Exhibit 10(e)

 

December 30, 2003  

 

NEWMONT

ANNUAL INCENTIVE COMPENSATION PLAN

 

(Effective as of January 1, 2003)

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NEWMONT

ANNUAL INCENTIVE COMPENSATION PLAN

 

(Effective as of January 1, 2003)

 

The Board of Directors of Newmont USA Limited, a Delaware corporation (the
“Company”), hereby adopts the Newmont Annual Incentive Compensation Plan (the
“Plan”), effective as of January 1, 2003 (the “Effective Date”). This Plan is
effective for the 2003 Plan Year (as defined herein) and will not apply to
subsequent Plan Years, unless specifically extended by the Board (as defined
herein).

 

PURPOSE

 

The purpose of the Plan is to provide to those employees of the Company and its
Affiliated Entities (as defined herein) that participate in the Plan a more
direct interest in the success of the operations of the Company by rewarding
their successful efforts to maximize free cash flow, increase the net worth of
Newmont Mining (as defined herein), maximize the replacement of reserves, and
positively impact earnings per share. Employees of the Company and participating
Affiliated Entities will be rewarded in accordance with the terms and conditions
described below.

 

ARTICLE I

 

DEFINITIONS

 

1.1 “Affiliated Entity(ies)” means any corporation or other entity, now or
hereafter formed, that is or shall become affiliated with the Company, either
directly or indirectly, through stock ownership, control or otherwise, as
determined by the Company.

 

1.2 “Annual Proportional Free Cash Flow” or “FCF” means Newmont Mining’s
proportional share of After-Tax Free Cash Flow equal to Newmont Mining’s
operating cash flow, plus or minus (+/-) investing cash flow, for the Plan Year.
Certain items, including hedgebook transactions and unbudgeted property sales
and acquisitions shall be excluded from the calculation of FCF. The calculation
of FCF and the determination of FCF for the Plan Year shall be determined by the
Company and approved by the Compensation Committee of Newmont Mining.

 

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

 

1.4 “Bonus Eligible Earnings” means the total base salary and, as applicable,
overtime, holiday and vacation pay (collectively, “base earnings”) earnings of
the Employee during the Plan Year. If an Employee is absent from work because of
a work-related injury, the Employee’s “Bonus Eligible Earnings” will be
determined by his actual gross base earnings during the Plan Year. In the case
of a Terminated Eligible Employee who is Disabled, “Bonus Eligible Earnings”
will be determined by his actual gross base earnings, including short-term
disability pay received during the Plan Year, but excluding pay from any other
source. If an Employee dies during the Plan Year, the “Bonus Eligible Earnings”
for such Terminated Eligible Employee will be determined by his actual gross
base earnings. If an Employee is on active military duty during a Plan Year, the
“Bonus Eligible Earnings” will be determined by his actual gross base earnings
during the Plan Year, exclusive of any military pay. If an Employee does not
receive a W-2, his “Bonus Eligible Earnings” shall be determined on the basis of
his actual gross base earnings for the Plan Year, or portion thereof, as shown
on the payroll records of the Company or the Participating Employer. In all
cases, an Employee’s “Bonus Eligible Earnings” shall be computed before
reduction for pre-tax contributions to an employee benefit plan of the Company
pursuant to Section 401(k) or Section 125 of the Code. In the event of a Change
of Control the Bonus Eligible Earnings of each Eligible Employee shall be equal
to such Employee’s base salary, on an annualized basis, as of the date
immediately preceding the Change of Control and, in the case of a Terminated
Eligible Employee, such Employee’s base salary for the Plan Year through the
date of termination of employment.

