>
PROPOSAL NO. 1
ELECTION OF FOUR DIRECTORS
The Board of Directors of Homestake consists of 13 members, divided into
three classes. One class is elected at each Annual Meeting of Stockholders to
serve a three-year term. On May 11, 1999, two of the directors, G. Robert
Durham and Douglas W. Fuerstenau, will be age 70 and will retire under the
Company's mandatory retirement policy for directors. We have not nominated
anyone to replace Mr. Durham or Mr. Fuerstenau, so the Board of Directors will
amend the Company's By-laws on May 11, 1999 to reduce the total number of
Directors to 11.
In addition to the retirements, the terms of four Class III directors will
expire at the date of the Annual Meeting. We have renominated each of those
four Class III directors to serve an additional three-year term, to expire at
the Annual Meeting in 2002. There are seven other directors who are not up for
election this year, and they will continue in office.
INFORMATION ABOUT THE HOMESTAKE BOARD
Directors Nominated This Year for Class III Director Terms Expiring in 2002
<TABLE>
<CAPTION>
Age at
May 11, Director
Director 1999 Since Biographical Information
-------- ------- -------- ------------------------
<C> <C> <C> <S>
Gerhard Ammann(1)....... 55 1998 Mr. Ammann, a chartered accountant,
has been a partner with Mandataria
Revision AG (consulting firm) since
1998. He is a director of Monarch
Resources Ltd. (gold mining).
Richard R. Burt......... 52 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).
Peter J. Neff........... 60 1998 Mr. Neff is an international
business management consultant. He
was previously employed by 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), and is
Chairman of the Board of Trustees of
Rider University.
</TABLE>
- --------
(1) Mr. Ammann was proposed as a director by August Von Finck, a significant
Stockholder of the Company. See page 5.
6
<PAGE>
<TABLE>
<CAPTION>
Age at
May 11, Director
Director 1999 Since Biographical Information
-------- ------- -------- ------------------------
<C> <C> <C> <S>
Carol A. Rae............ 53 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.
The Board of Directors recommends that you vote FOR
each of the directors nominated by Homestake.
Continuing Class I Directors to Serve Until the 2000 Annual Meeting
<CAPTION>
Age at
May 11, Director
Director 1999 Since Biographical Information
-------- ------- -------- ------------------------
<C> <C> <C> <S>
M. Norman Anderson...... 68 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 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..... 58 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).
Jeffrey L. Zelms........ 55 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).
</TABLE>
7
<PAGE>
Continuing Class II Directors to Serve Until the 2001 Annual Meeting
<TABLE>
<CAPTION>
Age at
May 11, Director
Director 1999 Since Biographical Information
-------- ------- -------- ------------------------
<C> <C> <C> <S>
Paul McClintock......... 49 1998 Mr. McClintock has been a director
of McClintock Associates Pty Limited
(investment banking) since 1985. He
was the chairman of Plutonic
Resources Limited (gold mining) from
1996 until April 1998, when
Homestake acquired Plutonic. He is a
director of Ashton Mining Limited
(diamond mining) and Tower Life
Australia Limited (life insurance
and financial services).
John Neerhout, Jr....... 68 1989 Mr. Neerhout has been the Chairman
of London and Continental Railways
Ltd. (rail transportation) since
April 1998. He was the Managing
Director of Union Railways Limited
from April 1997 until December 1998,
and he was the Executive Chairman of
London and Continental Railways Ltd.
from April until December 1998.
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 before his retirement.
Stuart T. Peeler(2)..... 69 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 Chieftain
International, Inc. (oil and gas
exploration and production) and
Chieftain International Funding
Corp. (financial services).
Jack E. Thompson........ 49 1994 Mr. Thompson has been the Chairman
of Homestake since July 1998, 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 HCI from July 1992 until
August 1994. He has held other
positions with Homestake and its
subsidiaries beginning in 1981.
</TABLE>
- --------
(2) Mr. Peeler will be age 70 at the time of the 2000 annual meeting and will
retire at that time unless the mandatory retirement policy for directors
is waived.
Board Meetings and Committees
In 1998, our full Board met 14 times.
Our Board has seven standing committees:
The Audit Committee receives and considers the reports of our auditors, and
oversees our internal auditing. The Audit Committee also recommends to the
Board which auditing firm we should retain for the next fiscal year. All of
the members of the Audit Committee are "outside directors," that is, directors
who are not employees of Homestake or any of our subsidiaries. The Audit
Committee met three times during 1998.
8
<PAGE>
The Compensation Committee evaluates and recommends to the Board the
compensation and benefits for our executives and key employees. The
Compensation Committee also administers our stock and retirement plans. All of
the members of the Compensation Committee are outside directors. The
Compensation Committee met two times during 1998.
The Director Affairs Committee reviews and evaluates candidates for
director, including nominees recommended by our Stockholders. This committee
also makes recommendations to the Board regarding director compensation and
stock ownership. All of the members of the Director Affairs Committee are
outside directors. The committee met three times during 1998.
The Environment, Health and Safety Committee oversees our compliance with
environment, health and safety laws and policies. All of the members of the
Committee are outside directors. The committee met two times during 1998.
The Executive Committee has authority to exercise most of the powers of the
Board on an "as needed" basis when the Board is not in session. The Executive
Committee did not meet during 1998.
The Finance Committee makes recommendations to the Board about dividends,
investments and financial matters. This committee also oversees the
investments in our pension and savings plans. The Finance Committee met three
times during 1998.
The Committee of the Whole includes all directors other than directors who
are employees of the Company. This Committee evaluates the state of the
Company and its Strategic Plan, evaluates the performance of the Chief
Executive Officer, and sets corporate goals and individual performance goals
for the Chief Executive Officer. The Committee of the Whole met two times
during 1998.
During 1998, each director attended at least 75% of the total number of
meetings of the Board of Directors and Committees on which he or she served.
The average attendance at Board and Committee meetings was at least 95%.
