EXHIBIT 10.10
1987 LONG-TERM PERFORMANCE INCENTIVE PLAN
OF FREEPORT-MCMORAN INC.
ARTICLE I
PURPOSE OF PLAN
SECTION 1.1. The purpose of the 1987 Long-Term Performance
Incentive Plan of Freeport-McMoRan Inc. (the "Plan") is to provide
incentives for senior executives whose performance in fulfilling the
responsibilities of their positions can have a major impact on the
profitability and future growth of Freeport-McMoRan Inc. (the "Company")
and its subsidiaries.
ARTICLE II
ADMINISTRATION OF THE PLAN
SECTION 2.1. Subject to the authority and powers of the Board of
Directors in relation to the Plan as hereinafter provided, the Plan shall
be administered by a Committee designated by the Board of Directors and
composed of not fewer than two directors, each of whom, to the extent
necessary to comply with Rule 16b-3 only, is a "non-employee director"
within the meaning of Rule 16b-3 and, to the extent necessary to comply
with Section 162(m) only, is an "outside director" under Section 162(m).
The Committee shall have full authority to interpret the Plan and from
time to time to adopt such rules and regulations for carrying out the
Plan as it may deem best. All determinations by the Committee shall be
made by the affirmative vote of a majority of its members, but any
determination reduced to writing and signed by a majority of the members
shall be fully as effective as if it had been made by a majority vote at
a meeting duly called and held. All decisions by the Committee pursuant
to the provisions of the Plan and all orders or resolutions of the Board
of Directors pursuant thereto shall be final, conclusive and binding on
all persons, including but not limited to the Participants, the Company
and its Subsidiaries and their respective equity holders.
ARTICLE III
ELIGIBILITY FOR AND GRANT OF PERFORMANCE AWARDS
SECTION 3.1. Subject to the provisions of the Plan, the Committee
may from time to time select salaried officers or employees (including
officers or employees who are also directors) of the Company or of any of
its Subsidiaries to be granted Performance Awards under the Plan, and
determine the number of Performance Units covered by each such
Performance Award. Performance Awards may be granted at different times
to the same individual. The Plan shall expire on December 31, 1992 and
no Performance Awards shall be granted hereunder after such date.
SECTION 3.2. Upon the grant of a Performance Award to a
Participant, the Company shall establish a Performance Award Account for
such Participant and shall credit to such Performance Award Account the
number of Performance Units covered by such Performance Award.
SECTION 3.3. The number of Performance Units outstanding at any
time shall not exceed 1,500,000. Performance Units that shall have been
forfeited or with respect to which payment has been made pursuant to
Section 4.2 or deferred pursuant to Section 4.4 shall not thereafter be
deemed to be credited or outstanding for any purpose of the Plan and may
again be the subject of Performance Awards.
ARTICLE IV
CREDITS TO AND PAYMENTS FROM PARTICIPANTS'
PERFORMANCE AWARD ACCOUNTS
SECTION 4.1. Subject to the provisions of Section 4.5, the
Performance Award Account or Accounts of each Participant at December 31
of any year shall be credited, as of such December 31, with an amount
equal to the Annual Earnings Per Share (or Net Loss Per Share) for such
year times the number of Performance Units then credited to each such
Performance Award Account; provided that, if in any year there shall be
any outstanding Net Loss Carryforward applicable to such Performance
Award Account, such Net Loss Carryforward shall be applied to reduce any
amount which would otherwise be credited to such Performance Award
Account pursuant to this Section 4.1 in such year until such Net Loss
Carryforward has been fully so applied.
SECTION 4.2. (a) Subject to Section 4.4, the balance credited to a
Participant's Performance Award Account shall be paid to such Participant
as soon as practicable on or after the Award Valuation Date with respect
to such Performance Award.
(b) Payments pursuant to Section 4.2(a) shall be in cash.
