o Preliminary Proxy Statement þ Definitive Proxy Statement o Definitive Additional Materials o Soliciting Material Pursuant to §240.14a-12 |
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
þ | No fee required. | |
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Newmont Mining Corporation 6363 South Fiddlers Green Circle Greenwood Village, Colorado 80111 USA |
Date of Meeting: | Tuesday, April 19, 2011 | |
Time: |
11:00 a.m., local time |
|
Place: |
Hotel du Pont 11th and Market Streets Wilmington, Delaware 19801 |
|
Purpose: |
1. Elect directors;
|
|
2. Ratify the Audit Committees appointment of
PricewaterhouseCoopers LLP as Newmonts independent
auditors for 2011;
|
||
3. Conduct an advisory vote on the compensation of the
named executive officers;
|
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4. Conduct an advisory vote on the frequency of
stockholders votes on executive compensation; and
|
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5. Transact such other business that may properly come
before the meeting.
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Record Date: | February 18, 2011 |
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i
| common stock of Newmont, par value $1.60 per share, of which there were 486,564,649 shares outstanding as of the record date; and | |
| exchangeable shares of Newmont Mining Corporation of Canada Limited, a Canadian federal corporation (Newmont Canada), of which there were 6,703,999 shares as of the record date entitled to vote pursuant to the terms of the Newmont Special Voting Stock described below. |
| By Mail - If you have received or requested a paper copy of the proxy materials, please date and sign the proxy card and return it promptly in the accompanying envelope. | |
| By Internet - If you received a Notice of Internet Availability of Proxy Materials, you can access our proxy materials and vote online. Instructions to vote online are provided in the Notice. | |
| In Person - You may attend the Annual Meeting and vote in person. We will give you a ballot when you arrive. If your stock is held in the name of your broker, bank or another nominee (a Nominee), then you must present a proxy from that Nominee in order to verify that the Nominee has not already voted your shares on your behalf. | |
| If you hold Newmont Common Stock at your Broker - If your shares were held in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in street name and the Notice or proxy materials, as applicable, are being forwarded to you by that organization. Your voting instruction form from Broadridge or your Notice provides information on how to vote your shares. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. |
| By Mail - You may vote by signing and returning the enclosed voting instruction form. This form permits you to instruct Computershare Trust Company of Canada, as trustee under the Voting Agreement (the Trustee), to vote at the Annual Meeting. The Trustee holds one share of special voting stock of Newmont (the Newmont Special Voting Stock) that is entitled to vote on all matters on which the shares of the Companys common stock vote. The Newmont Special Voting Stock has a number of votes in respect to the Annual Meeting equal to the lesser of (a) the number of exchangeable shares outstanding on the record date (other than the Companys exchangeable shares held by Newmont or its affiliates), or (b) 10% of the total number of votes corresponding to the common stock then outstanding. Based upon the foregoing, the Trustee will be entitled to cast up to 6,703,999 votes at the Annual Meeting. The Trustee must receive your voting instructions by 5:00 p.m. in Toronto, Ontario, Canada, on April 18, 2011. This will give the Trustee time to tabulate the voting instructions and vote on your behalf. The Trustee will exercise each vote attached to the Newmont Special Voting Stock only on the basis of instructions received from the relevant holders of exchangeable shares. In the absence of instructions from a holder as to voting, the Trustee will not have any voting rights with respect to such exchangeable shares. | |
| In Person - You may attend the Annual Meeting and vote in person. As a holder of exchangeable shares, you may attend the Annual Meeting in person to vote directly the number of votes to which you are entitled under the Voting Agreement. Please refer to the Notice to Exchangeable Shareholders and Voting Instruction Form for additional instructions on voting at the meeting. |
2
Proposal
|
Vote Required
|
|
Election of Directors
|
Majority of votes cast for the Nominees. | |
Ratification of independent auditors for 2011
|
Majority of stock present in person or by proxy and entitled to vote on the Ratification. | |
Advisory vote on compensation of named executive officers
|
Non-binding advisory vote majority of stock present in person or by proxy and entitled to vote. | |
Advisory vote on frequency of stockholders votes on executive
compensation
|
Non-binding advisory vote majority of stock present in person or by proxy and entitled to vote. |
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4
5
| CEO/Executive Management Skills Experience as former Chairman, Director and Chief Executive Officer of Caterpillar Inc. and other senior executive positions noted above. | |
| Financial Expertise Prior service on the Audit Committee of the Board of Directors of Inco Limited and financial oversight experience in senior executive roles. | |
| International Experience Prior service on the International Committee of the Board of Directors of Valmont Industries, Inc. and experience as a senior executive of an international corporation, Caterpillar Inc. | |
| Compensation Expertise Prior service on the Companys Compensation Committee, including as Chairman, and participation in compensation, benefits and related decisions in senior executive roles. Member on the Valmont Industries, Inc. Compensation Committee, including as acting Chairman. |
| CEO/Executive Management Skills Experience as Chairman, President and Chief Executive Officer of Crompton Corporation and Non-Executive Chairman of Newmont. | |
| Financial Expertise Experience serving on the Companys Audit Committee and as the Chairman of the Audit Committee of the Board of Directors of Consolidated Edison of New York. Extensive financial oversight experience in senior management roles. | |
| International Experience Extensive senior executive experience working with multinational operations at Crompton Corporation, which has global manufacturing facilities on five continents and conducts business in over 120 countries, as well as experience establishing inter-industry relationships and negotiating product safety regulations as Chairman of several domestic and international chemical industry trade associations. | |
| Operational and Industry Expertise Extensive experience in the chemical industry, a process industry with similar operating characteristics and issues, and prior service on the Board of Directors of a copper mining company, Asarco Corporation. | |
| Compensation Expertise Current service as Chairman of the Compensation Committee of Citadel Plastics and participation in compensation, benefits and related decisions in senior executive roles. |
6
| CEO/Executive Management Skills Experience as Chairman, President and Chief Executive Officer of Cliffs Natural Resources Inc. and other executive management positions noted above. | |
| Financial Expertise Extensive financial management experience in senior executive roles. | |
| Operational and Industry Expertise Operational experience in the mining industry, including as former President and Chief Operating Officer of Cliffs Natural Resources Inc., former President and Chief Operating Officer of Diavik Diamond Mines, Inc. and former General Manger of Weipa Bauxite Operation of Comalco Aluminum. Awarded a Bachelors Degree in Geology from Capital University. | |
| International Experience Extensive senior executive experience working with multinational mining operations, including with Cliffs Natural Resources Inc., which has operations in North America, Australia, Latin America and Asia. | |
| Health, Safety, Environmental and Social Responsibility Experience Experience serving on the Companys Operations and Safety Committee and the Environmental and Social Responsibility Committee. |
| Financial Expertise Extensive experience in banking and finance at Bankers Trust Company and at the EBRD, including experience as head of risk management and head of banking at EBRD. Experience serving on the Companys Audit Committee, including as Chair, and the Audit Committees of the Board of Directors of QinetiQ Group plc and Rexam PLC. | |
| International Experience Extensive senior executive experience working with businesses, global and local, and governments throughout eastern Europe and the former Soviet Union. | |
| Health, Safety, Environmental and Social Responsibility Experience Experience serving on the Companys Environmental and Social Responsibility Committee. |
7
| CEO/Executive Management Skills Experience as Chief Executive Officer of Polymer Group, Inc., and former President and Chief Executive Officer of Sappi Fine Paper North America. | |
| Industry and Operational Expertise Extensive mining industry experience, including in executive positions with Alcoa, Inc., an international aluminum producer, for over 10 years, including as former Vice President and Chief Customer Officer and former Vice President, Alcoa North American Extrusions. | |
| International Experience Extensive senior executive experience including Chief Executive Officer of Polymer Group Inc., a company operating manufacturing facilities in seven countries. | |
| Health, Safety, Environmental and Social Responsibility Experience Experience serving on the Companys Operations and Safety Committee and prior experience on the Environmental and Social Responsibility Committee. | |
| Compensation Expertise Experience serving as a member of the Companys Compensation Committee. Participation in compensation, benefits and related decisions in senior executive roles. |
| CEO/Executive Management Skills Experience as Chairman, Hamson Consultants Pty Ltd and former Joint Chairman and Chief Executive Officer of McIntosh Hamson Hoare Govett Limited. | |
| Financial Expertise Experience serving on the Companys Audit Committee, the Audit Committee of the Board of Directors of Genesis Emerging Markets Fund Ltd., membership in the Charter Accountants Institute and financial management experience in senior executive roles. | |
| Legal Expertise Extensive experience as practicing lawyer in multiple jurisdictions. | |
| Industry and Operational Expertise Experience as Director and Deputy Chairman of Normandy Mining Limited from 1987 to 2002. | |
| International Experience Extensive senior executive experience working in global banking activities with McIntosh Hamson Hoare Govett Limited. |
8
| CEO/Executive Management Skills President and Chief Executive Officer of the Company and other senior executive positions noted above. | |
| Financial Expertise Extensive financial management experience in executive roles, including as President and Chief Financial Officer of the Company and other executive management positions noted above. Experience serving on the Audit Committees of Inergy Holdings, L.P. and Vulcan Materials Company. Awarded a Bachelor of Arts degree in economics from the University of Chicago. | |
| Industry and Operational Experience Over 20 years of broad financial and operational experience in the energy, power and natural resources businesses. | |
| International Experience Extensive senior executive experience working with the Companys multinational mining operations. | |
| Compensation Expertise Participation in compensation, benefits and related decisions in senior executive roles. | |
| Legal Expertise Awarded a Doctor of Jurisprudence degree from Lewis and Clark College, Northwestern School of Law. |
| CEO/Executive Management Skills Experience as Chairman of QR, and other executive management positions noted above. | |
| Financial Expertise Extensive financial management experience in executive roles and served on the Audit Committee of the Board of Directors of QR. | |
| Industry and Operational Experience Experience in the mining industry as a senior executive with BHP, a natural resource company, and as a former director of Normandy Mining Limited, a mining company. | |
| International Experience Extensive senior executive experience working with multinational mining operations. | |
| Compensation Expertise Experience serving on the Companys Compensation Committee and participation in compensation, benefits and related decisions in senior executive roles. Managing Director of BHP. Member of Compensation committees of ASC Pty Ltd and QR. | |
| Health, Safety, Environmental and Social Responsibility Experience Experience serving on the Companys Operations and Safety Committee, including as Chairman, and on the Environmental and Social Responsibility Committee. |
9
| Financial Expertise Extensive financial management experience in various roles, including as former Vice President and Treasurer of the World Bank, as Chairman of the Audit Committee of Irelands National Pension Reserve Fund, and other executive management positions noted in the table above. | |
| International Experience Extensive experience in international investment banking and capital markets. | |
| Compensation Expertise Experience serving as a member of the Companys Compensation Committee, including as Chairman. Participation in compensation, benefits and related decisions in senior executive roles. |
| Financial Expertise Over 15 years experience in merchant and investment banking and financial management experience in executive roles. Service on the Audit Committee of the Boards of Directors of AMEC plc and Sandvik AB. | |
| International Experience Extensive experience in international investment banking, as well as multinational mining experience with Anglo American, which operates in Africa, Europe, South and North America, Australia and Asia. | |
| Industry and Operational Experience Over 15 years experience in the mining industry, including as former Chief Executive of Anglo Base, the base metals mining division of Anglo America, and other positions noted in the table above. Awarded a Masters Degree in Geology from Oxford University. | |
| Health, Safety, Environmental and Social Responsibility Expertise Experience acting as Chairman of the Health, Safety and Environment committee of United Company Rusal and Chairman of the Compliance and Ethics committee of AMEC plc. Serves on the Companys Operations and Safety Committee and as Chairman of the Environmental and Social Responsibility Committee. Member of Remuneration Committee of AMEC plc in 2010. |
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Glen A. Barton
|
Noreen Doyle | John B. Prescott | ||
Vincent A. Calarco
|
Veronica M. Hagen | Donald C. Roth | ||
Joseph A. Carrabba
|
Michael S. Hamson | Simon R. Thompson | ||
Beneficial |
||||||||||||||||||||
Name of |
Shares |
Restricted |
401(k) |
Option |
Ownership |
|||||||||||||||
Beneficial Owner
|
Owned | Stock(2) | Plan(3) | Shares(4) | Total | |||||||||||||||
Non-Employee
Directors(1)
|
||||||||||||||||||||
Glen A. Barton
|
18,876 | 0 | -0- | 0 | 18,876 | |||||||||||||||
Vincent A. Calarco
|
16,900 | 0 | -0- | 0 | 16,900 | |||||||||||||||
Joseph A. Carrabba
|
9,720 | 0 | -0- | 0 | 9,720 | |||||||||||||||
Noreen Doyle
|
12,035 | 0 | -0- | 0 | 12,035 | |||||||||||||||
Veronica M. Hagen
|
12,035 | 0 | -0- | 0 | 12,035 | |||||||||||||||
Michael S.
