Document:

<PAGE>

                                                                   EXHIBIT 10.19

             THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY
                          BNSFC 302606 - Amendment 1
                       REGULATED TRANSPORTATION CONTRACT

Effective Date: 01/01/2001                           Expiration Date: 12/31/2013

1. INTRODUCTION

The parties to this Transportation Contract, as named below, desire to amend
said Contract as stated herein, pursuant to 49 U.S.C. 10709.

CALIFORNIA STEEL INDS
THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY

2. TERM

The term of this Contract is being amended and shall be effective on 01-01-2001
and shall remain in effect through 12-31-2013.

3. TRANSPORTATION SERVICE AGREEMENT

A. The Contract is being amended to delete the current rate structure and
   replace with rates and conditions as shown in the Transportation Service
   Agreement, attached hereto and by this reference made a part hereof.
B. Amend Section "14" by adding the following at the end of the first paragraph:
   "As further clarification with respect to CSI, Force Majeure shall include
   any act of God (as defined in section 14 of the contract), acts of public
   enemy, war, blockade, insurrection, vandalism, sabotage, fire, accident,
   explosion, labor strike or interference, lockout or labor dispute,
   governmental order or regulation, or breakage of machinery, and/or any other
   causes beyond reasonable control of CSI, which results in the closure,
   suspension or material diminishment of operations at CSI's facility. The
   Minimum Volume Requirements of CSI during any given year shall be pro-rated
   to take into account any period of Force Majeure invoked by either CSI or
   BNSF. Any shipment made contrary to the route(s) specified in the Contract or
   Amendment due to a Force Majeure invoked by BNSF shall apply in determining
   compliance with the minimum percentage requirement.
C. Delete the second paragraph of Section 18 of the Contract.

4. RIGHTS AND OBLIGATIONS

Nothing in this Amendment shall alter the rights or obligations of the parties,
except as specifically provided for in the above. The terms and conditions of
the Amendment will only apply to shipments tendered on or subsequent to the
effective date of this Amendment.

5. SIGNATURES

Intending to be legally bound, the parties hereto have caused this Contract to
be executed by their representatives as written below:

CALIFORNIA STEEL INDS

By:  /s/ C. Lourenco Goncalves
     --------------------------
Title: PRESIDENT & C.E.O.
       ------------------------
Date:        1/15/2001
       ------------------------

                                       1
<PAGE>

             THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY
                          BNSFC 302606 - Amendment 1
                       REGULATED TRANSPORTATION CONTRACT

THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY

By:  /s/ David L. Garin
    ------------------------------------

Title:  Group V.P. Industrial Products
       ---------------------------------

Date:  1-15-01
      ----------------------------------

                                       2
<PAGE>

             THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY
                          BNSFC 302606 - Amendment 1
                       REGULATED TRANSPORTATION CONTRACT

                      *Transportation Service Agreement*

Effective Date: 01/01/2001                           Expiration Date: 12/31/2013

                                   CUSTOMER

CALIFORNIA STEEL INDS is the Party entitled to the price(s). PO BOX 5065
FONTANA, CA. 92334-5065
CALIFORNIA STEEL INDS is the Party responsible for the freight charges. Freight
bills will be directed to PO BOX 5065 FONTANA, CA 92334-5065
CALIFORNIA STEEL INDS is the Party who is designated to receive
either notifications of a price authority, amendments, revisions or supplements,
or escalations, or matters pertaining to a Force Majeure or other matters of an
emergency or operating nature. PO BOX 5065 FONTANA, CA. 92334-5065
CALIFORNIA STEEL INDS is a signature Party to the contract. PO BOX 5065 FONTANA,
CA 92334-5065
THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY is a signature Party
to the contract. PO BOX 961069 FT WORTH, TX 76161-0069

