EXHIBIT 10.12
FREEPORT-McMoRan COPPER & GOLD INC.
ADJUSTED STOCK AWARD PLAN
SECTION 1
Purpose. The purpose of the Freeport-McMoRan Copper & Gold Inc.
Adjusted Stock Award Plan (the "Plan") is to provide for the issuance and
administration of certain awards relating to common stock of the Company
issued to employees, officers and directors of Freeport-McMoRan Inc.
("FTX"), the Company's current parent, in connection with FTX's
distribution to FTX stockholders of all of the Class B Common Stock of
the Company.
SECTION 2
Definitions. As used in the Plan, the following terms shall have
the meanings set forth below:
"Award" shall mean any Option, Limited Right, Stock Appreciation
Right or Stock Incentive Unit granted under this Plan.
"Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award, which may, but need
not, be executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Committee" shall mean a committee of the Board designated by the
Board to administer the Plan 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). Until otherwise
determined by the Board, the Committee shall be the Corporate Personnel
Committee of the Board.
"Company" shall mean Freeport-McMoRan Copper & Gold Inc.
"Consent Solicitation Statement" shall mean the consent
solicitation statement dated February 7, 1995 distributed to Company
stockholders in connection with the transactions relating to the
Distribution.
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"Designated Beneficiary" shall mean the beneficiary designated by
the Participant, in a manner determined by the Committee, to receive the
benefits due the Participant under the Plan in the event of the
Participant's death. In the absence of an effective designation by the
Participant, Designated Beneficiary shall mean the Participant's estate.
"Distribution" shall mean the distribution by FTX of all the then
outstanding Shares owned by FTX to the holders of FTX common stock, as
described in the Consent Solicitation Statement.
"Distribution Date" shall mean the effective date of the
Distribution.
"Eligible Individual" shall mean any present or former employee,
officer or director of FTX who on the Distribution Date holds an FTX
Award.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"FTX Award" shall mean any of the FTX Options, FTX Director
Options, FTX SARs and FTX SIUs, and any limited rights appertaining
thereto.
"FTX Director Option" shall mean an option to purchase FTX common
stock granted under the FTX 1988 Stock Option Plan for Non-Employee
Directors that is outstanding and unexercised on the Distribution Date.
"FTX Option" shall mean an option to purchase FTX common stock
granted by FTX to a present or former officer or employee of FTX that is
outstanding and unexercised on the Distribution Date.
"FTX SAR" shall mean a stock appreciation right granted to a
present or former officer or employee of FTX that is outstanding and
unexercised on the Distribution Date.
"FTX SIU" shall mean a stock incentive unit granted under the FTX
1992 Stock Incentive Unit Plan that is outstanding and unexercised on the
Distribution Date.
"Limited Right" shall mean any right granted under Section 8 of
the Plan.
"Offer" shall mean any tender offer, exchange offer or series of
purchases or other acquisitions, or any combination of those
transactions, as a result of which any person, or any two or more persons
acting as a group, and all affiliates of such person or persons, shall
beneficially own more than 40% 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).
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"Offer Price" shall mean the highest price per Share paid in any
Offer that is in effect at any time during the period beginning on the
ninetieth day prior to the date on which a Limited Right is exercised and
ending on and including the date of exercise of such Limited Right. Any
securities or property that comprise all or a portion of the
consideration paid for Shares in the Offer shall be valued in determining
the Offer Price at the higher of (i) the valuation placed on such
securities or property by the person or persons making such Offer, or
(ii) the valuation, if any, placed on such securities or property by the
Committee or the Board.
"Option" shall mean an option granted under Section 6 of the
Plan.
"Participant" shall mean any Eligible Individual granted an Award
under the Plan.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization,
government or political subdivision thereof or other entity.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under
the Exchange Act, or any successor rule or regulation thereto as in
effect from time to time.
"SAR" shall mean a Stock Appreciation Right.
"SEC" shall mean the Securities and Exchange Commission,
including the staff thereof, or any successor thereto.
"Section 162(m)" shall mean Section 162(m) of the Code and all
regulations promulgated thereunder as in effect from time to time.
"SIU" shall mean any Stock Incentive Unit.
"Shares" shall mean the shares of Class B Common Stock, par value
$.10 per share, of the Company and such other securities of the Company
or a Subsidiary as the Committee may from time to time designate.
"Stock Appreciation Right" shall mean any award of stock
appreciation rights granted under Section 7 of the Plan.
"Stock Incentive Unit" shall mean any award of stock incentive
units granted under Section 9 of the Plan.
"Subsidiary" shall mean 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.
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SECTION 3
Administration. The Plan shall be administered by the Committee.