Hamson(5)
|
19,578 | 0 | -0- | 0 | 19,578 | |||||||||||||||
John B.
Prescott(6)
|
18,235 | 0 | -0- | 0 | 18,235 | |||||||||||||||
Donald C. Roth
|
13,295 | 0 | -0- | 0 | 13,295 | |||||||||||||||
Simon R. Thompson
|
10,150 | 0 | -0- | 0 | 10,150 | |||||||||||||||
Named Executive Officers
|
||||||||||||||||||||
Richard T. OBrien
|
64,874 | 150,173 | 1,324 | 245,176 | 461,547 | |||||||||||||||
Russell Ball
|
14,579 | 19,050 | 1,566 | 86,229 | 121,424 | |||||||||||||||
Randy Engel
|
11,309 | 16,817 | 3,126 | 48,870 | 80,122 | |||||||||||||||
Brian Hill
|
15,001 | 22,227 | 259 | 27,752 | 65,239 | |||||||||||||||
Guy Lansdown
|
18,072 | 19,843 | 802 | 57,283 | 96,000 | |||||||||||||||
All directors and executive officers as a group, including
those named above (22 persons)
|
320,207 | 288,414 | 15,589 | 858,351 | 1,482,561 |
(1) | For 2010, director stock units were awarded to all non-employee directors under the 2005 Stock Incentive Plan, except Mr. Prescott elected to receive shares of the Companys common stock. The director stock units represent the right to receive shares of common stock and are immediately fully vested and non-forfeitable. The holders of director stock units do not have the right to vote the underlying shares; however, the director stock units accrue dividend equivalents, which are paid at the time the common shares are issued. Upon retirement from the board of directors, the holder of director stock units is entitled to receive one share of common stock for each director stock unit. |
12
(2) | Restricted Stock Awards (RSAs) of the Companys common stock were awarded under the Companys 2005 Stock Incentive Plan. RSAs can be voted, but are subject to forfeiture risk and other restrictions. In 2010, the Company granted the Named Executive Officers Restricted Stock Units (RSUs), instead of RSAs. The RSUs do not have voting rights, and are subject to forfeiture risk and other restrictions. The RSUs accrue dividend equivalents, which are paid at the time the units vest and common stock is issued. RSUs vesting within 60 days after February 18, 2011 are included in this column as follows: Richard T. OBrien, 28,498 RSUs; Russell Ball, 10,633 RSUs; Randy Engel, 9,421 RSUs; Brian Hill, 11,448 RSUs; Guy Lansdown, 11,107 RSUs; and all executive officers as a group, 71,107 RSUs. | |
(3) | Equivalent shares of the Companys common stock held by the trustee in the Companys 401(k) Plans. Each participant in such plan instructs the trustee as to how the participants shares should be voted. | |
(4) | Shares of the Companys common stock that the executive officers have the right to acquire through stock option exercises within 60 days after February 18, 2011. | |
(5) | Mr. Hamsons ownership includes 2,421 shares of common stock held in trust for Mr. Hamsons Superannuation Fund, and 4,943 shares of common stock held in trust for Mr. Hamsons spouse in her Superannuation Fund. Mr. Hamson shares voting and investment power with his spouse. | |
(6) | Mr. Prescotts ownership includes 8,176 shares of common stock held in trust for Mr. Prescotts Superannuation Fund. Mr. Prescotts spouse is also a director of the trust. Mr. Prescott shares voting and investment power with his spouse. |
Amount and |
||||||||||||
Title of |
Nature of |
Percentage |
||||||||||
Name and Address of Beneficial Owner
|
Class | Beneficial Ownership | of Class | |||||||||
BlackRock, Inc.
|
Common Stock | (1 | ) | 9.80 | % | |||||||
40 East 52nd Avenue
|
||||||||||||
New York, NY 10022
|
||||||||||||
Capital World Investors, a Division of Capital Research and Management Company | Common Stock | (2 | ) | 7.1 | % | |||||||
333 South Hope Street
|
||||||||||||
Los Angeles, CA 90071
|
(1) | As of December 31, 2010, BlackRock, Inc. and its subsidiaries had sole power to vote and dispose of 48,372,757 shares of Newmont common stock. | |
(2) | As of December 31, 2010, Capital World Investors, a Division of Capital Research and Management Company (CRMC) beneficially owned 35,109,209 shares of common stock. Capital World Investors is deemed to be the beneficial owner of such shares as a result of CRMC acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. Capital World Investors reported that it had sole power to vote and dispose of all such shares. It disclaimed beneficial ownership of all reported shares. |
Annual Retainer:
|
$100,000 for each Director $25,000 for the Chairman of the Audit Committee $5,000 for each Audit Committee Member $20,000 for the Chairman of the Compensation Committee $10,000 for the Chairman of each standing committee, other than the Chairman of the Audit Committee and Compensation Committee $240,000 for the Non-Executive Chairman of the Board |
|
Attendance Fees:
|
$2,000 for each Committee Meeting No attendance fees for Board meetings, except $2,000 for every meeting in excess of 15 per year | |
Stock Award:
|
$120,000 of common stock or director stock units each year under the 2005 Stock Incentive Plan. The fair market value is determined on the third business day following election by the Board or re-election at the Companys Annual Meeting. |
13
2010 Annual Retainer:
|
$80,000 for each Director $225,000 for the Non-Executive Chairman of the Board $15,000 for the Chairman of the Audit Committee $15,000 for the Chairman of the Compensation Committee |
Fees Earned or |
All Other |
|||||||||||||||
Paid in Cash |
Stock
Awards(2) |
Compensation |
Total |
|||||||||||||
Name(1)
|
($) | ($) | ($) | ($) | ||||||||||||
Glen A. Barton
|
$ | 102,000 | $ | 120,000 | 0 | $ | 222,000 | |||||||||
Vincent A. Calarco
|
$ | 338,000 | $ | 120,000 | 0 | $ | 458,000 | |||||||||
Joseph A. Carrabba
|
$ | 98,000 | $ | 120,000 | 0 | $ | 218,000 | |||||||||
Noreen Doyle
|
$ | 108,000 | $ | 120,000 | 0 | $ | 228,000 | |||||||||
Veronica M. Hagen
|
$ | 102,000 | $ | 120,000 | 0 | $ | 222,000 | |||||||||
Michael S. Hamson
|
$ | 93,000 | $ | 120,000 | 0 | $ | 213,000 | |||||||||
Robert J.
Miller(3)
|
$ | 29,200 | 0 | $ | 253,488 | $ | 282,688 | |||||||||
John B. Prescott
|
$ | 100,000 | $ | 120,000 | 0 | $ | 220,000 | |||||||||
Donald C. Roth
|
$ | 117,000 | $ | 120,000 | 0 | $ | 237,000 | |||||||||
James V.
