FREEPORT-McMoRan COPPER & GOLD INC. PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT UNDER THE 2003 STOCK INCENTIVE PLAN
Exhibit
10.22
FREEPORT-McMoRan
COPPER & GOLD INC.
PERFORMANCE-BASED
RESTRICTED
STOCK UNIT AGREEMENT
UNDER
THE 2003 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. 2003 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 6(b) of this Agreement (the “Vesting Date”), one share (a
“Share”) of Class B 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 7 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
(unless the receipt of such Shares and amounts has been deferred by the
Participant pursuant to the provisions of Section 5(a) of this Agreement),
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 7 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 6 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)
Notwithstanding
the provisions of Section 1(d) of this Agreement, if, at the time of, and as
part of, the Participant’s Election, the Participant so elects in accordance
with procedures and subject to any limitations established by the Committee,
all
or a portion of the Shares issuable to the Participant upon the vesting of
such
RSUs and all or a portion of the amounts notionally credited in the Dividend
Equivalent Account related to such RSUs shall not be distributed on the Vesting
Date but shall be deferred and paid in one or more periodic installments, not
in
excess of ten, beginning at such time or times elected by the Participant at
such time. The deferral is subject to the following limitations:
(i) If
the
Participant is a Key Employee, a distribution of deferred amounts triggered
by
the Participant’s separation from service (as that term is defined pursuant to
Section 409A of the Code) may not occur or begin until six months after the
date
(the “Termination Date”) the Participant ceases to be an Eligible Individual
(the “Termination”).
(ii) The
deferral period with respect to any Participant shall
end
no later than six months after the Termination Date if the Participant’s
Termination is for any reason other than the Participant’s Disability or
Retirement.
(iii) The
deferral period with respect to any Participant shall end three years after
the
Termination Date if the Participant’s Termination occurs by reason of the
Participant’s Disability or Retirement.
(iv) In
the
event of any Termination, a distribution of all amounts remaining unpaid shall
be made in full to the Participant or his or her designated beneficiary as
soon
as administratively possible following the date of the end of the deferral
period as set forth in Sections 5(a)(ii) and (iii).
(v) All
securities or property comprising Property Distributions deposited in such
Dividend Equivalent Account related to such RSUs shall be distributed to the
Participant as soon as practicable after the Vesting Date for such RSUs,
irrespective of a deferral election made pursuant to this Section
5.
(vi) The
deferral procedures described in this Section 5 are intended to comply with
the
requirements of Section 409A of the Code and any related implementing
regulations or guidance.
(b) The
provisions of Section 4 shall continue to apply to all such vested RSUs and
all
such credited amounts subject to a deferral election until paid in accordance
with the provisions of this Agreement.
6.
(a)
Except
as
set forth in Section 6(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 Participant’s
Termination Date.
(b) Notwithstanding
the foregoing, and provided the condition of Section 7 of this Agreement has
been met, if the Participant ceases to be an Eligible Individual 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 7 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 6(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
Termination Date, unless the Participant’s Termination is due to death or
Disability.
7. 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 6(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 7, 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.
8. 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.
9. 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.
10. 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.
11. 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.
12. 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.
13. 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.
(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. 2003 Stock Incentive Plan Policies of
the Committee, 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.
(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.
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)
