EXHIBIT 10.16
AGREEMENT AND GENERAL RELEASE
This Agreement and General Release ("Agreement") is between Phelps Dodge
Corporation ("Company") and Thomas M. St. Clair ("St. Clair"). This Agreement is
entered into in order to (i) provide St. Clair with special pay and benefits,
(ii) resolve all matters relating to St. Clair's employment with, and separation
from, the Company, and (iii) provide the Company with protection against any
claims.
The Company and St. Clair, therefore, agree as follows:
1. St. Clair's last day of employment with the Company will be May 31, 1999.
St. Clair will resign from all positions he holds with the Company and with
each of the Company's subsidiaries and affiliated entities on May 5, 1999.
At the request of the Company, St. Clair agrees to execute any documents to
effectuate or to facilitate his resignations.
2. The Company will pay St. Clair a severance payment in the gross amount of
$186,667.00. All necessary taxes and withholdings will be deducted from
this amount. This severance payment will be paid to St. Clair within 15
calendar days after the effective date of this Agreement
3. St. Clair will receive the monthly retirement benefit he is entitled to
under the Phelps Dodge Retirement Plan for Salaried Employees, and in
addition he will receive a special, nonqualified monthly retirement benefit
in an amount sufficient to bring his combined qualified and nonqualified
monthly retirement benefit to $5,906.91. Monthly payment of these
retirement benefits will start in the month following St. Clair's last day
of employment. (The retirement benefit set forth in this paragraph has been
calculated on the basis of a 50% joint and survivor annuity.)
4. The Company will provide St. Clair with a physical examination to be
conducted before the end of 1999 in accordance with the Executive Physical
Examination Policy.
5. Until St. Clair reaches age 65, and subject to his making those
contributions, if any, required of employees generally to receive these
benefits, the Company will continue the participation of St. Clair and his
eligible dependents in its medical and dental benefit plans for active
employees on the same terms and conditions as generally apply to similarly
situated active employees. When St. Clair attains age 65, he and his
eligible dependents will become eligible for retiree medical benefits on
the same terms and conditions, and subject to the same future
modifications, as similarly situated active employees retiring at that
time. If he elects to receive retiree medical benefits, he will, in
accordance with the provisions of the retiree medical plan, be required to
contribute the applicable percentage of the premium cost of those benefits
that is in effect at the time.
6. In accordance with the terms of the Annual Incentive Compensation Plan
("AICP"), St. Clair shall receive an AICP payment. The payment will be
calculated based upon St. Clair's salary earned through May 31, 1999, the
actual performance level of the Company and the target performance level
for St. Clair's support goals. This AICP payment will be paid to St. Clair
in 2000 at the same time that the 1999 AICP payments are made to other
individuals eligible to receive AICP payments.
7. Any unvested stock options held by St. Clair under the terms of the Phelps
Dodge 1998 Stock Option and Restricted Stock Plan will vest as of May 31,
1999, and St. Clair will have until the earlier of the exercisable date of
the options or until May 31, 2004 to exercise these stock options. Except
to the extent modified by this paragraph, all of the terms and conditions
of the Phelps Dodge 1998 Stock Option and Restricted Stock Plan shall
continue to be applicable.
8. The Company will, at its cost, provide St. Clair with a reasonable amount
of the services of AYCO Corporation through April 15, 2000, not to exceed
$7,500.00. The services of AYCO will be provided to St. Clair under the
same conditions and at the same level as those services are provided to
similarly situated active employees of the Company during that time.
9. The Company will provide St. Clair with a payment sufficient to fund an
ELIP death benefit equal to one-times his annual base salary. This payment
will be made in December 1999 and shall be reduced by required
withholdings.
10. The Company and its subsidiaries (collectively the "Related Entities")
shall indemnify St. Clair for any claim arising out of or in connection
with St. Clair's service as an officer and employee of the Related Entities
in the same manner and to the same extent as the Related Entities
indemnifies its then current officers or employees. The Related Entities
shall continue coverage of St. Clair under its directors' and officers'
liability insurance policy to the same extent as its then current officers
or employees are covered during the period that any claim can be asserted
against St. Clair.
11. St. Clair shall deliver to the Company (a) any documents, materials, files,
or computer files, if he has any, relating to the Company's business or
affairs, and (b) any documents, materials, files, computer files or other
property, if he has any, belonging to the Company or any other affiliated
entities that is in St. Clair's possession or control. St. Clair will make
a diligent search for such documents, materials, files, computer files and
other property. St. Clair will deliver these items to the Company by May
31, 1999.