Taranik(4)
|
$ | 56,087 | $ | 120,000 | $ | 709,111 | $ | 885,198 | ||||||||
Simon R. Thompson
|
$ | 108,000 | $ | 120,000 | 0 | $ | 228,000 |
(1) | Mr. OBriens compensation is shown in the Summary Compensation Table. | |
(2) | For 2010, all non-employee directors elected to receive $120,000 in the form of director stock units, except Mr. Prescott who elected to receive his award in the form of the Companys common stock. Amounts shown represent dollar amounts recognized for 2010 for financial statement reporting purposes under Statement of Financial Accounting Standard No. 123R. The number of shares of common stock was calculated based on the fair value of the Companys common stock on the third business day following re-election at the Companys Annual Meeting by taking the average of the high and low sales prices for a share of common stock on the New York Stock Exchange for such date, as reported by Bloomberg Professional, the independent commercial reporting service selected by the Compensation Committee of the Board of Directors. There are no other assumptions made in the valuation of the stock awards. | |
(3) | Gov. Miller retired from the Board of Directors in April 2010. Upon retirement, 1,303 director stock units awarded in 2005 in connection with Newmonts director stock award program, vested and one share of Newmont common stock for each director stock award was issued to Gov. Miller. The value of such stock award was determined by taking the closing price of a share of Newmont common stock on Gov. Millers date of retirement. The amount shown as All Other Compensation represents (a) $69,189 for common stock issued on retirement, (b) $34,305 in cash retirement payments (see description under Retirement below), (c) accrued dividends of $2,475, and (d) $147,519 for services as Chairman of the Nevada Advisory Panel as described on page 18. | |
(4) | Dr. Taranik retired from the Board of Directors in July 2010. Upon retirement, 12,214 director stock units awarded to Dr. Taranik from 2005 to 2010 in connection with Newmonts director stock award program, vested and one share of Newmont common stock for each director stock award was issued to Dr. Taranik. The value of such stock award was determined by taking the closing price of a share of Newmont common stock on Dr. Taraniks date of retirement. The amount shown as All Other Compensation represents (a) $676,655 for common stock issued on retirement from the Board, (b) $21,236 in cash retirement payments, and (b) accrued dividends of $11,220. It is currently contemplated that in 2011 Dr. Taranik will receive approximately $80,000 for consulting services, such amount is not included above. |
14
Stock Awards | ||||||||
Aggregate |
Market Value |
|||||||
Director |
of Outstanding |
|||||||
Stock Units |
Director Stock |
|||||||
Outstanding |
Units |
|||||||
Name
|
(#) | ($) | ||||||
Glen A. Barton
|
9,213 | $ | 565,955 | |||||
Vincent A. Calarco
|
12,214 | $ | 750,306 | |||||
Joseph A. Carrabba
|
9,720 | $ | 597,100 | |||||
Noreen Doyle
|
12,035 | $ | 739,310 | |||||
Veronica M. Hagen
|
12,035 | $ | 739,310 | |||||
Michael S. Hamson
|
12,214 | $ | 750,306 | |||||
John B. Prescott
|
10,059 | $ | 617,924 | |||||
Donald C. Roth
|
12,214 | $ | 750,306 | |||||
Simon R. Thompson
|
10,150 | $ | 623,515 |
15
Audit |
Meetings |
|||||
Committee Members
|
Functions of the Committee
|
in 2010 | ||||
Noreen Doyle, Chair
|
| please refer to Audit Committee Report. | 4 | |||
Vincent A. Calarco Michael S. Hamson |
Compensation |
Meetings |
|||||
Committee Members
|
Functions of the Committee
|
in 2010 | ||||
Donald C. Roth, Chairman Glen A. Barton |
| determines the components and compensation of the Companys key employees, including its executive officers. | 6 | |||
Veronica M. Hagen
|
| reviews plans for management development and senior executive succession. | ||||
| administers (determines) awards of stock based compensation, including stock options, restricted stock and restricted stock units, which are subject to ratification by the full Board of Directors. | |||||
| please refer to Report of the Compensation Committee on Executive Compensation and the Compensation, Discussion and Analysis beginning on pages 19 and 20, respectively. |
Corporate Governance |
||||||
and Nominating |
Meetings |
|||||
Committee
Members(1)
|
Functions of the Committee
|
in 2010 | ||||
Vincent A. Calarco, Chairman
|
| proposes slates of directors to be nominated for election or re-election. | 5 | |||
Glen A. Barton
|
| proposes slates of officers to be elected. | ||||
Donald C. Roth
|
| conducts annual Board and committee evaluations. | ||||
| conducts evaluations of the performance of the chief executive officer. | |||||
| responsible for recommending amount of director compensation. | |||||
| advises Board of corporate governance issues. |
Operations and Safety |
Meetings |
|||||
Committee
Members(1)
|
Functions of the Committee
|
in 2010 | ||||
John B. Prescott, Chairman
|
| assists the Board in its oversight of operations and safety issues. | 5 | |||
Joseph A. Carrabba Veronica M. Hagen Simon R. Thompson |
| administers the Companys policies, processes, standards and procedures designed to accomplish the Companys goals and objectives relating to these issues. |
Environmental and |
||||||
Social Responsibility |
Meetings |
|||||
Committee
Members(1)
|
Functions of the Committee
|
in 2010 | ||||
Simon Thompson, Chairman Joseph A. Carrabba |
| assists the Board in its oversight of sustainable development, environmental affairs, community relations and communications issues. | 4 | |||
Noreen Doyle(2) | | administers the Companys policies, processes, standards and procedures designated to accomplish the Companys goals and objectives relating to these issues. |
(1) | Following Gov. Millers retirement, the Board reduced the size of the Corporate Governance and Nominating Committee to three members and the Environmental and Social Responsibility Committee to three members. Following Dr. Taraniks retirement, the Board also reduced the size of the Operations and Safety Committee to four members. | |
(2) | Noreen Doyle was appointed a member of the Environmental and Social Responsibility Committee following Dr. Taraniks retirement. |
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| Richard T. OBrien, President and Chief Executive Officer; | |
| Russell Ball, Executive Vice President and Chief Financial Officer; | |
| Brian A. Hill, Executive Vice President, Operations; | |
| Randy Engel, Executive Vice President, Strategic Development; and | |
| Guy Lansdown, Executive Vice President, Discovery and Development. |
| Executive Summary: Provides the highlights of the Companys business performance, executive compensation structure and the relationship between the two, and the key Compensation Committee actions in 2010; | |
| Philosophy and Objectives: An overview of the compensation philosophy and objectives of the executive compensation program at Newmont; | |
| Components of Total Compensation: Provides details of the components within executive pay, how they are structured and why they are used; | |
| 2010 Compensation: Provides details regarding current pay levels and incentive programs; and | |
| Other Policies and Considerations: Provides information on other programs, governance, risk and related items. |
| Consolidated gold production of approximately 6.5 million ounces (5.4 million ounces attributable to Newmont) at costs applicable to sales of $485 per ounce; | |
| Consolidated copper production of approximately 600 million pounds (327 million pounds attributable to Newmont) at costs applicable to sales of $0.80 per pound; | |
| Record Revenues of $9.54 billion, an increase of 24% over 2009; | |
| Gold operating margin (average realized price per ounce less consolidated costs applicable to sales per ounce) of $737 per ounce, an increase of 30% over 2009 compared to an increase of 25% in the average realized gold price for the same period; | |
| Record net income attributable to Newmont stockholders of $4.63 per share; | |
| Record cash flow from continuing operations of $3.2 billion, an increase of 9% over 2009; |
20
| Net increase of 1.7 million ounces of gold reserves to 93.5 million ounces at December 31, 2010; and | |
| Total Shareholder Return (TSR) of 26%. |
| Continuing to improve our safety performance; | |
| Continuing evolution to a process-driven culture; | |
| Maintaining our industry-leading environmental, social and community relations commitments; | |
| Remaining a leading member of the Dow Jones Sustainability World Index; and | |
| Investing in people. |
| Annual and long-term performance; | |
| Internal and external performance comparisons; | |
| Absolute and relative performance measures; and | |
| Formulaic and discretionary programs. |
21
Corporate Metric |
Newmont Performance |
|||||||||||
Incentive Plan Measures | Supported | (against target) | Resulting Officer Compensation | Linkage to Officer Compensation | ||||||||
Gold and Copper Production
|
Revenue | Below target | Below target | |||||||||
Costs Applicable to Sales
|
Operating Income | At target | At target | |||||||||
Capital Expenditures
|
Efficient Use of Assets/Balance Sheet Strength | Above target | Above target |
Short-term Incentives; Financial Performance Long-term Incentives |
||||||||
Reserves
|
Assets; Future Revenue | Above target | Above target | |||||||||
Non-Reserve Mineralization
|
Assets; Future Revenue | Above target | Above target | |||||||||
Share Price Growth
|
Share Price Performance | Above median | Above target | |||||||||
Total Shareholder Return vs. Peers
|
Share Price Performance vs. Peers | Above target | Above target |
Performance-Leveraged Long-term Incentives |
||||||||
22
(1)
|
2010 Pay includes an estimated stock option award for 2010 performance as it was not determined as of the date of the filing of this Proxy Statement. |
| Introduced a new long-term incentive plan, based on share price performance to further align executive compensation, stockholder returns and company performance, is based on: |
| Newmonts change in share price over the performance period; and | |
| Newmonts TSR performance relative to its peer group TSR; |
| Added copper to the incentive plan measures for both production and costs given the Companys significant production of copper; | |
| Increased the stock ownership requirements for the Chief Executive Officer from four-times to five-times base salary; | |
| Revised the executive pay philosophy to reflect a reasonable range for targeting compensation based on a variety of internal and external factors; | |
| Revised the Compensation Committee charter to formally add items regarding annual review of stockholder relations, peer group review, management development and succession planning, and annual review of severance policies; and | |
| Established the Compensation Committee Operating System to support the governance activities of the Compensation Committee. |
| Stock ownership requirements for Officers to own significant holdings of Newmont stock; |
23
| A clawback policy to recover excess compensation from incentive payouts and stock gains if the financial results were misstated, whether intentionally or by administrative error; | |
| Stock trading policy prohibiting executives from buying Newmont stock on margin, or hedging Newmont stock holdings; | |
| Change-of-control plans that provide cash payments only upon termination following a change-of-control (double-trigger); | |
| No employment contracts for Officers; | |
| Prohibition against the repricing of stock options without stockholder approval; and | |
| Use of an independent compensation consultant, Frederic W. Cook & Co., Inc. (Cook & Co.), to advise regarding executive and director compensation (the consultant does not perform any other services to the Company). |
| The Company adjusted base salaries following a competitive market review completed by the Compensation Committees independent consultant, Cook & Co. The base salaries of the Officers were below the targeted competitive market position. Given this, and based on the performance of the Officers and overall Company performance, the Compensation Committee approved salary increases which place the Officers within their competitive range; | |
| For the Corporate Performance Bonus (based on the measures stated above), the aggregate performance for 2010 was 124.3% of target; | |
| For the Strategic Objectives Bonus (based on individual qualitative and quantitative goals), the awards ranged from 98%-136% of the mid-point; | |
| For the Financial Performance Stock Bonus Plan (based on the weighted average three-year prior performance of the financial and operational measures noted above), the aggregate three-year performance was 126.7% of target; | |
| For the Performance-Leveraged Stock Units (based on stock price growth and relative total shareholder return), Newmonts stock price increased 25.3% in 2010, resulting in a TSR performance that placed Newmont at the 74.7th percentile of the peer companies, which combined, funded the program at 174.7%; and | |
| In addition, the Company awarded stock options to the Officers with compensation from the stock options fully tied to any growth in share price over the vesting period. |
| Maintaining a clear link between the achievement of business goals and compensation payout. Our Compensation Committee believes that (1) Officers should be measured and paid on performance that leads to long-term success and relative stock price improvement, and (2) Officer compensation programs can be an effective means of driving the behavior needed to accomplish our objectives, but only if each executive clearly understands how achievement of predetermined business goals influences his or her compensation. | |
| Selecting the right performance measures. Equally important is the selection of those performance measures which need to be measurable and linked to both increased stockholder value and Newmonts short- and long-term success. | |
| Sharing information and encouraging feedback. Focused and clear program design supports transparency for our stockholders. It is important for stockholders to understand the basis for our Officers compensation, as this provides stockholders insight into our goals, direction and the manner in which |
24
resources are being used to increase stockholder value. We welcome stockholder input and have regularly responded to feedback from stockholders in this regard. |
| Motivate executives to achieve business goals that drive value for our stockholders; | |
| Provide competitive compensation opportunities to attract and retain highly qualified executives; | |
| Emphasize long-term performance, which includes our high safety and social responsibility standards; | |
| Blend the mix of cash and equity compensation and financial and non-financial performance; | |
| Provide incentives to improve performance without taking excessive risks; and | |
| Encourage an ownership mentality and stewardship of long-term stockholder interests. |
| Assess the competitiveness of the Companys executive compensation levels against peer groups; | |
| Consider the desired target benchmark for total executive compensation levels; and | |
| Make necessary refinements to the compensation components to further align executive compensation with performance goals and ensure good governance practices. |
25
26
Time Horizon | Component | Purpose | Key Features | ||||||
Current
|
Base Salary | Compensation for the level of responsibility, experience, skills, and sustained individual performance |
Fixed compensation is not subject to financial performance risk;
Targeted to the 62.5 percentile of the peer group to ensure the ability to attract strong leaders in an increasingly competitive executive talent market; Used to determine pay-based benefits; and Individual compensation can vary above or below the market reference point based on such factors as performance, skills, experience and scope of the role relative to internal and external peers. |
||||||
Short-Term
(annual) |
Corporate Performance Bonus | Supports annual operating and financial performance, based on defined performance metrics |
Annual cash award which ranges from 0-200% of target based on:
Production;
Cost of sales;
Capital expenditures;
Reserve additions; and
Non-reserve mineralization additions.
