Exhibit 10.2

NEWMONT MINING CORPORATION

PERFORMANCE PAY PLAN

Adopted by the Board: February 20, 2013

Approved by the Stockholders: April 24, 2013

 

SECTION 1. ESTABLISHMENT; PURPOSE

Newmont Mining Corporation (the “Company”) hereby establishes the Newmont Mining
Corporation Performance Pay Plan (the “Plan”) for the benefit of certain members
of the Company’s senior management team. The purposes of the Plan are to
(i) place a significant portion of the compensation of Plan Participants at risk
by tying such compensation to specific measurable goals designed to drive
shareholder value, and (ii) exempt bonuses paid hereunder from the deduction
limitations of Code Section 162(m). The Plan is intended to encourage
initiative, resourcefulness, teamwork, motivation, and efficiency on the part of
the Participants that will result in financial success for both the stockholders
of the Company and the Participants.

 

SECTION 2. CERTAIN DEFINITIONS.

“Board” means the Board of Directors of the Company.

“Change of Control” means the occurrence of any of the following events:

(i) The acquisition in one or a series of related transactions by any
individual, entity or group (within the meaning of Section 12(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (x) the then outstanding shares
of common stock of the Company (the “Outstanding Company Common Stock”) or
(y) the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that for purposes
of this subsection (i), the following acquisitions shall not constitute a Change
of Control: (A) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege, unless the
security being so converted was itself acquired directly from the Company,
(B) any acquisition by the Company, (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (D) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A), (B) and (C) of
paragraph (iii) below;

(ii) Individuals who, as of the Effective Date, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the Effective Date whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;

(iii) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or an
acquisition of assets of another corporation (a “Business Combination”), in each
case, unless, following such Business Combination, (A) all or substantially all
of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock, and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including a
corporation or other Person which as a result of such transaction owns

 

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the Company or all or substantially all of the Company’s assets either directly
or through one or more subsidiaries (a “Parent Company”)) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding the Company, any
corporation resulting from such Business Combination, any employee benefit plan
(or related trust) of the Company or an Affiliate or any corporation resulting
from such Business Combination, or, if reference was made to equity ownership of
any Parent Company for purposes of determining whether clause (A) above is
satisfied in connection with the applicable Business Combination, such Parent
Company) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors, unless such ownership resulted solely
from ownership of securities of the Company prior to the Business Combination
and (C) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination (or, if reference was made
to equity ownership of any Parent Company for purposes of determining whether
clause (A) above is satisfied in connection with the applicable Business
Combination, of the Parent Company) were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or

(iv) Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

“Code” means the Internal Revenue Code of 1986, as amended.

“Code Section 162(m)” means Section 162(m) of the Code and the applicable
Treasury Regulations and other guidance issued thereunder.

“Code Section 409A” means Section 409A of the Code and the applicable Treasury
Regulations and other guidance issued thereunder.

“Committee” means a committee comprised of two or more directors, all of whom
are “outside directors,” as defined in Treasury Regulation
Section 1.162-27(e)(3). In the absence of an explicit Board delegation to the
contrary, the Committee shall be the Compensation Committee of the Board.

“Disability” means a condition that causes a Participant to terminate employment
with the Company and any Affiliate, and the Participant has immediately begun
receiving benefits from the long-term disability plan of the Company.

“Participant” means any member of senior management of the Company who is
selected to participate in the Plan for a Performance Period in accordance with
Section 4, below.

“Performance Goals” means the specific, measurable goals set by the Committee
for any given Performance Period. Performance Goals may include multiple goals
and may be based on one or more operational or financial criteria. In setting
the Performance Goals for any Performance Period, the Committee may include one
or any combination of the following criteria in either absolute or relative
terms, for the Company or any business unit thereof: (a) net earnings or net
income (before or after interest, taxes and/or other adjustments); (b) basic or
diluted earnings per share (before or after interest, taxes and/or other
adjustments); (c) reserve replacement; (d) book value per share; (e) net revenue
or revenue growth; (f) sales; (g) production; (h) costs of production; (i) net
interest margin; (j) operating profit (before or after taxes); (k) return on
assets, equity, capital, or revenue; (l) cash flow (including, but not limited
to, operating cash flow and free cash flow); (m) capital expenditures; (n) share
price (including, but not limited to, growth measures and total shareholder
return); (o) market capitalization; (p) working capital; (q) expense targets;
(r) margins; (s) operating efficiency; (t) measures of economic value added;
(u) asset quality; (v) net asset value; (w) enterprise value; (x) employee
retention; (y) objective measures of personal performance targets, goals or
completion of projects; (z) asset growth; (aa) dividend yield; or (bb) product
development, product market share, licensing, mergers, acquisitions, or sales of
assets.