Subject to the terms of the Plan and applicable law, and in addition to
other express powers and authorizations conferred on the Committee by the
Plan, the Committee shall have full power and authority to interpret and
administer the Plan and any instrument or agreement relating to, or Award
made under, the Plan; establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; and make any other determination and
take any other action that the Committee deems necessary or desirable for
the administration of the Plan. The Committee shall have no discretion
relating to the timing, price and size of Awards granted under the Plan,
which shall be determined in accordance with the provisions of Sections 6
through 9. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other decisions under
or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all Persons, including the Company, any
Subsidiary, any Participant, any holder or beneficiary of any Award, any
stockholder of the Company and any Eligible Individual.
SECTION 4
Eligibility. Each Eligible Individual shall be granted an Award
in accordance with the provisions of the Plan.
SECTION 5
(a) Shares Available for Awards. Subject to adjustment as
provided in paragraph 5(b):
(i) Calculation of Number of Shares Available. The number of
Shares with respect to which Awards may be granted under the Plan shall
be such number of Shares as results from the application of the award
formulas set forth in Sections 6 through 8. Such number of Shares shall
not be reduced by the number of Shares with respect to which SIUs shall
be granted, which shall be determined in accordance with Section 9. If,
after the effective date of the Plan, an Award granted under the Plan
expires or is exercised, forfeited, canceled or terminated without the
delivery of Shares, then the Shares covered by such Award or to which
such Award relates, or the number of Shares otherwise counted against the
aggregate number of Shares with respect to which Awards may be granted,
to the extent of any such expiration, exercise, forfeiture, cancellation
or termination, shall not thereafter be available for grants or Awards
under the Plan.
(ii) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist of authorized and unissued
Shares or of treasury Shares, including Shares held by the Company or a
Subsidiary and Shares acquired in the open market or otherwise obtained
by the Company or a Subsidiary.
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(b) Adjustments. In the event that the Committee determines
that any dividend or other distribution (whether in the form of cash,
Shares, Subsidiary securities, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase or
exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the
Shares such that an adjustment is determined by the Committee to be
appropriate to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee may, in its sole discretion and in such manner as it may deem
equitable, adjust any or all of (i) the number and type of Shares (or
other securities or property) subject to outstanding Awards, and (ii) the
grant or exercise price with respect to any Award and, if deemed
appropriate, make provision for a cash payment to the holder of an
outstanding Award; provided, that the number of Shares subject to any
Award denominated in Shares shall always be a whole number.
SECTION 6
(a) Stock Options. Immediately prior to the Distribution, each
holder of an FTX Option or an FTX Director Option shall receive an Option
to purchase such number of Shares (disregarding any fractional Share) as
such holder would be eligible to receive in the Distribution with respect
to the number of shares of FTX common stock subject to such FTX Award if
such holder were the owner of record of such FTX shares on the record
date for the Distribution. Except as set forth in paragraph 6(b), each
such Option shall have the same remaining term and other terms and
conditions (whether such terms and conditions are contained in the
related FTX Award agreement or in the plan under which such FTX Award was
made) and shall be exercisable to the same extent as the FTX Award from
which they were derived, with such changes and modifications as are
necessary to substitute the Company for FTX as the issuer of the Option;
provided, however, if the FTX Award from which an Option is derived has a
term that will expire prior to one hundred and eighty days after the
effective date of the Distribution, the term of such Option shall expire
on the one hundred and eightieth day after the effective date of the
Distribution. Notwithstanding the foregoing, no Option shall be
exercisable prior to the ninetieth day after the effective date of the
Distribution.
(b) Exercise Price. The per Share exercise price of each Option
granted pursuant to paragraph 6(a) shall be the per share exercise price
or grant price of the FTX Award from which such Option was derived
multiplied by a fraction, the numerator of which is the per Share fair
market value at the time of the Distribution, determined as set forth
below, and the denominator of which is the per share fair market value of
FTX common stock (trading with due bills) at the time of the
Distribution, determined as set forth below. For purposes of this
paragraph 6(b), the per Share fair market value at the time of the
Distribution shall be the weighted average when-issued per Share price on
the New York Stock Exchange on the first day on which the Shares are
traded on a when-issued basis on the New York Stock Exchange, and the per
share fair market value of FTX common stock (trading with due bills) at
the time of the Distribution shall be the weighted average per share
price of FTX common stock (trading with due bills) on the New York Stock
Exchange on such trading day.
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(c) Tax-Offset Payment Right. If the FTX Award from which the
Option granted under this Section 6 derives contained a right to receive
a cash payment upon exercise of such FTX Award related to and intended to
defray the income tax liability associated therewith, the Option granted
under this Section 6 shall contain a similar tax-offset payment right
feature.