|
||||||
Strategic Objectives Bonus | Rewards for the achievement of group and individual strategic objectives designed to support current initiatives and long-term sustainability and performance of the Company | Annual cash award based on stated measures and objectives approved in advance by the Compensation Committee. | |||||||
Long-Term
(3-10 years) |
Performance Leveraged Stock Units | Incentive to outperform peer group share price performance to make Newmont the preferred gold stock; aligns pay with stockholder interests and long-term Company/stock price performance | Awards are based on absolute stock price growth and relative stock price performance against the peer group, over a three-year period. | ||||||
Financial Performance Stock Bonus | Supports consistent long-term operational and financial performance measures that drive the success of the Company; stability in production and key financial and operational targets | Three-year rolling weighted average of the Corporate Performance Bonus metrics (2010: 50%; 2009: 30%; 2008: 20%). | |||||||
Stock Options | Reward for growth in the Companys share price over the long-term | Grant of stock options that only deliver value in the event of increased share price following three-year vesting period; Grant is adjusted based on individual performance. Stock options have a 10 year life following grant. | |||||||
Grant amount is based on individual performance. | |||||||||
| Market information; |
27
| Individual performance; | |
| Experience, skills and scope of responsibilities; | |
| Company performance; | |
| Succession planning; | |
| Value of the compensation relative to the corresponding objective; and | |
| Other key measures which assist in providing a comprehensive understanding of pay, such as pay mix, internal equity, Chief Executive Officer compensation versus Total Shareholder Return, and performance sensitivity analysis. |
Agnico Eagle Mines Ltd
|
Goldcorp Inc | Consol Energy Inc | ||
Anglogold Ashanti Ltd
|
Kinross Gold Corp | EOG Resources Inc | ||
Barrick Gold Corp
|
Teck Resources Ltd | Peabody Energy Corp | ||
Freeport-McMoran Copper and Gold Inc
|
Apache Corp | Talisman Energy Inc | ||
Gold Fields Ltd
|
Chesapeake Energy Corp | Vulcan Materials Co |
(1) | Data based on the most recent disclosed 2010 performance. |
28
29
Analysis | Purpose | ||
Pay Mix
|
To ensure pay at-risk is consistent with philosophy and comparator group practices; a significant majority of pay should be at-risk. | ||
Internal Equity | To understand whether internal pay differences are reasonable between executive levels and consistent with market practice. The Compensation Committee also considers scope and accountability of the role in determining reasonable differences for internal compensation rates. | ||
Total Compensation | To understand the purpose and amount of each pay component as well as the sum of all compensation elements in order to gauge the reasonableness and the total potential expense. | ||
Chief Executive Officer and other Officer compensation versus Total Shareholder Return (Pay-for-Performance Charts) | To ensure that pay is aligned with performance and set appropriately given industry performance and pay rates. | ||
Performance Sensitivity Analysis | To understand potential payments assuming various company performance outcomes; understand how potential performance extremes are reflected in pay; a component of our compensation risk assessment. | ||
Name
|
2009 Base Salary
|
2010 Base Salary
|
Change
|
|||||||||
Richard OBrien
|
$ | 1,025,000 | $ | 1,060,000 | 3 | % | ||||||
Russell Ball
|
$ | 544,667 | $ | 565,000 | 4 | % | ||||||
Randy Engel
|
$ | 486,917 | $ | 545,000 | 12 | % | ||||||
Brian Hill
|
$ | 625,660 | $ | 605,000 | −3 | % | ||||||
Guy Lansdown
|
$ | 574,000 | $ | 605,000 | 5 | % |
30
| Comprised of two components: |
| Corporate Performance Bonus (50% of the total short-term incentive opportunity); and | |
| Strategic Objectives Bonus (50% of the total short-term incentive opportunity). |
Target Corporate Performance |
Mid-Point of Strategic |
|||||||||||
Bonus as a Percentage of Base |
Objectives Bonus Range as a |
Total as a Percentage of Base |
||||||||||
Name
|
Salary (A) | Percentage of Salary (B)(1) | Salary (A+B) | |||||||||
Richard OBrien
|
75.0 | % | 75.0 | % | 150 | % | ||||||
Russell Ball
|
42.5 | % | 42.5 | % | 85 | % | ||||||
Randy Engel
|
42.5 | % | 42.5 | % | 85 | % | ||||||
Brian Hill
|
42.5 | % | 42.5 | % | 85 | % | ||||||
Guy Lansdown
|
42.5 | % | 42.5 | % | 85 | % |
(1) | The Compensation Committee set the Strategic Objectives Bonuses at a maximum opportunity for each Officer, rather than a target, with the intent that the Compensation Committee will exercise its business judgment in determining the amount of payout. |
| Annual Company financial and operational measures; | |
| Payment based on overall Corporate performance; | |
| Payment ranges from 0-200% of target Corporate performance; | |
| Five of seven measures performed near target or above target levels; | |
| Low or no payment for the two measures that were below target levels; and | |
| Weighted performance resulted in an award of 124.3% of target payment. |
31
Corporate Performance |
||||||
Bonus Measure(1) |
What It Is |
Why It Is Used |
||||
Equity Production
|
Measures the ounces of gold and pounds of copper produced each year |
Production of gold and copper is the
basis of Newmonts business. Production is the primary
factor within the Companys control.
The metric also provides incentive to bring various projects into production in a timely manner. |
||||
Costs Applicable to Sales
|
Measures the costs of producing an ounce of gold and pound of copper |
The cost metric balances the production
metric by encouraging efficient, safe production.
The cost metric is designed to promote implementation of Company-wide cost control measures. |
||||
Capital Expenditures
|
Measures actual capital expense against the planned capital investments for the year, as approved by the Board. The target includes assumptions for variables such as commodities prices, currency fluctuation, and deferral or acceleration of projects. At the end of the year, the actual impact of these variables is determined, and the target is adjusted up or down, accordingly. |
As a capital intensive business, the
capital expenditure metric focuses on efficient utilization of
capital in developing and completing projects. Efficient use of
capital impacts the years to payback and the overall long-term
return of the project.
|
||||
Reserves and Non-Reserve
Mineralization |
Measures the proven and probable mineral reserves (Reserves) as well as the mineralization not yet proven to the level required for public disclosure (Non-Reserve Mineralization) |
The Reserves and Non-Reserve
Mineralization metrics promote the discovery of new deposits and
the successful completion of the work needed to report these as
reserves and non-reserve mineralization. In a business that
depletes its resources every year through production, the
ability to maintain reserve levels is a substantial challenge,
but necessary for sustainability.
|
||||
(1) | For Equity Production and Costs Applicable to Sales, both gold and copper are measured separately. In addition, Reserves and Non-Reserve Mineralization are also measured separately, resulting in a total of 7 measures. |
32
Bonus Structure | Bonus Payment Range | 2010 Results | ||||||||||||||||||||||||||||||||||||
Performance |
Minimum |
Target |
Maximum |
2010 |
Performance |
Payout |
||||||||||||||||||||||||||||||||
Metric | Measure | Weighting | (50%) | (100%) | (200%) | Performance | Percentage | Percentage (1) | ||||||||||||||||||||||||||||||
Equity Production |
Gold (oz.000) |
20 | % | 5,217 | 5,491 | 5,684 | 5,391 | 81.7 | % | 16.3 | % | |||||||||||||||||||||||||||
Copper
(million lb.) |
5 | % | 366 | 385 | 399 | 348 | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||||
Cost Applicable to Sales |
Gold ($/oz.) |
20 | % | $ | 509 | $ | 467 | $ | 439 | $ | 485 | 79.0 | % | 15.8 | % | |||||||||||||||||||||||
Copper ($/lb.) |
5 | % | $ | 0.97 | $ | 0.89 | $ | 0.84 | $ | 0.80 | 200.0 | % | 10.0 | % | ||||||||||||||||||||||||
Capital Expenditures |
($million) | 25 | % | $ | 1,518 | $ | 1,445 | $ | 1,272 | $ | 1,375 | 140.6 | % | 35.2 | % | |||||||||||||||||||||||
Reserves
|
(Moz.) | 16.67 | % | 4.00 | 6.75 | 9.00 | 8.59 | 181.7 | % | 30.3 | % | |||||||||||||||||||||||||||
Non-Reserve Mineralization |
(Moz.) | 8.33 | % | 3.00 | 4.25 | 6.36 | 7.96 | 200.0 | % | 16.7 | % | |||||||||||||||||||||||||||
(1)
Calculated by multiplying Weighting x
Performance Percentage
|
||||||||||||||||||||||||||||||||||||||
Total Payout =
|
124.3 | % | ||||||||||||||||||||||||||||||||||||
| Individualized strategic objectives established for each Officer by the Compensation Committee; | |
| Objectives support long-term sustainability and performance; | |
| Incorporates the leadership areas of people and organizational development, safety, operational execution and efficiency, corporate sustainability and financial strength; | |
| Objectives are pre-approved by the Compensation Committee; | |
| May be single or multi-year; and | |
| Payments based on discretion and reasoned business judgment of the Compensation Committee as a percent of maximum. |
33
| Holistically consider performance against a broad set of strategic, operational, environmental, social and financial business goals; | |
| Incentivize and reward efforts that are difficult to quantify, but provide long-term stockholder value; | |
| Reward for timely adjustments to business dynamics not anticipated prior to the performance period; | |
| Consider the multitude of complex factors that can affect performance inside and outside of managements control for the purpose of assessing performance and providing appropriate compensation (e.g., economic cycles, market volatility, and fluctuations in commodities prices); | |
| Take an extended long-term perspective ensuring directional alignment of current performance with the vision of the organizations future; | |
| Control the potential risk of sub-optimized results due to a focus on set goals which may no longer be a key priority; and | |
| Differentiate awards based on a broad perspective of an individuals contribution to the Company. |
| People, Our Most Valued Resource Retain, Develop and Attract Employees; | |
| Operational and Project Planning and Execution Deliver On Our Plans in a Safe and Environmentally and Socially Responsible Manner; | |
| Sustainability through Financial Strength and Flexibility and through Growth Think and Invest Strategically; and | |
| Leverage, Scope and Scale Create Operating and Business Efficiencies. |
34
