UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 18, 2000
HOMESTAKE MINING COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-8736 94-2934609
(State or other (Commission File (I.R.S. Employer
jurisdiction Number) Identification
of incorporation) Number)
650 California Street, San Francisco, California 94108-2788
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 981-8150
http://www.homestake.com
Item 5. Other
This Form 8-K is submitted to file the documents listed below
in the Exhibit Index.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
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7(c) Exhibits
Exhibit 10.41 Consulting Agreement between McClintock Associates
Pty Limited and Plutonic Resources Limited, composite
as amended September 24, 1999.
Exhibit 10.42 Amended 1999 Executive Supplemental Retirement
Plan of Homestake Mining Company, effective April 1,
1999, amended as of September 1, 1999.
Exhibit 10.43 1999 Change of Control Severance Plan of Homestake
Mining Company (alternative I, applicable to persons
who were participants in the Change of Control
Severance Plan prior to May, 1998).
Exhibit 10.44 1999 Change of Control Severance Plan of Homestake
Mining Company (alternative II, applicable to persons
who became participants in the Change of Control
Severance Plan after May, 1998).
Exhibit 10.45 First Amendment to the Retirement Plan for Outside
Directors of Homestake Mining Company, dated as of
January 6, 2000.
Exhibit 10.46 Amended Form of Stock Option Agreement under the
1996 Plan.
Exhibit 10.47 Amended Form of Performance Based Share Agreement
under the 1996 Plan - 1997 Grants.
Exhibit 10.48 Amended Form of Performance Based Share Agreement
under the 1996 Plan - 1998 Grants.
Exhibit 10.49 Amended Form of Performance Based Share Agreement
under the 1996 Plan - 1999 Grants.
Exhibit 10.50 Amended Form of Bonus Stock Program Agreement
under the 1996 Plan.
Exhibit 10.51 Amended Form of Matching Stock Agreement under the
1996 Plan.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Dated: January 18, 2000
HOMESTAKE MINING COMPANY
(Registrant)
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By:/s/ David W. Peat
David W. Peat
Vice President and Controller
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CONSULTING AGREEMENT
(Composite, as amended September 24, 1999)
This CONSULTING AGREEMENT, dated as of October 1, 1998
("Effective Date"), is between McClintock Associates Pty Limited,
ACN 002 802 9986 ("Consultant") and Plutonic Resources Limited,
ACN 006 245 629 ("Plutonic").
1. Plutonic agrees to engage Consultant, and Consultant
agrees to accept the engagement, to provide consulting services
with respect to the following and for such additional matters as
Consultant and Plutonic agree ("Services"):
(a) As requested, Consultant will provide the services of
Paul McClintock ("McClintock") to advise in respect of general
Australian business and government affairs to both Plutonic and
to its Affiliates.
(b) Consultant will provide such additional services of
McClintock as may be agreed between Consultant and the Plutonic
Representatives.
Services under this agreement shall not include (i) serving as a
director of Plutonic or any of its Affiliates, for which separate
arrangements have been or will be made, or (ii) testifying as a
witness in legal proceedings, and compensation shall not be
payable under this agreement with respect to testifying in any
proceeding.
2. The engagement shall begin on the Effective Date and
continue until September 30, September 30, 2000. Notwithstanding
the foregoing, if McClintock shall for any reason cease to be
employed by Consultant, this agreement shall immediately
terminate.
3. (a) McClintock shall perform Services for Plutonic as,
when and where reasonably requested to do so by Plutonic. It is
expected that McClintock may spend up to approximately 50 days
per year providing Services. As compensation for McClintock's
Services, Plutonic shall pay Consultant the Australian dollar
equivalent of US$40,000 per year, payable in quarterly
installments, in arrears at the last day of each calendar
quarter. In calculating the Australian dollars payable, US
dollars shall be converted to Australian dollars using the US
Dollar Hedge Settlement Rate as displayed on the Reuters FEYA-C
Screen as of the last Business Day of each calendar quarter. If
this agreement terminates during any quarter because McClintock
has ceased to be employed by Consultant, then the amount
otherwise payable in respect of that quarter shall be pro-rated
based on the number of days in the quarter during which this
agreement was in effect.
(b) If Plutonic requests that Consultant provide unusual or
extraordinary services in addition to the general services
provided hereunder, or if Plutonic requests that Consultant
provide Services that may be expected to significantly exceed 50
hours per year, Plutonic and Consultant shall make separate
arrangements therefor.
(c) Plutonic shall also pay all costs reasonably incurred
by Consultant in providing Services, other than compensation
payable to McClintock and withholding, employee benefits
<PAGE>
and other expenses relating to employment of McClintock by
Consultant. Plutonic shall have no obligation to compensate
McClintock, it being agreed that Consultant shall be solely
responsible for compensating McClintock for Services provided
hereunder and for payment of employment related expenses
applicable to McClintock.
(d) Plutonic shall make reasonable advances to Consultant
for travel related to Services, and after presentation of
customary receipts shall reimburse Consultant for approved
expenses related to Services in accordance with the travel
advance and expense reimbursement policies for Plutonic
employees.
(e) Plutonic shall pay for Services within ten days after
the end of each calendar quarter. Plutonic shall reimburse
Consultant for related expenses within ten days of its receipt
and approval of Consultant's invoice therefor.
4. (a) Consultant shall make such written reports of
Consultant's activities to Plutonic as Plutonic may from time to
time reasonably request.
(b) All such reports shall be the sole and exclusive
property of Plutonic, to be delivered to Plutonic by Consultant
upon Plutonic's request. Consultant expressly agrees to deliver
to Plutonic all papers, drawings, models, maps, or any other
thing related to Services in Consultant's possession or under its
control upon termination of this agreement.
5. Consultant shall not, and shall procure that McClintock
shall not, within three years after the termination of this
agreement, divulge to any person any proprietary or confidential
information relating to Plutonic or its Subsidiaries or
Affiliates ("Plutonic Companies"), or relating to any business or
property in which any of the Plutonic Companies has an interest,
acquired by Consultant or McClintock while serving as a present
or former director or employee of any of the Plutonic Companies
or in the course of performance of duties under this agreement
without express written authorization by an officer of Plutonic.
For purposes of this agreement, "Subsidiary" shall mean any
corporation, partnership, joint venture or other entity or person
in which Plutonic has a total direct and/or indirect equity or
voting interest of at least 20%, and "Affiliate" shall mean any
corporation, partnership, joint venture or other entity or person
which is directly or indirectly controlling, controlled by or
under common control with Plutonic.
6. Consultant represents and warrants to Plutonic that the
performance of Services hereunder will not breach any obligation
Consultant or McClintock may have to any third party.
7. Consultant agrees that until termination of this
agreement, Consultant shall not, and shall procure that
McClintock shall not, engage in any employment or consulting
services with anyone other than one of the Plutonic Companies
relating to the Services performed or relating to any business or
property in which any of the Plutonic Companies has an interest
at the date of termination without Plutonic's prior written
consent, which consent will not be
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unreasonably withheld.
8. Consultant shall not delegate, subcontract, assign, or
employ any person other than McClintock to perform any work
directly or indirectly related to Services without Plutonic's
prior written consent.
9. (a) The relationship of Consultant to Plutonic shall
be that of an independent contractor. Notwithstanding anything
contained in this agreement, the parties agree that McClintock is
solely the employee of Consultant and is not an employee of
Plutonic. Plutonic acknowledges that it shall have no right to
exercise control over McClintock. Consultant and McClintock
shall not, by reason of this agreement, participate in any
employee benefits available to employees of Plutonic Companies.
(b) Consultant assumes full responsibility and liability
for the payment of any taxes due on any amount payable hereunder.
(c) Except to the extent required by law, Plutonic shall
not make any deduction from any amount payable by it to
Consultant for taxes or for insurance or benefits.
10. The Plutonic Representatives authorized to assign work
to Consultant and coordinate Consultant's performance of Services
are Gregory A. Lang and Jack E. Thompson. Plutonic may assign
such responsibility to any other Representative or
Representatives.
11. (a) All notices provided for in this agreement shall
be delivered personally or by facsimile or by first class
airmail, postage prepaid, and shall be deemed received when
personally delivered or, if by facsimile, on the next business
day after receipt or, if mailed, five business days after date of
mailing.
(b) Any notice of default shall only be effective if
delivered personally, or sent by registered or certified mail.
(c) Any notice from Consultant to Plutonic shall be
delivered or addressed to the Plutonic Representatives.
(d) All notices to be delivered by mail or facsimile shall
be sent to the addresses and facsimile numbers shown below (or as
changed by notice given as provided herein).
12. The interpretation and performance of this agreement
shall be governed by the domestic law of the State of Western
Australia, without regard to conflict of laws principles.
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13. This agreement constitutes the entire agreement between
the parties related to its subject matter. It supersedes all
prior proposals, agreements, understandings, representations and
conditions. It may not be changed or amended except in writing.
CONSULTANT
Name: McClintock
Associates Pty Limited
Address: Level 21, 1 O'Connell
Street
Sydney, NSW 2000
Australia
Tel No.: (02) 9251-4900
Fax No.: (02) 9221-8364
Signature:________________________
PLUTONIC
RESOURCES LIMITED
Locked Bag 12
Cloisters Square
Perth, Western Australia 6850
Tel. No.: (08) 9212-5777
Fax No.: (08) 9322-5700
By:______________________________
Wayne Kirk, Director
I hereby acknowledge and agree to the foregoing agreement
insofar as it imposes obligations on or otherwise applies to me.
_____________________________
Paul McClintock
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word\pmccons3
AMENDED 1999 EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
HOMESTAKE MINING COMPANY
EFFECTIVE APRIL 1, 1999, AMENDED AS OF SEPTEMBER 1, 1999
<PAGE>
HOMESTAKE MINING COMPANY
AMENDED 1999 EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
1. This Amended 1999 Executive Supplemental Retirement Plan for
designated key executives of Homestake Mining Company is
effective as of April 1, 1999, and amended as of September
1, 1999 (the "Plan").
2. GENERAL PURPOSE OF PLAN
This Plan is established to provide supplementary Retirement
Benefits for key executives designated by the Compensation
Committee of the Board of Directors.
3. DEFINITIONS
(a) "Affiliate" means Homestake Mining Company of
California, Homestake Canada Inc., Homestake Gold of
Australia Limited, Plutonic Resources Limited, and any
other affiliated organizations designated by the
Committee to participate in the Plan.
(b) "Board" means the Board of Directors of Homestake
Mining Company.
(c) "Change of Control" means any of the following
events (except as specifically provided elsewhere):
(i) The Company or any of its Subsidiaries is a party
to a consolidation or merger or other combination,
or there is an acquisition by the Company or any
of its Subsidiaries of another corporation or
entity or its assets, or there is any other
corporate reorganization or acquisition
transaction in which the Company or any of its
Subsidiaries is a participant, under the terms of
which capital stock having less than 62.5% of the
voting power in election of directors in the
Company or the resulting or surviving publicly
held corporation or entity (if not the Company) is
held by the Stockholders of the Company
immediately preceding such event;
(ii) At least 75% in fair market value of the Company's
assets are sold; or
(iii)Capital stock having at least 25% in voting
power in election of directors of the Company is
acquired by any one person or group as that term
is used in Rule 13d-5 under the Securities
Exchange Act of 1934.
For purposes of this Plan, holders of Homestake Canada
Inc. Exchangeable Shares shall be deemed to be
Stockholders of Homestake.
(d) "Company" or "Homestake" means Homestake Mining Company.
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(e) "Committee" means the Compensation Committee of
the Board, as constituted from time to time, or, in the
event there is no such Committee of the Board, means
the Board.
(f) "Compensation" means all regular base salary and
performance bonuses paid under the Homestake Variable
Pay Plan which are or would be reported on Form W-2 (or
comparable form) for any calendar year; any pre-tax
reductions of such compensation made pursuant to
election under a Section 401(k), Cafeteria, Deferred
Income or similar plan; and any amount of cash bonus
for such year under the Homestake Variable Pay Plan
that has been foregone in lieu of restricted stock
awards. "Compensation" does not include: directors'
fees; amounts resulting or relating to exercise of or
vesting in stock options, stock appreciation rights or
other restricted stock rights under stock option and
share rights plans (including stock received on vesting
of restricted stock awards received in lieu of cash
bonuses foregone); relocation or signing bonuses; loan
forgiveness amounts; tax gross-up payments; tax
equalization payments; other fees and commissions; and
any other payments (or deemed payments) not described
in the preceding sentence.
(g) "Normal Retirement Date" means, with respect to a
Participant, the first day of the calendar month
coincident with or next following the first date on
which the Participant has both attained age 62 and
attained a Vesting Event.
(h) "Participant" means a key executive of the Company
or Affiliate who receives written notification from the
Company that he or she has been designated as a
participant in the Plan by the Committee, and who
agrees to be a participant in the Plan.
(i) "Prior Plan" means the Amended and Restated Executive
Supplemental Retirement Plan effective August 1, 1995,
as modified January 23, 1998.
(j) "Retirement Benefit" means the benefits payable
under this Plan, calculated in accordance with Section 4.
(k) "Homestake Retirement Plan" means the Homestake
Retirement Plan, restated as of January 1, 1989, as it
has been and may be amended and restated from time to
time.
(l) "Reorganization Vesting Events" has the meaning set out
in Section 13 hereof.
(m) "Service" means all periods of employment with the
Company and any Affiliate and any other entity
designated by the Committee.
(n) "Subsidiary" means any corporation or other entity that
is controlled by the Company.
(o) "Vesting Event" means the earliest of the following dates:
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(i) A Participant has attained age 55 and has
completed 10 years of Service;
(ii) A Participant has been a Participant in the Plan
(and/or the Prior Plan) for five years and has
completed 15 years of Service; or
(iii)A Participant has attained age 55 and has
been a Participant in the Plan (and/or the Prior
Plan) for five years.
4. RETIREMENT BENEFIT
(a) Normal Retirement Benefit. A Participant who
retires at the Normal Retirement Date shall be entitled
to receive a monthly Retirement Benefit equal to the
amount determined by multiplying:
(i) 4-1/3% by
(ii) the complete or fractional
years of Service (up to a maximum of 15
years) by
(iii)the average monthly
Compensation paid to the Participant during
the period of his 36 consecutive months of
highest Compensation (or, if employed for
less than 36 consecutive months, the period
of such Participant's actual employment);
The monthly Retirement Benefit thus calculated
shall be reduced by:
(iv) commencing on the Participant's
attainment of age 65, (x) 50% of the
primary insurance amount of United
States Social Security which the Participant
would be entitled to receive if he retired
and commenced receipt of benefits at that
time, and (y) an amount equal to any
reduction for Canada Pension Plan, Quebec
Pension Plan and any similar foreign
employment related social security plan
("foreign plans") benefits which the
Participant would be entitled to receive if
he retired and commenced receipt of benefits
at that time, but only to the extent the
Homestake Retirement Plan has been amended
prior to the Participant's attainment of age
65 to provide for such a reduction in respect
of foreign plans from benefits payable under
the Homestake Retirement Plan, and
(v) benefits from time to time
received or receivable before giving effect
to any spousal or contingent annuitant
benefit election under the Homestake
Retirement Plan, the Supplemental Retirement
Plan or any other of the Company's pension or
retirement plans (not including the Savings
Plan), and any disability plan or worker's
compensation plan.
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(b) Early Retirement Benefit. A Participant who has
attained a Vesting Event and who is not employed by the
Company or any of its Affiliates at the time Retirement
Benefits are proposed to commence may request
commencement of Retirement Benefits on the first day of
any month after the Participant has attained age 55, by
written request filed with, and subject to the approval
of, the Committee. The Committee, at its discretion,
may withhold such approval, but in no event beyond age
62. If the request is approved, the Participant shall
be entitled to receive a monthly Retirement Benefit
determined as provided in clauses (i), (ii) and (iii)
of paragraph (a) above, reduced as follows:
(i) by 4% of such amount for each
year (prorated on a monthly basis for parts
of a year) by which such commencement of
benefits precedes the Participant's Normal
Retirement Date; and
(ii) there shall then be made the
reductions provided in clauses (iv) and (v)
of paragraph (a) above.
Notwithstanding the foregoing, if the Committee
withholds such approval, the Participant may
nonetheless elect to commence receiving early
Retirement Benefits on the date requested (or 30 days
after the election, whichever is later), provided that,
in addition to the reductions set out in clauses (i)
and (ii) of this paragraph (b), the Retirement Benefit
shall be subject to an additional penalty reduction of
1% for each year (prorated on a monthly basis for parts
of a year) by which such commencement of benefits
precedes the Participant's Normal Retirement Date, up
to a maximum additional reduction of 5%. Such
election must be made within 30 days after the
Participant receives notice from the Committee
withholding such approval.
