-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jw+Xvs5ARljdglnvOdwmXT+3mEpg4Yjw/30DtW3zveSh+lFh0MeITeYDWNKRqlMy yhqxUIBsdSY7ul+5Yk0luQ== 0000929624-98-000840.txt : 19980504 0000929624-98-000840.hdr.sgml : 19980504 ACCESSION NUMBER: 0000929624-98-000840 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980430 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOMESTAKE MINING CO /DE/ CENTRAL INDEX KEY: 0000743872 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 942934609 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-08736 FILM NUMBER: 98605636 BUSINESS ADDRESS: STREET 1: 650 CALIFORNIA ST STREET 2: 9TH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94108-2788 BUSINESS PHONE: 4159818150 MAIL ADDRESS: STREET 1: 650 CALIFORNIA ST CITY: SAN FRANCISCO STATE: CA ZIP: 94108-2788 10-K/A 1 AMENDMENT NO. 1 TO FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-K/A (AMENDMENT NO. 1) (Mark One) [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 OR []TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number 1-8736 HOMESTAKE MINING COMPANY (Exact name of registrant as specified in its charter) Delaware 94-2934609 (State of Incorporation) (I.R.S. Employer Identification No.) 650 California Street 94108-2788 San Francisco, California (Zip Code) (Address of principal executive office) (415) 981-8150 http://www.homestake.com (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $1.00 par value New York Stock Exchange, Inc. Rights to Purchase Series A Participating Cumulative Preferred Stock Securities registered pursuant to Section 12(g) of the Act: 5 1/2% Convertible Subordinated Notes Due June 23, 2000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $1,837,860,360 as of April 23, 1998. The number of shares of common stock outstanding as of April 23, 1998 was 146,780,900. This amendment contains 17 pages. 1 FORM 10-K/A AMENDMENT NO. 1 The undersigned registrant hereby amends its annual report on form 10-K for the fiscal year ended December 31, 1997 to include items 10, 11, 12 and 13 as set forth in the pages hereto: PART III ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. (a) Information with Respect to Directors. Certain information as to the Directors of the registrant is set forth below. The information appearing below, and certain information regarding beneficial ownership of securities by the Directors has been furnished by the Directors.
Age at March 1, Director 1998 Since Biographical Information -------- ---------- ------------------------ CLASS I DIRECTORS TO SERVE UNTIL 2000 ANNUAL MEETING: M. Norman Anderson 67 1992 Mr. Anderson is President of Norman Anderson & Associates Ltd. (mining consultants). Mr. Anderson was a director of Homestake Canada Inc. ("HCI") from 1987 to 1993, and was the Chairman of the Board of Directors of HCI from February 1991 to July 1992, when the Company acquired the outstanding voting shares of HCI. He is a director of Prime Resources Group Inc. ("Prime")(gold mining), Solv-ex Corporation (tar sands processing), Finning International (construction equipment sales and service), Buenaventura S.A. (gold and silver mining) and Toronto Dominion Bank. Robert H. Clark, Jr. 56 1984 Mr. Clark has been Chief Executive Officer since 1993, President since 1983, and a director since 1968 of Case, Pomeroy & Company, Inc. (mining, oil and gas, real estate). Mr. Clark is a director of FINOVA Group Inc. (financial services). Douglas W. Fuerstenau 69 1977 Mr. Fuerstenau has been a Professor of Metallurgy, Department of Materials Science and Mineral Engineering, University of California, Berkeley from 1959 to 1992. He was P. Malozemoff Professor of Mineral Engineering from 1987 to 1993, and has been a professor emeritus since 1993 and has been a professor in the Graduate School since July 1994.