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1.5 “Change of Control” means any of the following events or circumstances with
respect to either Newmont USA Limited or Newmont Mining Corporation (“Newmont
Mining”), the ultimate parent of Newmont USA Limited, and for purposes of the
following definition, the “Company” shall mean both Newmont Mining, or any
successor thereto, and Newmont USA Limited, or any successor thereto:

 

(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(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 (i)
the then outstanding shares of common stock of the Company (the “Outstanding
Common Stock”) or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Voting Securities”); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not constitute
a Change of Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any corporation pursuant to
a transaction which complies with clauses (i), (ii) and (iii) of subsection (c)
of this Section; or

 

(b) Individuals who, as of the Effective Date, constitute the Board of Directors
of the Company (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board of Directors of the Company; provided, however,
that any individual becoming a director subsequent to the date hereof 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 of Directors of the Company; or

 

(c) Consummation by the Company of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another entity (a “Business
Combination”), in each case, unless, following such Business Combination, (i)
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Common Stock and Outstanding 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, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business Combination of
the Outstanding Common Stock and Outstanding Voting Securities, as the case may
be, (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) 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 except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination 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

 

(d) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

 

1.6 “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

 

 

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1.7 “Company” means Newmont USA Limited, and where the context requires, any
Affiliated Entity that has become a Participating Employer.

 

1.8 “Compensation Committee” means the Compensation Committee of the Board or,
if no such committee has been established, the full Board. References to the
Compensation Committee of Newmont Mining shall mean the Compensation Committee
of the Board of Directors of Newmont Mining.

 

1.9 “Disability” means a condition such that the Employee has terminated
employment with the Company and/or all Participating Employers with a qualifying
disability and has begun receiving benefits from a long-term disability plan of
the Company or a Participating Employer.

 

1.10 “Earnings per Share” means the reported earnings per share of Newmont
Mining for the applicable Plan Year adjusted for the tax-affected amount of the
financial accounting impact of “mark-to-market” adjustments relating to the
long-dated call options sold by Newmont Mining, merger charges, restructuring
charges, impairment writedowns and before extraordinary items for the Plan Year,
as determined by the Company and approved by the Compensation Committee of
Newmont Mining.

 

1.11 “Employee” means a full-time, salaried employee of the Company and/or a
Participating Employer, excluding temporary or leased employees. For purposes of
this Plan, an Employee is any individual who provides services to the Company as
a common law employee. An Employee shall not include any individual (i) who
provides services to the Company and/or a Participating Employer under an
agreement, contract, or any other arrangement pursuant to which the individual
is initially classified as an independent contractor by the Company and/or a
Participating Employer, or (ii) in the case of individuals subject to United
States income tax with respect to remuneration for services performed for the
Company, whose remuneration for services has not been treated initially as
subject to the withholding of federal income tax pursuant to Section 3401 of the
Code even if the individual is subsequently reclassified as a common law
employee as a result of a final decree of a court of competent jurisdiction or
the settlement of an administrative or judicial proceeding.

 

1.12 “Key Objectives” means the key results expected by the end of the review
period for an Employee, as established and administered through the Company’s
performance management system.

 

1.13 “Participating Employer” means the Company and any Affiliated Entity that
the Company determines shall participate in the Plan.

 

1.14 “Pay Grade” means those jobs sharing a common salary range, as designated
by the Company. If the Pay Grade of an Employee changes during the Plan Year,
the bonus payable to such Employee shall be calculated on a pro rata basis in
accordance with the provisions of Section 5.1.

 

1.15 “Performance Bonus” means the bonus payable to an Employee pursuant to
Section 3.1.

 

1.16 “Performance Rating Category” means the numerical category used to classify
the performance of each Employee in accordance with the Company’s performance
management system, which range from one (1) at the bottom through nine (9) at
the top.

 

1.17 “Personal Performance Bonus” means the bonus payable to an Employee based
on the individual performance of such Employee, as set forth in Section 4.2.

 

1.18 “Personal Performance Bonus Factor” means the factor used to determine an
Employee’s Personal Performance Bonus, based upon the Performance Rating
Category assigned to the Employee, in accordance with Table IV-A in Section 4.1.

 

1.19 “Plan Year” means the calendar year.

 

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1.20 “Position(s)” means the defined job(s) held by an Employee during the Plan
Year.