(c) Postponed Retirement Benefit. A Participant who
retires after the Normal Retirement Date shall receive
a Retirement Benefit calculated as provided in
paragraph (a), recognizing all years of Service (up to
a maximum of fifteen years) and Compensation paid prior
to the Participant's actual retirement.
(d) Surviving Spouse Benefit. If a Participant who
has attained a Vesting Event or a Reorganization
Vesting Event dies, either before or after commencement
of Retirement Benefits, the Participant's qualifying
spouse shall receive a Surviving Spouse Benefit for
life if the Participant did not, at the time of death,
have in effect a valid election to receive an optional
form of joint and survivor annuity pursuant to Section
5. A "qualifying spouse" is the spouse of a
Participant at the Participant's death who has been
lawfully married to the Participant throughout the one-
year period ending on the Participant's death. If the
Participant had previously commenced receiving
Retirement Benefits, the Surviving Spouse Benefit shall
commence on the first day of the month following the
Participant's death. If the Participant had not
previously commenced receiving Retirement Benefits, the
Surviving Spouse Benefit shall commence on the first
day of the month following
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the month in which the
Participant's Normal Retirement date would have
occurred or, at the election of the Spouse in
accordance with the procedures set out in paragraph (b)
above, at any time after what would have been the
Participant's 55th birthday. In all instances, the
Surviving Spouse Benefit shall terminate with the
payment for the month in which the spouse's death
occurs. If the Participant was receiving Retirement
Benefits at the time of the Participant's death, the
Surviving Spouse Benefit shall equal one-half of the
Retirement Benefit then being paid to the Participant,
subject to further reduction as hereafter provided. If
the Participant was not receiving Retirement Benefits
at the time of the Participant's death, the Surviving
Spouse Benefit shall equal one-half of the Retirement
Benefit which would have been payable if the
Participant had been living and had commenced receipt
of benefits on the date of commencement of the
Surviving Spouse Benefit, subject to further reduction
as hereafter provided. Notwithstanding the foregoing,
the Surviving Spouse Benefit shall be reduced by one
percent of such benefit for each full year in excess of
ten that the date of birth of the surviving spouse
occurred after the date of birth of the deceased
Participant.
(e) For the purposes of paragraphs (a), (b) and (c) of
Section 4, the payment of any benefit provided under
this Plan shall commence on the first day of the month
following the month in which retirement occurs or the
month in which the election to receive Retirement
Benefits is made. The final payment shall be the
payment made on the first day of the month in which
death occurs.
5. OPTIONAL FORMS OF BENEFITS
Instead of the Retirement Benefit with Surviving Spouse
Benefit provided in Section 4, a Participant may elect to
receive an actuarially equivalent Retirement Benefit.
Benefits paid to a surviving spouse or contingent annuitant
shall be governed by the optional form of benefit elected.
The election may be made at any time and may be changed at
any time prior to the commencement of payment of benefits.
The optional forms of benefits are as follows:
(a) Surviving Spouse. The Retirement Benefit may be
actuarially reduced to provide a benefit to a
qualifying surviving spouse equal to:
(i) the benefit the Participant
would have been entitled to receive, or
(ii) two-thirds of the benefit the
Participant would have been entitled to
receive.
(b) Contingent Annuitant. With the written consent of
a spouse, if any, a Participant may designate a person
other than a qualifying spouse to be a contingent
annuitant, in which case the Retirement Benefit will be
actuarially reduced to provide a benefit to the
contingent annuitant equal to:
(i) the benefit the Participant
would have been entitled to receive, or
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(ii) two-thirds of the benefit the
Participant would have been entitled to
receive, or
(iii)one-half of the benefit
the Participant would have been entitled to
receive.
Any actuarial reduction in benefits made pursuant to this
Section 5 shall be made in accordance with the actuarial
assumptions used in computing alternative forms of benefits
under the Homestake Retirement Plan at the time that such
reduction is made.
6. BENEFIT INCREASES
It is anticipated that the retirement benefits payable to
Participants hereunder will exceed those to which
Participants are entitled pursuant to the Homestake
Retirement Plan, the Supplemental Retirement Plan or any
other retirement plans from time to time in effect and its
employment policies generally and, in the event that any
Participant becomes entitled to retirement benefits under
said plans and policies which benefits at any time or from
time to time are greater than those herein provided, no
additional benefits shall be payable under this Plan. If at
any time the Company increases the benefits paid to persons
then retired under the Company's retirement plans generally
or to then retired senior executives generally, such
increases shall be applied pro rata to all of the Retirement
Benefits payable to Participants hereunder. For purposes of
this section 6, any annual adjustment to the Participants'
retirement benefits under the Homestake Retirement Plan will
also apply to Retirement Benefits payable hereunder.
7. TERMINATION OF SERVICE
A Participant who ceases to be employed by the Company or
any Subsidiary or Affiliate for any reason after having
attained a Vesting Event or a Reorganization Vesting Event
shall be entitled to receive Retirement Benefits as provided
in Section 4 or Section 13. Any Participant who ceases to
be employed by the Company or any Subsidiary or Affiliate
for any reason before having attained a Vesting Event or a
Reorganization Vesting Event shall cease to be a Participant
and shall not be entitled to received any benefits under
this Plan except for any benefits to which such Participant
may become entitled through re-employment.
8. ACCELERATED PAYMENT AND LUMP SUM ELECTIONS.
(a) A Participant or his or her Beneficiary, as the case
may be, may request, at any time after he or she
becomes eligible to receive benefits payments under
this Plan (including an early Retirement Benefit under
Section 4(b)), to receive payments in a lump sum or in
equal monthly installment payments over 10 years, based
on the actuarial equivalent of his or her remaining
vested benefits. Payments may not begin prior to the
date that is or would have been the Participant's 55th
birthday. The written request shall be filed with and
be subject to the approval of, the Committee.
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The Committee, at its discretion, may withhold such
approval. Notwithstanding the foregoing, if the
Committee withholds such approval, the Participant or
Beneficiary may nonetheless elect to receive such
accelerated or lump sum benefits on the date requested
(or 30 days after the election, whichever is later),
provided that, in addition to the reductions set out in
clauses (i) and (ii) of Section 4(b), the amount of the
Retirement Benefit (determined prior to actuarial
adjustment) shall be subject to an additional penalty
reduction of (i) 1% for each year (prorated on a
monthly basis for parts of a year) by which
commencement of such accelerated or lump sum benefits
precedes the date that is or would have been the
Participant's 62nd birthday, subject to a minimum
reduction of 3% and a maximum reduction of 5%, and (ii)
3% as to any other Participant. Such election must be
made within 30 days after the Participant or
Beneficiary receives notice from the Committee
withholding such approval.
(b) Actuarial equivalence shall be determined in accordance
with the actuarial assumptions used in computing lump
sum payments under the Homestake Retirement Plan at the
time such accelerated payments begin or such lump sum
payment is made. Such actuarial benefit shall be paid
(or commence to be paid) within 60 days of his or her
election.
9. SUSPENSION OR TERMINATION OF BENEFITS
If the Committee determines that a Participant otherwise
entitled to benefits under the Plan is engaged actively or
proposes to engage actively, directly or indirectly, in
activities which may be detrimental to the interests of the
Company, it shall give such person written notice of the
grounds for its determination. The Committee shall afford
such person an opportunity to submit to it within 60 days
thereafter a written statement of reasons why such person
considers such determination to be incorrect. After
considering such written statement and any other information
which it determines to be relevant, the Committee shall have
the right to terminate benefits otherwise payable under the
Plan or to suspend them for such period as it determines to
be appropriate. The Committee shall advise such person of
its action. Any determination by the Committee to suspend or
terminate benefits shall be final and binding upon the
Participant.
10. TRUST
(a) The Company shall establish one or more grantor Trusts
and the Company and Affiliates shall at least annually
transfer over to the Trust such assets as the Company
and Affiliates determine, in their sole discretion, are
necessary to provide for the Company's and Affiliates'
future liabilities created under the Plan, provided the
assets of the Trust shall be considered part of the
general assets of the Company and Affiliates subject to
the claims of its general creditors.
(b) The provisions of the Plan shall govern rights of a
Participant to receive distributions pursuant to the
Plan. The provisions of the Trust shall govern the
rights of the Participants and the creditors of the
Company and Affiliates to the assets transferred
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to the Trust. The Company and Affiliates shall at all times
remain liable to carry out its obligations under the
Plan. The Company's and Affiliates' obligations under
the Plan may be satisfied with Trust assets distributed
pursuant to the terms of the Trust.
11. ADMINISTRATION AND INTERPRETATION
(a) This Plan is intended to qualify for exemption from
Parts II, III and IV of the Employee Retirement Income
Security Act of 1974, as amended, as a plan maintained
primarily for the purpose of providing deferred
compensation for a select group of management or highly
compensated employees under Sections 201(2), 301(a)(3)
and 401(a)(1) of such Act, and shall be so interpreted.
(b) This Plan shall be administered by the Committee. The
Committee shall have the discretion and authority to
make, amend, interpret and enforce all appropriate
rules and regulations for the administration of this
Plan and decide or resolve any and all questions
including interpretations of this Plan, as may arise in
connection with the Plan.
(c) In the administration of this Plan, the Committee may,
from time to time, employ agents and delegate to them
such administrative duties as it sees fit and may, from
time to time, consult with counsel who may be counsel
to the Company.
(d) The decision or action of the Committee with respect to
any question arising out of or in connection with the
administration, interpretation and application of the
Plan and the rules and regulations promulgated
hereunder shall be final and conclusive and binding
upon all persons having any interest in the Plan.
(e) The Company and Affiliates shall indemnify and hold
harmless each member of the Committee against any and
all claims, losses, damages, expenses or liabilities
arising from any action or failure to act with respect
to this Plan, except in the case of willful misconduct
by that member.
(f) To enable the Committee to perform its functions, the
Company and Affiliates shall supply full and timely
information to the Committee on all matters relating to
the compensation of its Participants, the date and
circumstances of the retirement, disability, death or
termination of employment of its Participants, and such
other pertinent information as the Committee may
reasonably require.
12. TERMINATION OF PLAN
The Company and Affiliates reserves the right to change or
terminate the Plan, or both, at any time. The Company and
Affiliates shall promptly notify Participants of any change
or termination. Any change or termination will not affect
benefits vested on the effective date of change or
termination, but, except as provided in Section 13(a), any
benefits or expected benefits not then vested shall be
modified or extinguished as the case may be. For this
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<PAGE>
purpose, benefits shall be deemed vested when a Participant
has attained a Vesting Event or a Reorganization Vesting
Event.
13. EFFECTS OF DISSOLUTION, LIQUIDATION OR CHANGE OF CONTROL
(a) Notwithstanding any other provision of the Plan, if the
Company is dissolved or liquidated or is a party to a
Change of Control and if (i) the Company's successor
does not, by operation or law or prior agreement,
assume the Company's obligations with respect to the
Plan, or (ii) a Participant's employment is terminated
for any reason or no reason by the Participant or by
such successor within two years following the
occurrence of such dissolution or liquidation, or (iii)
a Participant's employment is terminated under
circumstances described in Section 13(b) within two
years following the occurrence of a Change of Control
(collectively, "Reorganization Vesting Events" and
individually a "Reorganization Vesting Event"), the
benefits under the Plan of each Participant affected
thereby shall vest fully as if such Participant had a
total of 15 years of Service, and shall be calculated
based on such Participant's highest average monthly
Compensation over any 36 consecutive month period of
actual employment prior to the Reorganization Vesting
Event or, if the Participant has been employed for less
than 36 consecutive months at such time, the period of
such Participant's actual employment. No termination
or modification of the Plan shall affect the rights of
a Participant to then-vested benefits pursuant to the
preceding sentence. If the Company is dissolved or
liquidated or is a party to a Change of Control then,
as to that event, the 1999 Plan may not be terminated
or amended to reduce the benefits provided hereunder
during the two year period following that event.
(b) If a Participant's employment is terminated under the
following circumstances within two years following the
occurrence of a Change of Control, any unvested
benefits of such Participant under the Plan shall vest
fully if:
(i) The Participant's employment is terminated
involuntarily for reasons other than death,
disability or discharge for "Good and Sufficient
Cause" (as defined below); or
(ii) The Participant voluntarily chooses to terminate
employment for "Good Reason" (as defined below).
(c) Benefits so vested pursuant to this Section 13 shall be
payable commencing on the later of attainment of age
fifty-five or the first day of the month following the
Reorganization Vesting Event; provided, however, that
the amount of such benefits shall be reduced as
provided in clauses (i) and (ii) of Section 4(b) hereof
for any Participant for whom commencement of benefits
precedes such Participant's Normal Retirement Date.
Sections 4(d) and (e) and Sections 5 and 6 shall apply
to benefits payable pursuant to this Section 13.
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<PAGE>
(d) Any Participant or his or her Beneficiary, as the case
may be, receiving or entitled to receive benefits under
this Section 13 may request, at any time, to receive
payments in a lump sum or in equal monthly installment
payments over 10 years, based on the actuarial
equivalent of his or her remaining vested benefits.
Payments may not begin prior to the date that is or
would have been the Participant's 55th birthday. The
written request shall be filed with and be subject to
the approval of, the Committee. The Committee, at its
discretion, may withhold such approval. Notwithstanding
the foregoing, if the Committee withholds such
approval, the Participant or Beneficiary may
nonetheless elect to receive such accelerated or lump
sum benefits on the date requested (or 30 days after
the election, whichever is later), provided that, in
addition to the reductions set out in clauses (i) and
(ii) of Section 4(b), the amount of the Retirement
Benefit (determined prior to actuarial adjustment)
shall be subject to an additional penalty reduction of
(i) 1% for each year (prorated on a monthly basis for
parts of a year) by which commencement of such
accelerated or lump sum benefits precedes the date that
is or would have been the Participant's 62nd birthday,
subject to a minimum reduction of 3% and a maximum
reduction of 5%, and (ii) 3% as to any other
Participant. Such election must be made within 30 days
after the Participant or Beneficiary receives notice
from the Committee withholding such approval. Actuarial
equivalence shall be determined in accordance with the
actuarial assumptions used in computing lump sum
payments under the Homestake Retirement Plan at the
time such accelerated payments begin or such lump sum
payment is made. Such actuarial benefit shall be paid
(or commence to be paid) within 60 days of his or her
election.
(e) Notwithstanding the foregoing, if a Participant or
Beneficiary fails to make any request or election under
clause (d) of this Section 13 and the federal, state,
provincial or local taxing authorities for the
Participant's or Beneficiary's jurisdiction of
residence subsequently contends that the Participant or
Beneficiary had constructive receipt of benefits
hereunder because of the rights provided by clause (d),
then the Participant or Beneficiary may elect a lump
sum with respect to the actuarial equivalent of his or
her remaining vested benefits hereunder within 30 days
receiving notice of such contention. Such lump sum
will be paid within 30 days of receipt of the
Participant's or Beneficiary's written election to
receive such lump sum, accompanied by a copy of the
notice from the applicable taxing authority.
(f) As used herein:
(i) "Good and Sufficient Cause" means any act of fraud
or dishonesty, or conviction of a felony involving
moral turpitude or a Participant knowingly
engaging in acts seriously detrimental to any of
the operations of the Company.