2
Age at March 1, Director 1998 Since Biographical Information -------- ---------- ------------------------ Jeffrey L. Zelms 53 1997 Mr. Zelms has been the President since 1986 and the Chief Executive Officer since 1992 of the Doe Run Company (lead, zinc and copper mining, lead fabrication and recycling). He is a director of the Phoenix Textile Corporation (linen supplier for the health industry). CLASS II DIRECTORS TO SERVE UNTIL 1998 ANNUAL MEETING: Henry G. Grundstedt 69 1992 Mr. Grundstedt is a mining consultant. He was Senior Vice President of Capital Guardian Trust Company (money manager of pension and mutual funds) from 1973 to 1991 and held other executive positions with that firm beginning in 1972, specializing in the mining and metals industry. John Neerhout, Jr. 67 1989 Mr. Neerhout has been the Managing Director of Union Railways Limited (rail transportation) since April 1997, and a director of London and Continental Railways Ltd. since March 1997. He has been a director of The Energy Group PLC (gas and coal production, power generation and sales) since February 1997. Mr. Neerhout retired as Executive Vice President of Bechtel Group Inc. (engineering and construction) in October 1996, a position he held since 1986. Mr. Neerhout was also a director of and held executive positions with Bechtel Group Inc. and other of its affiliated companies prior to his retirement. Stuart T. Peeler 68 1981 Mr. Peeler has been a petroleum industry consultant since 1989. From 1982 until 1988 he was Chairman of the Board and Chief Executive Officer of Statex Petroleum, Inc. He is a director of CalMat Company (aggregates, asphalt, and property development), Chieftain International, Inc. (oil and gas exploration and production) and Chieftain International Funding Corp. (financial services). Jack E. Thompson 47 1994 Mr. Thompson has been the Chief Executive
3 Age at March 1, Director 1998 Since Biographical Information -------- ---------- ------------------------ Officer of Homestake since May 1996, and President and a director of Homestake since August 1994. He was Executive Vice President--Canada of Homestake and President and Chief Executive Officer of Prime and HCI from July 1992 until August 1994. He was President of Homestake Mineral Development Company and of North American Metals Corp. (gold mining) from 1988 until 1992. CLASS III DIRECTORS TO SERVE UNTIL 1999 ANNUAL MEETING: Richard R. Burt 51 1997 Mr. Burt has been the Chairman of IEP Advisors, Inc. (strategic and financial advisory services) since June 1993. He is also Chairman of Powerhouse Technologies, Inc. (gaming software design) and Weirton Steel Company (integrated steel producer). From April 1991 to June 1993, he was a partner in McKinsey & Company (management consultants). Mr. Burt was the United States Ambassador to the Federal Republic of Germany from 1985 to 1989. He is a director of Archer Daniels Midland Company (processing and sales of agricultural commodities) and Hollinger International Inc. (publishing). Harry M. Conger 67 1977 Mr. Conger has been Chairman of the Board of Homestake since 1982. He was also Chief Executive Officer from 1978 until May 1996, and President of Homestake from 1977 to 1986. He is a director of ASA Limited (investment company), CalMat Company, Pacific Gas and Electric Company and Apex Silver Mines Limited. G. Robert Durham 68 1990 In May 1996, Mr. Durham retired as Chairman of the Board, Chief Executive Officer and a director of Walter Industries, Inc. (building materials, home building, mortgage financing and natural resources development). He was Chief Executive Officer and a director of Walter Industries, Inc. from June 1991, and Chairman from October 1995, until his retirement. He was also President from June 1991 until October 1995. He was Chairman of the Board and President of Phelps Dodge Corporation (mining)
4 Age at March 1, Director 1998 Since Biographical Information -------- ---------- ------------------------ from 1987 to 1989 and President and Chief Operating Officer from 1985 to 1987, and he held other executive positions with Phelps Dodge Corporation or affiliated corporations beginning in 1977. He is a director of FINOVA Group Inc. (financial services), Amphenol Corp. (manufacturer of electronic connectors and coaxial cables), and a trustee of Mutual Life Insurance Company of New York. Peter J. Neff 59 1998 Mr. Neff currently serves as a consultant to Rhone-Poulenc Inc. (chemicals and pharmaceuticals). He joined Rhone-Poulenc in 1987 as President and Chief Operating Officer and was elected Chief Executive Officer in 1991 and served as President and Chief Executive Officer until his retirement in December 1997. Mr. Neff is a director of UST Inc. (tobacco and wine manufacturer and distributor) and Envirogen, Inc. (environmental services). Carol A. Rae 51 1995 Ms. Rae has been the President and Chief Executive Officer of Integrated Media and Marketing, LLC (producer of educational video and multimedia products) since 1995, and the President of MedVal Technologies International, Inc. (manufacturer of orthopedic splints) since 1984. She has been a member of the Board of Directors of the U.S. Chamber of Commerce since 1994. She was Senior Vice President and General Manager of the Refractive Division of Chiron Vision Corporation (manufacturer of ophthalmic intraocular lenses) from 1994 until 1995 and Senior Vice President of Government Affairs of Chiron Vision from 1995 until 1997. She was President and Chief Executive Officer of Magnum Diamond Corporation (manufacturer of surgical instruments) from 1989 to 1995.