12. St. Clair agrees that during the course of his employment with the Company,
he had access to confidential and proprietary information concerning the
Company including but not limited to such matters as the Company's trade
secrets, strategic plans, programs (including, without limitation, the
Company's computer software programs), procedures, manuals, confidential
reports and communications, lists of customers, and sources of supply. That
information was disclosed to St. Clair in confidence and solely for use by
or on behalf of the Company. St. Clair has no ownership right or interest
in that confidential and proprietary information. St. Clair agrees that he
will keep that information confidential at all times after his employment,
that he will not, directly or indirectly, disclose, divulge, reveal,
report, publish, transfer, or use, for any purpose whatsoever, that
information on his own behalf or on behalf of any other person or entity.
13. St. Clair acknowledges that all of the following information and materials
are "Protected Information" belonging to the Company and shall be subject
to the provisions of paragraph 12 of this Agreement and shall be kept
strictly confidential, even if not physically marked as such:
a. Production processes, strategic plans, marketing techniques and
arrangements, mailing lists, purchasing information, pricing policies,
quoting procedures, financial information, customer and prospect names
and requirements, employee, customer, supplier and distributor data,
and other materials and information relating to the Company's business
and activities and the manner in which the Company does business;
b. Discoveries, concepts, and ideas including, without limitation, the
nature and results of research and development activities, processes,
formulas, inventions, equipment or technology, techniques, "know-how,"
designs, drawings and specifications, and patent applications;
c. Any other materials or information related to the Company's business
or activities which are not generally known to others engaged in
similar businesses or activities and which are not in the public
domain; and
d. All ideas which are derived from or relate to St. Clair's access to or
knowledge of any of the above enumerated materials and information.
14. St. Clair acknowledges that in the course of his employment with the
Company, he has had direct or indirect contact with the Company's existing
and prospective customers and others having business dealings with the
Company and has thereby had the opportunity to meet and develop, on the
Company's behalf, goodwill and working relationships with those persons,
firms, or entities. St. Clair acknowledges that such goodwill and
relationships are valuable assets of the Company, and he understands and
agrees that, because of the nature of the Company's business, it is
necessary to afford fair protection to the Company for those assets.
Therefore, St. Clair covenants and agrees that, for the period beginning on
the date of this Agreement and ending two years after the date of this
Agreement, he shall not compete with the business of the Company by: (i)
engaging in the copper mining, milling, smelting, refining, or
hydrometallurgical business, whether as a proprietor, partner, co-venturer,
director, officer, employer, employee, servant, agent, or representative of
an operation engaging in such business; (ii) soliciting, directly or
indirectly, any existing or prospective customer of the Company with whom
he has gained significant business contacts while employed by the Company;
(iii) advising, directly or indirectly, any existing or prospective
customer of the Company with whom he has gained significant business
contacts while employed by the Company, to withdraw, curtail, or cancel
business or negotiations with the Company; or (iv) serving as a consultant
or contractor to any entity engaged in the copper mining, milling,
smelting, refining, or hydrometallurgical business. St. Clair acknowledges
and agrees that the geographic scope of this provision has not been limited
because the Company's business and customers are worldwide and the Company
has a legitimate, protectible business interest in its goodwill and
relationships with its customers in preventing the solicitation of its
customers regardless of the geographical location of its customers or where
St. Clair is employed if and when he attempts such solicitation.
15. St. Clair acknowledges that the Company's employees are an integral part of
the Company's business, and he understands and agrees that, because of the
nature of the Company's business, it is necessary to afford fair protection
to the Company from the loss of any such employees. Therefore, St. Clair
agrees that, for the period beginning on the date of this Agreement and
ending two years after the date of this Agreement, he shall not, directly
or indirectly, hire or engage, or attempt to hire or engage any individual
who shall have been an employee of the Company at any time during the
one-year period before the date of this Agreement, whether for or on his
behalf or for any entity in which he shall have a direct or indirect
interest (or any subsidiary or affiliate of any such entity), whether as a
proprietor, partner, co-venturer, financier, investor or stockholder,
director, officer, employer, employee, servant, agent, representative, or
otherwise. Any failure by St. Clair to comply with this provision shall
constitute a material breach of this Agreement and shall entitle the
Company to full reimbursement of the pay and benefits he received pursuant
to this Agreement, in addition to any other damages and relief to which the
Company may be entitled.
16. St. Clair understands that the special pay and benefits he will receive by
this Agreement are not required by the Company's policies. St. Clair also
understands that if he and the Company did not have this Agreement, he
would not be getting this special pay and benefits. St. Clair and the
Company agree that the fact that they are making this Agreement does not
mean that the Company had any obligation or liability to St. Clair.
17. St. Clair will keep this Agreement confidential. He will only talk about it
with his immediate family, his attorney, and his accountant or tax and
financial advisor, and they will not discuss it with anyone else.
