Other Compensation Information

Incentive Plan Award Tables

Aggregate Option Exercises During Financial Year Ended December 31, 2018

The NEOs did not exercise any stock options during 2018.

Outstanding Share-Based Awards and Option-Based Awards as at Year Ended December 31, 2018(1)

The following table provides information for all share-based and option-based awards to NEOs outstanding as at December 31, 2018.

Option Awards(2) Share-Based Awards(3)
Name Number of Securities Underlying Unexercised Options (#) Option Exercise Price(4) ($) Option Expiration Date Value of Unexercised In-the-Money Options or Similar Instruments   Number of Shares or Units of Shares That Have Not Vested (includes PGSUs and RSUs) Market or Payout Value of Share-Based Awards That Have Not Vested (includes PGSUs and RSUs) Market or Payout Value of Vested Share-Based Awards Not Paid Out or Distributed (DSUs)
(a) (b) (c) (d) (e) (f) (g) (h)
John L. Thornton
2/12/2013 Nil Nil Nil Nil Nil $15,625
Total(5) Nil Nil Nil Nil $15,625
Kelvin P.M. Dushnisky
2/14/2012 102,414 $48.45 2/13/2019 Nil Nil Nil
8/7/2012 56,408 $33.36 2/28/2019 Nil Nil Nil
2/12/2013 113,685 $32.30 2/28/2019 Nil Nil Nil
2/14/2017 Nil Nil Nil 124,637 $1,683,851
2/13/2018 174,065 $2,351,614
Total(6) 272,507 Nil 298,702 $4,035,464
Kevin J. Thomson
2/14/2017 Nil Nil Nil 77,898 $1,052,407
2/13/2018 Nil Nil Nil 119,669 $1,616,734
Total(7) Nil Nil 197,568 $2,669,141
Catherine P. Raw
2/14/2017 Nil Nil Nil 69,243 $935,468
2/13/2018 Nil Nil Nil 106,374 $1,437,108
Total(8) Nil Nil 175,616 $2,372,576
Mark F. Hill
10/25/2016 Nil Nil Nil 46,125 $623,142
10/24/2017 Nil Nil Nil 49,564 $669,611
2/13/2018 Nil Nil Nil 84,616 $1,143,156
Total(9) Nil Nil 180,304 $2,435,909
  1. The amounts shown in the table above for each of the NEOs as at December 31, 2018 include: (i) each stock option outstanding, (ii) the aggregate number of unvested PGSUs and RSUs, (iii) the aggregate number of vested DSUs that have not yet paid out, and (iv) the market value of such PGSUs, RSUs, and DSUs based on the closing price of Barrick Shares on December 31, 2018. For options and DSUs, the closing share price of Barrick Shares is based on the NYSE as at December 31, 2018 ($13.54). For PGSUs and RSUs, the closing price of Barrick Shares is based on the TSX as at December 31, 2018 (Cdn $18.43), converted to U.S. dollars based on the December 31, 2018 Bank of Canada daily average rate of exchange (1.3642). The value realized upon vesting of a PGSU is equal to the closing share price of Barrick Shares on the TSX on the vesting date. The value realized upon vesting of a RSU is equal to the average closing share price of Barrick Shares on the TSX during the five trading days preceding the vesting date.
  2. We have ceased granting stock options to executives to further underscore long-term ownership as the basis of our long-term incentive awards.
  3. PGSUs vest 33 months from the date of grant and upon vesting, the after-tax proceeds are used to purchase Restricted Shares that cannot be sold until the Named Partner retires or leaves the Company (up to two years longer if they leave to join, or provide services to, a defined competitor). RSUs vest 33 months from the date of grant. DSUs vest immediately on grant but must be retained until the director leaves the Board. Market or payout value of PGSU awards and RSU awards that have not vested is determined by multiplying the number of PGSUs or RSUs by the closing share price of Barrick Shares on the TSX as at December 31, 2018 (Cdn $18.43). Market or payout value of DSUs that have vested but have not been paid out or distributed is determined by multiplying the number of DSUs by the closing share price of Barrick Shares on the NYSE as at December 31, 2018 ($13.54).
  4. The exercise price is the closing price of Barrick Shares on the day immediately prior to the grant date on the NYSE or, if the grant date is during a period in which trading of Barrick securities by an option holder is restricted by Company policy, the exercise price is the greater of the closing price on the day immediately prior to the grant date and the closing price on the first business day after trading restrictions are lifted. Details on the exercise price and closing share price (in U.S. dollars) for each of the outstanding option grants are shown in the table below:
    Exercise and Closing Share Prices for Outstanding Option Grants
    Option Grant Exercise Price Closing Share Price on Grant Date (NYSE)
    February 14, 2012 $48.45 $48.45
    August 7, 2012 $33.36 $33.36
    February 12, 2013 $32.30 $32.30
  5. Mr. Thornton’s vested share-based awards that have yet to be paid out or distributed include 1,059 DSUs and 95 DSU dividend equivalents that he received for his service as an independent director of the Board from February 15, 2012 to June 5, 2012. Pursuant to the Directors’ Deferred Share Unit Plan, these DSUs must be retained until Mr. Thornton leaves the Board, at which point the value of the DSUs including any dividends accrued on the initial DSU grant will be paid out in cash.
  6. Mr. Dushnisky’s total outstanding share-based awards include 294,848 PGSUs and 3,854 PGSU dividend equivalents. Mr. Dushnisky’s employment with Barrick ceased August 31, 2018. Pursuant to the PGSU Plan, all PGSUs that were unvested on the date of the cessation of his employment will continue to vest in accordance with the normal vesting schedule and will be paid out in cash upon vesting. In accordance with the terms of the Stock Option Plan (2004), Mr. Dushnisky’s vested and unexercised stock options remained exercisable for the earlier of six months after the date of his resignation, February 28, 2019, or until the original expiry date. All of his vested and unexercised stock options expired on February 28, 2019 and are no longer exercisable.
  7. Mr. Thomson’s total outstanding share-based awards include 195,052 PGSUs and 2,515 PGSU dividend equivalents.
  8. Ms. Raw’s total outstanding share-based awards include 173,380 PGSUs and 2,236 PGSU dividend equivalents.
  9. Mr. Hill’s total outstanding share-based awards include 83,783 PGSUs, 94,242 RSUs, 832 PGSU dividend equivalents, and 1,446 RSU dividend equivalents.

