Potential Payments Upon Change-In-Control Terminations for Covered Executives

In the event of a change-in-control, Barrick has agreed with each of Messrs. Sokalsky, Dushnisky and Al-Joundi (the “Covered Executives”) that if his employment is terminated by the Company (other than for cause or disability) or the Covered Executive terminates his employment for Good Reason (as defined below) at any time within two years following the change-in-control (a “Change-in-Control Termination”), such individual is entitled to receive, among other things, severance benefits described in items (a) — (j) below. These are “double trigger” change-in-control arrangements requiring both a change-in- control of the Company and the specified termination of the employment of the Covered Executive. Terminations for cause or disability following a change-in-control would be treated the same as they are in non-change-in-control situations. Mr. Peter Munk and Mr. Thornton do not have change-in-control agreements with the Company.

 

(a)

Two and a half times the Annual Salary, which is the sum of:

 

 

(i)

The annual salary of the Covered Executive based upon the greater of (A) the salary paid to the Covered Executive for the fiscal year next preceding the fiscal year during which the change-in-control occurs; and (B) the salary which would have been payable to the Covered Executive (based upon the agreed salary rate in effect immediately preceding the change-in-control) for the 12 months immediately following the change-in-control (in addition to any unpaid salary already earned); and

 

 

(ii)

An amount equal to the greater of (A) the agreed yearly target annual performance incentive (if any) which is payable to the Covered Executive immediately prior to the change-in-control; and (B) the average of the yearly annual performance incentive amounts paid or payable to the Covered Executive over the last three completed fiscal years next preceding the change-in-control, or, for Covered Executives who have been employed by Barrick for less than three completed fiscal year, the average of the yearly annual performance incentive amounts paid or payable to the Covered Executive over the number of completed fiscal years since the employment date preceding the change-in-control;

 

(b)

If not theretofore paid, the amount of the Covered Executive’s unpaid annual salary for the relevant fiscal year of the Company for the period to and including the date of termination;

 

(c)

An amount equal to the product of (i) the maximum annual incentive that would be payable to the Covered Executive by or on behalf of the Company for the fiscal year during which the date of termination occurs, assuming that all relevant performance targets are met; and (ii) a fraction of the numerator of which is the number of days in such year to and including the date of termination and the denominator of which is 365;

 

(d)

Two and a half times the amount that would have been credited to the Covered Executive’s benefit under the Executive Retirement Plan during the year (in addition to the amounts already accrued in the Executive Retirement Plan);

 

(e)

Two and a half times the amount that would have been contributed by the Company to the Covered Executive’s applicable retirement contribution plan if any during the year (in addition to the amounts already accrued in the retirement contribution plan);

 

(f)

Immediate vesting of all unvested stock options, and options would remain exercisable for the lesser of two and a half years or their remaining term to expiry;

 

(g)

Job relocation counseling services for up to 18 months after termination, up to a maximum of Cdn $25,000;

 

(h)

The continuation of all life insurance, medical, dental, health, and accident and disability plans until the earlier of two and a half years after the date of termination, or the Covered Executive’s commencement of full-time employment with a new employer;

 

(i)

Two and a half times the annual fair market value of the Covered Executive’s automobile benefit to be paid in a lump sum; and an option for the Covered Executive to purchase the company vehicle at the remaining cost to the Company as of the date of termination; and

 

(j)

No gross up protection with respect to potential U.S. change-in-control excise taxes.

Pursuant to the change-in-control agreements, “Good Reason” means the occurrence, after a change-in-control, of any of the following events without the Covered Executive’s written consent:

 

 

·

 

The assignment to the Covered Executive of any duties inconsistent in any respect with the Covered Executive’s position (including status, offices or titles held, or reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities with the Company from that which existed immediately prior to such change-in-control, or in the salary, yearly annual incentive or other compensation, benefits, expense allowance or expense reimbursement rights, office location or

 

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support staff previously provided to the Covered Executive, 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 Covered Executive and, with respect to the Covered Executive’s yearly annual incentive, excluding any diminution in the Covered Executive’s yearly annual incentive that (i) was determined in accordance with and using the same policies and practices that were used to determine the Covered Executive’s yearly annual incentive in the fiscal year next preceding the fiscal year in which the change-in-control occurs, and (ii) does not represent a reduction of greater than 10% of the yearly annual incentive of the Covered Executive, calculated in the manner as described in sub-paragraph (a) above;

 

 

·

 

Any failure by the Company to comply with any other terms of the Covered Executive’s employment as in effect immediately prior to such change-in-control such as salary or annual 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 Covered Executive;

 

 

·

 

The Company requiring the Covered Executive (i) to be based at any office or location other than (1) in the Greater Toronto Area or (2) at any other office or location previously agreed to in writing by the Covered Executive, or (ii) to travel on business to an extent substantially greater than the travel obligations of the Covered Executive immediately prior to the change-in-control; or

 

 

·

 

Any other constructive dismissal by the Company of the Covered Executive’s employment.

The agreements prohibit the Covered Executive from soliciting Barrick employees for a period of two and a half years following termination. The Covered Executives 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 provisions for RSUs and PRSUs are set forth in the RSU plan and relevant award agreements. In both cases, a “double trigger” is required to accelerate vesting in the event of a change-in-control of Barrick. That is, if there is a change-in-control followed by a Change-in-Control Termination, the RSUs will vest immediately pursuant to the RSU Plan and PRSU awards will vest pursuant to the relevant award agreement. Vesting of the PRSUs is based on how much of the performance cycle is complete at the time of the change-in-control and is converted to a cash payout at the end of the performance period.

 

 

·

 

If the performance cycle is less than half complete, a pro-rata portion of the target PRSU award would vest based on performance during the portion of the cycle completed.

 

 

·

 

If the performance cycle is half complete or more, the number of PRSUs vesting would be determined at the time of the change-in-control based on performance to date (not pro-rated).

According to the RSU plan, the Compensation Committee may, in its discretion, accelerate vesting for other types of terminations. The terms of the PRSUs also provide for acceleration of vesting in the event of a termination other than for cause, disability or retirement, or by the executive for good reason or death following a change-in-control based on the lapse of time in the performance cycle and actual performance through the date of termination. The Compensation Committee may, in its discretion, accelerate vesting of PRSUs for other types of terminations.

In addition, Barrick’s Stock Option Plan (2004) specifies acceleration of unvested options and/or exercisability periods under a number of termination scenarios (as described below). The Committee may, in its discretion, accelerate vesting and/or extend the exercise period (but not beyond the original term to expiry) in the cases of retirement, death or in the event of termination of an optionee who is a senior executive other than for cause.