FREEPORT-McMoRan COPPER & GOLD INC. PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT UNDER THE 1999 STOCK INCENTIVE PLAN
Exhibit
10.27
FREEPORT-McMoRan
COPPER & GOLD INC.
PERFORMANCE-BASED
RESTRICTED
STOCK UNIT AGREEMENT
UNDER
THE 1999 STOCK INCENTIVE PLAN
AGREEMENT
dated as of ____________, 20__ (the “Grant Date”), between Freeport-McMoRan
Copper & Gold Inc., a Delaware corporation (the “Company”), and
_______________ (the “Participant”).
1. (a) Pursuant
to the Freeport-McMoRan Copper & Gold Inc. 1999 Stock Incentive Plan (the
“Plan”), the Participant is hereby granted effective the Grant Date _________
restricted stock units (“Restricted Stock Units” or “RSUs”) on the terms and
conditions set forth in this Agreement and in the Plan.
(b) Defined
terms not otherwise defined herein shall have the meanings set forth in Section
2 of the Plan.
(c) Subject
to the terms, conditions, and restrictions set forth in the Plan and herein,
each RSU granted hereunder represents the right to receive from the Company,
on
the respective scheduled vesting date for such RSU set forth in Section 2(a)
of
this Agreement or on such earlier date as provided in Section 2(b) of this
Agreement or Section 5(b) of this Agreement (the “Vesting Date”), one share (a
“Share”) of common stock of the Company (“Common Stock”), free of any
restrictions, all amounts notionally credited to the Participant’s Dividend
Equivalent Account (as defined in Section 4 of this Agreement) with respect
to
such RSU, and all securities and property comprising all Property Distributions
(as defined in Section 4 of this Agreement) deposited in such Dividend
Equivalent Account with respect to such RSU.
(d) Provided
the condition of Section 6 of this Agreement, if applicable, has been met,
as
soon as practicable after the Vesting Date (but no later than 2 ½ months from
such date) for any RSUs granted hereunder, the Participant shall receive from
the Company the number of Shares to which the vested RSUs relate, free of any
restrictions, a cash payment for all amounts notionally credited to the
Participant’s Dividend Equivalent Account with respect to such vested RSUs, and
all securities and property comprising all Property Distributions deposited
in
such Dividend Equivalent Account with respect to such vested RSUs.
2. (a) The
RSUs granted hereunder are granted to the Participant in accordance with the
Participant’s election (the “Election”) to receive RSUs in lieu of certain cash
bonus payments awarded under the Company’s Annual Incentive Plan, which Election
was made within the time period required by Section 409A of the
Code. Provided the condition of Section 6 of this Agreement has been
met, the RSUs granted hereunder shall vest in installments as
follows:
Scheduled
Vesting
Date Number
of RSUs
(b) Notwithstanding
Section 2(a) of this Agreement, at such time as there shall be a Change in
Control of the Company, all unvested RSUs shall be accelerated and shall
immediately vest.
(c) Until
the
respective Vesting Date for an RSU granted hereunder, such RSU, all amounts
notionally credited in any Dividend Equivalent Account related to such RSU,
and
all securities or property comprising all Property Distributions deposited
in
such Dividend Equivalent Account related to such RSU shall be subject to
forfeiture as provided in Section 5 of this Agreement.
3. Except
as
provided in Section 4 of this Agreement, an RSU shall not entitle the
Participant to any incidents of ownership (including, without limitation,
dividend and voting rights) in any Share until the RSU shall vest and the
Participant shall be issued the Share to which such RSU relates nor in any
securities or property comprising any Property Distribution deposited in a
Dividend Equivalent Account related to such RSU until such RSU
vests.
4. From
and
after the Grant Date of an RSU until the issuance of the Share payable in
respect of such RSU, the Participant shall be credited, as of the payment date
therefor, with (i) the amount of any cash dividends and (ii) the amount equal
to
the Fair Market Value of any Shares, Subsidiary securities, other securities,
or
other property distributed or distributable in respect of one share of Common
Stock to which the Participant would have been entitled had the Participant
been
a record holder of one share of Common Stock at all times from the Grant Date
to
such issuance date (a “Property Distribution”). All such credits
shall be made notionally to a dividend equivalent account (a “Dividend
Equivalent Account”) established for the Participant with respect to all RSUs
granted hereunder with the same Vesting Date. All credits to a
Dividend Equivalent Account for the Participant shall be notionally increased
by
the Account Rate (as hereinafter defined), compounded quarterly, from and after
the applicable date of credit until paid in accordance with the provisions
of
this Agreement. The “Account Rate” shall be the prime commercial
lending rate announced from time to time by The Chase Manhattan Bank, N.A.
or by
another major national bank headquartered in New York, New York designated
by
the Committee. The Committee may, in its discretion, deposit in the
Participant’s Dividend Equivalent Account the securities or property comprising
any Property Distribution in lieu of crediting such Dividend Equivalent Account
with the Fair Market Value thereof.
