Exhibit 10(z)

 

Newmont Mining Corporation

Summary of Executive Compensation

 

The following is a summary of the compensation paid to executive officers of
Newmont Mining Corporation (the “Company”):

 

Base Salaries. Base salaries are designed to reflect competitive base pay
levels, results achieved by the executive, and scope of responsibilities and
experience.

 

The Compensation and Management Development Committee of the Company established
the following base salaries for 2005 for the Company’s Chief Executive Officer
and each of the Company’s four most highly compensated executive officers (the
“named executive officers”) in 2004:

 

Name

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   Base Salary

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Wayne W. Murdy

   $ 900,000

Pierre Lassonde

   $ 632,245

David H. Francisco

   $ 456,000

Bruce D. Hansen

   $ 360,000

John A.S. Dow(1)

   $ 356,000

 

Annual Cash Incentives. Annual cash incentive awards are made pursuant to the
Company’s Annual Incentive Compensation Payroll Practice (“AICP”). The named
executive officers (and other senior management) are eligible to receive both a
corporate performance bonus and a personal performance bonus. Participants in
the AICP are assigned target awards as a percentage of their eligible base
salary. Target award percentages increase at higher management levels to 100% of
eligible base salary in the case of the Chief Executive Officer. The weight of
corporate performance and personal performance factors varies by participant.

 

The 2004 corporate performance bonus was paid in cash based on achievement of
corporate performance goals, which consist of (a) certain goals relating to net
asset value, (b) certain reserve replacement goals, (c) certain free cash flow
goals, and (d) an earnings per share goal. All of these performance goals were
established by the Committee. The AICP bonus amount depends on the Company’s
performance against these goals. If the Company meets the goals, each eligible
employee receives a payment equal to his or her target award percentage; if the
Company exceeds the goals, the payment can increase to as high as 200% of the
target award percentage; if the Company does not meet the goals, the payment can
decrease and, if the Company fails to achieve certain threshold performance, the
payment will not be made at all. In 2004, the Company achieved a corporate
performance percentage of 106.6% of target

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(1) Mr. Dow retired on March 1, 2005.

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performance, based on the Company’s actual performance results as compared to
the 2004 corporate performance goals.

 

The personal performance bonus is also paid in cash. Target bonus levels are
determined by the executives’ grade level within the executive grade structure,
and payouts are based on an evaluation of each executive’s personal contribution
to the Company. In 2004, the maximum payout percentage for the personal
performance bonus was 150% of the target level for the grade (with awards paid
above target based on exemplary performance). Performance deemed to fall below
expectations results in a payment below the target level, or in some cases no
payment at all. In 2004, personal performance awards to the named executive
officers and other AICP participants were based on certain factors such as the
individual goals and accomplishments of the relevant executive officer, as well
as such executive officer’s contributions to the positive results realized by
the Company during 2004. The performance targets for 2005 consist of five
performance factors, with equal weighting, which measure achievement of certain
goals relating to (a) net asset value, (b) replacement of proven and probably
reserves, (c) free cash flow, (d) earnings per share, and (e) gross margin.

 

In 2003, the Company eliminated the Intermediate Term Incentive Compensation
Plan (“ITIP”), which paid bonuses in the form of cash and restricted stock based
on a consolidated three-year performance measurement. The elimination of the
ITIP resulted in a reduction in total direct compensation for the executives. In
order to address this reduction, cash transition payments are paid over three
years to those executives who previously participated in the ITIP. The
transition payments are also based on the Company’s achievement of corporate
performance goals under the AICP, which paid out at 106.6% based on the
Company’s actual performance during 2004.

 

The following chart represents cash payments awarded to the named executive
officers under the AICP and the transition payments described above for
performance in 2004:

 

Name and Title

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   Corporate
Performance
Bonus

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   Personal
Performance
Bonus

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   Transition
Payment

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Wayne W. Murdy,

Chairman and Chief Financial Officer

   $ 562,448    $ 298,856    $ 320,466

Pierre Lassonde,

President

     323,965      207,209      139,928

David H. Francisco,

Executive Vice President, Operations

     241,449      130,238      108,391

Bruce D. Hansen,

Senior Vice President and Chief Financial Officer

     190,548      111,719      88,068

John A. S. Dow,

Executive Vice President

     188,775      110,680      90,777

 

Restricted Stock Awards. The Company’s executive compensation program also
includes awards of restricted stock based on the Company’s performance.
Restricted stock awards are intended to reward the named executive officers and
other eligible executives based on the attainment of corporate performance goals
established by the Committee. These goals track the corporate performance goals
established under the AICP, as described above, and the Company must achieve
certain threshold performance before any restricted stock awards are made.
Awards

 

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in 2004 were made in the form of restricted shares of Newmont Common Stock under
the Newmont Mining Corporation 1999 Employees Stock Plan, with such shares
vesting in equal installments over three years. Executives are assigned target
awards as a percentage of their eligible base salary. For 2004, these target
award percentages for the top five executives ranged from 75% to 135%. As with
the AICP, the restricted stock award amount depends on the Company’s performance
against defined goals. If the Company meets the goals, each eligible employee
receives a payment equal to his or her target award percentage; if the Company
exceeds the goals, the payment can increase to as high as 200% of the target
award percentage; if the Company does not meet the goals, the award can decrease
and, if the Company fails to achieve certain threshold performance, the award
will not be made at all. In 2004, the Company’s named executive officers and
other senior management achieved a corporate performance percentage as described
above of 106.6% of target performance, based on the Company’s actual performance
results as compared to the 2004 corporate performance goals.

