EXHIBIT 10(f)
CYPRUS AMAX MINERALS COMPANY
MATERIAL CONTRACTS
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE
DIRECTORS OF CYPRUS AMAX MINERALS COMPANY
EXHIBIT 10(f)
DEFERRED COMPENSATION PLAN
FOR
NON-EMPLOYEE DIRECTORS OF
CYPRUS AMAX MINERALS COMPANY
Amended and Restated Effective January 1, 1999
Deferred Compensation Plan
For
Non-Employee Directors of
Cyprus Amax Minerals Company
Table of Contents
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Section 1. Purpose 1
Section 2. Definitions.......................................... 1
(a) "Account"............................................ 1
(b) "Administrator"...................................... 1
(c) "Beneficiary"........................................ 1
(d) "Board".............................................. 1
(e) "Board Member"....................................... 1
(f) "Change of Control".................................. 1
(g) "Change of Control Stock Value"...................... 2
(h) "Company"............................................ 3
(i) "Compensation"....................................... 3
(j) "Exchange Act"....................................... 3
(k) "Investments"........................................ 3
(l) "Participant"........................................ 3
(m) "Plan"............................................... 3
(n) "Plan Year".......................................... 3
(o) "Phantom Stock"...................................... 3
(p) "Stock".............................................. 3
Section 3. Participation........................................ 4
(a) Participation is Voluntary........................... 4
(b) Filing of Application................................ 4
(c) Revoking or Modifying an Application................. 4
(d) Designation of Beneficiary........................... 4
Section 4. Accrual of Benefits.................................. 4
(a) Deferred Compensation................................ 4
(b) Earnings............................................. 4
(c) Vesting.............................................. 5
Section 5. Distribution of Benefits............................. 6
(a) Time of Distribution................................. 6
(b) Payment Upon Death................................... 6
(c) Methods of Payment................................... 6
Section 6. Administration....................................... 6
(a) Appointment of Administrator......................... 6
(b) Rights and Duties of Administrator................... 6
(c) Quarterly Reports.................................... 7
(d) Information.......................................... 7
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(e) Compensation, Indemnity and Liability............... 7
Section 7. Amendment and Discontinuance........................ 7
(a) Amendments.......................................... 7
(b) Discontinuance of Plan.............................. 7
Section 8. General Provisions.................................. 8
(a) No Interest in Assets............................... 8
(b) Restriction Against Assignment...................... 8
(c) Receipt or Release.................................. 8
(d) Payment on Behalf of Minor.......................... 8
(e) Forfeiture.......................................... 8
(f) Withholding......................................... 9
(g) Governing Law....................................... 9
(h) Captions............................................ 9
(i) Successors and Assigns.............................. 9
(j) Effective Date...................................... 9
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Deferred Compensation Plan
For
Non-Employee Directors of
Cyprus Amax Minerals Company
Section 1. Purpose. The purpose of the Plan is to assist the Company in
recruiting qualified individuals to serve as non-employee members of the Board
and to provide an incentive to such persons to continue to serve the Company in
that capacity.
Section 2. Definitions. Whenever the following terms are used herein, with the
first letter capitalized, they shall have the meanings specified below:
(a) "Account" means the account maintained by the Administrator
for each Participant which is to be credited, as hereinafter set forth, with
Phantom Stock or other Investments equal in value to the amount of the
Participant's Compensation which is deferred pursuant to this Plan, together
with the earnings thereon as provided for herein.
(b) "Administrator" means one or more individuals appointed in
accordance with Section 6(a) to administer the Plan.
(c) "Beneficiary" or "Beneficiaries" means the person or persons
(including without limitation, any trustee) last designated by a Participant to
receive the benefits specified hereunder, in the event of the Participant's
death, or if there is no designated Beneficiary or surviving Beneficiary, the
Participant's estate.
(d) "Board" means the Board of Directors of the Company.
(e) "Board Member" means a member of the Board who is not an
employee of the Company or any of its subsidiaries or affiliates.
(f) "Change of Control" means the occurrence of any of the
following events:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 35% or more of either (A) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (B) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this Section 2(f)(i), the
following acquisitions shall not constitute a Change of Control: (A) any
acquisition directly from the Company, (B) any acquisition by the Company, (C)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (D)
any acquisition by any corporation pursuant to a transaction which complies with
Sections 2(f)(iii)(A) and (B).