Incentive Plan Awards – Value Vested or Earned During the Year Ended December 31, 2018

The following table provides information for each of the NEOs on (1) the value that would have been realized if the options under the option-based awards had been exercised on the vesting date, (2) the value realized upon vesting of share-based awards (PGSUs, RSUs, and DSUs), and (3) the value earned under the API program or long-term incentive awards that are awarded pursuant to the Executive Chairman LTI arrangement, as described in “2018 Compensation of Named Executive Officers – 2018 Compensation of the Executive Chairman”.

Name Option-Based Awards –
Value Vested
During the Year(1)
Share-Based Awards –
Value Vested
During the Year(2)
Non-Equity Incentive
Plan Compensation –
Value Earned
During the Year(3)
(a) (b) (c) (d)
John L. Thornton Nil $138 $9,735,000
Kelvin P.M. Dushnisky Nil $1,637,585 $926,160
Kevin J. Thomson Nil $1,023,502 $1,667,088
Catherine P. Raw Nil $1,116,938 $1,667,088
Mark F. Hill Nil Nil $1,833,797
  1. We have ceased granting stock options to executives to further underscore long-term ownership as the basis of our long-term incentive awards.
  2. For Mr. Thornton, share-based awards that vested during 2018 represent the DSU dividend equivalents credited to his account based on the DSUs that he received for his service as an independent director of the Board from February 15, 2012 to June 5, 2012. For Mr. Dushnisky, the value of PGSUs that vested in 2018 (denominated in U.S. dollars) is determined by multiplying the number of PGSUs that vested by the closing share price of Barrick Shares on the TSX on the vesting date, converted to U.S. dollars based on the Bank of Canada daily average exchange rate on the vesting date pursuant to the PGSU Plan. In accordance with the terms of the PGSU Plan, upon vesting, the after-tax proceeds were paid to Mr. Dushnisky in cash. For Mr. Thomson, the value of PGSUs that vested in 2018 (denominated in U.S. dollars) is determined by multiplying the number of PGSUs that vested by the closing share price of Barrick Shares on the TSX on the vesting date, converted to U.S. dollars based on the Bank of Canada daily average exchange rate on the vesting date pursuant to the PGSU Plan. Upon vesting, the after-tax proceeds of the PGSU award were used to purchase Restricted Shares that cannot be sold until Mr. Thomson retires or leaves the Company (up to two years longer if he leaves to join, or provide services to, a defined competitor). For Ms. Raw, the value of RSUs that vested in 2018 (denominated in U.S. dollars) is determined by multiplying the number of RSUs that vested by the average of the closing share price of Barrick Shares on the TSX on the five trading days prior to the vesting date, converted to U.S. dollars based on the Bank of Canada daily average exchange rate on the day preceding the vesting date pursuant to the Long-Term Incentive Plan (formerly the RSU Plan).
  3. For Mr. Thornton, the value of non-equity incentive plan awards earned in the year represents the long-term incentive awarded pursuant to the Executive Chairman LTI arrangement. For Messrs. Dushnisky, Thomson, and Hill and Ms. Raw, the value of non-equity incentive plan awards earned in the year represents the API earned for 2018 performance.

