<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Newmont Gold Company
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Newmont Gold Company
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
--------------------------------------------------------------------------------
NEWMONT GOLD COMPANY
--------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING
The Annual Meeting of Stockholders of NEWMONT GOLD COMPANY will be held at
9:30 a.m. on Thursday, May 4, 1995 in the John D. Hershner Room, 1700 Lincoln
Street, Denver, Colorado to:
1. Elect directors.
2. Transact such other business that may properly come before the
meeting.
Stockholders are cordially invited to attend the meeting.
By order of the Board of Directors
TIMOTHY J. SCHMITT
Secretary
1700 Lincoln Street
Denver, Colorado 80203
March 31, 1995
--------------------------------------------------------------------------------
IF YOU ARE UNABLE TO ATTEND THE MEETING IN PERSON, PLEASE MARK,
SIGN AND DATE THE ACCOMPANYING PROXY CARD AND RETURN IT
PROMPTLY IN THE ACCOMPANYING ENVELOPE.
--------------------------------------------------------------------------------
<PAGE> 3
PROXY STATEMENT
GENERAL INFORMATION
STOCKHOLDERS ENTITLED TO VOTE. Holders of the common stock of the Company
of record at the close of business on March 9, 1995 are entitled to vote at the
Annual Meeting of Stockholders. As of March 9, 1995 there were 96,472,588 shares
of common stock outstanding. Each share of common stock entitles its owner to
one vote. The holders of a majority of the shares entitled to vote at the Annual
Meeting of Stockholders must be present in person or represented by proxy in
order to constitute a quorum for all matters to come before the meeting.
Votes at the Annual Meeting of Stockholders will be tabulated by two
inspectors of election who shall be appointed by the Chairman of the meeting and
who shall not be candidates for election to the Board of Directors. The
inspectors of election will treat shares of common stock represented by a
properly signed and returned proxy as present at the Annual Meeting of
Stockholders for purposes of determining a quorum, without regard to whether the
proxy is marked as casting a vote or abstaining.
Directors will be elected by a favorable vote of a plurality of the shares
of common stock present and entitled to vote, in person or by proxy, at the
Annual Meeting of Stockholders. All other matters to come before the Annual
Meeting require the approval of a majority of the votes cast on such matters.
Under the Company's Certificate of Incorporation, By-Laws or Delaware law
abstentions and broker "non-votes" as to particular matters will not count as
votes cast for or against any matters and are counted only for purposes of
determining whether a quorum is present at the Annual Meeting of Stockholders.
Abstentions and "non-votes" have the same effect as votes against proposals
presented to stockholders except with respect to the election of directors. A
"non-vote" occurs when a nominee holding shares for a beneficial owner votes on
one proposal, but does not vote on another proposal because the nominee does not
have discretionary voting power and has not received instructions to do so from
the beneficial owner.
PROXY SOLICITATION. The accompanying proxy is solicited by the Board of
Directors of the Company. This Proxy Statement is being mailed to the
stockholders on or about March 31, 1995 concurrently with the mailing of the
Company's 1994 Annual Report. In addition to solicitation by mail, solicitation
of proxies may be made by certain officers and regular employees of the Company
by mail, telephone, telegraph or personal interview. All costs of the
solicitation of proxies will be borne by the Company. The Company will also
reimburse brokerage firms and others for their expenses in forwarding proxy
materials to beneficial owners of the Company's common stock. A stockholder who
executes a proxy may revoke it by (i) delivering to the Secretary of the Company
at any time before the proxies are voted, a written notice of the revocation
bearing a later date than the proxy or (ii) attending the Annual Meeting of
Stockholders and voting in person (although attendance at the Annual Meeting of
Stockholders will not in and of itself constitute a revocation of a proxy).
Written notice revoking a proxy should be sent to the attention of the Secretary
of the Company at 1700 Lincoln Street, Denver, Colorado 80203. A stockholder may
substitute another person in place of those persons presently named as proxies.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS. Arthur Andersen & Co. has
acted as auditors for the Company since 1967. The Board of Directors has
selected Arthur Andersen & Co. to continue in that capacity for the current
year. In addition to audit services, Arthur Andersen & Co. has regularly
provided tax consulting services to the Company. Representatives of Arthur
Andersen & Co. will be present at the Annual Meeting of Stockholders and will be
allowed to make a statement if they wish. Additionally, they will be available
to respond to appropriate questions from stockholders during the meeting.
STOCKHOLDER PROPOSALS. To be included in the Board of Directors' Proxy
Statement for the 1996 Annual Meeting of Stockholders, stockholder proposals
must be received by the Company on or before November 30, 1995. Proposals should
be sent to the attention of the Secretary of the Company at 1700 Lincoln Street,
Denver, Colorado 80203.
PRINCIPAL STOCKHOLDER. As of March 9, 1995, the only beneficial owner of
more than 5% of the outstanding shares of the Company was Newmont Mining
Corporation ("NMC"), 1700 Lincoln Street,
<PAGE> 4
Denver, Colorado 80203, which owned 86,083,676 sharers (89.2%) and as to which
it had sole voting and investment power. See "Principal Stockholders of NMC".
ELECTION OF DIRECTORS
NOMINEES. Each of the eleven persons named below is a nominee for election
as a director at the Annual Meeting of Stockholders for the term of one year and
until his successor is elected and qualifies. Unless authority is withheld, the
proxies will be voted for the election of such nominees. Except for Messrs.
Qureshi and Reilly who were elected to the Board of Directors in November 1994
and July 1994, respectively, all of the nominees were elected to the Board of
Directors at the last Annual Meeting of Stockholders and are all currently
serving as directors of the Company. If any such nominee cannot be a candidate
for election at the Annual Meeting of Stockholders, then the proxies will be
voted either for a substitute nominee designated by the Board of Directors or
for the election only of the remaining nominees.
The following table contains a summary of the background and principal
occupations of the nominees.
<TABLE>
<CAPTION>
DIRECTOR
NOMINEE SINCE
<S> <C>
----------------------------------------------------------------------------------------------
RUDOLPH I. J. AGNEW (60)............................................................ 1989
Former Chairman and Chief Executive Officer of Consolidated Gold Fields PLC, a
natural resources company; Chairman, World Conservation Monitoring Centre, a
charitable organization for environmental data gathering
Director of NMC, Bona Shipbuilding Ltd., LASMO PLC, New London PLC, Redland PLC
and Standard Chartered PLC
----------------------------------------------------------------------------------------------
J. P. BOLDUC (55)................................................................... 1994
Director of W. R. Grace & Co., a specialty chemical and health care company since
1986; President from 1990 through March 3, 1995 and Chief Executive Officer
from January 1, 1993 through March 3, 1995 of W. R. Grace & Co.