Committee Membership Roster
<TABLE>
<CAPTION>
Environ-
ment
Health Committee
Compen- Director and of the
Name Audit sation Affairs Safety Executive Finance Whole
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gerhard Ammann X X X
- -----------------------------------------------------------------------------------------
M. Norman Anderson X X Chairman X X
- -----------------------------------------------------------------------------------------
Richard R. Burt X X X
- -----------------------------------------------------------------------------------------
Robert H. Clark, Jr. Chairman X X X
- -----------------------------------------------------------------------------------------
G. Robert Durham Chairman X X X Chairman
- -----------------------------------------------------------------------------------------
Douglas W. Fuerstenau X Chairman X X
- -----------------------------------------------------------------------------------------
Paul McClintock X X X
- -----------------------------------------------------------------------------------------
John Neerhout, Jr. X X X X
- -----------------------------------------------------------------------------------------
Peter J. Neff X X X
- -----------------------------------------------------------------------------------------
Stuart T. Peeler X X Chairman X
- -----------------------------------------------------------------------------------------
Carol A. Rae X X X X
- -----------------------------------------------------------------------------------------
Jack E. Thompson Chairman X
- -----------------------------------------------------------------------------------------
Jeffrey L. Zelms X X X
</TABLE>
9
<PAGE>
Director Compensation
Outside Directors' Plan...... Last year, Homestake adopted the 1998 Outside
Directors' Stock Compensation Plan. The purpose
of the Outside Directors' Plan is to encourage
outside director ownership of Homestake Common
Stock, which we think better aligns the
interests of outside directors and our
stockholders.
Annual Fees.................. We pay our outside directors an annual retainer
of $16,000:
. we pay $8,000 in cash; and
. we pay $8,000 in Homestake Common Stock
under our Outside Directors' Plan.
In addition, the Outside Directors' Plan
permits an outside director to take any part of
the cash portion of the annual retainer in
Homestake Common Stock. If the outside director
makes this election, he or she will receive one
additional share of stock for each four shares
paid in lieu of the cash portion of the
retainer. The right to receive those additional
shares vests in installments over a three-year
period, and the outside director has to
continue to be a director at the time of
vesting, subject to certain exceptions.
We also pay a director who serves as the
chairman of a committee an annual fee of
$2,000.
Meeting Fees................. We pay outside directors a fee of:
. $1,000 for each Board or committee
meeting; and
. $1,500 per trip if the outside director
resides on another continent and travels
to North America to attend Board or
committee meetings.
Prime Fees .................. Before we acquired the minority interest in
Prime in December 1998, Prime was a publicly-
held company. M. Norman Anderson, an outside
director of Homestake, was a director of Prime.
Four of our executive officers also served on
the Prime board: Gene G. Elam, Wayne Kirk,
Gillyeard J. Leathley and Walter T. Segsworth.
During 1998, Prime paid directors who were not
employed by Homestake or Prime an annual
retainer of C$10,000. All directors received
C$1,000 for each board or committee meeting the
director attended in person and C$750 for each
board or committee meeting the director
attended by telephone. In 1998, Mr. Anderson
received from Prime an aggregate of C$21,250 in
director fees. Fees paid to Messrs. Elam, Kirk
and Leathley are reflected in the executive
compensation table that appears on page 12 of
this Proxy Statement.
Share Rights................. Share rights granted under the Outside
Directors' Plan give an outside director the
right to receive, for no additional
consideration, Homestake Common Stock on the
date the outside director stops serving as a
Homestake director.
10
<PAGE>
We grant an outside director 2,000 share rights
when he or she joins the Board. In 1998, we
made grants of share rights for 2,000 shares of
Homestake Common Stock retroactively to five
outside directors who joined our Board in 1997
and 1998. On an annual basis, we also grant
each outside director share rights for 1,000
shares of Homestake Common Stock as
compensation for the prior year's service.
Share rights are canceled if the director
doesn't serve three full years from the date of
grant, subject to certain exceptions.
Before the Outside Directors' Plan went into
effect, we granted share rights to outside
directors under the Homestake Stock Option and
Share Rights Plan--1996 (1996 Plan). The number
of shares of Homestake Common Stock that an
outside director was entitled to annually was
determined by dividing 10% of the total
compensation paid for services as a Homestake
director during the prior year by the fair
market value of Homestake Common Stock at the
time of announcement of earnings for that year.
During 1998, a total of 3,775 share rights were
granted to outside directors, ranging from 84
to 493 share rights per outside director.
Deferred Compensation Plan... Outside directors can defer cash and stock
compensation of $2,000 or more per year under
our Deferred Compensation Plan. Cash amounts
deferred are credited with interest equal to
120% of the monthly Moody's Corporate Bond
Yield Average. The Compensation Committee may
increase the interest component. Stock amounts
deferred are credited with dividend
equivalents.
Retirement Plan.............. We provide qualifying outside directors with
retirement benefits under the Outside
Directors' Retirement Plan. An outside director
qualifies if he or she does not have a fully
vested interest under one of our tax-qualified
retirement plans for employees. The retirement
benefit, which is fixed when the outside
director retires, is equal to the annual
retainer (currently $16,000 per year) payable
on the retirement date multiplied by the number
of years the director served as an outside
director. The retirement benefit is paid in
monthly installments based on the number of
months he or she was an outside director.
Consulting Agreement
with Stuart T. Peeler........ Since July 1992, Mr. Peeler has had a
consulting agreement with Homestake. Under this
agreement, he provides advisory services on
Homestake's investment in the Main Pass 299 oil
and sulphur project in the Gulf of Mexico. He
receives $1,000 for each day of services he
provides. In 1998, Homestake paid $11,595 to
Mr. Peeler under this agreement.
Consulting Agreement
with Paul McClintock......... Since October 1, 1998, Mr. McClintock has had a
consulting agreement with Plutonic Resources
Limited, an Australian subsidiary of Homestake.
He provides advisory services in respect of
Australian business and governmental affairs.
He receives the Australian dollar equivalent of
$50,000 per year for services under the
agreement.