                                   EXHIBIT
-Freight charges must be prepaid.
-Price applies in US funds.
-When BNSF bills CSI, CSI will have up to 15 calendar days from the date of the
freight bill to make payment utilizing Web based "epay" payment option.  All
other terms and conditions of the "BNSF Credit Policy" will apply.
-Prices in this Regulated Contract alternate with other Regulated Contracts.
-The Price document number, correct address and patron code must be shown on the
bill of lading to insure accurate billing.
-Price does not apply on shipments accorded transit, inspection, reconsignment,
diversion, or stopping in transit for loading or unloading.
-Prices are subject to BNSF Rules Book 6100-Series.
-Prices are not subject to Fuel Surcharge provisions as described in BNSF Rules
Book 6100.
-BNSF agrees to acquire rail car equipment designed to accommodate the loading
of steel slabs. Such equipment is anticipated to be placed in customer's service
no later than 12-31-2001.
-If CSI or its agent meets its obligations in the next paragraph, BNSF agrees to
place an empty train at CSI's designated loading facility located at the Port of
Long Beach or Los Angeles Harbor, CA at or prior to the time for which CSI or
its agent had ordered placements.

CSI or its agent shall give BNSF notice by a telephone call at 213-267-4086, to
place an empty train, or a portion thereof, at CSI's designated loading
facility at the Port of Long Beach or Los Angeles Harbor, CA no later than 22
hours before the time at which CSI or its agent desires the train to be placed.

If BNSF fails to meet the service commitment as above stated for reasons other
than those set forth in the next paragraph, BNSF agrees to pay CSI the actual
terminal invoice covering the costs incurred by their agent, RDP Terminals, up
to a maximum, of eight (8) hours for each hour or portion there of, that elapse
between the time of actual placement and the time for which placement was
ordered. Notwithstanding the foregoing if BNSF is not able to furnish empty cars
for the 8:00 A.M. or 1:00 P.M. loading shift but telephones CSI's agent (RDP)
not later than 7:00 A.M. of the same day; BNSF agrees to pay CSI the actual

                                      3

<PAGE>

             THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY
                           BNSFC 302606 - Amendment 1
                       REGULATED TRANSPORTATION CONTRACT

terminal invoice covering the costs incurred by the their agent, RDP Terminals
for a total of four (4) hours in lieu of eight (8) hours as provided above.
Provided however that BNSF shall not be obligated to make such payment unless
CSI or its agent has given BNSF notice of CSI's intent to invoke this Section,
within the first two (2) hours of such delay, by telephone call at 213-267-4086
and has followed such notice with a Telefax (fax 213-267-5668).

The service commitment specified above shall not apply where BNSF is unable to
perform due to an Act of God, strikes, lockouts, wrecks, mechanical breakdowns
in equipment or facilities of BNSF, CSI or its agent, or any act of failure to
act on the part of CSI or its agent.

By way of clarification, derailments of empty unit trains, or any portion
thereof, or collisions with other vehicles or objects while enroute to CSI or
its agent at Los Angeles Harbor to meet a prescheduled empty train loading
appointment, shall not constitute grounds for exclusion from Service commitment
requirements and responsibilities.

-If CSI elects to change port of entry from Long Beach or Los Angeles Harbor,
CA. CSI will notify BNSF of such anticipated change at least three (3) months
prior to such change. CSI and BNSF will thence commence negotiations for
transportation charges from the new port of entry.

                             COMMODITY DEFINITIONS

STCC     Description
33123    IRON OR STEEL SHEET OR STRIP PLATED LEADED, PRIMED OR TARRED, OR
         PAINTED OR LACQUERED WITH ONE COAT OR BOTH, ONE COLOR ONLY SIDE
3312140  SLABS, IRON OR STEEL, IN THE ROUGH
3312150  BREAKDOWNS, SLAB OR SHEETBARS, IRON OR STEEL, VIZ. UNFINISHED MATERIAL
         HAVING VALUE FOR REFOLLING PURPOSES ONLY

                                       4
<PAGE>

             THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY
                           BNSFC 302606 - Amendment 1
                       REGULATED TRANSPORTATION CONTRACT

                                   MATRIX 01

Origin                  LONG BEACH, CA
                        LOS ANGELES HARBOR, CA

Destination             KAISER, CA

Equipment               Price applies in railroad owned or leased equipment.
                        Price applies in Coil Cars (General Car Types: OC - Open
                        Coil Cars, CD - Closed Coil Cars, CL - Coil Cars) or
                        Flat Cars (General Car Type: FP - Flat Pedestal Cars).

