UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant þ

Filed by a Party other than the Registrant o

Check the appropriate box:

o Preliminary Proxy Statement þ Definitive Proxy Statement o Definitive Additional Materials o Soliciting Material Pursuant to §240.14a-12		o  Confidential, for Use of the Commission       Only (as permitted by Rule 14a-6(e)(2))

Newmont Mining Corporation

Payment of Filing Fee (Check the appropriate box):

þ		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
	(2)		Aggregate number of securities to which transaction applies:
	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)		Proposed maximum aggregate value of transaction:
	(5)		Total fee paid:

o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)		Amount Previously Paid:
	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:

 

 

 

Notice of 2009 Annual Meeting of Stockholders

 

 

Under the Securities and Exchange Commission rules, we have elected to use the Internet for delivery of annual meeting materials to the majority of our stockholders, which allows us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of our annual meeting.

 

All stockholders are cordially invited to attend the meeting in person. If you are unable to attend the meeting in person, please mark, sign and date the enclosed proxy card or voting instruction form and return it promptly in the enclosed envelope. In certain instances, you can vote over the telephone or Internet as described on the enclosed proxy card or voting instruction form. Your vote is important so that your shares will be represented and voted at the meeting even if you cannot attend.

 

By Order of the Board of Directors

 

 

Sharon E. Thomas
Vice President and Secretary

 

March 9, 2009

 

 

2009 Proxy Statement
Table of Contents

 

 

PROXY STATEMENT

 

 

 

We are pleased to take advantage of the Securities and Exchange Commission (SEC) e-proxy rules allowing us to furnish proxy materials through a “notice and access” model via the Internet. We believe the use of the SEC e-proxy rules will expedite stockholders’ receipt of this 2009 Proxy Statement and Form 10-K and lower the costs and reduce the environmental impact of our annual stockholders meeting. On or about March 19, 2009, we will furnish a Notice of Internet Availability to a majority of our stockholders containing instructions on how to access the proxy materials and to vote online. In addition, instructions on how to request a printed copy of these materials may be found on the Notice. For more information on voting your stock, please see “Voting Your Shares” below.

 

You are cordially invited to attend the meeting. Your vote is important no matter how large or small your holdings may be. Please vote as soon as possible in one of three ways, whether or not you plan to attend the meeting:

 

 

This proxy statement is furnished to holders of (1) Newmont Mining Corporation common stock (“Newmont Common Stock”), (2) Newmont Mining Corporation of Canada Limited (“Newmont Canada”) exchangeable shares (“Newmont Exchangeable Shares”), and (3) Newmont Mining Corporation CHESS Depository Interests (“Newmont CDIs”), in connection with the solicitation of proxies on behalf of the Board of Directors of Newmont Mining Corporation (“Newmont” or the “Company”) to be voted at the 2009 Annual Meeting of Stockholders (the “Annual Meeting) of Newmont on April 29, 2009. Specifically, stockholders of record holding shares at the close of business on March 2, 2009 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting and at all adjournments:

 

 

Newmont Common Stock. Each share of Newmont Common Stock that you own entitles you to one vote. Your proxy card shows the number of shares of Newmont Common Stock that you own. You may elect to vote in one of three methods:

 

 

Newmont Exchangeable Shares. Each Newmont Exchangeable Share that you own has economic rights (such as the right to receive dividends and other distributions) that are, as nearly as practicable, equivalent to rights of shares of Newmont Common Stock. Holders of Newmont Exchangeable Shares have a right through a Voting and Exchange Trust Agreement (the “Voting Agreement”) to vote at stockholders’ meetings of the Company. The Newmont Exchangeable Shares, however, are not shares issued by Newmont and, therefore, a holder of Exchangeable Shares is not a registered stockholder of Newmont, but is a registered stockholder of Newmont Canada. The Newmont Exchangeable Shares are exchangeable at the option of the holders into Newmont Common Stock on a one-for-one basis. There are two ways to vote your Newmont Exchangeable Shares:

 

 

Newmont CDIs. The Newmont CDIs are units of beneficial ownership in Newmont Common Stock held by CHESS Depository Nominees Pty Ltd (ACN 071 346 506) (“CDN”), a wholly-owned subsidiary of the Australian Stock Exchange Limited (ACN 008 624 691). References to Newmont Mining Corporation for purposes of Australian equity holders are to “Newmont Mining Corporation ARBN 099 065 997, organized in Delaware with limited liability,” and principally regulated in accordance with the laws and rules of Delaware. Since July 1, 2002, Newmont CDIs have traded on the Australian Stock Exchange (“ASX”) as a Foreign Exempt Listing granted by the

ASX, which provides an ancillary trading facility to the Company’s primary listing on the New York Stock Exchange. Newmont CDIs entitle holders to dividends and other rights economically equivalent to Newmont Common Stock on a ten-for-one basis. CDN, as the stockholder of record (or its proxy or substitute), will vote the underlying shares of Newmont Common Stock in accordance with the directions of the CDI holders. Your CDI Voting Instruction Form shows the number of Newmont CDIs that you own. There are two ways to vote your Newmont CDIs.

 

 

Revocation of Newmont Common Stock Proxy. A stockholder who executes a proxy may revoke it by delivering to the Secretary of the Company, at any time before the proxies are voted, a written notice of revocation bearing a later date than the proxy, or by attending the Annual Meeting and voting in person (although attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). Written notice revoking a proxy should be sent to the attention of the Secretary, Newmont Mining Corporation, at 6363 South Fiddlers Green Circle, Greenwood Village, Colorado 80111 USA. A stockholder may substitute another person in place of those persons presently named as proxies.

 

Revocation of Newmont Exchangeable Shares Voting Instruction Form. A registered holder of Newmont Exchangeable Shares who has submitted a Voting Instruction Form may revoke the Voting Instruction Form by completing and signing a Voting Instruction Form bearing a later date and depositing it with the Trustee. No notice of revocation or later-dated Voting Instruction Form, however, will be effective unless received by the Trustee prior to 1:00 p.m., Toronto time, on April 28, 2009.

 

A non-registered holder of Newmont Exchangeable Shares may revoke a Voting Instruction Form at any time by written notice to the intermediary, except that an intermediary is not required to act on a revocation of a Voting Instruction Form that is not received by the intermediary at least ten days prior to the Annual Meeting.

 

Revocation of Newmont CDI Voting Instruction Form. A holder of Newmont CDIs who has completed and returned a CDI Voting Instruction Form (in the manner described above) may revoke the voting instructions to CDN contained therein by delivering to Computershare Investor Services Pty Limited, Level 5, 115 Grenfell Street, Adelaide 5000, South Australia, Australia, no later than April 24, 2009, a written notice of revocation bearing a later date than the CDI Voting Instruction Form previously sent.

 

Quorum. The holders of a majority of the outstanding shares of capital stock of the Company entitled to vote at the Annual Meeting must be present in person or represented by proxy in order to constitute a quorum for all matters to come before the meeting. For purposes of determining the presence of a quorum, “shares of capital stock of the Company” include all shares of Newmont Common Stock (including shares represented by Newmont CDIs) and the maximum number of shares of Newmont Common Stock that the Trustee of the Newmont Exchangeable Shares is entitled to vote at the Annual Meeting.

 

Tabulating Votes. Votes at the Annual Meeting will be tabulated by two inspectors of election who will be appointed by the Chairman of the meeting and who will not be candidates for election to the Board of Directors. The inspectors of election will treat shares of capital stock represented by a properly signed and returned proxy as

present at the Annual Meeting for purposes of determining a quorum, without regard to whether the proxy is marked as casting a vote or abstaining.