| Richard OBrien: led efforts to promote cultural changes with the objective of positioning the Company to deliver high performance over the long-term, such as through enhancing the Companys safety mindset and improving planning capabilities; enhanced governmental and external relationship programs; positioned the Companys environmental and social responsibility programs as competitive strengths through sound environmental performance and enhanced programs; fully established the foundation of the ongoing Community Relationships Review Program; increased the Companys Human Resources capabilities, including improved succession planning, management training and employee engagement; delivered on the Companys business plans in a safe, environmentally and socially responsible manner; refined the Companys overall strategic plans, including defining the appropriate mix between internal projects/development opportunities and external merger/acquisition opportunities; managed the Companys divestiture obligations and external relationships relating to the Companys interest in the Batu Hijau mine in Indonesia; improved the Companys financial strength and flexibility; and implemented programs to achieve operational efficiency. | |
| Russell Ball: ensured access to capital and financial flexibility; eliminated waste and maximized value of assets through Business Excellence programs, such as Continuous Improvement and creation of a Management Operating System; successfully strengthened Newmonts balance sheet; and successfully completed the integrations for the supply chain, information technology, accounting and tax functions. | |
| Randy Engel: developed and led a planning initiative, making changes to allow increased understanding of the direction of the business, promoting focused analysis of results and options around alternative plan decisions; identified and analyzed several growth opportunities; enhanced Newmonts Investor Relations function; and improved bench strength in the groups he oversees. | |
| Brian Hill: delivered on targeted operating metrics in-line with expectations despite geotechnical events and ore grade reconciliation issues; deployed the Business Excellence programs resulting in cost reductions and operational improvements; established and led the Companys Safety Task Force; and improved leadership bench strength. | |
| Guy Lansdown: built and led exploration programs that delivered above targets; successfully advanced key development and exploration projects, including the Conga project in Peru and the Akyem project in Ghana; reinstituted innovation and research and development to advance Newmonts technical practices. |
35
2010 Maximum |
2010 Strategic |
|||||||
Strategic |
Objectives Bonus |
|||||||
Objectives Bonus |
Awarded |
|||||||
Name
|
($) | ($) | ||||||
Richard OBrien
|
$ | 1,590,000 | $ | 779,100 | ||||
Russell Ball
|
$ | 480,250 | $ | 300,000 | ||||
Randy Engel
|
$ | 463,250 | $ | 300,000 | ||||
Brian Hill
|
$ | 514,250 | $ | 325,000 | ||||
Guy Lansdown
|
$ | 514,250 | $ | 300,000 |
| Includes three performance-based elements: |
| Financial Performance Stock Bonus; | |
| Stock Options; and | |
| Performance Leveraged Stock Units. |
Name
|
% of Base Salary | |||
Richard OBrien
|
465 | % | ||
Russell Ball
|
270 | % | ||
Randy Engel
|
270 | % | ||
Brian Hill
|
270 | % | ||
Guy Lansdown
|
270 | % |
36
| Provides long-term focus on key operational and financial measures that drive Company success; | |
| Supports linearity in production, supporting stable and predictable long-term results; | |
| Performance basis is the weighted average of the Corporate Performance Bonus over three years; | |
| Performance is weighted 20% for 2008, 30% for 2009, 50% for 2010; | |
| Shares are set at the beginning of the performance period, so pay is at-risk to changes in share price over the performance period; and | |
| Weighted payout for 2010 was 126.7% of the target award. |
| The target grant is set in number of shares, versus dollars, so that the Officer is at-risk to changes in share price over the performance period. |
| Target shares are set by dividing the Officers eligible wages by the average Newmont share price for the month prior to the performance period. |
| The number of shares granted at the end of the performance period is based upon the three year weighted average of the Corporate Performance Bonus metrics and can range from 0% to 200% of target. |
Corporate |
Weighted |
|||||||||||
Performance Bonus |
Performance Factor |
|||||||||||
Year
|
Weighting (A) | Result (B) | (AxB) | |||||||||
2010
|
50 | % | 124.3 | % | 62.2 | % | ||||||
2009
|
30 | % | 129.6 | % | 38.9 | % | ||||||
2008
|
20 | % | 128.1 | % | 25.6 | % | ||||||
Total
Payout(1)
|
126.7 | % |
(1) | Represents the sum of the Weighted Performance Factor for each year. |
37
2010 Target as a |
Stock Price Basis |
Number of Shares |
||||||||||||||||||||||
Eligible Earnings |
Percentage of |
used for Setting |
Target Shares (D) |
Granted March 1, |
||||||||||||||||||||
Name | (A) | Base Salary (B) | Target Shares (C) | = (AxB)/C | Payout Factor (E) | 2011 (DxE) | ||||||||||||||||||
Richard T. OBrien
|
$ | 1,060,000 | 165 | % | $ | 50.18 | 32,742 | 126.7 | % | 41,467 | ||||||||||||||
Russell Ball
|
$ | 565,000 | 90 | % | $ | 50.18 | 10,134 | 126.7 | % | 12,834 | ||||||||||||||
Randy Engel
|
$ | 545,000 | 90 | % | $ | 50.18 | 9,775 | 126.7 | % | 12,379 | ||||||||||||||
Brian Hill
|
$ | 605,000 | 90 | % | $ | 50.18 | 10,851 | 126.7 | % | 13,742 | ||||||||||||||
Guy Lansdown
|
$ | 605,000 | 90 | % | $ | 50.18 | 10,851 | 126.7 | % | 13,742 |
| Directly align executive Officers and stockholder interests; | |
| Performance-based, at-risk incentive as the executive does not receive any benefit unless the stock price rises after the date of grant; | |
| Further performance-based as the award size is also subject to the Officers performance; | |
| Exercise price is equal to the fair market value on the date of grant; | |
| Awards are only granted at predetermined Compensation Committee meeting dates; and | |
| Awards vest over three years, sale of shares after exercise is subject to each executive meeting Newmonts stock ownership requirements. |
38
| Richard OBrien: improved company work environment to allow retention and attraction of high performing employees; delivered on Company business plans in a safe en environmentally and socially responsible manner; successfully implemented strategic business plans related to the Boddington mine in Australia; refined the Companys overall strategic plans; implemented plans to achieve operational efficiency and improved the Companys financial strength and flexibility through successful capital markets transactions. | |
| Russell Ball: successfully completed the capital effectiveness program; exceeded goal to provide additional liquidity for improved financial strength and flexibility through a two billion dollar debt offering and a $1.3 billion equity issuance; successfully completed integrations for supply chain, information technology, accounting and tax functions; and led an operating review for improved efficiencies. | |
| Randy Engel: led the successful closing of a number of transactions, including the acquisition of the outstanding ownership interest in the Boddington project; identified other growth opportunities; implemented improved process for earnings communications and other investor engagements; and led the re-engineering project for the planning function. | |
| Brian Hill: deployed the business excellence program resulting in $140 million of cost reductions and operational improvements; established Management Operating System designed to drive organizational efficiency; launched Newmonts safety journey; improved leadership bench strength; and delivered solid operating results. | |
| Guy Lansdown: successfully executed key development and exploration projects including the Boddington project in Australia and the Conga project in Peru; exceeded the number of planned due diligence reviews; completed projects that are expected to result in overachieving on the non-reserve mineralization and reserve growth targets; reinstituted innovation and research and development to advance Newmonts operating practices. |
Black-Scholes per |
||||||||||||||||||||
2010 Target as a |
Modified Target |
Share used to |
||||||||||||||||||
Percentage of |
Target Dollar Value |
Based on |
Determine Options |
Stock Options |
||||||||||||||||
Name | Eligible Wages(1) | of Option Grant | Performance (A) | Granted (B) | Granted (A/B) | |||||||||||||||
Richard OBrien
|
135 | % | $ | 1,383,750 | $ | 1,600,000 | $ | 20.01 | 79,960 | |||||||||||
Russell Ball
|
110 | % | $ | 599,133 | $ | 700,000 | $ | 20.01 | 34,983 | |||||||||||
Randy Engel
|
110 | % | $ | 535,608 | $ | 700,000 | $ | 20.01 | 34,983 | |||||||||||
Brian Hill
|
110 | % | $ | 706,327 | $ | 750,000 | $ | 20.01 | 37,481 | |||||||||||
Guy Lansdown
|
110 | % | $ | 631,400 | $ | 750,000 | $ | 20.01 | 37,481 |
(1) | For awards related to 2009 performance, the 2009 percent weighting was used. For awards granted for 2010 performance, the weighting is 165% for the CEO and 90% for other Officers. |
39
| Long-term pay-for-performance vehicle based on: |
| Newmonts share price performance versus peers; and | |
| Absolute share price growth over the performance period. |
| Contains a baseline to support retention and succession planning in down commodity cycles; | |
| Performance Period is three years; and | |
| 2010 performance resulted in a weighted payout of 174.7% of target. |
40
Agnico Eagle Mines Ltd
|
Gold Fields Ltd | |
Anglogold Ltd
|
Harmony Gold Mining Co Ltd | |
Barrick Gold Corp
|
Kinross Gold Corp | |
Compania De Minas Buenaventura SA
|
Newcrest Mining Ltd | |
Freeport-McMoran Copper and Gold Inc
|
Yamana Gold Inc | |
Goldcorp Inc
|
41
Average |
2010 Target Feather- |
|||||||||||||||||||||||||||
2010 Eligible |
Target |
Closing Price |
in Stock Award (D)* |
2010 Price |
2010 Relative |
Resulting PSU Award = |
||||||||||||||||||||||
Name
|
Earnings (A) | % (B) | for Q4 2009 (C) | = ((A x B)/C)/3 | Appreciation (E) | TSR Ranking (F) | D x (E + (F-50)x2) | |||||||||||||||||||||
Richard T. OBrien
|
$ | 1,060,000 | 155 | % | $ | 48.66 | 11,255 | 125 | % | 74.7 | % | 19,663 | ||||||||||||||||
Russell Ball
|
$ | 565,000 | 90 | % | $ | 48.66 | 3,483 | 125 | % | 74.7 | % | 6,085 | ||||||||||||||||
Randy Engel
|
$ | 545,000 | 90 | % | $ | 48.66 | 3,360 | 125 | % | 74.7 | % | 5,870 | ||||||||||||||||
Brian Hill
|
$ | 605,000 | 90 | % | $ | 48.66 | 3,730 | 125 | % | 74.7 | % | 6,516 | ||||||||||||||||
Guy Lansdown
|
$ | 605,000 | 90 | % | $ | 48.66 | 3,730 | 125 | % | 74.7 | % | 6,516 |
* | The amounts listed represent the one-year feather-in award which equates to one-third of the full value, as described above. |
Corporate Performance Bonus | Strategic Objectives Bonus | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 |
2010 |
Financial Performance Stock(1) | Performance Leveraged Stock Units(3) |