 

1.21 “Proportional Net Asset Value per Share” or “NAV” means the net asset value
per share of outstanding stock of Newmont Mining, calculated in the following
manner. Proportionate pre-income tax free cash flow based on the approved budget
plan for the Plan Year, which is operating cash flow, plus cash flows, plus or
minus (+/-) investing activities, with hedged ounces calculated at contracted
prices, provides the initial calculation. Proportionate interest expense is
added back, proportionate interest income is deducted and proportionate
exploration expense is added back. That result is discounted at the weighted
average cash cost of capital for Newmont Mining and the result is multiplied by
one minus an assumed tax rate (20%). Then, proportionate cash and market value
of securities held (based on 12 month rolling average) is added and the
proportionate share of debt (based on book value) is deducted. That result is
then divided by the Newmont Mining common shares outstanding at the applicable
measurement date. The foregoing process is used to determine NAV as of the
beginning of each Plan Year. As of the end of each Plan Year, the approved
Budget Plan for the following calendar year, calculated as set forth above,
would be used, adjusted for beginning of the year metal prices, discount rate
and assumed tax rate. In addition, dividends paid per share for the Plan Year
would be added back in to determine the end of Plan Year NAV. The calculation of
NAV and the determination of NAV for the Plan Year shall be determined by the
Company and approved by the Compensation Committee of Newmont Mining.

 

1.22 “Reserve Replacement Ratio” or “RRR” means a ratio calculated with a
numerator consisting of additions to reserves for the Plan Year plus any reserve
adjustments for the Plan Year, whether positive or negative, with a denominator
equal to the depletion of reserves for the Plan Year, including any sales of
reserves. All reserves shall be calculated based on Newmont Mining’s equity
share. The calculation of RRR and the determination of RRR for the Plan Year
shall be determined by the Company and approved by the Compensation Committee of
Newmont Mining.

 

1.23 “Retirement” means termination of employment with the Company and all
Participating Employers by an Employee who begins to receive benefits from a
defined benefit plan of the Company or a Participating Employer.

 

1.24 “Severance” means the termination of employment with the Company and all
Participating Employers because of an event entitling the Employee to benefits
under the terms of the Newmont Severance Pay Plan if the Employee complies with
all requirements of the Severance Pay Plan and begins receiving benefits under
the terms of the Severance Pay Plan.

 

1.25 “Target Annual Proportional Free Cash Flow” means the target Annual
Proportional Free Cash Flow, in United States dollars, established by the
Compensation Committee of Newmont Mining for the Plan Year. The Target Annual
Proportional Free Cash Flow shall be adjusted for each Plan Year by the
Compensation Committee of Newmont Mining, based on realized gold and copper
prices for the Plan Year.

 

1.26 “Target Earnings per Share” means the target Earnings Per Share, in United
States dollars, established by the Compensation Committee of Newmont Mining for
the Plan Year.

 

1.27 “Target Proportional Net Asset Value per Share” means the target
Proportional Net Asset Value per Share, in United States dollars, established by
the Compensation Committee of Newmont Mining for the Plan Year.

 

1.28 “Target Reserve Replacement Ratio” means the target Reserve Replacement
Ratio established by the Compensation Committee of Newmont Mining for the Plan
Year.

 

1.29 “Terminated Eligible Employee” means an Employee who terminates employment
with the Company and/or a Participating Employer during the Plan Year on account
of death, Retirement, Disability, or Severance.

 

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The Vice President of Human Resources of the Company may, in his/her sole
discretion, also designate in writing other Employees who terminate employment
during the Plan Year under other circumstances as “Terminated Eligible
Employees”.

 

ARTICLE II

 

ELIGIBILITY

 

All Employees of the Company and/or a Participating Employer are potentially
eligible to receive a bonus payment under the Plan, provided (i) they are on the
payroll of the Company and/or a Participating Employer as of the last day of the
Plan Year, or (ii) they are a Terminated Eligible Employee with respect to such
Plan Year (such Employees are hereafter referred to as “Eligible Employees”).
Employees who are on short-term disability under the Company’s short-term
disability policy or not working because of a work-related injury as of the last
day of the Plan Year shall be eligible to receive a bonus under clause (i).
Notwithstanding the foregoing provisions of this Article II, the Compensation
Committee of Newmont Mining may, prior to the end of the Plan Year, exclude from
eligibility for participation under this Plan with respect to the Plan Year any
Employee or Employees, as the Compensation Committee of Newmont Mining may
determine in its sole discretion.