11
<PAGE>
EXECUTIVE COMPENSATION
The following table shows the compensation paid for 1998, 1997 and 1996 to
Jack E. Thompson and the other four executives whose pay was the highest in
1998. Gene G. Elam retired on February 12, 1999.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------- ----------------------------------
Awards Payouts
Other -------------------------- -------
Annual Restricted Securities LTIP All Other
Name and Compen- Stock Awards Underlying Payouts Compen-
Principal Position Year Salary Bonus sation(1) ($)(2) Options (#) ($) sation
- ------------------ ---- -------- -------- --------- ------------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jack E. Thompson........ 1998 $490,000 $300,000 $18,393(4) $631,000(5) 252,600 $ 0 $21,174(6)
Chairman, President and 61,302(7)
Chief Executive 1997 475,000 285,000 18,778(4) 475,950(5) 133,400 0 15,874
Officer(3) 136,810(7)
213,738(8)
1996 422,452 225,000 25,212(4) 0 56,100 0 12,044
Gene G. Elam............ 1998 291,500 114,500 6,087(9) 237,000(5) 107,800 0 15,041(10)
Vice President, Finance 3,875(7)
and 22,491(8)
Chief Financial Officer
1997 283,000 98,900 5,213(9) 178,125(5) 57,100 0 13,906
44,250(7)
22,501(8)
1996 272,000 95,700 24,167(9) 0 17,900 0 11,546
Wayne Kirk.............. 1998 364,600 148,500 5,511(11) 296,000(5) 134,800 0 15,382(12)
Vice President, General 3,115(7)
Counsel and Corporate 29,996(8)
Secretary
1997 354,000 138,700 5,076(11) 223,725(5) 71,300 0 12,790
31,738(7)
15,000(8)
1996 340,000 121,400 1,110(11) 0 22,300 0 10,908
Gillyeard J. Leathley... 1998 240,000 89,250 21,531(13) 195,000(5) 88,700 0 18,421(14)
Senior Vice President, 23,619(8)
Operations
1997 223,606 76,800 19,556(13) 136,800(5) 43,600 0 14,975
14,371(7)
45,000(8)
1996 208,000 71,700 18,995(13) 0 15,400 0 10,438
William F. Lindqvist.... 1998 240,000 50,400 13,445(15) 195,000(5) 88,700 0 19,724(16)
Vice President, 75,002(8)
Exploration
1997 223,000 93,800 13,615(15) 146,775(5) 47,000 0 13,926
1996 224,000 77,300 19,731(15) 0 16,500 0 10,916
</TABLE>
- -------
(1) The Securities and Exchange Commission does not require us to report the
value of personal benefits for any year unless the total value exceeds
the lesser of 10 percent of the executive'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 senior executives
(Vice Presidents and above) to provide those executives with additional
incentive to encourage them to increase their ownership in the Company.
We think that this better aligns the interests of the executives and our
Stockholders.
(3) Mr. Thompson was President and Chief Operating Officer until May 1996. He
was appointed President and Chief Executive Officer in May 1996 and he
was appointed Chairman of the Board in July 1998.
(4) This consists of: for 1998, $1,393 (financial planning) and $17,000
(director's fees); for 1997, $1,178 (financial planning) and $17, 600
(director's fees); and for 1996, $6,012 (financial planning) and $19,200
(director's fees).
(5) This was the value at date of grant of restricted stock rights granted
under the Performance Based Program. Under the Performance Based Program,
the Compensation Committee grants restricted stock rights to senior
executives. The rights vest over time if the
12
<PAGE>
performance goals set out in the rights agreement are met. The executive
has to continue to be employed on the vesting dates. Restricted stock
rights under the Performance Based Program accrue dividend credits, and the
dividend credit amounts are paid when the related stock rights vest. For
1998, the amounts shown in the table are the dollar values of the following
share grants: Mr. Thompson--63,100 shares; Mr. Elam--23,700 shares; Mr.
Kirk--29,600 shares; Mr. Leathley--19,500 shares; and Mr. Lindqvist--19,500
shares. For 1997, the amounts shown in the table are the dollar values of
the following share grants: Mr. Thompson--33,400 shares; Mr. Elam--12,500
shares; Mr. Kirk--15,700 shares; Mr. Leathley--9,600 shares; and Mr.
Lindqvist--10,300 shares.
(6) This consists of $9,600 (matching contribution to savings plan), $2,470
(imputed interest on split dollar life insurance), $2,297 (tax gross-up
related to split dollar life insurance), $1,254 (above market component
of interest paid on deferred compensation plan), and $5,553 (dividend
credit amounts paid on vested stock under the Performance Based Program
(see note 5) and the Bonus Stock Program (see note 7)).
(7) This was the value at date of grant of restricted stock rights granted
under the Matching Stock Award Program. Under the Matching Stock Award
Program, the Compensation Committee grants restricted stock rights to
senior executives. The rights entitle the executives to receive one Share
of Homestake Common Stock for each three Shares owned by the senior
executive that are "enrolled" with the Company. The enrolled Shares must
be held for five years and the executive must continue to be employed
during the five years for the matching Shares to vest. For 1998, the
amounts shown in the table are the dollar values of the following share
grants: Mr. Thompson--7,910 shares; Mr. Elam--500 shares; and Mr. Kirk--
402 shares. For 1997, the amounts shown are the dollar values of the
following share grants: Mr. Thompson--9,275 shares; Mr. Elam--3,000
shares; Mr. Kirk--2,151 shares; and Mr. Leathley--974 shares.
(8) This was the value at date of grant of restricted stock rights granted
under the Bonus Stock Program. Under the Bonus Stock Program, the
Compensation Committee gives senior executives the opportunity to
exchange part or all of their annual cash bonuses (if paid) for
restricted stock. The Shares awarded are equal in value to 150% of the
cash foregone, and the Shares vest over time. The executive must continue
to be employed on the vesting dates to receive the shares. Restricted
stock rights under the Bonus Stock Program accrue dividend credits, and
the dividend credit amounts are paid when the related stock rights vest.
For 1998, the amounts shown in the table are the dollar values of the
following share grants: Mr. Elam--1,894 shares; Mr. Kirk--2,526 shares;
Mr. Leathley--1,989 shares; and Mr. Lindqvist--6,316 shares. For 1997,
the amounts shown in the table are the dollar values of the following
share grants: Mr. Thompson--18,894 shares; Mr. Elam--1,989 shares; Mr.
Kirk--1,326 shares; and Mr. Leathley--3,978 shares.
(9) This consists of: for 1998, $900 (financial planning) and $5,187
(director's fees paid by a publicly held subsidiary); for 1997, $880
(financial planning) and $4,333 (director's fees paid by a publicly held
subsidiary); and for 1996, $1,620 (financial planning) and $22,547
(director's fees paid by a publicly held subsidiary).
(10) This consists of $9,600 (matching contribution to savings plan), $1,574
(imputed interest on split dollar life insurance), $1,629 (tax gross-up
related to split dollar life insurance), $411 (above market component of
interest paid on deferred compensation plan), and $1,827 (dividend credit
amounts paid on vested stock under the Performance Based Program and the
Bonus Stock Program).
(11) This consists of director's fees paid by a publicly held subsidiary.
(12) This consists of $9,600 (matching contribution to savings plan), $2,082
(imputed interest on split dollar life insurance), $1,401 (tax gross-up
related to split dollar life insurance), $68 (above market component of
interest paid on deferred compensation plan), and $2,231 (dividend credit
amounts paid on vested stock under the Performance Based Program and the
Bonus Stock Program).
(13) This consists of: for 1998, $5,857 (financial planning), $5,674
(director's fees paid by a publicly held subsidiary) and $10,000
(forgiveness of relocation loan); for 1997, $5,021 (financial planning),
$4,535 (director's fees paid by a publicly held subsidiary) and $10,000
(forgiveness of relocation loan); and for 1996, $4,967 (financial
planning), $563 (director's fees paid by a publicly held subsidiary)
$10,000 (forgiveness of relocation loan), and $3,465 (tax gross-up
related to relocation expenses).