Actual Total |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate |
Percent of |
Strategic |
Financial |
Stock Options(2) |
PSU |
2010 Total |
Direct |
|||||||||||||||||||||||||||||||||||||||||||||||||
2010 Base |
Performance |
Performance |
Target |
Objectives |
Performance |
Performance |
Percent of |
Performance |
Direct |
Compensation |
Newmont |
|||||||||||||||||||||||||||||||||||||||||||||
Name
|
Salary | Result | Bonus | Award | Bonus | Result | Stock | Target Awarded | Stock Options | Result | PSUs | Compensation | versus Target | 2010 TSR | ||||||||||||||||||||||||||||||||||||||||||
Richard T. OBrien
|
$ | 1,060,000 | 124.3 | % | $ | 988,185 | 98.0 | % | $ | 779,100 | 126.7 | % | $ | 2,268,867 | Target | $ | 1,643,000 | 174.7 | % | $ | 1,075,861 | $ | 7,815,013 | 121 | % | |||||||||||||||||||||||||||||||
Russell Ball
|
$ | 565,000 | 124.3 | % | $ | 298,475 | 124.9 | % | $ | 300,000 | 126.7 | % | $ | 702,212 | Target | $ | 508,500 | 174.7 | % | $ | 332,941 | $ | 2,707,128 | 121 | % | |||||||||||||||||||||||||||||||
Randy Engel
|
$ | 545,000 | 124.3 | % | $ | 287,910 | 129.5 | % | $ | 300,000 | 126.7 | % | $ | 677,317 | Target | $ | 490,500 | 174.7 | % | $ | 321,177 | $ | 2,621,904 | 122 | % | 26 | % | |||||||||||||||||||||||||||||
Brian Hill
|
$ | 605,000 | 124.3 | % | $ | 319,606 | 136.1 | % | $ | 325,000 | 126.7 | % | $ | 751,894 | Target | $ | 544,500 | 174.7 | % | $ | 356,523 | $ | 2,902,523 | 121 | % | |||||||||||||||||||||||||||||||
Guy Lansdown
|
$ | 605,000 | 124.3 | % | $ | 319,606 | 116.7 | % | $ | 300,000 | 126.7 | % | $ | 751,894 | Target | $ | 544,500 | 174.7 | % | $ | 356,523 | $ | 2,877,523 | 120 | % |
(1) | Value displayed is based on the estimated value on grant date by multiplying the Companys average opening and closing share price as of February 28, 2011 by the number of shares awarded as described in the CD&A. | |
(2) | Value displayed is target value of stock options; the stock option award for 2010 performance was not determined as of the filing of the Proxy Statement. | |
(3) | Value displayed is based on the estimated value on grant date by multiplying the Companys average opening and closing share price as of February 28, 2011 by the number of shares awarded as described in the CD&A. | |
(4) | Target Direct Compensation is adjusted to recognize the first year PSU award represents one-third of the standard PSU value. |
42
43
| Financial Performance Stock Bonuses: all restrictions applicable to outstanding Financial Performance Stock Bonuses will lapse; | |
| Stock Options: all outstanding options will become fully exercisable and those options will remain exercisable until at least the first anniversary of any termination of the holders employment or service within one year after the change of control, subject to any earlier expiration date of those options; and |
44
| PSUs: PSU performance will be measured using the change of control price of the Company stock. The pro-rata percentage of the actual payout of PSUs correlating to the period of time that elapsed prior to the change of control shall be granted in common stock. For the remainder of the actual PSUs correlating to the performance period that did not elapse prior to the change of control, the Company will issue restricted stock units that will vest at the end of the performance period. In the event that the acquiring company will not issue equity, the acquiring company may issue cash equivalent awards. |
| Financial Performance Stock Bonus: Termination of employment due to death, long-term disability or retirement under the Pension Plan (entitling the executive to immediate pension benefits) or severance (following approval by the Executive Vice President of Human Resources and execution of a release) triggers the immediate vesting of all Financial Performance Stock Bonuses granted to the executive. | |
| Stock Options: In the event of employment termination due to death, severance (after execution of release) or long-term disability, a pro-rata portion of the executives stock options (such pro-rata portion is based on days of service from the date of grant until the date of termination of employment in relation to the full vesting period) will immediately vest and all previously vested and accelerated vested options will be exercisable for a period beyond termination. If an executive retires and is entitled to an immediate pension under the Pension Plan, the executives unvested stock options will vest and all previously vested and accelerated vested options will remain exercisable beyond termination for a certain period. Despite the extension of time to exercise options after termination in the event of death, long-term disability, retirement or severance, no option remains exercisable beyond 10 years from the date of grant. | |
| PSUs: In the event of death or disability during the performance period, payout is pro-rated at target and common stock is issued as soon as practicable. In the event of severance during the first year of the performance period, all PSUs are forfeited. In the event of severance after the first year of the performance period, payout is pro-rated at the lesser of target or actual performance and paid at the end of the performance period. In the event of retirement under the Pension Plan (entitling the executive to immediate pension benefits), the Company will issue a pro-rata award at the end of the performance period based upon actual performance. |
| does not have a program, plan or practice to time stock option grants to its executives in coordination with the release of material nonpublic information; | |
| does not set the date of its stock option grants to newly-hired executives in coordination with the release of material nonpublic information; | |
| does not plan to time, nor has it timed, the release of material nonpublic information for the purpose of affecting the value of executive compensation; and | |
| does not have a program, plan or practice related to setting stock option prices based on the value of the Companys stock on a date other than the stock options actual grant date. |
| the Company will not time release of material nonpublic information for the purpose of affecting the value of executive compensation; |
45
| stock options will be granted only by the Board of Directors or the Compensation Committee designated under the applicable stock plan, and authority to grant options will not be delegated to management; | |
| stock options will be priced at fair market value on the day of the grant (as defined in the Companys stock plan); and, | |
| stock options will generally be granted annually, at least three days after announcement of financial and operations results for the first quarter of the year. In deviating from this policy, the Compensation Committee may consider all relevant facts and circumstances, including the desirability of granting options for new employees or granting stock options at meetings held at other times of the year. |
Multiple of |
||||
Name
|
Base Salary | |||
Richard OBrien
|
5 | |||
Russell Ball
|
2 | |||
Randy Engel
|
2 | |||
Brian Hill
|
2 | |||
Guy Lansdown
|
2 |
46
47
Change in |
||||||||||||||||||||||||||||||||||||
Pension |
||||||||||||||||||||||||||||||||||||
Non-Equity |
Value and |
|||||||||||||||||||||||||||||||||||
Incentive |
Non-Qualified |
|||||||||||||||||||||||||||||||||||
Plan |
Deferred |
All Other |
||||||||||||||||||||||||||||||||||
Stock |
Option |
Compen- |
Compensation |
Compen- |
||||||||||||||||||||||||||||||||
Name and |
Bonus(1) |
Awards(2) |
Awards(3) |
sation(4) |
Earnings(5) |
sation(6) |
Total |
|||||||||||||||||||||||||||||
Principal Position
|
Year | Salary ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||
Richard T. OBrien
|
2010 | $ | 1,065,000 | (7) | $ | 779,100 | $ | 7,103,249 | (8) | $ | 1,600,000 | $ | 988,185 | $ | 905,919 | $ | 64,678 | $ | 12,506,131 | |||||||||||||||||
President and Chief
|
2009 | $ | 1,025,000 | $ | 1,153,125 | $ | 1,529,919 | $ | 1,552,490 | $ | 996,300 | $ | 746,612 | $ | 64,474 | $ | 7,067,920 | |||||||||||||||||||
Executive Officer
|
2008 | $ | 1,000,000 | $ | 1,093,750 | $ | 3,430,179 | $ | 3,897,375 | $ | 800,625 | $ | 307,277 | $ | 88,023 | $ | 10,617,229 | |||||||||||||||||||
Russell Ball
|
2010 | $ | 565,000 | $ | 300,000 | $ | 2,505,291 | (9) | $ | 699,990 | $ | 298,475 | $ | 825,560 | $ | 37,261 | $ | 5,231,577 | ||||||||||||||||||
Executive Vice
|
2009 | $ | 544,667 | $ | 350,000 | $ | 441,359 | $ | 611,014 | $ | 300,002 | $ | 679,431 | $ | 29,996 | $ | 2,956,469 | |||||||||||||||||||
President and Chief
|
2008 | $ | 493,750 | $ | 225,796 | $ | 176,240 | $ | 324,750 | $ | 177,997 | $ | 245,444 | $ | 51,454 | $ | 1,695,431 | |||||||||||||||||||
Financial Officer
|
||||||||||||||||||||||||||||||||||||
Randy Engel
|
2010 | $ | 545,000 | $ | 300,000 | $ | 2,340,681 | (10) | $ | 699,990 | $ | 287,910 | $ | 795,086 | $ | 35,248 | $ | 5,003,915 | ||||||||||||||||||
Executive Vice President,
|
2009 | $ | 486,917 | $ | 310,000 | $ | 383,657 | $ | 539,206 | $ | 268,194 | $ | 547,471 | $ | 28,919 | $ | 2,564,364 | |||||||||||||||||||
Strategic Development
|
2008 | $ | 426,250 | $ | 209,922 | $ | 138,411 | $ | 324,750 | $ | 153,663 | $ | 245,863 | $ | 48,773 | $ | 1,547,632 | |||||||||||||||||||
Brian Hill
|
2010 | $ | 605,000 | $ | 325,000 | $ | 2,766,402 | (11) | $ | 749,995 | $ | 319,606 | $ | 103,963 | $ | 140,979 | $ | 5,010,945 | ||||||||||||||||||
Executive Vice President,
|
2009 | $ | 625,660 | $ | 400,000 | $ | 407,627 | $ | 557,214 | $ | 344,580 | | $ | 12,781 | $ | 2,347,862 | ||||||||||||||||||||
Operations
|
||||||||||||||||||||||||||||||||||||
Guy Lansdown
|
2010 | $ | 605,000 | $ | 300,000 | $ | 2,664,342 | (12) | $ | 749,995 | $ | 319,606 | $ | 876,471 | $ | 39,127 | $ | 5,554,541 | ||||||||||||||||||
Executive Vice President,
|
2009 | $ | 574,000 | $ | 365,000 | $ | 452,286 | $ | 635,654 | $ | 316,159 | $ | 665,057 | $ | 32,935 | $ | 3,041,091 | |||||||||||||||||||
Development
|
2008 | $ | 502,500 | $ | 247,474 | $ | 165,855 | $ | 324,750 | $ | 181,151 | $ | 231,695 | $ | 72,172 | $ | 1,725,597 |
(1) | Amounts shown represent the Strategic Objective Bonuses paid in cash. | |