 

Broker Non-Votes and Abstentions. Abstentions and broker “non-votes” as to particular matters are counted for purposes of determining whether a quorum is present at the Annual Meeting. Abstentions are counted in tabulations of the votes cast on proposals presented to stockholders, whereas broker non-votes are not counted for purposes of determining whether a proposal has been approved. Abstentions have the same effect as votes against proposals presented to stockholders. A “non-vote” occurs when a nominee holding shares for a beneficial owner votes on one proposal, but does not vote on another proposal because the nominee does not have discretionary voting power and has not received instructions to do so from the beneficial owner.

 

Election of Directors. Directors will be elected by a favorable vote of a plurality (meaning the largest number of votes cast) of those shares of capital stock present and entitled to vote, in person or by proxy, at the Annual Meeting. A stockholder may withhold votes from any or all nominees.

 

Ratify PricewaterhouseCoopers LLP as the Company’s Independent Auditors for 2009. The affirmative vote of a majority of the shares present and entitled to vote, in person or by proxy, at the Annual Meeting is required to ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP as the Company’s independent auditors for 2009.

 

Other Items. If any other items are presented at the Annual Meeting, they must receive an affirmative vote of a majority of the shares present and entitled to vote, in person or by proxy, in order to be approved.

 

The enclosed proxy and/or Voting Instruction Form is solicited by the Board of Directors of the Company. This proxy material will be mailed to the holders of Newmont Common Stock, Newmont Exchangeable Shares, and Newmont CDIs on or about March 19, 2009. In addition to solicitation by mail, solicitation of proxies and Voting Instruction Forms may be made by certain officers and employees of the Company by mail, telephone or in person. The Company has retained Georgeson Shareholder Communications Inc. to aid in the solicitation of brokers, banks, intermediaries and other institutional holders in the United States and Canada for a fee of $15,000. All costs of the solicitation of proxies will be borne by the Company. The Company also will reimburse brokerage firms and others for their expenses in forwarding proxy materials to beneficial owners of Newmont Common Stock, Newmont Exchangeable Shares and Newmont CDIs.

 

Participants in the Retirement Savings Plan of Newmont and Retirement Savings Plan for Hourly-Rated Employees of Newmont. If you are a participant in the Retirement Savings Plan of Newmont or Retirement Savings Plan for Hourly-Rated Employees of Newmont (the “Retirement Savings Plans”) and hold Newmont Common Stock under the Retirement Savings Plans, shares of Newmont Common Stock that are held for you under the Retirement Savings Plans, as applicable, may be voted through the proxy card accompanying this mailing. The Retirement Savings Plans are administered by The Vanguard Group, as trustee. The trustee, as the stockholder of record of the Newmont Common Stock held in the Retirement Savings Plans, will vote the shares held for you in accordance with the directions you give on the enclosed proxy card, provided that you return the proxy card duly signed and dated to the address indicated on the enclosed envelope. If the proxy cards representing shares of Newmont Common Stock held under the Retirement Savings Plans are not returned duly signed and dated, the Trustee will vote the shares in the same proportion as it votes shares as to which directions have been received.

 

For a stockholder proposal, including a proposal for the election of a director, to be included in the proxy statement and form of proxy for the 2010 Annual Meeting, the proposal must have been received by us at our principal executive offices no later than November 19, 2009. Proposals should be sent to the attention of the Secretary of the Company at 6363 South Fiddlers Green Circle, Greenwood Village, Colorado 80111 USA. We are not required to include in our proxy statement and form of proxy a stockholder proposal that was received after that date or otherwise fails to meet the requirements for stockholder proposals established by regulations of the SEC.

 

In addition, under our bylaws, stockholders must give advance notice of nominations for directors or other business to be addressed at the 2010 Annual Meeting no later than the close of business on February 26, 2010. The advance notice must be delivered to the attention of the Secretary of the Company at 6363 South Fiddlers Green Circle, Greenwood Village, Colorado 80111, USA.

 

Each of the 12 persons named below is a nominee for election as a director at the Annual Meeting for a term of one year or until his/her successor is elected and qualifies. Unless authority is withheld, the proxies will be voted for the election of such nominees. All such nominees are currently serving as directors of the Company. All such nominees were elected to the Board of Directors at the last Annual Meeting, except for Simon R. Thompson, who was elected to the Board of Directors on October 21, 2008. Mr. Thompson was identified as a candidate for election to the Board by an independent search firm. If any such nominees cannot be a candidate for election at the Annual Meeting, then the proxies will be voted either for a substitute nominee designated by the Board of Directors or for the election of only the remaining nominees.

 

The following table sets forth information as to each nominee for election, including his or her age (as of the Record Date), background and principal occupation, including public company directorships:

 

 

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” ALL OF THE FOREGOING NOMINEES AND, UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON THE PROXY CARD TO THE CONTRARY, THE PROXIES NAMED THEREON INTEND SO TO VOTE.

 

The Board affirmatively determines the independence of each director and each nominee for election as director. For each individual deemed to be independent, the Board has determined (a) that there is no relationship with the Company, or (b) the relationship is immaterial. The Board has considered the independence standards of the New York Stock Exchange and adopted more stringent categorical independence standards described below.

 

The Board has determined that the relationships that fall within the standards described in its independence standards are categorically immaterial. As such, provided that no law, rule or regulation precludes a determination of independence, the following relationships are not considered to be material relationships with the Company for purposes of assessing independence: service as an officer, director, employee or trustee or greater than five percent beneficial ownership in (i) a supplier of goods or services to the Company if the annual sales to the Company are less than $1 million or two percent of the gross revenues or sales of the supplier, whichever is greater; (ii) a lender to the Company if the total amount of the Company’s indebtedness is less than one percent of the total consolidated assets of the lender; (iii) a charitable organization if the total amount of the Company’s total annual charitable contributions to the organization are less than $1 million or two percent of that organization’s total annual gross receipts (excluding any amounts received through the Company’s employee matching program for charitable contributions), whichever is greater; or (iv) any relationship arising out of a transaction, or series of transactions, in which the amount involved is less than $60,000.

 

In making its independence determinations, the Board considered the circumstances described below.

 

Mr. Hamson is a director of Genesis Emerging Markets Ltd. The committee administering the investment of Company funds for its pension plan selected one of the Genesis Emerging Market funds as one investment in its portfolio. This relationship meets categorical independence standard (i) above.

 

Dr. Taranik is the director of the Mackay School of Earth Sciences and Engineering at University of Nevada, Reno. The Company donated $200,000 to the University of Nevada Foundation in 2008, for the benefit of mining education at the Mackay School of Earth Sciences and Engineering. Dr. Taranik is not a director, trustee or employee of the University of Nevada Foundation, and the Company’s donation to the Foundation constituted less than 2% of the Foundation’s charitable receipts in 2008. The Company’s donation reflects its strong interest in promoting mining education in Nevada, one of its core operating regions. The Board of Directors has considered these circumstances and determined that the donation does not constitute a material relationship with the Company that would affect independence.

 

Mr. Thompson is a director of Sandvik AB, an international engineering group that provides certain products to the Company including certain mining equipment for rock excavation. As of January 2009, Mr. Thompson also is a director of AMEC plc, an international engineering and project management company, which provides certain consulting services to the Company. These relationships both meet the categorical independence standard (i) above.

 

Based on the foregoing analysis, the Board determined that the following directors are independent:

 

 

In addition, based on these standards, the Board has affirmatively determined that Richard T. O’Brien is not independent because he is President and Chief Executive Officer of the Company.

 

As of March 2, 2009, the directors and executive officers of the Company as a group beneficially owned, in the aggregate, 811,454 shares of the Company’s outstanding capital stock, constituting, in the aggregate, less than 1% of the Company’s outstanding capital stock.

 

No director or executive officer beneficially owned (a) more than 1% of the outstanding shares of Newmont Common Stock or Newmont Exchangeable Shares, or (b) shares voting power in excess of 1% of the voting power of the outstanding capital stock of the Company. Each director and executive officer has sole voting power and dispositive power with respect to all shares beneficially owned by them, except as set forth below.