 

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“Performance Period” means one or more periods of time, which may be of varying
and overlapping durations, as the Committee may select, over which the
attainment of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to, and the payment of, a bonus award granted
under the terms of the Plan.

“Treasury Regulations” means the Treasury Regulations promulgated under the
Code.

 

SECTION 3. ADMINISTRATION.

The Plan shall be administered by the Committee, and the Committee shall have
full authority to administer the Plan, including authority to interpret and
construe any provision of the Plan and to adopt such rules for administering the
Plan as it may deem necessary to comply with the requirements of the Code, or to
conform to any regulation or any change in any law or regulation applicable
thereto. The Committee may delegate any of its responsibilities under the Plan
other than such responsibilities that are explicitly reserved for Committee
action pursuant to Code Section 162(m). The Committee’s decisions shall be final
and binding upon all parties, including the Company, stockholders, and
Participants.

 

SECTION 4. PERFORMANCE PERIODS; ELIGIBILITY

The Committee may, but need not, establish multiple Performance Periods
beginning in any calendar year, with each such Performance Period to extend for
such duration as determined by the Committee in its sole and absolute
discretion. Within ninety (90) days after the beginning of any such Performance
Period, but in no event after twenty-five (25) percent of the Performance Period
has elapsed, the Committee shall designate in writing those executives, who are
at least at grade level E-4, of the Company who shall be Participants in the
Plan for such Performance Period. Only those individuals selected to be
Participants shall be eligible to earn bonus awards under the Plan.

 

SECTION 5. ESTABLISHMENT OF PERFORMANCE GOALS; DETERMINATION OF AWARDS

5.1 Establishment of Performance Goals; Bonus Formulas. Within ninety (90) days
after the beginning of a Performance Period, but in no event after twenty-five
(25) percent of the Performance Period has lapsed, the Committee shall establish
in writing (i) the Performance Goals and the underlying performance criteria
applicable to the Performance Period, and (ii) the formula or methodology for
determining the bonus award payable (if any) to each Participant for such
Performance Period upon attainment of the specified Performance Goals.
Performance Goals must be objective and must satisfy the third-party objectivity
standards under Code Section 162(m). Notwithstanding the foregoing, at the time
such Performance Goals are established, the Committee may determine that the
Performance Goals shall be adjusted to account for any unusual items or
specified events or occurrences during the Performance Period, provided that any
such items, events or occurrences are specified in writing at such time and any
such adjustments satisfy the third-party objectivity standards of Code
Section 162(m). Additionally, the Committee is authorized, at any time during
the first 90 days of a Performance Period (or, if longer or shorter, within the
maximum period allowed under Section 162(m) of the Code), or at any time
thereafter to the extent the exercise of such authority at such time would not
cause the awards granted pursuant to this Plan to any Participant for such
Performance Period to fail to qualify as “qualified performance-based
compensation” under Code Section 162(m), in its discretion, to adjust or modify
the calculation of a Performance Goal for such Performance Period, based on and
in order to appropriately reflect the following events: (i) asset write-downs;
(ii) litigation or claim judgments or settlements; (iii) the effect of changes
in tax laws, accounting principles, or other laws or regulatory rules affecting
reported results; (iv) any reorganization and restructuring programs; (v) the
cumulative effect of changes in accounting principles; (vi) extraordinary
nonrecurring items as described in Accounting Principles Board Opinion No. 30
(or any successor pronouncement thereto); (vii) acquisitions, divestitures or
discontinued operations; (viii) gains or losses on refinancing or extinguishment
of debt; (ix) foreign exchange gains and losses; (x) a change in the Company’s
fiscal year and (xi) any other specific unusual events, or objectively
determinable category thereof and (xii) any other specific nonrecurring events,
or objectively determinable category thereof.

 

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5.2 Certification of Results; Calculation of Bonuses. As soon as reasonably
practicable after the close of the Performance Period, the Committee shall
determine bonus awards to be paid under the terms of the Plan. Any payments made
under this Plan shall be contingent upon achieving the Performance Goals set in
advance for the Performance Period in question. The Committee shall certify in
writing prior to approval of any awards that such Performance Goals have been
satisfied (approved minutes of the Committee may be used for this purpose).