(2) | Amounts shown represent the aggregate grant date fair value computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718. For the financial performance stock bonus, the grant date fair value is the number of shares granted multiplied by the fair market value on the date of grant. The Companys 2005 Stock Incentive Plan defines fair market value of the stock as the average of the high and low sales price on the date of the grant, which is the grant date fair value for the financial performance stock bonus. The fair market values are $49.45 (February 2008), $43.19 (February 2009) and $49.64 (March 2010). Mr. OBrien received an additional stock grant in October 2008 with a fair market value of $26.91 per share. See 2010 Outstanding Equity Awards at Fiscal Year-End Table for the number of shares granted in each award. In 2010, the Company added the Performance Leveraged Stock Unit bonus program, including a 3-year feather-in of the grants, as described in the CD&A. As a result, the stock awards for 2010, appear large due to the one-time feathering-in process for the Performance Leveraged Stock Unit bonus program. Pursuant to FASB 718, the aggregate grant date fair value of Performance Leveraged Stock Units is determined by a Monte Carlo simulation method, which determined a grant date fair value of $64.55 for the 2010 grant, $67.50 for the 2010-2011 grant and $70.25 for the 2010-2012 grant. | |
(3) | Amounts shown represent the aggregate grant date fair value computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, which is the number of options granted multiplied by the Black Scholes value. The Black Scholes values are $12.99 (April 2008), $12.88 (May 2009) and $20.01 (April 2010). Mr. OBrien received an additional option grant in October 2008 with a Black Scholes value of $8.12 per share. See 2010 Outstanding Equity Awards at Fiscal Year-End Table for the number of options granted in each award. | |
(4) | Amounts shown represent Corporate Performance Bonuses paid in cash. | |
(5) | Amounts shown represent the increase in the actuarial present value under the Companys qualified and non-qualified defined benefit pension plans. The change in pension value for the non-qualified pension plan increased significantly in 2010 due to the Pension Benefit Guaranty Corporation (PBGC) rate change, decrease in interest rates (both Pension Benefit Guaranty Corporation (PBGC) rates and FASB rates) as well as increase in pay. The non-qualified pension plan (Pension Equalization Plan PEP) present values are based on both the Financial Accounting Standards Board and PEP interest rates. The PEP interest rate is based upon the PBGC interest rate. At December 31, 2010 the PBGC lump sum interest rate was 2.25%, at December 31, 2009 the PBGC lump sum interest rate was 2.50% and at December 31, 2008 the PBGC lump sum rate is 4.75%. The PBGC rate change increased the present values of the PEP. At December 31, 2010 the FASB rate was 5.75%, at December 31, 2009 the FASB rate was 6.1% and at December 31, 2008 the FASB rate was 6.05%. | |
(6) | Amounts shown are described in the All Other Compensation Table below. | |
(7) | Amount includes $5,000 for salary correction from 2009, when Mr. OBrien was underpaid $5,000 in salary due to administrative error. | |
(8) | Figure includes target performance leveraged stock units of $4,617,725 calculated utilizing the Monte Carlo simulation method and values discussed in footnote 2 to the Summary Compensation Table. The maximum number of performance leveraged stock units are shown in the Grants of Plan Based Awards Table. | |
(9) | Figure includes target performance leveraged stock units of $1,429,145 calculated utilizing the Monte Carlo simulation method and values discussed in footnote 2 to the Summary Compensation Table. The maximum number of performance leveraged stock units are shown in the Grants of Plan Based Awards Table. | |
(10) | Figure includes target performance leveraged stock units of $1,378,608 calculated utilizing the Monte Carlo simulation method and values discussed in footnote 2 to the Summary Compensation Table. The maximum number of performance leveraged stock units are shown in the Grants of Plan Based Awards Table. |
48
(11) | Figure includes target performance leveraged stock units of $1,530,217 calculated utilizing the Monte Carlo simulation method and values discussed in footnote 2 to the Summary Compensation Table. The maximum number of performance leveraged stock units are shown in the Grants of Plan Based Awards Table. | |
(12) | Figure includes target performance leveraged stock units of $1,530,217 calculated utilizing the Monte Carlo simulation method and values discussed in footnote 2 to the Summary Compensation Table. The maximum number of performance leveraged stock units are shown in the Grants of Plan Based Awards Table. |
Change in |
||||||||||||||||||||
Company |
Value of |
|||||||||||||||||||
Contributions |
Post- |
Relocation |
||||||||||||||||||
to Defined |
Retirement |
Reimbursement |
||||||||||||||||||
Contribution |
Medical |
and Tax Gross- |
||||||||||||||||||
Plans |
and Life |
Perquisites(1) |
Ups(2) |
|||||||||||||||||
Name
|
($) | Insurance | ($) | ($) | Total ($) | |||||||||||||||
Richard T. OBrien
|
$ | 12,000 | $ | 41,731 | $ | 10,947 | (3) | | $ | 64,678 | ||||||||||
Russell Ball
|
$ | 12,000 | $ | 25,261 | | | $ | 37,261 | ||||||||||||
Randy Engel
|
$ | 12,000 | $ | 23,248 | | | $ | 35,248 | ||||||||||||
Brian Hill
|
$ | 12,000 | $ | 16,366 | | $ | 112,613 | $ | 140,979 | |||||||||||
Guy Lansdown
|
$ | 12,000 | $ | 27,127 | | | $ | 39,127 |
(1) | The Company provides a limited number of perquisites to its executive officers. See the Compensation Discussion and Analysis section for a description of perquisites. | |
(2) | Amount includes $94,737.44 in paid time off payout for move from Australian employment to U.S. employment, $15,260 in salary adjustments not processed in 2009, $1,640.07 FICA tax gross up on the payments for move to U.S. payroll, $672 in moving costs and $303.04 in tax gross-ups on moving expenses, all in accordance with the Companys standard relocation policies. | |
(3) | Amount shown represents amounts paid for golf club membership ($5,035) and personal use of administrative assistant services ($5,912). |
49
All Other |
All Other |
|||||||||||||||||||||||||||||||||||||||||||||||
Stock |
Option |
Grant Date |
||||||||||||||||||||||||||||||||||||||||||||||
Estimated Possible Payouts |
Awards |
Awards: |
Exercise |
Closing |
Fair Value |
|||||||||||||||||||||||||||||||||||||||||||
Under |
Number of |
Number of |
or Base |
Price |
of |
|||||||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan |
Estimated Future Payouts Under |
Shares of |
Securities |
Price of |
on |
Stock and |
||||||||||||||||||||||||||||||||||||||||||
Awards(1) | Equity Incentive Plan Awards(2) |
Stock or |
Underlying |
Option |
Grant |
Option |
||||||||||||||||||||||||||||||||||||||||||
Grant |
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
Units(3) |
Options(4) |
Awards(5) |
Date |
Awards(6) |
|||||||||||||||||||||||||||||||||||||
Name
|
Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($ /Sh) | ($ /Sh) | ($) | ||||||||||||||||||||||||||||||||||||
Richard T. OBrien
|
$ | 397,500 | $ | 795,000 | $ | 1,590,000 | ||||||||||||||||||||||||||||||||||||||||||
2010 PSU
|
5,627 | 11,254 | 22,508 | |||||||||||||||||||||||||||||||||||||||||||||
2010-2011 PSU
|
11,253 | 22,509 | 45,018 | |||||||||||||||||||||||||||||||||||||||||||||
2010-2012PSU
|
16,882 | 33,764 | 67,528 | |||||||||||||||||||||||||||||||||||||||||||||
FPS
|
3/1/2010 | 50,071 | $ | 2,485,524 | ||||||||||||||||||||||||||||||||||||||||||||
Options
|
4/29/2010 | 79,960 | $ | 55.675 | $ | 55.80 | $ | 1,600,000 | ||||||||||||||||||||||||||||||||||||||||
Russell Ball
|
$ | 120,063 | $ | 240,125 | $480,250 | |||||||||||||||||||||||||||||||||||||||||||
2010 PSU
|
1,742 | 3,483 | 6,966 | |||||||||||||||||||||||||||||||||||||||||||||
2010-2011 PSU
|
3,483 | 6,966 | 13,932 | |||||||||||||||||||||||||||||||||||||||||||||
2010-2012 PSU
|
5,225 | 10,450 | 20,900 | |||||||||||||||||||||||||||||||||||||||||||||
FPS
|
3/1/2010 | 21,679 | $ | 1,076,146 | ||||||||||||||||||||||||||||||||||||||||||||
Options
|
4/29/2010 | 34,982 | $ | 55.675 | $ | 55.80 | $ | 699,990 | ||||||||||||||||||||||||||||||||||||||||
Randy Engel
|
$ | 115,813 | $ | 231,625 | $463,250 | |||||||||||||||||||||||||||||||||||||||||||
2010 PSU
|
1,680 | 3,360 | 6,720 | |||||||||||||||||||||||||||||||||||||||||||||
2010-2011 PSU
|
3,360 | 6,720 | 13,440 | |||||||||||||||||||||||||||||||||||||||||||||
2010-2012 PSU
|
5,040 | 10,080 | 20,160 | |||||||||||||||||||||||||||||||||||||||||||||
FPS
|
3/1/2010 | 19,381 | $ | 962,073 | ||||||||||||||||||||||||||||||||||||||||||||
Options
|
4/29/2010 | 34,982 | $ | 55.675 | $ | 55.80 | $ | 699,990 | ||||||||||||||||||||||||||||||||||||||||
Brian Hill
|
$ | 128,563 | $ | 257,125 | $514,250 | |||||||||||||||||||||||||||||||||||||||||||
2010 PSU
|
1,865 | 3,729 | 7,458 | |||||||||||||||||||||||||||||||||||||||||||||
2010-2011 PSU
|
3,730 | 7,459 | 14,918 | |||||||||||||||||||||||||||||||||||||||||||||
2010-2012 PSU
|
5,595 | 11,189 | 22,378 | |||||||||||||||||||||||||||||||||||||||||||||
FPS
|
3/1/2010 | 24,903 | $ | 1,236,185 | ||||||||||||||||||||||||||||||||||||||||||||
Options
|
4/29/2010 | 37,481 | $ | 55.675 | $ | 55.80 | $ | 749,995 | ||||||||||||||||||||||||||||||||||||||||
Guy Lansdown
|
$ | 128,563 | $ | 257,125 | $514,250 | |||||||||||||||||||||||||||||||||||||||||||
2010 PSU
|
1,865 | 3,729 | 7,458 | |||||||||||||||||||||||||||||||||||||||||||||
2010-2011 PSU
|
3,730 | 7,459 | 14,918 | |||||||||||||||||||||||||||||||||||||||||||||
2010-2012 PSU
|
5,595 | 11,189 | 22,378 | |||||||||||||||||||||||||||||||||||||||||||||
FPS
|
3/1/2010 | 22,847 | $ | 1,134,125 | ||||||||||||||||||||||||||||||||||||||||||||
Options
|
4/29/2010 | 37,481 | $ | 55.675 | $ | 55.80 | $ | 749,995 |
(1) | Amounts shown represent threshold, target and maximum amounts for 2010 Corporate Performance Bonuses. The Compensation Committee established the target for corporate metrics on April 28, 2010. Payments of Corporate Performance Bonuses for 2010 performance are shown in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. Refer to the Compensation Discussion and Analysis for a description of the criteria for payment of Corporate Performance Bonuses. | |
(2) | Amounts shown represent the threshold, target and maximum number of shares of the Performance Leveraged Share Unit Bonuses potentially awardable for all three awards in 2010, which represent the one-time feather- in process for the new Performance Leveraged Stock Unit Bonus. Refer to the Compensation Discussion and Analysis for a description of the terms of and criteria for making these awards, the feather-in process and the payouts for the 2010 performance year on March 1, 2011. | |
(3) | Refer to the Compensation Discussion and Analysis section on Financial Performance Stock Bonus for a description of the terms of and criteria for making these awards. | |
(4) | Refer to the Compensation Discussion and Analysis for a description of the terms of and criteria for making these awards. | |
(5) | Exercise or base price is determined by the average of the high and low sales price of Common Stock on the New York Stock Exchange on grant date, as reported by Bloomberg Professional, the independent commercial reporting service selected by the Compensation Committee. | |