SECTION 4.3. In addition to any amounts payable pursuant to Section
4.2, the Committee may in its sole discretion determine that there shall
be payable to a former Participant a supplemental amount not exceeding
the excess, if any, of (i) the amount determined in accordance with
Section 4.1 which would have been payable to such former Participant if
the Award Valuation Date with respect to a Performance Award of such
Participant had been December 31 of the first, second or third calendar
year next following the year in which such Participant's Termination of
Employment occurred (the selection of such first, second or third
calendar year to be in the sole discretion of the Committee subject only
to the last sentence of this Section 4.3) over (ii) the amount determined
in accordance with said Section 4.1 as of December 31 of the calendar
year in which such Termination of Employment actually occurred. Any such
supplemental amount so payable shall be paid in a lump sum as promptly as
practicable on or after December 31 of the calendar year so selected by
the Committee or in one or more installments ending not later than five
years after such December 31, as the Committee may in its discretion
direct. In no event shall any payment under this Section 4.3 be made
with respect to any calendar year after the year in which such former
Participant reaches his normal retirement date under the Company's
retirement plan.
SECTION 4.4. (a) Prior to January 1 of any calendar year in which
it is anticipated that an Award Valuation Date with respect to any
Performance Award may occur, a Participant may elect, in accordance with
procedures established by the Committee, to defer, as and to the extent
hereinafter provided, the payment of the amount, if any, which shall be
paid pursuant to Section 4.2.
(b) All payments deferred pursuant to Section 4.4(a) shall be paid
in one or more periodic installments, not in excess of ten, at such time
or times after the applicable Award Valuation Date, but not later than
ten years after such Award Valuation Date, as shall be specified in such
Participant's election pursuant to Section 4.4(a).
(c) In the case of payments deferred as provided in Section 4.4(a),
the unpaid amounts shall, commencing with the applicable Award Valuation
Date, be increased at a rate equal to the prime commercial lending rate
announced from time to time by The Chase Manhattan Bank, N.A. (compounded
quarterly) or at such other rate and in such manner as shall be
determined from time to time by the Committee. If subsequent to such
Participant's election pursuant to Section 4.4(a) such Participant's
Termination of Employment occurs for any reason other than death,
Disability, retirement under the Company's retirement plan, or retirement
with the consent of the Company outside the Company's retirement plan,
the Committee may, in its sole discretion, pay to such Participant in a
lump sum the aggregate amount of any payments so deferred,
notwithstanding such election.
SECTION 4.5. Anything contained in the Plan to the contrary
notwithstanding:
(a) The Committee may, in its sole discretion, suspend,
permanently or for a specified period of time or until further
determination by the Committee, the making of any part or all of the
credits which would otherwise have been made to the Performance
Award Accounts of all the Participants or to such Accounts of one or
more Participants as shall be designated by the Committee.
(b) All Performance Units and other amounts credited to a
Participant's Performance Award Account with respect to or arising
from any Performance Award shall be forfeited in the event of the
Discharge for Cause of such Participant prior to December 31 of the
third year following the year of grant of such Performance Award.
(c) All Performance Units and other amounts credited to a
Participant's Performance Award Account with respect to or arising
from a Performance Award shall, unless and to the extent that the
Committee shall in its absolute discretion otherwise determine by
reason of special mitigating circumstances, be forfeited in the
event that such Participant's Termination of Employment shall occur
for any reason other than death, Disability, retirement under the
Company's retirement plan, or retirement with the consent of the
Company outside the Company's retirement plan, at any time (except
within two years after the date on which a Change in Control shall
have occurred) prior to December 31 of the third year following the
year of grant of such Performance Award.
(d) If any suspension is in effect pursuant to Section 4.5(a)
on a date when a credit would otherwise have been made pursuant to
Section 4.1, the amounts which would have been credited but for such
suspension shall be forfeited and no credits shall thereafter be
made in lieu thereof. If the Committee shall so determine in its
sole discretion, the amounts theretofore credited to any Performance
Award Account or Accounts shall be increased, during the suspension
period, at a rate equal to the prime commercial lending rate
announced from time to time by The Chase Manhattan Bank, N.A.
(compounded quarterly) or at such other rate and in such manner as
shall be determined from time to time by the Committee.