 

The following table sets forth the beneficial ownership of Newmont Common Stock, including shares in the form of Newmont CDIs, as of March 2, 2009 held by (a) each current director and nominee; (b) the Chief Executive Officer, the Chief Financial Officer and each of the other highly compensated executive officers (the “Named Executive Officers”); and (c) all current directors and executive officers as a group. The address for each of the named individuals below is c/o Newmont Mining Corporation, 6363 South Fiddlers Green Circle, Greenwood Village, Colorado 80111.

 

 

 

 

The following table sets forth information with respect to each person known by the Company to be the beneficial owner of more than 5% of any class of the Company’s voting securities. The share information contained herein is based on filings with the Securities and Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of 1934.

 

 

 

 

Effective January 1, 2008, the annual compensation for non-employee directors for their service on the board of directors is as follows:

 

The following table shows the compensation paid to the Company’s non-employee directors for the year ended December 31, 2008:

 

2008 Directors Compensation

 

 

 

 

Outstanding Awards. The following table shows outstanding equity compensation for all non-employee directors of the Company as of December 31, 2008:

 

 

 

 

Retirement. The Company has no current retirement plan for non-employee directors, but certain non-employee directors serving on the Board have been grandfathered under the previous plan. On retirement from the Board of Directors at any time after attaining age 65, a non-employee director who was serving on the Board of

Directors on January 27, 1999 and who has served for at least ten consecutive years as a director of the Company is entitled to be paid an annual sum of $50,000 for life.

 

Share Ownership Guidelines. All directors are encouraged to have a significant long-term financial interest in the Company. To encourage alignment of the interests of the directors and the stockholders, each director is expected to own, or acquire within three years of becoming a director, shares of Newmont Common Stock having a market value of three times the annual cash retainer payable under the Company’s director compensation policy. All directors meet the share ownership guidelines.

 

Attendance at Meetings. During 2008, the Board of Directors held eight meetings. Each incumbent director attended 75% or more of all meetings of the Board of Directors and committees of the Board of Directors on which he or she served. It is the policy and practice of the Company that nominees for election at the Annual Meeting of Stockholders attend the meeting. All of the directors serving the time of the 2008 Annual Meeting of Stockholders held on April 23, 2008, attended the meeting.

 

Board Committees. The Board of Directors has the following standing committees: Audit; Compensation; Corporate Governance and Nominating; Operations and Safety; and Environmental and Social Responsibility Committees. All members of these five committees are independent, as defined in the listing standards of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. The current members of these committees are:

 

 

Audit Committee. The Audit Committee, consisting entirely of independent directors, assists the Board of Directors in its oversight of the integrity of the Company’s financial statements and the Company’s compliance with legal and regulatory requirements and corporate policies and controls. The Audit Committee has the sole authority to retain and terminate the Company’s independent auditors, approve all auditing services and related fees and the terms thereof, and pre-approve any non-audit services to be rendered by the Company’s independent auditors. The Audit Committee is responsible for confirming the independence and objectivity of the independent auditors. The Audit Committee is also responsible for preparation of the annual report of the audit committee for public disclosure in the Company’s proxy statement. Unrestricted access to the Audit Committee is given to the Company’s independent auditors, the Chief Financial Officer, the Controller and the Group Executive of Internal Audit. During 2008, the Audit Committee held five meetings.

 

The Board of Directors has determined that each of the members of the Audit Committee is an Audit Committee Financial Expert, as a result of his or her knowledge, abilities, education and experience. Ms. Doyle serves on audit committees for three other public companies. The Board has determined that such service does not impair her ability to effectively serve on the Company’s Audit Committee.

 

Compensation Committee. The Compensation Committee, consisting entirely of independent directors, is responsible for discharging the responsibilities of the Board of Directors relating to compensation of the Chief Executive Officer and other executive officers. The Compensation Committee is also responsible for overseeing the preparation of the Compensation Discussion and Analysis and preparing the report on executive compensation for public disclosure in the Company’s proxy statement. During 2008, the Compensation Committee held five meetings.

 

The Compensation Committee has a Charter, which is reviewed annually. The Compensation Committee has full authority to determine the components and amounts of executive compensation. Awards of stock-based compensation (stock options, restricted stock or restricted stock units) are subject to ratification by the full Board of Directors.

The Compensation Committee has the authority to retain, at the Company’s expense, experts with special competencies, including legal, accounting and compensation. The Compensation Committee has the sole authority to terminate the engagement of such experts and to approve the fees and other terms of retention of such experts. For additional information, the use of consultants and other Compensation Committee procedures, refer to the Compensation Discussion and Analysis beginning at page 17.

 

The Compensation Committee may form and delegate authority to subcommittees when appropriate. Under the policies of the Board of Directors, the Compensation Committee may not delegate authority to grant stock options.

 

Compensation Committee Interlocks and Insider Participation. The Compensation Committee is composed entirely of independent directors. None of the members of the Compensation Committee was or is an employee of the Company.

 

Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee, consisting entirely of independent directors, proposes to the Board of Directors slates of directors to be recommended for election at the Annual Meeting of Stockholders (and any directors to be elected by the Board of Directors to fill vacancies) and slates of officers to be elected by the Company’s Board of Directors. It also advises the Board of Directors on various corporate governance issues, and leads the Board of Directors in its annual review of the Board’s performance. The Corporate Governance and Nominating Committee also is responsible for recommending to the Board amounts of director compensation, leading the Board in its evaluation of the performance of the chief executive officer and management development. During 2008, the Corporate Governance and Nominating Committee held three meetings.

 

Environmental and Social Responsibility Committee. The Environmental and Social Responsibility Committee, consisting entirely of independent directors, assists the Board of Directors in its oversight of sustainable development, environmental affairs, community relations and communications issues, and the Company’s policies, processes, standards and procedures designed to accomplish the Company’s goals and objectives relating to these issues. During 2008, the Environmental and Social Responsibility Committee held five meetings.

 

In April 2007, the Board of Directors recommended and the stockholders approved a proposal that the Company prepare a report regarding its policies and practices relating to existing and future relationships with local communities near its operations. The proposal was submitted by a group of stockholders led by Christian Brothers Investment Services, Inc. The Company’s Environmental and Social Responsibility Committee provided oversight for the preparation of the report, as further described beginning on page 52 of this proxy statement.

 

Operations and Safety Committee. The Operations and Safety Committee, consisting entirely of independent directors, was formed to assist the Board of Directors in its oversight of operations and safety issues, and the Company’s policies, processes, standards and procedures designed to accomplish the Company’s goals and objectives relating to these issues. During 2008, the Operations and Safety Committee held five meetings.

 

 

Corporate Governance Guidelines and Charters. The Company has adopted Corporate Governance Guidelines that outline important policies and practices regarding the governance of the Company. In addition, each of the committees has adopted a charter outlining responsibilities and operations. The Corporate Governance Guidelines and the charters are available at www.newmont.com under the Investor Relations section and are available in print upon request to the Investor Relations Department, Newmont Mining Corporation, 6363 South Fiddlers Green Circle, Greenwood Village, Colorado 80111 USA.

 

Independent Chairman. The independent members of the Board of Directors elected an independent Non-Executive Chairman, Vincent A. Calarco, effective January 1, 2008 for a one-year term. Mr. Calarco was re-elected, effective January 1, 2009, for a second one-year term. Mr. Calarco presides at independent directors sessions scheduled at each regular Board meeting. The Chairman serves as liaison between the Chief Executive Officer and other independent directors, approves meeting agendas and schedules and notifies other members of the Board of Directors regarding any legitimate concerns of stockholders or interested parties of which he or she becomes aware. The Non-Executive Chairman presides at stockholders meetings and provides advice and counsel to the Chief Executive Officer.

