Exhibit 10.30
Amended and Restated
Change of Control Agreement
This Amended and Restated Change of Control
Agreement (“Agreement”) between Freeport-McMoRan Copper
& Gold Inc., a Delaware corporation (the
“Company”), and Michael J. Arnold (the
“Executive”) is dated effective as of December 2, 2008
(the “Agreement Date”).
W I T N E S S E T
H:
WHEREAS, the Executive and the Company are
parties to that certain Change of Control Agreement dated February
3, 2004 (the “Original Agreement”);
WHEREAS, the Company and the Executive wish to
amend the Original Agreement to (i) extend the term of the Original
Agreement, (ii) amend the Original Agreement to comply with the
final regulations under Section 409A of the Internal Revenue Code,
as amended, (iii) eliminate the excise tax gross-up payment
previously provided to the Executive, and (iv) clarify certain
provision of the Original Agreement, including the definition of
“bonus” used in calculating the lump sum payment due
upon certain terminations of employment.
NOW, THEREFORE,
for and in consideration of the continued employment of Executive
by the Company and the payment of salary, benefits and other
compensation to Executive by the Company, the parties hereto agree
to amend and restate the Original Agreement to read as
follows:
ARTICLE I
Definitions
1.1 Company
. As used in this Agreement, “Company” means
the Company as defined above and any successor to or assignee of
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) all or substantially all of the assets of the
Company.
1.2 Change of
Control . (a) “Change of Control” means
(capitalized terms not otherwise defined will have the meanings
ascribed to them in paragraph (b) below):
(i) the acquisition by
any Person together with all Affiliates of such Person, of
Beneficial Ownership of the Threshold Percentage or more; provided,
however, that for purposes of this Section 1.2(a)(i), the following
will not constitute a Change of Control:
(A) any acquisition
(other than a “Business Combination,” as defined below,
that constitutes a Change of Control under Section 1.2(a)(iii)
hereof) of Common Stock directly from the Company,
(B) any acquisition of
Common Stock by the Company or its subsidiaries,
(C) any acquisition of
Common Stock by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation or other
entity controlled by the Company, or
(D) any acquisition of
Common Stock pursuant to a Business Combination that does not
constitute a Change of Control under Section 1.2(a)(iii) hereof;
or
(ii) individuals who,
as of the effective date of this Agreement, 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 effective
date of this Agreement 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 will be considered a member of the Incumbent Board, unless
such individual’s 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 any other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Incumbent Board; or
(iii) the consummation
of a reorganization, merger or consolidation (including a merger or
consolidation of the Company or any direct or indirect 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, immediately following
such Business Combination:
(A) the individuals
and entities who were the Beneficial Owners of the Company Voting
Stock immediately prior to such Business Combination have direct or
indirect Beneficial Ownership of more than 50% of the then
outstanding shares of common stock, and more than 50% of the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, of the
Post-Transaction Corporation, and
(B) no Person together
with all Affiliates of such Person (excluding the Post-Transaction
Corporation and any employee benefit plan or related trust of
either the Company, the Post-Transaction Corporation or any
subsidiary of either corporation) Beneficially Owns 30% or more of
the then outstanding shares of common stock of the Post-Transaction
Corporation or 30% or more of the combined voting power of the then
outstanding voting securities of the Post-Transaction Corporation,
and
(C) at least a
majority of the members of the board of directors of the
Post-Transaction Corporation were members of the Incumbent Board at
the time of the execution of the initial agreement, and of the
action of the Board, providing for such Business Combination;
or
(iv) approval by the
shareholders of the Company of a complete liquidation or
dissolution of the Company.
(b) As used in this
Section 1.2 and elsewhere in this Agreement, the following terms
have the meanings indicated:
(i)
Affiliate: “Affiliate” means a Person that
directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with,
another specified Person.