(ii) Voluntary termination of employment by a
Participant for "Good Reason" means termination
after a Change of Control of the Company following the
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<PAGE>
occurrence of one of the following events
without the Participant's express written consent:
(A) The assignment by the Company to the
Participant of any duties inconsistent with
the Participant's positions, duties,
responsibilities, and status with the Company
immediately prior to the Change of Control;
provided, however, that for purposes of this
subclause (A), the amount "50%" shall be
substituted for "62.5%" in Section 3(c)(i)
above (definition of "Change of Control") and
Sections 3(c)(ii) and (iii) shall not apply;
(B) A material reduction in the Participant's
responsibilities, titles, or offices as in
effect immediately prior to the Change of
Control, or any removal of the Participant
from or any failure to re-elect the
Participant to any such positions, except in
connection with the involuntary termination
of the Participant's employment for Good and
Sufficient Cause, or as a result of the
Participant's death, disability or
retirement, or voluntary termination by the
Participant for other than Good Reason;
provided, however, that for purposes of this
subclause (B), the amount "50%" shall be
substituted for "62.5%" in Section 3(c)(i)
above (definition of "Change of Control");
(C) A reduction by the Company in the
Participant's base salary as in effect
immediately prior to the Change of Control;
(D) If there has been a change in the principal
executive office of the Company to a location
more than 50 miles from the location of the
principal executive office of the Company
immediately prior to the Change of Control,
the requirement by the Company that the
Participant be based anywhere other than
within a 50-mile radius of your location
immediately prior to the Change of Control,
except for required travel on the Company's
business to an extent substantially
consistent with the Participant's business
travel obligations immediately prior to the
Change of Control; provided, however, that
this subclause (D) shall not apply if the new
location at which the Participant is to be
based is as close to or closer to the
Participant's principal residence than the
prior location at which the Participant was
based;
(E) The requirement by the Company that the
Participant be based anywhere other than
within a 50-mile radius of the Participant's
location immediately prior to the Change of
Control, except for required travel on the
Company's business to an extent substantially
consistent with the Participant's travel
obligations immediately prior to the Change
of Control; provided, however,
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<PAGE>
that for purposes of this subclause (E), the
amount "50%" shall be substituted for "62.5%" in
Section 3(c)(i) above (definition of "Change
of Control") and Sections 3(c)(ii) and (iii)
shall not apply; and provided, further, that
this subclause (E) shall not apply if the new
location at which the Participant is to be
based is as close to or closer to the
Participant's principal residence than the
prior location at which the Participant was
based; or
(F) The failure by the Company to continue in
effect, or a change of the Participant's
participation or benefits under, any bonus or
incentive compensation plan, any employee
benefit plan qualified under Section 401 (a)
of the Internal Revenue Code of 1954, as
amended from time to time (the "Code"), any
stock ownership, stock purchase, stock option
or other equity incentive plan, any life,
health, accident, disability or similar plan
providing welfare benefits or any plan or
program of fringe benefits in which the
Participant participates immediately prior to
a Change of Control ("Existing Plans"), the
effect of which would be to materially reduce
the total value, in the aggregate, of the
Participant's benefits under all Existing
Plans and all amendments thereto and plans
substituted therefor, as compared to the
Participant's benefits under Existing Plans
as they existed immediately prior to the
Change of Control, or the failure by the
Company to provide the Participant with the
number of paid vacation days to which the
Participant was entitled in accordance with
the Company's general vacation policy for key
executives in effect immediately prior to the
Change of Control.
(g) Some or all of the events which constitute a Change of
Control for purposes of this Plan also may constitute a
change of control under Sections 280G and 4999 of the
Internal Revenue Code ("Code") and related proposed
regulations ("Regulations"). In the event a Change of
Control occurs which also constitutes a change of
control under the Code and Regulations and which
subjects a Participant or Beneficiary to excise taxes
under the Code and Regulations, the Participant or
Beneficiary will be entitled to receive a "gross-up
payment" in an amount sufficient to pay the excise tax,
the taxes (including the excise tax) on the gross-up
payment, and any related interest and penalties.
Whether a Participant or Beneficiary is subject to the
excise tax and the amount of the gross-up payment shall
be determined by a law firm, a certified public
accounting firm, and/or a firm of recognized executive
compensation consultants selected by the Company (the
"Consultant"). Determinations of the Consultant shall
be binding upon the Participant or Beneficiary and the
Company. Unless the Consultant concludes that a
contrary method is clearly preferable, the gross-up
payment shall be calculated on the assumption that the
Participant or Beneficiary is subject to tax at the sum
of the maximum marginal tax rates applicable to the
state of residence of the Participant or Beneficiary,
with no adjustment for the amount of income, for
13
<PAGE>
the deduction of state taxes on a federal return, for the
deduction of federal tax on a state return, for the
loss of itemized deductions or exemptions, or for any
other purpose, and the Company shall make the gross-up
payment in a lump sum within 10 days of receipt of the
Consultant's determination. The Consultant shall
provide the Participant or Beneficiary and the Company
with a written notice of the amount of the excise taxes
that is required to be paid and the amount of the gross-
up payment, including any necessary calculations in
support of its conclusions. The Company shall pay all
fees and expenses of the Consultant.
The Participant or Beneficiary shall notify the Company
in writing within five days if the Internal Revenue
Service takes the position that the amount of excise
tax paid was incorrect. The Company shall have the
right to challenge any excise tax determinations made
by the Internal Revenue Service, and the Participant or
Beneficiary shall cooperate fully with the Company in
connection with any such challenge. The Company shall
control any such challenge and shall bear all costs
associated with the challenge. After the Company has
exhausted the rights to challenge the determination or
indicated that it intends to concede or settle the
excise tax determination, the gross-up payment shall be
recalculated by the Consultant to reflect the actual
excise taxes and any related interest and penalties.
The Company shall pay to the Participant or Beneficiary
any deficiency in the gross-up payment and any related
interest and penalties payable (or the Participant or
Beneficiary shall return to the Company any excess
gross-up payment and any interest received thereon)
within 10 days of receipt of the revised calculations
from the Consultant.
14. GENERAL PROVISIONS
(a) Except as provided by the Trust, Participants and their
Beneficiaries, heirs, successors and assigns shall have
no legal or equitable rights, interest or claims in any
property or assets of the Company or its Affiliates.
With respect to the Plan, any Plan Agreement and the
Trust, any and all of the Company's and Affiliates'
assets shall be, and shall remain, the general,
unpledged unrestricted assets of the Company and its
Affiliates, except as provided by the Trust.
(b) The Company's and its Affiliates' liability for the
payment of benefits shall be defined only by the Plan.
The Company and its Affiliates shall have no obligation
to a Participant under the Plan except as expressly
provided in the Plan.
(c) Neither a Participant nor any other person shall have
any right to sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt, the
amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are,
expressly declared to be unassignable and non-
transferable, except that the foregoing shall not apply
to any family support obligations set forth in a court
order. No part of the amounts payable shall, prior to
actual payment, be subject to seizure or sequestration
for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or
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<PAGE>
any other person, nor be transferable by operation of law
in the event of a Participant's or any other person's
bankruptcy or insolvency.
(d) The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between
the Company or any Affiliate and the Participant. Such
employment is an "at will" employment relationship that
can be terminated at any time for any reason, with or
without cause, unless expressly provided in a written
employment agreement. Nothing in this Plan shall be
deemed to give a Participant the right to be retained
in the service of any Company or Affiliate or to
interfere with the right of any Company or Affiliate
to discipline or discharge the Participant at any time.
(e) A Participant shall cooperate with the Company or
Affiliate by furnishing any and all information
requested by the Company or Affiliate and take such
other actions as may be requested in order to
facilitate the administration of the Plan and the
payments of benefits hereunder, including but not
limited to taking such physical examinations as any
Company or Affiliate may deem necessary.
(f) Whenever any words are used herein in the masculine,
they shall be construed as though they were in the
feminine in all cases where they would so apply; and
wherever any words are used herein in the singular or
in the plural, they shall be construed as though they
were used in the plural or the singular, as the case
may be, in all cases where they would so apply.
(g) The captions of the articles, sections and paragraphs
of this plan are for convenience only and shall not
control or affect the meaning or construction of any of
its provisions.
(h) The provisions of this Plan shall be construed and
interpreted according to the laws of the State of
California.
(i) In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity
shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal
and invalid provision had never been inserted herein.
(j) Any notice or filing required or permitted to be given
to the Committee under this Plan shall be sufficient if
in writing and hand-delivered, or sent by registered or
certified mail, to the address below:
Homestake Mining Company
Attn: Compensation Committee
650 California Street
San Francisco, CA 94108
Such notice shall be deemed given as of the date of
delivery or, if delivery is
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<PAGE>
made by mail, as of the date shown on the postmark on
the receipt for registration or certification.
(k) Any notice or filing required or permitted to be given
to a Participant under this Plan shall be sufficient if
in writing and hand-delivered, or sent by mail, to the
last known address of the Participant.
(l) The provisions of this Plan shall bind and inure to the
benefit of the Company and its Affiliates and their
successors and assigns and the Participant, the
Participant's Beneficiaries, and their permitted
successors and assigns.
(m) The interest in the benefits hereunder of a spouse of a
Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be
transferable by such spouse in any manner, including
but not limited to such spouse's will, nor shall such
interest pass under the laws of intestate succession.
(n) If a benefit under this Plan is to be paid to a minor,
a person declared incompetent or to a person incapable
of handling the disposition of that person's property,
the Committee may direct payment of such benefit to the
guardian, legal representative or person having the
care and custody of such minor, incompetent or
incapable person. The Committee may require proof of
minority, incompetence, incapacity or guardianship, as
it may deem appropriate prior to distribution of the
benefit. Any payment of a benefit shall be a payment
for the account of the Participant and the
Participant's Beneficiary, as the case may be, and
shall be a complete discharge of any liability under
the Plan for such payment amount.
15. DISTRIBUTION IN THE EVENT OF TAXATION
If, for any reason, all or any portion of a Participant's
benefits under this Plan become taxable to the Participant
prior to receipt, a Participant may petition the Committee
for a distribution of assets sufficient to meet the
Participant's tax liability (including additions to tax,
penalties and interest). Upon the grant of such a petition,
which grant shall not be unreasonably withheld, the Company
and it Affiliates shall cause to be distributed to the
Participant immediately available funds in an amount equal
to the Participant's federal, state and local tax liability
associated with such taxation (which amount shall not exceed
a Participant's accrued benefit under the Plan), which
liability shall be measured by using that Participant's then
current highest federal, state and local marginal tax rate,
plus the rates or amounts for the applicable additions to
tax, penalties and interest. If the petition is granted,
the tax liability distribution shall be made within 90 days
of the date when Participant's petition is granted. Such a
distribution shall affect and reduce the benefits to be paid
subsequently hereunder.
16. CLAIMS PROCEDURE
If a Participant or Beneficiary ("Claimant") believes that
he or she is entitled to a benefit or greater benefit as the
case may be, under the Plan, the Claimant may submit a signed,
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<PAGE>
written application to the Committee within 90 days
of having been denied such benefit. The Claimant will
generally be notified of the approval or denial of this
application within 90 days of the date that the Committee
receives the application. If the claim is denied, the
denial will state specific reasons for the denial and the
Claimant will have 60 days to file a signed, written request
for a review of the denial with the Committee. This request
should include the reasons for requesting a review, facts
supporting the request and any other relevant comments. The
Committee, operating pursuant to its discretionary authority
to administer and interpret the Plan and to determine
eligibility for benefits under the terms of the Plan, will
generally make a final, written determination of the
Claimant's eligibility for benefits within 60 days of
receipt of the request for review.
17. ARBITRATION
Any controversy between a Participant and the Company or its
Affiliates involving the construction or application of any
of the terms, provisions, or conditions of this Plan shall
be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association,
then in effect, and judgment on the award rendered by the
arbitrator(s) may be entered by any court having
jurisdiction thereof. The exclusive place of arbitration
shall be San Francisco, California. The expenses reasonably
incurred by both parties in connection with arbitration,
including attorney fees, shall be borne by the Company and
its Affiliates.
18. TERMINATION OF PRIOR PLAN AND RIGHTS THEREUNDER
This Plan superceded and replaced the Prior Plan, and all
rights, if any, that the undersigned Participant may have
had under the Prior Plan terminated.
IN WITNESS WHEREOF, Homestake Mining Company has adopted
this 1999 Executive Supplemental Retirement Plan, effective April
1, 1999, amended as of September 1, 1999.
HOMESTAKE MINING COMPANY
__________________________ By: ________________________
Date of Execution
ACKNOWLEDGEMENT AND AGREEMENT
I have read and understand and agree to the 1999 Executive
Supplemental Retirement Plan, as amended as of September 1, 1999
("Plan"), set out above. I acknowledge that the Plan
17
<PAGE>
defines the entire obligation of Homestake and its Affiliates with
respect to the benefits identified therein and is limited to
those benefits.
Date:__________________ ________________________
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HOMESTAKE MINING COMPANY [HOMESTAKE LOGO HERE]
1999 Change of Control Severance Plan of Homestake Mining Company
(alternative I, applicable to persons who were participants in
the Change of Control Severance Plan prior to May, 1998).
Date:
TO:
SUBJECT: 1999 Change of Control Severance Plan
Homestake Mining Company ("Homestake" or the "Company")
considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best
interests of Homestake and its Stockholders. In this connection,
Homestake recognizes that the possibility of a change in control
and the uncertainty and questions which it may raise among
management may result in the departure or distraction of
management personnel to the detriment of Homestake and its
Stockholders. Accordingly, the Board of Directors of Homestake
("Board") has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication
of members of Homestake management, including yourself, to their
assigned duties without distraction in the face of the
potentially disturbing circumstances arising from the possibility
of a change in control of Homestake.
As a result, the Board has adopted the 1999 Change of
Control Severance Plan ("Severance Plan") which will provide you
with financial support in the event Homestake undergoes a
significant change of ownership or other change in control. The
terms of the Severance Plan are set forth in this letter. If you
accept the terms of the Severance Plan, you should acknowledge
such by signing the Verification and Acceptance at the end of the
letter. Your participation in the Severance Plan will begin
effective as of the date your acceptance is received by Homestake
and will terminate effective as of the date of your 65th
birthday.
1. Events Entitling You to Benefits
(a) No benefits will be payable under the Severance Plan
unless there is a Change of Control (as defined below). You will
become entitled to benefits under the Severance Plan if, within
the two-year period following a Change of Control and prior to
the date of your becoming age 65,
<PAGE>
(i) Your employment is terminated involuntarily
for reasons other than death, disability or
discharge for Good and Sufficient Cause (as
defined below); or
(ii) You voluntarily choose to terminate your
employment for Good Reason (as defined below).
(b) As used herein, "Change of Control" means any of the
following events (except as specifically provided elsewhere):
(i) Homestake or any of its Subsidiaries is a
party to a consolidation or merger or other
combination, or there is an acquisition by
Homestake or any of its Subsidiaries of another
corporation or entity or its assets, or there is
any other corporate reorganization or acquisition
transaction in which Homestake or any of its
Subsidiaries is a participant, under the terms of
which capital stock having less than 62.5% of the
voting power in election of directors in Homestake
or the resulting or surviving publicly held
corporation or entity (if not Homestake) is held
by the Stockholders of Homestake immediately
preceding such event;
(ii) At least 75% in fair market value of
Homestake's assets are sold; or
(iii)Capital stock having at least 25% in
voting power in election of directors of Homestake
is acquired by any one person or "group," as that
term is used in Rule 13d-5 under the Securities
Exchange Act of 1934.
For purposes of this clause 1(b), holders of Homestake Canada
Inc. Exchangeable Shares shall be deemed to be Stockholders of
Homestake.
(c) As used herein, voluntary termination by you of your
employment for "Good Reason" means termination after a Change of
Control of Homestake following the occurrence of one of the
following events without your express written consent:
(i) The assignment by Homestake to you of any
duties inconsistent with your positions, duties,
responsibilities, and status with Homestake
immediately prior to the Change of Control,
provided, however, that for purposes of this
subclause 1(c)(i), the amount "50%" shall be
substituted for "62.5%" in subclause 1(b)(i) above
(definition of "Change of Control") and subclauses
1(b)(ii) and (iii) shall not apply;
(ii) A material reduction in your
responsibilities, titles, or offices as in effect
immediately prior to the Change of Control, or any
removal of you from or any failure to re-elect you
to any such positions, except in connection with
the involuntary termination of your employment for
Good and Sufficient Cause, or as a result of your
death, disability or retirement, or voluntary
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<PAGE>
termination by you for other than Good Reason;
provided, however, that for purposes of this
subclause 1(c)(ii), the amount "50%" shall be
substituted for "62.5%" in subclause 1(b)(i) above
(definition of "Change of Control");
(iii)A reduction by Homestake in your base
salary as in effect immediately prior to the
Change of Control;
(iv) If there has been a change in the principal
executive office of Homestake to a location more
than 50 miles from the location of the principal
executive office of Homestake immediately prior to
the Change of Control, the requirement by
Homestake that you be based anywhere other than
within a 50-mile radius of your location
immediately prior to the Change of Control, except
for required travel on the Company's business to
an extent substantially consistent with your
business travel obligations immediately prior to
the Change of Control; provided, however, that
this subclause 1(c)(iv) shall not apply if the new
location at which you are to be based is as close
to or closer to your principal residence than the
prior location at which you were based;
(v) The requirement by Homestake that you be
based anywhere other than within a 50-mile radius
of your location immediately prior to the Change
of Control, except for required travel on the
Company's business to an extent substantially
consistent with your business travel obligations
immediately prior to the Change of Control;
provided, however, that for purposes of this
subclause 1(c)(v), the amount "50%" shall be
substituted for "62.5%" in subclause 1(b)(i) above
(definition of "Change of Control") and subclauses
1(b)(ii) and (iii) shall not apply; and provided,
further, that this subclause 1(c)(v) shall not
apply if the new location at which you are to be
based is as close to or closer to your principal
residence than the prior location at which you
were based;
(vi) The failure by Homestake to continue in
effect, or a change of your participation or
benefits under, any bonus or incentive
compensation plan, any employee benefit plan
qualified under Section 401 (a) of the Internal
Revenue Code of 1954, as amended from time to time
(the "Code"), any stock ownership, stock purchase,
stock option or other equity incentive plan, any
life, health, accident, disability or similar plan
providing welfare benefits or any plan or program
of fringe benefits in which you are participating
immediately prior to a Change of Control
("Existing Plans"), the effect of which would be
to materially reduce the total value, in the
aggregate, of your benefits under all Existing
Plans and all amendments thereto and plans
substituted therefor, as compared to your benefits
under Existing Plans as they existed immediately
prior to the Change of Control, or the failure by
Homestake to provide you with the number of paid
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vacation days to which you are entitled in
accordance with Homestake's general vacation
policy in effect immediately prior to the Change
of Control; or
(vii)The failure of Homestake to obtain the
express assumption by any successor of Homestake's
obligations under the Severance Plan, as
contemplated in Section 3.