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(ii) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
(iii) Consummation of a reorganization, merger or
consolidation involving the Company or any subsidiary of the Company or sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, either (A)(1) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
50% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be or (2) at
least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination and (B) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 35% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination; or
(iv) A complete liquidation or dissolution of the Company.
(g) "Change of Control Stock Value" means the value of a
share of Stock determined as follows:
(i) if the Change of Control results from an event
described in Clause (iii) of the Change of Control definition, the highest per
share price paid for shares of Stock in the transaction resulting in the Change
of Control;
(ii) if the Change of Control results from an event
described in Clauses (i) or (ii) of the Change of Control definition and no
event described in Clauses (iii) or (iv) of the Change of Control definition has
occurred in connection with such Change of
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Control, the highest sale price of a share of Stock on any trading day during
the sixty consecutive trading days immediately preceding the date of such Change
of Control as reported on the New York Stock Exchange Composite Tape and
published in the Wall Street Journal; or
(iii) If the Change of Control results from an event
described in Clause (iv) of the Change of Control definition, the price per
share received by holders of Stock in the transaction described in such Clause
(iv).
(h) "Company" means Cyprus Amax Minerals Company, a Delaware
corporation, or any successor corporation.
(i) "Compensation" means for any Plan Year, all retainer,
meeting, committee and chair fees payable in cash or in shares of Stock to a
Board Member for service on the Board, or any other amounts payable for any
services rendered to the Company as an independent contractor while serving as a
Board Member, before any reduction pursuant to the Plan.
(j) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time. References to any provision of the Exchange Act
shall be deemed to include successor provisions thereto and regulations
thereunder.
(k) "Investments" means an Investment option, other than
Phantom Stock, that is made available as the mechanism by which to credit
hypothetical earnings on cash compensation deferred under the Plan, specifically
T. Rowe Price Funds. A Participant may modify his or her Investment elections
quarterly, and such modification shall be effective as soon as administratively
practicable after the Administrator receives the Participant's election to
change Investments. The Company, in its sole discretion, has the right to
utilize some other mechanism for measuring hypothetical earnings on cash
compensation deferred under the Plan.
(l) "Participant" means any Board Member who elects to defer
Compensation under the Plan in any Plan Year and who is entitled to a benefit
hereunder.
(m) "Plan" means the Deferred Compensation Plan for Non-
Employee Directors of Cyprus Amax Minerals Company, as set forth herein, and as
amended from time to time.
(n) "Plan Year" means the 12-consecutive month period
beginning January 1 and ending December 31 of each year; except that the initial
Plan Year shall be the period beginning May 5, 1994, and ending December 31,
1994.
(o) "Phantom Stock" means one or more hypothetical shares of
Stock. For purposes of the Plan, one share of Phantom Stock shall equal one
share of Stock.
(p) "Stock" means the Common Stock of Cyprus Amax Minerals
Company, without par value.
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Section 3. Participation
(a) Participation is Voluntary. Participation in the Plan is
voluntary. The Administrator shall notify each Board Member of his or her
prospective eligibility to participate in the Plan at least thirty days prior to
each November 30.
(b) Filing of Application. To participate in the Plan for any Plan
Year a Board Member must file a written application with the Administrator. The
application for participation shall signify the Board Member's acceptance of the
benefits and terms of his or her Compensation that he or she elects to defer
under the Plan, whether such deferrals shall be credited to his or her Account
as Phantom Stock or other Investments and the timing and form of the
distribution of the Board Member's Plan benefits under the Plan. A Board Member
electing to participate in the Plan for any Plan Year must file the application
with the Administrator no later than November 30 immediately preceding such Plan
Year.
Notwithstanding any other provision of this Section, during the Plan Year in
which a person first becomes a Board Member, the new Board Member may elect
within thirty days after the date he or she becomes a Board Member to defer any
or all Compensation to be earned for the remainder of that Plan Year for
services to be performed subsequent to his or her deferral election, and, if
such election is made, such deferred amount shall be credited to his or her
Account as other Investments or as Phantom Stock.