Executive Retirement Plans

Barrick adopted the Executive Retirement Plan in 2000. The Executive Retirement Plan is a non-registered/non-qualified defined contribution plan in which participants accrue benefits in the form of account balances with a guaranteed rate of return and defined notional contributions. Currently, we administer one plan for officers based outside of the United States (including Canada) and another for officers primarily based in the United States. All NEOs participate in an Executive Retirement Plan and do not participate in any other Barrick retirement plan.

An amount equal to 15% of the officer’s salary and API for the year is accrued to the Executive Retirement Plan and accumulated with interest until termination of employment (before the participant’s retirement date), or upon retirement, as applicable. Interest accumulates at the annual rate of “Government of Canada Marketable Bonds with Average Yield over 10 years” as published in the Bank of Canada Weekly Financial Statistics for the month of January of the relevant calendar year. For 2018, this interest rate was 2.35%. No above-market or preferential earnings were paid out.

Participants are eligible to receive payouts upon retiring after attaining the age of 55, with the option of receiving the payout as a lump sum or in monthly installments having an equivalent actuarial value. Currently, Messrs. Thornton and Thomson are eligible to receive payouts under the Executive Retirement Plan from their accumulated account balances.

Upon termination, before the participant’s retirement date, the participant will receive the total amount credited to his or her account after the deduction of any amount transferred to a registered retirement savings plan as a retiring allowance. If the participant dies prior to retirement, the account balance will be paid out as a lump sum to the participant’s beneficiary or estate. See Potential Payments Upon Change in Control Termination for information on payments made upon termination following a Change in Control.

Defined Contribution Plan Table as at December 31, 2018(1)

Name Accumulated Value
at Start of Year
Compensatory(2) Accumulated Value
at Year-End
(a) (b) (c) (d)
John L. Thornton $3,052,469 $375,000 $3,503,194
Kelvin P.M. Dushnisky(3) $3,242,801 $196,809 Nil
Kevin J. Thomson $902,477 $322,998 $1,161,279
Catherine P. Raw $502,130 $310,650 $772,520
Mark F. Hill $171,523 $270,516 $422,495
  1. Executive Retirement Plan values are denominated in Canadian dollars and are converted from Canadian dollars to U.S. dollars using the following exchange rates reported by the Bank of Canada, except the contributions for Mr. Thornton that are made and reported in U.S. dollars:
    1. Accumulated Value at Start of Year – December 29, 2017 daily average rate of exchange of 1.2545, the last trading day of 2017;
    2. Compensatory Value – annual average exchange rate for 2018 of 1.2957; and
    3. Accumulated Value at Year End – daily average rate of exchange of 1.3642 on December 31, 2018.
  2. Pursuant to the Executive Retirement Plan, an amount equal to 15% of an officer’s salary and API received during the year is accrued and accumulated with interest until termination of employment or retirement, as applicable. API in respect of the most recently completed financial year is awarded in February, after the end of the most recently completed financial year. Accordingly, the compensatory value for the year ended December 31, 2018 reflected in the table above includes 15% of the salary earned in 2018, as well as 15% of the 2017 API that was awarded in February 2018.
  3. Mr. Dushnisky’s accumulated account balance under the Executive Retirement Plan was paid out in accordance with its terms in the amount of Cdn $4,391,089 upon his resignation.

Potential Payments Upon Termination

Termination Provisions for Existing Compensation Plans and Programs

The table below describes the standard treatment of certain compensation that would have become payable under existing compensation plans and programs, if an NEO’s employment had terminated on December 31, 2018, in circumstances other than a Change in Control (see Potential Payments Upon Change in Control Termination for further details). The Compensation Committee has the authority to depart from standard treatment and to consider other factors deemed appropriate, including individual contributions to the Company, restrictive covenant agreements, as well as payments to mitigate potential legal claims, subject to any such payment being made pursuant to a statutory settlement agreement.