(14) This consists of $9,600 (matching contribution to savings plan), $4,400
(imputed interest on split dollar life insurance), $1,107 (tax gross-up
related to split dollar life insurance), $1,328 (above market component
of interest paid on deferred compensation plan), $417 (interest in
Canadian retirement account), and $1,569 (dividend credit amounts paid on
vested stock under the Performance Based Program and the Bonus Stock
Program).
(15) This consists of: for 1998, $3,445 (financial planning) and $10,000
(forgiveness of relocation loan); for 1997, $3,615 (financial planning)
and $10,000 (forgiveness of relocation loan); and for 1996, $6,497
(financial planning), $10,000 (forgiveness of relocation loan), and
$3,234 (tax gross-up related to relocation expenses).
(16) This consists of $9,600 (matching contribution to savings plan), $1,594
(imputed interest on split dollar life insurance), $2,939 (tax gross-up
related to split dollar life insurance), $2,360 (above market component
of interest paid on deferred compensation plan), $1,808 (reimbursement
for spousal travel and related tax gross-up), and $1,423 (dividend credit
amounts paid on vested stock under the Performance Based Program).
13
<PAGE>
We have a Deferred Compensation Plan that permits directors, officers and
other key employees selected by the Compensation Committee to defer income.
Participants may elect to defer each year from $2,000 up to 100 percent of
their compensation. Cash amounts deferred are credited with interest in an
amount equivalent to 120% of (i) the monthly Moody's Corporate Bond Yield
Average as published by Moody's Investors Service, Inc. and (ii) any
additional amount the Compensation Committee decides is appropriate. Directors
can also elect to defer Share compensation and be credited with the equivalent
of dividends payable on that amount of Stock.
Stock Option Plans
Options Granted
This table gives certain information with respect to options to acquire
common stock that were granted under our stock option plan during 1998 to Mr.
Thompson and the other four named executives.
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
No. of % of Total Annual Rates of Stock
Securities Options Price Appreciation
Underlying Granted to Exercise or for Option Term
Options Employees Base Price Expiration ---------------------
Name Granted(1) in Fiscal Year ($/SH) Date 5%(2) 10%(2)
- ---- ---------- -------------- ----------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Jack E. Thompson........ 252,600 15.91% $9.37 March 2, 2008 $1,734,867 $4,164,457
Gene G. Elam............ 107,800 6.79 9.37 March 2, 2008 740,375 1,777,230
Wayne Kirk.............. 134,800 8.49 9.37 March 2, 2008 925,812 2,222,362
Gillyeard J. Leathley... 88,700 5.59 9.37 March 2, 2008 609,195 1,462,341
William F. Lindqvist.... 88,700 5.59 9.27 March 2, 2008 609,195 1,462,341
</TABLE>
- --------
(1) Granted at fair market value. Granted on March 2, 1998 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.
Year-End Values
This table shows the value of the options held by Mr. Thompson and the other
four named executives at the end of 1998. None of Mr. Thompson or the four
executives exercised options in 1998.
OPTION VALUES AT 1998 YEAR END
<TABLE>
<CAPTION>
No. of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Options at Year-End at Year-End
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------- -------------------------
<S> <C> <C>
Jack E. Thompson............ 181,800/388,475 $0/0
Gene G. Elam................ 122,750/163,600 0/0
Wayne Kirk.................. 105,500/204,450 0/0
Gillyeard J. Leathley....... 62,425/134,475 0/0
William F. Lindqvist........ 91,300/137,200 0/0
</TABLE>
14
<PAGE>
Retirement Programs
Homestake Retirement Plan
Our full-time, nonunion U.S. employees (about 448 persons at the end of
1998) participate in the Homestake Retirement Plan, a noncontributory defined
benefit 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 is 65. Participants at least 55 with
five years of service can retire early with reduced benefits. The Retirement
Plan is integrated with Social Security. A participant who retires at age 65
with 25 years of service will get a monthly benefit equal to one-half of his
or her average monthly pay (salary and bonus) during the five years of highest
pay, less one-half of the participant's Social Security benefits. There is a
cost-of-living increase, up to a maximum of three percent per year. Benefits
vest after five years of service. We make annual actuarially determined
contributions to the Retirement Plan and do not segregate contributions by
employees.
The following table shows estimated annual payments under the Retirement
Plan for retirees aged 65 with the years of service and levels of pay shown.
The table includes amounts that may be payable under our Supplemental
Retirement Plan described below (the SRP). The amounts are calculated on a
straight life annuity basis and are shown before the Social Security offset
mentioned above. For purposes of the Retirement Plan and the SRP, Messrs.
Elam, Kirk, Leathley, Lindqvist and Thompson had 8, 6, 12, 6 and 17 years of
service at of the end of 1998. For these plans, earnings include salary and
bonus but exclude directors' fees and other benefits that are included in the
Summary Compensation Table.
HOMESTAKE RETIREMENT PLAN
<TABLE>
<CAPTION>
Average Annual
Earnings Years of Service
(60 Consecutive -----------------------------------------------------
Highest Months) 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
--------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$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
650,000 130,000 195,000 260,000 325,000 341,250 357,500
700,000 140,000 210,000 280,000 350,000 367,500 385,000
</TABLE>
Homestake Supplemental Retirement Plan
The U.S. Internal Revenue Code puts a maximum yearly payment limit on
benefits payable under qualified retirement plans. For 1998, that annual limit
was $130,000. Federal law also limits the amount of pay that may be considered
in determining the retirement benefits payable under qualified retirement
plans. In 1998, that limit was $160,000 per year. Under the SRP, the
Compensation Committee can authorize additional retirement payments for
selected executives and key employees to make up the difference between the
full amount of their pension as determined under the Retirement Plan and the
maximum amount that may be paid by a qualified retirement plan under the law.
These extra SRP payments are paid from a "rabbi trust" that we fund with
contributions from time to time. Messrs. Kirk, Leathley, Lindqvist and
Thompson participate in the SRP. Mr. Elam participated in the SRP prior to his
retirement in February 1999.
Homestake Executive Supplemental Retirement Plan
We also have an Executive Supplemental Retirement Plan (the ESRP) that
allows us to pay additional retirement pay to executives and key employees
that are selected by the Compensation Committee. A plan like the ESRP helps us
to compete with other companies in getting and keeping highly qualified senior
management. ESRP participants get service credit equal to 4-1/3% multiplied by
years of service, up to a maximum of 15 years.