ARTICLE V
GENERAL INFORMATION
SECTION 5.1. If Net Income, Annual Earnings Per Share or Net Loss
Per Share for any year shall have been affected by special factors
(including material changes in accounting policies or practices, material
acquisitions or dispositions of property, or other unusual items) which
in the Committee's judgment should or should not be taken into account,
in whole or in part, in the equitable administration of the Plan, the
Committee may, for any purpose of the Plan, adjust Net Income, Annual
Earnings Per Share or Net Loss Per Share, as the case may be, for such
year (and subsequent years as appropriate), or any combination of them,
and make credits, payments and reductions accordingly under the Plan.
SECTION 5.2. The Committee shall for purposes of Articles III and
IV make appropriate adjustments in the number of Performance Units which
shall remain subject to Performance Awards and in the number of
Performance Units which shall have been credited to Participants'
accounts, in order to reflect any merger or consolidation to which the
Company is a party or any stock dividend, split-up, combination or
reclassification of the outstanding shares of Company Common Stock or any
other relevant change in the capitalization of the Company.
SECTION 5.3. A Participant may designate in writing a beneficiary
(including the trustee or trustees of a trust) who shall upon the death
of such Participant be entitled to receive all amounts which would have
been payable hereunder to such Participant. A Participant may rescind or
change any such designation at any time. Except as provided in this
Section 5.3, none of the amounts which may be payable under the Plan may
be assigned or transferred otherwise than by will or by the laws of
descent and distribution.
SECTION 5.4. All payments made pursuant to the Plan shall be
subject to withholding in respect of income and other taxes required by
law to be withheld, in accordance with procedures to be established by
the Committee.
SECTION 5.5. The selection of an individual for participation in
the Plan shall not give such Participant any right to be retained in the
employ of the Company or any of its Subsidiaries, and the right of the
Company and of such Subsidiary to dismiss or discharge any such
Participant is specifically reserved. The benefits provided for
Participants under the Plan shall be in addition to, and shall in no way
preclude, other forms of compensation to or in respect of such
Participants.
SECTION 5.6. The Board of Directors and the Committee shall be
entitled to rely on the advice of counsel and other experts, including
the independent public accountants for the Company. No member of the
Board of Directors or of the Committee or any officers of the Company or
its Subsidiaries shall be liable for any act or failure to act under the
Plan, except in circumstances involving bad faith on the part of such
member or officer.
ARTICLE VI
AMENDMENT OR TERMINATION OF THE PLAN
SECTION 6.1. The Board of Directors may at any time terminate, in
whole or in part, or from time to time amend the Plan, provided that,
except as otherwise provided in the Plan, no such amendment shall
increase the number of Performance Units which may be outstanding at any
time, nor shall any such amendment or termination adversely affect the
amounts credited to the Performance Award Account of a Participant with
respect to Performance Awards previously made to such Participant. In
the event of such termination, in whole or in part, of the Plan, the
Committee may in its sole discretion direct the payment to Participants
of any amounts specified in Article IV and not theretofore paid out,
prior to the respective dates upon which payments would otherwise be made
hereunder to such Participants, and in a lump sum or installments as the
Committee shall prescribe with respect to each such Participant. The
Board may at any time and from time to time delegate to the Committee any
or all of its authority under this Article VI.
ARTICLE VII
DEFINITIONS
SECTION 7.1. For the purposes of the Plan, the following terms
shall have the meanings indicated:
(a) Annual Earnings Per Share: With respect to any year, the
result obtained by dividing (i) Net Income for such year by (ii) the
average number of issued and outstanding shares (excluding treasury
shares and shares held by any Subsidiaries) of Company Common Stock
during such year as shown in the Company's Annual Report to
Stockholders for such year.
(b) Award Valuation Date: With respect to any Performance
Award, (i) December 31 of the year in which the third anniversary of
the grant of such Performance Award to a Participant shall occur or,
(ii) if earlier, December 31 of the year in which such Participant's
Termination of Employment shall occur, if such Termination of
Employment occurs (x) within two years after a Change in Control or
(y) as a result of death, Disability, retirement under the Company's
retirement plan or retirement with the consent of the Company
outside the Company's retirement plan.
(c) Board of Directors: The Board of Directors of the
Company.