Resignation Retirement, Death, or Disability(1) Termination with Cause(2) Termination Without Cause(2)
Base Salary
Only earned portion Only earned portion Only earned portion Only earned portion, plus compensation pursuant to Canadian statutory and common law
Annual Performance Incentive None Prorated portion based on actual performance achieved; determined on a case-by-case basis None Prorated portion based on actual performance achieved; determined on a case-by-case basis
Unvested
Performance Granted Share Units (PGSUs)(3)
Continue to vest according to their normal vesting schedule and are paid out in cash, provided that the participant does not join, or provide services to, a “Competitor” during the continued vesting period (see below for details) For retirement, treatment consistent with Resignation. For termination due to death or disability, vest on the termination date or date of death, as applicable All unvested PGSU awards lapse and are forfeited Continue to vest according to normal vesting schedule, and are paid out in cash, provided that employee does not join, or provide services to, a “Competitor” during the continued vesting period (see below for details)
Vested
Performance Granted Share Units (PGSUs) that are held as “Restricted Shares”
Prohibitions lapse and cease to apply to all Restricted Shares, provided that the participant does not join, or provide services to, a “Competitor” (see below for details) Prohibitions lapse and cease to apply to all Restricted Shares on the termination date or date of death, as applicable Restricted Shares will be released in three tranches: 50% on the termination or retirement date, 25% on the first anniversary of the termination or retirement date, and 25% on the second anniversary of the termination or retirement date Prohibitions lapse and cease to apply to all Restricted Shares, provided that the participant does not join, or provide services to, a “Competitor” (see below for details)
Unvested
Restricted Share Units (RSUs)
Unvested RSUs are forfeited immediately Accelerated vesting of unvested RSUs Unvested RSUs are forfeited immediately In accordance with the Long-Term Incentive Plan (formerly the RSU Plan), Compensation Committee discretion to accelerate and/or extend vesting of unvested RSUs; otherwise forfeited
Retirement Plan Benefits Entitled to receive the total amount accrued under the Executive Retirement Plan Entitled to receive the total amount accrued under Executive Retirement Plan Entitled to receive the total amount accrued under the Executive Retirement Plan Entitled to receive the total amount accrued under the Executive Retirement Plan
Benefits and Perquisites Cease as of the last day of employment In the case of death, benefits are extended for 31 days; otherwise, cease as of the last day of employment Cease as of the last day of employment Canadian statutory and common law
  1. See footnote 1 in Termination Provisions for Previous Compensation Plans and Programs that Continue to Apply table below.
  2. See footnote 2 in Termination Provisions for Previous Compensation Plans and Programs that Continue to Apply table below.
  3. For U.S. participants only, PGSUs will not accelerate in vesting under any circumstance to ensure that there are no unintentional and adverse tax consequences imposed by the Internal Revenue Code’s Section 409A.

For PGSU awards, in the event of resignation or termination without cause, the Compensation Committee must be satisfied that the Named Partner has no current or future intention to be employed by a “Competitor”. The following standard treatment applies to our Named Partners who resign or retire to join, or provide services to, a “Competitor”, or if the Compensation Committee becomes aware of any evidence to this effect before full vesting:

  • All unvested PGSU awards lapse and are forfeited; and
  • Vested PGSU awards (Restricted Shares), subject to sale and trading restrictions, will be released in three tranches: 50% on the termination date, 25% on the first anniversary of the termination date, 25% on the second anniversary of the termination date.

Termination Provisions for Previous Compensation Plans and Programs that Continue to Apply

The table below outlines the standard provisions applicable to our Stock Option Plan (2004) upon termination in circumstances other than a Change in Control (see Potential Payments upon Change in Control Terminationfor further details). No stock option grants have been awarded to our Named Partners since 2013 for the 2012 performance year.