15
<PAGE>
Then we multiply service credit by the average monthly pay (salary and bonus)
during the three years of highest pay to determine a monthly benefit. We
reduce that monthly benefit by the benefits payable under all other Homestake
retirement plans (except the contributory savings plans). Once the ESRP
participant reaches age 65, we also reduce the benefit by one-half of Social
Security and comparable foreign plan benefits. Participants can retire at age
62 after 10 years of continuous service. A participant who is at least age 55
with 10 years of service can ask for early retirement and receive a reduced
benefit if the Compensation Committee approves. The ESRP benefits are paid
from the "rabbi trust" mentioned above. The following table shows estimated
annual payments under the ESRP for a 62 year old retiree with the years of
service and levels of pay shown. The amounts are calculated on a straight life
annuity basis and are shown before the offsets for Social Security and
comparable foreign plans, and before reduction for payments under our other
retirement plans. The payments are not limited by the laws that apply to
qualified plans. Messrs. Kirk, Leathley and Thompson participate in the ESRP,
and had 6, 12 and 15 years of service credit at the end of 1998. Mr. Elam
participated in the ESRP prior to his retirement in February 1999. Mr.
Lindqvist was a Homestake employee once before and, following our 1992
acquisition of International Corona Corporation, he was fully vested in his
benefits under the Homestake ESRP with 15 years of deemed service. When he
came back to Homestake in 1995, we agreed to recalculate his ESRP benefits
based on the three years of highest pay after the date of re-employment,
subject however to his completing five years of service from the date of
re-employment, unless we terminate his employment for reasons other than
cause.
HOMESTAKE EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
<TABLE>
<CAPTION>
Average Annual
Earnings Years of Service
(36 Consecutive ----------------------------------------------------------
Highest Months) 10 Years 13 Years 15 Years
--------------- -------- -------- --------
<S> <C> <C> <C>
$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
650,000 281,667 366,167 422,500
700,000 303,333 394,333 455,000
</TABLE>
Severance Agreements
We have severance arrangements with Messrs. Kirk, Leathley, Lindqvist and
Thompson under which they are entitled to benefits if there is a change of
control of Homestake and certain things happen. A change of control may occur
in any of the following circumstances: (i) we are a party to a merger or
combination and less than 75% of the shares in the surviving public company
are owned by our Stockholder group as it existed immediately before the
transaction; (ii) we sell at least 75% of our assets (calculated at fair
market value); or (iii) a person or group (as defined in the SEC's rules)
accumulates Stock with at least 25% in voting power in election of our
directors. For benefits to be payable under the arrangements, within a
specified period after the change of control (generally three years), the
executive has to lose his job, other than for cause, or the executive has to
resign after (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 the change of control. Benefits include (i) a lump sum cash
payment equal to two times the highest annual salary and bonus during the
three years before termination, (ii) continued insurance and certain other
fringe benefits for two years, (iii) vesting in the ESRP described above as if
the employee worked until age 62, (iv) accelerated vesting of stock options
and partial vesting in the restricted stock grants described in footnotes 5, 7
and 8 to the compensation table on page 12, and (v) relocation assistance to
the extent not provided by another employer. These benefits are in place of
any severance benefits under our general severance policy. Mr. Elam had such a
serverance arrangement prior to his retirement in February 1999.
16
<PAGE>
PERFORMANCE GRAPH
The following graph shows the cumulative total Stockholder return on
Homestake Common Stock for the five years ended December 31, 1998, based on
the market price of the Homestake Common Stock and assuming reinvestment of
dividends, and compares it with the comparable cumulative total return of
companies included in the Standard & Poor's 500 Index and the Standard &
Poor's Gold & Precious Metals Mining Index.
The Performance Graph is 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.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG HOMESTAKE MINING COMPANY, THE S&P 500 INDEX
AND THE S&P GOLD & PRECIOUS METALS MINING INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Homestake Mining Company 100.00 80 70 65 45 45
S&P 500 100.00 100 145 170 230 290
S&P Gold & Precious
Metals & Mining 100.00 80 90 90 60 50
</TABLE>
*$100 INVESTED ON 12/31/93 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
17
<PAGE>
COMPENSATION COMMITTEE REPORT*
There are seven members of the Compensation Committee of the Board of
Directors, all outside directors. None of us is an employee or former employee
and none of us has any other services arrangement with the Company. We develop
and administer the Company's executive compensation policies. We evaluate
management's performance and recommend the compensation level for officers and
key employees to the full Board of Directors. We also administer the Company's
stock option and other stock based compensation plans and decide on the amount
of stock options and other stock-based incentives granted to officers and key
employees, and we administer the Deferred Compensation Plan, the Supplemental
Retirement Plan and the Executive Supplemental Retirement Plan. In developing
compensation policies, we use the services of Compensation Resources Group
Inc. as our consultants. We also use the Homestake Human Resources Department
to develop information about compensation policies and practices of companies
with which Homestake competes for executive personnel.
The Company's executive compensation program has the following objectives:
. Attract and retain key executives critical to the long-term success of
the Company by offering competitive compensation packages.
. Make a significant portion of compensation variable, rewarding superior
performance.
. Align the interests of the Company's management with the interests of
the Company's Stockholders by developing compensation programs that link
compensation directly to increases in Stockholder value.
. Maintain an appropriate balance between base salary and performance-
based compensation, with a higher proportion of compensation being
performance-based as salary grade increases.
The basic compensation program includes both cash and long-term, stock-based
compensation. Officers and key employees also may participate in the Company's
Savings Plan, which is generally available to all salaried employees and which
provides for Company and employee matching contributions, and (if they are
selected by the Compensation Committee) in the Company's Retirement Plan, the
Supplemental Retirement Plan, and the Executive Supplemental Retirement Plan.
Officers and key employees may also defer income under the Deferred
Compensation Plan.
Annual Cash Compensation. Annual cash compensation has two components, a
base salary and an annual bonus. The objective is to provide a competitive
compensation package, but one that emphasizes and rewards performance and
success. With this in mind, the Company's policy is to pay base salaries that
are generally competitive with the median of base salaries paid by comparable
companies. We determine and recommend to the full Board a base salary for
officers and key employees that takes into account individual performance,
level of responsibility, experience and competitive factors. Competitive
factors include general pay levels in other businesses, especially mining
companies in the countries where the Company operates. To that end, the
Company's Human Resources Department, under our direction, participates in and
receives data from several surveys conducted by outside executive compensation
consultants. In addition, the Human Resources Department conducts its own
annual survey of salary increases in the mining industry. For 1998, this
survey included Barrick Gold, Battle Mountain Gold, BHP, Cyprus, Echo Bay
Mines, Hecla Mining, Independence, Kennecott, Kinross, Newmont Mining, Phelps
Dodge, Placer Dome, Teck Mining and TVX. We use all of this information in
recommending base salary levels, but we don't assign specific weight to any
particular factor.