Director of NMC, Brothers Gourmet Coffee, Inc., Marshall & Ilsley Corporation,
Sunstrand Corporation and Unisys Corporation
----------------------------------------------------------------------------------------------
RONALD C. CAMBRE (56)............................................................... 1993
Chairman of the Company since January 1, 1995, President since June 1, 1994 and
Chief Executive Officer since November 1, 1993, previously Vice Chairman from
November 1, 1993 through December 31, 1994; previously Vice President and
Senior Technical Advisor to the Office of the Chairman of Freeport-McMoRan
Inc., a natural resources company, since 1988
Chairman, President and Chief Executive Officer and Director of NMC
----------------------------------------------------------------------------------------------
JOSEPH P. FLANNERY (62)............................................................. 1989
Chairman, President and Chief Executive Officer of Uniroyal Holding, Inc., a
holding company; Partner in Clayton & Dubilier, Inc., an investment firm, from
September 1, 1988 through December 31, 1990
Director of NMC, APS Holding Corporation, Arvin Industries, Inc., Ingersoll-Rand
Company, K-Mart Corporation and The Scotts Company
----------------------------------------------------------------------------------------------
THOMAS A. HOLMES (71)............................................................... 1989
Retired Chairman and Chief Executive Officer of Ingersoll-Rand Company, a
manufacturer of machinery
Director of NMC, Arvin Industries, Inc., Becton, Dickinson and Company and W. R.
Grace & Co.
----------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
DIRECTOR
NOMINEE SINCE
<S> <C>
----------------------------------------------------------------------------------------------
ROBIN A. PLUMBRIDGE (59)............................................................ 1989
Chairman and Chief Executive Officer of Gold Fields of South Africa Limited, a
natural resources company
Director of NMC, Driefontein Consolidated Limited and Kloof Gold Mining Company
Limited
----------------------------------------------------------------------------------------------
ROBERT H. QUENON (66)............................................................... 1988
Mining consultant since August 16, 1991; previously Chairman of Peabody Holding
Company, Inc., a coal producer, from August 16, 1990 through August 15, 1991,
previously President and Chief Executive Officer
Chairman of Federal Reserve Bank of St. Louis; Director of Laclede Steel Company
and Union Electric Company
----------------------------------------------------------------------------------------------
MOEEN A. QURESHI (64)............................................................... 1994
Chairman and Managing Partner of Emerging Markets Partnership, a private
investment management company since June 1992; Prime Minister of Pakistan from
July 1993 through October 1993; previously Senior Vice President, Operations,
World Bank
Director of NMC
----------------------------------------------------------------------------------------------
MICHAEL K. REILLY (62).............................................................. 1994
Chairman of Zeigler Coal Holding Company, a coal producer, since 1985, previously
Chief Executive Officer from 1983 through December 31, 1994, previously
President from 1983 through 1991
Director of NMC
----------------------------------------------------------------------------------------------
JAMES V. TARANIK (54)............................................................... 1986
President of Desert Research Institute, University and Community College System of
Nevada, an environmental research organization
----------------------------------------------------------------------------------------------
WILLIAM I. M. TURNER, JR. (66)...................................................... 1989
Chairman and Chief Executive officer of EXSULTATE INC., a holding company, since
July 1, 1990; previously Chairman and Chief Executive Officer of PCC Industrial
Corporation, a holding company, from February 1, 1989 through June 30, 1990
Director of NMC and Schroders PLC
----------------------------------------------------------------------------------------------
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE FOREGOING
NOMINEES AND, UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON THE PROXY CARD TO THE
CONTRARY, THE APPOINTEES NAMED THEREON INTEND SO TO VOTE.
NGC TRANSACTION. On March 18, 1994, the Company and NMC entered into a
transaction (the "NGC Transaction") to combine the operations of the Company and
NMC, effective as of January 1, 1994. In the NGC Transaction, NMC transferred to
the Company all of the assets of NMC, other than 85,850,101 shares of the
Company's common stock owned by NMC and the Company assumed all existing and
future liabilities of NMC (but not NMC's obligations with respect to NMC's $5.50
convertible preferred stock and employee stock options of NMC exercisable for
the common stock of NMC). In addition, as part of the NGC Transaction, in order
to equalize, as closely as possible, the outstanding number of shares of common
stock of NMC and the number of shares of common stock of the Company held by
NMC, and to maintain such equality thereafter, NMC effected a stock split of its
common stock and the Company (i) issued to NMC preferred stock of the Company
having terms identical to the NMC's preferred stock (except that upon
conversion, NMC will be entitled to receive shares of Company common stock
(instead of NMC common stock)) and (ii) issued to NMC options exercisable for
Company common stock (the "NGC Options") on
3
<PAGE> 6
the same terms as NMC's options. The preferred stock issued by the Company to
NMC will be converted into common stock of the Company if and to the extent
NMC's preferred stock is converted. The NGC Options have been and will be
exercised if and to the extent NMC's employee stock options are exercised. As
part of the NGC Transaction, additional NGC Options have been and will be
granted by the Company to NMC if and to the extent additional employee stock
options are granted by NMC, to maintain, as closely as possible, equality
between the outstanding number of shares of common stock of NMC and the number
of shares of common stock of the Company held by NMC. The Company and NMC
operate as a single economic unit.
STOCK OWNERSHIP. As of March 9, 1995, all directors and executive officers
of the Company as a group beneficially owned 14,387 shares of the Company's
common stock, constituting in the aggregate less than 1% of the Company's
outstanding common stock. The nature of beneficial ownership of all such shares
is sole voting and investment power. Except as described under "Principal
Stockholders of NMC", as of March 9, 1995, all directors and executive officers
of the Company as a group beneficially owned 419,475 shares of NMC's common
stock, constituting in the aggregate less than 1% of NMC's outstanding common
stock. The nature of beneficial ownership of all such shares is sole voting and
investment power. The following table sets forth the number of shares of common
stock of the Company and the number of shares of common stock of NMC
beneficially owned by the Company's directors and executive officers as of March
9, 1995:
<TABLE>
<CAPTION>
NAME OF SHARES OF COMPANY SHARES OF NMC
BENEFICIAL OWNER COMMON STOCK OWNED COMMON STOCK OWNED(1)
---------------------------------------------------- ------------------ ---------------------
<S> <C> <C>
Rudolph I. J. Agnew................................. 625 2,496
J. P. Bolduc........................................ 625 -0-
Ronald C. Cambre.................................... 4,480 50,347(2)
Graham M. Clark, Jr. ............................... 991 54,976(2)
Joseph P. Flannery.................................. 625 2,745
Eric Hamer.......................................... -0- 51,781(2)
Thomas A. Holmes.................................... 625 6,948
Lawrence T. Kurlander............................... 810 5,680(2)
Wayne W. Murdy...................................... 1,381 66,869(2)
Robin A. Plumbridge................................. 625 2,496
Robert H. Quenon.................................... 925 374
Moeen A. Qureshi.................................... 625 -0-
Michael K. Reilly................................... 625 5,000
James V. Taranik.................................... 725 124
William I. M. Turner, Jr. .......................... 625 8,000
All directors and executive officers as a group,
including those named above (30 persons).......... 14,387 419,475(2)
</TABLE>
---------------
(1) None of the directors or executive officers of the Company beneficially own
any shares of NMC's convertible preferred stock.