Communications with Stockholders or Interested Parties. Any stockholder or interested party who desires to contact the Company’s Chairman, the non-management directors as a group or the other members of the Board of Directors may do so by writing to the Secretary, Newmont Mining Corporation, 6363 South Fiddlers Green Circle, Greenwood Village, Colorado 80111 USA. Any such communication should state the number of shares owned, if applicable. The Secretary will forward to the Chairman any such communication addressed to him, the non-management directors as a group or to the Board of Directors generally, and will forward such communication to other board members, as appropriate, provided that such communication addresses a legitimate business issue. Any communication relating to accounting, auditing or fraud will be forwarded immediately to the Chairman of the Audit Committee.

 

Director Nomination Process. Newmont has established a process for identifying and nominating director candidates that has resulted in the election of a highly-qualified and dedicated Board of Directors. The following is an outline of the process for nomination of candidates for election to the Board: (a) the Chief Executive Officer, the Corporate Governance and Nominating Committee or other members of the Board of Directors identify the need to add new Board members, with careful consideration of the mix of qualifications, skills and experience represented on the Board of Directors; (b) the Chairman of the Corporate Governance and Nominating Committee coordinates the search for qualified candidates with input from management and other Board members; (c) the Corporate Governance and Nominating Committee engages a candidate search firm to assist in identifying potential nominees, if it deems such engagement necessary and appropriate; (d) selected members of management and the Board of Directors interview prospective candidates; and (e) the Corporate Governance and Nominating Committee recommends a nominee and seeks full Board endorsement of the selected candidate, based on its judgment as to which candidate will best serve the interests of Newmont’s stockholders. During 2008, the Board engaged a search firm, Spencer Stuart, to assist in identifying and evaluating potential new directors.

 

The Board of Directors has determined that directors should possess the following minimum qualifications: (a) the highest personal and professional ethics, integrity and values; (b) commitment to representing the long-term interest of the stockholders; (c) broad experience at the policy-making level in business, government, education, technology or public interest; and (d) sufficient time to effectively fulfill duties as a Board member. The Corporate Governance and Nominating Committee considers any candidates submitted by stockholders on the same basis as any other candidate. Any stockholder proposing a nomination should submit such candidate’s name, along with a curriculum vitae or other summary of qualifications, experience and skills to the Secretary, Newmont Mining Corporation, 6363 South Fiddlers Green Circle, Greenwood Village, Colorado 80111 USA.

 

Majority Voting Policy. If a nominee for director does not receive the vote of at least a majority of votes cast at an Annual Meeting of Stockholders, it is the policy of the Board of Directors that the director will tender his or her resignation to the Board. In such a case, the Corporate Governance and Nominating Committee will make a recommendation to the Board, and the independent members of the Board will determine, whether to accept or reject the tendered resignation, taking into account all of the facts and circumstances. The director who has tendered his or her resignation will not take part in the deliberations. The Board will publicly disclose its decision within 90 days from the date of certification of the election results.

 

Retirement Age. The Company’s retirement policy for non-employee directors provides that, except at the request of the Board of Directors, no non-employee director may stand for reelection to the Board after reaching age 72.

 

Code of Business Ethics and Conduct. Newmont has adopted a Code of Business Ethics and Conduct applicable to all of its directors, officers and employees, including the Chief Executive Officer, the Chief Financial Officer, the Controller and other persons performing financial reporting functions. The Code is available through the Investor Relations section of the Company’s website at www.newmont.com and is available in print upon request to the Investor Relations Department, Newmont Mining Corporation, 6363 South Fiddlers Green Circle, Greenwood Village, Colorado 80111 USA. The Code is designed to deter wrongdoing and promote (a) honest and ethical conduct; (b) full, fair, accurate, timely and understandable disclosures; (c) compliance with laws, rules and regulations; (d) prompt internal reporting of Code violations; and (e) accountability for adherence to the Code. The Company will timely disclose on its web site amendments to, or waivers from, certain provisions of the Code that apply to the Company’s directors or executive officers.

Related Person Transactions. The Board has adopted written policies and procedures for approving related person transactions. Any transaction with a related person, other than transactions available to all employees generally or involving aggregate amounts of less than $120,000 must be approved or ratified by the Audit Committee, the Compensation Committee for compensation matters or disinterested members of the Board. The policies apply to all executive officers, directors and their family members and entities in which any of these individuals has a substantial ownership interest or control. One transaction with a related person has been approved in accordance with the policies: the donation for the benefit of the Mackay School of Earth Sciences and Engineering, Dr. Taranik’s employer, described on page 8.

 

The Compensation Committee of the Board of Directors (the “Compensation Committee”) is composed entirely of directors who are not officers or employees of the Company or any of its subsidiaries, and are independent, as defined in the listing standards of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. The Compensation Committee has adopted a Charter that describes its responsibilities in detail and the Compensation Committee and Board review and assess the adequacy of the Charter on a regular basis. The Compensation Committee has the responsibility of taking the leadership role with respect to the Board’s responsibilities relating to compensation of the Company’s key employees, including the Chief Executive Officer, the Chief Financial Officer and the other executive officers. Additional information about the Compensation Committee’s role in corporate governance can be found in the Compensation Committee’s Charter, available on the Company’s web site at www.newmont.com under the Investor Relations section.

 

The Compensation Committee has reviewed and discussed with management the Company’s Compensation Discussion and Analysis section of this Proxy Statement. Based on such review and discussions, the Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement. The Compensation Discussion and Analysis is incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

 

Submitted by the following members of the Compensation Committee of the Board of Directors:

 

Glen A. Barton, Chairman
John B. Prescott
Donald C. Roth

 

Introduction. The Company is one of the world’s largest gold producers and the only gold company included in the Standard & Poor’s 500 Index. As a result, the Company’s share price is heavily influenced by gold prices and other commodity prices. Therefore, the Company’s executive compensation practices are designed to create a balance between results within the control of the Company’s management and absolute share price performance in the short and long term.

 

Since July 2007 when the Board promoted Richard T. O’Brien to the position of President and Chief Executive Officer, Mr. O’Brien has worked with the Board and the Compensation Committee to shape and refine his senior leadership team. The compensation decisions in 2008 centered upon two goals: 1) attraction and retention of key talent; and 2) alignment of compensation with Company performance and share price.

 

Compensation Committee’s Process for Arriving at Compensation Decisions. The Compensation Committee is supported by compensation experts in the Company’s Human Resources Department, who provide the Committee with data and analyses to support decision making. The Chief Executive Officer, the Senior Vice President, Human Resources and the General Counsel or Corporate Secretary generally attend part of each meeting. The role of management is to provide the Committee with perspectives on the business context and individual performance in order to assist the Committee in making its decisions. Management is also responsible for keeping the minutes of Committee meetings. External compensation experts are invited to attend from time-to-time for consultation regarding specific topics. An executive session, without management present, is generally held at the end of each meeting. The Chairman of the Committee sets the agenda for each meeting, in consultation with management representatives and other Compensation Committee members. The Chairman provides regular reports to the Board of Directors regarding actions and discussion at Committee meetings. The Board of Directors or Compensation Committee make all decisions regarding the Chief Executive Officer’s compensation in executive session.

 

Since 2002, the Compensation Committee has engaged Frederic W. Cook & Co., Inc. to provide advice regarding trends in executive and director compensation, and for independent review of the reasonableness of the decisions made by the Compensation Committee. Mr. Cook has reviewed compensation philosophy, objectives, strategy, benchmark analysis and recommendations regarding executive officer compensation. Mr. Cook is engaged solely by the Compensation Committee, and provides no services or advice directly to management. Mr. Cook has not been given specific instructions regarding his services. In late 2007 and early 2008, the Compensation Committee also engaged Farient Advisors to provide advice regarding the design of the executive compensation program, particularly regarding the elements of “at-risk” compensation. The Compensation Committee instructed Farient Advisors to consider whether alternative structures might improve the correlation between compensation and Company performance. At the request of management, Farient Advisors also reviewed data on market pay practices for executives and provided recommendations to the Compensation Committee regarding reasonable ranges of compensation for executive officers, including the Chief Executive Officer.