5. (a) Except
as set forth in Section 5(b) of this Agreement, all unvested RSUs provided
for
in this Agreement, all amounts credited to the Participant’s Dividend Equivalent
Accounts with respect to such RSUs, and all securities and property comprising
Property Distributions deposited in such Dividend Equivalent Accounts with
respect to such RSUs shall immediately be forfeited on the date the Participant
ceases to be an Eligible Individual (the “Termination Date”).
2
(b) Notwithstanding
the foregoing, and provided the condition of Section 6 of this Agreement has
been met, if the Participant ceases to be an Eligible Individual (the
“Termination”) by reason of the Participant’s death, Disability, or Retirement,
all the unvested RSUs granted hereunder, all amounts credited to the
Participant’s Dividend Equivalent Accounts with respect to such RSUs, and all
securities and property comprising Property Distributions deposited in such
Dividend Equivalent Accounts with respect to such RSUs shall vest as of the
Participant’s Termination Date. In the event that the Participant
ceases to be an Eligible Individual by reason of the Participant’s Termination
by his employer or principal without Cause, and provided the condition of
Section 6 of this Agreement has been met, the Committee, or any person to whom
the Committee has delegated authority, may, in its or his sole discretion,
determine that all or any portion of the unvested RSUs granted hereunder, all
amounts credited to the Participant’s Dividend Equivalent Accounts with respect
to such RSUs, and all securities and property comprising Property Distributions
deposited in such Dividend Equivalent Accounts with respect to such RSUs shall
vest as of the Participant’s Termination Date. In the event vesting
is accelerated pursuant to this Section 5(b) and the Participant is a Key
Employee, a distribution of Shares issuable to the Participant, all amounts
notionally credited to the Participant’s Dividend Equivalent Account, and all
securities and property comprising all Property Distributions deposited in
such
Dividend Equivalent Account due the Participant upon the vesting of the RSUs
shall not occur until six months after the Participant’s Termination Date,
unless the Participant’s Termination is due to death or Disability.
6. The
other
provisions of this Agreement notwithstanding, no unvested RSU granted hereunder
shall vest on its scheduled Vesting Date under Section 2(a) of this Agreement
or
upon the Participant’s Termination pursuant to Section 5(b) of this Agreement
unless the average of the Return on Investment for the five calendar years
preceding the year in which such event occurs is at least 6% and, if required
or
deemed necessary to satisfy the requirements to qualify such RSU as
“performance-based compensation” under Section 162(m), the appropriate members
of the Committee shall have certified that such condition has been
met. Any unvested RSUs that do not vest upon the occurrence of any of
such events as a result of the failure to meet the condition of this Section
6,
all amounts credited to the Participant’s Dividend Equivalent Accounts with
respect to such RSUs, and all securities and property comprising Property
Distributions deposited in such Dividend Equivalent Accounts with respect to
such RSUs shall immediately be forfeited.
7. The
RSUs
granted hereunder, any amounts notionally credited in the Participant’s Dividend
Equivalent Accounts, and any securities and property comprising Property
Distributions deposited in such Dividend Equivalent Accounts are not
transferable by the Participant otherwise than by will or by the laws of descent
and distribution or pursuant to a domestic relations order, as defined in the
Code.
8. All
notices hereunder shall be in writing and, if to the Company, shall be delivered
personally to the Secretary of the Company or mailed to its principal office,
0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000, addressed to the attention
of
the Secretary; and, if to the Participant, shall be delivered personally or
mailed to the Participant at the address on file with the
Company. Such addresses may be changed at any time by notice from one
party to the other.
3
9. This
Agreement is subject to the provisions of the Plan. The Plan may at
any time be amended by the Board, except that any such amendment of the Plan
that would materially impair the rights of the Participant hereunder may not
be
made without the Participant’s consent. The Committee may amend this
Agreement at any time in any manner that is not inconsistent with the terms
of
the Plan and that will not result in the application of Section 409A(a)(1)
of
the Code. Notwithstanding the foregoing, no such amendment may
materially impair the rights of the Participant hereunder without the
Participant’s consent. Except as set forth above, any applicable
determinations, orders, resolutions or other actions of the Committee shall
be
final, conclusive and binding on the Company and the Participant.
10. The
Participant is required to satisfy any obligation in respect of withholding
or
other payroll taxes resulting from the vesting of any RSU granted hereunder
or
the payment of any securities, cash, or property hereunder, in accordance with
procedures established by the Committee, as a condition to receiving any
securities, cash payments, or property resulting from the vesting of any RSU
or
otherwise.