Information with Respect to Executive Officers. The required information is contained in Part I of the 10-K Report, at pages 46-48. 5 Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of the Securities Exchange Act of 1934 and related rules require the Company's directors and executive officers to file reports of beneficial ownership and changes of beneficial ownership with the Securities and Exchange Commission and with the Company. Based on its review of reports of beneficial ownership and changes in beneficial ownership required under Section 16(a), the Company believes that during 1997 all of its directors and executive officers timely filed all reports of beneficial ownership and changes in beneficial ownership required under Section 16(a), except that the Form 4 Statement of Changes in Beneficial Ownership for G. Robert Durham, a Director of the Company, reporting a sale of Company shares in October 1997, was filed late (in January 1998). No directors or executive officers reported in 1997 a transaction that should have been reported in an earlier year, except that Ronald D. Parker, a former Vice-President of the Company, filed in 1997 a Form 4 Statement of Changes in Beneficial Ownership, reporting an exercise of Company stock options and the sale of the shares so acquired in 1996. ITEM 11. EXECUTIVE COMPENSATION. (a) Compensation of Directors. A director of Homestake who is not an employee of Homestake or its subsidiaries receives an annual retainer fee of $16,000 and each chairman of a committee of the Board of Directors who is not an employee of Homestake receives an additional annual retainer of $2,000. All directors, including employee directors, receive attendance fees of $900 for each meeting of the Board of Directors and $800 for each committee meeting. Directors are entitled to defer compensation under the Deferred Compensation Plan described below under "Compensation of Executive Officers--Summary Compensation Table." The Company has adopted a Retirement Plan for Outside Directors. Under the Plan, directors who do not have a fully vested interest under any tax-qualified Homestake retirement plan are eligible to receive benefits. The total retirement benefit payable is an amount equal to the annual retainer fee payable to Outside Directors at the date of retirement (presently $16,000 per year) multiplied by the number of years such retiring director was an Outside Director (i.e., not an employee of the Company or its subsidiaries). The retirement benefit is payable in monthly installments over the number of months the retiring Outside Director served as an Outside Director, beginning on the later of retirement or attaining of age 70 (later of retirement or age 65 in the case of an Outside Director who has served at least 10 years). Benefits payable to a participant who dies prior to completion of payout are payable to the participant's spouse. Under the Stock Option and Share Rights Plan--1996 (the "1996 Plan"), automatic share rights are made available to directors who are not employees of Homestake. For each year that the 1996 Plan is in effect, on the eighth business day after Homestake's annual earnings for the preceding year are released, each non-employee director on that date is granted share rights entitling him or her to receive shares of Homestake common stock for no consideration on the date he or she ceases to serve as a director. The number of shares covered by each annual share right grant is calculated by dividing 10 percent of the compensation received for services as a director of Homestake for the preceding calendar year by the average fair market value of one share of Homestake common stock for the third through the seventh business days following release of Homestake's earnings for the preceding calendar year. Share rights are cancelled if an individual ceases to serve as a director within three years from the date of grant, other than by reason of death, disability, retirement at mandatory retirement age for directors, or termination within one year following a change of control as 6 defined in the 1996 Plan. For 1997, a total of 3,775 share rights were granted under the 1996 Plan. No director was credited with more than 493 share rights for 1997. During 1997, Prime Resources Group Inc. ("Prime"), 50.6% owned by the Company, paid directors who were not employees of the Company or its subsidiaries an annual retainer of C$10,000 per year and C$750 for each meeting of the Board or any committee which they attended. Effective January 1, 1997, Prime paid directors who were employees of the Company or its subsidiaries C$1,000 for meetings attended in person and C$750 for telephone meetings. M. Norman Anderson, a non-employee director of the Company and Prime, received C$21,500 in directors fees from Prime for 1997. In May 1996, upon Harry M. Conger's retirement as Chief Executive Officer of the Company, Homestake entered into a consulting agreement with Mr. Conger under which he would act as a consultant to the Board and the Chief Executive Officer of Homestake for one year, subject to renewal for an additional year. The consulting agreement was renewed at the request of the Company for an additional year. Mr. Conger agreed to provide at least 500 hours of consulting services, including continuing to act as a director and non-executive Chairman of the Board. Mr. Conger is paid a total of $150,000 per year, which is in lieu of any other payments, including directors fees, that would otherwise be payable to him for his services as a