(d) Change in Control: A Change in Control shall be deemed to
have occurred if either (i) any person, or any two or more persons
acting as a group, and all affiliates of such person or persons,
shall own beneficially more than 20% of the Company Common Stock
outstanding (exclusive of shares held in the Company's treasury or
by the Company's Subsidiaries) pursuant to a tender offer, exchange
offer or series of purchases or other acquisitions, or any
combination of those transactions, or (ii) there shall be a change
in the composition of the Board of Directors of the Company at any
time within two years after any tender offer, exchange offer,
merger, consolidation, sale of assets or contested election, or any
combination of those transactions (a "Transaction"), so that (A) the
persons who were directors of the Company immediately before the
first such Transaction cease to constitute a majority of the Board
of Directors of the corporation which shall thereafter be in control
of the companies that were parties to or otherwise involved in such
first Transaction, or (B) the number of persons who shall thereafter
be directors of such corporation shall be fewer than two-thirds of
the number of directors of the Company immediately prior to such
first Transaction. A Change in Control shall be deemed to take
place upon the first to occur of the events specified in the
foregoing clauses (i) and (ii).
(e) Committee: The Committee designated pursuant to Section
2.1. Until otherwise determined by the Board of Directors, the
Corporate Personnel Committee designated by such Board shall be the
Committee under the Plan.
(f) Company Common Stock: Common Stock, par value $.01, of
the Company.
(g) Disability: In the case of any Participant, disability
which after the expiration of more than 26 weeks after its
commencement is determined to be total and permanent by a physician
selected by the Company and acceptable to such Participant or his
legal representatives.
(h) Discharge for Cause: Involuntary Termination of
Employment as a result of dishonesty or similar serious misconduct
directly related to the performance of duties for any and all
Related Entities.
(i) Net Income: With respect to any year, the sum of:
(i) the net income (or net loss) of the Company and its
consolidated subsidiaries for such year as shown in the
Company's Annual Report to Stockholders for such year; plus (or
minus)
(ii) the net income (or net loss) of each Subsidiary that
is not wholly-owned, directly or indirectly, by the Company, as
shown in such Subsidiary's annual audited financial statements
for such year, attributable to shares of common stock or other
equity securities or interests that are not owned, directly or
indirectly, by the Company for such portion of the year that
the Company owned directly or indirectly equity securities or
interests in such Subsidiary.
(j) Net Loss Carryforward: With respect to any Performance
Award Account, (i) an amount equal to the Net Loss per Share for any
year times the number of Performance Units then outstanding and
credited to such Performance Award Account, reduced by (ii) any
portion thereof which has been applied in any prior year as provided
in Section 4.1.
(k) Net Loss Per Share: The amount obtained when the
calculation of Annual Earnings Per Share results in a number that is
less than zero.
(l) Participant: An individual who has been selected by the
Committee to receive a Performance Award and in respect of whose
Performance Award Account any amounts remain payable.
(m) Performance Award: The grant of Performance Units by the
Committee to a Participant pursuant to Section 3.1.
(n) Performance Award Account: An account established for a
Participant pursuant to Section 3.2.
(o) Performance Unit: A unit covered by Performance Awards
granted or subject to grant pursuant to Article III.
(p) Related Entities: The Company, any subsidiary of the
Company, Freeport-McMoRan Copper & Gold Inc., any subsidiary of
Freeport-McMoRan Copper & Gold Inc., McMoRan Oil & Gas Co., any
subsidiary of McMoRan Oil & Gas Co., and any law firm rendering
services to any of the foregoing entities provided such law firm
consists of at least two or more members or associates who are or
were officers of the Company or any subsidiary of the Company.
(q) Rule 16b-3: Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, or
any successor rule or regulation thereto as in effect from time to
time.
(r) Section 162(m): Section 162(m) of the Internal Revenue
Code of 1986 and all regulations promulgated thereunder as in effect
from time to time.
(s) Subsidiary: Any corporation of which stock representing
at least 50% of the ordinary voting power is owned, directly or
indirectly, by the Company and any other entity of which equity
securities or interests representing at least 50% of the ordinary
voting power or 50% of the total value of all classes of equity
securities or interests of such entity are owned, directly or
indirectly, by the Company.
(t) Termination of Employment: The cessation of the rendering
of services, whether or not as an employee, to any and all of the
Related Entities.
As amended effective December 10, 1996