Resignation Retirement, Death, or Disability(1) Termination with Cause(2) Termination Without Cause(2)
Unvested
Stock Options
Unvested portion is forfeited In the event of termination due to retirement or death, the Compensation Committee may in its discretion choose to accelerate vesting of unvested options and/or extend the exercise period to the earlier of three years and the original term to expiry. In the event of termination due to disability, options are not affected and continue to vest and are exercisable in accordance with their original terms Unvested options are immediately forfeited In accordance with the 2004 Plan, Compensation Committee discretion to accelerate vesting of unvested options and/or extend the exercise period up to the earlier of three years and the original term to expiry; otherwise forfeited
Vested
Stock Options
Vested and unexercised options exercisable on the date of termination remain exercisable for six months or until original term to expiry, if earlier For termination due to disability, the exercise period of options is not affected. For termination due to retirement or death, vested and unexercised options remain exercisable for six months from the date of retirement or death or until the original term to expiry, if earlier Vested and unexercised options immediately expire on the date of termination Vested and unexercised options exercisable on the date of termination remain exercisable for six months or until the original term to expiry, if earlier
  1. “Disability” means, with respect to a non-U.S. participant, the physical or mental illness of the participant resulting in the participant’s absence from his or her full-time duties with the relevant Barrick Gold Company for a period of time that results in a termination event pursuant to the applicable long-term disability plan for the Barrick Gold Company for which the participant is employed. “Disability” means, with respect to a U.S. participant, if the participant is: (i) unable to engage in his or her full-time duties with the relevant Barrick Gold Company by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering the participant.
  2. “Cause” is defined as:
    1. Willful and continued failure by the participant to substantially perform the participant’s duties with the Company (other than any such failure resulting from his or her incapacity due to physical or mental illness or disability (as defined under the plan) or any such failure subsequent to the delivery to the participant of a notice of termination without cause by the Company or the delivery by the participant of a notice of termination for good reason (as defined under the plan) to the Company after a demand for substantial performance improvement has been delivered in writing to the participant by the President, the Chairman, or a committee of the Board of Directors, as appropriate, of the Company which specifically identifies the manner in which the participant has not substantially performed his or her duties);
    2. Willful engaging by the participant in gross misconduct which is demonstrably and materially injurious to the Company, monetarily or reputationally; or
    3. The conviction of the participant of a criminal offense involving dishonesty or other moral turpitude; provided that for the purpose of footnote (2), no act or failure to act by the participant shall be considered “willful” unless done or omitted to be done by the participant in bad faith and without reasonable belief that the participant’s action or omission was in the best interests of the Company or its affiliates or subsidiaries. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company or upon the instructions of a more senior officer of the Company shall be conclusively presumed to be done, or omitted to be done, by the participant in good faith and in the best interests of the Company. The Company must notify the participant of any event constituting cause within 90 days following the Company’s knowledge of its existence or such event shall not constitute Cause under the Change in Control Plan.

Potential Payments Upon Termination

The table below describes and quantifies certain compensation that would have become payable under our existing and previous compensation policies and programs if an NEO’s employment had been terminated on December 31, 2018. The amounts shown in the table below are the incremental amounts to which our NEOs would be entitled upon termination (except in connection with a Change in Control). This table does not show any statutory or common law benefits payable pursuant to Canadian law or the value of continued equity vesting, as it is not considered to be an incremental benefit to our NEOs.

Incremental Compensation J.Thornton K.Thomson(1) C. Raw M. Hill
Resignation Nil Nil Nil Nil
Termination for Cause Nil Nil Nil Nil
Termination Without Cause Nil $8,536,481 Nil Nil
Retirement Nil Nil Nil Nil
Termination Upon Death or Disability(2) Nil $2,669,141 $2,372,576 $2,418,685
  1. Pursuant to his termination arrangement, in the event of a termination without cause in 2018 or beyond, Mr. Thomson is entitled to a severance payment equal to two times base salary (Cdn $900,000), plus two times an amount equivalent to the average of his 2015, 2016 and 2017 API, plus payment of Executive Retirement Plan contributions, and compensation for loss of benefits for a 24-month period. Compensation for loss of benefits is in lieu of Mr. Thomson’s medical, dental, vision care, life insurance, accidental death and dismemberment, and long-term disability coverage, as well as automobile benefits and outplacement services. Additionally, he is entitled to short-term and long-term incentive payments, prorated from January 1, 2018 to the date of his termination. For API, he is entitled to the greater of the average of his prior year’s actual API payment and the result of his individual API scorecard for 2018, as determined by the Compensation Committee. For LTI, he is entitled to an amount as determined by the Compensation Committee based on the Long-Term Company Scorecard results. The estimated severance payable has been converted from Canadian dollars to U.S. dollars based on the Bank of Canada daily average exchange rate as of December 31, 2018 (1.3642).
  2. The amounts stated in the table represent the value of accelerating the vesting of unvested RSUs and PGSUs. The value of accelerating the vesting of unvested RSUs is calculated as the product of (i) the number of RSUs where restrictions lapsed because of the termination, and (ii) $13.33 (the average of the closing share price of Barrick Shares on the TSX on the five trading days prior to the date of assumed vesting, December 31, 2018, converted to U.S. dollars based on the Bank of Canada daily average rate of exchange on the preceding day, pursuant to the Long-Term Incentive Plan (formerly the RSU Plan). The value of accelerating the vesting of unvested PGSUs is calculated as the product of (i) the number of PGSUs where restrictions lapsed because of the termination, and (ii) $13.51 (the closing share price of Barrick Shares on the TSX on December 31, 2018, converted from Canadian dollars to U.S. dollars based on the Bank of Canada daily average rate of exchange on December 31, 2018, pursuant to the PGSU Plan).