director. Homestake also agreed to provide Mr. Conger office facilities. For the year 1997, Mr. Conger received a total of $151,500 in compensation ($1,500 was 1996 compensation paid to Mr. Conger in 1997) and $20,945 in office expense reimbursement . In July 1992, Homestake entered into a consulting agreement with Stuart T. Peeler under which Mr. Peeler provides advisory services to the Company with respect to its investment in the Main Pass 299 oil and sulphur project in the Gulf of Mexico. The agreement is terminable by either party on 30 days' notice. Mr. Peeler receives compensation at a rate of $1,000 for each day of service under the agreement. For 1997, the Company paid $11,844 to Mr. Peeler under the agreement. (b) Compensation of Executive Officers. Summary Compensation Table The following table discloses, for the years indicated, compensation received by Homestake's executive officers named therein (the "Named Executive Officers") for the fiscal years ended December 31, 1997, 1996 and 1995. Such officers served as Chief Executive Officer or were one of the four most highly compensated executive officers (other than the Chief Executive Officer) for the fiscal year ended December 31, 1997. SUMMARY COMPENSATION TABLE
Long-Term Compensation Annual Compensation Awards --------------------------------------------- -------------------------------------------- Restricted Securities LTIP Name and Other Annual Stock Award Underlying Payouts All Other Principal Position Year Salary Bonus Compensation (1) ($)(2) Options (#) ($) Compensation - ------------------------- ---- -------- -------- ---------------- ----------- ----------- ------- ------------ Jack E. Thompson 1997 $475,000 $142,500 $ 18,778(4) $475,950(5) 133,400 $0 $15,874(6) President and Chief 136,810(7) Executive Officer (3) 213,738(8)
7 1996 422,452 255,000 25,212(9) 56,100 0 12,044 1995 336,000 68,000 29,146(10) 31,100 0 9,174 Gene G. Elam 1997 283,000 98,900 5,213(11) 178,125(5) 57,100 0 13,906(12) Vice President, Finance 44,250(7) and Chief Financial 22,501(8) Officer 1996 272,000 95,700 24,167(13) 17,900 0 11,546 1995 261,000 41,000 8,150(14) 16,100 0 9,010 Wayne Kirk 1997 354,000 138,700 5,076(15) 223,725(5) 71,300 0 12,790(16) Vice President, General 31,738(7) Counsel and Corporate 15,000(8) Secretary 1996 340,000 121,400 1,110(17) 22,300 0 10,908 1995 326,000 52,000 0 20,100 0 9,010 Gil J. Leathley 1997 223,606 76,800 19,556(19) 136,800(5) 43,600 0 14,975(20) Senior Vice President, 14,371(7) Operations(18) 45,000(8) 1996 208,000 71,700 18,995(21) 15,400 0 10,438 1995 198,088 30,000 49,571(22) 21,500 0 10,655 William F. Lindqvist 1997 233,000 93,800 13,615(24) 146,775(5) 47,000 0 13,926(25) Vice President, 1996 224,000 77,300 19,731(26) 16,500 0 10,916 Exploration(23) 1995 91,667 12,000 125,525(27) 30,000 0 3,663
(1) In accordance with the rules of the Commission, Homestake is not required to report the value of personal benefits for any year unless the aggregate dollar value exceeds the lesser of 10 percent of the executive officer's salary and bonus or $50,000. (2) In March 1997, the Compensation Committee adopted three restricted stock programs (described in notes 5, 7 and 8 below) for the members of the Company's senior management as a further means of aligning management's long term interests with the interests of the Company's shareholders, as a means of providing additional incentives and to encourage members of senior management to increase their ownership in the Company and to remain with the Company. (3) Mr. Thompson served as President and Chief Operating Officer until May 1996, when he was appointed President and Chief Executive Officer. (4) Consists of $1,178 (financial planning) and $17,600 (directors' fees). (5) Value at date of grant of restricted stock granted under the Performance Based Program. Under the Performance Based Program, the Compensation Committee grants restricted stock to members of the senior management which vest over time and which vest depending on achievement of performance goals over the life of the Performance Based Stock Rights. (6) Consists of $9,500 (matching contribution to savings plan), $2,223 (imputed income on split dollar life insurance), $2,254 (tax gross-up related to split dollar life insurance), $838 (reimbursement for spousal travel, expense and tax gross-up) and $1,059 (above market component of interest paid on deferred compensation plan). 8 (7) Value at date of grant of restricted stock granted under the Matching Stock Award Program. Under the Matching Stock Award Program, the Compensation Committee grants restricted stock to senior managers on the basis of one restricted share for each three shares owned by the senior managers that are "enrolled" by the senior manager. The enrolled shares must be held for five years for the matching shares to vest. (8) Value at date of grant of restricted stock granted under the Bonus Stock Program. Under the Bonus Stock Program, the Compensation Committee provides senior managers with an opportunity to exchange a portion of their annual cash bonuses for awards of restricted stock. The shares awarded are equal to 150% of the cash foregone, and the shares vest over time. The employee must continue to be employed on the vesting dates to receive the shares. If not, the invested shares and cash foregone are forfeited. (9) Consists of $6,012 (financial planning) and $19,200 (directors' fees). (10) Consists of $17,500 (directors' fees), $11,030 (financial planning) and $616 (tax gross-up for payment made in connection with the sale