(ii) Beneficial
Owner: “Beneficial Owner” (and variants
thereof), with respect to a security, means a Person who, directly
or indirectly (through any contract, understanding, relationship or
otherwise), has or shares (A) the power to vote, or direct the
voting of, the security, and/or (B) the power to dispose of, or to
direct the disposition of, the security.
(iii) Company Voting
Stock: “Company Voting Stock” means any
capital stock of the Company that is then entitled to vote for the
election of directors.
(iv) Majority
Shares: “Majority Shares” means the number
of shares of Company Voting Stock that could elect a majority of
the directors of the Company if all directors were to be elected at
a single meeting.
(v)
Person: “Person” means a natural person or
entity, and will also mean the group or syndicate created when two
or more Persons act as a syndicate or other group (including
without limitation a partnership, limited partnership, joint
venture or other joint undertaking) for the purpose of acquiring,
holding, or disposing of a security, except that
“Person” will not include an underwriter temporarily
holding a security pursuant to an offering of the
security.
(vi) Post-Transaction
Corporation: Unless a Change of Control includes a
Business Combination, “Post-Transaction Corporation”
means the Company after the Change of Control. If a
Change of Control includes a Business Combination,
“Post-Transaction Corporation” will mean the
corporation or other entity resulting from the Business Combination
unless, as a result of such Business Combination, an ultimate
parent entity controls the Company or all or substantially all of
the Company’s assets either directly or indirectly, in which
case, “Post-Transaction Corporation” will mean such
ultimate parent entity.
(vii) Threshold
Percentage: “Threshold Percentage” means 30%
of all then outstanding Common Stock.
(viii) Common
Stock: “Common Stock” means the common
stock, $0.10 par value per share, of the Company.
1.3 Cause
. “Cause” shall mean:
(a) The
Executive’s willful and continued failure to perform
substantially the Executive’s duties with the
Post-Transaction Corporation or its Affiliates (other than any such
failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is
delivered to the Executive by the Board, which specifically
identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive’s
duties;
(b) The
Executive’s material breach of this Agreement after a written
demand is delivered to the Executive by the Board, which
specifically identifies the manner in which the Board believes that
the Executive has materially breached this Agreement;
(c) The final
conviction of the Executive or an entering of a guilty plea or a
plea of no contest by the Executive to a felony;
(d) Unauthorized acts
or omissions by the Executive that could reasonably be expected to
cause material financial harm to the Company or materially disrupt
Company operations;
(e) The
Executive’s commission of an act of dishonesty (even if not a
crime) resulting in the enrichment of the Executive at the expense
of the Company; or
(f) The
Executive’s knowing falsification or knowing attempted
falsification of financial records of the Company in violation of
SEC Rule 13b2-1.
For purposes of
this provision, no act or failure to act, on the part of the
Executive, will be considered “willful” unless it is
done, or omitted to be done, by the Executive in bad faith or
without a reasonable belief that the act or omission was in the
best interest of the Post-Transaction Corporation or its
Affiliates. Any act, or failure to act, based on
authority given pursuant to a resolution duly adopted by the Board
or the advice of counsel to the Post-Transaction Corporation or its
Affiliates will be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests
of the Post-Transaction Corporation or its
Affiliates. The termination of employment of the
Executive will not be deemed to be for Cause unless and until there
has been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of
the entire membership of the Board at a meeting of the Board called
and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together
with counsel, to be heard before the Board), finding that, in the
good faith opinion of the Board, the Executive has engaged in the
conduct described in subparagraph (a) through (f) above, and
specifying the particulars of such conduct.