(e) As used herein, "Good and Sufficient Cause" means any
act of fraud or dishonesty, or conviction of a felony involving
moral turpitude or your knowingly engaging in acts seriously
detrimental to Homestake.
2. Severance Payment and Benefits Payable to You.
(a) As the Severance Payment hereunder, you will be
entitled to receive a lump sum cash payment equal to two [three*]
times your highest "Annual Compensation" during the three
calendar years immediately preceding the date of your
termination. The lump sum cash payment shall be payable in full
within 10 calendar days of the occurrence of the first event
entitling you to benefits under the Plan. The foregoing
notwithstanding, if, at the date of the occurrence of the first
event entitling you to benefits under the Severance Plan, your
age is greater than 63 [62*], then the amount of the lump sum
cash payment payable to you shall be reduced by multiplying the
amount otherwise payable by a fraction, (i) the numerator of
which is the number of weeks (or part thereof) from the date of
such first event until your 65th birthday and (ii) the
denominator of which is the number "104" ["156"*].
(b) You will be entitled to the continuation of the
following benefits:
(i) Continuation of participation and coverage
for a period of two [three*] years from the date
of your termination, or until your 65th birthday
if earlier, under all Homestake life, health,
accident, disability or similar plans providing
welfare benefits, and all fringe benefit plans and
programs in which you are participating
immediately prior to your termination of
employment, under the same coverages and on the
same terms as in effect immediately prior to the
date of your termination (or in the case of your
voluntary termination for Good Reason following a
Change of Control as a result of a reduction in
benefits, such coverages and terms as were in
effect immediately prior to a Change of Control);
provided, however, that if your continued
participation is not possible under the general
terms and provisions of such plans and programs,
Homestake shall arrange to provide you with
substantially similar benefits; and provided
further, that, except as provided in such plans or
in existing agreements, you will not have
continued participation in Homestake's bonus
plans, stock option, stock appreciation and share
rights plans, or any other similar incentive based
compensation plan or the plans and programs
described in clause 2(c) below.
_________
* Chief Executive Officer and Chief Operating Officer only.
4
<PAGE>
(ii) Relocation assistance, to the extent not
provided by another employer.
(c) Benefit accruals under Homestake employee benefit plans
qualified under Section 401(a) and 401(k) of the Code and under
any supplemental retirement plan or executive supplemental
retirement plan in which you are participating immediately prior
to your termination shall cease as of the date of your
termination. You will become entitled to payment of benefits, if
any, under such plans in accordance with their terms.
(d) Benefits payable under the Severance Plan will be in
lieu of any severance pay benefits provided under any Homestake
severance pay policy provided, however, that if Homestake has a
severance pay policy that would apply to you in the absence of
the Severance Plan that would permit payment of a greater amount
than provided for in clause 2(a), then you will be entitled to
receive that greater amount. In the event you have an
outstanding employment agreement with Homestake in effect as of
your date of termination and such agreement provides you with
compensation and benefits which will continue during the period
of time coincident with that covered by the Severance Plan, your
benefits under the Severance Plan will be provided only to the
extent they exceed the benefits under such agreement.
(e) As used in clause 2(a), "Annual Compensation" includes:
all regular base salary and performance bonuses paid under the
Homestake Variable Pay Plan which are or would be reported on
your Form W-2 for any calendar year; any pre-tax reductions of
such compensation made at your election under a Section 401(k),
Cafeteria, Deferred Income or similar plan; and any amount of
cash bonus for such year under the Homestake Variable Pay Plan
that has been foregone in lieu of restricted stock awards.
"Annual Compensation" does not include: directors' fees; amounts
resulting or relating to exercise of or vesting in stock options,
stock appreciation rights or other restricted stock rights under
stock option and share rights plans (including stock received on
vesting of restricted stock awards received in lieu of cash
bonuses foregone); relocation or signing bonuses; loan
forgiveness amounts; tax gross-up payments; tax equalization
payments; other fees and commissions; and any other payments (or
deemed payments) to you and not described in the preceding
sentence.
3. Successors
As used herein, Homestake means Homestake (as defined
above) and any successor to its business and/or assets.
Homestake will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Homestake by
agreement to expressly assume Homestake's obligations under the
Plan in the same manner and to the same extent that Homestake
would be required to perform if no such succession had taken
place.
4. Arbitration
5
<PAGE>
Any controversy between you and Homestake involving the
construction or application of any of the terms, provisions, or
conditions of this Agreement shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, then in effect, and judgment on the
award may be entered by any court having jurisdiction thereof.
The exclusive location of the arbitration shall be San Francisco,
California. The expenses reasonably incurred by both parties in
connection with arbitration, including attorney fees, shall be
borne by Homestake.
5. Tax Gross-up
(a) Sections 280G and 4999 of the Code imposes penalties on
the payor and payee of certain "excess parachute payments." Very
generally, "parachute payments" are amounts which are paid as a
result of the change of control of a corporation and the present
value of which equals or exceeds a threshold of three times the
employee's average annual taxable compensation (excluding
deferred compensation) for the five years preceding the year in
which a change of control occurs. If the employee has been with
Homestake, including predecessor or related entities, for less
than five years, the employee's average annual compensation is
that earned during the period of employment. If the threshold is
exceeded, "parachute payments" which exceed one times your
average annual taxable compensation for the five-year period
preceding the change of control will be deemed "excess parachute
payments" which are (i) not deductible by the payor corporation,
and (ii) subject the payee to a non-deductible excise tax equal
to 20% of the payment.
(b) The IRS has proposed regulations which define a "change
of control." Some or all of the events which constitute a Change
of Control for purposes of the Severance Plan also constitute a
change of control under the regulations. In the event a Change
of Control occurs which also constitutes a change of control
under the IRS regulations, you will be subject to the non-
deductible excise tax if your benefits under the Severance Plan,
together with any other amounts that are deemed to be conditioned
on a change of control, equal or exceed the threshold amount.
(c) If you are subject to the excise tax, you will be
entitled to receive a "gross-up payment" in an amount sufficient
to pay the excise tax, the taxes (including the excise tax) on
the gross-up payment, and any related interest and penalties.
Whether you are subject to the excise tax and the amount of the
gross-up payment shall be determined by a law firm, a certified
public accounting firm, and/or a firm of recognized executive
compensation consultants selected by Homestake (the
"Consultant"). Determinations of the Consultant shall be binding
upon you and Homestake. Unless the Consultant concludes that a
contrary method is clearly preferable, the gross-up payment shall
be calculated on the assumption that you are subject to tax at
the sum of the maximum marginal tax rates applicable to the state
of your residence, with no adjustment for the amount of your
income, for the deduction of state taxes on a federal return, for
the deduction of federal tax on a state return, for the loss of
itemized deductions or exemptions, or for any other purpose, and
Homestake shall make the gross-up payment in a lump sum within 10
days of receipt of the Consultant's determination. For example,
the rate applicable to a California
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<PAGE>
resident in 1998 would be
70.35% (39.6% federal income tax, plus 20% excise tax, plus 1.45%
federal Medicare tax, plus 9.3% California income tax). The
Consultant shall provide you and Homestake with a written notice
of the amount of the excise taxes that you are required to pay
and the amount of the gross-up payment, including any necessary
calculations in support of its conclusions. Homestake shall pay
all fees and expenses of the Consultant.
(d) You agree to notify Homestake in writing within five
days if the Internal Revenue Service takes the position that the
amount of excise tax paid by you was incorrect. Homestake has
the right to challenge any excise tax determinations made by the
Internal Revenue Service, and you must cooperate fully with
Homestake in connection with any such challenge. Homestake shall
control any such challenge and shall bear all costs associated
with the challenge. After Homestake has exhausted the rights to
challenge the determination or indicated that it intends to
concede or settle the excise tax determination, the gross-up
payment will be recalculated by the Consultant to reflect the
actual excise taxes and any related interest and penalties.
Homestake will pay you any deficiency in the gross-up payment and
any related interest and penalties payable (or will you return to
Homestake any excess gross-up payment and any interest received
thereon) within 10 days of receipt of the revised calculations
from the Consultant.
6. Termination of Prior Plan and Rights Thereunder.
(a) Upon execution and delivery of this Agreement by
Homestake and you, this Severance Plan and Agreement supercedes
and replaces the prior severance plan and Agreement between
Homestake and you dated as of _________________, as heretofore
amended from time to time (collectively "Prior Severance Plan"),
and all rights that you may have under that Prior Severance Plan
are terminated.
(B) WITHOUT LIMITING THE GENERALITY OF CLAUSE 6(A), YOU
SPECIFICALLY UNDERSTAND AND AGREE THAT, UPON EXECUTION AND
DELIVERY OF THIS AGREEMENT BY HOMESTAKE AND YOU, THE 1998
ACQUISITION BY HOMESTAKE OF PLUTONIC RESOURCES LIMITED, A NEW
SOUTH WALES COMPANY, WILL CEASE TO BE A "CHANGE OF CONTROL" FOR
ANY AND ALL PURPOSES OF ALL SEVERANCE PLANS, THE HOMESTAKE
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN, STOCK OPTIONS, STOCK
APPRECIATION RIGHTS AND OTHER RESTRICTED STOCK RIGHTS UNDER STOCK
OPTION AND SHARE RIGHTS PLANS (INCLUDING STOCK RECEIVED ON
VESTING OF RESTRICTED STOCK AWARDS RECEIVED IN LIEU OF CASH
BONUSES FOREGONE), AND ALL OTHER EMPLOYEE BENEFIT PLANS OF
HOMESTAKE AND ITS SUBSIDIARIES. YOU UNDERSTAND AND ACKNOWLEDGE
THAT YOU ARE WAIVING AND GIVING UP POTENTIALLY VALUABLE RIGHTS
UNDER THE PRIOR SEVERANCE PLAN IN RESPECT OF THE ACQUISITION BY
HOMESTAKE OF PLUTONIC RESOURCES LIMITED, INCLUDING BUT NOT
LIMITED TO THE RIGHT TO RECEIVE SEVERANCE PAY AND OTHER BENEFITS
SHOULD YOUR EMPLOYMENT BE TERMINATED INVOLUNTARILY FOR REASONS
OTHER THAN DISCHARGE FOR GOOD AND SUFFICIENT CAUSE (AS DEFINED IN
THE PRIOR SEVERANCE AGREEMENT) OR SHOULD YOU VOLUNTARILY CHOOSE
TO TERMINATE YOUR EMPLOYMENT FOR GOOD REASON (AS DEFINED IN THE
PRIOR SEVERANCE AGREEMENT).
7. General Provisions
7
<PAGE>
(a) No provision in the Severance Plan shall be construed
to guarantee continued employment by Homestake for any specified
period of time, or to impair or interfere with Homestake's right
to dismiss its employees.
(b) You will be entitled to reimbursement by Homestake of
all reasonable expenses, including attorney's fees, incurred by
you in enforcing the provisions of the Severance Plan.
(c) For purposes of the Severance Plan, "Subsidiary" of
Homestake means any corporation or other entity that is
controlled by Homestake.
(d) All payments are subject to applicable withholding
taxes and income taxes.
8. Administration and Interpretation
(a) This Severance Plan is intended to qualify for
exemption from Parts II, III and IV of the Employee Retirement
Income Security Act of 1974, as amended, as a plan maintained
primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees
under Sections 201(2), 301(a)(3) and 401(a)(1) of such Act, and
shall be so interpreted.
(b) The Severance Plan shall be administered by the
Compensation Committee of the Board ("Committee"). The Committee
shall have the discretion and authority to make, amend, interpret
and enforce all appropriate rules and regulations for the
administration of the Severance Plan and decide or resolve any
and all questions including interpretations of the Severance
Plan, as may arise in connection with the Severance Plan.
(c) In the administration of the Severance Plan, the
Committee may, from time to time, employ agents and delegate to
them such administrative duties as it sees fit and may, from time
to time, consult with counsel who may be counsel to Homestake.
(d) The decision or action of the Committee with respect to
any question arising out of or in connection with the
administration, interpretation and application of the Severance
Plan and the rules and regulations promulgated hereunder shall be
final and conclusive and binding..
(e) Homestake shall indemnify and hold harmless each member
of the Committee against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act
with respect to the Severance Plan, except in the case of willful
misconduct by that member.
(f) To enable the Committee to perform its functions,
Homestake shall supply full and timely information to the
Committee on all matters relating to your compensation, the date
and circumstances of the termination of your employment, and such
other pertinent information as the Committee may reasonably
require.
(g) If you believes that you are entitled to a benefit or
greater benefit as the case may be, under the Severance Plan, you
may submit a signed, written application to the Committee within 90
8
<PAGE>
days of having been denied such benefit. You will generally
be notified of the approval or denial of this application within
90 days of the date that the Committee receives the application.
If the claim is denied, the denial will state specific reasons
for the denial and you will have 60 days to file a signed,
written request for a review of the denial with the Committee.
This request should include the reasons for requesting a review,
facts supporting the request and any other relevant comments.
The Committee, operating pursuant to its discretionary authority
to administer and interpret the Severance Plan and to determine
eligibility for benefits under the terms of the Severance Plan,
will generally make a final, written determination of your
eligibility for benefits within 60 days of receipt of the request
for review.
Please indicate your acceptance of the terms of the
Severance Plan by signing one copy of this letter and returning
it to me in the enclosed envelope. The second copy is for your
own records.
Sincerely,
HOMESTAKE MINING COMPANY
By ______________________________
VERIFICATION AND ACCEPTANCE
I have read the foregoing letter and understand that
the 1999 Change of Control Severance Plan set out above
("Severance Plan") defines the entire obligation of Homestake
with respect to the benefits identified above and is limited to
those benefits. I understand that the Severance Plan modifies
Homestake's obligations under Homestake's general severance pay
policy in the manner described above and that the opportunity to
receive the special benefits provided under the Plan represents
valuable consideration for this modification. I ALSO UNDERSTAND
THAT BY ACCEPTING AND AGREEING TO THE SEVERANCE PLAN I WAIVE AND
GIVE UP VALUABLE RIGHTS UNDER THE PRIOR SEVERANCE PLAN AND
AGREEMENT BETWEEN HOMESTAKE AND ME DATED AS OF ________________,
AS HERETOFORE AMENDED FROM TIME TO TIME (COLLECTIVELY THE "PRIOR
SEVERANCE PLAN"). WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, I SPECIFICALLY UNDERSTAND AND AGREE THAT, UPON
EXECUTION AND DELIVERY OF THIS AGREEMENT BY HOMESTAKE AND ME, THE
1998 ACQUISITION BY HOMESTAKE OF PLUTONIC RESOURCES LIMITED, A
NEW SOUTH WALES COMPANY, WILL CEASE TO BE A "CHANGE OF CONTROL"
FOR ANY AND ALL PURPOSES OF THE PRIOR SEVERANCE PLAN. I enter
into this agreement in recognition that the Severance Plan
provides other valuable benefits that I do not have under the
Prior Severance Plan. I accept the terms of the Severance Plan.