 

Company management uses, and provides to the Compensation Committee and its outside consultants, mining industry and general industry benchmark data provided by an independent compensation consultant, HayGroup. HayGroup provides very limited advice regarding executive compensation.

 

When making compensation decisions for Named Executive Officers, the Compensation Committee considers factors beyond market data and the advice of consultants. The Compensation Committee also considers the individual’s performance, tenure and experience, the performance of the Company overall, any retention concerns, the individual’s historical compensation and the compensation of the individual’s peers in the Company. There is no mandatory framework that determines which of these additional factors may be more or less important, and the emphasis placed on any of these additional factors may vary among the executive officers. While the Compensation Committee does have certain guidelines, goals, and tools that it uses to make its decisions, as explained below, the compensation process is not an exact science and does incorporate the judgment of the Compensation Committee. In making decisions for executives other than the Chief Executive Officer, the input and perspective of the Chief Executive Officer has a significant influence on the Compensation Committee’s decisions.

Compensation Components and Alignment to Compensation Goals. For 2008, the executive compensation program contained five basic elements, along with a package of benefit plans designed to complement the compensation components described below.

 

 

Each of the compensation components above are specifically designed to accomplish one or both of the Company’s two goals: 1) attraction and retention of key talent, and 2) alignment of compensation with Company performance and share price.

 

Attraction and Retention of Key Talent: The compensation package meets the goal of attracting and retaining key talent in a highly competitive mining environment through the following elements:

 

 

Alignment of Compensation with Company Performance and Share Price: The compensation package meets the goal of alignment to Company performance and share price through the following elements:

 

 

The Company recognizes that the share price is heavily influenced by the prices of gold and other commodities, which are outside of the control of the Company or its leaders. Thus, as a way to balance that commodity fluctuation, the Company grants both stock options, and financial performance stock (common stock and restricted stock units) to align the interests of management with the interests of stockholders. This balanced approach means that management needs to achieve specific performance goals to earn the common stock and restricted stock units even in periods of positive gold price movement, and that the equity package continues to motivate performance in

down-cycles as the common stock and restricted stock units remain “in the money” and have motivational impact even when gold prices are falling. At the same time, the use of stock options ensures that the highest rewards will only occur with an increasing share price.

 

Target Pay Levels Relative to Market. The Company is one of the world’s largest gold producers and the only gold company included in the Standard & Poor’s 500 Index. As a result, the Compensation Committee seeks to target a total compensation program (including base salary, target annual incentive, and the grant value of equity incentives, but exclusive of benefits) at the 75^th percentile of comparable market practices. In the view of the Compensation Committee, the 75^th percentile is the proper level to target because the market for executive talent in the mining industry is exceptionally competitive. In addition, other natural resource and materials companies are typically more diverse than the Company and therefore face lower potential volatility in performance results. The Compensation Committee believes that an above market pay positioning strategy at target is appropriate to compensate for the additional performance risk of being tied exclusively to gold.

 

Competitive Benchmarking Analysis and Peers. In order to assess competitive pay levels, the Compensation Committee reviews benchmark data for the mining industry for all of its Named Executive Officers except for the Chief Executive Officer. For the Chief Executive Officer, the Compensation Committee reviews benchmark data for general industry. The Compensation Committee utilizes general industry benchmark data for the Chief Executive Officer because the pool of similarly-sized mining companies is statistically too small to provide satisfactory data for the Chief Executive Officer position. Using HayGroup data, the Compensation Committee reviews the 75^th percentile of total compensation for the mining industry and general industry.

 

Participants in the mining industry survey are:

 

 

Participants in the general industry survey used for the Chief Executive Officer position number over 500 organizations, including 134 organizations with total revenue in a similar range as the Company.

 

Determination of the Size of Each Component of Target Total Compensation. The Compensation Committee targets total compensation, excluding benefits, at the 75^th percentile of comparable market practices. Salaries are targeted at a level below the 75^th percentile and then at-risk cash bonus and at-risk equity grant opportunities are managed so that the total package adds up to approximate the 75^th percentile at target performance levels. Within total target compensation, in 2008 the Compensation Committee generally sought to balance the target compensation components at 40-50% short-term cash compensation (including salary) and 50-60% long-term equity compensation. Besides base salary, all other compensation is at-risk, which means that the bulk of the total compensation package is at-risk and tied to Company performance or strategic objective performance for the Named Executive Officers. The Compensation Committee believes that the percentage of compensation tied to Company performance should increase at more senior levels.

 

The target pay positioning of the 75^th percentile of the applicable benchmark as stated above for each position is intended to be a guideline, and the Compensation Committee makes its decisions within the context of market practices. However, this is not intended to be an exact science. Other factors such as an individual’s performance, tenure and experience, the performance of the Company overall, any retention concerns and the individual’s historical compensation and comparisons to peers at the Company impact the decision-making process. The

Compensation Committee does not weigh any of these factors more heavily than others and does not use any formula to assess these factors, but rather considers each factor in its judgment and at its discretion.

 

Short Term Compensation – Salary and Bonus. In constructing a compensation program that seeks to target the 75^th percentile, the Compensation Committee first sets base salary. In 2008, the Compensation Committee targeted base salaries at the 62^nd percentile of the mining industry, and the 62^nd percentile of general industry for the Chief Executive Officer. The Compensation Committee sets the salary target below the 75^th percentile to more heavily weight at-risk compensation in the total package, including cash bonus, financial performance stock and stock options. After setting salary, the Compensation Committee sets the target cash bonus considering the total short-term compensation (base salary and target cash bonus) at the 75^th percentile in the mining industry, or general industry for the Chief Executive Officer. The goal is to set base salary and cash bonus so that the sum of the two is close to the 75^th percentile of the relevant benchmark, assuming that the Company and individual accomplish target results.

 

Long Term Compensation – Equity. After setting salary and cash bonus as described above, the Compensation Committee sets target financial performance stock opportunities and option grants. In 2008, the Compensation Committee targeted total long-term incentives (financial performance stock and options) as a percent of base salary for each currently-serving Named Executive Officer, as set forth in the table below. The Compensation Committee determined these targets based upon the levels needed to achieve the 75^th percentile of total compensation compared to the benchmark data detailed above, after taking into consideration salary levels and cash bonus targets for each executive.

 

2008 Named Executive Officer Target Long Term Incentives⁽¹⁾

 

 

 

 

At the end of 2008, review of 2008 target compensation levels revealed that despite the Board’s consideration and general desire to achieve the 75^th percentile total target compensation for the applicable benchmark, total target compensation for the currently-employed Named Executive Officers is below the 75^th percentile target pay positioning. In part, this negative deviation from the 75^th percentile in target compensation for the Company executives in 2008 was due to the fact that Messrs. Ball, Engel and Lansdown all took on expanded positions during the course of 2008.

 

Material Differences Between Named Executive Officers. Mr. Banks resigned as an executive officer as of July 31, 2008, and assumed a part-time role of Senior Advisor, External Affairs. The Company pays Mr. Banks an hourly rate of $450 for his services. Upon his resignation as an executive officer in July 2008, the Company paid Mr. Banks a pro-rated target cash bonus for 2008 performance and vested his outstanding restricted stock awards in consideration of his agreement to continue providing services on a part-time basis and exemplary service to the Company. Mr. Enders’ compensation package is less than the other Named Executive Officers because his position as the Senior Vice President of Exploration involved less responsibility and scope than the other Named Executive Officers.