Route                   BNSF

MATRIX 01

<TABLE>
<CAPTION>

 Effective                    Expiration                  Commodity                    Base Rate                  Volume in
   Date                           Date                                              (Per Metric Ton)             Metric Tons
--------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                          <C>                         <C>                         <C>
--------------------------------------------------------------------------------------------------------------------------------
                                          Minimum Weight will be 81.8 Metric Tons per car
--------------------------------------------------------------------------------------------------------------------------------
01/01/2001                     12/31/2001                33-121-40/50                       $4.48                0 to 1,400,000
-------------------------------------------------------------------------------------------------------------------------------
01/01/2001                     12/31/2001                33-121-40/50                       $4.12                over 1,400,000
-------------------------------------------------------------------------------------------------------------------------------
01/01/2001                     12/31/2001                   33-123                          $4.70                   no volume
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
01/01/2002                     12/31/2002                33-121-40/50                       $4.57                0 to 1,400,000
-------------------------------------------------------------------------------------------------------------------------------
01/01/2002                     12/31/2002                33-121-40/50                       $4.20                over 1,400,000
-------------------------------------------------------------------------------------------------------------------------------
01/01/2002                     12/31/2002                   33-123                          $4.79                   no volume
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
01/01/2003                     12/31/2003                33-121-40/50                       $4.66                0 to 1,400,000
-------------------------------------------------------------------------------------------------------------------------------
01/01/2003                     12/31/2003                33-121-40/50                       $4.28                over 1,400,000
-------------------------------------------------------------------------------------------------------------------------------
01/01/2003                     12/31/2003                   33-123                          $4.88                   no volume
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
01/01/2004                     12/31/2004                33-121-40/50                       $4.75                0 to 1,400,000
-------------------------------------------------------------------------------------------------------------------------------
01/01/2004                     12/31/2004                33-121-40/50                       $4.37                over 1,400,000
-------------------------------------------------------------------------------------------------------------------------------
01/01/2004                     12/31/2004                   33-123                          $4.98                   no volume
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
01/01/2005                     12/31/2005                33-121-40/50                       $4.85                0 to 1,400,000
-------------------------------------------------------------------------------------------------------------------------------
01/01/2005                     12/31/2005                33-121-40/50                       $4.46                over 1,400,000
-------------------------------------------------------------------------------------------------------------------------------
01/01/2005                     12/31/2005                   33-123                          $5.08                   no volume
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       5
<PAGE>

             THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY
                          BNSFC 302606 - Amendment 1
                       REGULATED TRANSPORTATION CONTRACT

<TABLE>
<CAPTION>
Effective          Expiration         Commodity             Base Rate            Volume in
  Date                Date                               (Per Metric Ton)       Metric Tons
-------------------------------------------------------------------------------------------
                          Minimum Weight will be 81.8 Metric Tons per car
<S>                <C>              <C>                  <C>                  <C>
01/01/2006         12/31/2006       33-121-40/50             $4.95            0 to 1,400,000
01/01/2006         12/31/2006       33-121-40/50             $4.55            over 1,400,000
01/01/2006         12/31/2006       33-123                   $5.18            no volume

01/01/2007         12/31/2007       33-121-40/50             $5.05            0 to 1,400,000
01/01/2007         12/31/2007       33-121-40/50             $4.64            over 1,400,000
01/01/2007         12/31/2007       33-123                   $5.28            no volume

01/01/2008         12/31/2008       33-121-40/50             $5.15            0 to 1,400,000
01/01/2008         12/31/2008       33-121-40/50             $4.73            over 1,400,000
01/01/2008         12/31/2008       33-123                   $5.39            no volume

01/01/2009         12/31/2009       33-121-40/50             $5.25            0 to 1,400,000
01/01/2009         12/31/2009       33-121-40/50             $4.82            over 1,400,000
01/01/2009         12/31/2009       33-123                   $5.50            no volume

01/01/2010         12/31/2010       33-121-40/50             $5.36            0 to 1,400,000
01/01/2010         12/31/2010       33-121-40/50             $4.92            over 1,400,000
01/01/2010         12/31/2010       33-123                   $5.61            no volume

01/01/2011         12/31/2011       33-121-40/50             $5.47           0 to 1,400,000
01/01/2011         12/31/2011       33-121-40/50             $5.02           over 1,400,000
01/01/2011         12/31/2011       33-123                   $5.72           no volume