The variable component of cash compensation is in the form of an annual
bonus. In deciding on the bonus for each individual, we consider the Company's
performance, the individual's performance and (where appropriate) departmental
performance. Each officer and key employee is assigned a target bonus amount
at the beginning of each year, based on his or her salary grade, that ranges
from 20% to 50% of base salary. In addition,
- --------
* 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.
18
<PAGE>
at the beginning of each year, both (i) Corporate Performance Objectives and
(ii) Department and Individual Performance Objectives are established and
given a weighting percentage. When it comes time to decide on the amount of
the bonus, the various Performance Objectives are assigned a "performance
factor," which is a subjective assessment of how successful the person was in
achieving the objectives. To determine the recommended bonus, the performance
factor for each of the Corporate Performance Objectives and the Department and
Individual Performance Objectives is multiplied by the weighting percentage
and the product is multiplied by the target bonus amount. If results
significantly exceed the objectives, it is possible to earn a bonus up to two
times the target bonus. As a result, bonuses payable to particular individuals
could equal as much as 40% to 100% of base salary. Each year, after we
complete this analysis, we recommend bonuses for approval by the Board of
Directors.
The Corporate Performance Objectives for 1998 and the relative weight
assigned to each were as follows: (i) improve average stock market
capitalization per ounce of production relative to that of the S&P Gold and
Precious Metals Index (50%), (ii) successfully integrate Plutonic Resources
Limited (acquired in 1998) into Homestake and exceed the performance
expectations for Plutonic that were established for 1998 (30%), (iii) maintain
focus on growth of reserves and annual production to improve the quality of
assets and lower costs (10%), and (iv) improve operating performance as
measured by operating cash flow, production, cash costs and environmental,
health and safety excellence (10%). For senior executives, 50% of the 1998
bonus was based on the Corporate Performance Objectives, and 50% was based on
the each participant's Department and Individual Performance Objectives. In
November 1998, after reviewing the year's performance by the Company, we
approved a 128% performance factor relating to achievement of the Corporate
Performance Objectives. In addition, in November 1998, we approved performance
factors for achievement of Department and Individual Performance Objectives by
senior executives that ranged from 97% to 136%.
Long-term, stock-based compensation. The Company's executive compensation
program also includes a Stock component. The purpose is to give officers and
key employees an incentive to continue as employees of the Company over a long
term and to align their long-range interests with those of our Stockholders by
helping them increase their Stock ownership in the Company. In that way they
can build a stake in the Company, the value of which will increase as the
value of the Company's Stock increases. We believe that Stock-based
compensation programs encourage key employees to maintain a long-term
perspective.
In 1996, you approved the Stock Option and Share Rights Plan--1996, which
authorizes the issuance of stock options and other stock-based incentives,
such as performance based and other types of restricted stock awards.
For many years, the Company has used stock options to provide Stock-based
compensation. We have the authority to decide on the recipients of stock
option awards, the terms of options, and the number of shares subject to
options. We limit the grant of stock options to a relatively limited number of
employees who we believe can have a significant influence on Company policies
and performance. For that reason, we granted stock options to 62 employees in
1998 (approximately 3.9% of total Company employees). We also believe that the
number of options granted should give a strong incentive to increase share
value, and that the number of options should increase in proportion to the
relative potential influence of the particular employee on overall Company
performance.
In the first quarter of each year, we award stock options to officers and
key employees of the Company and its subsidiaries. For each optionee, an
annual target gain is established based on salary and a subjective evaluation
of the perceived impact that he or she may have on the Company's success. We
generally use the Black-Scholes option valuation formula to determine the
appropriate number of stock options to be granted, with adjustments for
particular employees where circumstances warrant. The Black-Scholes valuation
formula is widely used by publicly held companies in the United States in
granting stock options.
We don't consider the number of outstanding options in determining annual
option awards. The exercise price for options generally is determined by
averaging the closing prices of the Stock on the New York Stock Exchange for
the five trading days preceding the grant date. Options generally vest over a
four-year period and
19
<PAGE>
have a 10-year term. In addition, from time to time we grant additional
options to particular individuals in connection with significant promotions,
in recognition of the fact that those persons have the potential to have a
greater impact on the Company's future success. We also grant options in
connection with the initial hiring of executives and key employees.
In March 1997, we established stock ownership guidelines for the members of
the Company's senior management as an additional means of aligning
management's long-term interests with those of the Stockholders. We also
decided that we should use restricted stock grants as a part of the Company's
Stock-based compensation system, both to give senior management additional
incentives to perform and remain with the Company, and to provide a means for
them to increase their Stock ownership in the Company and meet the stock
ownership guidelines. Accordingly, in March 1997, we approved three restricted
stock programs.
. Under the first program, we make restricted stock grants to members of
senior management. These stock grants vest over time, but only if pre-
established performance goals are met. Goals may include such things as
improvements in earnings per share, increases in the value of the
Company's Stock relative to other gold mining companies, and return on
Stockholders' equity. In 1997, we made restricted stock grants for a
total of 125,400 shares to thirteen senior managers, and we set annual
achievement goals to be met at the end of 1997, 1998, 1999 and 2000. In
1998, we made additional restricted stock grants for a total of 255,900
shares to fourteen senior managers, and we set annual achievement goals
to be met at the end of 1998, 1999 and 2000. The annual achievement
goals for both the 1997 and 1998 grants are to close, by specific
amounts each year, the gap between the Company's average market
capitalization per ounce of production and that average for the
companies comprising the S&P Gold and Precious Metals Index. The senior
managers can earn 25% of the shares subject to the 1997 restricted stock
grants and one-third of the shares subject to the 1998 restricted stock
grants on each measurement date on which the annual achievement goals
for that year's restricted stock grants are met, plus any shares that
were not earned at a prior measurement date because the annual
achievement goal for that measurement date was not met. The annual
achievement goals for year-end 1997 were not met. The annual achievement
goals for 1998 were met, and eleven senior managers earned a total of
56,400 shares under the 1997 restricted stock grants and twelve senior
managers earned a total of 77,999 shares under the 1998 restricted stock
grants.
. Under the second program, we grant matching restricted stock to senior
managers on the basis of one restricted share for each three shares
owned by them that they "enroll" for matching grants. The matching
grants vest after a number of years, but only to the extent the senior
manager maintains continuous ownership of the "enrolled" shares
throughout the vesting period. We made matching stock grants in 1997 to
seven senior managers for a total of 23,587 shares and in 1998 to seven
senior managers for a total of 11,195 shares. The senior managers are
required to hold the "enrolled" shares under the 1997 and 1998 grants
for five years to qualify and receive the matching stock.