(2) Includes 45,555 shares, 49,610 shares, 49,984 shares, 4,680 shares, 59,907
and 366,256 shares of NMC common stock which Messrs. Cambre, Clark, Hamer,
Kurlander and Murdy and all directors and executive officers as a group,
respectively, have the right to acquire on or within 60 days after March 9,
1995 by the exercise of options granted by NMC.
PRINCIPAL STOCKHOLDERS OF NMC. The description of the beneficial ownership
of the outstanding NMC common stock and the other information which is set forth
below is based upon the Schedules 13D under the Securities Exchange Act of 1934
filed with the Securities and Exchange Commission ("SEC") by the persons
reporting such beneficial ownership and certain additional information provided
by such persons to NMC. The power of such persons to vote and dispose of the NMC
common stock is subject to the contractual arrangements described below.
According to a Schedule 13D dated April 23, 1993 (as amended by Amendment 1
thereto dated May 10, 1993 and Amendment No. 2 thereto dated April 28, 1994, the
"Soros Schedule 13D") and Statements of Changes in Beneficial Ownership on Form
4, dated July 8, 1994, filed by Mr. George Soros ("Soros") with the SEC under
the Exchange Act, as of June 24, 1994, Quota Fund N.V. ("Quota"), Quantum Fund
N.V.
4
<PAGE> 7
("Quantum") and Quasar International Partners C.V. ("Quasar") could be deemed to
own beneficially, in the aggregate, 10,194,700 shares of NMC common stock (which
number includes the number of shares that Quasar would hold upon conversion of
the 8,200 depositary shares referred to below), or approximately 11.9% of the
then outstanding NMC common stock. The shares of NMC common stock were acquired
by Quota, Quantum and Quasar at the direction of Soros Fund Management ("SFM"),
an investment advisory firm whose sole proprietor is Soros. SFM acts as the
principal investment manager or asset manager to Quota, Quantum and Quasar. The
sole power to direct the disposition of the shares of NMC common stock currently
owned by Quota, Quantum and Quasar is held by SFM. In addition, the authority to
vote such shares of NMC common stock is shared by SFM with Quota, Quantum and
Quasar, acting through their respective corporate officers, but, according to
the Soros Schedule 13D, SFM anticipates that, if exercised, such voting power
would be exercised in accordance with recommendations given by SFM. SFM shares
the power to direct the disposition of 8,200 depositary shares, each
representing one-half of one share of NMC's convertible preferred stock, par
value $5.50 per share (which shares are convertible into 11,265 shares of NMC
common stock), held by Quasar with D. Nolan Management Company, Inc. ("Nolan").
The authority to vote these securities is shared by SFM and Nolan with Quasar,
acting through the corporate officers of Quasar's managing general partner, but
SFM anticipates that, if exercised, such voting power would be exercised in
accordance with recommendations given by Nolan or SFM. According to the Soros
Schedule 13D, Soros, as sole proprietor of SFM, may be deemed for purposes of
Section 13(d) of the Securities Exchange Act of 1934 to be the beneficial owner
of the shares of NMC common stock beneficially owned by Quota, Quantum and
Quasar.
According to the Soros Schedule 13D dated as of April 28, 1994, certain
clients of Priority Investment Management, Incorporated ("Priority"), for which
Priority has investment discretion, beneficially owned 1,301,143 shares of NMC's
common stock, or approximately 1.52% of NMC's then outstanding common stock.
According to the Soros Schedule 13D, Mr. Stanley F. Druckenmiller
("Druckenmiller"), Chief Executive Officer and principal stockholder of
Priority, and Priority may be deemed for purposes of Section 13(d) of the
Securities Exchange Act of 1934 to be beneficial owners of the shares of NMC's
common stock beneficially owned by the clients of Priority.
In connection with the acquisitions of the shares of NMC common stock
described above, NMC entered into a Standstill Agreement dated as of May 10,
1993 with Soros, SFM, Druckenmiller (a predecessor entity to Priority), Quantum,
Quasar and Quota (collectively, with certain other entities, the "Soros Group")
providing, among other things, for certain restrictions on shareholdings by the
Soros Group. The Standstill Agreement was filed as an exhibit to NMC's annual
report on Form 10-K for the year ended December 31, 1993.
DIRECTORS' FEES, COMMITTEES AND MEETINGS. Directors who are neither
directors of NMC nor officers nor employees of the Company, NMC or any of the
Company's subsidiaries are entitled to receive $25,000 per annum for serving as
directors on the Company's Board of Directors. All directors are entitled to
receive an attendance fee of $1,000 per meeting of the Board of Directors. Each
director who is neither an officer nor an employee of the Company, NMC or any of
the Company's subsidiaries is entitled to receive an attendance fee of $750 per
meeting of a committee of which he is a member and $1,000 per meeting in the
case of the Chairman of the committee.
In addition, pursuant to the Company's Directors' Stock Award Plan,
directors who are not employees of the Company, NMC or any of the Company's
subsidiaries will receive 625 shares of common stock of the Company annually on
the date of their election or re-election at the Annual Meeting of Stockholders
commencing in 1995. Under the terms of such plan, each eligible director also
received 625 shares when the plan became effective in November 1994. If a person
who is not an employee of the Company, NMC or any of the Company's subsidiaries
becomes a director in any year, after the Annual Meeting of Stockholders held in
such year, such person will receive 625 shares of common stock of the Company on
the effective date of such person's election as a director of the Company.
Shares awarded under the plan are transferable only after five years or on such
earlier date on which the participating person is no longer a director and which
is at least six months after the participant receives such shares. The shares
will also become transferable upon the death or disability of a participant.
5
<PAGE> 8
On retirement from the Board of Directors at any time after attaining age
65, a director who is not entitled to a pension under the Company's Pension Plan
(i.e., a director who has not been an officer or employee of the Company, NMC or
their subsidiaries) and who has served for at least ten consecutive years as a
director of the Company or NMC is entitled to be paid an annual sum of $20,000
and an amount equal to the per annum fee paid to him in his capacity as a
director during his final year of service on the Board of Directors, in each
case, for life.