(d) Payment. No Shares shall be delivered pursuant to any
exercise of an Option until payment in full of the option price therefor
is received by the Company. Such payment may be made in cash, or its
equivalent, or, if and to the extent permitted by the Committee, by
applying cash amounts payable by the Company upon the exercise of such
Option or other Awards by the holder thereof or by exchanging whole
Shares owned by such holder (which are not the subject of any pledge or
other security interest), or by a combination of the foregoing, provided
that the combined value of all cash, cash equivalents, cash amounts so
payable by the Company upon exercises of Awards and the fair market value
of any such whole Shares so tendered to the Company, valued (in
accordance with procedures established by the Committee) as of the
effective date of such exercise, is at least equal to such option price.
SECTION 7
(a) Stock Appreciation Rights. Immediately prior to the
Distribution, each holder of an FTX SAR shall receive a Stock
Appreciation Right relating to such number of Shares (disregarding any
fractional Share) as such holder would be eligible to receive in the
Distribution with respect to the number of shares of FTX common stock to
which such FTX SAR relates if such holder were the owner of record of
such FTX shares on the record date for the Distribution. Except as set
forth below, each such SAR shall have the same remaining term and other
terms and conditions (whether such terms and conditions are contained in
the related FTX SAR agreement or in the plan under which such FTX SAR was
awarded) and shall be exercisable to the same extent as the FTX SAR from
which they were derived, with such changes and modifications as are
necessary to substitute the Company for FTX as the issuer of the SAR.
The per Share grant price of each SAR shall be determined in the same
manner as the exercise price of Options granted pursuant to Section 6, as
described in paragraph 6(b).
(b) A Stock Appreciation Right shall entitle the holder thereof
to receive upon exercise, for each Share to which the SAR relates, an
amount in cash equal to the excess, if any, of the fair market value of a
Share on the date of exercise of the SAR over the grant price.
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SECTION 8
(a) Limited Rights. Each holder of an FTX Option shall receive,
at the same time as and in tandem with each Option granted to such holder
under Section 6, Limited Rights equal in number to the number of Shares
subject to such Option with which such Limited Rights are in tandem.
Such Limited Rights shall have a grant price equal to the exercise price
of the Option with which it is in tandem, and shall in all other respects
contain the same terms and conditions as in the agreement pertaining to
the FTX Option from which they derived.
(b) A Limited Right shall entitle the holder thereof to receive
upon exercise, for each Share to which the Limited Right relates, an
amount in cash equal to the excess, if any, of the Offer Price on the
date of exercise of the Limited Right over the grant price. Any Limited
Right shall only be exercisable during a period beginning not earlier
than one day and ending not more than ninety days after the expiration
date of an Offer.
SECTION 9
(a) Stock Incentive Units. Immediately prior to the
Distribution, each holder of an FTX SIU shall receive a Stock Incentive
Unit relating to such number of Shares (disregarding any fractional
Share) as such holder would be eligible to receive in the Distribution
with respect to the number of shares of FTX common stock to which such
FTX SIU relates if such holder were the owner of record of such FTX
shares on the record date for the Distribution. Except as set forth
below, each such SIU shall have the same remaining term and other terms
and conditions (whether such terms and conditions are contained in the
related FTX SIU agreement or in the plan under which such FTX SIU was
awarded) and shall be exercisable to the same extent as the FTX SIU from
which they were derived, with such changes and modifications as are
necessary to substitute the Company for FTX as the issuer of the SIU.
The per Share exercise price of each SIU shall be determined in the same
manner as the exercise price of Options granted pursuant to Section 6, as
described in paragraph 6(b).
(b) A Stock Incentive Unit shall entitle the holder thereof to
receive upon exercise, for each Share to which the SIU relates, an amount
in cash equal to the excess, if any, of the fair market value of a Share
on the date of exercise of the SIU over the exercise price. In the event
that the SIU is exercised during a period beginning not earlier than one
day after the expiration date of an Offer and ending not more than ninety
days after the expiration date of such Offer, an SIU shall entitle the
holder thereof to receive upon exercise, for each Share to which the SIU
relates, the higher of (i) the amount described in the first sentence of
this paragraph 9(b) and (ii) an amount in cash equal to the excess, if
any, of the Offer Price on the date of exercise of the SIU over the
exercise price.
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SECTION 10
(a) Amendments to the Plan. The Board may amend, suspend or
terminate the Plan or any portion thereof at any time, provided that no
amendment shall be made without stockholder approval if such approval is
necessary to comply with any tax or regulatory requirement.
