Document:

Exhibit 10.3

Exhibit 10.3

 

 

NEWMONT

ANNUAL INCENTIVE COMPENSATION PROGRAM

As Amended and Restated Effective January 1, 2010

 

 

 

 

 

NEWMONT

ANNUAL INCENTIVE COMPENSATION PROGRAM

(Effective as of January 1, 2010)

PURPOSE

The purpose of this program is to provide to those employees of Newmont Mining and its
Affiliated Entities that participate in this program a more direct interest in the success of the
operations of Newmont Mining. Employees of Newmont Mining and participating Affiliated Entities
will be rewarded in accordance with the terms and conditions described below.

This program is intended to be a program described in Department of Labor Regulation
Section 2510.3-1(b) and shall not be considered a plan subject to the Employee Retirement Income
Security Act of 1974, as amended.

SECTION I-DEFINITIONS

1.1 “Affiliated Entity(ies)” means any corporation or other entity, now or hereafter
formed, that is or shall become affiliated with Newmont Mining, either directly or indirectly,
through stock ownership or control, and which is (a) included in the controlled group of
corporations (within the meaning of Code Section 1563(a) without regard to Code Section 1563(a)(4)
and Code Section 1563(e)(3)(C)) in which Newmont Mining is also included and (b) included in the
group of entities (whether or not incorporated) under common control (within the meaning of Code
Section 414(c)) in which Newmont Mining is also included.

1.2 “Board” means the Board of Directors of Newmont Mining or its delegate.

1.3 “Bonus Eligible Earnings” means the total base salary and regular earnings
(collectively, “regular earnings”) of the Employee during the calendar 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 calendar 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 calendar year, but excluding
pay from any other source. If an Employee dies during the calendar 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 calendar year, the “Bonus Eligible
Earnings” will be determined by his actual gross base earnings during the calendar year, exclusive
of any government 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 calendar year,
or portion thereof, as shown on the payroll records of Newmont Mining 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
Newmont Mining 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
calendar year through the date of termination of employment.

 

 

 

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

(i) The acquisition in one or a series of transactions 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 (x) the
then outstanding shares of common stock of Newmont Mining (the “Outstanding Company Common
Stock”) or (y) the combined voting power of the then outstanding voting securities of
Newmont Mining entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this subsection (i),
the following acquisitions shall not constitute a Change of Control: (A) any acquisition
directly from Newmont Mining other than an acquisition by virtue of the exercise of a
conversion privilege, unless the security being so converted was itself acquired directly
from Newmont Mining, (B) any acquisition by Newmont Mining, (C) any acquisition by any
employee benefits plan (or related trust) sponsored or maintained by Newmont Mining or any
corporation controlled by Newmont Mining or (D) any acquisition by any corporation pursuant
to a transaction which complies with clauses (A), (B) and (C) of paragraph (iii) below; or

(ii) Individuals who, as of the Effective Date, constitute the Board of Directors of
Newmont Mining (“Incumbent Board”) cease for any reason to constitute at least a majority of
the Board of Directors of Newmont Mining; provided, however, that any individual becoming a
director subsequent to the Effective Date whose election, or nomination for election by
Newmont Mining’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 Newmont Mining; or

(iii) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of Newmont Mining or an acquisition of
assets of another corporation (a “Business Combination”), in each case, unless, following
such Business Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation or other entity which as
a result of such transaction owns Newmont Mining or all or substantially all of Newmont
Mining’s assets either directly or through one or more subsidiaries

 

 

 

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

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

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

1.6 “Compensation Committee” means the Compensation Committee of the Board of
Directors of Newmont Mining.

1.7
“Consolidated Capital Expenditures” means Newmont Mining’s total capital
expenditures on an accrual basis measured against target capital expenditures on an accrual basis,
adjusted from time to time as approved by the Board.