of Mr. Thompson's Canadian residence in 1994). (11) Consists of $880 (financial planning) and $4,333 (directors' fees paid by publicly held subsidiary). (12) Consists of $9,500 (matching contribution to savings plan), $1,459 (imputed income on split dollar life insurance), $1,480 (tax gross-up related to split dollar life insurance), $884 (reimbursement for spousal travel, expense and tax gross-up) and $583 (above market component of interest paid on deferred compensation plan). (13) Consists of $1,620 (financial planning) and $22,547 (directors' fees paid by publicly held subsidiary). (14) Consists of $7,200 (directors' fees paid by publicly held subsidiary) and $950 (financial planning). (15) Directors' fees paid by publicly held subsidiary. (16) Consists of $9,500 (matching contribution to savings plan), $1,204 (imputed income on split dollar life insurance), $1,221 (tax gross-up related to split dollar life insurance), $768 (reimbursement for spousal travel, expense and tax gross-up) and $97 (above market component of interest paid on deferred compensation plan). (17) Directors' fees paid by publicly held subsidiary. 9 (18) Mr. Leathley served as Vice President, Canadian Operations during a portion of 1995 and was a Canadian resident. Accordingly, a portion of Mr. Leathley's 1995 Annual Compensation and All Other Compensation was paid in Canadian dollars. The conversion rate used to convert such amounts was 0.7324. Mr. Leathley became Vice President, Operations, of Homestake in May 1995. (19) Consists of $5,021 (financial planning), $4,535 (directors' fees paid by publicly held subsidiary) and $10,000 (forgiveness of relocation loan). (20) Consists of $9,500 (matching contribution to savings plan), $1,221 (imputed income on split dollar life insurance), $1,168 (tax gross-up related to split dollar life insurance), $823 (reimbursement for spousal travel, expense and tax gross-up), $1,790 (above market component of interest paid on deferred compensation plan) and $473 (interest in Canadian retirement account). (21) Consists of $4,967 (financial planning), $563 (directors' fees paid by publicly held subsidiary), $10,000 (forgiveness of relocation loan) and $3,465 (tax gross-up related to relocation expenses). (22) Consists of $717 (premiums paid on life and accidental death and dismemberment policy), $39,600 (relocation expenses paid by or on behalf of Mr. Leathley) and $9,254 (tax gross-up for relocation expenses). In connection with his appointment as Vice President, Operations, Mr. Leathley relocated from Canada to the San Francisco area. (23) Mr. Lindqvist became an employee of Homestake on June 30, 1995. (24) Consists of $3,615 (financial planning) and $10,000 (forgiveness of relocation loan). (25) Consists of $9,500 (matching contribution to savings plan), $881 (imputed income on split dollar life insurance), $973 (tax gross-up related to split dollar life insurance) and $2,572 (above market component of interest paid on deferred compensation plan). (26) Consists of $6,497 (financial planning), $10,000 (forgiveness of relocation loan) and $3,234 (tax gross-up related to relocation expenses). (27) Consists of $91,394 (relocation expenses for move from Australia to the San Francisco area) and $34,131 (tax gross-up related to relocation expenses). Under the Company's Deferred Compensation Plan, directors, officers and other key employees selected by the Compensation Committee are permitted to defer income. Under the Company's Deferred Compensation Plan, participants may elect to defer each year an amount not 10 less than $2,000 nor more than 100 percent of compensation. Amounts deferred are credited with interest in an amount equivalent to 120% of (i) the monthly Moody's Corporate Bond Yield Average as published by Moody's Investors Service, Inc. and (ii) such additional amount as the Compensation Committee determines to be appropriate. Stock Option Plans. Options Granted. The following table sets forth certain information with respect to options to acquire common stock that were granted during 1997 to each Named Executive Officer under Homestake's stock option plans. OPTION GRANTS IN 1997
% of Total No. of Options Potential Realizable Securities Granted to Exercise Value at Assumed Underlying Employees or Base Annual Rates of Stock Options in Fiscal Price Expiration Price for Option Term Name Granted (1) Year ($/Sh) Date 5%(2) 10%(2) ---- ----------- ---------- -------- ---------- ---------------------- Jack E. Thompson 64,500 8.12% $15.225 Feb. 19, 2007 $672,740 $1,652,905 68,900 8.68 14.900 April 4, 2007 621,780 1,598,176 Gene G. Elam 20,500 2.58 15.225 Feb. 19, 2007 213,816 525,342 36,600 4.61 14.900 April 4, 2007 330,292 848,958 Wayne Kirk 25,600 3.22 15.225 Feb. 19, 2007 267,010 656,037 45,700 5.75 14.900 April 4, 2007 412,414 1,060,039 Gil J. Leathley 17,600 2.22 15.225 Feb. 19, 2007 183,569 451,025 26,000 3.27 14.900 April 4, 2007 234,634 603,085 William F. Lindqvist 19,000 2.39 15.225 Feb. 19, 2007 198,172 486,902 28,000 3.53 14.900 April 4, 2007 252,683 649,477
(1) Granted at fair market value. Granted on February 19, 1997 and April 4, 1997 and vesting in 25 percent increments on the first through fourth anniversaries of the grant date. Vesting of options is accelerated in specified circumstances, including upon certain reorganizations and the commencement of certain tender offers. (2) Compounded annually. 11 Option Exercises and Year-End Values: The following table sets forth certain information with respect to options exercised during 1997 by each Named Executive Officer. AGGREGATED OPTION EXERCISES IN 1997 AND OPTION VALUES AT 1997 YEAR END