 

ARTICLE III

 

PERFORMANCE BONUS

 

3.1 Determination of Performance Bonus. (a) For the Plan Year, the Performance
Bonus for each Eligible Employee who is in Pay Grade 109 and above on the last
day of the Plan Year (or was in such Pay Grade at the time of termination of
employment), and each Eligible Employee who is in Pay Grade 108 and below who is
employed in the corporate office or in a non-site location, as determined by the
Company, on the last day of the Plan Year (or was in such Pay Grade and at such
location at the time of termination of employment) will be determined pursuant
to the following provisions:

 

  (i)   The Compensation Committee of Newmont Mining shall establish both the
targets and the minimum and maximum amounts for each performance factor
(Earnings per Share, Annual Proportional Free Cash Flow, Proportional Net Asset
Value per Share and Reserve Replacement Ratio). The Target Earnings per Share,
the Target Annual Proportional Free Cash Flow and the Target Proportional Net
Asset Value per Share, together with the applicable minimums and maximums for
each such performance factor, shall be established in United States dollars and
cents and the target and minimum and maximum Reserve Replacement Ratio shall be
established as a multiplier factor.

 

  (ii)   The appropriate weighting factors for each performance factor shall be
determined in accordance with Appendix A. The applicable weighting factor for
each performance factor (Annual Proportional Free Cash Flow, Earnings per Share,
Proportional Net Asset Value per Share and Reserve Replacement Ratio) shall be
multiplied by a factor (the “Performance Percentage”) derived by comparing the
target amount for each performance factor to the actual performance factor,
ignoring any amounts in excess of the maximum and assigning a multiplier of zero
for any performance factor with an actual result less than the minimum
established amount and then multiplying that result for each of the four
performance factors by the applicable Bonus Payout as a Percentage of Target
percentage in subsection (v) below and the results summed to determine the
aggregate Performance Bonus percentage for each Eligible Employee for the Plan
Year. Each Eligible Employee’s aggregate Performance Bonus percentage shall then
be multiplied by the Eligible Employee’s Target Performance Level from Table III
and that result shall then be multiplied by the Eligible Employee’s Bonus
Eligible Earnings to determine the amount of the Performance Bonus payable to
each such Eligible Employee.

 

  (iii)   When calculating Bonus Payout as a Percent of Target, there is a cap
of 200% for each percentage calculated.

 

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  (iv)   If an Eligible Employee changes Pay Grades during the Plan Year, a
prorata calculation shall be made based upon the number of days spent in each
applicable Pay Grade.

 

  (v)  

 

SCHEDULE

 

Performance

Percentage

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Bonus Payout

as a Percent of Target

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50 or less

   0 %

100 (Target)

   100 %

105

   125 %

110

   150 %

115

   175 %

120 or more

   200 %

 

If the Performance Percentage of a measure is less than 100 but more than 50,
the Bonus Payout as a Percent of Target shall be the same as the Performance
Percentage. If the Performance Percentage of a measure otherwise falls between
the various Performance Percentages set forth in the foregoing Schedule, then
the Bonus Payout as a Percent of Target percentages set forth in the foregoing
Schedule shall be interpolated so that such percentage bears the same
relationship to the Performance Bonus as a Percent of Target percentages for the
two closest Performance Percentages.

 

The Compensation Committee of Newmont Mining may adjust the Performance
Percentage of any measure or otherwise increase the Performance Bonus otherwise
payable in order to reflect changed circumstances or such other matters as the
Compensation Committee of Newmont Mining deems appropriate.

 

(b) For the Plan Year, the Performance Bonus for each Eligible Employee who is
in Pay Grade 108 or below on the last day of the Plan Year (or was in such Pay
Grade at the time of termination of employment) and who is not assigned to the
corporate office or a non-site location, will be determined in accordance with
such performance factors, weighting factors and other methods of bonus
determination as shall be established for each specific site or region by the
Company for the Plan Year. Each operating site shall develop its own critical
performance indicators for this purpose.