Potential Payments Upon Change in Control Termination

Barrick’s Partner Change in Control Severance Plan (Change in Control Plan) ensures that Named Partners and other Partnership Plan participants are entitled to receive severance benefits in the event that their employment is terminated by the Company (other than for cause or disability), or employment is deemed to have been terminated for Good Reason at any time within two years following a Change in Control. These are “double trigger” Change in Control arrangements, requiring both a Change in Control of the Company and a qualifying termination of the employment of the Named Partner or Partnership Plan participant before any payments are owed. Terminations for cause or disability and resignation without Good Reason following a Change in Control would be treated the same as in non-Change in Control situations.

Mr. Thornton is not subject to Change in Control protection. Pursuant to Mr. Thomson’s termination agreement, he is entitled to receive the greater of (a) the aggregate payments and benefits pursuant to the Change in Control Plan and (b) the aggregate payments and benefits pursuant to his termination agreement. See footnote 1 in the Potential Payments Upon Termination table for a summary of the provisions of his termination agreement.

The table below outlines a comparison of the standard severance treatment applicable to our Named Partners and other Partnership Plan participants upon a Termination without Cause and a double-trigger Change in Control, pursuant to the Change in Control Plan and relevant provisions of each of the equity-based LTI plans:

Provision Termination Without Cause Change in Control (Double Trigger)
Lump Sum Cash Severance Payment (1) Earned portion of Base Salary and prorated API award, based on actual performance achieved, determined on a case-by-case basis, plus compensation pursuant to Canadian statutory and common law Earned portion of Base Salary and an API amount equal to the product of: (a) the maximum API opportunity assuming all relevant performance targets are met, and (b) the number of days worked up to and including the date of termination divided by 365 days, plus one times the sum of the following: the greater of: (a) base salary paid for the most recently completed fiscal year; or (b) the agreed upon base salary for the 12-months immediately following the Change in Control, plus the average of the actual API paid for the last three completed fiscal years prior to the Change in Control, plus the average of the actual PGSU awards granted for the last three completed fiscal years prior to the Change in Control
Performance Granted Share Units (PGSUs)(1,2) Unvested PGSUs continue to vest according to normal vesting schedule, provided that the employee does not join a “Competitor” during the continued vesting period. Prohibitions lapse and cease to apply to all Restricted Shares Unvested PGSU awards vest on the termination date, and are paid out in cash, except for U.S. participants whose unvested PGSU awards will continue to vest according to the normal vesting schedule to ensure compliance with the Internal Revenue Code’s Section 409A. All prohibitions on the sale and transfer of Restricted Shares lapse in the event of a bona fide third-party takeover bid, provided that the takeover bid is successfully completed
Restricted Share Units (RSUs) (2,3) Unvested units forfeited Unvested units vest on the termination date, except for U.S. participants whose unvested RSUs will continue to vest according to the normal vesting schedule to ensure compliance with the Internal Revenue Code’s Section 409A
Stock Options Vested options remain exercisable for six months from the date of termination and unvested options are forfeited immediately Unvested options vest immediately and become exercisable. Unvested options remain exercisable for the lesser of two years or the original term to expiry
Retirement Benefits The total amount accrued under the Executive Retirement Plan The total amount accrued under the Executive Retirement Plan, plus two times the annual contribution that would have been credited under the Executive Retirement Plan or a retirement contribution plan for the full fiscal year in which employment ceases
Benefits and Perquisites Cease, subject to
requirements of Canadian statutory and common law
Benefits continue until the earlier of two years after termination, or the executive’s commencement of new full-time employment with a new employer. Entitlement to a lump sum payment equivalent to two times the annual fair value of the automobile benefit, and an option for the executive to purchase the automobile at the remaining cost to the Company under the applicable lease as of the date of termination. U.S. participants are entitled to continued medical insurance for two years and to a lump sum payment equivalent to the fair market value of all other benefits they are entitled to for a two-year period
Reimbursement for Relocation Services Not applicable Up to a maximum period of 18 months following the date of termination
  1. If the Named Partner or Partnership Plan participant has been designated a partner for less than three completed fiscal years prior to the Change in Control, the average of the API and/or PGSU awards will be calculated based on the average of the actual number of years that the Named Partner or Partnership Plan participant has been designated a partner. If no API or PGSU award has been paid to the Named Partner or Partnership Plan participant since being designated a partner, then one-half of the maximum API and/or maximum yearly PGSU Plan award that would be payable or granted to the Named Partner or Partnership Plan participant will be used to determine the Lump Sum Cash Severance Payment. For certainty, the API paid or payable, and the PGSU award granted or to be granted, will be annualized in circumstances where the Named Partner or Partnership Plan participant was not employed by the Company for the whole of an applicable fiscal year.
  2. For U.S. participants only, paragraph (i) in the Change in Control definition below is replaced by “the acquisition by any individual, entity or group of individuals or entities acting jointly or in concert of beneficial ownership of 30% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors other than as part of and at the time of completion of a transaction described in paragraph (iii) of the Change in Control definition below, provided, however, that for the purposes of paragraph (i), the acquisition by the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by the Company of Barrick Shares or other Voting Securities shall not constitute a Change in Control.”
  3. In addition, the Compensation Committee may, in its discretion, accelerate vesting of unvested RSUs and unvested stock options and/or extend the exercise period up to the earlier of three years and the original term to expiry.