No. of Securities Underlying Value of Unexercised Unexercised Options In-the-Money Options No. of Shares at Fiscal Year-End at Fiscal Year-End Acquired Exercisable/ Exercisable/ Name on Exercise Unexercisable Unexercisable - --------------------------- ---------------------- ---------------------- --------------------- Jack E. Thompson 0 119,225/198,450 $0/0 Gene G. Elam 0 96,675/81,875 0/0 Wayne Kirk 0 72,950/102,200 0/0 Gil J. Leathley 0 39,875/68,325 0/0 William F. Lindqvist 0 70,425/69,375 0/0
Retirement Programs. Homestake Retirement Plan. In general, all full-time, non-union U.S. employees of Homestake (approximately 476 persons at December 31, 1997) participate in the Homestake Retirement Plan, a noncontributory defined benefit plan (the "Homestake Retirement Plan"). Under the Homestake Retirement Plan, participants accrue benefits at the rate of two percent per year of service during the first 25 years and one-half percent for each year of service thereafter. Normal retirement age under the Homestake Retirement Plan is 65. Early retirement, with reduced benefits, is permitted after age 55 with five years of service. The Homestake Retirement Plan is integrated with Social Security. For a participant who retires at age 65 with 25 years of service, the monthly benefit payable will be 50 percent of the average monthly compensation during the 60 consecutive months of highest compensation (salary and bonus), less one-half of the participant's Social Security benefits. Benefits paid upon retirement are subject to a cost-of-living increase, up to a maximum of three percent per year. Vesting requires five years of service. Homestake makes annual actuarially determined contributions to the Homestake Retirement Plan to provide the benefits to retirees. Funding contributions are not segregated as to individual employees. The following table shows selected estimated annual benefits payable upon retirement at age 65 under the Homestake Retirement Plan for persons having specified years of service and the indicated remuneration. The table includes amounts that may be payable under the Supplemental Retirement Plan described below (the "Homestake SRP"). Amounts shown are calculated on a straight life annuity basis and are shown before deduction for one-half of Social Security benefits. For purposes of the Homestake Retirement Plan and the Homestake SRP, the years of service as of December 31, 1997, for Messrs. Elam, Kirk, Leathley, Lindqvist and Thompson are 7 years, 5 years, 11 years, 5 years and 16 years, respectively. For purposes of these plans, earnings include salary and bonus but exclude directors' fees and other benefits that are included in the Summary Compensation Table. 12 YEARS OF SERVICE
Average Annual Earnings (60 Consecutive Highest Months) 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years - ---------------- ------------- ------------- ------------- ------------- ------------- ------------- $150,000 $ 30,000 $ 45,000 $ 60,000 $ 75,000 $ 78,750 $ 82,500 200,000 40,000 60,000 80,000 100,000 105,000 110,000 250,000 50,000 75,000 100,000 125,000 131,250 137,500 300,000 60,000 90,000 120,000 150,000 157,500 165,000 350,000 70,000 105,000 140,000 175,000 183,750 192,500 400,000 80,000 120,000 160,000 200,000 210,000 220,000 450,000 90,000 135,000 180,000 225,000 236,250 247,500 500,000 100,000 150,000 200,000 250,000 262,500 275,000 550,000 110,000 165,000 220,000 275,000 288,750 302,500 600,000 120,000 180,000 240,000 300,000 315,000 330,000
Homestake Supplemental Retirement Plan. The Internal Revenue Code of 1986 (the "Code") imposes a maximum limit on annual retirement benefits payable under qualified retirement plans. For 1997, that annual limit was $125,000. In addition, the Code limits the amount of annual compensation that may be considered under qualified retirement plans. In 1997, that annual limit was $160,000. Under the Homestake SRP, executive officers and key employees selected by the Compensation Committee will be entitled to a supplemental retirement benefit equal to the difference between the full amount of their pension benefits determined under the Homestake Retirement Plan and the maximum amount permitted to be paid under the Employee Retirement Income Security Act of 1974 ("ERISA") and the Code. The Homestake SRP is funded by Homestake contributions into a "rabbi trust." All of the officers identified in the Summary Compensation Table are participants in the Homestake SRP. Homestake Executive Supplemental Retirement Plan. Homestake has established the Homestake Executive Supplemental Retirement Plan (the "Homestake ESRP") for executive officers and key employees selected by the Compensation Committee. Under the Homestake ESRP, participants accrue benefits under the following formula. Service credit is determined by multiplying 4 1/3% by years of service, up to a maximum of 15 years. Service credit is then multiplied by average monthly compensation during the 36 consecutive months of highest compensation (salary and bonus) to determine a monthly retirement benefit. The monthly benefit is reduced by benefits payable under all other Homestake retirement plans and, commencing at age 65, by one- half of Social Security and comparable foreign social security plan benefits. Retirement is permitted at age 62 after 10 continuous years of service, although a participant who has attained age 55 and 10 years of service may elect early retirement and receive a reduced benefit