 

3.2 Determination of Target Performance Level. An Employee’s Target Performance
Level is determined by the Employee’s Pay Grade pursuant to the following Table
III:

 

TABLE III

 

Pay

Grade

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Target

Performance Level

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E-1

   67 %

E-2

   55 %

E-3

   50 %

E-4

   40 %

E-5

   33.5 %

E-6

   26.5 %

109

   25 %

107-108

   15 %

105-106

   10 %

11-104

   5 %

 

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3.3 Terminated Eligible Employees. Terminated Eligible Employees shall be
eligible to receive a Performance Bonus. This bonus will be calculated as
follows:

 

Target Performance Level x Year to Date Bonus Eligible Earnings = Performance
Bonus Payable

 

ARTICLE IV

 

PERSONAL PERFORMANCE BONUS

 

4.1 Personal Performance Level. At the end of the Plan Year, each Eligible
Employee’s supervisor will evaluate the Employee and rate the Employee’s
personal performance level. The Personal Performance Bonus for the Chairman and
Chief Executive Officer of the Company shall be determined by the Compensation
Committee of Newmont Mining. In accordance with the Company’s performance
management system, the supervisor will rate the degree to which the Employee met
the Key Objectives that were established for the Employee during the Plan Year.
Each Employee will be rated by the Employee’s supervisor in one of the Company’s
Performance Rating Categories. In conjunction with these ratings, the Company
will assign a Personal Performance Bonus Factor for the Employee from Table
IV-A, which Personal Performance Bonus Factor may be greater or smaller than the
Bonus Factor set forth in Table IV-A as determined in the sole discretion of the
Company. The distribution of Personal Performance Ratings and Personal
Performance Bonus Factors will be reviewed annually by the Chief Executive
Officer of the Company and the Compensation Committee for internal equity and
consistency.

 

TABLE IV-A

 

Performance

Rating Category

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Personal Performance

Bonus Factor

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1

   0

2

   .10

3

   .15

4

   .50

5

   1.0

6

   1.10

7

   1.20

8

   1.30

9

   1.50

 

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4.2 Determination of Personal Performance Bonus. Subject to Section 4.3, an
Eligible Employee’s Personal Performance Bonus is calculated by multiplying (x)
the Eligible Employee’s Bonus Eligible Earnings by (y) the Personal Performance
Bonus Factor determined pursuant to Section 4.1 and (z) multiplying that product
by the applicable percentage from the Target Personal Performance Level, as set
forth in the following Table IV-B:

 

TABLE IV-B

 

Pay

Grade

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Target

Performance Level

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E-1

   33 %

E-2

   30 %

E-3

   25 %

E-4

   20 %

E-5

   16.5 %

E-6

   13.5 %

109

   10 %

107-108

   9 %

105-106

   6.5 %

103-104

   4 %

11-102

   0 %

 

4.3 Proration of Certain Bonuses. Notwithstanding any other provision in this
ARTICLE 1V, except as approved by the Compensation Committee of Newmont Mining
prior to the payment of Personal Performance Bonuses, or subsequently thereto by
ratification, the amount of the Personal Performance Bonuses payable to all
Eligible Employees of the Company and all Participating Employers in Pay Grades
E-1 – E-6 may not exceed the amount that would be payable to all such Eligible
Employees if each of their Personal Performance Bonus Factors were determined to
be 1.10%. Any reduction in Performance Bonuses required by this Section 4.3
shall be made by reducing the Performance Bonuses of all affected Eligible
Employees by an equal percentage of their Performance Bonuses before such
reduction.

 

4.4 Terminated Eligible Employees. Terminated Eligible Employees shall be
eligible to receive a Personal Performance Bonus based upon an assumed Personal
Performance Bonus Factor of 1.0, so that the Terminated Eligible Employees will
receive a Personal Performance Bonus at their individual Target Personal
Performance Level multiplied by their Bonus Eligible Earnings for the Plan Year.

 

4.5 Ineligible Employees. Eligible Employees whose Personal Performance Bonus
Factor (determined pursuant to Section 4.1) is less than .15 shall not be
eligible to receive a Personal Performance Bonus.