. Under the third program, we provide senior managers with an opportunity
to exchange a portion of their annual cash bonuses for awards of
restricted stock. The restricted stock awards are equal to 1.5 times the
amount of the cash bonus to be exchanged, divided by the market value of
the Company's Stock on the date of grant. The senior managers have to
make the election several months in advance, before they know the amount
of their bonus, if any, and well before they know the Stock price that
will be used for the calculation. These restricted stock awards vest
over a number of years, and the grantees must continue to be employed by
the Company during the vesting period. In 1997, eight senior mangers
elected to forego $253,700 in cash bonuses, and in exchange they
received awards of 33,638 shares of restricted stock. In 1998, eight
senior managers elected to forego $187,344 in cash bonuses, and in
exchange they received awards of 23,665 shares of restricted stock.
Under the 1997 and 1998 grants, 50% of the shares will vest after one
year, an additional 25% will vest after two years, and the remaining 25%
will vest after three years, but only if the senior manager is still an
employee on the vesting date. The senior manager forfeits unvested
shares if he or she does not continue to be employed on the relevant
vesting dates. In 1998, seven senior managers vested in 15,163 shares of
stock under the 1997 restricted stock awards.
20
<PAGE>
We will continue to regularly review the Company's executive compensation
program to make sure that the Company's program is competitive with those of
other companies that compete with Homestake for executive personnel.
Chief Executive Officer's 1998 Compensation. Each year, we evaluate the
compensation of the Chief Executive Officer, without the Chief Executive
Officer or any other officer being present. In November 1997, after reviewing
the proposed levels of 1998 compensation for other mining company executives
and also considering the Company's 1997 performance and the Chief Executive
Officer's 1997 performance, we decided that it would be appropriate to
increase the 1998 base salary for Jack E. Thompson, the Chief Executive
Officer, by approximately 3% from an annual rate of $475,000 to $490,000. Our
recommendation was accepted by the Board of Directors.
For 1998, we set a target bonus for Mr. Thompson at 50% of his annual base
salary. We also decided that 50% of his bonus would be based on the extent of
the achievement of the Corporate Performance Objectives and 50% would be based
on his achievement of his Individual Performance Objectives. In November 1998,
we made our annual bonus recommendations. As noted above, we approved a 128%
performance factor for achievement of the 1998 Corporate Performance
Objectives. After evaluating the Individual Performance Objectives established
for Mr. Thompson in 1998, and after considering his performance during the
year, including the leadership ability shown by him, we approved a 117%
performance factor for achievement of his Individual Performance Objectives.
That resulted in a recommended bonus of $300,000, and our recommendation was
accepted by the Board of Directors.
Other Executive Officers' 1998 Compensation. In November 1997, after
reviewing the proposed levels of 1998 compensation for other mining company
executives and also considering the Company's 1997 performance, we concluded
that the 1998 base salaries for all other executive officers should be
increased by approximately 3% over 1997 base salaries, and our recommendation
was accepted by the Board of Directors. In November 1997, we set target
bonuses for other executive officers at 25% to 50% of their annual base
salaries. We also concluded that 50% of each executive officer's bonus should
be based on the achievement of the Corporate Performance Objectives and 50%
should be based on the achievement of the executive officer's Department and
Individual Performance Objectives. In November 1998, we conducted our annual
performance review and bonus recommendations. As noted above, we approved a
128% performance factor for achievement of the 1998 Corporate Performance
Objectives. We reviewed the 1998 performance of each executive officer against
his Department and Individual Performance Objectives, and we approved
Department and Individual Performance factors for executive officers ranging
from 97% to 136%. The resulting bonus recommendations ranged from 113% to 133%
of the target bonuses for the executive officers, and our recommendations were
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 receives
annual compensation in excess of the maximum deductible amount. If, because of
competitive factors and individual performance, we should determine that it is
appropriate to pay one or more executive officers in excess of annual maximum
deductible amount, we expect that we would recommend such compensation.
March 15, 1999
COMPENSATION COMMITTEE
G. Robert Durham, John Neerhout, Jr.
Chairman Peter J. Neff
Gerhard Ammann Jeffrey L. Zelms
M. Norman Anderson
Douglas W. Fuerstenau
21
<PAGE>
CERTAIN RELATED PARTY TRANSACTIONS
Agreement With Case Pomeroy
When we acquired Felmont Oil Corporation (now Homestake Sulphur Company) in
1984, we and Case, Pomeroy & Company, Inc. (Case Pomeroy) entered into an
Agreement since amended in 1989 and 1992. Mr. Robert H. Clark, Jr., one of our
directors, and his family are controlling shareholders of Case Pomeroy. Each
of Homestake and Case Pomeroy indirectly owns a 25 percent interest in the
Round Mountain mine in Nye County, Nevada. Round Mountain Gold Corporation
owns the other 50% and is the manager. Our Agreement provides that whenever we
vote on matters requiring approval of a majority of the ownership interests,
we and Case Pomeroy will agree in advance on what to do. The Agreement also
provides that neither one of us will transfer any of our interest in Round
Mountain, directly or indirectly, unless it is to the other or unless it is to
someone approved by the other. Approval of a majority of the ownership
interests is required for a number of things, including budgets and work
programs for the mine.
Transactions With Case Pomeroy
In 1985, 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 kept a 2.5% net smelter return royalty
interest in the properties and an option to convert any part of the royalty
into a 40% participating interest in the property if commercial production
appears feasible. No royalties have been paid. We have no obligation to
explore, develop or spend any money on any of the property and we can drop any
of the property at any time after we first offer it to Case Pomeroy.
PROPOSAL NO. 2
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
The Audit Committee recommended that we engage PricewaterhouseCoopers LLP as
independent auditors to audit and report on our 1999 financial statements.
Based on that recommendation, the Board appointed PricewaterhouseCoopers LLP
as our auditors for 1999. However, we would like to have the Stockholders
approve that appointment. If the Stockholders don't give their approval, the
Board will consider the appointment of other independent auditors for 1999.
However, because of the difficulty of substituting auditors in mid-year, it is
likely that the Board would continue with PricewaterhouseCoopers LLP through
1999 even if Stockholder disapprove, and consider other auditors for the year
2000, unless there are other good reasons to make an earlier change.
Representatives of PricewaterhouseCoopers LLP will be available at the
Annual Meeting to respond to any questions you have.
Your Board of Directors recommends a vote FOR this proposal.