5.3 Committee Discretion to Reduce Awards. The Committee may, in its sole and
absolute discretion, reduce the bonus awards to which any Participant is
otherwise due for any Performance Period if it believes that such reduction is
in the best interest of the Company and its shareholders, but any reduction
cannot result in any increase in the bonus award of one or more other
Participants for such Performance Period. The Committee has no discretion to
increase the bonus award otherwise payable to any Participant for any
Performance Period.

5.4 Maximum Awards. The maximum bonus award that may be paid to any Participant
for any Performance Period shall be (x) two million five hundred thousand
dollars ($2,500,000), multiplied by (y) the number of years (or portion thereof)
in the Performance Period.

 

SECTION 6. PAYMENT OF AWARDS

Coincident with the Committee’s establishment of Performance Goals for any
Performance Period, the Committee shall also establish in writing when bonus
awards for such Performance Period (if any) shall be paid, including (but not
limited to) the effect that a Participant’s death, Disability, or a Change of
Control of the Company, shall have on the payment of such awards. All payment
terms shall be intended to comply with Code Section 409A. Payment may be made in
the form of cash or Company common stock (including Company common stock that is
subject to forfeiture), pursuant to the Company’s 2013 Stock Incentive
Compensation Plan, or any successor plan thereto, or any combination thereof, as
determined by the Committee in its sole and absolute discretion.

 

SECTION 7. GENERAL PROVISIONS.

7.1 Nonassignability. A Participant shall have no right to assign or transfer
any interest under this Plan.

7.2 No Contract of Employment. Nothing in this Plan shall confer upon the
Participant the right to maintain his relationship with the Company or any
affiliate as an employee, nor shall it interfere in any way with any right of
the Company, or any such affiliate, to terminate its relationship with the
Participant at any time for any reason whatsoever, with or without Cause.

7.3 Amendment and Termination. The Board may from time to time alter, amend,
suspend, terminate or discontinue the Plan, including, where applicable, any
modifications or amendments as it shall deem advisable in order that the Plan
not be subject to the limitations on deductibility contained in Code
Section 162(m), or to conform to any regulation or to any change in law or
regulation applicable thereto; provided, however, that no such action shall
adversely affect the rights and obligations of the Participants with respect to
the bonus amount payable under the Plan at the time of such alteration,
amendment, suspension, termination or discontinuance, except as may be required
in order to comply with the requirements of Code Section 162(m) or Code
Section 409A.

7.4 Section 409A of the Code. This Plan, including any payment terms established
in accordance with Section 6, above, is intended to be established, administered
and operated in a manner that complies with or is exempt from Code Section 409A.
Although the Company intends to administer the Plan so that it complies with or
is exempt from the requirements of Code Section 409A, the Company does not
warrant that any bonus amount payable under the Plan will not be subject to the
tax imposed by Code Section 409A or will otherwise qualify for favorable tax
treatment under any other provision of federal, state, local or foreign law. The
Company shall not be liable to any Participant for any tax, interest or
penalties the Participant might owe as a result of its participation in the
Plan.

 

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7.5 Tax Withholding. The Company shall withhold all applicable taxes from any
bonus awards payable hereunder, including any non-U.S., federal, state, and
local taxes.

7.6 Applicable Law. This Plan shall be construed in accordance with provisions
of the laws of the State of Colorado, without regards to the conflicts of laws
provisions of such state.

 

SECTION 8. EFFECTIVE DATE; PRIOR PLAN NOT SUSPENDED.

8.1 Effective Date of Plan. This Newmont Mining Corporation Performance Pay Plan
was adopted by the Board of Directors on February 20, 2013, to be effective as
of April 24, 2013, subject to stockholder approval, and it shall remain in
effect, subject to amendment or termination from time to time in accordance with
the terms and conditions hereof.

8.2 Stockholder Approval. The Plan will be submitted to the stockholders of the
Company for approval as soon as practicable following the adoption of the Plan
by the Board. In the event that the Plan is not approved by the affirmative vote
of a majority of the shares of the common stock of the Company cast on the issue
of approval of the Plan in accordance with the requirements of Code
Section 162(m) prior to the end of any Performance Period established hereunder,
no bonus award shall be payable pursuant to this Plan for such Performance
Period. The Plan will be re-approved by the stockholders of the Company no less
than every five (5) years.

8.3 2010 Plans Not Superseded. This Plan does not supersede or otherwise affect
the Newmont Senior Executive Compensation Program of Newmont. All awards granted
under the foregoing plan remain valid and shall continue to be governed by the
provisions of such plan.

 

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