During 1994, the Board of Directors held eight meetings and each incumbent
director attended more than 75% in the aggregate of all meetings of the Board of
Directors and committees of the Board of Directors on which he served for the
period during which he was a member except for Mr. Reilly who attended 66% of
the meetings of the Board of Directors for the period during which he was a
director.
The Board of Directors has, in addition to other standing committees,
audit, compensation and nominating committees. Members of these three committees
are not, and have not been, officers or employees of the Company, NMC or their
subsidiaries. The members of these committees during all or part of 1994 were:
<TABLE>
<CAPTION>
AUDIT COMPENSATION NOMINATING
---------------------- ---------------------------- ----------------------------
<S> <C> <C>
J. P. Bolduc(2) Rudolph I. J. Agnew(2) Rudolph I. J. Agnew(2)
Joseph P. Flannery(2) Joseph P. Flannery(1)(2) J. P. Bolduc(2)
Pierre Haas(3) Thomas A. Holmes(2) Joseph P. Flannery(2)
Robin A. Plumbridge(2) Robin A. Plumbridge(2) Thomas A. Holmes(1)(2)
Robert H. Quenon(1)(2) William I. M. Turner, Jr.(2) William I. M. Turner, Jr.(2)
James V. Taranik(2)
</TABLE>
---------------
(1) Chairman
(2) Current member
(3) Former director
The Audit Committee recommends independent public accountants to act as
auditors for the Company for consideration by the Board of Directors, reviews
the Company's financial statements, confers with the independent public
accountants with respect to the scope and results of their audit of the
Company's financial statements and their reports thereon, reviews the Company's
accounting policies, tax matters and internal controls and oversees compliance
by the Company with requirements of the Financial Accounting Standards Board and
federal regulatory agencies. The Audit Committee also reviews non-audit services
furnished to the Company by the independent public accountants, primarily
consultation on tax matters. Access to the Audit Committee is given to the
Company's Controller and Director of Internal Audit. During 1994, the Audit
Committee held three meetings.
The Compensation Committee in conjunction with the Compensation Committee
of NMC recommends to the Board of Directors the levels and forms of compensation
to be paid to the officers and key employees of the Company and its subsidiaries
and bonus awards under the Company's Annual Incentive Compensation Plan. During
1994, the Compensation Committee held four meetings.
The Nominating Committee's function is to propose to the Board of Directors
slates of directors to be elected at the Annual Meetings of Stockholders (and
any directors to be elected by the Board of Directors to fill vacancies) and
slates of officers to be elected by the Board of Directors. During 1994, the
Nominating Committee held three meetings. The Nominating Committee will consider
for nomination to become directors any persons recommended by stockholders.
Recommendations may be submitted to the Nominating Committee in care of the
Secretary of the Company at 1700 Lincoln Street, Denver, Colorado 80203.
CONTRACTUAL ARRANGEMENT WITH NEWMONT MINING CORPORATION
The Company's taxable income is included in the consolidated federal income
tax return of NMC and its 80% or greater owned subsidiaries, filed by NMC as
parent, and certain other state income tax returns filed by NMC on a combined,
consolidated or unitary basis. Effective January 1, 1994, NMC and the Company
have entered into a new tax sharing agreement for the allocation of federal,
state and foreign income taxes.
6
<PAGE> 9
Under the agreement, the Company has succeeded to all NMC federal, state
and foreign income tax attributes existing as of December 31, 1993, and has
assumed all NMC liabilities for federal, state and foreign income taxes,
interest and penalties attributable to tax periods ending on or before December
31, 1993.
For all tax periods beginning after December 31, 1993, the Company will
determine its federal, state and foreign income tax liability on a separate
return basis, which shall include the taxable income, loss, credits and other
relevant tax items attributable to all members of the Newmont consolidated,
combined or unitary group that are owned directly or indirectly by the Company.
Consistent therewith, the Company will pay to NMC the greater of regular
corporate income tax or the corporate alternative minimum tax, as applicable,
computed on a separate return basis, including interest and penalties. The
Company will tender payment to NMC no later than the time the Company would have
been required to pay income tax to the Internal Revenue Service ("IRS") or the
relevant state or foreign taxing authorities had the Company filed on a separate
return basis.
NMC, in turn, will pay to the Company amounts equal to the refunds the
Company would have been entitled to receive had the Company filed separate
company returns, including interest and rebate of penalties. NMC will tender
payment to the Company no later than the time the Company would have been
entitled to receive such tax refunds from the IRS or the relevant state or
foreign taxing authorities had the Company filed on a separate return basis.
The Company may deduct net operating losses from federal, state or foreign
taxable income as determined on a separate return basis. Such loss will be given
effect only to the extent that the losses reduced the actual tax liability of
the consolidated, combined or unitary group, or resulted in an actual refund of
tax to the group. NMC's obligation will not extend to any interest on such
taxes.
In the event that the Company fails to satisfy its obligations regarding
payment of federal, state or foreign income taxes, interest and penalties under
the agreement, NMC can seek payment of such obligations from any member of the
Newmont consolidated or combined group that is owned directly or indirectly by
the Company.
7
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION. The following table shows
the total compensation earned or paid to the Chief Executive Officer and to each
of the Company's four most highly compensated executive officers, other than the
Chief Executive Officer, for services rendered in all capacities to the Company,
NMC and the Company's subsidiaries in 1994, 1993 and 1992.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
NAME/ --------------------- STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS OPTIONS(#)(5) COMPENSATION(6)
------------------------------------ ---- -------- -------- ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Ronald C. Cambre 1994 $514,000(1) $321,278 $153,722(4) -0- $ 9,000
Chairman, President and 1993 80,000(1) 75,000(2) -0- 302,038 -0-
Chief Executive Officer 1992 N/A N/A N/A N/A N/A
Wayne W. Murdy 1994 223,000 108,491 47,386(4) -0- 9,000
Senior Vice President 1993 215,000 109,930 38,832 -0- 6,450
and Chief Financial Officer 1992 827 242,500(3) -0- 149,771 -0-
Graham M. Clark, Jr. 1994 223,000 95,113 34,004(4) -0- 9,000
Senior Vice President 1993 215,000 102,814 31,969 -0- 9,000
and General Counsel 1992 200,000 105,243 24,000 149,771 9,000
Lawrence T. Kurlander 1994 161,250(7) 132,020(7) 27,794(4) 108,583 3,225
Senior Vice President, 1993 N/A N/A N/A N/A N/A
Administration 1992 N/A N/A N/A N/A N/A
Eric Hamer 1994 164,000 53,776 -0- -0- 9,000
Vice President, 1993 160,000 49,040 -0- -0- 9,000
Indonesian Projects 1992 155,000 68,859 -0- 89,861 9,000
T. Peter Philip(8) 1994 182,387(9) 100,038 -0- -0- 8,060
Former President 1993 331,000(9) 182,474 67,084 -0- 9,000
and Chief Operating Officer 1992 311,500(9) 180,405 45,000 109,832 9,000
</TABLE>
---------------
N/A -- Not applicable
(1) Became an executive officer on November 1, 1993. Salary in 1993 based on an
annualized base salary of $450,000 for the period from November 1, 1993
through December 31, 1993. See "Executive Agreements" below. Such amounts
also include director's fees of $14,000 and $5,000 in 1994 and 1993,
respectively.