1.8
“Consolidated Costs Applicable to Sales — Gold and
Copper” means audited, US GAAP
consolidated costs applicable to sales for gold (per ounce calculation) and for copper (per pound
calculation), measured against the target consolidated costs applicable to sales for gold (per
ounce calculation) and to sales for copper (per pound calculation) per the approved business plan,
and as adjusted from time to time as approved by the Board.

1.9 “Corporate Performance Bonus” means the bonus payable to an Employee pursuant to
Section III.

 

 

 

1.10 “Disability” means a condition such that the salaried Employee has terminated
employment with Newmont Mining or Affiliated Entities with a disability and has begun receiving
benefits from the Long Term Disability Plan of Newmont Mining (or Affiliated Entity) or a
successor plan.

1.11 “Equity Ounces Production — Gold and Equity Pounds Production — Copper” means the
reported equity ounces of gold produced and reported equity pounds of copper produced for the
applicable calendar year, measured against the target equity ounces of gold and target equity
pounds of copper produced per the approved business plan, and as adjusted from time to time as
approved by the Board.

1.12 “Economic Performance Driver” means Consolidated Capital Expenditures,
Consolidated Costs Applicable to Sales — Gold and Copper, Equity Ounces Production — Gold and
Equity Pounds Production Copper, and Reserve and NRM Additions.

1.13 “Employee” means an employee of Newmont Mining or an Affiliated Entity who
satisfied the conditions for this program and who is not (a) an individual who performs services
for Newmont Mining or an Affiliated Entity under an agreement, contract or arrangement (which may
be written or oral) between the employer and the individual or with any other organization that
provides the services of the individual to the Employer pursuant to which the individual is
initially classified or treated as an independent contractor or whose remuneration for services has
not been treated initially as subject to the withholding of federal income tax pursuant to Code
§ 3401, or who is otherwise treated as an employee of an entity other than Newmont Mining or an
Affiliated Entity, irrespective of whether he or she is treated as an employee of Newmont Mining or
an Affiliated Entity under common-law employment principles or pursuant to the provisions of Code
§ 414(m), 414(n) or 414(o), 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, the settlement of an
administrative or judicial proceeding or a determination by the Internal Revenue Service, the
Department of the Treasury or the Department of Labor, (b) an individual who is a leased employee,
(c) a temporary employee, or (d) an individual covered by a collective bargaining agreement unless
otherwise provided for in such agreement.

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

1.15 “Newmont Mining” means Newmont Mining Corporation.

1.16 “Participating Employer” means Newmont Mining and any Affiliated Entity.

1.17 “Pay Grade” means those jobs sharing a common salary range, as designated by the
Board or its delegate.

1.18 “Performance Rating Category” means the numerical category used to classify the
performance of each Employee in accordance with Newmont Mining’s performance management system.

 

 

 

1.19 “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.

1.20 “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 Section 4.1.

1.21 “Reserve and NRM Additions” means annual gold reserve and non-reserve
mineralization material (“NRM”) additions measured against target annual reserve and non-reserve
mineralization material additions per the approved business plan, and as adjusted from time to time
as approved by the Board.

1.22 “Terminated Eligible Employee” means an Employee employed in a position located
in Colorado or any Employee in an Executive grade level position who terminates employment with
Newmont Mining and/or a Participating Employer during the calendar year on account of death,
retirement or Disability. The Executive Vice President of Human Resources of Newmont Mining (or
his or her delegate) may, in his/her sole discretion, also designate in writing other Employees who
terminate employment during the calendar year under other circumstances as “Terminated Eligible
Employees.”

