Exhibit 10.19
1999 LONG-TERM PERFORMANCE INCENTIVE PLAN
OF FREEPORT-McMoRan COPPER & GOLD INC.
ARTICLE I
PURPOSE OF PLAN
SECTION 1.1. The purpose of the 1999 Long-Term
Performance Incentive Plan of Freeport-McMoRan Copper & Gold Inc.
(the "Plan") is to provide incentives for senior executives and
other service providers whose performance in fulfilling their
responsibilities can have a major impact on the profitability and
future growth of Freeport-McMoRan Copper & Gold 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 consisting of two or more members of the Board.
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; provided, however, that the
Committee may not exercise any authority otherwise granted to it
hereunder if such action would have the effect of increasing the
amount of any credit to or payment from the Performance Award
Account of any Covered Officer. 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 any of the following to be
granted Performance Awards under the Plan, and determine the number
of Performance Units covered by each such Performance Award: (a)
any person providing services as an officer of the Company or a
Subsidiary, whether or not employed by such entity, including any
person who is also a director of the Company, (b) any employee of
the Company or a Subsidiary, including any director who is also an
employee of the Company or a Subsidiary, (c) any officer or
employee of an entity with which the Company or a Subsidiary has
contracted to receive executive, management or legal services who
provides services to the Company or a Subsidiary through such
arrangement, (d) any consultant or adviser to the Company, a
Subsidiary or to an entity described in clause (c) hereof who
provides services to the Company or a Subsidiary through such
arrangement and (e) any person who has agreed in writing to become
a person described in clauses (a), (b), (c) or (d) within not more
than 30 days following the date of grant of such person's first
Performance Award under the Plan. Performance Awards may be
granted at different times to the same individual.
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. Subject to adjustment as provided in
Section 5.2 the number of Performance Units outstanding at any time
shall not exceed 4,000,000. 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.
SECTION 3.4. (a) Notwithstanding the provisions of
Section 3.1, 3.2 and 3.3, all Performance Awards granted to Covered
Officers must be granted no later than 90 days following the
beginning of the calendar year. No Covered Officer may be granted
more than 250,000 Performance Units in any calendar year.
(b) All Performance Awards to Covered Officers under the
Plan will be made and administered by two or more members of the
Committee who are also "outside directors" within the meaning of
Section 162(m).
ARTICLE IV
CREDITS TO AND PAYMENTS FROM PARTICIPANTS'
PERFORMANCE AWARD ACCOUNTS
SECTION 4.1. Subject to the provisions of the Plan, each
Performance Unit in any Performance Award Account of each
Participant at December 31 of any year shall be credited, as of
such December 31 of each year in the Performance Period for such
Performance Unit, with an amount equal to the Annual Earnings Per
Share (or Net Loss Per Share) for such year; provided that, if in
any year there shall be any outstanding Net Loss Carryforward
applicable to such Performance Unit, such Net Loss Carryforward
shall be applied to reduce any amount which would otherwise be
credited to or in respect of such Performance Unit 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 the provisions of the Plan,
amounts credited to a Participant's Performance Award Account in
respect of Performance Units shall be paid to such Participant as
soon as practicable on or after the Award Valuation Date with
respect to such Performance Units.
(b) Payments pursuant to Section 4.2(a) shall be in
cash.
(c) Notwithstanding any other provision of the Plan to
the contrary, no Covered Officer shall be entitled to any payment
with respect to any Performance Units unless the members of the
Committee referred to in Section 3.4(b) hereof shall have certified
the amount of the Annual Earnings Per Share (or Net Loss Per Share)
for each year or portion thereof in the Performance Period
applicable to such Performance Units.
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, other than a
Participant who is at the time of any payment a Covered Officer, 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 any Performance Units granted to 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 Units 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, accrue interest 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 by another
major national bank headquartered in New York, New York and
designated 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. Subject to the terms of the Plan
and applicable law, the Committee may delegate to one or more
officers or assistant officers of the Company its authority set
forth in the immediately preceding sentence, subject to such terms
and limitations as the Committee shall determine.
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) Each Performance Unit and all other amounts credited
to a Participant's Performance Award Account in respect of such
Performance Unit shall be forfeited in the event of the Discharge
for Cause of such Participant prior to the end of the Performance
Period applicable to such Performance Unit.
(c) Each Performance Unit and all other amounts credited
to a Participant's Performance Award Account in respect of such
Performance Unit 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 the end of the Performance Period applicable to
such Performance Unit.
(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 amount 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, other than any
Performance Award Account of a Covered Officer, shall accrue
interest, 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 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;
provided, however, the Committee shall not have the authority to
make any such adjustments to payments with respect to the
Performance Awards of, or credits to the Performance Award Accounts
of, any Participant who is at such time a Covered Officer if the
effect of any such action would be to increase the amount that
would be credited to or paid from such Performance Award Accounts.