(2) The amount of Mr. Cambre's bonus was stipulated by the terms of his
employment agreement. See "Executive Agreements" below.
(3) Mr. Murdy became an executive officer on December 31, 1992. The amount shown
consists of a "sign-on" bonus of $75,000, a one-time payment of $117,500 to
compensate Mr. Murdy for a bonus foregone as a result of his agreement to
undertake his current duties with the Company and NMC and a reimbursement to
Mr. Murdy of $50,000 for expenses incurred in connection with the
cancellation of a home construction contract in Mr. Murdy's former city of
residence.
(4) Value of restricted stock awarded under the Company's Annual Incentive
Compensation Plan for 1994 at the election of the Company's Compensation
Committee in lieu of cash. Dividends are payable on the shares awarded.
These shares are subject to two year vesting and were issued in January 1995
in the following amounts:
<TABLE>
<CAPTION>
#
-------
<S> <C>
Ronald C. Cambre................................................................... 4,480
Wayne W. Murdy..................................................................... 1,381
Graham M. Clark, Jr................................................................ 991
Lawrence T. Kurlander.............................................................. 810
</TABLE>
The number of shares and value of restricted stock of NMC held by the named
executive officers on December 31, 1994 was as follows:
<TABLE>
<CAPTION>
# $
------ --------
<S> <C> <C>
Ronald C. Cambre.......................................................... -0- -0-
Wayne W. Murdy............................................................ 847 30,439
Graham M. Clark, Jr....................................................... 1,471 52,864
Lawrence T. Kurlander..................................................... -0- -0-
Eric Hamer................................................................ -0- -0-
T. Peter Philip........................................................... -0- -0-
</TABLE>
On December 31, 1994, none of the named executive officers held any
restricted shares of the Company.
(5) Represents special equity option grants for NMC stock made to these
individuals by NMC which generally vest over a period of four to five years,
except for Mr. Kurlander whose options vest over a period of approximately
one to three years.
8
<PAGE> 11
(6) The amounts shown represent the Company's contributions and credits to its
Employee Savings Plan and nonqualified supplemental Savings Equalization
Plan for the named executive officers.
(7) Mr. Kurlander became an executive officer on April 1, 1994. Salary in 1994
based on an annualized base salary of $215,000 for the period April 1, 1994
through December 31, 1994. The bonus amount shown consists of a "sign-on"
bonus of $60,000 and a bonus under the Company's Annual Incentive
Compensation Plan of $72,020 for the period April 1, 1994 through December
31, 1994.
(8) Mr. Philip retired as President and Chief Operating Officer of the Company
and of NMC on June 1, 1994.
(9) Includes director's fees of $6,000, $16,000 and $11,500 in 1994, 1993 and
1992, respectively.
STOCK OPTIONS GRANTED BY NMC. The following table contains information
concerning the grant of stock options by NMC in 1994 under its stock option
plans with respect to the named executive officers.
OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------------------------------------------------------------------------------- ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION
UNDERLYING GRANTED TO MARKET PRICE FOR OPTION TERMS
OPTIONS PARTICIPANTS EXERCISE ON GRANT EXPIRATION ------------------------
NAME GRANTED (#) IN 1994 PRICE ($/SH) DATE ($/SH) DATE 5% 10%
-------------------------- ----------- ------------- ------------ ------------ ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence T. Kurlander..... 9,360(1) 2.0 46.27 46.27 03/31/04 $ 272,845 $ 688,609
44,932(2) 9.5 40.07 40.07 11/15/04 1,134,268 2,862,676
14,977(3) 3.2 48.08 40.07 11/15/04 258,115 834,238
14,977(3) 3.2 52.08 40.07 11/15/04 198,207 774,330
14,977(3) 3.2 56.09 40.07 11/15/04 138,149 714,273
</TABLE>
---------------
(1) These options were granted by NMC on April 1, 1994 and become exercisable
for NMC stock in two annual increments of 50% each commencing on April 1,
1995.
(2) These options were granted by NMC on November 16, 1994 and become
exercisable for NMC common stock in three annual increments of 33 1/3% each
commencing on April 28, 1995. All of these options are exercisable at the
indicated exercise price but only if on the day prior to exercise the price
of NMC's common stock is at least 125% of the exercise price ($50.09).
(3) These options were granted by NMC on November 16, 1994 and become
exercisable for NMC common stock in full, as follows:
<TABLE>
<CAPTION>
EXERCISE DATE ON
PRICE ($/SH) WHICH EXERCISABLE
------------ -----------------
<S> <C> <C>
48.08............................................ June 23, 1995
52.08............................................ June 23, 1996
56.09............................................ June 23, 1997
</TABLE>
NMC OPTION EXERCISES AND HOLDINGS. The following table sets forth
information with respect to the named executive officers concerning the exercise
of NMC options in 1994 and unexercised NMC options held at the end of 1994.
AGGREGATED OPTION EXERCISES IN 1994 AND
1994 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT 1994 IN-THE-MONEY OPTIONS
ACQUIRED YEAR-END (#) AT 1994 YEAR-END
ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---------------------------------------- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald C. Cambre........................ -0- $ -0- 75,509 226,529 $ -0- $ -0-
Wayne W. Murdy.......................... -0- -0- 21,092 113,702 -0- 439,447
Graham M. Clark, Jr..................... -0- -0- 19,657 104,839 20,077 382,812
Lawrence T. Kurlander................... -0- -0- -0- 99,223 -0- -0-
Eric Hamer.............................. 8,986 152,064 32,012 62,903 44,164 229,689
T. Peter Philip......................... 26,009 266,545 -0- -0- -0- -0-
</TABLE>
PENSION PLANS. The following table shows the estimated pension benefits
payable to a covered participant at normal retirement age (62 years) under the
Company's qualified defined benefit pension plan (the "Pension Plan"), as well
as under the Company's nonqualified supplemental pension plan that provides
benefits that would otherwise be denied participants by reason of certain
Internal Revenue Code limitations on qualified plan benefits, based on
remuneration that is covered under the plans and years of service with the
Company, NMC and the Company's subsidiaries.