01/01/2012         12/31/2012       33-121-40/50             $5.58          0 to 1,400,000
01/01/2012         12/31/2012       33-121-40/50             $5.12          over 1,400,000
01/01/2012         12/31/2012       33-123                   $5.83          no volume

01/01/2013         12/31/2013       33-121-40/50             $5.69          0 to 1,400,000
01/01/2013         12/31/2013       33-121-40/50             $5.22          over 1,400,000
01/01/2013         12/31/2013       33-123                   $5.95          no volume
</TABLE>

(+) Location includes switching limits
*See Matrix Definitions Below

                            MATRIX 01 DEFINITIONS

Commodities

33123                    33123 - IRON OR STEEL SHEET OR

3312140/050              3312140 SLABS, IRON OR STEEL,
                         3312150 SLAB BKDN IORS

                                      6<PAGE>

                                                                   EXHIBIT 10.32

                            HOMESTAKE MINING COMPANY

                1998 OUTSIDE DIRECTORS' STOCK COMPENSATION PLAN

                       (effective as of January 1, 2000)

          The Plan was adopted by the Board on September 24, 1998, and will be
submitted for approval by Homestake's stockholders at the next meeting of
stockholders held after Board Approval. Contingent upon stockholder approval,
the Plan is generally effective as of January 1, 1999, except as specified below
in Article 8, relating to initial grants of Share Rights. Capitalized terms used
herein shall have the meanings provided in Article 12.

               ARTICLE 1.  SHARE OWNERSHIP POLICY; PLAN PURPOSE.

          It is hereby declared to be the policy of Homestake that Outside
Directors are expected to own Shares equal in value to three times the amount of
the Annual Retainer. Outside Directors are expected to achieve that level of
ownership within five years from the later of (i) the effective date of the Plan
or (ii) the date of election as a Director.

          The purpose of the Plan is to facilitate compliance with this share
ownership policy and to promote the interests of Homestake by attracting and
retaining qualified individuals who are neither employees nor officers of
Homestake or a subsidiary to serve as directors of Homestake. The Plan is
intended to further align the interests of outside directors with the interests
of stockholders of Homestake, thereby promoting long-term growth and performance
of Homestake. The Plan is intended to supersede Article 7 of the Homestake
Mining Company Stock Option and Share Rights Plan - 1996 and, on the date the
Plan becomes effective, no further grants shall be made to Eligible Directors
under that plan.

                           ARTICLE 2. ADMINISTRATION.

          The Plan shall be administered by the Board. The Board shall
administer the Plan in accordance with the Plan and shall have all powers and
discretion necessary or appropriate to administer the Plan, including but not
limited to, the power to (a) interpret the Plan and (b) make all other decisions
relating to the operation of the Plan. The Board may adopt such rules or
guidelines as it deems appropriate to implement the Plan. The Board's
determinations under the Plan shall be final and binding on all persons. No
member of the Board shall be liable for any action or decision made in good
faith in connection with the exercise of the Board's duties under the Plan.

                    ARTICLE 3. SHARES AVAILABLE FOR GRANTS.

3.1  Basic Limitation.  Shares issued pursuant to the Plan shall be authorized
but unissued Shares or treasury Shares. The aggregate number of Shares that may
be issued under the Plan shall not exceed 250,000. The limitations of this
Section 3.1 shall be subject to adjustment pursuant to Section 3.3.

<PAGE>

3.2  Available Shares.  If Restricted Shares or Share Rights are forfeited or
terminate for any other reason before being exercised, then such Restricted
Shares and Shares subject to such Share Rights shall again become available for
Awards under the Plan. If cash is paid in lieu of the issuance of Shares, the
number of Shares with respect to which such payment is made shall not again be
available under the Plan.

3.3  Adjustments.  In the event of a reorganization, recapitalization, stock
split, stock dividend, combination of Shares, merger, consolidation, rights
offering, or any other change in the corporate structure or Shares of Homestake,
the Board shall make such adjustment, if any, as it may deem appropriate in the
number and kind of Shares authorized by the Plan, and in the number and value of
Shares covered by Awards.

                     ARTICLE 4. PARTICIPATION IN THE PLAN.

          Only Eligible Directors are eligible to participate in the Plan.

                             ARTICLE 5. AGREEMENTS.

