What is the main purpose of the revised Executive Change of Control Plan?

The primary purpose of the revised 2012 ECOC Plan is to modify the terms and reduce the potential financial obligations of the company in the event of a change of control, particularly concerning executive compensation and benefits.

Who is eligible for the new Executive Change of Control Plan?

The 2012 ECOC Plan is effective for any newly hired eligible employee or any employee promoted into eligible positions on or after January 1, 2012. Eligibility is restricted to individuals at the Senior Director level and above.

How do the equity award terms change under the new plan?

For equity grants made in 2012 and subsequent years, acceleration of these awards in the event of a change of control will now require a 'double trigger.' This means both a qualifying change of control event must occur, and the executive's employment must also be terminated.

Are there any benefits that will no longer be provided or are reduced?

Yes, several benefits have been removed or reduced. These include the removal of excise tax gross-ups, the use of target bonus for calculations (instead of a higher historical bonus), the discontinuation of company contributions to 401(k) and non-qualified pension plans during the benefit period, and a reduced health benefits continuation period to 18 months.

NEM/NEMCL 8-K: Leadership Changes

Summary

Newmont Corporation filed an 8-K on January 3, 2012, to report the adoption of a revised Executive Change of Control Plan (ECOC Plan) effective January 1, 2012. This new plan, applicable to newly hired or promoted eligible employees at the Senior Director level and above, introduces several significant changes compared to the previous 2005 plan. The primary objective appears to be a reduction in the potential cost to the company associated with executive departures following a change of control. Key modifications include the elimination of excise tax gross-ups on benefits, the use of target bonus instead of the highest bonus in the prior three years for benefit calculations, and the removal of company contributions to 401(k) and non-qualified pension plans during the change of control benefits period. Additionally, health benefits continuation is now limited to 18 months. For equity awards granted from 2012 onwards, acceleration will require a "double trigger" event: both a qualifying change of control and a termination of employment.

Key Highlights

1Newmont adopted a revised Executive Change of Control Plan (2012 ECOC Plan) effective January 1, 2012.
2The plan applies to newly hired or promoted employees at the Senior Director level and above.
3Excise tax gross-up on change of control benefits has been removed.
4Benefit calculations will now use target bonus, not the highest bonus from the prior 3 years.
5Company contributions to 401(k) and non-qualified pension plans for the change of control benefit period have been removed.
6Health benefits continuation is limited to 18 months.
7Equity grants from 2012 onwards require a 'double trigger' (change of control and termination) for acceleration.

NEWMONT Corp /DE/ 8-K Report, Executive Changes (Jan 4, 2012)

Summary

Key Highlights

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