9
<PAGE> 12
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------
REMUNERATION 15 20 25 30 35
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 100,000................................. $ 26,250 $ 35,000 $ 43,750 $ 52,500 $ 61,250
150,000................................. 39,375 52,500 65,625 78,750 91,875
200,000................................. 52,500 70,000 87,500 105,000 122,500
250,000................................. 65,625 87,500 109,375 131,250 153,125
300,000................................. 78,750 105,000 131,250 157,500 183,750
350,000................................. 91,875 122,500 153,125 183,750 214,375
400,000................................. 105,000 140,000 175,000 210,000 245,000
450,000................................. 118,125 157,500 196,875 236,250 275,625
500,000................................. 131,250 175,000 218,750 262,500 306,250
550,000................................. 144,375 192,500 240,625 288,750 336,875
600,000................................. 157,500 210,000 262,500 315,000 367,500
650,000................................. 170,625 227,500 284,375 341,250 398,125
700,000................................. 183,750 245,000 306,250 367,500 428,750
750,000................................. 196,875 262,500 328,125 393,750 459,375
800,000................................. 210,000 280,000 350,000 420,000 490,000
850,000................................. 223,125 297,500 371,875 446,250 520,625
900,000................................. 236,250 315,000 393,750 472,500 551,250
950,000................................. 249,375 332,500 415,625 498,750 581,875
1,000,000................................. 262,500 350,000 437,500 525,000 612,500
1,050,000................................. 275,625 367,500 459,375 551,250 643,125
1,100,000................................. 288,750 385,000 481,250 577,500 673,750
</TABLE>
A participant's remuneration covered by the Pension Plan is his or her
average base salary and bonus, including amounts paid in the form of NMC
restricted stock (as reported in the Summary Compensation Table) for the sixty
consecutive months in which the highest level of compensation was paid to the
participant during the last one hundred twenty months of the participant's
career with the Company, NMC and their subsidiaries. The approximate term of
service as of the end of 1994 for each named executive officer is: Mr. Cambre
one year; Mr. Clark 11 years; Mr. Murdy two years; Mr. Kurlander eight months;
Mr. Hamer 20 years. Benefits shown are computed on a straight single life
annuity basis beginning at age 62. Such amounts have not been reduced for Social
Security benefits.
OFFICERS' DEATH BENEFIT PLAN AND GROUP LIFE INSURANCE PROGRAM. The Company
has an Officers' Death Benefit Plan which provides a death benefit of three
times annual base salary for an executive officer who dies while an active
employee and a death benefit of one times final annual base salary for an
executive officer who dies after retiring at or after normal retirement age. For
retirement prior to normal retirement age, the post-retirement death benefit is
30% to 100% of one times final annual base salary, depending on the number of
years to normal retirement age. Mr. Clark is a participant in a prior plan and
has a death benefit of the greater of $770,000 or three times annual base salary
while an active employee and a post-retirement death benefit based on retirement
at or after normal retirement age of the greater of $385,000 or one times final
annual base salary. Under such prior plan, for retirement prior to normal
retirement age, Mr. Clark's post-retirement death benefit is 30% to 100% of the
greater of $385,000 or one times final annual base salary, depending on the
number of years to normal retirement age. Coverage under the Officers' Death
Benefit Plan is offset by group life insurance maintained for the benefit of all
salaried employees of the Company, NMC and certain of their subsidiaries.
EXECUTIVE AGREEMENTS. An agreement is currently in effect between the
Company, NMC and Mr. Cambre which provides for a base salary of $500,000 for
1994. Mr. Cambre's employment agreement is effective until his 62nd birthday,
unless terminated earlier as provided in the agreement. In the event Mr.
Cambre's employment is terminated without "cause" (as defined below) and without
any breach by Mr. Cambre of such agreement, he will be entitled to receive a
lump sum payment equal to twice his annual
10
<PAGE> 13
base salary for each twelve-month period in the remaining term of his
employment, provided that such term will not exceed two years.
Mr. Murdy's letter of offer of employment provides that if his employment
is terminated other than for "cause" (as defined below) before December 31,
1997, he will be entitled to receive 35 months of his then annual base salary
plus certain other severance benefits; thereafter, he will be entitled to 24
months of salary plus benefits.
Any benefits to which Messrs. Cambre and Murdy may be entitled from the
Company's Severance Pay Plan reduce the benefits due under these arrangements.
"Cause" as a basis for termination under these arrangements is generally
limited to (i) misappropriation of funds of the Company, NMC or their
subsidiaries, (ii) conviction of a felony, (iii) obtaining personal benefit from
any transaction between the Company, NMC or their subsidiaries and a third party
without the prior approval of such benefit by the Company's Board of Directors
or (iv) obtaining a personal profit from the sale of the Company's, NMC's or
their subsidiaries' trade secrets.
Mr. Gordon R. Parker, former Chairman of the Board and Chief Executive
Officer of the Company and of NMC, has been retained by the Company and NMC as a
consultant. He will receive in the aggregate compensation equal to $300,000 per
annum through December 31, 1995.
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company is
composed entirely of directors who are neither officers nor employees of the
Company nor NMC. The Company's Compensation Committee is responsible to the
Board and by extension to the stockholders of the Company and NMC for setting
and administering the policies which govern both annual compensation and stock
incentive programs for the Company's and NMC's executive officers and other key
employees. The members of the Company's Compensation Committee are also
directors of NMC and serve on the NMC Compensation Committee. The membership of
the two Committees is identical. As a result of the NGC Transaction, the Company
and NMC operate as a single economic unit and the Company pays the
compensation expenses of NMC. The following report reflects the compensation
philosophy and decisions of both Committees.
There are three elements to the Company's and NMC's executive compensation
program -- base salaries, annual incentives and stock options.
BASE SALARIES. The base salaries of Mr. Cambre and the other named
executive officers fall within salary ranges that reflect competitive pay levels
within the mining industry as a whole for the positions they hold. The Company
and NMC subscribe to and participate in surveys of executive-level compensation.