18. This Agreement may not be changed orally, but only by a written agreement
signed by St. Clair and the Company.
19. St. Clair agrees not to bring any suit or claim against the Company or any
of its related entities or individuals with respect to any matter,
including those related to his employment with the Company or his
separation from that employment. Therefore, St. Clair, for himself and his
heirs, executors, administrators, representatives, agents, and assigns,
forever releases the Company and its parents, subsidiaries, successors,
predecessors, and affiliated entities, and their officers, directors,
agents, employees, shareholders, attorneys, and representatives, from any
and all claims, demands, liabilities, obligations, suits, charges, actions,
and causes of action, whether known or unknown, past or present, accrued or
not accrued, as of the date St. Clair signs this Agreement. The items
released include, but are not limited to, matters relating to or arising
out of his employment or separation from employment. Some examples of items
released are claims under federal, state, or local laws, such as the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of
1964, as amended, the Employee Retirement Income and Security Act of 1974,
the Americans with Disabilities Act, the Family and Medical Leave Act, the
Arizona Civil Rights Act, any common law, tort, or contract claims, and any
claims for attorneys' fees and costs. This provision, of course, does not
affect St. Clair's rights, if any, to benefits under the Company's benefit
plans in accordance with the terms of those plans, or to make a complaint
to any state or federal agency with respect to issues related to his
employment with the Company.
20. St. Clair agrees not to challenge this Agreement. If he attempts to do so,
he must first return to the Company all of the pay and benefits he received
from the Agreement.
21. St. Clair understands and agrees that the Company will suffer irreparable
harm in the event that he breaches any of his obligations under this
Agreement and that monetary damages will be inadequate to compensate the
Company for such breach. Accordingly, St. Clair agrees that, in the event
of his breach or threatened breach of any of the provisions of this
Agreement, the Company, in addition to and not in limitation of any other
rights, remedies, or damages available to the Company at law or in equity,
shall be entitled to a temporary restraining order, preliminary injunction,
and permanent injunction in order to prevent or to restrain any such breach
by St. Clair or by any or all of his partners, co-venturers, employers,
employees, servants, agents, representatives, and any and all persons
directly or indirectly acting for, or on behalf of, or with him. The
Company may seek such relief pursuant to a court action notwithstanding the
arbitration provision set forth in paragraph 24 of this Agreement.
22. The provisions of this Agreement are severable. This means that if any
provision is invalid, it will not affect the validity of the other
provisions. If the scope of any restrictions of this Agreement should ever
be deemed to exceed that permitted by applicable law or be otherwise
overboard, St. Clair agrees that a court of competent jurisdiction shall
enforce that restriction to the maximum scope permitted by law under the
circumstances.
23. The laws of the State of Arizona will apply to this Agreement.
24. Any disputes arising in connection with this Agreement, other than disputes
arising under paragraphs 12, 13, 14, 15, 21 and 22 shall be resolved by
binding arbitration in accordance with the rules and procedures of the
American Arbitration Association. Judgment upon any award rendered by the
arbitrator may be entered in any court having jurisdiction of this matter.
Costs of the arbitration shall be borne equally by the parties. Unless the
arbitrator otherwise determines, the party that does not prevail in any
such action shall reimburse the other party for his or its reasonable
attorneys' fees incurred with respect to such arbitration.
25. St. Clair has been advised by the Company to talk with an attorney of his
choice before signing this Agreement. He has been given a period of at
least 21 days to consider this Agreement, and he has had an opportunity to
talk with an attorney about this Agreement.
26. St. Clair may revoke this Agreement. St. Clair may do so during the seven
calendar days after the date he signs it. The Agreement will not become
effective until the eighth calendar day after St. Clair signs it. If St.
Clair wishes to revoke the Agreement, he must do so in writing and his
written notice of revocation must be sent to Stuart L. Marcus ("Marcus"),
Vice President - Human Resources, Phelps Dodge Corporation, 2600 N. Central
Avenue, Phoenix, AZ 85004. To be effective, Marcus must receive the
revocation of the Agreement during the seven calendar days after the day
St. Clair signs it.
27. St. Clair has carefully considered his obligations as stated in this
Agreement and agrees that the restrictions contained in this Agreement are
fair and reasonable and are reasonably required for the Company's
protection. St. Clair has carefully read this Agreement, he has had an
opportunity to ask questions about it, he understands it, and he agrees to
all of its provisions. St. Clair understands that by signing this
Agreement, he agrees not to sue or bring any claim against the Company or
any other entity or person he has released from claims. St. Clair has made
this Agreement voluntarily and without any duress.
Thomas M. St. Clair Phelps Dodge Corporation
Stuart L. Marcus
Vice President - Human Resources
Date June 15, 1999 Date June 15, 1999