1.4 Good Reason
. “Good Reason” shall mean:
(a) Any failure of the
Post-Transaction Corporation to provide the Executive with the
position, authority, duties and responsibilities at least
commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 120-day
period immediately preceding the Change of
Control. Executive’s position, authority, duties
and responsibilities after a Change of Control shall not be
considered commensurate in all material respects with
Executive’s position, authority, duties and responsibilities
prior to a Change of Control unless after the Change of Control the
Executive holds an equivalent position in the Post-Transaction
Corporation;
(b) The assignment to
the Executive of any duties inconsistent in any material respect
with Executive’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities
as contemplated by Section 2.1(b) of this Agreement, or
any
other action
that results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith that is
remedied within 10 days after receipt of written notice thereof
from the Executive to the Post-Transaction Corporation;
(c) Any failure by the
Post-Transaction Corporation or its Affiliates to comply with any
of the provisions of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith
that is remedied within 10 days after receipt of written notice
thereof from the Executive to the Post-Transaction
Corporation;
(d) The
Post-Transaction Corporation or its Affiliates requiring the
Executive to be based at any office or location other than as
provided in Section 2.1(b)(ii) hereof or requiring the Executive to
travel on business to a substantially greater extent than required
immediately prior to the Change of Control; or
(e) Any failure by the
Company to comply with and satisfy Sections 4.1(c) and (d) of this
Agreement.
For purposes of
this Section 1.4, any determination of “Good Reason”
made by the Executive in good faith and based upon his reasonable
belief and understanding shall be conclusive.
1.5 Code
. “Code” shall mean the Internal Revenue
Code of 1986, as amended from time to time.
1.6 Disability
. “Disability” shall mean:
(a) A disability
entitling the Executive to receive benefits under a long-term
disability insurance policy maintained by the Post-Transaction
Corporation or an Affiliate in effect at the time either because he
is totally disabled or partially disabled, as such terms are
defined in such policy in effect as of the Agreement Date or as
similar terms are defined in any successor policy.
(b) If there is no
long-term disability plan in effect covering the Executive, and if
(i) a physical or mental illness renders the Executive incapable of
satisfactorily discharging his duties and responsibilities to the
Post-Transaction Corporation or an Affiliate for a period of 90
consecutive days, and (ii) such incapacity is certified in writing
by a duly qualified physician chosen by the Post-Transaction
Corporation or an Affiliate and reasonably acceptable
to the Executive or his legal representatives, then the Board will
have the power to determine that the Executive has become
disabled. If the Board makes such a determination, the
Post-Transaction Corporation or its Affiliate will
have the continuing right and option, during the period that such
disability continues, and by notice given in the manner provided in
this Agreement, to terminate the status of Executive as an officer
and employee. Any such termination will become effective
30 days after such notice of termination is given, unless within
such 30-day period, the Executive becomes capable of rendering
services of the character contemplated hereby (and a physician
chosen by the Post-Transaction Corporation or an
Affiliate and reasonably acceptable to the Executive or his legal
representatives so certifies in writing) and the Executive in fact
resumes such services.
(c) The
“Disability Effective Date” will mean the date on which
termination of Executive’s status as an officer and employee
becomes effective due to Disability.
1.7 Retirement
. “Retirement” (and variants thereof) for
purposes of this Agreement is defined as the Executive’s
voluntary termination of his status as an officer and employee at
any time after reaching age 60, but shall not include a termination
for Good Reason.
1.8 Board
. “Board” shall mean the Board of Directors
of the Company, or if after a Change of Control, the
Post-Transaction Corporation.
1.9 Termination
Date . “Termination Date” means, if
Executive’s status as an officer and employee is terminated
(i) by reason of Executive’s death, the date of
Executive’s death, (ii) by reason of Disability, the
Disability Effective Date, (iii) by the Company other than by
reason of death or Disability, the date of delivery of the notice
of termination or any later date specified in the notice of
termination, which date will not be more than 30 days after the
giving of the notice, or (iv) by the Executive other than by
reason of death, the date of delivery of the notice of termination
or any later date specified in the notice of termination, which
date will not be more than 30 days after the giving of the
notice.
ARTICLE II
Change of Control
Benefit
2.1 Employment Term
and Capacity after Change of Control . (a) If the
Executive continues to serve as an officer of the Company and a
Change of Control occurs on or before December 31, 2011, then the
Executive’s employment term (the “Employment
Term”) shall continue through the later of the third
anniversary of the Change of Control or December 31, 2011, subject
to any earlier termination of Executive’s status as an
officer and employee pursuant to this Agreement.