One of the surveys in which the Company and NMC participate is devoted
exclusively to the gold mining industry and includes information about 15
companies based in North America. This survey not only includes the four
companies that comprise the S&P Gold Index shown on the Company's Performance
Graph below, but also includes a number of companies which the Committees
believe are more appropriate for comparison with the Company and NMC for
purposes of analyzing executive compensation. Based on a review of such survey
information, the Committees believe that the base salaries of the Company's and
NMC's executive officers are generally between the median and 75th percentile of
base salaries for comparable positions in the gold mining industry. The Company
and NMC participate in other surveys as well, which cover a wide range of
industries and companies. Although many of the companies included in these
broader surveys are not capable of meaningful comparison with the Company and
NMC, the Company and NMC use such surveys to identify general trends in
executive compensation.
Base salary increases are made on the basis of changes in industry levels
as well as evaluated individual contribution and the Company's and NMC's
performance in the prior year. The 1994 base salary increases of Messrs. Murdy,
Clark and Hamer were in line with increases in base salaries for comparable
industry positions
11
<PAGE> 14
as reflected in the gold mining industry survey. Mr. Cambre's 1994 base salary
was determined by the terms of his employment agreement.
ANNUAL INCENTIVES. Annual incentive awards are made pursuant to the
Company's Annual Incentive Compensation Plan. The named executive officers (and
other participants at specified salary levels) are eligible to receive both a
corporate performance bonus and a personal performance bonus. Corporate
performance bonuses are paid in cash and are based upon the attainment of
production and cost-of-production goals established annually by the Company's
Board of Directors on the recommendation of its Compensation Committee. Such
goals are more demanding than budgeted production and cost-of-production goals.
At year-end, actual cash costs of production are adjusted to consider the effect
of actual production over or under targeted production. Such adjusted costs are
then compared with targeted costs to determine a "corporate performance
percentage". The Company must achieve a minimum percentage (designated by the
Company's Board of Directors to be 85%) before any bonuses based on corporate
performance can be made to participants in the Plan. Corporate performance
bonuses are incrementally increased (or decreased) in accordance with
incrementally higher (or lower) performance percentages (with the maximum
percentage being 120%). In 1994, the Company achieved a corporate performance
percentage of 100.29%. In addition, each year the Company's Board of Directors
designates a minimum average price of gold per ounce when the corporate
performance target is determined. No corporate or personal performance bonuses
may be paid for any year in which the Company does not realize such minimum
average price of gold per ounce.
Personal performance bonuses are based upon an evaluation of a
participant's personal contribution to the Company and NMC and are also
typically paid in cash. However, 1994 personal performance bonuses to Messrs.
Cambre, Murdy, Clark and Kurlander were paid 50% in cash and 50% in the form of
restricted shares of the Company's common stock, subject to two-year vesting
provisions. The restricted stock component of the Plan is intended to align the
interests and motivation of such recipients with the interests of the Company's
and NMC's stockholders. It is believed that such ownership will positively
influence long-term decision making since awards for current performance will be
impacted by future stock prices. In 1994, personal performance awards to the
named executive officers and other Plan participants were based primarily on
such persons' completion or advancement of the goals established to maximize
stockholder value. For 1994 such goals included (i) completing the NGC
Transaction, (ii) replacing depleting reserves at a rate at least equal to
current production, (iii) establishing a program to increase production at
certain mining sites to certain targeted levels, (iv) identifying construction
project problems and instituting appropriate corrective actions, (v) completing
the financing for a new production facility at the Carlin mine, (vi) finalizing
feasibility and technical studies for certain projects in Asia, (vii) finalizing
certain legal arrangements related to a mill closure and to certain consent
decrees and (viii) developing a strategic business plan for the Company and NMC.
In making their determinations concerning personal performance bonuses, the
Committees also took into consideration the fact that income before taxes
exceeded target, notwithstanding delays in completing the commissioning of a new
production facility at the Carlin mine. The Committees weighed each factor
equally in determining the value of any named executive officer's contribution
to the Company, NMC and their respective stockholders.
Participants in the Plan are assigned target awards as a percentage of
their base salary. Target awards increase at higher management levels to 100% of
salary in the case of Mr. Cambre. The weighting of corporate performance and
personal performance factors varies by participant, and in the case of Mr.
Cambre was one-third corporate performance and two-thirds personal performance.
The sum of an individual's base salary and his or her target annual
incentive award is generally targeted to approach the 75th percentile for
comparable positions in the gold mining industry when performance goals are met.
The Chief Executive Officer's 1994 corporate performance bonus was based on
the corporate performance percentage described above, while his 1994 personal
performance bonus was based on his individual accomplishments as well as the
overall results of the Company and NMC. Mr. Cambre's total 1994 cash and
restricted stock bonus of $475,000 was equal to 95% of his 1994 base salary. Mr.
Cambre's corporate performance bonus of $167,500 (33.3% of such total award) was
based on a corporate performance percentage
12
<PAGE> 15
of 100.29% as described above. His personal performance bonus of $307,500 (64.7%
of such total award) was based on Mr. Cambre's personal performance evaluation,
which reflects his continuing leadership in advancing projects in Uzbekistan,
Indonesia and Peru, in completing the NGC Transaction and in the positioning of
the Company and NMC for future growth through a strategic planning process. The
Committees considered Mr. Cambre's personal contributions to the Company and NMC
to be especially significant during a period marked by an industry-wide
downturn, the retirement of two of the Company's and NMC's senior executives,
the death of a senior operational executive and Mr. Cambre's subsequent
restructuring of the Company's and NMC's management team.
STOCK OPTIONS. The third element of executive compensation -- stock
options -- is long-term in nature. In 1992, NMC's Compensation Committee, which
is also responsible for administering NMC's stock option plans, suspended its
practice of making semi-annual stock option grants to Messrs. Clark and Hamer.
Instead, the Committee awarded special equity option grants to these executives.
In addition, Messrs. Cambre, Murdy and Kurlander were also awarded special
equity option grants in November 1993, December 1992 and November 1994,
respectively, when they joined, or shortly after they joined, the Company and
NMC. These awards were based upon recommendations contained in a study
undertaken for NMC's Compensation Committee by an independent compensation
consultant which had been asked to design an option program which would align
the financial interests of its key executives more closely with those of the
stockholders of the Company and of NMC.
The equity awards are stock options with special pricing features. With
respect to half of these special grants the options are not exercisable unless
NMC's common stock price rises to 125% of the exercise price on the day prior to
exercise. With respect to the other half of the special grants, the exercise
prices are set at successively higher levels above the value of NMC's common
stock on the grant date. Individuals must own and place on deposit with NMC a
number of shares equal to 2% of the shares covered by the options they were
granted. The purpose of the deposited shares is to evidence a commitment to
ownership and risk on the part of the executive in exchange for the leveraged
opportunity to participate in the growth in share value represented by the
options. The shares come off deposit when an option is exercised or expires. If
the required number of shares are not placed on deposit, or if they are taken
off deposit early, the option is proportionately reduced.