SECTION II-ELIGIBILITY

All Employees of a Participating Employer are potentially eligible to receive a bonus payment
under this program, provided (i) they are on the payroll of a Participating Employer as of the last
day of the calendar year, and at the time of payment, or (ii) they are a Terminated Eligible
Employee with respect to such calendar year. Otherwise eligible Employees who are on short-term
disability under the Short-Term Disability Plan of Newmont Mining (of Affiliated Entity) or a
similar or a successor plan or not working because of a work-related injury as of the last day of
the calendar year shall be eligible to receive a bonus under clause (i). Notwithstanding the
foregoing provisions of this paragraph, the Compensation Committee or the Executive Vice President
of Human Resources (or his or her delegate) may, prior to the end of the calendar year, exclude
from eligibility for participation under this program with respect to the calendar year any
Employee or Employees, as he or she may determine in his or her sole discretion. Additionally, the
Compensation Committee or the Executive Vice President of Human Resources (or his or her delegate)
may, prior to the end of the calendar year, exclude from eligibility for participation under this
program with respect to the calendar year any Employee or Employees, that has failed to complete
any required ethics training or failed to comply with acknowledgement of any Code of Conduct of
Newmont Mining or any Affiliated Entity.

 

 

 

SECTION III-CORPORATE PERFORMANCE BONUS

3.1 Eligibility for Corporate Performance Bonus. For the calendar year, the Corporate
Performance Bonus will be determined pursuant to this section for each eligible Employee who is
(a) in Pay Grade 109 and above on the last day of the calendar year and at the time the payment is
made (or was in such Pay Grade at the time of termination of employment), excluding any Employee
eligible to participate in the Senior Executive Compensation Program; (b) each eligible Employee
who is in Pay Grade 108 and below who is employed by the corporate office (including expatriate
assignments) or at a non-operating site location, as determined by the Executive Vice President of
Human Resources (or his or her delegate), on the last day of the calendar year and at the time
payment is made (or was in such Pay Grade and at such location at the time of termination of
employment); and (c) any other employee or class of employees as determined by the Executive Vice
President of Human Resources (or his or her delegate). For the calendar year, the performance
bonus for each eligible Employee who is in Pay Grade 108 or below on the last day of the calendar
year and at the time the payment is made (or was in such Pay Grade at the time of termination of
employment) and who is not assigned to the corporate office or at 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 Newmont Mining for
the calendar year, rather than the Corporate Performance Bonus. Each operating site shall develop
its own critical performance indicators for this purpose.

3.2 Target Amounts for Economic Performance Drivers. The Compensation Committee shall
establish both the targets and the minimum and maximum amounts for each Economic Performance Driver
on an annual basis. The target Consolidated Capital Expenditures and Consolidated Costs Applicable
to Sales — Gold and Copper, together with the applicable minimums and maximums for each such
Economic Performance Driver, shall be established in United States dollars and cents. The target,
minimum and maximum Equity Ounces Production-Gold and Reserve and NRM Additions shall be
established in ounces. The target, minimum and maximum Equity Pounds Production-Copper shall be
established in pounds. Targets will be adjusted for acquisitions or divestitures as approved by the
Newmont Mining Board of Directors.

3.3 Actual Performance for Economic Performance Drivers. As soon as possible after
the end of each calendar year, the Compensation Committee shall certify the extent to which actual
performance met the target amounts for each Economic Performance Driver.

3.4 Aggregate Payout Percentage. An aggregate payout factor (the “Aggregate Payout
Percentage”) will be calculated as follows:

(i) Calculating the Performance Percentage for each Economic Performance Driver. For
each Economic Performance Driver, actual performance will be compared to the target, minimum
and maximum amounts to arrive at a performance percentage (“Performance Percentage”)
calculated as follows:

	 	•	 	If the actual amount is less than the minimum amount, the Performance Percentage
is zero;

 

 

 

	 	•	 	If the actual amount is equal to the minimum amount, the Performance Percentage
is 50%;

	 	•	 	If the actual amount is less than the target amount and greater than the minimum
amount, the Performance Percentage is the sum of (A) 50%, plus (B) the product of
50%, times a fraction, the numerator of which is the difference between the actual
amount and the minimum amount, and the denominator of which is the difference
between the target amount and the minimum amount;

	 	•	 	If the actual amount is equal to the target amount, the Performance Percentage
is 100%;

	 	•	 	If the actual amount is greater than the target amount and less than the maximum
amount, the Performance Percentage is the sum of (A) 100%, plus (B) a fraction, the
numerator of which is the difference between the actual amount and the target
amount, and the denominator of which is the difference between the maximum amount
and the target amount; and

	 	•	 	If the actual amount is greater than or equal to the maximum amount, the
Performance Percentage is 200%.