Date:_____________ __________________________________
9
<PAGE>
HOMESTAKE MINING COMPANY [HOMESTAKE LOGO HERE]
1999 Change of Control Severance Plan of Homestake Mining Company
(alternative II, applicable to persons who became participants in
the Change of Control Severance Plan after May, 1998).
Date:
TO:
SUBJECT: 1999 Change of Control Severance Plan
Homestake Mining Company ("Homestake" or the "Company")
considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best
interests of Homestake and its Stockholders. In this connection,
Homestake recognizes that the possibility of a change in control
and the uncertainty and questions which it may raise among
management may result in the departure or distraction of
management personnel to the detriment of Homestake and its
Stockholders. Accordingly, the Board of Directors of Homestake
("Board") has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication
of members of Homestake management, including yourself, to their
assigned duties without distraction in the face of the
potentially disturbing circumstances arising from the possibility
of a change in control of Homestake.
As a result, the Board has adopted the 1999 Change of
Control Severance Plan ("Severance Plan") which will provide you
with financial support in the event Homestake undergoes a
significant change of ownership or other change in control. The
terms of the Severance Plan are set forth in this letter. If you
accept the terms of the Severance Plan, you should acknowledge
such by signing the Verification and Acceptance at the end of the
letter. Your participation in the Severance Plan will begin
effective as of the date your acceptance is received by Homestake
and will terminate effective as of the date of your 65th
birthday.
1. Events Entitling You to Benefits
(a) No benefits will be payable under the Severance Plan
unless there is a Change of Control (as defined below). You will
become entitled to benefits under the Severance Plan if, within
the two-year period following a Change of Control and prior to
the date of your becoming age 65,
<PAGE>
(i) Your employment is terminated involuntarily
for reasons other than death, disability or
discharge for Good and Sufficient Cause (as
defined below); or
(ii) You voluntarily choose to terminate your
employment for Good Reason (as defined below).
(b) As used herein, "Change of Control" means any of the
following events (except as specifically provided elsewhere):
(i) Homestake or any of its Subsidiaries is a
party to a consolidation or merger or other
combination, or there is an acquisition by
Homestake or any of its Subsidiaries of another
corporation or entity or its assets, or there is
any other corporate reorganization or acquisition
transaction in which Homestake or any of its
Subsidiaries is a participant, under the terms of
which capital stock having less than 62.5% of the
voting power in election of directors in Homestake
or the resulting or surviving publicly held
corporation or entity (if not Homestake) is held
by the Stockholders of Homestake immediately
preceding such event;
(ii) At least 75% in fair market value of
Homestake's assets are sold; or
(iii)Capital stock having at least 25% in
voting power in election of directors of Homestake
is acquired by any one person or "group," as that
term is used in Rule 13d-5 under the Securities
Exchange Act of 1934.
For purposes of this clause 1(b), holders of Homestake Canada
Inc. Exchangeable Shares shall be deemed to be Stockholders of
Homestake.
(c) As used herein, voluntary termination by you of your
employment for "Good Reason" means termination after a Change of
Control of Homestake following the occurrence of one of the
following events without your express written consent:
(i) The assignment by Homestake to you of any
duties inconsistent with your positions, duties,
responsibilities, and status with Homestake
immediately prior to the Change of Control,
provided, however, that for purposes of this
subclause 1(c)(i), the amount "50%" shall be
substituted for "62.5%" in subclause 1(b)(i) above
(definition of "Change of Control") and subclauses
1(b)(ii) and (iii) shall not apply;
(ii) A material reduction in your
responsibilities, titles, or offices as in effect
immediately prior to the Change of Control, or any
removal of you from or any failure to re-elect you
to any such positions, except in connection with
the involuntary termination of your employment for
Good and Sufficient Cause, or as a result of your
death, disability or retirement, or voluntary
2
<PAGE>
termination by you for other than Good Reason;
provided, however, that for purposes of this
subclause 1(c)(ii), the amount "50%" shall be
substituted for "62.5%" in subclause 1(b)(i) above
(definition of "Change of Control");
(iii)A reduction by Homestake in your base
salary as in effect immediately prior to the
Change of Control;
(iv) If there has been a change in the principal
executive office of Homestake to a location more
than 50 miles from the location of the principal
executive office of Homestake immediately prior to
the Change of Control, the requirement by
Homestake that you be based anywhere other than
within a 50-mile radius of your location
immediately prior to the Change of Control, except
for required travel on the Company's business to
an extent substantially consistent with your
business travel obligations immediately prior to
the Change of Control; provided, however, that
this subclause 1(c)(iv) shall not apply if the new
location at which you are to be based is as close
to or closer to your principal residence than the
prior location at which you were based;
(v) The requirement by Homestake that you be
based anywhere other than within a 50-mile radius
of your location immediately prior to the Change
of Control, except for required travel on the
Company's business to an extent substantially
consistent with your business travel obligations
immediately prior to the Change of Control;
provided, however, that for purposes of this
subclause 1(c)(v), the amount "50%" shall be
substituted for "62.5%" in subclause 1(b)(i) above
(definition of "Change of Control") and subclauses
1(b)(ii) and (iii) shall not apply; and provided,
further, that this subclause 1(c)(v) shall not
apply if the new location at which you are to be
based is as close to or closer to your principal
residence than the prior location at which you
were based;
(vi) The failure by Homestake to continue in
effect, or a change of your participation or
benefits under, any bonus or incentive
compensation plan, any employee benefit plan
qualified under Section 401 (a) of the Internal
Revenue Code of 1954, as amended from time to time
(the "Code"), any stock ownership, stock purchase,
stock option or other equity incentive plan, any
life, health, accident, disability or similar plan
providing welfare benefits or any plan or program
of fringe benefits in which you are participating
immediately prior to a Change of Control
("Existing Plans"), the effect of which would be
to materially reduce the total value, in the
aggregate, of your benefits under all Existing
Plans and all amendments thereto and plans
substituted therefor, as compared to your benefits
under Existing Plans as they existed immediately
prior to the Change of Control, or the failure by
Homestake to provide you with the number of paid
3
<PAGE>
vacation days to which you are entitled in
accordance with Homestake's general vacation
policy in effect immediately prior to the Change
of Control; or
(vii)The failure of Homestake to obtain the
express assumption by any successor of Homestake's
obligations under the Severance Plan, as
contemplated in Section 3.
(e) As used herein, "Good and Sufficient Cause" means any
act of fraud or dishonesty, or conviction of a felony involving
moral turpitude or your knowingly engaging in acts seriously
detrimental to Homestake.
2. Severance Payment and Benefits Payable to You.
(a) As the Severance Payment hereunder, you will be
entitled to receive a lump sum cash payment equal to two [three*]
times your highest "Annual Compensation" during the three
calendar years immediately preceding the date of your
termination. The lump sum cash payment shall be payable in full
within 10 calendar days of the occurrence of the first event
entitling you to benefits under the Plan. The foregoing
notwithstanding, if, at the date of the occurrence of the first
event entitling you to benefits under the Severance Plan, your
age is greater than 63 [62*], then the amount of the lump sum
cash payment payable to you shall be reduced by multiplying the
amount otherwise payable by a fraction, (i) the numerator of
which is the number of weeks (or part thereof) from the date of
such first event until your 65th birthday and (ii) the
denominator of which is the number "104" ["156"*].
(b) You will be entitled to the continuation of the
following benefits:
(i) Continuation of participation and coverage
for a period of two [three*] years from the date
of your termination, or until your 65th birthday
if earlier, under all Homestake life, health,
accident, disability or similar plans providing
welfare benefits, and all fringe benefit plans and
programs in which you are participating
immediately prior to your termination of
employment, under the same coverages and on the
same terms as in effect immediately prior to the
date of your termination (or in the case of your
voluntary termination for Good Reason following a
Change of Control as a result of a reduction in
benefits, such coverages and terms as were in
effect immediately prior to a Change of Control);
provided, however, that if your continued
participation is not possible under the general
terms and provisions of such plans and programs,
Homestake shall arrange to provide you with
substantially similar benefits; and provided
further, that, except as provided in such plans or
in existing agreements, you will not have
continued participation in Homestake's bonus
plans, stock option, stock appreciation and share
rights plans, or any other similar incentive based
compensation plan or the plans and programs
described in clause 2(c) below.
_________
* Chief Executive Officer and Chief Operating Officer only.
4
<PAGE>
(ii) Relocation assistance, to the extent not
provided by another employer.
(c) Benefit accruals under Homestake employee benefit plans
qualified under Section 401(a) and 401(k) of the Code and under
any supplemental retirement plan or executive supplemental
retirement plan in which you are participating immediately prior
to your termination shall cease as of the date of your
termination. You will become entitled to payment of benefits, if
any, under such plans in accordance with their terms.
(d) Benefits payable under the Severance Plan will be in
lieu of any severance pay benefits provided under any Homestake
severance pay policy provided, however, that if Homestake has a
severance pay policy that would apply to you in the absence of
the Severance Plan that would permit payment of a greater amount
than provided for in clause 2(a), then you will be entitled to
receive that greater amount. In the event you have an
outstanding employment agreement with Homestake in effect as of
your date of termination and such agreement provides you with
compensation and benefits which will continue during the period
of time coincident with that covered by the Severance Plan, your
benefits under the Severance Plan will be provided only to the
extent they exceed the benefits under such agreement.
(e) As used in clause 2(a), "Annual Compensation" includes:
all regular base salary and performance bonuses paid under the
Homestake Variable Pay Plan which are or would be reported on
your Form W-2 for any calendar year; any pre-tax reductions of
such compensation made at your election under a Section 401(k),
Cafeteria, Deferred Income or similar plan; and any amount of
cash bonus for such year under the Homestake Variable Pay Plan
that has been foregone in lieu of restricted stock awards.
"Annual Compensation" does not include: directors' fees; amounts
resulting or relating to exercise of or vesting in stock options,
stock appreciation rights or other restricted stock rights under
stock option and share rights plans (including stock received on
vesting of restricted stock awards received in lieu of cash
bonuses foregone); relocation or signing bonuses; loan
forgiveness amounts; tax gross-up payments; tax equalization
payments; other fees and commissions; and any other payments (or
deemed payments) to you and not described in the preceding
sentence.
3. Successors
As used herein, Homestake means Homestake (as defined
above) and any successor to its business and/or assets.
Homestake will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Homestake by
agreement to expressly assume Homestake's obligations under the
Plan in the same manner and to the same extent that Homestake
would be required to perform if no such succession had taken
place.
4. Arbitration
5
<PAGE>
Any controversy between you and Homestake involving the
construction or application of any of the terms, provisions, or
conditions of this Agreement shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association, then in effect, and judgment on the
award may be entered by any court having jurisdiction thereof.
The exclusive location of the arbitration shall be San Francisco,
California. The expenses reasonably incurred by both parties in
connection with arbitration, including attorney fees, shall be
borne by Homestake.
5. Tax Gross-up
(a) Sections 280G and 4999 of the Code imposes penalties on
the payor and payee of certain "excess parachute payments." Very
generally, "parachute payments" are amounts which are paid as a
result of the change of control of a corporation and the present
value of which equals or exceeds a threshold of three times the
employee's average annual taxable compensation (excluding
deferred compensation) for the five years preceding the year in
which a change of control occurs. If the employee has been with
Homestake, including predecessor or related entities, for less
than five years, the employee's average annual compensation is
that earned during the period of employment. If the threshold is
exceeded, "parachute payments" which exceed one times your
average annual taxable compensation for the five-year period
preceding the change of control will be deemed "excess parachute
payments" which are (i) not deductible by the payor corporation,
and (ii) subject the payee to a non-deductible excise tax equal
to 20% of the payment.
(b) The IRS has proposed regulations which define a "change
of control." Some or all of the events which constitute a Change
of Control for purposes of the Severance Plan also constitute a
change of control under the regulations. In the event a Change
of Control occurs which also constitutes a change of control
under the IRS regulations, you will be subject to the non-
deductible excise tax if your benefits under the Severance Plan,
together with any other amounts that are deemed to be conditioned
on a change of control, equal or exceed the threshold amount.
(c) If you are subject to the excise tax, you will be
entitled to receive a "gross-up payment" in an amount sufficient
to pay the excise tax, the taxes (including the excise tax) on
the gross-up payment, and any related interest and penalties.
Whether you are subject to the excise tax and the amount of the
gross-up payment shall be determined by a law firm, a certified
public accounting firm, and/or a firm of recognized executive
compensation consultants selected by Homestake (the
"Consultant"). Determinations of the Consultant shall be binding
upon you and Homestake. Unless the Consultant concludes that a
contrary method is clearly preferable, the gross-up payment shall
be calculated on the assumption that you are subject to tax at
the sum of the maximum marginal tax rates applicable to the state
of your residence, with no adjustment for the amount of your
income, for the deduction of state taxes on a federal return, for
the deduction of federal tax on a state return, for the loss of
itemized deductions or exemptions, or for any other purpose, and
Homestake shall make the gross-up payment in a lump sum within 10
days of receipt of the Consultant's determination. For example,
the rate applicable to a California
6
<PAGE>
resident in 1998 would be
70.35% (39.6% federal income tax, plus 20% excise tax, plus 1.45%
federal Medicare tax, plus 9.3% California income tax). The
Consultant shall provide you and Homestake with a written notice
of the amount of the excise taxes that you are required to pay
and the amount of the gross-up payment, including any necessary
calculations in support of its conclusions. Homestake shall pay
all fees and expenses of the Consultant.
(d) You agree to notify Homestake in writing within five
days if the Internal Revenue Service takes the position that the
amount of excise tax paid by you was incorrect. Homestake has
the right to challenge any excise tax determinations made by the
Internal Revenue Service, and you must cooperate fully with
Homestake in connection with any such challenge. Homestake shall
control any such challenge and shall bear all costs associated
with the challenge. After Homestake has exhausted the rights to
challenge the determination or indicated that it intends to
concede or settle the excise tax determination, the gross-up
payment will be recalculated by the Consultant to reflect the
actual excise taxes and any related interest and penalties.
Homestake will pay you any deficiency in the gross-up payment and
any related interest and penalties payable (or will you return to
Homestake any excess gross-up payment and any interest received
thereon) within 10 days of receipt of the revised calculations
from the Consultant.
6. [Reserved]
7. General Provisions
(a) No provision in the Severance Plan shall be construed
to guarantee continued employment by Homestake for any specified
period of time, or to impair or interfere with Homestake's right
to dismiss its employees.
(b) You will be entitled to reimbursement by Homestake of
all reasonable expenses, including attorney's fees, incurred by
you in enforcing the provisions of the Severance Plan.
(c) For purposes of the Severance Plan, "Subsidiary" of
Homestake means any corporation or other entity that is
controlled by Homestake.
(d) All payments are subject to applicable withholding
taxes and income taxes.
8. Administration and Interpretation
(a) This Severance Plan is intended to qualify for
exemption from Parts II, III and IV of the Employee Retirement
Income Security Act of 1974, as amended, as a plan maintained
primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees
under Sections 201(2), 301(a)(3) and 401(a)(1) of such Act, and
shall be so interpreted.
(b) The Severance Plan shall be administered by the
Compensation Committee of the Board ("Committee"). The Committee
shall have the discretion and authority to make, amend,
7
<PAGE>
interpret and enforce all appropriate rules and regulations for the
administration of the Severance Plan and decide or resolve any
and all questions including interpretations of the Severance
Plan, as may arise in connection with the Severance Plan.
(c) In the administration of the Severance Plan, the
Committee may, from time to time, employ agents and delegate to
them such administrative duties as it sees fit and may, from time
to time, consult with counsel who may be counsel to Homestake.
(d) The decision or action of the Committee with respect to
any question arising out of or in connection with the
administration, interpretation and application of the Severance
Plan and the rules and regulations promulgated hereunder shall be
final and conclusive and binding.
(e) Homestake shall indemnify and hold harmless each member
of the Committee against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act
with respect to the Severance Plan, except in the case of willful
misconduct by that member.
(f) To enable the Committee to perform its functions,
Homestake shall supply full and timely information to the
Committee on all matters relating to your compensation, the date
and circumstances of the termination of your employment, and such
other pertinent information as the Committee may reasonably
require.
(g) If you believes that you are entitled to a benefit or
greater benefit as the case may be, under the Severance Plan, you
may submit a signed, written application to the Committee within
90 days of having been denied such benefit. You will generally
be notified of the approval or denial of this application within
90 days of the date that the Committee receives the application.