Other Terms and Provisions

The Change in Control Plan prohibits Named Partners and Partnership Plan participants from soliciting Barrick people for a period of two years following termination. Named Partners and Partnership Plan participants are required to maintain the confidentiality of any confidential or proprietary information concerning Barrick for a period of three years following termination.

Change in Control Definitions

Pursuant to the Change in Control Plan, a “Change in Control” is generally defined as:

  1. The acquisition by any individual, entity or group of individuals or entities acting jointly or in concert, of 30% or more of either (A) the then outstanding Barrick Shares, or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors other than as part of and at the time of completion of a transaction described in (iii) below, provided that the acquisition by the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company shall not constitute a Change in Control;
  2. Individuals who constitute the Board at the time the Change in Control Plan took effect (Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual who becomes a director who was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board will be deemed to be a member of the Incumbent Board. For greater certainty, this excludes any such individual whose initial assumption of office occurs as a result of an actual or threatened proxy contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of any individual, entity or group of individuals or entities other than the management or the Board;
  3. The consummation of a reorganization, merger, amalgamation, plan of arrangement or consolidation of or involving the Company or a sale or other disposition of all or substantially all of the assets of the Company or an acquisition of assets, in a single transaction or in a series of linked transactions (Business Combination), in each case, unless: (A) the beneficial owners of the then outstanding Barrick Shares and other voting securities prior to such Business Combination continue to hold more than 50% of the beneficial ownership of the outstanding Barrick Shares and voting securities of the Company or continuing corporation following the Business Combination, (B) no individual, entity or group of individuals or entities (excluding any employee benefit plan (or related trust) sponsored or maintained by the Company or continuing corporation beneficially owns 30% or more of the then outstanding Barrick Shares and voting securities of the Company or continuing corporation), and (C) at least a majority of the members of the board of directors of the Company or continuing corporation were members of the Incumbent Board at the time of the execution of the definitive agreement providing for such Business Combination or, in the absence of such an agreement, at the time at which approval of the Board was obtained for such Business Combination;
  4. The sale or other disposition of assets of the Company, in a single transaction or in a series of linked transactions, (A) having an aggregate net asset value of more than 50% of the aggregate net asset value of the consolidated assets of the Company, or (B) which generate, in aggregate, more than 50% of the net income or net cash flow during the last completed financial year or during the current financial year, in each case on a consolidated basis; or
  5. Approval by the shareholders of the Company of the complete liquidation or dissolution of the Company.

Good Reason” generally means the occurrence, after a Change in Control, of any of the following events without the participant’s written consent:

  1. The assignment to the participant of any duties inconsistent in any respect with the participant’s position (including status, offices or titles held, or reporting requirements), authority, duties or responsibilities with the Company from that which existed immediately prior to such Change in Control, or in the salary, annual performance incentive, or other compensation, benefits, expense allowance or expense reimbursement rights, office location or support staff previously provided to the participant, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of written notice thereof given by the participant and, with respect to the participant’s annual performance incentive, excluding any diminution in the participant’s annual performance incentive that (A) was determined in accordance with and using the same policies and practices that were used to determine the participant’s annual performance incentive in the fiscal year immediately preceding the fiscal year in which the Change in Control occurs; and (B) does not represent a reduction greater than 10% of the agreed maximum annual performance incentive, if any, which is payable to the participant under the compensation terms in effect immediately prior to the Change in Control;
  2. Any failure by the Company to comply with any other terms of the participant’s employment as in effect immediately prior to such Change in Control such as salary or annual performance incentive review, allowable activities, and vacation, other than an isolated, insubstantial, and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of written notice thereof given by the participant;
  3. The Company requiring the participant to (A) be based at any office or location other than: (1) within 50 kilometers of the participant’s office or location immediately prior to the Change in Control, or (2) at any other office or location previously agreed to in writing by the participant; or (B) travel on business to an extent substantially greater than the travel obligations of the participant immediately prior to the Change in Control; or
  4. Any other purported termination by the Company of the participant’s employment, other than for Cause.

Estimated Payments Upon Change in Control Termination

The Merger did not result in a Change in Control of Barrick and, consequently, did not trigger any payments under Barrick’s Change in Control Plan.