SECTION 5.2. The Committee shall for purposes of
Articles III and IV make appropriate adjustments in the number of
Performance Units which may be granted pursuant 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 Subsidiary, and
the right of the Company or any such Subsidiary to dismiss or
discharge any such Participant, or to terminate any arrangement
pursuant to which any such Participant provides services to the
Company, 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 any Subsidiary 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.
SECTION 5.7. Nothing contained in the Plan shall prevent
the Company or any Subsidiary or affiliate of the Company from
adopting or continuing in effect other compensation arrangements,
which arrangements may be either generally applicable or applicable
only in specific cases.
ARTICLE VI
AMENDMENT OR TERMINATION OF THE PLAN
SECTION 6.1. The Board of Directors may at any time
terminate the Plan, in whole or in part, or from time to time,
subject to the stockholder approval requirements of Section 162(m),
amend the Plan, provided that, except as otherwise provided in the
Plan, no such amendment or termination shall 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.
Notwithstanding the foregoing, any such payment to a Covered
Officer must be discounted to reflect the present value of such
payment using the rate specified in Section 4.4(c). 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
Class A Common Stock, par value $.10 per share, of the Company and
Class B Common Stock, par value $.10 per share, of the Company
during such year as reviewed by the Company's independent auditors.
(b) Award Valuation Date: December 31 of the year in
which the third anniversary of the grant of such Performance Award
to a Participant shall occur or, if earlier, December 31 of the
year in which such Participant's Termination of Employment shall
occur, if such Termination of Employment occurs (i) within two
years after a Change in Control or (ii) 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 acquire beneficial ownership of more than 20% of
all classes and series of the Company's stock outstanding, taken as
a whole, that has voting rights with respect to the election of
directors of the Company (not including any series of preferred
stock of the Company that has the right to elect directors only
upon the failure of the Company to pay dividends) 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: Class B Common Stock, par
value $0.10 per share, of the Company and such other Company or
subsidiary securities as may be designated from time to time by the
Committee.
(g) Covered Officer: At any date, (i) any individual
who, with respect to the previous taxable year of the Company, was
a "covered employee" of the Company within the meaning of Section
162(m); provided, however, the term "Covered Officer" shall not
include any such individual who is designated by the Committee, in
its discretion, at the time of any grant or at any subsequent time
as reasonably expected not to be such a "covered employee" with
respect to the current taxable year of the Company and (ii) any
individual who is designated by the Committee, in its discretion,
at the time of any grant or at any subsequent time as reasonably
expected to be such a "covered employee" with respect to the
current taxable year of the Company or with respect to the taxable
year of the Company in which payment from any Performance Award
Account of such individual will be made.
(h) 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.
(i) Discharge for Cause: Involuntary Termination of
Employment as a result of dishonesty or similar misconduct directly
related to the performance of duties for the Company or a
Subsidiary.
(j) 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
reviewed by the Company's independent auditors and
released by the Company to the public; plus (or minus)
(ii) the minority interests' share in the net
income (or net loss) of the Company's consolidated
subsidiaries for such year as reviewed by the Company's
independent auditors and released by the Company to the
public; plus (or minus)
(iii) the effect of changes in accounting
principles of the Company and its consolidated
subsidiaries for such year plus (or minus) the minority
interests' share in such changes in accounting
principles,
as reviewed by the Company's independent auditors and released by
the Company to the public.
(k) Net Loss Carryforward: With respect to any
Performance Units, (i) an amount equal to the Net Loss Per Share
for any year in the applicable Performance Period times the number
of such Performance Units then outstanding, reduced by (ii) any
portion thereof which has been applied in any prior year as
provided in Section 4.1.
(l) Net Loss Per Share: The amount obtained when the
calculation of Annual Earnings Per Share results in a number that
is less than zero.
(m) 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.
(n) Performance Award: The grant of Performance Units
by the Committee to a Participant pursuant to Section 3.1 or 3.4.
(o) Performance Award Account: An account established
for a Participant pursuant to Section 3.2.
(p) Performance Period: With respect to any Performance
Unit, the period beginning on January 1 of the year in which such
Performance Unit was granted and ending on the Award Valuation Date
for such Performance Unit.
(q) Performance Unit: A unit covered by Performance
Awards granted or subject to grant pursuant to Article III.
(r) Section 162(m): Section 162(m) of the Internal
Revenue Code of 1986, as amended, and the rules promulgated
thereunder by the Internal Revenue Service.
(s) Subsidiary: (i) Any corporation or other entity in
which the Company possesses directly or indirectly equity interests
representing at least 50% of the total ordinary voting power or at
least 50% of the total value of all classes of equity interests of
such corporation or other entity and (ii) any other entity in which
the Company has a direct or indirect economic interest that is
designated as a Subsidiary by the Committee.
(t) Termination of Employment: The cessation of the
rendering of services, such that a person would no longer be
eligible to receive a Performance Award under Section 3.1 hereof,
or a termination of employment or termination of officer position
with the Company or a Subsidiary where the person continues to
provide services under Section 3.1 (c) or (d) hereof.
As approved by the stockholders on May 6, 1999