(ii) Calculating the Payout Percentage for each Economic Performance Driver. The
payout percentage for each Economic Performance Driver is the product of the Performance
Percentage times the applicable weighting factor as listed in Appendix A (“Payout Percentage
for each Economic Performance Driver”).

(iii) Calculating the Aggregate Payout Percentage. The Aggregate Payout Percentage is
the sum of the Payout Percentages for each Performance Factor.

3.5 Determination of Target Performance Level. An Employee’s Target Performance Level
is determined by the Employee’s Pay Grade pursuant to the table in Appendix B.

3.6 Determination of the Corporate Performance Bonus. The Corporate Performance Bonus
for each eligible Employee is the product of the Aggregate Payout Percentage, times the Employee’s
Target Performance Level, times the Employee’s Bonus Eligible Earnings.

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

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

 

 

 

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

SECTION IV-PERSONAL PERFORMANCE BONUS

4.1 Personal Performance Level. At the end of the calendar year, each eligible
Employee’s supervisor will evaluate the Employee and rate the Employee’s personal performance
level. In accordance with Newmont Mining’s performance management system, the supervisor will rate
the Employee. Each Employee will be rated by the Employee’s supervisor in one of Newmont Mining’s
Performance Rating Categories. In conjunction with these ratings, Newmont Mining will assign a
Personal Performance Bonus Factor for the Employee as listed in Appendix C. For Employees in
grades E6-E5, the Employee’s supervisor shall also recommend a Personal Performance Payout Factor
within the range stated in Appendix C corresponding to the rating that Employee’s supervisor
assigned to Employee. Newmont Mining may increase or decrease any eligible Employee’s Personal
Performance Bonus Factor in its sole discretion.

4.2 Determination of Personal Performance Bonus. Subject to Section 4.3, an eligible
Employee’s Personal Performance Bonus is determined by multiplying the eligible Employee’s Bonus
Eligible Earnings times the applicable percentage from the Target Performance Level, as set forth
in Appendix C times the Personal Performance Bonus Factor determined pursuant to Section 4.1.

4.3 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 Performance Level multiplied by their Bonus Eligible Earnings for the calendar
year.

4.4 Ineligible Employees. Eligible Employees whose Personal Performance Bonus Factor
(determined pursuant to Section 4.1) is less than .70 shall not be eligible to receive a Personal
Performance Bonus.

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

 

 

 

SECTION V-PAYMENT OF BONUS

5.1 Pay Grade. If an eligible Employee was in more than one Pay Grade during the
calendar year, the bonus payable to such eligible Employee 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
calendar year.

5.2 Time and Method of Payment. The aggregate of any and all bonuses payable under
this program shall be payable to each eligible Employee (other than Terminated Eligible Employees)
in cash as soon as practicable following approval of bonuses by the Compensation Committee.
Terminated Eligible Employees shall receive the aggregate of any and all bonuses payable under this
program in cash as soon as practicable following the date of their termination from employment with
a Participating Employer. All payments and the timing of such payments shall be made in accordance
with practices and procedures established by the Participating Employer. Payment under this
program will be made no later than the 15th day of the third month following the
calendar year in which an Employee’s right to payment is no longer subject to a substantial risk of
forfeiture. Notwithstanding the foregoing, in the event an Employee failed to complete any
required ethics training or failed to comply with acknowledgement of any Code of Conduct of Newmont
Mining or any Affiliated Entity, Newmont Mining may withhold payment under this program unless or
until such Employee complies.