The following table estimates the amounts that would have been payable to our Named Partners in the circumstance of a termination within two years following a Change in Control. Our Executive Chairman is not subject to Change in Control protection. Except as noted below, estimated amounts provided in the table below assume that a Change in Control occurred and the executive’s employment terminated on December 31, 2018. Amounts payable pursuant to a double trigger Change in Control situation are calculated according to the Change in Control Plan.

Consistent with our historical disclosure, this table does not show any statutory or common law benefits payable pursuant to Canadian law in the event of termination without cause in the absence of a Change in Control, or the value of continued equity vesting, as it is not considered to be an incremental benefit to our Named Partners.

Incremental Compensation J.Thornton K.Thomson(1) C. Raw M. Hill
a) Change in Control (Termination)
Cash Severance(2):
     Annual Total Direct Compensation Nil $3,581,438 $3,345,412 $2,763,410
     API Award Nil $1,979,100 $1,979,100 $1,979,100
Incremental Executive Retirement Plan Contributions Nil $681,910 $612,202 $521,163
Unvested Equity Acceleration:
     RSUs(3) Nil Nil Nil $1,275,529
     PGSUs(4) Nil $2,669,141 $2,372,576 $1,143,156
Benefits and Perquisites:
     Compensation in lieu of Benefits and Perquisites(5) Nil $60,216 $60,216 $72,517
     Job Relocation Counselling Service (up to 18 months)(6) Nil $10,995 $10,995 $10,995
Total Nil $8,982,800 $8,380,501 $7,765,870
b) Change in Control (No Termination)
Total Nil Nil Nil Nil
  1. Pursuant to his termination agreement, Mr. Thomson is entitled to receive the greater of (a) the aggregate payments and benefits pursuant to the Change in Control Plan and (b) the aggregate payments and benefits pursuant to his termination agreement. Mr. Thomson would have been entitled to receive $8,982,800, which represents his aggregate payment and benefit entitlements pursuant to the Change in Control Plan, assuming his employment terminated on December 31, 2018.
  2. For the purposes of this analysis, the Cash Severance for each Named Partner is determined pursuant to the “Lump Sum Cash Severance Payment” section in “Potential Payments upon Change in Control Termination”. These amounts are converted from Canadian dollars to U.S. dollars based on the Bank of Canada daily average rate of exchange as of December 31, 2018 (1.3642).
  3. The amounts stated in the table represent the product of: (a) the number of RSUs whose restrictions lapsed because of the termination and (b) $13.33 (the average closing price of Barrick Shares on the TSX on the five trading days prior to the date of assumed vesting, December 31, 2018, converted from Canadian dollars to U.S. dollars based on the Bank of Canada daily average rate of exchange on the preceding day, pursuant to the Long-Term Incentive Plan (formerly the RSU Plan)).
  4. The amounts stated in the table represent the product of: (a) the number of PGSUs whose restrictions lapsed because of the termination, and (b) $13.51 (the closing share price of Barrick Shares on the TSX on December 31, 2018, converted from Canadian dollars to U.S. dollars based on the Bank of Canada daily average rate of exchange on December 31, 2018, pursuant to the PGSU Plan).
  5. The Change in Control Plan provides benefit continuation under all life insurance, medical, dental, health and accidental and disability plans for a period of 24 months for each Named Partner. Barrick will also provide cash payment in lieu of the continued use of an automobile or continuation of an automobile benefit, as applicable, for a two-year period for each Named Partner. The annual amounts shown below have been converted from Canadian dollars to U.S. dollars based on the Bank of Canada daily average rate of exchange as of December 31, 2018 (1.3642), and the total costs have then been multiplied by two for each of Messrs. Thomson, and Hill, and Ms. Raw pursuant to the Change in Control Plan.

Benefits and Perquisites for Severance Calculation

Life, AD&D, and Long-Term Disability Health Automobile
Benefit
Total Multiple Continued
Benefits and
Perquisites
J. Thornton Nil Nil Nil Nil Nil Nil
K. Thomson $9,584 $5,864 $14,660 $30,108 2x $60,216
C. Raw $9,584 $5,864 $14,660 $30,108 2x $60,216
M. Hill $15,734 $5,864 $14,660 $36,258 2x $72,517

(6)   The Change in Control Plan provides for job relocation counselling services, for a period not to exceed 18 months. The amounts shown here are based on an estimated cost of Cdn $15,000 for Mr. Thomson, Cdn $15,000 for Ms. Raw, and Cdn $15,000 for Mr. Hill, converted to U.S. dollars based on the Bank of Canada daily average rate of exchange as of December 31, 2018 (1.3642).