 

The named executive officers were awarded the following amounts of restricted
stock of Newmont Common Stock for 2004:

 

Name

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   Restricted Stock Awarded

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Wayne W. Murdy

   25,427

Pierre Lassonde

   13,216

David H. Francisco

   9,209

John A. S. Dow

   7,200

Bruce D. Hansen

   7,268

 

Stock Options. Stock options are a long-term incentive award designed to link
executive rewards with stockholder value over time. The award of stock options
promotes the creation of stockholder value because the benefits cannot be
realized unless stock price appreciation occurs. Options provide a strong
incentive to increase stockholder value, with the number of options increasing
in proportion to the relative potential influence of the recipient on overall
performance of the Company, and reward recipients making a long-term commitment
to the Company.

 

During 2004, stock options were granted to the named executive officers under
Newmont’s 1996 Employees Stock Plan as the follows:

 

Name

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   Options
Granted (#)

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    Exercise
Price

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Wayne W. Murdy

   45,000
45,000 (1)
(2)   $
  40.43
45.74

Pierre Lassonde

   30,000
30,000 (1)
(2)    
  40.43
45.74

David H. Francisco

   20,000
20,000 (1)
(2)    
  40.43
45.74

Bruce D. Hansen

   20,000
20,000 (1)
(2)    
  40.43
45.74

John A. S. Dow

   20,000
20,000 (1)
(2)    
  40.43
45.74

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(1) Granted on April 27, 2004, and exercisable in three annual increments,
commencing on April 27, 2005.

(2) Granted on December 7, 2004, and exercisable in three annual increments,
commencing on December 7, 2005.

 

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Pension Plans. The named executive officers (except Mr. Lassonde) participate in
the Company’s qualified defined benefit pension plan, as well as its
nonqualified supplemental pension plan that provides benefits that would
otherwise be denied participants by reason of certain Internal Revenue Code
limitations on qualified plan benefits. Mr. Lassonde participates in the
Company’s International Retirement Plan, which provides participants with a
basic, savings and supplemental payment upon retirement or termination of
employment. The basic and savings payments are calculated based on participants’
age and annual compensation during each year of participation in the
International Plan.

 

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Officers’ Death Benefit Plan and Group Life Insurance Program. The Company has
an Officers’ Death Benefit Plan for the benefit of the named executive officers
and other executive officers of the Company. The plan provides a death benefit
of three times final annual base salary for an executive officer who dies while
an active employee and a death benefit of one times final annual base salary for
an executive officer who dies after retiring at or after normal retirement age.
For retirement prior to normal retirement age, the post-retirement death benefit
is 30% to 100% of one times final annual base salary, depending on the number of
years remaining to normal retirement age. Coverage under the Officers’ Death
Benefit Plan is offset by group life insurance maintained for the benefit of all
salaried employees of the Company and certain of its subsidiaries.

 

Executive Agreements. Mr. Murdy’s letter of offer of employment from the Company
provides that if his employment is terminated other than for “cause” (as defined
in the Company’s Severance Pay Plan), or if he terminates employment after a
reduction in base salary or a significant reduction in duties and
responsibilities (as determined by independent members of the Board of Directors
of the Company), he will be entitled to receive 24 months of his then salary (as
defined in the Company’s Severance Pay Plan) plus certain other severance
benefits. Mr. Murdy’s letter agreement with the Company provides that upon his
retirement from the Company on or after his 62nd birthday, he will receive an
additional one-half year of “credited” service under the Company’s supplemental
pension plan for each otherwise credited year of his service with the Company or
any of its subsidiaries in computing his pension benefits. In the event Mr.
Murdy’s employment with the Company or any of its subsidiaries terminates prior
to his 62nd birthday, he will not be entitled to such benefit unless his
termination constitutes a “qualifying termination” as defined in the letter
agreement. Generally, a qualifying termination means (a) a termination due to
Mr. Murdy’s death or disability, (b) a termination by Mr. Murdy for “good
reason” (as defined in the letter agreement), (c) a termination of Mr. Murdy by
the Company without cause (as defined in the Company’s Severance Pay Plan), or
(d) a termination that qualifies Mr. Murdy for enhanced severance benefits under
his Change of Control Agreement (see “Change of Control Employment Agreements”
below). Any benefits to which Mr. Murdy may be entitled under the Company’s
Severance Pay Plan (as described below) reduce the benefits due under these
arrangements.