(c) Revoking or Modifying an Application. A Board Member may revoke
or change his or her election to defer Compensation solely for future Plan Years
by filing with the Administrator a form approved by the Administrator for such
purpose no later than November 30 prior to the Plan Year for which the
revocation or change shall be effective.
(d) Designation of Beneficiary. Utilizing forms provided by the
Administrator for such purpose, each Participant shall designate the Beneficiary
or Beneficiaries to receive the amounts distributable from the Plan, if any, in
the event of such Participant's death. A Participant may from time to time
change the designated Beneficiary or Beneficiaries, without the consent of such
Beneficiary or Beneficiaries, by filing a new designation with the Administrator
utilizing forms available from the Administrator for such purpose. With respect
to each Participant, the Company and the Administrator shall follow the
Beneficiary designation last filed with the Administrator in accordance with the
terms of the Plan.
Section 4. Accrual of Benefits.
(a) Deferred Compensation. Each Board Member who elects to
participate in the Plan for any Plan Year must irrevocably elect to defer the
receipt of all or a specified percentage of his or her Compensation for that
Plan Year in accordance with the terms of Section 3(b). Said amount shall be
credited to such Board Member's Account in accordance with Section 4(b) and
shall be paid in accordance with Section 5.
(b) Earnings. The amount of Compensation that a Participant elects
to defer under the Plan shall increase or decrease in value during the period of
deferral based on the market value of Phantom Stock or on the value of
Investments, including earnings
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and losses thereon. On the date the Plan is credited with the deferred
Compensation of a Participant, the Participant's Account shall be credited with
cash or a number of shares of Phantom Stock (including fractional shares) having
a value equal to the amount of the Participant's Compensation deferred on that
date. The date the Plan is credited with the deferred cash Compensation shall be
the date of the Board meeting for regularly scheduled meetings and shall be the
date of the meetings(s) for other than regular Board meetings. The date the Plan
is credited with the deferred Stock Compensation shall be the first business day
of January of the year for which the deferral election was made. The value of
Phantom Stock shall be determined using the closing market price of the Stock on
the Composite Tape of the New York Stock Exchange for the date of valuation. If
the Composite Tape is not operating on such date, or if Stock is not traded on
such Exchange on such date, the value shall be computed using the closing price
on the next business day on which such Stock is traded thereon.
Whenever dividends are paid with respect to shares of Stock, each
Participant's Account shall be credited with additional shares of Phantom Stock
(including fractional shares) equal in value to the amount of the dividend paid
on a single share of Stock multiplied by the number of shares of Phantom Stock
(including fractional shares) credited to the Participant's Account as of the
record date for dividend purposes. For purposes of crediting dividends, the
value of Phantom Stock shall be determined as of the day dividends are actually
paid on the Stock and in the same manner as is used for crediting deferred
Compensation to Accounts.
To the extent that a Participant's Account is credited with other
Investments, the Account shall be adjusted from time to time to effect changes
in value, including earnings.
The number of shares of Phantom Stock credited to a Participant's Account
shall be appropriately adjusted and modified upon the occurrence of any Stock
split, reverse Stock split, Stock dividend or Stock consolidation.
Notwithstanding any provision of the Plan to the contrary, upon the occurrence
of a Change of Control, all shares of Phantom Stock credited to a Participant's
Account shall be converted into cash in an amount equal to the product of (i)
the Change of Control Stock Value, multiplied by (ii) the number of shares of
Phantom Stock that have been credited to the Participant's Account as of the
date of the Change of Control. The amount of cash resulting from the foregoing
conversion of shares of Phantom Stock in a Participant's Account shall be paid
out in a lump sum as soon as administratively practicable after the date of the
Change of Control. In the event of a Change of Control, the value of any other
Investments in a Participant's Account shall be converted to cash, and at the
election of the Participant made on a form approved by the Administrator, shall
be credited to such Participant's Account or paid out in a lump sum, no later
than fifteen days after the date of the Change of Control, and income shall be
credited to the Participant's Account from the date of the Change of Control to
the date of distribution at the prime rate of the Bank of New York, as in effect
from time to time during such period. If cash is credited to a Participant's
Account under this paragraph, income shall be credited thereto from the date of
the Change of Control to the date of distribution at the prime rate of the Bank
of New York as in effect from time to time during such period.