If the claim is denied, the denial will state specific reasons
for the denial and you will have 60 days to file a signed,
written request for a review of the denial with the Committee.
This request should include the reasons for requesting a review,
facts supporting the request and any other relevant comments.
The Committee, operating pursuant to its discretionary authority
to administer and interpret the Severance Plan and to determine
eligibility for benefits under the terms of the Severance Plan,
will generally make a final, written determination of your
eligibility for benefits within 60 days of receipt of the request
for review.
Please indicate your acceptance of the terms of the
Severance Plan by signing one copy of this letter and returning
it to me in the enclosed envelope. The second copy is for your
own records.
Sincerely,
HOMESTAKE MINING COMPANY
By ______________________________
VERIFICATION AND ACCEPTANCE
8
<PAGE>
I have read the foregoing letter and understand that
the 1999 Change of Control Severance Plan set out above
("Severance Plan") defines the entire obligation of Homestake
with respect to the benefits identified above and is limited to
those benefits. I understand that the Severance Plan modifies
Homestake's obligations under Homestake's general severance pay
policy in the manner described above and that the opportunity to
receive the special benefits provided under the Plan represents
valuable consideration for this modification. I accept the terms
of the Severance Plan.
Date:_____________ __________________________________
9
<PAGE>
First Amendment to the Retirement Plan for Outside Directors of
Homestake Mining Company, dated as of January 6, 2000.
FIRST AMENDMENT
TO THE
RETIREMENT PLAN FOR OUTSIDE DIRECTORS
OF
HOMESTAKE MINING COMPANY
1. Capitalized terms used herein which are defined in the
Retirement Plan For Outside Directors of Homestake Mining Company
have the same meaning as so defined.
2. The first sentence of Section 4.1 of the Retirement
Plan For Outside Directors of Homestake Mining Company is hereby
deleted and replaced with the following:
"A Participant who ceases to be a Director after the
Effective Date, and who is vested in accordance with Section
3.2, or a former Director who becomes a Participant upon
designation by the Plan Administrator as an Outside Director
shall be entitled to receive a monthly Retirement Benefit.
(i) For Participants who ceased to be Directors prior to
January 1, 2000, the monthly Retirement Benefit shall
be equal to one/twelfth (1/12) of the Retainer Fee in
effect at the time the Participant ceased to be a
Director.
(ii) For Participants who cease to be Directors on or after
January 1, 2000, the monthly Retirement Benefit shall
be equal to the amount obtained by the following
formula:
$1,333.33 x M1 + $1,666.66 x M2 ,
-----------------------------------
M1 + M2
where M1 is equal to the number of Months of Credited
Service prior to January 1, 2000 and M2 is equal to the
number of Months of Credited Service after January 1,
2000.
IN WITNESS WHEREOF, Homestake has caused this First
Amendment to the Retirement Plan For Outside Directors of
Homestake Mining Company to be executed this 6th day of January,
2000.
HOMESTAKE MINING COMPANY
By /s/ Wayne Kirk
Vice President
Amended Form of Stock Option Agreement under the 1996 Plan.
HOMESTAKE MINING COMPANY
_____________
_______________________
_______________________
_______________________
_______________________
RE: OPTION TO PURCHASE SHARES OF $1.00 PAR
VALUE COMMON STOCK OF HOMESTAKE MINING COMPANY
Dear _________:
Homestake Mining Company ("Company") hereby grants you an option
to purchase ________ shares of its $1.00 par value common stock
at a price of $____ per share on the following terms:
1. The option is intended to be a non-statutory option that
does not satisfy the requirements of Section 422A of the
Internal Revenue Code.
2. The option shall expire on the earlier of ___________ or the
occurrence of the first of the following:
a. Three months after the termination of your active
employment with the company or any affiliate (as
hereafter defined) for reason other than retirement,
death, disability, or cause.
b. Thirty-six months after termination of your active
employment with the Company or any affiliate by
retirement.
c. Thirty-six months after the termination of your
active employment with the Company or any affiliate by
death or disability.
d. Except as provided in paragraph 2.b. and 2.c., six
months after termination of your active employment with
the Company or any affiliate for any reason other than
cause if you should die or become disabled within three
months after such termination.
e. Immediately upon termination of your active employment
with the Company or any affiliate for cause, as determined
by the Compensation Committee of the Board of Directors of
the Company ("Committee").
For purposes of this agreement, (i) affiliate includes any
corporation or other form of enterprise in which the Company
has, directly or indirectly, an ownership interest of 50% or
more or equivalent power to direct the management and policy
of such enterprise by contract or otherwise; (ii) if your
employment with the Company or an affiliate terminates and
immediately thereafter you become a consultant to the
Company or an affiliate, such service may be treated as
employment with the
<PAGE>
Company but only if the Committee in its
sole discretion so determines; (iii) any determination by
the Committee made in good faith shall be final unless
clearly erroneous; and (iv) any determination by the
Committee as to a matter reserved to the sole discretion of
the Committee shall be final.
3. The option shall become exercisable in installments
beginning ________ and on the same day of each of the next
three years, as to 25% of the shares each year. To the
extent not previously exercised, such installments shall
accumulate and be exercisable, in whole or in part, at any
time before expiration of the option.
4. Except as hereafter provided, if for any reason your active
employment with the Company or any affiliates terminates
before one or more installments become exercisable, the
option shall be exercisable only as to any installments
which became exercisable before termination and then only to
the extent not previously exercised. Notwithstanding the
foregoing:
a. Upon your death or total and permanent disability
occurring while employed, all installments shall be
immediately exercisable to the extent not previously
exercised; and
b. If, within two years after a "Change of Control," your
employment is terminated involuntarily for reasons
other than death, disability or discharge for "Good and
Sufficient Cause," or you voluntarily choose to
terminate your employment for "Good Reason" (all as
defined in the Company's 1999 Change of Control
Severance Plan as amended from time to time), all
installments shall be immediately exercisable to the
extend not previously exercised. The provisions of this
paragraph 4 are in addition to any rights that you may
have under the Plan under which this option was issued.
5. Except as permitted by the Committee, the option is
transferable by you only by will or the laws of descent or
distribution. Except as permitted by the Committee, it may
be exercised during your lifetime only by you or by your
legal representative duly appointed by a court of competent
jurisdiction. After your death, it may be exercised only by
your executor or administrator or by persons who acquire it
directly from you by bequest or inheritance or as permitted
by the Committee.
6. If a dividend is declared on common stock of the Company
payable in common stock, the unexercised shares shall be
increased and the per share option price shall be decreased
proportionately to reflect the dividend as the Committee may
determine.
7. If any change is made in the common stock through merger,
consolidation, reorganization, recapitalization, split-up,
combination of shares, exchange of shares, change in
corporate structure or otherwise or a stock dividend is
payable in stock other than common stock, an appropriate
adjustment shall be made for shares not previously exercised
as to the number of any kind of securities or rights and the
price per share as the Committee may determine.
8. You shall not be a stockholder, nor be entitled to any
privileges of stock ownership, under this agreement until
shares are actually issued and delivered to you.
9. a. The option may be exercised from time to time in
accordance with this agreement by written notice signed
and delivered by you or your legal representative (or
after your death,
2
<PAGE>
by your executor, administrator, heir
or legatee, as the case may be), or other permitted
transferee to the Secretary of the Company at the
Company's principal office.
b. The notice shall state the number of shares as to
which the option is exercised, the date of exercise and
how the exercise price will be paid. The notice shall
be accompanied by payment in cash or by delivery of a
check, bank draft or money order, or, as more
specifically provided in the Plan, by common stock duly
endorsed for transfer or a combination thereof for the
full exercise price. The fair market value of any
common stock so delivered shall be the mean between the
high and low sales price of the shares on the composite
tape for New York Stock Exchange-listed securities on
the day of exercise, or if no sales of shares of common
stock shall have been reported on such composite tape
on that day, then such amount as the Committee shall
determine to be the fair market value on such day.
10. Before delivery of any shares, the Company shall determine
the amount of federal and state income tax or other tax
withholding required by law and you shall pay the Company
such amount, to the extent not previously withheld.
11. a. Upon receipt of notice of exercise by the Company,
this agreement shall become a contract for the purchase
and sale of the shares specified in the notice and,
except as herein provided, neither you nor the Company
shall have the right to terminate or rescind the
contract. The Company shall tender the shares within a
reasonable time.
b. If the Committee determines that any law or
regulation or requirement of any securities exchange
requires the Company to take any action before issuance
or delivery of shares or prohibits or delays their
issuance or delivery then the date for payment,
issuance and delivery, shall be extended for the period
necessary to take such action, or during the period of
such prohibition or limitation delay.
12. In the event of certain corporate transactions or changes of
control, the option may become immediately exercisable in
accordance with the terms of the Plan.
13. By exercising the option, you agree that you are acquiring
the shares for investment and will not transfer any shares
in violation of applicable federal and state securities
laws. Any shares delivered under this agreement may bear
such legends and may be subject to such restrictions on
transfer as the Committee determines to be necessary or
appropriate. You agree to execute such agreements as to
transfer of such shares as the Committee may deem advisable.
You agree that the Company shall not be required to register
any shares acquired by you and that you may be required to
hold such shares indefinitely in the absence of registration
or an exemption from registration under federal and state
securities laws. You agree that any shares purchased by you
may be issued in the name of you and your spouse if you then
or recently lived in a community property state.
14. This agreement incorporates the Plan by reference. In the
event of a conflict between the terms of this agreement and
the Plan, the Plan, as interpreted and administered by the
Committee, shall prevail.
15. The option may be exercised only as to whole shares. No
fractional shares will be issued or delivered.
3
<PAGE>
Please indicate your acceptance of the foregoing by signing the
agreement and returning it to the Company in the enclosed
envelope.
Very truly yours,
HOMESTAKE MINING COMPANY
By____________________________
Acceptance and Agreement:
The foregoing agreement is hereby accepted by me as of
___________ (date).
___________________________________
(Signature )
4
<PAGE>
Amended Form of Performance Based Share Agreement under the 1996
Plan - 1997 Grants.
_________, 1997
___________________
___________________
___________________
RE: GRANT OF RIGHT TO RECEIVE PERFORMANCE BASED SHARES
Dear ________:
Effective upon your entering into this agreement, Homestake
Mining Company ("Company") grants you the right to receive
_______ shares of its $1.00 value common stock ("Shares") on the
following terms and conditions:
1. This grant is made under the Company's Stock Option and
Share Rights Plan - 1996 (the "Plan"). Any capitalized terms
used in this agreement that are not defined in this agreement
have the meanings given to them in the Plan.
2. Effective upon your entering into this agreement, there
also will be established for you in the records of the Company a
Dividend Equivalency Account. As of each subsequent record date
for dividends on the Company's Common Stock, there will be
credited to your Dividend Equivalency Account an amount equal to
the amount of dividends (a "Dividend Equivalent") that would have
been payable in respect of each unvested Share subject to this
agreement had such Share been outstanding on that record date.
Such Dividend Equivalents will accumulate without interest. At
the time your right to receive any Share under this agreement
vests, you will also vest in and be entitled to receive the
accumulated Dividend Equivalents that have accrued in your
Dividend Equivalency Account in respect of such Share. Under no
circumstances will you have any rights in or right to receive any
Dividend Equivalent until you vest in the Share in respect of
which the Dividend Equivalent was credited. If your right to
receive any Shares under this agreement is forfeited, your right
to receive related Dividend Equivalents will also be forfeited at
the same time. Any subsequent reference in this agreement to
Shares will be deemed to refer to the related Dividend
Equivalents, and any subsequent reference in this agreement to
the vesting in and/or issuance of Shares shall be deemed to refer
to the vesting in and/or payment of the related Dividend
Equivalents.
3. Your right to receive Shares under this agreement is
subject to achieving the Annual Performance Goals set out below
and is also subject to compliance with the terms and conditions
of this agreement. Shares will not be issued, and you will have
no rights of ownership in respect of ownership thereof, except
and until your rights to the Shares have vested. Except for
transfers by will or under laws of descent or distribution,
interests in and rights to receive
<PAGE>
Shares may not be sold,
assigned, pledged or otherwise transferred until rights to the
Shares have vested and the Shares have been issued.
4. Your right to receive Shares will vest if and to the
extent the Annual Performance Goals described below are achieved:
(a) For purposes of this agreement, achievement of an
"Annual Performance Goal" means that the Company's market
capitalization per ounce (expressed in terms of dollars per ounce
of proven and probable reserves) has achieved, on a "Measurement
Date" set out in paragraph (c) below, the percentage of the
arithmetic average of the market capitalizations for the Standard
and Poor's Gold and Precious Metals Index companies set out under
"Annual Performance Goal" in paragraph (c) below.
(b) "Final Performance Date" means December 31, 2000.
(c) On each "Measurement Date" set out below, if the
Company achieves the Annual Performance Goal for that date, your
right to receive Shares will vest as to: (i) 25% of the Shares;
and (ii) any Shares as to which your right could have but did not
vest on any prior Measurement Date because the Annual Performance
Goal for that Measurement Date was not achieved. If the Company
fails to achieve the Annual Performance Goal for any Measurement
Date, your right to receive Shares will not vest on that
Measurement Date, but your right to receive those Shares will
vest on any subsequent Measurement Date on which the Annual
Performance Goal for that subsequent Measurement Date is
achieved. The Measurement Dates and the Annual Performance Goals
for each are as follows:
Measurement Date Annual Performance Goal
12/31/97 73%
12/31/98 82%
12/31/99 91%
12/31/00 100%
(d) For purposes of this agreement, "Standard and Poor's
Gold and Precious Metals Index Companies" means those companies
whose shares are included in the Standard and Poor's Gold and
Precious Metals Index from time to time, notwithstanding that
there may be a change in those companies between the date of this
agreement and the Final Performance Date.
5. This agreement will expire immediately after the close
of business on the Final Performance Date and any rights in
respect of Shares that have not vested on or before the Final
Performance Date will be forfeited. Except as otherwise provided
in connection with Termination of Employment, no rights in
respect of Shares will be forfeited prior to the close of
business on the Final Performance Date.
6. Except as hereafter provided, all rights to receive
Shares under this agreement that have not already vested will
expire and be forfeited to the Company if you cease to be an
2
<PAGE>
"Employee" (as defined in the Plan) of Homestake or any Affiliate
of Homestake prior to any Measurement Date ("Termination of
Employment"). If any company or other entity which is your
employer ceases to be an Affiliate of Homestake, then you will be
deemed to have ceased being an Employee as of the time that
company or other entity ceases to be an Affiliate.
(a) If your Termination of Employment is because you (i)
die, (ii) are Disabled (as defined in the Homestake Retirement
Plan), (iii) retire from Homestake or any Affiliated Company on
or after your Normal Retirement Date or on your Early Retirement
Date (as defined in the Homestake Retirement Plan), or (iv)
retire at a time when you are eligible to receive a "Retirement
Benefit" under the Homestake Executive Supplemental Retirement
Plan, you will continue to be treated as an Employee for a period
of thirty-six months following the date of such death, disability
or retirement or until the Final Performance Date, whichever is
earlier. Rights in respect of Shares that do not vest during
that period will be forfeited.
(b) If your Termination of Employment takes place within
two years following a "Change of Control" and is as a result of
(i) termination by the Company other than for "Good and
Sufficient Cause" or (ii) termination by you for "Good Reason,"
(all as defined in the Company's 1999 Change of Control Severance
Plan as amended from time to time), then on such termination,
your right to receive any Shares that remain unvested under this
agreement will immediately vest in full, and you will be entitled
to receive all such Shares as of the date of Termination of
Employment. The provisions of this paragraph 6(b) are in
addition to any rights that you may have under Article XIII of
the Plan.
(c) The Committee will have the authority, in its
discretion, to extend the term of this agreement to include all
or part of any period of time during which you continue as an
Employee of any corporation, joint venture, partnership or other
entity in which Homestake has, directly or indirectly, at least a
20% ownership or profits interest or during which you act as a
consultant to Homestake, any of its Affiliates, or any
corporation, joint venture, partnership or other entity in which
Homestake has, directly or indirectly , at least a 20% ownership
or profits interest.
7. You do does not own any Shares granted under this
agreement until your right to receive such Shares have vested and
such Shares have actually been issued. Until such Share
issuance, you will not be entitled to exercise any voting rights
or receive dividends in respect of such Shares.