 

The only other executive with material differences in compensation is Mr. O’Brien, our Chief Executive Officer. Mr. O’Brien’s compensation is different in amount and structure due to his position as the top executive officer of the Company. Market pay levels for top executives are in general significantly higher than the pay levels

for other executives, as indicated by the market pay benchmarks utilized by the Committee and described above. Additionally, the pay mix for top executives typically includes a greater emphasis on at-risk pay, commensurate with the level of responsibility of the Chief Executive Officer position and the greater degree of impact that this executive can have on overall business results.

 

Base Salary. In setting salaries of the Named Executive Officers, the Compensation Committee and Board of Directors reviewed advice from its outside consultants, Frederic W. Cook & Co., Inc. and Farient Advisors, mining industry benchmark data for the Named Executive Officers other than the Chief Executive Officer, and general industry benchmark data for the Chief Executive Officer. Based on the foregoing review, as well as consideration of the individual’s performance, tenure and experience, the performance of the Company overall, any retention concerns, the individual’s historical compensation and input from other Board members, the Compensation Committee set the base salaries for the Named Executive Officers.

 

In 2008, the Board appointed each of Messrs. Ball, Engel and Lansdown the title of Executive Vice President after increasing the scope of responsibilities for each of their positions. For each of the new executive vice president roles, the Compensation Committee reviewed mining industry benchmark data, from the list of comparators stated above, for comparable positions to set new salary, cash bonus and long-term incentive targets and the recommendations of the Chief Executive Officer. Differentiation in the salaries and other components of compensation between Named Executive Officers reflects the varying scope and responsibility for each particular position as reflected in the survey data. The Compensation Committee has not adopted a policy with regard to the internal relationship of compensation among the Named Executive Officers or other employees.

 

Short-Term Non-Equity Incentive Compensation. Short-term non-equity incentives include a Corporate Performance Bonus and a Strategic Objectives Bonus. Each is expressed as a percentage of base salary. The Corporate Performance Bonus has a target level and the Strategic Objectives Bonus has a maximum level, leaving the Board full discretion to decrease the maximum level. A total of the target Corporate Performance Bonus and 50% mid-point of the range of Strategic Objective Bonus is designed to achieve 75^th percentile total short-term compensation, as described above.

 

Short-Term Non-Equity Incentives⁽¹⁾

 

 

 

 

Corporate Performance Bonus. The Corporate Performance Bonus provides an annual reward based on four publicly-reported metrics designed to balance short-term and long-term factors, business performance and successful investment in and development of Company assets. The Compensation Committee reviews and approves the performance metrics and target levels of performance annually. The amounts of 2008 Corporate Performance Bonuses earned by the Named Executive Officers are shown in the Non-Equity Incentive Plan Compensation

column of the Summary Compensation Table on page 30. The four metrics that the Committee established for 2008 were:

 

Gold Equity Ounces Sold Metric: The equity ounces sold metric focuses employees on achieving budgeted amounts of gold sales. The metric also provides incentive to bring various projects into production in a timely manner.

 

Costs Applicable to Sales Metric: The cost metric balances the equity ounces sold metric by encouraging efficient production of gold. The cost metric is designed to promote implementation of Company-wide cost control measures.

 

Capital Expenditures Metric: The capital expenditures metric focuses employees on efficient utilization of capital.

 

Reserve and Non-Reserve Mineralization Additions Metric: The reserve and non-reserve mineralization additions metric promotes the discovery of new gold deposits and successful completion of the work needed to report these discoveries as proven and probable reserves. In a business that depletes its reserves every year through production, just maintaining the level of reserves and non-reserve mineralization from one year to the next is a substantial challenge. In order to promote growth in reserves and non-reserve mineralization, amounts acquired by acquisition are included in reserve and non-reserve mineralization increases.

 

The Company and the Compensation Committee believe that these metrics contribute to a balanced approach of driving both short-term and long-term share price appreciation. All targets are adjusted for acquisitions and divestitures during the year, if any, with the exception of reserve and non-reserve mineralization targets.

 

Calculation of Corporate Performance Bonuses: If the Company achieves its targeted performance for each of the metrics, the payout percentage for the Corporate Performance Bonus is 100%. If the maximum amounts for each metric are achieved or exceeded, the payout percentage for the Corporate Performance Bonus is 200%. If the minimum amounts are not achieved for a particular metric, no Corporate Performance Bonus is payable for that metric. For performance between the minimum and maximum for any metric, the amount is prorated to result in a payout percentage between 50% and 200%.

 

The 2008 targets were a mix of demanding financial, production, and reserve/non-reserve mineralization targets. The targets are adjusted during the year by a set of pre-defined variables that are outside of the control of management. In 2008, the Compensation Committee adjusted the Costs Applicable to Sales target to reflect actual variations in the prices of gold, copper, silver, oil and the Australian dollar compared to budgeted values. When the Compensation Committee sets the Costs Applicable to Sales target, the Compensation Committee must use an estimated value for gold, copper, silver, oil and the Australian dollar. The Compensation Committee adjusts the Costs Applicable to Sales target after the performance period to reflect actual value of gold, copper, silver, oil and the Australian dollar over the performance period to avoid an unintended windfall or penalty on the bonus payout based upon an inaccurate assumption at the time of setting the target. The Compensation Committee also adjusted the capital expenditures target for capital deferrals and movements in the price of oil and the Australian dollar for the same reasons related to the adjustment to the Costs Applicable to Sales target.

 

The targets for 2009 performance have not yet been established.

 

2008 Corporate Performance Bonus Metrics

 

For 2008, the Compensation Committee made no discretionary adjustments to the bonus targets or calculation. The 2008 payout percentage for the Corporate Performance Bonus was 128.1%, calculated as follow:

 

2008 Corporate Performance Bonus Calculation

 

 

Thus, to calculate the Corporate Performance Bonus for each of the executives, the relevant percentage of base salary was multiplied by 128.1%.

 

Strategic Objectives Bonus. In 2008, the Compensation Committee established the Strategic Objectives Bonus to replace a personal performance bonus. The reason for this transition was to align personal performance with key individualized strategic objectives that will support the long-term sustainability and performance of the Company. The strategic objectives are not always quantitative, and may not have immediate impact on financial results of the Company, but are still important for sustained Company success. In order to encourage focus on the strategic objectives and reward individuals appropriately for results, the Compensation Committee decided that the Board’s business judgment must be applied to evaluating payout of the Strategic Objectives Bonus. Accordingly, the Compensation Committee set the Strategic Objective Bonus at a maximum opportunity for each Named Executive Officer, rather than a target, with the intent that the Compensation Committee will exercise its business judgment in determining the amount of payout. In the cases of the Named Executive Officers other than the Chief Executive Officer, the Chief Executive Officer provides recommendations regarding Strategic Objectives Bonuses to the Compensation Committee. The Board of Directors determines the Strategic Objectives Bonus of the Chief Executive Officer.

 

The Board designated several universal Strategic Objectives for each Named Executive Officer in 2008, and also designated Strategic Objectives tailored to each Officer’s specific role. The universal Strategic Objectives for the Names Executive Officers in 2008 were: safety first (meaning each individual must focus efforts on operating in the safest manner possible), deliver on 2008 budgeted targets, think and invest strategically and attract, retain and develop employees. Following is a summary of the key individual Strategic Objectives for the Named Executive Officer, with the exception of Mr. Banks who resigned as an executive officer in July 2008.

 

 

The amounts of the Strategic Objective Bonuses that the Compensation Committee approved for the Named Executive Officers for 2008 are shown in the Bonus column of the Summary Compensation Table on page 30. The Compensation Committee’s determination of the amounts of Strategic Objectives Bonuses is subjective, not subject to mathematical precision. In determining the amounts of 2008 Strategic Objectives Bonuses, the Compensation Committee evaluated the Board’s opinions regarding progress against goals and, in the case of Messrs. Ball, Lansdown, Engel and Enders, the recommendations of the Chief Executive Officer.