          All Awards shall be evidenced by an Agreement signed by the Eligible
Directors and Homestake. Each Award shall be subject to the terms and conditions
of the Plan and to such other terms and conditions as may be established by the
Board.

                          ARTICLE 6. ANNUAL RETAINER.

6.1  Portion of Annual Retainer Payable in Shares.  With respect to each Annual
Service Period, each Eligible Director shall receive, in lieu of cash,
unrestricted Shares having a Fair Market Value equal to 50% of his or her Annual
Retainer. The number of Shares to be issued pursuant to Section 6.1 on each date
that a part of the Annual Retainer is payable shall be determined by dividing
50% of the Annual Retainer that would otherwise have been paid in cash on each
payment date (but for this Section 6.1) by the Fair Market Value of a Share on
that date. The Shares shall be issued as soon as is reasonably possible after
the dates on which the cash portion of the Annual Retainer is to be paid.

6.2  Election to Receive Additional Shares.  Not later than ten Business Days
prior to the first day of an Annual Service Period or, if later, the date on
which an individual first becomes an Eligible Director, an Eligible Director
may, by filing a written Annual Election with Homestake, direct Homestake to pay
to such Eligible Director, in the form of unrestricted Shares, some or all of
the cash portion of the Annual Retainer payable to such Eligible Director for
the related Annual Service Period. Any Annual Election shall be effective for
the entire Annual Service Period to which the Annual Election relates. The
number of Shares to be issued pursuant to an Annual Election shall be determined
by dividing the amount of the Annual Retainer that would otherwise have been
paid in cash on each payment date (but for this Section 6.2) by the Fair Market
Value of a Share on that date. Such Shares shall be issued as soon as is
reasonably possible after the dates on which that portion of the Annual Retainer
would have been paid in cash. If the Annual

                                       2
<PAGE>

Retainer is increased during the Annual Service Period, Eligible Directors shall
receive such increase in cash and not Shares, regardless of whether an Annual
Election has been made.

6.3  Bonus Restricted Shares.  Each Eligible Director who has made an Annual
Election pursuant to Section 6.2, shall also receive one Restricted Share for
each four Shares issued pursuant to Section 6.2. The Restricted Shares shall be
subject to the provisions of Article 7.

6.4  Election to Defer.  Not later than ten Business Days prior to the first day
of an Annual Service Period or, if later, the date on which an individual first
becomes an Eligible Director, an Eligible Director may elect to defer, in
accordance with the Homestake Deferred Compensation Plan, receipt of Shares to
be issued pursuant to Sections 6.1 and 6.2 during the Annual Service Period to
which the election relates. To the extent that any Eligible Director elects to
defer the receipt of Shares, such number of deferred stock units shall be
credited to the Eligible Director's Deferred Compensation Plan account, and such
Deferred Compensation Plan account shall be credited with all dividends and
distributions payable with respect to the number of Shares equal to that number
of deferred stock units.

                     ARTICLE 7. TERMS OF RESTRICTED SHARES.

7.1  Restrictions.  The Restricted Shares may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as otherwise specifically
provided, prior to the lapse of the restrictions.

7.2  Issuance of Shares. Homestake shall issue Restricted Shares awarded
hereunder as soon as practicable after the restrictions thereon shall lapse.
Prior to the lapse of the restrictions thereon, the Restricted Shares shall not
be deemed to be outstanding for any purpose.

7.3  Forfeiture.  Restricted Shares shall be forfeited and shall be returned to
Homestake and all rights of the Eligible Director to the Restricted Shares shall
terminate without any payment of consideration by Homestake if the Eligible
Director ceases to be a Director prior to the lapse of the restrictions.

7.4  Lapse of Restrictions.  The restrictions shall lapse in accordance with
this section.

               (a) Restrictions shall lapse with respect to the first 50% of the
     Restricted Shares comprising an Award of Restricted Shares to an Eligible
     Director on the first anniversary of the Grant Date.

               (b) Restrictions shall lapse with respect to an additional 25% of
     such Restricted Shares on the second anniversary of the Grant Date.

               (c) Restrictions shall lapse with respect to the final 25% of
     such Restricted Shares on the third anniversary of the Grant Date.

                                       3
<PAGE>

               (d) In the event that an Eligible Director ceases to be a
     Director prior to the lapse of restrictions as described above within one
     year following a Change of Control, or by reason of death, disability, or
     retirement at mandatory retirement age for Directors, the restrictions on
     all Restricted Shares (and accrued dividends thereon) awarded to such
     Eligible Director shall lapse on the date the Eligible Director ceases to
     be an Director.

               (e) The Board shall have the authority to accelerate the time at
     which the restrictions will lapse or to remove any of such restrictions
     whenever it decides, in its sole discretion, that, by reason of changes in
     applicable law or other material changes in circumstances arising after the
     date of the Award, such action is in the best interests of Homestake and
     equitable to the Eligible Director.

7.5  Voting Rights.  Prior to lapse of the restrictions on Restricted Shares,
Eligible Directors shall not have any right to vote with respect to those
Restricted Shares, unless otherwise provided in the Agreement.

7.6  Dividends.  Prior to lapse of the restrictions, dividends and other
distributions shall be credited to Restricted Shares, but not paid to Eligible
Directors, unless otherwise provided in the Agreement. After lapse of the
restrictions, Eligible Directors shall be entitled to receive all dividends and
other distributions accrued since the Grant Date with respect to such Restricted
Shares, unless otherwise provided in the Agreement.

7.7  Election to Defer.  Not later than ten Business Days prior to the first day
of an Annual Service Period, an Eligible Director may elect to defer, in
accordance with the Homestake Deferred Compensation Plan, receipt of Restricted
Shares to be issued pursuant to Sections 6.3, 7.2 and 7.4 during the Annual
Service Period to which the election relates. To the extent that any Eligible
Director elects to defer the receipt of Restricted Shares, such number of
deferred stock units shall be credited to the Eligible Director's Deferred
Compensation Plan account, and such Deferred Compensation Plan account shall be
credited with all dividends and distributions payable with respect to the number
of Shares equal to that number of deferred stock units.

                   ARTICLE 8. INITIAL GRANTS OF SHARE RIGHTS;
                         ANNUAL GRANTS OF SHARE RIGHTS

8.1  Initial Grant of Share Rights.  Effective January 1, 1997, upon first being
elected to the Board, each Eligible Director shall be granted Share Rights
providing for the issuance of 2,000 Shares. For purposes of Section 8.4, the
date of election to the Board shall be the Grant Date for Eligible Directors
elected between January 1, 1997 and the effective date of the Plan.

8.2  Annual Grant of Share Rights.  Effective January 1, 1999, on the first day
of each Annual Service Period, each Eligible Director shall be granted Share
Rights providing for the issuance of 1,000 Shares attributable to services
performed during the preceding Annual Service Period. Annual Grants to Eligible
Directors who were not Eligible Directors for the entire preceding Annual
Service Period shall be prorated and rounded to the nearest whole Share based on
the number of days actually served as an Eligible Director during such Annual
Service Period.

                                       4
<PAGE>

8.3  Forfeiture.  Share Rights shall be canceled if the Eligible Director ceases
to be a Director before the lapse of the restrictions.

8.4  Lapse of Restrictions.  The restrictions imposed on Share Rights shall
lapse upon the earlier of: (i) the third anniversary of the Grant Date, (ii) the
date the Eligible Director ceases to be a Director within one year following a
Change of Control, or (iii) the date the Eligible Director ceases to be a
Director by reason of death, disability, or retirement at mandatory retirement
age for Directors.

8.5  Payment of Share Rights.  If the restrictions imposed on an Eligible
Director Share Right lapse, the Shares to which such Share Right relates shall
be issued to the Eligible Director as soon as reasonably possible after the date
the Eligible Director ceases to be a Director.

                 ARTICLE 9. PLAN TERM; AMENDMENT; TERMINATION.

9.1  Plan Term.  The Plan shall be effective upon approval at the next meeting
of stockholders held after Board Approval. Unless terminated sooner in
accordance with Section 9.2, no Award may be granted after the earlier of (i)
December 31, 2008, or (ii) the date on which all Shares (or Share Rights in
respect thereof) available for issuance under the Plan have been issued or
canceled pursuant to the exercise or surrender of Awards under the Plan.

9.2  Amendment or Termination.  Except as hereafter provided, the Board may, at
any time and for any reason, amend or terminate the Plan. The foregoing
notwithstanding, any amendment of the Plan shall be subject to the approval of
Homestake's stockholders to the extent required by applicable laws, regulations
or rules, or to the extent any such amendment shall (i) increase the maximum
number of Shares issuable under the Plan (except in accordance with Section
3.3), (ii) increase the benefits accruing to Eligible Directors, or (iii) modify
the eligibility requirements for Awards. No Awards shall be granted under the
Plan after the termination of the Plan. The termination of the Plan, or any
amendment thereof, shall not affect any Award previously granted under the Plan.

                        ARTICLE 10. REGULATORY APPROVAL,
                     REGISTRATION, AND INVESTMENT PURPOSE.

10.1  Regulatory Approval.  The implementation of the Plan, the issuance of
Restricted Shares and the granting of any Share Rights shall be subject to
Homestake's procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, and the Shares issued pursuant to
it.

10.2  Registration.  The Plan, the Shares subject thereto, and the Share Rights
granted thereunder may, in the discretion of the Board, be registered under the
Securities Act and under the securities laws of any state, province or country.
Unless the Share Rights or the Shares shall have been registered under the
Securities Act, each grant of Share Rights and each grant of Shares shall be for
investment and not with a view to resale or distribution of such Shares

                                       5
<PAGE>

contrary to any applicable securities laws. As a condition to the issuance of
any Shares which are not registered under such Act, the Eligible Director and
his or her legal representative, executor, administrator, heir or legatee, as
the case may be, receiving such Shares shall deliver to Homestake a writing, in
form and substance satisfactory to Homestake and its counsel, implementing such
agreement.

                           ARTICLE 11. MISCELLANEOUS.

11.1  No Right to Continue as a Director.  Neither the Plan nor any Award
granted under the Plan shall be deemed to give any individual a right to remain
a Director of Homestake, an Affiliate or any other person. Homestake reserves
the right to terminate the service of any Director in accordance with
Homestake's Certificate of Incorporation, its Bylaws or applicable law.

11.2  Shareholders' Rights.  Except as otherwise provided in an Agreement, an
Eligible Director shall have no dividend rights, voting rights or other rights
as a shareholder with respect to any Shares covered by an Award prior to the
issuance of a stock certificate for such Shares and delivery thereof to such
Director.

11.3  Rule 16b3.  Homestake intends that, with respect to persons subject to
Section 16 of the Exchange Act, this Plan and the issuance of Restricted Shares,
Share Rights and Shares issued on account of Share Rights will qualify under
Rule 16b3 promulgated thereunder. So long as Homestake has any class of equity
securities registered under the Exchange Act, to the extent required to avoid
application of Section 16(b) of the Exchange Act to an acquisition of Shares,
any equity security, as defined in the Exchange Act or the rules and regulations
thereunder, granted pursuant to the Plan, must be held for six months from the
Grant Date, and in the case of any derivative security (as defined in the rules
and regulations promulgated under Section 16) offered pursuant to the Plan, at
least six months must elapse from the date of acquisition of the derivative
security to the date of disposition of the derivative security (other than upon
exercise or conversion) or its underlying equity security, except in the event
of the death or disability of the holder thereof. If any provision of the Plan
or an Agreement requires modification to comply with the requirements of Section
16 and the rules thereunder, the Board may waive, amend or modify the Plan or
the Agreement accordingly. To the extent that any provision of this Plan or
action by the Board fails to comply with the Section 16 rules, it shall be null
and void to the extent permitted by law and deemed advisable by the Board.

11.4  Transferability.  Restricted Shares and rights to dividends thereon (prior
to lapse of restrictions thereon) and Share Rights granted under the Plan shall
not be transferable other than by will or the laws of descent or distribution;
provided, however, to the extent permitted by Rule 16b3 or any successor rule,
an Agreement with respect to Restricted Shares and Share Rights may permit
transfers, (i) in connection with an Eligible Director's estate plan, to (a) an
Eligible Director's family members, (b) a trust for the benefit of the Eligible
Director or the Eligible Director's family members, or (c) other members of the
Eligible Director's household, or (ii) pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986, as amended, or
Title I of the Employee Retirement Income Security Act, or the rules thereunder.

                                       6
<PAGE>

11.5  Governing Law.  The Plan and all Agreements shall be construed in
accordance with and governed by the laws of the State of Delaware.