22
<PAGE>
OTHER INFORMATION
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 and related rules
require our 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. After reviewing the reports filed by the
directors and executive officers, we believe that the directors and executive
officers filed all of the reports they were required to file in 1998 and that
they filed the reports on time.
Stockholder Proposals
The 2000 Annual Meeting of Stockholders will be held on May 9, 2000 unless
the date is changed by the Board of Directors. If you are a Stockholder and
you want to include a proposal in the Proxy Statement for the year 2000 Annual
Meeting, you need to get it to us by no later than November 30, 1999. You
should direct any proposals to our Corporate Secretary at the Company
principal office in San Francisco, California. If you want to present a matter
of business to be considered at the year 2000 Annual Meeting, under our By-
laws you must give timely notice thereof, in writing, to the Secretary of the
Company. To be timely, the notice has to be given between November 13, 1999
and February 28, 2000.
By Order of the Board of Directors
/s/ WAYNE KIRK
Wayne Kirk
Secretary
San Francisco, California
March 25, 1999
23
<PAGE>
SKU# 1600-PS-99
<PAGE>
HOMESTAKE MINING COMPANY
ANNUAL MEETING OF STOCKHOLDERS
MAY 11, 1999
VOTING INSTRUCTION FORM FOR HOLDERS OF
HOMESTAKE CANADA INC. ("HCI")
EXCHANGEABLE SHARES
These voting instructions are solicited on behalf of the
Board of Directors of
Homestake Mining Company
To holders of HCI Exchangeable Shares:
You are entitled to exercise voting rights at the Homestake Mining Company
Annual Meeting to be held on May 11, 1999. You may instruct Montreal Trust
Company of Canada, as trustee, to vote on your behalf. See paragraph A below.
Alternatively, you may name one or more persons as proxy to vote on your
behalf. See paragraph B below. Check the applicable boxes and, in the case of
appointment of a proxy, insert the name of the person(s) chosen as your proxy
in paragraph B (Check box A or box B):
[_] A. Voting Instructions to Montreal Trust Company of Canada. The
undersigned hereby instructs Montreal Trust Company of Canada to vote
as designated below, as to all HCI Exchangeable Shares held by the
undersigned on March 15, 1999, at the Homestake Mining Company Annual
Meeting or any postponement or adjournment thereof.
[_] B. Appointment of Proxy. The undersigned hereby appoints ____________ as
proxy, 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 below, as to all HCI Exchangeable Shares held by the
undersigned on March 15, 1999, at the Homestake Mining Company Annual
Meeting or any postponement or adjournment thereof. (Persons holding
proxies must attend the Meeting in order to vote).
[ ]
AFFIX LABEL OF
INTERMEDIARY HERE
(if you are not a registered shareholder)
[ ]
Business To Be Conducted:
1. Election of four Class III Directors of Homestake Mining Company (term of
three years).
[_] FOR all nominees listed below [_] Withhold Authority
(except as marked below) (on all nominees)
The nominees for director are Gerhard Ammann, Richard R. Burt, Peter J. Neff
and Carol A. Rae.
Instruction: To withhold authority to vote for one or more nominees, print
name(s) of nominee(s) on next line.
_________________________________________________________________________
2. Appointment of PricewaterhouseCoopers as independent auditors for 1999.
[_] FOR [_] Against [_] Abstain
By execution of these voting instructions, the undersigned hereby authorizes
Montreal Trust Company of Canada or the persons named as proxy (or their
substitutes), as applicable, to vote in their discretion on such other
business as may properly come before the meeting.
HCI EXCHANGEABLE SHARES WILL BE VOTED AS INSTRUCTED. IF NO DIRECTIONS ARE
GIVEN, THE SHARES WILL BE VOTED FOR ITEMS 1 AND 2.
Dated ________________________, 1999
(insert date of signing)
______________________
______________________
Sign exactly as name appears on this voting instruction form. If HCI
Exchangeable Shares are held jointly, each holder should sign. Executors,
administrators, trustees, guardians, attorneys and agents should give their
full titles. If holder is a corporation, sign in full corporate name by an
authorized officer.
1
<PAGE>
DETACH HERE
- --------------------------------------------------------------------------------
PROXY
HOMESTAKE MINING COMPANY
650 California Street
San Francisco, California 94108
Annual Meeting of Stockholders - May 11, 1999
This Proxy is Solicited on Behalf of the Board of Directors
PROXY - The undersigned hereby appoints Jack E. Thompson, Gill J. Leathley
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 below, all shares of common stock of
Homestake Mining Company held of record by the undersigned on March 15, 1999 at
the annual meeting of stockholders, or any postponement or adjournment thereof.
************* *************
*SEE REVERSE* *SEE REVERSE*
* SIDE * CONTINUED AND TO BE SIGNED ON REVERSE SIDE * SIDE *
************* *************
<PAGE>
HOMESTAKE MINING COMPANY
c/o EquiServe
P.O. Box 8040
Boston, MA 02266-8040
-----------------
Vote by Telephone
-----------------
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683)
-----------------------------------------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Call the toll-free number 1-877-PRX-VOTE (1-877-779-8683). For
shareholders residing outside the United States call collect on a touch-
tone phone 1-201-536-8073.
3. Enter your 14-digit Control Number located on your Proxy Card above your
name.
4. Follow the recorded instructions.
-----------------------------------------------------------------------------
Your vote is important!
Call 1-877-PRX-VOTE anytime!
----------------
Vote by Internet
----------------
It's fast, convenient, and your vote is immediately confirmed and posted.
-----------------------------------------------------------------------------
Follow these four easy steps:
1. Read the accompanying Proxy Statement and Proxy Card.
2. Go to the Website http://www.eproxyvote.com/hm
3. Enter your 14-digit Control Number located on your Proxy Card above your
name.
4. Follow the instructions provided.
-----------------------------------------------------------------------------
Your vote is important!
Go to http://www.eproxyvote.com/hm anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
DETACH HERE
- --------------------------------------------------------------------------------
[X] Please mark votes as in this example.
1. Election of Class III Directors (term of three years).
Nominees: (01) Gerhard Ammann, (02) Richard R. Burt,
(03) Peter J. Neff and (04) Carol A. Rae.
FOR [ ] [ ] WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
[ ]
-------------------------------------------------
For all nominees except as noted above
2. Appointed of PricewaterhouseCoopers as independent auditors for 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
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.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTIONS ARE GIVEN, THIS PROXY
WILL BE VOTED FOR ITEMS NUMBER 1 AND 2.
Sign exactly as name appears on this proxy card. If shares are held jointly,
each holder should sign. Executors, administrators, trustees, guardians,
attorneys and agents should give their full titles. If shareholder is a
corporation, sign in full corporate name by an authorized officer.
