Exhibit 10.28
Amended and Restated
Executive Employment Agreement
This Amended and Restated Executive Employment
Agreement (“Agreement”) between Freeport-McMoRan Copper
& Gold Inc., a Delaware corporation (the
“Company”), and James R. Moffett (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 an Executive Employment Agreement dated April 30, 2001,
which was previously amended on December 10, 2003 (the
“Original Agreement”), pursuant to which the Executive
currently serves as an officer of the Company;
WHEREAS, pursuant to the terms of this
Agreement, the Company desires to retain the services of the
Executive and the Executive desires to continue to provide services
to the Company;
WHEREAS, the Company and the Executive wish to
amend the Original Agreement to (i) comply with the final
regulations under Section 409A of the Internal Revenue Code, as
amended, (ii) clarify certain provisions in the Original Agreement,
including the method of calculating the “pro-rata”
bonus and the meaning of “bonus” in the calculation of
the lump sum payment due upon certain terminations of employment,
(iii) eliminate the additional cash payment of $1.8 million
provided to the Executive in connection with a termination of
employment due to death, disability or retirement, (iv) revise the
method of calculating the cash payment due in the event of a
termination of employment due to reasons other than death,
disability, cause or good reason, to be equal to three times the
sum of the executive’s base salary in effect on the
termination date and the average (instead of the highest) of the
bonuses paid to the executive for the immediately preceding three
fiscal years, and (v) add a customary nondisparagement
covenant;
WHEREAS, during the course of providing services
to the Company, the Executive has or will have received extensive
and unique knowledge of, experience in and access to resources
involving, the Mining Business (as defined below) at a substantial
cost to the Company, which Executive acknowledges has enhanced or
substantially will enhance Executive’s skills and knowledge
in such business;
WHEREAS, during the course of providing services
to the Company, Executive has had and will continue to have access
to valuable oral and written information, knowledge and data
relating to the business and operations of the Company and its
subsidiaries that is non-public, confidential or proprietary in
nature and is particularly useful in the Mining Business;
and
WHEREAS, in view of the opportunities provided
by the Company to Executive, the cost thereof to the Company, and
the need for the Company to be protected against disclosures by
Executive of the Company’s and its subsidiaries’ trade
secrets and other non-public, confidential or proprietary
information, the Company and Executive desire, among other things,
to prohibit
Executive from
disclosing or utilizing, outside the scope of his employment with
the Company, any non-public, confidential or proprietary
information, knowledge and data relating to the business and
operations of the Company or its subsidiaries received by Executive
during the course of his employment, and to restrict the ability of
Executive to compete with the Company or its subsidiaries for a
limited period of time.
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
Employment
Capacity
1.
Capacity and Duties of
Executive . The Executive is employed by the
Company to render services on behalf of the Company as Chairman of
the Board functioning in an executive capacity. The
Executive will perform such duties as are assigned to the
individual holding the title or titles held by him from time to
time in the Company’s By-laws and such other duties as may be
prescribed from time to time by the Company’s Board of
Directors (the “Board”), which duties shall be
consistent with the position of Chairman of the Board.
2.
Term . The term of this Agreement will
commence on the Agreement Date and will continue through December
31, 2008; provided, however, that commencing on December 31, 2008,
and each December 31 thereafter, the term of this Agreement will
automatically be extended for one additional year unless not later
than August 1 of the current year, the Corporate
Personnel Committee of the Board (the “Committee”) has
given written notice to the Executive that it does not wish to
extend this Agreement.
3.
Devotion to
Responsibilities . The Executive will devote
significant business time to the business of the Company, will use
his best efforts to perform faithfully and efficiently his duties
under this Agreement, and will not engage in or be employed by any
other business; provided, however, that nothing herein will
prohibit the Executive from (a) serving as an officer and
director of McMoRan Exploration Co. (“McMoRan”), FM
Services Company or any of their affiliates or successors, (b)
serving as a member of the board of directors, board of trustees or
the like of any for-profit or non-profit entity that does not
compete with the Company, or performing services of any type for
any civic or community entity, whether or not the Executive
receives compensation therefor, (c) investing his assets in
such form or manner as will require no more than nominal services
on the part of the Executive in the operation of the business of
the entity in which such investment is made, or (d) serving in
various capacities with, and attending meetings of, industry or
trade groups and associations, as long as the Executive’s
activities permitted by clauses (a), (b), (c) and (d) above do not
materially and unreasonably interfere with the ability of the
Executive to perform the services and discharge the
responsibilities required of him under this
Agreement. Notwithstanding clause (c) above, the
Executive may not, without the approval of the Committee,
beneficially own 5% or more of the equity interests of a business
organization required to file periodic reports with the Securities
and Exchange Commission under the Securities Exchange Act of 1934
(the “Exchange Act”) other than the Company or McMoRan,
and the Executive may not beneficially own more than 2% of the
equity interests of any business
organization
that competes with the Company. For purposes of this
paragraph, “beneficially own” has the meaning ascribed
to that term in Rule 13d-3 under the Exchange Act.
Article II
Compensation and
Benefits
1.
