Exhibit 10.2
McMoRan OIL & GAS CO.
ADJUSTED STOCK AWARD PLAN
SECTION 1
Purpose. The purpose of the McMoRan Oil & Gas Co.
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 parent, in connection with FTX's distribution to
FTX stockholders of all of the 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 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). In the absence of
such a designation, "Committee" shall mean the Board.
"Company" shall mean McMoRan Oil & Gas Co.
"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 to the holders of FTX
common stock, as described in the Information Statement.
"Distribution Date" shall mean the Distribution
Date, as disclosed in the Information Statement.
"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.
"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.
"Information Statement" shall mean the Information
Statement dated May 18, 1994 included in the Registration
Statement on Form 10A-2 filed by the Company under the
Exchange Act with respect to the Shares.
"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 own
beneficially more than 40% of the Shares outstanding
(exclusive of Shares held in the Company's treasury or by
the Company's Subsidiaries).
"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.
"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 a Stock Incentive Unit.
"Shares" shall mean the shares of common stock,
par value $.01 per share, of the Company (including any
attached Preferred Stock Purchase Rights), and such other
securities of the Company or a Subsidiary as the Committee
may from time to time designate.
"Stock Incentive Unit" shall mean any award of
stock incentive units granted under Section 7 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.
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, pricing and size of Awards granted under the
Plan, which shall be determined in accordance with the
provisions of Sections 6, 7 and 8. 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 and 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 7. 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 acquired in the open market or otherwise
obtained by the Company or a Subsidiary.
(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 or, 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, an FTX SAR 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 paragraphs 6(b) and
6(c), 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.
(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 of
the Shares 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 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 of the Shares on the
NASDAQ National Market System on the first trading date on
which the Shares are traded on a when-issued basis on the
NASDAQ National Market System, and the per share fair market
value of FTX common stock at the time of the Distribution
shall be the weighted average per share price of the FTX
common stock on the New York Stock Exchange on such trading
date.
(c) Tax-Offset Right Adjustment. Notwithstanding
the foregoing, 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 number of Shares to be subject to
the Option, determined according to the provisions of
paragraph 6(a) (without disregarding fractional Shares),
shall be multiplied by 1.6556 and any fractional Share
resulting from such adjustment shall be disregarded. Such
adjustment shall not affect the calculation of the per Share
exercise price of the Option as set forth in paragraph 6(b).
(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 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 in paragraphs 7(b) and 7(c), 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 made) 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 an amount 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 the higher of (i) the amount
described in the first sentence of this paragraph 7(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.
SECTION 8
(a) Limited Rights. Each holder of an FTX Option
or FTX SAR 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 under Section 6 with
which it is in tandem, and shall in all other respects
contain the same terms and conditions as the agreement
pertaining to the FTX Award from which they derived.
(b) A Limited Right shall entitle the holder
thereof to receive an amount 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 may be settled in
cash, Shares or a combination of cash and Shares, as
determined by the Committee or the Board at the time of
exercise, and 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) 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 9(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 10
(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.
(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 10(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.
(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 11
Effective Date of the Plan. The Plan shall be
effective as of the date of its approval by the stockholder
of the Company.
SECTION 12
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 and 8. 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.
As amended effective December 10, 1996