(b) After a Change of
Control and during the Employment Term, (i) the Executive’s
position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at
least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time
during the 120-day period immediately preceding the Change of
Control and (ii) the Executive’s services shall be performed
at the location where the Executive was employed immediately
preceding the Change of Control or any office or location less than
35 miles from such location. Executive’s position,
authority, duties and responsibilities after a Change of Control
shall not be considered commensurate in all material respects with
Executive’s position, authority, duties and responsibilities
prior to a Change of Control unless after the Change of Control the
Executive holds an equivalent position in the Post-Transaction
Corporation.
2.2 Compensation
and Benefits . During the Employment Term, the
Executive shall be entitled to the following compensation and
benefits:
(a) Salary
. An annual salary (“Base Salary”) at the
highest rate in effect for the Executive at any time during the
120-day period immediately preceding the Change of Control, payable
to the Executive at such intervals no less frequent than the most
frequent intervals in effect at any time during the 120-day period
immediately preceding the Change of
Control or, if
more favorable to the Executive, the intervals in effect at any
time after the Change of Control for other most senior executives
of the Post-Transaction Corporation and its Affiliates.
(b) Bonus
. Executive shall be entitled to participate in an
annual incentive bonus program applicable to other most senior
executives of the Post-Transaction Corporation and its Affiliates
but in no event shall such program provide the Executive with
incentive opportunities less favorable than the most favorable of
those provided by the Company and its Affiliates for the Executive
under the Company’s 2005 Annual Incentive Plan or similar
plan as in effect at any time during the 120-day period immediately
preceding the Change of Control or, if more favorable to the
Executive, those provided generally at any time after the Change of
Control to other most senior executives of the Post-Transaction
Corporation and its Affiliates.
(c) Fringe
Benefits . The Executive shall be entitled to fringe
benefits (including, but not limited to, automobile allowance, air
travel, and reimbursement for club membership dues) in accordance
with the most favorable agreements, plans, practices, programs and
policies of the Company and its Affiliates in effect for the
Executive at any time during the 120-day period immediately
preceding the Change of Control or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other most senior executives of the Post-Transaction
Corporation and its Affiliates.
(d) Expenses
. The Executive shall be entitled to receive prompt
reimbursement for all reasonable business expenses (including food
and lodging) incurred by the Executive in accordance with the most
favorable agreements, policies, practices and procedures of the
Company and its Affiliates in effect for the Executive at any time
during the 120-day period immediately preceding the Change of
Control or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other most senior
executives of the Post-Transaction Corporation and its
Affiliates.
(e) Incentive,
Savings and Retirement Plans . The Executive shall
be entitled to participate in all incentive, savings and retirement
plans, practices, policies and programs applicable generally to
other most senior executives of the Post-Transaction Corporation
and its Affiliates, but in no event shall such plans, practices,
policies and programs provide the Executive with incentive
opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable than the most
favorable of those provided by the Company and its Affiliates for
the Executive under any agreements, plans, practices, policies and
programs as in effect at any time during the 120-day period
immediately preceding the Change of Control.
(f) Welfare Benefit
Plans . The Executive and the Executive’s
family shall be eligible for participation in and shall receive all
benefits under welfare benefit plans, practices, policies and
programs provided by the Post-Transaction Corporation and its
Affiliates (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent
applicable generally to other most senior executives of the
Post-Transaction Corporation and its Affiliates, but in no event
shall such plans, practices, policies and programs provide the
Executive with benefits, in
each case, less
favorable than the most favorable of any agreements, plans,
practices, policies and programs of the Company in effect for the
Executive at any time during the 120-day period immediately
preceding the Change of Control.
(g) Indemnification
and Insurance . The Post-Transaction
Corporation