Long-Term Compensation – Equity. Long-term compensation consisted of a Financial Performance Stock Bonus and stock options for 2008. The Compensation Committee also made a special retention award of restricted stock and options to Mr. O’Brien in October 2008. In 2008, the Compensation Committee replaced the Stock Incentive Bonus with the Financial Performance Stock Bonus, as described in more detail below.

 

Financial Performance Stock Bonus. In 2008, the Company adopted a revised stock incentive plan to align restricted stock grants more closely to Company stock price performance. The Financial Performance Stock Bonus is an opportunity to earn common stock and restricted stock units based on a targeted number of shares. Specifically, the Company established a target number of shares by identifying a percentage of base salary for each executive officer in January 2008 and converted that dollar amount to shares using the average Company closing share price in December 2007. The Financial Performance Stock Bonus ties the grant of equity to overall Company performance in two ways. First, the target grant is set in number of shares, versus dollars, to drive performance that will increase share price. Second, the number of shares granted at the end of the performance calendar year is based upon corporate performance that the Company measures by way of the Corporate Performance Bonus metrics.

 

For the 2008 Financial Performance Stock Bonus, the Company measured the award on the same corporate performance metrics as used in calculating the 2008 Corporate Performance Bonus. Thus, in 2008, the Company multiplied the target number of shares by 128.1%, the Corporate Performance Bonus percentage for 2008. One third of the Financial Performance Stock Bonus is paid in common shares and two-thirds of the Financial Performance Stock Bonus is paid in restricted stock units that vest in equal annual increments during the second and third years from the beginning of the performance period.

 

After 2008, the Financial Performance Stock Bonus will include weighting for up to two prior years of Corporate Performance Bonus performance. Specifically, in 2009 the Financial Performance Stock Bonus will be weighted between 2008 and 2009 results, 40% and 60% respectively. In 2010, the Financial Performance Stock Bonus will be weighted between 2008, 2009 and 2010 results, 20%, 30% and 50% respectively. The purpose of the weighting is to emphasize long-term performance, while also emphasizing recent performance more significantly than performance from prior years.

 

On February 23, 2009, the Company awarded Financial Performance Stock Bonuses for 2008 performance in the following amounts.

 

2008 Financial Performance Stock Bonuses

 

 

 

 

Dividends equivalents are paid on restricted stock units upon the grant of the shares represented by the unit.

 

Stock Option Awards. Stock options reward executives for growth in the value of Company stock over the long term. This is the high-risk, high-return component of the executive total compensation program because stock options deliver value to an executive only if the share price is above the grant price, and therefore stock price volatility will have a greater impact on total compensation results as compared to restricted stock units.

Each executive, including the Named Executive Officers, receives an assigned target amount of stock options to be awarded in any year, as explained above. The actual grants to individual executives may vary from the targeted amount based on an assessment of individual performance, at the Committee’s discretion. The Compensation Committee created an additional pool of stock options, up to 10% above the targeted amount, to be awarded in recognition of exceptional individual performance.

 

During 2008, all of the Named Executive Officers received at least the targeted amount of stock options, as well as additional options in recognition of exceptional performance during 2007. The numbers and grant date fair values of stock options granted to the Named Executive Officers in 2008 are shown in the 2008 Grants of Plan-Based Awards Table on page 31.

 

 

Retention Awards. The Board approved a special retention and incentive restricted stock and options grant for Mr. O’Brien on October 31, 2008. The objective of this grant was to encourage Mr. O’Brien’s long-term service with the Company while aligning his incentives with stockholders through the use of restricted stock and options. The Compensation Committee granted to Mr. O’Brien 100,000 shares of restricted stock and 300,000 stock options at an option exercise price of $26.91. In determining the amount of these awards, the Committee consulted with their independent advisor, Mr. Cook, and considered the amounts of Mr. O’Brien’s existing stock awards and their opinions regarding amounts necessary to provide additional retention incentives. Both awards vest in full after a five-year period, on October 30, 2013.

 

The Company has a package of post-employment compensation plans and policies in place that include Company funded benefits as well as employee-contribution benefits. The combination of plans and policies allow the Company to offer a broad base of its employees, including the Named Executive Officers, post-employment compensation as well as powerful incentives for employees to remain with the Company, rather than seeking alternative employment. The Company’s decisions regarding post-employment compensation take into account the industry sector and general business comparisons to ensure post-employment compensation is aligned with the broader market.

 

Retirement. On a regular basis, usually every three years, the Company reviews its retirement benefits. The purpose of the review is to assess the level of replacement income that the Company’s retirement plans provide for a full career Newmont employee. The Company attempts to maintain a competitive suite of retirement benefits that accomplishes income replacement post retirement. The level of income replacement varies depending on the income level of the employee. Those employees at lower income levels enjoy much higher levels of income replacement with the Company retirement benefits package, compared to higher income level employees. The benefits included in the analysis are the pension plan, pension equalization plan, 401(k) matching contribution and social security benefits. The Company retirement benefits are important hiring and retention tools for all levels of employees within the Company.

The Company offers two tax-qualified retirement plans, the Pension Plan, which is a defined benefit plan and the Savings Plan, which is a defined contribution plan (401(k)). Both of these plans are available to a broad range of Company employees, generally including all salaried U.S. based employees. Because of the qualified status of the Pension Plan and Savings Plan, the Internal Revenue Code limits the benefits available to highly-compensated employees. As a result, the Company provides a non-qualified defined benefit plan (Pension Equalization Plan) and a non-qualified savings plan (Savings Equalization Plan) for highly-compensated employees who are subject to the Internal Revenue Code limitations in the qualified plans. The two equalization plans are in place to give employees the full benefit intended under the qualified plans by making them whole for benefits otherwise lost as a result of Internal Revenue Code annual compensation limits.

 

See the Pension Benefits Table and 2008 Non-Qualified Deferred Compensation Table on pages 34 and 36 and for a description of benefits payable to the Named Executive Officers under the Pension Plan, Pension Equalization Plan and the Savings Equalization Plan.

 

Change in Control. The Company recognizes that the potential for a change of control can create uncertainty for its employees that may result in loss or distraction of executives during a critical period. As a result, the Company adopted the Executive Change of Control Plan of Newmont (“Change of Control Plan”) to retain executives and their critical capabilities to enhance and protect the best interests of the Company and its stockholders during a change-of-control environment, or threatened change of control. When the Company adopted the original Change of Control Plan in 1998, the Compensation Committee at the time determined that the level of benefits in the plan were competitive within the mining industry. In the opinion of the present Compensation Committee, the levels of benefits provided in the Change of Control Plan continue to be appropriate to motivate and retain key executives during an actual or threatened change of control.

 

In the event of a Change of Control, as defined in the Plan, and a qualifying termination of employment, the Named Executive Officers receive three times annual pay and other benefits. See the Potential Payments Upon Termination or Change in Control section starting at page 37 for potential amounts payable to the Named Executive Officers under the Change of Control Plan.

 

Severance. The Severance Plan of Newmont (“Severance Plan”) provides a certain number of weeks of salary and pro-rated annual cash bonus (at target levels) to U.S. domestic salaried employees of the Company following involuntary termination. Messrs. O’Brien, Ball, Enders, Engel and Lansdown are all salaried employees of the Company and thus eligible to participate in the Severance Plan. The purpose of the Severance Plan is to provide basic income and benefit replacement for a period of weeks following employment termination that is not due to an employee’s poor performance or misconduct. The Severance Plan allows the terminated employee some time and resources to seek future employment. In the judgment of the Compensation Committee, the benefits in the Severance Plan are typical of those provided by other similar companies and provide the appropriate level of basic income and benefit replacement for a period of weeks that increases with years of service.

 

See the Potential Payments Upon Termination or Change in Control section starting on page 37 for potential amounts payable to the Named Executive Officers under the Severance Plan.