(c) Vesting. The interest of each Participant in any benefit
accrued hereunder shall be fully vested and nonforfeitable at all times.
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Section 5. Distribution of Benefits.
(a) Time of Distribution. A Participant may elect to have the
balance of his or her Account distributed to him or her on or commencing (i) as
soon as administratively practicable after the Participant ceases to be a Board
Member, or (ii) on the January 1 occurring a stated number of years after the
Participant ceases to be a Board Member, in either case, in a lump sum or in up
to ten annual installments, in each case as elected by the Participant pursuant
to Section 3(b). In the case of installment payments, the unpaid portion of the
Participant's Account shall continue to be credited with hypothetical earnings.
Such an election shall be made on the application filed with the Administrator
pursuant to Section 3(b) and shall be irrevocable once made. However, a
Participant may elect a different distribution date(s) for Compensation deferred
in subsequent years by filing a change of deferral election as provided in
Section 3(b).
(b) Payment Upon Death. Notwithstanding any election under Section
5(a), if a Participant dies prior to distribution of the full amount of the
credit to his or her Account, the balance to the credit of the Participant's
Account as of the date of the Participant's death shall be paid in a lump sum,
in Stock or cash, as applicable, as soon as reasonably possible thereafter, to
the Participant's Beneficiary or Beneficiaries.
(c) Methods of Payment. Lump sum payments under the Plan shall
consist of shares of Stock equal to the number of whole shares of Phantom Stock
credited to the Participant's Account on the date as of which the distribution
occurs and a cash payment for any fraction of a share. Installment distributions
under the Plan with respect to Phantom Stock shall consist of shares of Stock
equal to the number of whole shares of Stock obtained by multiplying (i) a
fraction, the numerator of which shall be 1 and the denominator of which shall
be the number of years remaining in the deferral period, by (ii) the number of
shares of Phantom Stock credited to the Participant's Account on the date as of
which the distribution occurs, and a cash payment for any fraction of a share.
The portion of the Account of any Participant credited with other Investments
shall be paid in cash, either in a lump sum or installment distributions, which
shall be calculated in the same manner as above. Each Participant, or
Beneficiary, shall be required to agree in writing that prior to distribution of
any benefit under the Plan he or she will make such representations and execute
such documents as are deemed by the Administrator necessary to comply with
applicable securities laws.
Section 6. Administration.
(a) Appointment of Administrator. An Administrator, which may be
one or more individuals, shall be appointed from time to time by the Chief
Executive Officer of the Company or by his delegate in order to administer the
Plan as provided herein.
(b) Rights and Duties of Administrator. The Administrator, on
behalf of the Participants and their Beneficiaries, shall enforce the Plan in
accordance with its terms, shall be charged with the general administration of
the Plan, and shall have all powers necessary to accomplish those purposes,
including, but not by way of limitation, the following:
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(i) to compute and certify the amount and kind of benefits payable
to Participants and their Beneficiaries;
(ii) to maintain or to designate any person or entity to maintain
all the necessary records for the administration of the Plan;
(iii) to make and publish such rules for the regulation of the
Plan as are not inconsistent with the terms hereof; and
(iv) to provide for disclosure of such information and filing or
provision of such reports and statements to participants or Beneficiaries under
this Plan as the Administrator deems appropriate.
All actions of the Administrator shall be conclusive on all persons
interested in the Plan except to the extent otherwise specifically indicated
herein. The Administrator may appoint a plan administrator and agents, and
delegate thereto such powers and duties in connection with the administration of
the Plan as the Administrator may from time to time prescribe.
(c) Quarterly Reports. The Administrator shall furnish each
Participant with a quarterly report indicating the number of shares of Phantom
Stock and/or the value of the other Investments credited to his or her Account
as of the end of the preceding calendar quarter.
(d) Information. To enable the Administrator to perform his or her
functions, the Company shall supply full and timely information to the
Administrator on all matters relating to the Compensation of all Participants,
their status as Board Members, their contributions, and such other pertinent
facts as the Administrator may require.