8. Notwithstanding anything contained herein to the
contrary, the Company's obligation to issue or deliver Shares
pursuant to this agreement will be subject to all applicable
laws, rules and regulations, including stock exchange rules. If
any laws, rules or regulations require that the Company take any
action before issuance and delivery of Shares, then the date of
issuance and delivery will be delayed for the period necessary to
take such action.
9. As a condition to the issuance and delivery of any
Shares which vest under this agreement, the Company will have the
right to require you to remit to the Company, or the Company will
have the right to withhold from any amounts payable to you, as
compensation or
3
<PAGE>
otherwise, amounts sufficient to satisfy all
federal, state and local tax and other withholding requirements.
10. This agreement incorporates the Plan by reference. In
the event of a conflict between the terms of this agreement and
the Plan, the Plan, as interpreted and administered by the
Committee, will prevail.
Please indicate your agreement with the foregoing by signing one
copy of this agreement and returning it to the Company in the
enclosed envelope.
Very truly yours
Homestake Mining Company
By ______________________
I agree to the foregoing
_________________________________
4
<PAGE>
Amended Form of Performance Based Share Agreement under the 1996
Plan - 1998 Grants.
, 1998
<FirstName> <LastName>
Homestake Mining Company
650 California Street
San Francisco, CA 94108
RE: GRANT OF RIGHT TO RECEIVE PERFORMANCE BASED SHARES
Dear <FirstName>:
Effective upon your entering into this agreement, Homestake
Mining Company ("Company") grants you the right to receive
<Total_Shares> shares of its $1.00 value common stock ("Shares")
on the following terms and conditions:
1. This grant is made under the Company's Stock Option and
Share Rights Plan - 1996 (the "Plan"). Any capitalized terms
used in this agreement that are not defined in this agreement
have the meanings given to them in the Plan.
2. Effective upon your entering into this agreement, there
also will be established for you in the records of the Company a
Dividend Equivalency Account. As of each subsequent record date
for dividends on the Company's Common Stock, there will be
credited to your Dividend Equivalency Account an amount equal to
the amount of dividends (a "Dividend Equivalent") that would have
been payable in respect of each unvested Share subject to this
agreement had such Share been outstanding on that record date.
Such Dividend Equivalents will accumulate without interest. At
the time your right to receive any Share under this agreement
vests, you will also vest in and be entitled to receive the
accumulated Dividend Equivalents that have accrued in your
Dividend Equivalency Account in respect of such Share. Under no
circumstances will you have any rights in or right to receive any
Dividend Equivalent until you vest in the Share in respect of
which the Dividend Equivalent was credited. If your right to
receive any Shares under this agreement is forfeited, your right
to receive related Dividend Equivalents will also be forfeited at
the same time. Any subsequent reference in this agreement to
Shares will be deemed to refer to the related Dividend
Equivalents, and any subsequent reference in this agreement to
the vesting in and/or issuance of Shares shall be deemed to refer
to the vesting in and/or payment of the related Dividend
Equivalents.
3. Your right to receive Shares under this agreement is
subject to achieving the Annual Performance Goals set out below
and is also subject to compliance with the terms and conditions
of this agreement. Shares will not be issued, and you will have
no rights of ownership in respect of ownership thereof, except
and until your rights to the Shares have vested. Except for
transfers by will or under laws of descent or distribution,
interests in and rights to receive
<PAGE>
Shares may not be sold,
assigned, pledged or otherwise transferred until rights to the
Shares have vested and the Shares have been issued.
4. Your right to receive Shares will vest if and to the
extent the Annual Performance Goals described below are achieved:
(a) For purposes of this agreement, achievement of an "Annual
Performance Goal" means that the Company's adjusted market
capitalization per ounce (expressed in terms of dollars per ounce
of proven and probable reserves) has achieved, on a "Measurement
Date" set out in paragraph (c) below, the percentage of the
arithmetic average of the adjusted market capitalizations for the
Standard and Poor's Gold and Precious Metals Index companies set
out under "Annual Performance Goal" in paragraph (c) below.
(b) "Final Performance Date" means December 31, 2000.
(c) On each "Measurement Date" set out below, if the
Company achieves the Annual Performance Goal for that date, your
right to receive Shares will vest as to: (i) 33 1/3 % of the
Shares; and (ii) any Shares as to which your right could have but
did not vest on any prior Measurement Date because the Annual
Performance Goal for that Measurement Date was not achieved. If
the Company fails to achieve the Annual Performance Goal for any
Measurement Date, your right to receive Shares will not vest on
that Measurement Date, but your right to receive those Shares
will vest on any subsequent Measurement Date on which the Annual
Performance Goal for that subsequent Measurement Date is
achieved. The Measurement Dates and the Annual Performance Goals
for each are as follows:
Measurement Date Annual Performance Goal
12/31/98 82%
12/31/99 91%
12/31/00 100%
(d) For purposes of this agreement, "Standard and Poor's Gold
and Precious Metals Index Companies" means those companies whose
shares are included in the Standard and Poor's Gold and Precious
Metals Index from time to time, notwithstanding that there may be
a change in those companies between the date of this agreement
and the Final Performance Date.
5. This agreement will expire immediately after the close
of business on the Final Performance Date and any rights in
respect of Shares that have not vested on or before the Final
Performance Date will be forfeited. Except as otherwise provided
in connection with Termination of Employment, no rights in
respect of Shares will be forfeited prior to the close of
business on the Final Performance Date.
6. Except as hereafter provided, all rights to receive
Shares under this agreement that have not already vested will
expire and be forfeited to the Company if you cease to be an
2
<PAGE>
"Employee" (as defined in the Plan) of Homestake or any Affiliate
of Homestake prior to any Measurement Date ("Termination of
Employment"). If any company or other entity which is your
employer ceases to be an Affiliate of Homestake, then you will be
deemed to have ceased being an Employee as of the time that
company or other entity ceases to be an Affiliate.
(a) If your Termination of Employment is because you (i) die,
(ii) are Disabled (as defined in the Homestake Retirement Plan),
(iii) retire from Homestake or any Affiliated Company on or after
your Normal Retirement Date or on your Early Retirement Date (as
defined in the Homestake Retirement Plan), or (iv) retire at a
time when you are eligible to receive a "Retirement Benefit"
under the Homestake Executive Supplemental Retirement Plan, you
will continue to be treated as an Employee for a period of thirty-
six months following the date of such death, disability or
retirement or until the Final Performance Date, whichever is
earlier. Rights in respect of Shares that do not vest during
that period will be forfeited.
(b) If your Termination of Employment takes place within
two years following a "Change of Control" and is as a result of
(i) termination by the Company other than for "Good and
Sufficient Cause" or (ii) termination by you for "Good Reason,"
(all as defined in the Company's 1999 Change of Control Severance
Plan as amended from time to time), then on such termination,
your right to receive any Shares that remain unvested under this
agreement will immediately vest in full, and you will be entitled
to receive all such Shares as of the date of Termination of
Employment. The provisions of this paragraph 6(b) are in
addition to any rights that you may have under Article XIII of
the Plan.
(c) The Committee will have the authority, in its discretion, to
extend the term of this agreement to include all or part of any
period of time during which you continue as an Employee of any
corporation, joint venture, partnership or other entity in which
Homestake has, directly or indirectly, at least a 20% ownership
or profits interest or during which you act as a consultant to
Homestake, any of its Affiliates, or any corporation, joint
venture, partnership or other entity in which Homestake has,
directly or indirectly , at least a 20% ownership or profits
interest.
7. You do does not own any Shares granted under this
agreement until your right to receive such Shares have vested and
such Shares have actually been issued. Until such Share
issuance, you will not be entitled to exercise any voting rights
or receive dividends in respect of such Shares.
8. Notwithstanding anything contained herein to the
contrary, the Company's obligation to issue or deliver Shares
pursuant to this agreement will be subject to all applicable
laws, rules and regulations, including stock exchange rules. If
any laws, rules or regulations require that the Company take any
action before issuance and delivery of Shares, then the date of
issuance and delivery will be delayed for the period necessary to
take such action.
9. As a condition to the issuance and delivery of any
Shares which vest under this agreement, the Company will have the
right to require you to remit to the Company, or the Company will
have the right to withhold from any amounts payable to you, as
compensation or otherwise, amounts sufficient to satisfy all
federal, state and local tax and other withholding requirements.
10. This agreement incorporates the Plan by reference. In
the event of a conflict between the terms of this agreement and
the Plan, the Plan, as interpreted and administered by the
Committee, will prevail.
Please indicate your agreement with the foregoing by signing one
copy of this agreement and returning it to the Company in the
enclosed envelope.
Very truly yours
Homestake Mining Company
By _____________________
I agree to the foregoing
_________________________________
4
<PAGE>
Amended Form of Performance Based Share Agreement under the 1996
Plan - 1999 Grants.
, 1999
<FirstName> <LastName>
Homestake Mining Company
650 California Street
San Francisco, CA 94108
RE: GRANT OF RIGHT TO RECEIVE PERFORMANCE BASED SHARES
Dear <FirstName>:
Effective upon your entering into this agreement, Homestake
Mining Company ("Homestake" or "Company") grants you the right to
receive <Total Shares> shares of its $1.00 value common stock
("Shares") on the following terms and conditions:
1. This grant is made under the Company's Stock Option and
Share Rights Plan - 1996 (the "Plan"). Any capitalized terms
used in this agreement that are not defined in this agreement
have the meanings given to them in the Plan.
2. Effective upon your entering into this agreement, there
also will be established for you in the records of the Company a
Dividend Equivalency Account. As of each subsequent record date
for dividends on the Company's Common Stock, there will be
credited to your Dividend Equivalency Account an amount equal to
the amount of dividends (a "Dividend Equivalent") that would have
been payable in respect of each unvested Share subject to this
agreement had such Share been outstanding on that record date.
Such Dividend Equivalents will accumulate without interest. At
the time your right to receive any Share under this agreement
vests, you will also vest in and be entitled to receive the
accumulated Dividend Equivalents that have accrued in your
Dividend Equivalency Account in respect of such Share. Under no
circumstances will you have any rights in or right to receive any
Dividend Equivalent until you vest in the Share in respect of
which the Dividend Equivalent was credited. If your right to
receive any Shares under this agreement is forfeited, your right
to receive related Dividend Equivalents will also be forfeited at
the same time. Any subsequent reference in this agreement to
Shares will be deemed to refer to the related Dividend
Equivalents, and any subsequent reference in this agreement to
the vesting in and/or issuance of Shares shall be deemed to refer
to the vesting in and/or payment of the related Dividend
Equivalents.
3. Your right to receive Shares under this agreement is
subject to achieving the Annual Performance Goals set out below
and is also subject to compliance with the terms and conditions
of this agreement. Shares will not be issued, and you will have
no rights of ownership in respect thereof, except and until your
rights to the Shares have vested. Except for transfers by will
or under laws of descent or distribution, interests in and rights
to receive Shares may not be
<PAGE>
sold, assigned, pledged or otherwise
transferred until rights to the Shares have vested and the Shares
have been issued.
4. Your right to receive Shares will vest if and to the
extent the Annual Performance Goals described below are achieved:
(a) For purposes of this agreement, achievement of an
"Annual Performance Goal" means that the closing price of the
Company's Common Stock on the New York Stock Exchange (or other
principal exchange selected by the board of directors on which
the Common Stock is listed if not listed on the New York Stock
Exchange) on the Measurement Dates set out below, in relation to
the stock closing price on December 31, 1998, cumulatively
outperforms the Adjusted Standard and Poor's Gold and Precious
Metals Index ("Index") on the Measurement Dates set out below, in
relation to the level thereof at December 31, 1998, by the
amounts set out under "Annual Performance Goal" in paragraph (c)
below.
(b) "Final Performance Date" means December 31, 2002.
(c) On each "Measurement Date" set out below, if the
Company achieves the Annual Performance Goal for that date, your
right to receive Shares will vest as to: (i) 25% of the Shares;
and (ii) any Shares as to which your right could have but did not
vest on any prior Measurement Date because the Annual Performance
Goal for that Measurement Date was not achieved. If the Company
fails to achieve the Annual Performance Goal for any Measurement
Date, your right to receive Shares will not vest on that
Measurement Date, but your right to receive those Shares will
vest on any subsequent Measurement Date on which the Annual
Performance Goal for that subsequent Measurement Date is
achieved. The Measurement Dates and the Annual Performance Goals
for each are as follows:
Measurement Date- Annual Performance Goal-
In Relation to HMC Common Stock to
12/31/98 Cumulatively Outperform the
Index By
12/31/99 5%
12/31/00 10%
12/31/01 15%
12/31/02 20%
(d) For purposes of this agreement, "Adjusted Standard and
Poor's Gold and Precious Metals Index" means the Standard and
Poor's Gold and Precious Metals Index from time to time,
notwithstanding that there may be a change in those companies
between the date of this agreement and the Final Performance
Date, but excluding therefrom the stock of the Company.
5. This agreement will expire immediately after the close
of business on the Final Performance Date and any rights in
respect of Shares that have not vested on or before the Final
Performance Date will be forfeited. Except as otherwise provided
in connection with
2
<PAGE>
Termination of Employment, no rights in
respect of Shares will be forfeited prior to the close of
business on the Final Performance Date.
6. Except as hereafter provided, all rights to receive
Shares under this agreement that have not already vested will
expire and be forfeited to the Company if you cease to be an
"Employee" (as defined in the Plan) of Homestake or any Affiliate
of Homestake prior to any Measurement Date ("Termination of
Employment"). If any company or other entity which is your
employer ceases to be an Affiliate of Homestake, then you will be
deemed to have ceased being an Employee as of the time that
company or other entity ceases to be an Affiliate.
(a) If your Termination of Employment is because you (i)
die, (ii) are Disabled (as defined in the Homestake Retirement
Plan), (iii) retire from Homestake or any Affiliated Company on
or after your Normal Retirement Date or on your Early Retirement
Date (as defined in the Homestake Retirement Plan) other than a
Termination of Employment pursuant to clause (b) below, or (iv)
retire at a time when you are eligible to receive a "Retirement
Benefit" under the Homestake Executive Supplemental Retirement
Plan other than a Termination of Employment pursuant to clause
(b) below, you will continue to be treated as an Employee for a
period of thirty-six months following the date of such death,
disability or retirement or until the Final Performance Date,
whichever is earlier. Rights in respect of Shares that do not
vest during that period will be forfeited.
(b) If your Termination of Employment takes place within
two years following a "Change of Control" and is as a result of
(i) termination by the Company other than for "Good and
Sufficient Cause" or (ii) termination by you for "Good Reason,"
(all as defined in the Company's 1999 Change of Control Severance
Plan as amended from time to time), then on such termination,
your right to receive any Shares that remain unvested under this
agreement will immediately vest in full, and you will be entitled
to receive all such Shares as of the date of Termination of
Employment. The provisions of this paragraph 6(b) are in
addition to any rights that you may have under Article XIII of
the Plan.
(c) The Committee will have the authority, in its
discretion, to extend the term of this agreement to include all
or part of any period of time during which you continue as an
Employee of any corporation, joint venture, partnership or other
entity in which Homestake has, directly or indirectly, at least a
20% ownership or profits interest or during which you act as a
consultant to Homestake, any of its Affiliates, or any
corporation, joint venture, partnership or other entity in which
Homestake has, directly or indirectly, at least a 20% ownership
or profits interest."
7. You do does not own any Shares granted under this
agreement until your right to receive such Shares have vested and
such Shares have actually been issued. Until such Share
issuance, you will not be entitled to exercise any voting rights
or receive dividends in respect of such Shares.
8. Notwithstanding anything contained herein to the
contrary, the Company's obligation to issue or deliver Shares
pursuant to this agreement will be subject to all applicable
laws, rules and regulations, including stock exchange rules. If
any laws, rules or regulations
3
<PAGE>
require that the Company take any
action before issuance and delivery of Shares, then the date of
issuance and delivery will be delayed for the period necessary to
take such action.
9. As a condition to the issuance and delivery of any
Shares which vest under this agreement, the Company will have the
right to require you to remit to the Company, or the Company will
have the right to withhold from any amounts payable to you, as
compensation or otherwise, amounts sufficient to satisfy all
federal, state, provincial and local tax and other withholding
requirements. If withholding is required, you will have the
opportunity to satisfy the withholding requirement by (i) paying
the withholding amounts in cash to the Company, (ii) having the
required amount withheld from other monies then due to you, or
(iii) having the Company retain a portion of the Shares otherwise
then issuable to you in an amount equal in value to the required
withholding amounts, with the Company paying the required
withholding amounts. If you select the third alternative, you
must notify the Company at least seven days before the date the
Shares may become issuable to you.