11. Nothing
in this Agreement shall confer upon the Participant any right to continue in
the
employ of the Company or any of its Subsidiaries, or to interfere in any way
with the right of the Company or any of its Subsidiaries to terminate the
Participant’s employment relationship with the Company or any of its
Subsidiaries at any time.
12. As
used
in this Agreement, the following terms shall have the meanings set forth
below.
(a) “Cause”
shall mean any of the following: (i) the commission by the Participant of an
illegal act (other than traffic violations or misdemeanors punishable solely
by
the payment of a fine), (ii) the engagement of the Participant in dishonest
or
unethical conduct, as determined by the Committee or its designee, (iii) the
commission by the Participant of any fraud, theft, embezzlement, or
misappropriation of funds, (iv) the failure of the Participant to carry out
a
directive of his superior, employer or principal, or (v) the breach of the
Participant of the terms of his engagement.
(b) “Change
in Control” shall mean a change in the ownership of the Company, a change in the
effective control of the Company or a change in the ownership of a substantial
portion of the assets of the Company as provided under Section 409A of the
Code,
as amended from time to time, and any related implementing regulations or
guidance.
(c) “Disability”
shall have occurred if the Participant is (i) unable to engage in any
substantial gainful activity by reason of any medically determinable physical
or
mental impairment which can be expected to result in death or can be expected
to
last for a continuous period of not less than 12 months, or (ii) by reason
of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of
not
less than 3 months under an accident and health plan covering employees of
the
Participant’s employer.
4
(d) “Fair
Market Value” shall, with respect to a share of Common Stock, a Subsidiary
security, or any other security, have the meaning set forth in the
Freeport-McMoRan Copper & Gold Inc. Policies of the Committee applicable to
the 1999 Stock Incentive Plan, and, with respect to any other property, mean
the
value thereof determined by the board of directors of the Company in connection
with declaring the dividend or distribution thereof.
(e) “Key
Employee” shall mean any employee who meets the definition of “key employee” as
defined in Section 416(i) of the Code.
(f) “Managed
Net Income” shall mean, with respect to any year, the sum of (i) the net income
(or net loss) of the Company and its consolidated subsidiaries for such year
as
reviewed by the Company’s independent auditors and released by the Company to
the public; plus (or minus) (ii) the minority interests’ share in the net income
(or net loss) of the Company’s consolidated subsidiaries for such year as
reviewed by the Company’s independent auditors and released by the Company to
the public; plus (or minus) (iii) the effect of changes in accounting principles
of the Company and its consolidated subsidiaries for such year plus (or minus)
the minority interests’ share in such changes in accounting principles as
reviewed by the Company’s independent auditors and released by the Company to
the public.
(g) “Net
Cash
Provided by Operating Activities” shall mean, with respect to any year, the net
cash provided by operating activities of the Company and its consolidated
subsidiaries for such year as reviewed by the Company’s independent auditors and
released by the Company to the public.
(h) “Net
Interest Expense” shall mean, with respect to any year, the net interest expense
of the Company and its consolidated subsidiaries for such year as reviewed
by
the Company’s independent auditors and released by the Company to the
public.
(i) “Retirement”
shall mean early, normal or deferred retirement of the Participant under a
tax
qualified retirement plan of the Company or any other cessation of the provision
of services to the Company or a Subsidiary by the Participant that is deemed
by
the Committee or its designee to constitute a retirement.
(j) “Return
on Investment” shall mean, with respect to any year, the result (expressed as a
percentage) calculated according to the following formula:
a
+ (b
- c)
d
in
which
“a” equals Managed Net Income for such year, “b” equals Net Interest Expense for
such year, “c” equals Tax on Net Interest Expense for such year, and “d” equals
Total Investment of Capital for such year.
(k) “Tax
on
Net Interest Expense” shall mean, with respect to any year, the tax on the net
interest expense of the Company and its consolidated subsidiaries for such
year
calculated at the appropriate statutory income tax rate for such year as
reviewed by the Company’s independent auditors.
5
(l) “Total
Investment of Capital” shall mean, with respect to any year, the sum of (i) the
weighted average of the stockholders’ equity in the Company and its consolidated
subsidiaries for such year, (ii) the weighted average of the minority interests
in the consolidated subsidiaries of the Company for such year, (iii) the
weighted average of the redeemable preferred stock of the Company for such
year
and (iv) the weighted average of the long-term debt of the Company and its
consolidated subsidiaries for such year, all as shown in the quarterly balance
sheets of the Company and its consolidated subsidiaries for such
year.
6
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day,
month, and year first above written.
FREEPORT-McMoRan
COPPER & GOLD INC.
By: ______________________________________
__________________________________
(Participant)
__________________________________
(Xxxxxx
Xxxxxxx)
__________________________________
(City)
(State) (Zip Code)
7