(e) Compensation, Indemnity and Liability. The Administrator shall
serve without bond, except as otherwise required by law, and without
compensation for his or her services hereunder. All expenses of the
Administrator shall be paid by the Company and the Company shall furnish the
Administrator with such clerical and other assistance as is necessary in the
performance of his or her duties.
The Administrator shall not be liable for any act or omission on his or her
part. The Company shall indemnify and hold harmless the Administrator against
any and all expenses and liabilities arising out of his or her administration of
the Plan.
Section 7. Amendment and Discontinuance.
(a) Amendments. The Board shall have the right to amend the Plan
from time to time, and to amend or cancel any amendments; provided, however,
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that no amendment shall reduce any amount already credited to a Participant's
Account as of the effective date of such amendment without the Participant's
prior written consent.
(b) Discontinuance of Plan. It is the expectation of the Company
that the Plan will be continued indefinitely, but continuance of the Plan is not
assumed as a contractual obligation of the Company, and the right is reserved by
the Company at any
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time to reduce, suspend, or discontinue the Plan; provided, however, the Company
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shall in no event have the power to reduce the amount already credited to a
Participant's Account as of the effective date of any such reduction, suspension
or discontinuance nor to discontinue the crediting of earnings on such amounts
subsequent to said date. In the event of a reduction, suspension or
discontinuance of the Plan, the payment of benefits accrued hereunder shall
continue to be made in accordance with the provisions of the Plan.
Section 8. General Provisions.
(a) No Interest in Assets. No Participant or any other person shall
have any interest in any shares of Stock or other Investments credited to his or
her Account or in any specific asset of the Company by reason of any amount
credited to him or her hereunder, nor any rights to receive any distribution
under the Plan except as and to the extent expressly provided in the Plan. There
shall be no funding of any benefits which may become payable hereunder. No trust
shall be created in connection with or by the execution or adoption of this
Plan. Any benefits which become payable hereunder shall be paid from the general
assets of the Company. Nothing in the Plan shall be deemed to give any Board
Member any right to participate in the Plan, except in accordance with the
provisions of the Plan.
(b) Restriction Against Assignment. The Company shall pay all
amounts payable hereunder only to the person or persons designated by the Plan
and not to any other person or corporation. No part of a Participant's Account
shall be liable for the debts, contracts or engagements of any Participant, his
or her Beneficiaries, or successors in interest, nor shall it be subject to
execution by levy, attachment or garnishment or by any other legal or equitable
proceeding, nor shall any such person have any right to alienate, anticipate,
commute, pledge, encumber, or assign any benefits or payments hereunder in any
manner whatsoever.
(c) Receipt or Release. Any payment to any Participant or his or her
Beneficiaries in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Administrator and the
Company with respect to such payment and the Administrator may require such
Participant or Beneficiaries, as a condition precedent to such payment, to
execute a receipt and release to such effect.
(d) Payment on Behalf of Minor. In the event any amount becomes
payable under the Plan to a minor or a person who, in the sole judgment of the
Administrator, is considered by reason of physical or mental condition to be
unable to give a valid receipt therefor, the Administrator may direct that such
payment be made to any person found by the Administrator, in his or her sole
judgment, to have assumed the care of such minor or other person. Any payment
made pursuant to such determination shall constitute a full release and
discharge of the Administrator and the Company.
(e) Forfeiture. Any payment or distribution to a Participant under
the Plan which is not claimed by the Participant, any Beneficiary or any other
person entitled thereto within three years after becoming payable shall be
forfeited and canceled and shall remain with the Company and no other person
shall have any right thereto or interest therein. The Company shall not have any
duty to give notice that amounts are payable under the Plan to any person other
than the Participant and the designated Beneficiary.
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(f) Withholding. The Company may deduct from the amount of all
distributions or deferrals under the Plan any taxes required to be withheld
pursuant to applicable law.
(g) Governing Law. This Plan shall be construed, administered and
enforced according to the laws of the State of Colorado.
(h) Captions. Captions in this Plan are not part of the provisions
hereof and shall have no force or effect.
(i) Successors and Assigns. This Plan shall inure to the benefit of,
and be binding upon, the parties hereto and their successors and assigns.
(j) Effective Date. The Plan, as amended and restated herein, shall be
effective as of January 1, 1999. The Plan was originally effective as of May 5,
1994.
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