if approved by the Compensation Committee. The Homestake ESRP is funded by Homestake contributions into a "rabbi trust." The following table shows selected estimated annual benefits payable under the Homestake ESRP, calculated on a straight life annuity basis, assuming retirement at age 62, to persons having specified years of service and the indicated average earnings before reductions for integration with Social Security and comparable foreign plans, and also before reduction for other Homestake retirement plans (except the Homestake Mining Company Savings Plan). Payments under the Homestake ESRP are not limited by ERISA or the Code. All of the officers identified in the Homestake Summary Compensation Table are participants in the Homestake ESRP. For purposes of the Homestake ESRP, the years of service as of 13 December 31, 1997, for Messrs. Elam, Kirk, Leathley and Thompson are 11 years, 5 years, 11 years and 15 years, respectively. Mr. Lindqvist was previously employed by Homestake and following Homestake's 1992 acquisition of International Corona, Mr. Lindqvist was fully vested in his benefits under the Homestake ESRP with 15 years of deemed service. In connection with his reemployment by Homestake in 1995, Homestake agreed to recalculate Mr. Lindqvist's Homestake ESRP benefits based on the 36 consecutive months of highest compensation following the date of reemployment, subject however to his completing five years of service from the date of reemployment, unless his employment is terminated by Homestake for reasons other than cause. YEARS OF SERVICE
Average Annual Earnings (36 Consecutive Highest Months) 10 Years 13 Years 15 Years - ------------------ ------------------------ ------------------------ ------------------------ $150,000 $ 65,000 $ 84,500 $ 97,500 200,000 86,667 112,667 130,000 250,000 108,333 140,833 162,500 300,000 130,000 169,000 195,000 350,000 151,667 197,167 227,500 400,000 173,333 225,333 260,000 450,000 195,000 253,500 292,500 500,000 216,667 281,667 325,000 550,000 238,333 309,833 357,500 600,000 260,000 338,000 390,000
Severance Agreements. Homestake has severance agreements with Messrs. Elam, Kirk, Leathley, Lindqvist and Thompson under which they are entitled to benefits in the event of a change of control followed by certain events. A change of control is defined as any of the following events: (i) Homestake is a party to a merger or combination under the terms of which less than 75% of the shares in the resulting company are owned by the shareholders of Homestake immediately preceding such event; (ii) at least 75% of fair market value of Homestake's assets are sold; or (iii) at least 25% in voting power in election of directors of Homestake's capital stock is acquired by any one person or group as that term is used in Rule 13d-5 under the Securities Exchange Act of 1934. Entitlement to benefits arises if within three years following such a change of control, the executive's employment is terminated (other than for cause) or if he elects to terminate his employment following (i) a reduction in salary or certain other benefits, (ii) a change in location of employment, (iii) a change in position, duties, responsibilities or status inconsistent with the executive's prior position or (iv) a reduction in responsibilities, titles, or offices as in effect immediately before such change of control. Benefits payable under the agreements consist of (i) a lump sum cash payment equal to two times the highest annual salary and bonus, including deferred compensation, during the three-year period preceding termination, (ii) continuation of participation in insurance and certain other fringe benefits for two years, (iii) full vesting in the Company's Executive Supplemental Retirement Plan described above under "Retirement Plans," (iv) continued vesting of stock options, and (v) relocation assistance to the extent not provided by another employer. Benefits payable under the agreements are in lieu of any severance benefits under Homestake's general severance policy. 14 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Ownership of Common Stock by Homestake's Management The following table shows: (i) the number of shares of Homestake Common Stock owned by directors and the five highest paid executive officers, and all directors and executive officers as a group, as of April 1, 1998, (ii) the number of shares of Homestake Common Stock which such persons have the right to acquire within 60 days of April 1, 1998, but do not actually own and (iii) the total number of shares of Homestake Common Stock which such persons own and have the right to acquire within 60 days of April 1, 1998. The shares so shown include shares held in Homestake's Savings Plan for the accounts of executive officers and directors share rights granted under Homestake's Stock Option and Share Rights Plan - 1988 and 1996, which entitle Outside Directors to receive shares on the date of ceasing to serve as a director. Other than Mr. Clark (see footnote 2 below), no director or executive officer beneficially owns greater than 1 percent of the total number of shares of Homestake Common Stock outstanding. The shares of Homestake Common Stock beneficially owned by all directors and executive officers as a group represent approximately 5.5% of the 146,778,475 shares of Homestake Common Stock outstanding as of April 1, 1998, which includes shares held by Case, Pomeroy & Company, Inc. (described in footnote 2 below) and the shares which the identified persons have the right to acquire but do not own.