10. This agreement incorporates the Plan by reference.
In the event of a conflict between the terms of this agreement
and the Plan, the Plan, as interpreted and administered by the
Committee, will prevail.
Please indicate your agreement with the foregoing by signing one
copy of this agreement and returning it to the Company in the
enclosed envelope.
Very truly yours
Homestake Mining Company
By
_____________________________
I agree to the foregoing
_________________________________
4
<PAGE>
Amended Form of Bonus Stock Program Agreement under the
1996 Plan.
HOMESTAKE MINING COMPANY
BONUS STOCK PROGRAM ELECTION FORM
I have read the Bonus Stock Program Memorandum Dated as of
__________ (which is deemed incorporated herein by this
reference), and I understand the Bonus Stock Program. I have
also had the opportunity to ask all questions I may have with
regard to the program, and I have received satisfactory answers
to all of my questions. I understand that, in electing to
participate in the Bonus Stock Program, there is no assurance
that cash bonuses will in fact be paid for _____, and therefore
there is no assurance that I will in fact receive a contingent
right to receive shares. I understand that the number of shares
subject to any contingent share right will have a value (on the
date bonuses are approved) equal to 150% of the cash foregone,
that the number of shares subject to the contingent share right
will be determined on that date, and that the number of shares
subject to the contingent share right will not change, regardless
of subsequent changes in market value of the shares. I also
understand that once I forego any cash, that cash will not be
paid to me even if I forfeit all rights to receive the shares
subject to the contingent share right. I understand that my
right to receive the shares will vest over three years from the
date the cash bonus being foregone is approved by the Board of
Directors - 50% after one year, 25% after two years and 25%
after three years. I also understand that, with certain
exceptions described in the Memorandum, I must continue to be an
employee of Homestake or its affiliated companies on the vesting
dates; otherwise I will forfeit all rights to the unvested shares
and related dividend equivalency amounts. Finally, I understand
that this election is irrevocable.
I hereby elect to forego _____%, subject to a maximum amount
of $_______________, of the cash bonus I may be entitled to
receive for the year _____. I elect to receive a contingent
right to receive Homestake Mining Company Common Stock in lieu
thereof. The terms of that contingent right are described in the
Memorandum and in the accompanying Terms and Conditions, which
are deemed incorporated in this election form. This election
will be effective upon its acceptance by Homestake Mining
Company.
_________________________________
Name
_________________________________
Signature
_________________________________
Date
ACCEPTED:
<PAGE>
Homestake Mining Company
By ____________________
TERMS AND CONDITIONS TO HOMESTAKE MINING COMPANY
BONUS STOCK PROGRAM ELECTION FORM
1. These Terms and Conditions are a part of the contract
created by the Bonus Stock Program Election Form ("Election
Form") when it has been executed by you and accepted by Homestake
Mining Company ("Homestake" or the "Company").
2. The grant of a contingent right to receive Homestake
Mining Company Common Stock, $1.00 par value ("Homestake Shares")
pursuant to the Bonus Stock Program is made under the pursuant
to the Company's Stock Option and Share Rights Plan - 1996 (the
"Plan"). Any capitalized terms used herein that are not defined
herein have the meanings given to them in the Plan.
3. Effective upon (i) your proper completion, execution
and delivery of the Election Form and (ii) its acceptance by
Homestake, you will have made the election specified in the
Election Form to forego up to 50% of your potential cash bonus
for ______ in exchange for the award of a contingent right to
receive Homestake Shares in the future (the "Contingent Right").
You are not assured that there will be a cash bonus for ______
payable to you, and the making of the election specified in the
Election Form does not assure that any cash bonus for ______ will
be payable in fact; you will not receive the Contingent Right
unless the cash bonus foregone by you is approved by the Board of
Directors, as provided below. Further, ONCE THE ELECTION IS
MADE, THE ELECTION IS IRREVOCABLE, AND YOU WILL FOREVER GIVE UP
ALL RIGHTS TO RECEIVE ANY FOREGONE CASH BONUS FOR ______ THAT
OTHERWISE WOULD HAVE BEEN PAYABLE, EVEN IF YOU FORFEIT ALL OR ANY
PART OF YOUR CONTINGENT RIGHT. THE ELECTION MAY NOT BE MADE AS
TO ANY PART OF THE CASH BONUS THAT HAS BEEN DEFERRED UNDER THE
COMPANY'S DEFERRED COMPENSATION PLAN.
4. The number of Homestake Shares subject to your
Contingent Right will be that number of Homestake Shares which
have a fair market value, on the day your cash bonus for ______
is approved by the Homestake Board of Directors ("Approval
Date"), equal to 150% of the amount of cash bonus for ______ that
is foregone by you. For this purpose, "fair market value" will
be the Closing Price of Homestake Shares on the New York Stock
Exchange on the Approval Date (or the next preceding trading day
if Homestake Shares do not trade on the Approval Date). If
Homestake Shares are not listed or otherwise trading on the New
York Stock Exchange at or about the Approval Date, the fair
market value will be determined by the Committee in its sole
discretion. Once the number of Homestake Shares subject to your
Contingent Right is determined, that number of Homestake Shares
is fixed and will not vary because of subsequent changes in the
market value of Homestake Shares. As a result, you take
2
<PAGE>
the market risk of an increase or decrease in the value of the
Homestake Shares subject to your Contingent Right.
5. There also will be established for you in the records
of the Company a Dividend Equivalency Account. As of each
subsequent record date for dividends on Homestake Shares, there
will be credited to your Dividend Equivalency Account an amount
equal to the amount of dividends (a "Dividend Equivalent") that
would have been payable in respect of each unvested Share subject
to your Contingent Right had such Share been outstanding on that
record date. Dividend Equivalents will accumulate without
interest. At the time your right to receive any Share subject to
your Contingent Right vests, you will also vest in and be
entitled to receive the accumulated Dividend Equivalents that
have accrued in your Dividend Equivalency Account in respect of
such Share. Under no circumstances will you have any rights in
or right to receive any Dividend Equivalent until you vest in the
Share in respect of which the Dividend Equivalent is credited.
If your right to receive any Shares subject to your Contingent
Right is forfeited, your right to receive related Dividend
Equivalents will also be forfeited at the same time. Any
subsequent reference in these Terms and Conditions to Shares will
be deemed to refer to the related Dividend Equivalents, and any
subsequent reference in these Terms and Conditions to the vesting
in and/or issuance of Shares also will be deemed to refer to the
vesting in and/or payment of the related Dividend Equivalents.
6. Your right to receive Homestake Shares subject to your
Contingent Right will vest over three years. Your right to
receive 50% of the Homestake Shares subject to your Contingent
Right will vest on the first anniversary of the Approval Date.
Your right to receive an additional 25% will vest on each of the
second and third anniversaries of the Approval Date. THE RIGHT
TO RECEIVE SHARES IS ALSO CONTINGENT ON YOUR CONTINUING TO BE AN
EMPLOYEE OF HOMESTAKE (OR AN AFFILIATED COMPANY) ON THE VESTING
DATE AS SET OUT BELOW. Shares will not be issued, and you will
have no rights of ownership in respect thereof, except and until
your rights to the Homestake Shares have vested. Except for
transfers by will or under laws of descent or distribution,
interests in and rights to receive Homestake Shares under your
Contingent Right may not be sold, assigned, pledged or otherwise
transferred until rights to the Homestake Shares have vested and
the Homestake Shares have been issued.
7. (a) Except as hereafter provided, all rights to
receive Homestake Shares under your Contingent Right that have
not already vested immediately will expire and be forfeited if
you cease to be an "Employee" (as defined in the Plan) of
Homestake or any Affiliate of Homestake prior to an anniversary
of the Approval Date ("Termination of Employment"). If any
company or other entity which is your employer ceases to be an
Affiliate of Homestake, then you will be deemed to have ceased
being an Employee as of the time that company or other entity
ceases to be an Affiliate.
(b) If your Termination of Employment is because you (i)
die, (ii) are Disabled (as defined in the Homestake Retirement
Plan), (iii) retire from Homestake or any Affiliated Company on
or after your Normal Retirement Date or on your Early Retirement
Date (as defined in the Homestake Retirement Plan), or (iv)
retire at a time when you are eligible to receive a "Retirement
Benefit" under the Homestake Executive Supplemental Retirement
Plan, your right
3
<PAGE>
to receive all unvested Homestake Shares subject
to your Contingent Right will immediately vest, and you will be
entitled to receive all Homestake Shares subject to the
Contingent Right as of the date of Termination of Employment.
(c) If there is a "Corporate Transaction" or a "Change of
Control" of Homestake, as defined in the Plan, then under certain
circumstances outlined in the Plan, there may be an acceleration
of vesting of your right to receive Homestake Shares subject to
your Contingent Right. If that occurs, then you may vest in and
be entitled to receive Homestake Shares subject to your
Contingent Right, or cash in lieu thereof under certain
circumstances.
(d) If your Termination of Employment takes place within
two years following a "Change of Control" and is as a result of
(i) termination by Homestake other than for "Good and Sufficient
Cause" or (ii) termination by you for "Good Reason," (all as
defined in Homestake's 1999 Change of Control Severance Plan),
then on such termination, your right to receive any unvested
Homestake Shares subject to your Contingent Right will
immediately vest, and you will be entitled to receive all
Homestake Shares subject to your Contingent Right as of the date
of Termination of Employment."
(e) The Committee will have the authority, in its
discretion, to extend the term of your Contingent Right to
include all or part of any period of time during which you
continue as an Employee of any corporation, joint venture,
partnership or other entity in which Homestake has, directly or
indirectly, at least a 20% ownership or profits interest or
during which you act as a consultant to Homestake, any of its
Affiliates, or any corporation, joint venture, partnership or
other entity in which Homestake has, directly or indirectly, at
least a 20% ownership or profits interest.
8. You do not own any Homestake Shares subject to your
Contingent Right until your right to receive such Homestake
Shares has vested and such Homestake Shares have actually been
issued. Until issuance of the Homestake Shares, you will not be
entitled to exercise any voting rights or receive dividends in
respect thereof.
9. Notwithstanding anything contained herein to the
contrary, Homestake's obligation to issue or deliver Homestake
Shares hereunder will be subject to all applicable laws, rules
and regulations, including stock exchange rules. If any laws,
rules or regulations require that Homestake take any action
before issuance and delivery of Homestake Shares subject to your
Contingent Right, then the date of issuance and delivery will be
delayed for the period necessary to take such action.
10. As a condition to the issuance and delivery of any
Homestake Shares subject to your Contingent Right, Homestake will
have the right to require you to remit to Homestake, or Homestake
will have the right to withhold from any amounts payable to you,
as compensation or otherwise, amounts sufficient to satisfy all
federal, state, provincial and local tax and other withholding
requirements. Alternatively, if you give written notice to
Homestake at least seven days in advance of any anniversary of
4
<PAGE>
the Approval Date, Homestake will retain a portion of the
Homestake Shares and Dividend Equivalents otherwise payable to
you on that anniversary of Approval Date, in an amount equal in
value to the required withholding amounts, which it will use to
satisfy such withholding requirements; provided, however, that if
Homestake withholds an incorrect amount, that will not relieve
you from paying the correct amount, if Homestake underwithholds,
nor will it relieve Homestake from reimbursing you, if Homestake
overwithholds.
11. These Terms and Conditions incorporate the Plan by
reference. In the event of a conflict between these Terms and
Conditions and the Plan, the Plan, as interpreted and
administered by the Committee, will prevail.
5
<PAGE>
[HOMESTAKE LOGO HERE] Interoffice Correspondence
Amended Form of Matching Stock Agreement under the 1996
Plan.
TO:
FROM:
DATE:
SUBJECT: Matching Stock Award Program
In 1997, Homestake Mining Company established a Matching
Stock Award Program to assist key employees in achieving the
stock ownership guidelines set by the Board. The Program was
established under the Homestake Mining Company Stock Option and
Share Rights Plan - 1996 (the "Plan"). Under the Program, you
have the right to receive one share of matching stock for each
three shares enrolled in the program. You will be permitted to
enroll shares in the Program once each calendar year. The right
to receive the matching shares will vest on the fifth anniversary
of enrollment of the shares to be matched. Once you enroll
shares, you must hold the enrolled stock continuously throughout
the five year period. If you sell or otherwise transfer the
enrolled stock during the five-year holding period, you will
completely forfeit the right to receive the corresponding
matching stock. Each annual enrollment will be treated as a
single enrollment and will not impact any other enrollment,
holding period or forfeiture. Once shares have been matched,
those shares may not be enrolled in the program a second time.
You may enroll shares held of record or held beneficially,
including shares held in a 401(k) account or in an IRA, or held
in trust for you. You may enroll shares separately owned by you
or held jointly or as community property with your spouse.
Shares held separately by or for the benefit of your spouse and
shares held by or for the benefit of your children are not
eligible for enrollment under the Program. If you hold shares
jointly with a person other than your spouse, or if you share
beneficial ownership of shares with a person other than your
spouse, only the portion of stock attributable to you may be
enrolled in the Program.
At the time shares are enrolled, you must provide the
Company with a statement certifying the number of shares that you
wish to enroll in the Program. Appropriate documentation of
ownership, such as a copy of a current 401(k) statement, an IRA,
trust or brokerage statement, or stock certificate must accompany
the certification.
By electing to enroll in the Program, you are indicating
your intent to hold the shares for at least five years. Each
year you will be required to provide documentation that you still
hold the shares. If you do not continue to retain the enrolled
shares, your right to receive the matching shares will be
forfeited.
Except as hereafter provided, all rights to receive matching
shares that have not already vested will expire and be forfeited
if you cease to be an "Employee" (as defined in the Plan) of
Homestake or any Affiliate of Homestake prior to fifth
anniversary of the date on which you enrolled the shares to be
matched. If any company or other entity which is your employer
ceases to be an Affiliate of Homestake, then you will be deemed
to have ceased being an Employee as of the time that company or
other entity ceases to be an Affiliate.
<PAGE>
If you have a termination of employment for any of the
following reasons, then on such termination, your right to
receive any matching shares that have not vested will vest in the
same proportion as equals the proportion of (i) number of months
(or part thereof) from the date of enrollment of the shares to be
matched to (ii) the fifth anniversary of enrollment. This
paragraph applies if (1) you die, (2) you are Disabled (as
defined in the Homestake Retirement Plan), (3) you retire from
Homestake or any Affiliated Company on or after your Normal
Retirement Date or on your Early Retirement Date (as defined in
the Homestake Retirement Plan), or (4) you retire at a time when
you are eligible to receive a "Retirement Benefit" under the
Homestake Executive Supplemental Retirement Plan.
If you have a termination of employment that takes place
within two years following a "Change of Control" and is as a
result of (i) termination by the Company other than for "Good and
Sufficient Cause" or (ii) termination by you for "Good Reason,"
(all as defined in the Company's 1999 Change of Control Severance
Plan as amended from time to time), then on such termination,
your right to receive any matching shares that have not vested in
full will immediately vest in full, and you will be entitled to
receive all such matching shares as of the date of Termination of
Employment. The provisions of this paragraph are in addition to
any rights that you may have under Article XIII of the Plan.
You do not own any matching shares until your right to
receive the shares has vested and the shares have actually been
issued. Until the matching shares are issued, you will not be
entitled to exercise any voting rights or receive dividends in
respect of such shares.
Notwithstanding anything contained herein to the contrary,
the Company's obligation to issue or deliver matching shares will
be subject to all applicable laws, rules and regulations,
including stock exchange rules. If any laws, rules or
regulations require that the Company take any action before
issuance and delivery of shares, then the date of issuance and
delivery will be delayed for the period necessary to take such
action.
The Company may be required to withhold income and other
taxes payable in respect of matching shares. If withholding is
required, you will have the opportunity to satisfy the
withholding requirement by (i) paying the withholding amounts in
cash to the Company, (ii) having the required amount withheld
from other monies then due to you, or (iii) having the Company
retain a portion of the matching shares otherwise then payable to
you in an amount equal in value to the required withholding
amounts, with the Company paying the required withholding
amounts. If you select the third alternative, you must notify
the Company at least seven days before the date the matching
shares become payable to you.
In ___ and ______, you enrolled ___________ and _________
shares of Homestake Common Stock in this Program. Please provide
documentation that you still hold enrolled stock.
If you wish to enroll additional stock in this program,
please complete the attached certification form, attach the
appropriate documentation and return to me by _________.
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