DRAFT OF 10-29-97
FREEPORT-MCMORAN SULPHUR INC.
ADJUSTED STOCK AWARD PLAN
SECTION 1
PURPOSE. The purpose of the Freeport-McMoRan Sulphur 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 for
the benefit of present and former employees, officers, directors and
consultants of Freeport-McMoRan Inc. ("FTX"), an affiliate of the Company, in
connection with the distribution by FTX to its stockholders of all the common
stock of the Company held by FTX and the subsequent merger of FTX into IMC
Global Inc.
SECTION 2
DEFINITIONS. As used in the Plan, the following terms shall have the
meanings set forth below:
"Award" shall mean any Option or Limited Right 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 Freeport Sulphur Company.
"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
outstanding Shares held by FTX to the holders of FTX common stock.
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"Distribution Date" shall mean the effective date of the Distribution.
"Eligible Individual" shall mean any present or former employee,
officer, director, or consultant 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 SARs and FTX SIUs.
"FTX Option" shall mean an option to purchase FTX common stock
granted by FTX to a present or former employee, officer, director, or
consultant 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 employee, officer, or consultant 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 7 of the
Plan.
"Merger" shall mean the merger of FTX into IMC Global Inc.
"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 a nonqualified stock 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.
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"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.
"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.
"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 and 7. 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 Section 5(b):
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(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 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.
(iii) INDIVIDUAL LIMIT. Any provision of the Plan to the
contrary notwithstanding, no individual may receive in any year Awards under
the Plan, whether payable in cash or Shares, that relate to more than
200,000 Shares.
(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) with respect to which Awards may be granted,
(ii) the number and type of Shares (or other securities or property) subject
to outstanding Awards, and (iii) 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 Award 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 Sections 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 immediately exercisable in
full, as were the FTX
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Awards from which they were derived as a result of the change of control of
FTX, 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 Section 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 "Company Distribution Value," as
defined below, and the denominator of which is the "FTX Distribution Value,"
as defined below. For purposes of this Section 6(b), the "Company
Distribution Value" shall be the weighted average per Share price of the
Shares on the New York Stock Exchange on the first day that Shares are traded
on the New York Stock Exchange after the effective date of the Merger, and
the FTX Distribution Value shall be the weighted average per share price of
the FTX common stock on the New York Stock Exchange on the last day that
shares of FTX common stock are traded on the New York Stock Exchange before
the effective date of the Merger.
(c) TAX-OFFSET RIGHT ADJUSTMENT. Notwithstanding the foregoing, if
the FTX Option from which the Option granted under this Section 6 derives
contained a right to receive a cash payment upon exercise of such FTX Option
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 Section 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
Section 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) LIMITED RIGHTS. Each holder of an FTX Award 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.
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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 8
(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, including for
these purposes any approval necessary to qualify Awards as "performance
based" compensation under Section 162(m) or any successor provision if such
qualification is deemed necessary or desirable by the Committee.
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 Section 8(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, a change in the date or dates as of which
an Award becomes exercisable.
(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 Section 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 subsection shall be
made by the Committee in its sole discretion.
SECTION 9
(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
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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) WITHHOLDING. (i) A Participant may be required to pay to the
Company, and the Company shall have the right to deduct from all amounts paid
to a Participant (whether under the Plan or otherwise), any taxes required by
law to be paid or withheld in respect of Awards hereunder to such
Participant.
(ii) At any time that a Participant is required to pay to the
Company an amount required to be withheld under the applicable tax laws in
connection with the issuance of Shares under the Plan, the Participant may,
if permitted by the Committee, satisfy this obligation in whole or in part by
electing (the "Election") that the Company withhold from the issuance Shares
having a value equal to the amount required to be withheld. The value of the
Shares withheld shall be based on the fair market value of the Shares on the
date that the amount of tax to be withheld shall be determined in accordance
with applicable tax laws (the "Tax Date").
(iii) Each Election must be made prior to the Tax Date. The
Committee may suspend or terminate the right to make Elections at any time.
(iv) A Participant may also satisfy his total tax liability
related to the Award by delivering Shares owned by the Participant. The
value of the Shares delivered shall be based on the fair market value of the
Shares on the Tax Date.
(c) 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) 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 owners, members or beneficiaries, as appropriate, are
the partners, (c) to a limited liability company in which Immediate Family
Members, or entities in which Immediate Family Members are the owners,
members or beneficiaries, as appropriate, are the members, or (d) to a trust
for the benefit of Immediate Family Members; provided, however, that no more
than a DE MINIMUS beneficial interest in a partnership, limited liability
company or trust described in (b), (c) or (d) above may be owned by a person
who is not an Immediate Family Member or by an entity that is not
beneficially owned solely by 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 9(c).
(d) 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,
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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.
(e) 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 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.
(f) 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.
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) 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.
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SECTION 10
EFFECTIVE DATE OF THE PLAN. The Plan shall be effective as of the
date of its approval by the stockholder of the Company.
SECTION 11
TERM OF THE PLAN. Subject to Section 5(b), no Award shall be
granted under the Plan except the Awards provided for in Sections 6 and 7.
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.
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