 

ARTICLE V

 

PAYMENT OF BONUS

 

5.1 Pay Grade. The bonus payable to an Eligible Employee who was in more than
one Pay Grade during the Plan Year shall be calculated on a pro-rata basis in
accordance with the amount of time spent by such Eligible Employee in each Pay
Grade during the Plan Year.

 

5.2 Time and Method of Payment. The aggregate of any and all bonuses payable
under the Plan shall be payable to each Eligible Employee (other than Terminated
Eligible Employees) in cash as soon as practicable following the close of the
Plan Year. Terminated Eligible Employees shall receive the aggregate of any and
all bonuses payable under the Plan in cash as soon as practicable following the
date of their termination from employment with the Company.

 

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5.3 Withholding Taxes. All bonuses payable hereunder shall be subject to the
withholding of such amounts as the Company may determine is required to be
withheld pursuant to any applicable federal, state, local or foreign law or
regulation.

 

ARTICLE VI

 

CHANGE OF CONTROL

 

6.1 In General. In the event of a Change of Control, each Eligible Employee
(including Terminated Eligible Employees who terminate employment during the
Plan Year in which the Change of Control occurs) shall become entitled to the
payment of a Performance Bonus and a Personal Performance Bonus, in accordance
with the provisions of this Article.

 

6.2 Calculation of Bonuses. Upon a Change of Control, each Eligible Employee,
together with each Terminated Eligible Employee, shall become entitled to the
payment of (i) a Performance Bonus calculated on the basis of a Performance
Percentage equal to the greater of the actual results attained for the Plan Year
or the applicable Targets for such Plan Year and (ii) a Personal Performance
Bonus calculated on the basis of a Personal Performance Bonus Factor equal to
the greater of the actual Personal Performance Bonus Factor for the Plan Year or
a Personal Performance Bonus Factor of 1.0. If a Change of Control occurs prior
to the time that the Compensation Committee of Newmont Mining has established
the targets for the Plan Year, such percentages shall be based upon the
corresponding percentages for the immediately preceding Plan Year.

 

6.3 Payment of Bonuses. The bonuses payable in accordance with the provisions of
this Article VII shall be calculated and paid as soon as practicable following
the date of the Change of Control, but in no event later than the sixtieth day
after the date of the Change of Control. Such payments shall be subject to the
withholding of such amounts as the Company may determine is required to be
withheld pursuant to any applicable federal, state or local law or regulation.
Upon the completion of such payments, Eligible Employees and Terminated Eligible
Employees shall have no further right to the payment of any bonus hereunder
(other than any bonus payable hereunder with respect to a previous Plan Year
that has not yet been paid) and this Plan shall terminate.

 

ARTICLE VII

 

GENERAL PROVISIONS

 

7.1 Administration. The Plan will be administered by the Compensation Committee
of Newmont Mining or its delegees. All actions by the Company under the Plan
shall be taken by the Compensation Committee of Newmont Mining or its delegees.
The Compensation Committee of Newmont Mining shall interpret the provisions of
the Plan in its full and absolute discretion. All determinations and actions of
the Compensation Committee of Newmont Mining with respect to the Plan shall be
taken or made in its full and absolute discretion in accordance with the terms
of the Plan and shall be final, binding and conclusive on all persons. All
expenses of the Company in administering the Plan shall be borne by the Company.

 

7.2 Plan Unfunded. The Plan shall be unfunded and no trust or other funding
mechanism shall be established for the Plan. All benefits to be paid pursuant to
the Plan shall be paid by the Company from its general assets and an Eligible
Employee or Terminated Eligible Employee (or his heir or devisee) shall not have
any greater rights than a general, unsecured creditor against the Company for
any benefit hereunder.

 

7.3 Participation in Plan by Affiliates. Any Affiliated Entity shall become a
party to this Plan and become a Participating Employer as determined by the
Company.