POLICIES WITH RESPECT TO TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Under
the Revenue Reconciliation Act of 1993, section 162 of the Internal Revenue Code
was amended to eliminate, with certain exceptions, the deduction for certain
compensation in excess of $1 million to any named executive officer, including
the Chief Executive Officer. The Committees believe that NMC's stock option
plans comply with the exceptions to this new limitation. It is possible that
payments made from time to time under the Company's Annual Incentive
Compensation Plan could constitute non-deductible compensation expenses.
Altering such Plan to assure full deductibility of compensation, however, could
inhibit the Committees' ability to adjust performance criteria as they deem
appropriate. Because the Committees do not currently anticipate any significant
increase in tax liability to the Company or NMC as a result of the section 162
amendments, the Committees have not altered their approach to setting incentive
compensation in response to such amendments. Should the compensation levels of
the Chief Executive Officer or any of the other named executive officers
materially affect the Company's or NMC's tax position in the future, the
Committees will consider establishing performance criteria that will allow the
Company and NMC to avail themselves of all appropriate tax deductions.
SUMMARY. The Committees believe that the combination of competitive base
salaries, potentially significant performance-based annual incentives paid
partially in restricted stock and a highly leveraged equity incentive
represented by premium-priced options combined with an ownership commitment,
represents a highly motivational and effective senior executive compensation
program that strongly aligns the interests of management with those of the
stockholders of the Company and of NMC in achieving above average long-term
returns on investment.
13
<PAGE> 16
Submitted by the Compensation Committee of the Company's Board of
Directors:
<TABLE>
<S> <C>
Joseph P. Flannery, Chairman Robin A. Plumbridge
Rudolph I. J. Agnew William I. M. Turner, Jr.
Thomas A. Holmes
</TABLE>
FIVE-YEAR STOCKHOLDER RETURN COMPARISON
The following graph assumes $100 invested on December 31, 1989 in the
Company's common stock, the S&P 500 Index and the S&P Gold Index.
CUMULATIVE VALUE OF A $100 INVESTMENT
ASSUMING REINVESTMENT OF DIVIDENDS
<TABLE>
<CAPTION>
MEASUREMENT PERIOD NEWMONT GOLD S&P 500 S&P GOLD
(FISCAL YEAR COVERED) COMPANY INDEX INDEX*
<S> <C> <C> <C>
1989 100 100 100
1990 87 97 88
1991 81 126 72
1992 66 136 67
1993 96 150 123
1994 74 152 99
</TABLE>
* Echo Bay Mines Ltd., Homestake Mining Company, Newmont Mining
Corporation, Placer Dome Inc.
SECTION 16(A) REPORTING
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors and holders of greater than 10% of the
Company's common stock to file reports of ownership and changes in ownership of
the Company's equity securities with the Securities and Exchange Commission and
the New York Stock Exchange. Based solely on a review of the copies of such
reports furnished to the Company and written representations from the Company's
executive officers and directors that no Forms 5 were required, the Company
believes that all Section 16(a) filing requirements applicable to the Company's
officers and directors were complied with in 1994.
NMC, which as of March 9, 1995, owned 89.2% of the outstanding common stock
of the Company, failed to file five monthly reports covering an aggregate of 159
transactions, all of which relate to the NGC Transaction which is described
under "NGC Transaction" above. All of these transactions, however, were reported
on a 1994 Annual Statement of Beneficial Ownership on Form 5, which was timely
filed. A total of 157 of such transactions relate to grants, exercises and
cancellations of NGC Options granted to NMC pursuant to the NGC Transaction. All
such grants, exercises and cancellations were effected as a result of grants,
exercises or cancellations of comparable NMC employee stock options in order to
maintain, as closely as possible, equality between the outstanding number of
shares of common stock of NMC and the number of
14
<PAGE> 17
shares of common stock of the Company held by NMC. Development of appropriate
procedures to coordinate NGC Option transactions with NMC employee stock option
transactions and assembling the information needed for NMC's required filings
under Section 16(a), given the substantial number of reportable transactions,
resulted in the delay in the reporting of the transactions until the Form 5
filing.
OTHER MATTERS
The Board of Directors does not intend to bring other matters before the
Annual Meeting of Stockholders except items incident to the conduct of the
meeting. However, on all matters properly brought before the meeting by the
Board of Directors or by others, the persons named as proxies in the
accompanying proxy, or their substitutes, will vote in accordance with their
best judgment.
15
<PAGE> 18
<TABLE>
<S> <C>
P NEWMONT GOLD COMPANY
R PROXY SOLICITED BY BOARD OF DIRECTORS FOR
O ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 4, 1995
X
Y The undersigned hereby appoints GRAHAM M. CLARK, JR., WAYNE W. MURDY and TIMOTHY J. SCHMITT,
and each or any of them as proxies, with full power of substitution and revocation, to
represent the undersigned and to vote all shares of the common stock of Newmont Gold Company
which the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Company
to be held at 9:30 a.m., local time, on Thursday, May 4, 1995 in the John D. Hershner Room,
1700 Lincoln Street, Denver, Colorado, and any adjournments thereof, upon the matter listed on
the reverse side hereof. The proxies appointed hereby may act by a majority of said proxies
present at the meeting (or if only one is present, by that one).
Election of Directors -- Nominees:
R.I.J. Agnew, J.P. Bolduc, R.C. Cambre,
J.P. Flannery, T.A. Holmes,
R.A. Plumbridge, R.H. Quenon, M.A. Qureshi,
M.K. Reilly, J.V. Taranik, W.I.M. Turner, Jr.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOX, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH ----------
THE BOARD OF DIRECTORS' RECOMMENDATION. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS SEE
YOU SIGN AND RETURN THIS CARD. REVERSE
SIDE
----------
</TABLE>
--
<PAGE> 19
<TABLE>
<S> <C> <C>
Please mark 0233
/X/ your
votes as in
this
example.
THIS PROXY WHEN PROPERLY EXECUTED
WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ELECTION OF
DIRECTORS.
-------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING NOMINEES FOR ELECTION OF DIRECTORS (SEE REVERSE):
-------------------------------------------------------------------------------------------------------------------------------
FOR WITHHELD
Election of
Directors / / / /
(see reverse)
For, except vote withheld from the following nominee(s):
-----------------------------------
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please sign exactly as name appears
hereon. Joint owners should each
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such.
Each signer hereby revokes all
previously signed proxies to vote
at the meeting or any adjournments
thereof.
-----------------------------------
-----------------------------------
SIGNATURE(S) DATE
FOLD AND DETACH HERE
NEWMONT GOLD COMPANY
PLEASE SIGN, DATE AND RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE