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

SECTION 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 calendar year in which
the Change of Control occurs) shall become entitled to the payment of a Corporate Performance Bonus
and a Personal Performance Bonus, in accordance with the provisions of this Section.

6.2 Calculation of Bonuses. Upon a Change of Control, each eligible Employee,
excluding any Terminated eligible Employee who terminated prior to the Change of Control, shall
become entitled to the payment of (i) a Corporate Performance Bonus calculated on the basis of a
Performance Percentage equal to the greater of the actual results attained for the calendar year or
the applicable targets for such Calendar 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 calendar year or a Personal Performance Bonus Factor of 1.0. If a
Change of Control occurs prior to the time that the Compensation
Committee has established the targets for the calendar year, such percentages shall be based
upon the corresponding percentages for the immediately preceding calendar year.

 

 

 

6.3 Payment of Bonuses. The bonuses payable in accordance with the provisions of this
Section VI shall be calculated and paid as soon as practicable following the date of the Change of
Control. Such payments shall be subject to the withholding of such amounts as Newmont Mining or a
Participating Employer 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 shall
have no further right to the payment of any bonus hereunder (other than any bonus payable hereunder
with respect to a previous calendar year that has not yet been paid).

SECTION VII-GENERAL PROVISIONS

7.1 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 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 Group Life and Accidental Death & Dismemberment Plan of Newmont USA
Limited (or a successor plan) or a similar plan of a Participating Employer. 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.

7.2 Right of Offset. To the extent permitted by applicable law, Newmont Mining or a
Participating Employer may, in its sole discretion, apply any bonus payments otherwise due and
payable under this program against any eligible Employee or Terminated Eligible Employee loans
outstanding to Newmont Mining, an Affiliated Entity, or Participating Employer, or other debts of
the eligible Employee or Terminated Eligible Employee to Newmont Mining Newmont Mining, an
Affiliated Entity, or Participating Employer. By accepting payments under this program, the
eligible Employee consents to the reduction of any compensation paid to the eligible Employee by
Newmont Mining, an Affiliated Entity, or Participating Employer to the extent the eligible Employee
receives an overpayment from this program.

7.3 Termination. The Board may at any time amend, modify, suspend or terminate this
program; provided, however, that the Compensation Committee may, consistent with its administrative
powers, waive or adjust provisions of this program as it determines necessary from time to time.

7.4 Payments Due Minors or Incapacitated Persons. If any person entitled to a payment
under this program is a minor, or if the Compensation Committee or its delegate 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 or its
delegate shall have the power to cause the payment becoming due to such person to be made to
another for his or her benefit, without responsibility of the Compensation Committee or its
delegate, Newmont Mining, 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, this program, Newmont Mining, and Affiliated Entity or Participating Employer.

 

 

 

7.5 Severability. If any 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 this program, and this program shall be construed and enforced as if such illegal and
invalid provision had never been set forth in this program.

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

7.7 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.

7.8 Successors. This program shall be binding upon and inure to the benefit of
Newmont Mining, the Participating Employers and the eligible Employees and Terminated Eligible
Employees and their respective heirs, representatives and successors.

7.9 Governing Law. This program 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.

7.10 Reimbursement. The Compensation Committee, to the full extent permitted by
governing law, shall have the discretion to require reimbursement of any portion of Corporate
Performance Bonus previously paid to an eligible Employee pursuant to the terms of this
compensation program if: a) the amount of such Corporate Performance Bonus was calculated based
upon the achievement of certain financial results that were subsequently the subject of a
restatement, and b) the amount of such Corporate Performance Bonus that would have been awarded to
the eligible Employee had the financial results been reported as in the restatement would have been
lower than the Corporate Performance Bonus actually awarded. Additionally, the Compensation
Committee, to the full extent permitted by governing law, shall have the discretion to require
reimbursement of any portion of a Corporate Performance Bonus and Personal Performance Bonus
previously paid to an eligible Employee pursuant to the terms of this compensation program if the
eligible Employee is terminated for cause as defined in the Executive Change of Control Plan of
Newmont.

 

 

 

APPENDIX
A - Payout Percentage for each Economic Performance Driver

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Reserve and	 	 	 	 	 	 	Equity	 
	 	 	 	 	NRM	 	 	 	 	 	 	Ounces	 
	 	 	 	 	Additions (2/3	 	 	 	 	 	 	Production -	 
	 	 	 	 	gold reserves	 	 	 	 	 	 	Gold and	 
	 	 	 	 	and 1/3 non-	 	 	Consolidated	 	 	Equity	 
	Consolidated	 	 	reserve	 	 	Costs	 	 	Pounds	 
	Capital	 	 	mineralization	 	 	Applicable to	 	 	Production -	 
	Expenditures	 	 	material)	 	 	Sales	 	 	Copper	 
	 	25	%	 	 	25	%	 	 	25	%	 	 	25	%

 

 

 

APPENDIX B

	 	 	 	 	 
	 	 	Target Corporate	 
		 	Performance Bonus	 
	Pay Grade	 	Level	 
	E-5
	 	 	30	%
	E-6
	 	 	20	%
	109
	 	 	20	%
	107-108
	 	 	15	%
	105-106
	 	 	14	%
	103-104
	 	 	10	%
	101-102
	 	 	5	%
	99-100
	 	 	4	%
	49-50
	 	 	3	%
	11-27
	 	 	3	%

 

 

 

APPENDIX C

	 	 	 
	Performance	 	Personal
	Rating System	 	Performance
	E5-E6	 	Bonus Factor
	1
	 	0
	2
	 	.50-.90
	3
	 	.90-1.10
	4
	 	1.10-1.30
	5
	 	1.30-1.70
	6
	 	1.70-2.0

	 	 	 	 	 
	Performance	 	Personal	 
	Rating System	 	Performance	 
	109 and below	 	Bonus Factor	 
	1
	 	 	0	 
	2
	 	 	.70	 
	3
	 	 	1.0	 
	4
	 	 	1.20	 
	5
	 	 	1.50	 
	6
	 	 	2.0	 

	 	 	 	 	 
		 	Target Personal	 
	Pay Grade	 	Performance Bonus Level	 
	E-5
	 	 	30	%
	E-6
	 	 	20	%
	109
	 	 	20	%
	107-108
	 	 	15	%
	105-106
	 	 	14	%
	103-104
	 	 	10	%
	101-102
	 	 	5	%
	99-100
	 	 	4	%
	49-50
	 	 	3	%
	11-27
	 	 	3	%Exhibit 10.4

Exhibit 10.4

 

NEWMONT

EMPLOYEE PERFORMANCE INCENTIVE COMPENSATION

PROGRAM

(Effective and restated January 1, 2010)

 

 

 

 

NEWMONT

EMPLOYEE PERFORMANCE INCENTIVE COMPENSATION

PROGRAM

(Effective as of January 1, 2010)

PURPOSE

The purpose of this program is to provide to Employees of Newmont Mining and its Affiliated
Entities that participate in this program a more direct interest in the success of the operations
of Newmont Mining. Employees of Newmont Mining and participating Affiliated Entities will be
rewarded in accordance with the terms and conditions described below.

SECTION I-DEFINITIONS

The capitalized terms used in this program shall have the same meaning as the capitalized
terms in the Annual Incentive Compensation Program, unless otherwise stated herein. In addition,
the terms set forth in this Section shall have the meaning set forth below.

1.1 “Common Stock” means the $1.60 par value common stock of Newmont Mining
Corporation.