11.6  Payment of Taxes.  Homestake shall have the right to require, prior to the
issuance or delivery of any Shares or dividends thereon, payment by an Eligible
Director of any taxes required by law with respect to the issuance or delivery
of such Shares or dividends. With respect to tax withholding required upon the
grant of Shares, upon the lapse of restrictions on Restricted Shares, or upon
any other taxable event arising out of or as a result of any grant or Award made
hereunder, Eligible Directors may elect to satisfy the withholding requirement,
in whole or in part, by tendering previouslyowned Shares or by having Homestake
withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All elections shall be irrevocable, made in writing, and signed
by the Eligible Director.

11.7  Costs.  Homestake shall bear all expenses incurred in administering the
Plan, including expenses related to the award and issuance of Shares, Restricted
Shares and Share Rights.

11.8  Fractional Shares.  In all instances, cash shall be paid in lieu of
fractional Shares in an amount equal to the Fair Market Value of the fractional
Shares on the date the fractional Shares would otherwise be payable.

                            ARTICLE 12. DEFINITIONS.

12.1  General Definitions.  The following words and phrases, when used in the
Plan, unless otherwise specifically defined or unless the context clearly
otherwise requires, shall have the following meanings:

          "Agreement" means the written agreement setting forth the terms and
provisions applicable to each Award granted under the Plan.

          "Annual Election" means an irrevocable election made in accordance
with Section 6.2.

          "Annual Retainer" means the annual retainer to be paid by Homestake to
an Eligible Director with respect to an Annual Service Period, at the rates
determined by the Board in advance of such period.

          "Annual Service Period" means an annual period determined by the
Board, which annual period shall be January 1 through December 31 or such other
annual period as may be designated from time to time by the Board of Directors.

          "Award" means any award of Shares, Restricted Shares or Share Rights
under the Plan.

                                       7
<PAGE>

          "Board" means Homestake's Board of Directors, as constituted from time
to time.

          "Change of Control" means the occurrence of any of the following
events:

          (i)    Homestake or any of its Subsidiaries is a party to a
                 consolidation or merger or other combination, or there is an
                 acquisition by Homestake or any of its Subsidiaries of another
                 corporation or entity or its assets, or there is any other
                 corporate reorganization or acquisition transaction in which
                 Homestake or any of its Subsidiaries is a participant, under
                 the terms of which capital stock having less than 62.5% of the
                 voting power in election of directors in Homestake or the
                 resulting or surviving publicly held corporation or entity (if
                 not Homestake) is held by the Stockholders of Homestake
                 immediately preceding such event;

          (ii)   At least 75% in fair market value of Homestake's assets are
                 sold; or

          (iii)  Capital stock having at least 25% in voting power in election
                 of directors of Homestake is acquired by any one person or
                 "group," as that term is used in Rule 13d-5 under the
                 Securities Exchange Act of 1934.

          "Code" means the Internal Revenue Code of 1986, as amended.

          "Director" means a member of the Board.

          "Eligible Director" means a Director who is not an employee of
Homestake or any of its subsidiaries or affiliates. Directors emeritus shall not
be eligible to participate.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Fair Market Value" means the fair market value of Shares, determined
by the Board, in its sole discretion.

          "Grant Date" means, with respect to an Award, the date that the Award
is deemed granted under the Plan. Within a reasonable time thereafter, Homestake
will execute and deliver an Agreement to the Eligible Director.

          "Homestake" means Homestake Mining Company, a Delaware corporation.

          "Plan" means this Homestake Mining Company 1998 Outside Directors'
Stock Compensation Plan, as it may be amended from time to time.

          "Restricted Share" means a Share which is subject to the restrictions
set forth in Section 7.

          "Securities Act" means the Securities Act of 1933, as amended.

                                       8
<PAGE>

          "Share" means one share of the common stock of Homestake.

          "Share Right" means the right to acquire a Share for no consideration.

12.2  Other Definitions.  In addition to the above definitions, certain words
and phrases used in the Plan and any Agreement may be defined in other portions
of the Plan or in an Agreement.

          IN WITNESS WHEREOF, HOMESTAKE MINING COMPANY has executed this Plan as
of December 1, 1998.

                                  HOMESTAKE MINING COMPANY
                                  By: /s/ Wayne Kirk

                                  Wayne Kirk
                                  Vice President, General Counsel and Secretary

                                       9

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