 

Pursuant to Mr. Lassonde’s Employment Agreement dated February 16, 2002, as
amended, Mr. Lassonde is paid a base salary to perform his duties as President
of the Company, including, but not limited to, the management, operation,
strategic direction and overall conduct of the merchant banking and business
development functions of the Company. In addition, Mr. Lassonde is eligible to
participate in Newmont’s incentive plans, welfare benefit program, stock option
plans and retirement plans. Should Mr. Lassonde be terminated for any reason
other than for cause, he will receive the benefit he would be eligible for under
the Company’s Severance Pay Plan and/or the Executive Change of Control
Severance Plan. In the event his employment is terminated, Mr. Lassonde is not
required to resign from the Board of Directors of the Company; instead, he will
be considered a non-employee director at such time and will be eligible to be
considered for nomination by the Board for re-election as a director at the next
scheduled annual meeting of stockholders, on the same basis as any other
non-employee director. The agreement automatically renews for one-year terms
unless terminated by either party.

 

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Change of Control Employment Agreements. The Company is a party to change of
control employment agreements with each of the named executive officers, other
than Mr. Lassonde (see above). The change of control employment agreements have
three-year terms, which terms are automatically extended for one year upon each
anniversary unless a notice not to extend is given by the Company. If a Change
of Control (as defined in the agreements) occurs during the term of an
agreement, then the agreement becomes operative for a fixed three-year period.
The agreements provide generally that the executive’s terms and conditions of
employment (including position, location, compensation and benefits) will not be
adversely changed during the three-year period after a Change of Control of the
Company. If the Company terminates the executive’s employment (other than for
cause, death or disability), the executive terminates for “good reason” during
such three-year period, or the executive terminates employment for any reason
during the 30-day period following the first anniversary of the Change of
Control, and upon certain terminations prior to a Change of Control in
connection with or in anticipation of a Change of Control, the executive is
generally entitled to receive (a) three times the sum of (i) the executive’s
annual base salary plus (ii) the executive’s annual bonus (as determined in the
agreements), (b) accrued but unpaid compensation, (c) welfare benefits for three
years, (d) a pro rata bonus for the year in which the termination of employment
occurs, and (e) a lump sum payment having an actuarial value equal to the
additional pension benefits the executive would have received if he or she had
continued to be employed by the Company for an additional three years. In
addition, the agreements provide that the executive is entitled to receive a
payment in an amount sufficient to make the executive whole for any excise tax
on excess parachute payments imposed under Section 4999 of the Internal Revenue
Code of 1986, as amended. In the event of a Change of Control, the agreements
will supersede any individual employment agreements entered into by the Company
with the executives, and the executive will not be permitted to participate in
the Company’s severance plans or policies, including the Severance Pay Plan
described below, during the three-year period following a Change of Control. Mr.
Lassonde participates in the Company’s Change of Control Severance Plan for
Executive Employees. In general, the terms of the Change of Control Severance
Plan are similar to those of the change of control agreements described above.

 

Severance Pay Plan. Each of the named executive officers participates in the
Company’s Severance Pay Plan. Participants in the Severance Pay Plan whose
employment with the Company or one of its subsidiaries or affiliates is
involuntarily terminated other than for “cause” (as defined in the Severance Pay
Plan) are entitled to receive a minimum of four weeks of salary (as defined in
the Severance Pay Plan), together with an additional two weeks of salary for
each year of service. Under the Severance Pay Plan, the maximum severance
allowance benefit payable to a participant calculated as set forth above is 104
weeks of the participant’s salary. In addition to the amount described above,
each participant is also entitled to a lump sum payment equal to the Company’s
matching contribution that would have been made under the Company’s Retirement
Savings Plan calculated in accordance with the relevant provisions of the
Severance Pay Plan and any accrued and unused vacation time. Participants under
the Severance Pay Plan are also entitled to certain fringe benefits, such as
coverage under the Company’s medical and dental plans and life insurance plan,
as set forth in the Severance Pay Plan.

 

Perquisites. The Company’s philosophy is to offer a minimum of perquisites to
its executives and generally when such benefits have a business purpose. In
2004, such benefits for the named executive officers were (a) limited use of a
corporate aircraft; (b) financial planning; (c) golf or social club memberships
for the Chief Executive Officer and President; and (d) life

 

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insurance benefits. The Company owns a fractional share in a corporate aircraft,
which is used solely for senior executives’ travel on Company business. On
occasion, a senior executive’s spouse may travel on the same aircraft, at no
incremental cost to the Company. If the spouse’s travel in such cases is in
connection with attendance at a corporate business function which spouses
generally attend, and such travel results in taxable income to the senior
executive, the Company reimburses the executive for the tax effect of such
income.

 

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