Number of Shares Beneficially Owned Right to as of April 1, Acquire Shares Total Number 1998, Excluding Within 60 Days of Shares Right to Acquire of Beneficially Name Shares April 1, 1998 Owned ---- ------------------ --------------- ------------- M. Norman Anderson................... 2,529 6,686 9,215 Richard R. Burt...................... 0 84 84 Robert H. Clark, Jr(2)............... 6,448,776 2,334 6,451,110 Harry M. Conger(3)................... 176,223 497,056 673,279 G. Robert Durham..................... 10,000 1,943 11,943 Douglas W. Fuerstenau................ 1,478 2,367 3,845 Henry G. Grundstedt.................. 1,000 1,497 2,497 John Neerhout, Jr.................... 1,000 1,889 2,889 Peter J. Neff........................ 0 0 0 Stuart T. Peeler(4).................. 10,000 2,503 12,503 Carol A. Rae......................... 500 810 1,310 Jack E. Thompson..................... 51,830 178,050 229,880 Jeffrey L. Zelms..................... 50 131 181 Gene G. Elam......................... 11,683 122,750 134,433 Wayne Kirk(5)........................ 8,360 105,500 113,860 Gil J. Leathley...................... 3,413 72,342 75,755 William F. Lindqvist................. 244 86,300 86,544 All Directors and Executive Officers as a Group (24 persons)..... 6,753,444 1,343,146 8,096,590
- --------------------- (1) In some instances voting and investment power is shared with the spouse of the identified person. (2) Includes 13,000 shares owned by Mr. Clark's spouse. Also includes 6,411,776 shares owned by Case, Pomeroy & Company, Inc. Mr. Clark is the President and Chief Executive Officer and, with family members, is a principal shareholder of Case, Pomeroy & Company, Inc. The shares beneficially owned by Mr. Clark represent approximately 4.4 percent of the 146,778,475 shares of Homestake Common Stock outstanding as of April 1, 1998. 15 (3) Includes 447 shares held of record by a Savings Plan Trust for Mr. Conger's spouse. Mr. Conger disclaims beneficial ownership of these shares. (4) Includes 3,200 shares owned by a corporation of which Mr. Peeler is the sole shareholder. (5) Includes 414 shares held of record by two of Mr. Kirk's children. Mr. Kirk disclaims beneficial ownership of these shares. Security Ownership of Certain Beneficial Owners of Homestake As of April 1, 1998, the only person known to Homestake to own beneficially five percent or more of the Homestake Common Stock outstanding was:
Name and Address Amount and Nature of of Beneficial Owner Beneficial Ownership(1) Percent of Class ------------------- ----------------------- ---------------- August von Finck........................... 10,510,000 7.16% Pacellistrasse 4 80333 Munich, Germany
- ----------------------- (1) The amount and nature of Mr. von Finck's beneficial ownership is based upon information provided to Homestake pursuant to a Schedule 13D filed on behalf of Mr. von Finck on March 10, 1998. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Agreement with Case Pomeroy. In connection with Homestake's acquisition of Felmont Oil Corporation (now Homestake Sulphur Company) in 1984, Homestake and Case, Pomeroy & Company, Inc. ("Case Pomeroy") entered into an Agreement, which agreement was amended in 1989, and further amended on March 27, 1992. Mr. Robert H. Clark, Jr., a director of Homestake, together with family members, is a controlling shareholder of Case Pomeroy. Each of Homestake and Case Pomeroy indirectly owns a 25 percent undivided co-tenancy interest in the Round Mountain mine in Nye County, Nevada, under the terms of an Operating Agreement with Round Mountain Gold Corporation, the owner of 50 percent undivided interest and the manager of the mine. The Agreement provides that whenever any action is to be taken pursuant to the Operating Agreement that requires consent or approval of a majority of the co- tenancy interests, Case Pomeroy and Homestake will cause their respective subsidiaries to agree to take such action as they agree upon in advance. The Agreement also provides that neither Case Pomeroy, nor Homestake, nor their respective subsidiaries will, directly or indirectly, transfer any interest in the Round Mountain mine without the approval of the other. Approval of a majority of the co-tenancy interests is required for budgets and work programs carried out by the manager of the Round Mountain mine. Transactions with Case Pomeroy. Under a 1985 agreement, Case Pomeroy transferred to Homestake all of Case Pomeroy's interest in certain unpatented mining claims and other mineral properties in the United States and Canada previously jointly owned by Case Pomeroy and Homestake Sulphur. Case Pomeroy reserved a 2.5 percent net smelter return royalty interest in each property transferred, as well as an option to convert all or part of the reserved royalty into a 40 percent participating interest in the property if commercial production appears feasible. No royalties have been paid. The transferee has no obligation to explore, develop or make any expenditures on any property transferred and may drop any property at any time after first offering to quitclaim it to Case Pomeroy. 16 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HOMESTAKE MINING COMPANY By: /s/ David W. Peat ---------------------- David W. Peat Vice President and Controller DATE: April 30, 1998 (Principal Accounting Officer) 17 -----END PRIVACY-ENHANCED MESSAGE-----