1.2 “EPI Bonus” means the bonus payable to an eligible Employee in the form of
Restricted Stock Units under this program with respect to a Performance Period (or portion thereof
as provided in Section 3.2), which shall be determined by multiplying the eligible Employee’s Bonus
Eligible Earnings by the product of (a) the Targeted Payout Percentage as set forth in Appendix A
for the eligible Employee’s grade for the Performance Period (or portion thereof) times (b) the
Aggregate Payout Percentage calculated in accordance with Section 3.4 of the Annual Incentive
Compensation Program. EPI bonus will be calculated using a three-year weighted EPI bonus
calculation. The three-year weighted EPI bonus calculation is comprised of 20% weighting for the
first year (two years ago), 30% weighting for the second year (one year ago), and 50% weighting for
the third year (the current year). Restricted Stock or Restricted Stock Units awarded as an EPI
Bonus shall have terms and conditions, and shall be subject to such restrictions as defined by the
Compensation Committee.

1.3 “Fair Market Value” means, with respect to a share of Common Stock as of a given
date, the fair market value calculated in accordance with the Newmont Mining stock plan from which
such shares are to be issued.

1.4 “Performance Period” means the calendar year over which the Aggregate Performance
Percentage shall be calculated for purposes of determining the amount of an EPI Bonus. The
Performance Period shall be the calendar year.

 

 

 

1.5 “Restricted Stock Units” means the right to receive Common Stock under terms and
conditions defined in a restricted stock unit agreement, as defined by the Compensation Committee.

1.6 “Targeted Payout Percentage” means the percentage of an eligible Employee’s Bonus
Eligible Earnings taken into account when calculating the EPI Bonus with respect to a Performance
Period, as specified in Appendix A. If the Pay Grade of an eligible Employee changes during a
Performance Period, the Targeted Payout Percentage applicable to such eligible Employee shall be
prorated based upon the number of days spent in each Pay Grade during the Performance Period.

1.7
“Terminated Eligible Employee” has the same meaning as stated in the Annual
Incentive Compensation Program except that a Terminated Eligible Employee for purposes of this
program shall not include employees severed under any severance plan of Newmont Mining or any
Affiliated Entity.

SECTION II-ELIGIBILITY

All Employees of a Participating Employer in an executive grade level, except any Employee who
is eligible for the Senior Executive Compensation Program, are eligible to receive an EPI Bonus
under this program, provided (i) they are on the payroll of a Participating Employer as of the last
day of the relevant Performance Period, and at the time the award is granted, or (ii) they are a
Terminated Eligible Employee with respect to such calendar year. Employees who are on short-term
disability under the Short-Term Disability Plan of Newmont or a successor plan or not working
because of a work-related injury as of the last day of the Performance Period shall be eligible to
receive a bonus under this program. Notwithstanding the foregoing provisions of this Section II,
the Compensation Committee or the Executive Vice President of Human Resources of Newmont Mining (or
his or her delegate) may, prior to the end of any Performance Period, exclude from or include in
eligibility for participation under this program with respect to such Performance Period any
Employee or Employees.

SECTION III-EPI BONUS

3.1 Determination of EPI Bonus—In General. The EPI Bonus shall be calculated as soon
as reasonably practicable after the Compensation Committee determines the Aggregate Payout
Percentage for the most current year and the three year weighted EPI bonus calculation. Following
such determination, payment of the EPI Bonus shall be made to the eligible Employees (other than
Terminated Eligible Employees) in accordance with the provisions of this Section III as soon as
reasonably practicable.

 

 

 

3.2 Determination of EPI Bonus and Payment of EPI Bonus to Terminated Eligible
Employees. Terminated Eligible Employees shall be entitled to receive an EPI Bonus based upon
their Bonus Eligible Earnings for the Performance Period during which their employment
with Newmont Mining and/or a Participating Employer terminates, calculated by using the
Targeted Payout Percentage for the Performance Period applicable to the Performance Period during
which the eligible Employee terminated employment. Payment shall be made to a Terminated Eligible
Employee with respect to a Performance Period in accordance with Section 3.3 as soon as practicable
following the date of termination from employment with Newmont Mining and/or a Participating
Employer.