 

Officer’s Death Benefit. The Company maintains group life insurance for the benefit of all salaried employees of the Company. In addition, for highly-compensated executives, including the Named Executive Officers, the Company provides a supplemental Officer Death Benefit Plan. The purpose of the Officer Death Benefit Plan is to provide benefits to officers of the Company beyond the maximum established in the Company’s group life insurance, as appropriate to their higher income levels.

 

See the Potential Payments Upon Termination or Change in Control section starting on page 37 for potential amounts payable to the Named Executive Officers under the Officer Death Benefit Plan.

 

All of the Named Executive Officers are at-will employees of the Company, without employment agreements.

 

Accelerated Vesting of Stock Awards.

 

Change of Control: In order to promote stability, retain executives and further align the interests of management and stockholders during the critical period of a change of control, a change of control will have certain immediate effects on stock awards granted to Named Executive Officers. Immediately prior to a change of control, among other things:

 

 

The restricted stock and stock option awards to Mr. O’Brien on October 31, 2008 do not vest upon a change of control, but do vest upon any involuntary termination of employment.

 

Death/Long-Term Disability/Retirement/Severance: Termination of employment due to death, long-term disability or retirement under the Pension Plan (entitling the executive to immediate pension benefits) or severance (following approval by the SVP of Human Resources and execution of a release) also triggers the immediate vesting of all restricted stock and restricted stock units granted to the executive.

 

In the event of employment termination due to death, severance (after execution of release) or long-term disability, a pro-rata portion of the executive’s stock options (such pro-rata portion is based on days of service from the date of grant until the date of termination of employment in relation to the full vesting period) will immediately vest and all previously vested and accelerated vested options will be exercisable for a period beyond termination.

 

If an executive retires and is entitled to an immediate pension under the Pension Plan, the executive’s unvested stock options will vest and all previously vested and accelerated vested options will remain exercisable beyond termination for a certain period. Despite the extension of time to exercise options after termination in the event of death, long-term disability, retirement or severance, no option remains exercisable beyond 10 years from the date of grant. In all cases, trading in Company securities is subject to the restrictions described in the section Restrictions on Trading Stock, below.

 

Granting Stock Options. On an annual basis, the Compensation Committee reviews the rate at which other companies grant stock options and other stock grants in the aggregate for all employees. The purpose of this review is to compare the Company’s overhang and dilution percentages in comparison to other companies. The Committee reviews data regarding other public companies considered to be in the Materials group of the Standard & Poor’s 500 Index. The Committee has concluded that the Company’s grant rates are significantly lower than the mean grant rates of other companies in the Materials group.

 

The Company, at the direction of the Compensation Committee, has examined its policies and procedures relating to the grant of stock options. The Company:

 

 

The Company has a written policy governing the grant of stock options. The policy applies equally to grants of stock options to executives and other employees. The policy provides, among other things, that:

 

 

The Company’s 2005 Stock Incentive Plan defines fair market value of the stock as the average of the high and low sales price on the date of the grant. The Company selected, and the Compensation Committee approved, this formula to mitigate the effect of the volatility of the Company’s stock price, often a direct result of day-to-day changes in the gold price and not factors related to Company performance. The formula does not increase the likelihood that recipients will be granted in-the-money stock options.

 

Stock Ownership Guidelines. The Company’s stock ownership guidelines require that all employees designated as “executives” for purposes of this policy (approximately 60 individuals) own shares of the Company’s stock, the value of which is a multiple of base salary. For the Named Executive Officers, the stock ownership guidelines are as follows:

 

Stock Ownership Guidelines

 

 

Stock ownership guidelines were put in place to increase the alignment of interests between executives and stockholders by encouraging executives to act as equity owners of the Company. The Compensation Committee sets the ownership guidelines by considering the size of stock awards. Based upon the historic conservative levels of stock awards to Company executives, the Compensation Committee sets the ownership guidelines at corresponding levels. Unvested shares of restricted stock, restricted stock units and shares held in retirement accounts are considered owned for purposes of the guidelines. The Compensation Committee reviews compliance with the guidelines annually. Executives who are new to their positions have three years to comply with the guidelines. All of the executives identified above are in compliance with the stock ownership guidelines.

 

Restrictions on Trading Stock. The Company has adopted a stock trading policy for its employees, including the Named Executive Officers. The policy prohibits certain employees from trading during specific periods at the end of each quarter until after the Company’s public disclosure of financial and operating results for that quarter, unless they have received the approval of the Company’s General Counsel. The Company may impose additional restricted trading periods at any time if it believes trading by employees would not be appropriate because of developments at the Company that are, or could be, material. In addition, the Company requires pre-clearance of trades in Company securities for its executive officers.

 

Perquisites. The Company’s philosophy is to provide a minimum of personal-use perquisites to its executives. The Company seeks to provide perquisites that involve a significant business purpose. In 2008,

such business related perquisites for the Named Executive Officers were: (a) golf club membership for the President and Chief Executive Officer, Mr. O’Brien; and (b) personal use of administrative assistant services for Mr. O’Brien.

 

Mr. O’Brien uses the golf club for substantial business purposes, including business entertainment, meetings and dinners. In recognition of the fact that some portion of the membership is used for personal purposes, the entire amount reimbursed is considered a perquisite and reported in the All Other Compensation column of the Summary Compensation Table on page 30.

 

Clawback Provisions. The Company’s Corporate Governance Guidelines, adopted by the Board of Directors, contains a policy that provides that the Board will require reimbursement of any portion of a bonus previously paid to an executive pursuant to the terms of the Company’s bonus programs if: (a) the amount of any bonus, including stock awards, was calculated based on the achievement of certain financial results that were subsequently the subject of a restatement; (b) the amount of such 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 bonus actually awarded; and (c) in the judgment of the Board of Directors, the circumstances warrant such reimbursement. The policy to seek reimbursement of bonuses is not limited to situations involving fraud and is not limited to those executives directly involved in causing the restatement.

 

Tax Deductibility of Compensation. Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the amount of compensation in excess of $1,000,000 that the Company may deduct in any one year with respect to its chief executive officer, chief financial officer, and three other most highly compensated executive officers. There are exceptions to the $1,000,000 limitation for performance-based compensation meeting certain requirements. The Company has not adopted a formal policy requiring all compensation to meet the exception requirements under Section 162(m) and therefore not be subject to the $1,000,000 deductibility limitation. The Company has decided not to implement a formal policy so that the Company can maintain flexibility in compensating executive officers in a manner designed to promote various corporate goals.

 

In 2008, Messrs. O’Brien’s and Lansdown’s amounts are greater than $1,000,000, and a portion of their salaries, bonuses, stock awards, and other compensation items are not deductible by the Company. Stock option awards pursuant to stockholder approved plans are performance-based and are fully deductible, regardless of the $1,000,000 limit in Section 162(m). Corporate Performance Bonuses, Strategic Objectives Bonuses and Financial Performance Stock Bonuses do not meet the performance-based exception under Section 162(m) and are therefore subject to the $1,000,000 deduction limit. To date, the Company has deemed the additional tax benefits that it could receive from a 162(m) executive compensation plan as immaterial to the Company. However, the Company continually assesses the materiality of additional 162(m) tax benefits that it could receive from a 162(m) executive compensation plan as executive compensation evolves.

 

2008 Summary Compensation Table

 

 

 

 

Refer to the Compensation Discussion and Analysis section for a description of the components of compensation, along with a description of all material terms and conditions of each component. In 2008, salary and bonus payments accounted for 36% of Mr. O’Brien’s total compensation. Salary and bonus accounted for 42%, 39%, 43% and 43% of Messrs. Ball, Enders, Engel and Lansdown total compensation, respectively.

 

2008 All Other Compensation Table

 

 

 

 

2008 Grants of Plan-Based Awards Table