 

7.4 Amount Payable Upon Death of Employee. If an Eligible Employee who is
entitled to payment hereunder dies after becoming eligible for payment but
before receiving full payment of the amount due, or if an

 

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Eligible Employee dies and becomes a Terminated Eligible Employee, all amounts
due shall be paid as soon as practicable after the death of the Eligible
Employee, in a cash lump sum, to the beneficiary or beneficiaries designated by
the Eligible Employee to receive life insurance proceeds under the Company’s
life insurance plan. In the absence of an effective beneficiary designation
under said plan, any amount payable hereunder following the death of an Eligible
Employee shall be paid to the Eligible Employee’s estate.

 

7.5 Right of Offset. To the extent permitted by applicable law, the Company may,
in its sole discretion, apply any bonus payments otherwise due and payable under
this Plan against any Eligible Employee or Terminated Eligible Employee loans
outstanding to the Company or other debts of the Eligible Employee or Terminated
Eligible Employee to the Company.

 

7.6 Amendments, Termination. Etc. The Board, either upon its own initiative or
upon the recommendation of the Compensation Committee of Newmont Mining, may at
any time amend, modify, suspend or terminate the Plan, provided, however, that
the Compensation Committee of Newmont Mining may, consistent with its
administrative powers, waive or adjust provisions of the Plan as it determines
necessary from time to time.

 

7.7 Payments Due Minors or Incapacitated Persons. If any person entitled to a
payment under the Plan is a minor, or if the Compensation Committee of Newmont
Mining determines that any such person is incapacitated by reason of physical or
mental disability, whether or not legally adjudicated as an incompetent, the
Compensation Committee of Newmont Mining shall have the power to cause the
payment becoming due to such person to be made to another for his benefit,
without responsibility of the Compensation Committee of Newmont Mining, the
Company, or any other person or entity to see to the application of such
payment. Payments made pursuant to such power shall operate as a complete
discharge of the Compensation Committee of Newmont Mining, the Plan and the
Company.

 

7.8 Section Headings. The Section headings are included herein only for
convenience, and they shall have no effect on the interpretation of the Plan.

 

7.9 Severability. If any article, section, subsection or specific provision is
found to be illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining provisions of the Plan, and the Plan shall be
construed and enforced as if such illegal and invalid provision had never been
set forth in the Plan.

 

7.10 No Right to Employment. The establishment of this Plan shall not be deemed
to confer upon any person any legal right to be employed by, or to be retained
in the employ of, the Company or any Affiliated Entity, or to give any Employee
or any person any right to receive any payment whatsoever, except as provided
under this Plan. All Employees shall remain subject to discharge from employment
to the same extent as if this Plan had never been adopted.

 

7.11 Transferability. Any bonus payable hereunder is personal to the Eligible
Employee or Terminated Eligible Employee and may not be sold, exchanged,
transferred, pledged, assigned or otherwise disposed of except by will or by the
laws of descent and distribution.

 

7.12 Successors. This Plan shall be binding upon and inure to the benefit of the
Company, the Participating Employers and the Eligible Employees and Terminated
Eligible Employees and their respective heirs, representatives and successors.

 

7.13 Governing Law. The Plan and all agreements hereunder shall be construed in
accordance with and governed by the laws of the State of Colorado, unless
superseded by federal law.

 

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--------------------------------------------------------------------------------

Adopted as of January 1, 2003.

 

 

NEWMONT USA LIMITED

By:

 

  /s/    Britt D. Banks

--------------------------------------------------------------------------------

    Britt D. Banks    

Vice President, General Counsel and
Secretary

 

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--------------------------------------------------------------------------------

APPENDIX A

 

     Consolidated Corporate Performance

--------------------------------------------------------------------------------

       Proportional Net
Asset Value per
Share (NAV)

--------------------------------------------------------------------------------

    Reserve
Replacement
Ratio (RRR)

--------------------------------------------------------------------------------

    Annual
Proportional
Free Cash
Flow (FCF)

--------------------------------------------------------------------------------

    Earnings per
Share

--------------------------------------------------------------------------------

 

Pay Grade 109 and Above, and Pay Grade 108 and below employed in the corporate
office or a non-site location

   45 %   25 %   15 %   15 %

 

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