Notwithstanding anything to the contrary contained herein, (i) the
Committee may amend the Plan in such manner as may be necessary for the
Plan to conform with local rules and regulations in any jurisdiction
outside the United States and (ii) any amendment, suspension or
termination made in accordance with this paragraph 10(a) that would
adversely affect a holder's rights under an Award made under the Plan may
not be made without such holder's consent.
(b) Amendments to Awards. The Committee may amend, modify or
terminate any outstanding Award with the holder's consent at any time
prior to payment or exercise in any manner not inconsistent with the
terms of the Plan, including without limitation, (i) to change the date
or dates as of which an Award becomes exercisable, or (ii) to cancel an
Award and grant a new Award in substitution therefor under such different
terms and conditions as it determines in its sole and complete discretion
to be appropriate.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual
or Nonrecurring Events. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included in,
Awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in paragraph 5(b) hereof)
affecting the Company, or the financial statements of the Company or any
Subsidiary, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
(d) Cancellation. Any provision of this Plan or any Award
Agreement to the contrary notwithstanding, the Committee may cause any
Award granted hereunder to be canceled in consideration of a cash payment
or alternative Award made to the holder of such canceled Award equal in
value to such canceled Award. The determinations of value under this
subparagraph shall be made by the Committee in its sole discretion.
SECTION 11
(a) Award Agreements. Each Award hereunder shall be evidenced
by a writing delivered to the Participant that shall specify the terms
and conditions thereof and any rules applicable thereto and that shall,
in accordance with the provisions of the Plan, replicate as closely as
possible the terms, conditions and other contractual attributes of the
FTX Award from which the Award is derived, as in effect on the
Distribution Date.
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(b) Transferability. No Awards granted hereunder may be
transferred, pledged, assigned or otherwise encumbered by a Participant
except: (i) by will; (ii) by the laws of descent and distribution; (iii)
pursuant to a domestic relations order, as defined in the Code, if
permitted by the Committee and so provided in the Award Agreement or an
amendment thereto; or (iv) as to Options only, if permitted by the
Committee and so provided in the Award Agreement or an amendment thereto,
(a) to Immediate Family Members, (b) to a partnership in which Immediate
Family Members, or entities in which Immediate Family Members are the
sole owners, members or beneficiaries, as appropriate, are the only
partners, (c) to a limited liability company in which Immediate Family
Members, or entities in which Immediate Family Members are the sole
owners, members or beneficiaries, as appropriate, are the only members,
or (d) to a trust for the sole benefit of Immediate Family Members.
"Immediate Family Members" shall be defined as the spouse and natural or
adopted children or grandchildren of the Participant and their spouses.
Any attempted assignment, transfer, pledge, hypothecation or other
disposition of Awards, or levy of attachment or similar process upon
Awards not specifically permitted herein, shall be null and void and
without effect. The designation of a Designated Beneficiary shall not be
a violation of this Section 11(b).
(c) Share Certificates. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the SEC, any stock exchange
upon which such Shares or other securities are then listed, and any
applicable federal or state laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference
to such restrictions.
(d) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company from adopting or
continuing in effect other compensation arrangements, which may, but need
not, provide for the grant of options, stock appreciation rights and
other types of Awards provided for hereunder (subject to stockholder
approval of any such arrangement if approval is required), and such
arrangements may be either generally applicable or applicable only in
specific cases.
(e) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be engaged or employed by
or retained in the employ of FTX, the Company or any Subsidiary. FTX,
the Company or any Subsidiary may at any time dismiss a Participant from
engagement or employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement or any agreement relating to the engagement or employment of
the Participant by FTX, the Company or any Subsidiary.
(f) Governing Law. The validity, construction, and effect of
the Plan, any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State of
Delaware.
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(g) Severability. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan
or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award and the remainder of the Plan and any such
Award shall remain in full force and effect.
(h) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company and a Participant or
any other Person. To the extent that any Person acquires a right to
receive payments from the Company pursuant to an Award, such right shall
be no greater than the right of any unsecured general creditor of the
Company.
(i) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award, and the Committee shall
determine, in accordance with the terms of the Plan, as applicable,
whether cash, other securities or other property shall be paid or
transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated, or otherwise
eliminated.
(j) Headings. Headings are given to the subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 12
Effective Date of the Plan. The Plan shall be effective as of
the date of its approval by the holders of the common stock of the
Company.
SECTION 13
Term of the Plan. Subject to paragraph 5(b), no Award shall be
granted under the Plan except the Awards provided for in Sections 6, 7, 8
and 9. Awards granted hereunder shall continue until their respective
expiration dates, and the authority of the Committee to administer,
interpret, amend, alter, adjust, suspend, discontinue, or terminate, in
accordance with the provisions of the Plan, any such Award or to waive
any conditions or rights under any such Award shall extend until the
latest such date.