3.3 Form of Payment. The amount of EPI Bonuses payable under this Program shall be
paid in Restricted Stock Units (payable in whole shares only rounded down to the nearest share),
which shall be subject to the restrictions set forth in Section 3.5 below. The number of shares of
Restricted Stock Units to be issued in payment of an EPI Bonus shall be determined based upon the
Fair Market Value of the Common Stock on the date that the Compensation Committee meets and
certifies the satisfaction of the material terms of this program with respect to the payment of the
EPI Bonus in accordance with the provisions of Section 3.1.

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

3.5 Restrictions on Common Stock or Restricted Stock Units.

(a) Shares of Restricted Stock Units issued as an EPI Bonus will have a three year vesting
period, with one-third of the units vesting each year on the anniversary of the date of grant.

(b) Shares of Restricted Stock Units issued under this program are subject to forfeiture as
follows: If an eligible Employee terminates employment prior to the first anniversary of the date
on which such shares of Restricted Stock Units were granted to the eligible Employee (the “Grant
Date”), all such shares of Restricted Stock Units shall be forfeited. If an eligible Employee
terminates employment on or after the first anniversary of the Grant Date, but prior to the second
anniversary of the Grant Date, the eligible Employee shall forfeit two-thirds of the shares of
Restricted Stock Units awarded as a part of such EPI Bonus. If an eligible Employee terminates
employment on or after the second anniversary of the Grant Date, the eligible Employee shall
forfeit one-third of the shares the Restricted Stock Units awarded as part of such EPI Bonus. If
the eligible Employee terminates employment on or after the third anniversary of the Grant Date
there are no restrictions.

(c) Shares of Restricted Stock Units issued hereunder as a part of an EPI Bonus shall not be
subject to transfer by the eligible Employee until such time as the Shares have become
non-forfeitable in accordance with this Section, at which time such Shares of Common Stock may be
freely transferred by the eligible Employee subject to all applicable laws, regulations and Newmont
Mining and Participating Employer policies.

(d) Shares of Restricted Stock Units issued under this program may be issued pursuant to the
provisions of any stock plan of Newmont Mining or as otherwise determined in the sole discretion of
the Compensation Committee.

 

 

 

(e) Notwithstanding anything contained in this program to the contrary, this program shall be
administered and operated in accordance with any applicable laws and regulations including but not
limited to laws affecting the timing of payment of the EPI Bonus to eligible Employees under this
program. The Compensation Committee or its delegate reserves the right to amend their program at
any time in order for this program to comply with such laws or regulations.

(f) The Compensation Committee, to the full extent permitted by governing law, shall have the
discretion to require reimbursement of any portion of an EPI Bonus previously paid to an executive
grade level employee pursuant to the terms of this program if: a) the amount of such EPI Bonus was
calculated based upon the achievement of certain financial results that were subsequently the
subject of a restatement, and: b) the amount of such EPI Bonus that would have been awarded to the
executive had the financial results been reported as in the restatement would have been lower than
the EPI Bonus actually awarded. Additionally, the Compensation Committee, to the full extent
permitted by governing law, shall have the discretion to require reimbursement of any portion of a
EPI Bonus if the eligible Employee is terminated for cause as defined in the Executive Change of
Control Plan of Newmont.

3.6 Timing of Payments. Payment under this program will be made no later than the
15th day of the third month following the calendar year in which an Employee’s right to
payment is no longer subject to a substantial risk of forfeiture.

SECTION IV-GENERAL PROVISIONS

The “General Provisions” section of the Annual Incentive Compensation Program shall otherwise
apply to this program.

 

 

 

APPENDIX A

Targeted Payout Percentages

	 	 	 	 	 
	Grade	 	Payout Percentage	 
	E-5
	 	 	60	%
	E-6
	 	 	40	%

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