(6) | Amounts shown represent Financial Performance Stock Bonuses awarded on March 1, 2010 for 2009 performance and stock option awards made on April 29, 2010. For Financial Performance Stock Bonuses, fair value is calculated using the average of the high and low stock price on the date of grant of $49.64. For stock options, fair value is calculated using the Black Scholes value on the grant date of $20.01. |
50
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity |
||||||||||||||||||||||||||||||||||||
Equity |
Incentive |
|||||||||||||||||||||||||||||||||||
Incentive |
Plan Awards: |
|||||||||||||||||||||||||||||||||||
Plan Awards: |
Market or |
|||||||||||||||||||||||||||||||||||
Market |
Number of |
Payout Value |
||||||||||||||||||||||||||||||||||
Number of |
Number of |
Value of |
Unearned |
of Unearned |
||||||||||||||||||||||||||||||||
Securities |
Number of |
Shares or |
Shares or |
Shares, |
Shares, Units |
|||||||||||||||||||||||||||||||
Underlying |
Securities |
Units of |
Units of |
Units or |
or Other |
|||||||||||||||||||||||||||||||
Unexercised |
Underlying |
Option |
Stock That |
Stock that |
other Rights |
Rights that |
||||||||||||||||||||||||||||||
Options(1) |
Unexercised |
Exercise |
Option |
Option |
Have |
Have Not |
that Have |
Have Not |
||||||||||||||||||||||||||||
(#) | Options(2)(#) |
Price |
Grant |
Expiration |
Not Vested |
Vested |
Not Vested |
Vested |
||||||||||||||||||||||||||||
Name
|
Exercisable | Unexercisable | ($) | Date | Date | (#) | ($)(3) | (#)(12) | ($)(13) | |||||||||||||||||||||||||||
Richard T.OBrien
|
20,000 | $ | 45.16 | 10/26/05 | 10/26/15 | |||||||||||||||||||||||||||||||
45,000 | $ | 57.71 | 4/26/06 | 4/26/16 | ||||||||||||||||||||||||||||||||
65,000 | $ | 42.06 | 4/30/07 | 4/30/17 | ||||||||||||||||||||||||||||||||
74,998 | 37,502 | (4) | $ | 44.49 | 4/28/08 | 4/28/18 | ||||||||||||||||||||||||||||||
300,000 | (5) | $ | 26.91 | 10/31/08 | 10/31/18 | |||||||||||||||||||||||||||||||
40,178 | 80,357 | (6) | $ | 39.95 | 5/4/09 | 5/4/19 | ||||||||||||||||||||||||||||||
79,960 | (7) | $ | 55.675 | 4/29/10 | 4/29/20 | |||||||||||||||||||||||||||||||
4,984 | (8) | $ | 306,167 | |||||||||||||||||||||||||||||||||
100,000 | (5) | $ | 6,143,000 | |||||||||||||||||||||||||||||||||
11,808 | (9) | $ | 725,365 | |||||||||||||||||||||||||||||||||
33,381 | (10) | $ | 2,050,595 | |||||||||||||||||||||||||||||||||
2010 PSU
|
22,508 | $ | 1,382,666 | |||||||||||||||||||||||||||||||||
2010-2011 PSU
|
45,018 | $ | 2,765,456 | |||||||||||||||||||||||||||||||||
2010-2012 PSU
|
67,528 | $ | 4,148,245 | |||||||||||||||||||||||||||||||||
Russell Ball
|
7,500 | $ | 49.725 | 12/2/03 | 12/2/13 | |||||||||||||||||||||||||||||||
3,750 | $ | 40.43 | 4/27/04 | 4/27/14 | ||||||||||||||||||||||||||||||||
6,250 | $ | 45.74 | 12/7/04 | 12/7/14 | ||||||||||||||||||||||||||||||||
6,250 | $ | 45.16 | 10/26/05 | 10/26/15 | ||||||||||||||||||||||||||||||||
15,000 | $ | 57.71 | 4/26/06 | 4/26/16 | ||||||||||||||||||||||||||||||||
15,000 | $ | 42.06 | 4/30/07 | 4/30/17 | ||||||||||||||||||||||||||||||||
16,666 | 8,334 | (4) | $ | 44.49 | 4/28/08 | 4/28/18 | ||||||||||||||||||||||||||||||
15,813 | 31,626 | (6) | $ | 39.95 | 5/4/09 | 5/4/19 | ||||||||||||||||||||||||||||||
34,982 | (7) | $ | 55.675 | 4/29/10 | 4/29/20 | |||||||||||||||||||||||||||||||
1,190 | (8) | $ | 73,102 | |||||||||||||||||||||||||||||||||
3,407 | (9) | $ | 209,292 | |||||||||||||||||||||||||||||||||
14,453 | (10) | $ | 887,848 | |||||||||||||||||||||||||||||||||
2010 PSU
|
6,966 | $ | 427,921 | |||||||||||||||||||||||||||||||||
2010-2011 PSU
|
13,932 | $ | 855,843 | |||||||||||||||||||||||||||||||||
2010-2012 PSU
|
20,900 | $ | 1,283,887 | |||||||||||||||||||||||||||||||||
Randy Engel
|
2,250 | $ | 49.725 | 12/2/03 | 12/2/13 | |||||||||||||||||||||||||||||||
3,750 | $ | 45.74 | 12/7/04 | 12/7/14 | ||||||||||||||||||||||||||||||||
3,750 | $ | 45.16 | 10/26/05 | 10/26/15 | ||||||||||||||||||||||||||||||||
8,500 | $ | 57.71 | 4/26/06 | 4/26/16 | ||||||||||||||||||||||||||||||||
16,666 | 8,334 | (4) | $ | 44.49 | 4/28/08 | 4/28/18 | ||||||||||||||||||||||||||||||
13,954 | 27,909 | (6) | $ | 39.95 | 5/4/09 | 5/4/19 | ||||||||||||||||||||||||||||||
34,982 | (7) | $ | 55.675 | 4/29/10 | 4/29/20 | |||||||||||||||||||||||||||||||
935 | (8) | $ | 57,437 | |||||||||||||||||||||||||||||||||
2,961 | (9) | $ | 181,894 | |||||||||||||||||||||||||||||||||
12,921 | (10) | $ | 793,737 | |||||||||||||||||||||||||||||||||
2010 PSU
|
6,720 | $ | 412,810 | |||||||||||||||||||||||||||||||||
2010-2011 PSU
|
13,440 | $ | 825,620 | |||||||||||||||||||||||||||||||||
2010-2012 PSU
|
20,160 | $ | 1,238,429 | |||||||||||||||||||||||||||||||||
Brian Hill
|
13,332 | 6,668 | (4) | $ | 44.49 | 4/28/08 | 4/28/18 | |||||||||||||||||||||||||||||
14,420 | 28,842 | (6) | $ | 39.95 | 5/4/09 | 5/4/19 | ||||||||||||||||||||||||||||||
37,481 | (7) | $ | 55.675 | 4/29/10 | 4/29/20 | |||||||||||||||||||||||||||||||
2,478 | (11) | $ | 152,224 | |||||||||||||||||||||||||||||||||
3,147 | (9) | $ | 193,320 | |||||||||||||||||||||||||||||||||
16,602 | (10) | $ | 1,019,861 | |||||||||||||||||||||||||||||||||
2010 PSU
|
7,458 | $ | 458,145 | |||||||||||||||||||||||||||||||||
2010-2011 PSU
|
14,918 | $ | 916,413 | |||||||||||||||||||||||||||||||||
2010-2012 PSU
|
22,378 | $ | 1,374,681 | |||||||||||||||||||||||||||||||||
Guy Lansdown
|
12,500 | $ | 57.71 | 4/26/06 | 4/26/16 | |||||||||||||||||||||||||||||||
20,000 | $ | 42.06 | 4/30/07 | 4/30/17 | ||||||||||||||||||||||||||||||||
8,333 | 8,334 | (4) | $ | 44.49 | 4/28/08 | 4/28/18 | ||||||||||||||||||||||||||||||
16,450 | 32,902 | (6) | $ | 39.95 | 5/4/09 | 5/4/19 | ||||||||||||||||||||||||||||||
37,481 | (7) | $ | 55.675 | 4/29/10 | 4/29/20 | |||||||||||||||||||||||||||||||
1,120 | (8) | $ | 68,802 | |||||||||||||||||||||||||||||||||
3,491 | (9) | $ | 214,452 | |||||||||||||||||||||||||||||||||
15,232 | (10) | $ | 935,702 | |||||||||||||||||||||||||||||||||
2010 PSU
|
7,458 | $ | 458,145 | |||||||||||||||||||||||||||||||||
2010-2011 PSU
|
14,918 | $ | 916,413 | |||||||||||||||||||||||||||||||||
2010-2012 PSU
|
22,378 | $ | 1,374,681 |
51
(1) | Stock options are generally granted one time per year. Stock options were granted two times per year prior to 2006. | |
(2) | Stock options vest at the rate of 331/3% per year, unless accelerated as explained in the Compensation Discussion and Analysis section. | |
(3) | Assumes stock price of $61.43 the closing price on December 31, 2010. | |
(4) | Vesting dates are April 28, 2011. | |
(5) | Vesting date is October 31, 2013. | |
(6) | Vesting dates are May 4, 2011 and 2012. | |
(7) | Vesting dates are April 29, 2011, 2012 and 2113. | |
(8) | Vesting date is February 25, 2011. | |
(9) | Vesting date is February 23, 2011. | |
(10) | Vesting dates are March 1, 2011 and 2012. | |
(11) | Vesting date is October 31, 2011. | |
(12) | Maximum number of Performance Leveraged Stock Units are shown for all three feather-in grants, which are described in the Compensation Discussion and Analysis. The maximum number represents twice the target number of units. | |
(13) | Assumes stock price of $61.43, the closing price on December 31, 2010. |
Option Awards | Stock Awards | |||||||||||||||
Number of Shares |
Value Realized |
Number of Shares |
Value Realized |
|||||||||||||
Acquired on Exercise |
on Exercise |
Acquired on Vesting |
on Vesting |
|||||||||||||
Name
|
(#) | ($) | (#) | ($) | ||||||||||||
Richard T. OBrien
|
| | 47,418 | $ | 2,378,317 | |||||||||||
Russell Ball
|
10,000 | $ | 257,931 | 12,702 | $ | 615,239 | ||||||||||
Randy Engel
|
15,500 | $ | 268,613 | 10,976 | $ | 532,409 | ||||||||||
Brian Hill
|
| | 13,925 | $ | 711,160 | |||||||||||
Guy Lansdown
|
| | 13,032 | $ | 631,872 |
Number |
Present |
|||||||||||||
of Years |
Value of |
Payments |
||||||||||||
Credited |
Accumulated |
During Last |
||||||||||||
Service |
Benefit |
Fiscal Year |
||||||||||||
Name
|
Plan Name | (#) | ($) | ($) | ||||||||||
Richard T. OBrien
|
Pension Plan | 5.3 | $ | 172,848 | | |||||||||
Pension Equalization Plan | 5.3 | $ | 2,120,674 | | ||||||||||
Russell Ball
|
Pension Plan | 16.6 | $ | 427,091 | | |||||||||
Pension Equalization Plan | 16.6 | $ | 1,978,846 | | ||||||||||
Randy Engel
|
Pension Plan | 17 | $ | 429,549 | | |||||||||
Pension Equalization Plan | 17 | $ | 1,479,547 | | ||||||||||
Brian Hill
|
Pension Plan | 1 | $ | 19,694 | | |||||||||
Pension Equalization Plan | 1 | $ | 84,269 | | ||||||||||
Guy Lansdown
|
Pension Plan | 17.3 | $ | 438,634 | | |||||||||
Pension Equalization Plan | 17.3 | $ | 1,960,619 | |
(1) | All calculations in the 2010 Pension Benefits Table were calculated using target Corporate Performance Bonus for 2010, and 50% of maximum Strategic Objectives Bonus. |
52
Age at |
Years of |
|||
Termination
|
Service | Reduction | ||
55
|
At least 30 | no reduction payable upon termination | ||
60
|
At least 10 | lesser of 1/3 of 1% for each month of service less than 30 years of service (4% per year) or 1/3 of 1% for each month by which the date of benefit commencement precedes age 62 (4% per year) payable upon termination | ||
At least 55
|
At least 10 | 1/3 of 1% for each month by which the date of benefit commencement precedes age 62 (4% per year) payable upon termination | ||
Under 55
|
At least 10 | 1/2 of 1% for each month by which the date of benefit commencement precedes age 62 (6% per year) payable following termination and attainment of age 55 | ||
At least 30 | No reduction payable at age 55 |
Years of |
||||
Age | Service | Reduction | ||
48 at time of change of control
|
At least 10 | Lower reduction of 2% for each year by which termination precedes age 62, or applicable reduction above |
Full Years of |
||||||||
Services Completed |
Percentage of Salary up |
Percent of Salary |
||||||
by the end of the |
to and including Social |
Over the Social |
||||||
Plan Year
|
Security Wage Base | Security Wage Base | ||||||
0-9
|
13 | % | 21 | % | ||||
10-19
|
15 | % | 23 | % | ||||
20+
|
17 | % | 25 | % |
53
Executive |
Registrant |
Aggregate |
Aggregate |
|||||||||||||||||
Contributions |
Contributions |
Earnings |
Aggregate |
Balance at |
||||||||||||||||
in Last |
in Last |
in Last |
Withdrawals / |
Last Fiscal |
||||||||||||||||
Fiscal
Year(1) |
Fiscal Year |
Fiscal Year |
Distributions |
Year-End |
||||||||||||||||
Name
|
($) | ($) | ($) | ($) | ($) | |||||||||||||||
Richard T. OBrien
|
| | $ | 6,446 | | $ | 62,995 | |||||||||||||
Russell Ball
|
$ | 154,915 | | $ | 104,011 | | $ | 781,095 | ||||||||||||
Randy Engel
|
| | | | | |||||||||||||||
Brian Hill
|
| | | | | |||||||||||||||
Guy Lansdown
|
$ | 93,153 | | $ | 51,168 | | $ | 544,418 |
(1) | Amounts shown are included in the Salary column of the Summary Compensation Table. |
54
Percentage of Company |
||||
Years of Service
|
Contribution Vested | |||
Less than 1 year
|
0 | |||
1 year
|
20 | |||
2 years
|
40 | |||
3 years
|
60 | |||
4 or more years
|
100 |
55