Salary . The Company will pay the Executive
a salary (“Base Salary”) at an annual rate per fiscal
year of the Company (“Fiscal Year”) of $2,500,000,
which will be payable to the Executive in equal semi-monthly
installments. Base Salary may be remitted to the
Executive on behalf of the Company by an affiliate of the
Company.
2.
Bonus . The Executive will be eligible to
receive an annual incentive bonus (the “Bonus”),
payable, if at all, only with respect to services that the
Executive provides to the Company. Any Bonus will be
determined, accrued and paid in accordance with the terms of the
Company’s 2005 Annual Incentive Plan, as amended, or any
incentive or bonus compensation plan that is a successor or
substitute therefor, that covers certain individuals designated by
the Committee (the “Annual Incentive
Plan”). The Executive acknowledges and agrees that
this Section 2 imposes no obligation on the Company to award any
bonus to the Executive.
3.
Equity Awards and Long-Term
Performance Units. The Executive will continue to be
eligible to participate in all short-term and long-term equity and
non-equity incentive plans in which the Executive currently
participates or which may be offered in the future to the most
senior executives of the Company.
4.
Vacation. The Executive will be entitled to
paid vacation and holidays as provided to executives of the Company
generally.
5.
Indemnification and
Insurance. In
accordance with the Company’s Certificate of Incorporation,
the Company will indemnify the Executive, to the fullest extent
permitted by applicable law, for any and all claims brought against
him arising out his services to the Company and its
subsidiaries. In addition, the Company will continue to
maintain a directors’ and officers’ insurance policy
covering the Executive substantially in the form of the policy in
existence as of the Agreement Date to the extent such policy
remains available at reasonable commercial terms.
6.
Other Benefits
. The Executive will
continue to be entitled to all benefits and perquisites presently
provided to him or generally to the most senior executives of the
Company and be eligible to participate in and receive all benefits
under welfare benefit plans, practices, policies and programs
(including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel
accident insurance plans and programs) available generally to the
most senior executives of the Company.
7.
Expenses . The Executive will be entitled to
receive prompt reimbursement for all reasonable business expenses
(including food, transportation, entertainment and lodging)
incurred from time to time on behalf of the Company in the
performance of his duties, upon the presentation of such supporting
invoices, documents and forms as the Company reasonably
requests.
Article III
Termination of Employment; Change
of Control
1.
Death . The Executive’s status as an
officer and employee will terminate immediately and automatically
upon the Executive’s death.
2.
Disability
. The Company may
terminate Executive’s status as an officer and employee for
“Disability” as follows:
(a) If the Executive
has a disability that entitles him to receive benefits under the
Company’s long-term disability insurance policy in effect at
the time either because he is Totally Disabled or Partially
Disabled, as such terms are defined in the Company’s policy
in effect as of the Agreement Date or as similar terms are defined
in any successor policy, then the Company may terminate
Executive’s status as an officer and employee effective on
the first day on which the Executive receives a payment under such
policy (or on the first day that he would be so eligible, if he had
applied timely for such payments).
(b) If the Company has
no long-term disability plan in effect, and if (i) because of
physical or mental illness the Executive is rendered incapable of
satisfactorily discharging his duties and responsibilities under
this Agreement for a period of 90 consecutive days and (ii) a duly
qualified physician chosen by the Company and reasonably acceptable
to the Executive or his legal representatives so certifies in
writing, the Board will have the power to determine that the
Executive has become disabled. If the Board makes such a
determination, the Company 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 Company 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.
3.
Cause. The Company may terminate the
Executive’s status as an officer and employee for
“Cause,” which is defined as follows:
(a) The
Executive’s willful and continued failure to perform
substantially the Executive’s duties with the Company 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 interests of the Company 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 Company 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 Company 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 any of the conduct
described in subparagraphs (a) through (f) above, and specifying
the particulars of such conduct.
4.
Good Reason.
The Executive may
terminate his status as an officer and employee for “Good
Reason,” which is defined as follows:
(a) Any failure by the
Company or its affiliates to comply with any of the provisions of
this Agreement (including, but not limited to, the failure to
provide the Executive with the position set forth in Article I,
Section 1 and, at a minimum, the Base Salary set forth in Article
II, Section 1), other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith that is remedied
within 10 days after receipt by the Company of written notice
thereof from the Executive; or
(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 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 by the Company of written
notice thereof from the Executive.
5.
Termination by the
Company . In
addition to termination for death, Disability or Cause, the Company
may at any time terminate the Executive’s status as an
officer and employee for any reason or for no reason at
all.
6.
Retirement
. In addition to
termination for death or Good Reason, the Executive may at any time
retire and terminate his status as an officer and
employee. “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 54, but shall not
include a termination for Good Reason.
7.
Notice of Termination;
Termination Date . (a) Other
than as a result of the death of Executive, any termination of
Executive’s status as an officer and employee shall be
communicated to the other party by Notice of Termination given in
accordance with Article VII, Section 2 of this
Agreement. For purposes of this Agreement, a
“Notice of Termination” means a written notice that (i)
indicates the specific termination provision in this Agreement on
which the party relies, (ii) to the extent applicable,
sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under the provisions so
indicated and (iii) if the Termination Date (as defined below) is
other than the date of receipt of such notice, specifies the
Termination Date. The Company’s failure to set
forth in the Notice of Termination any fact or circumstance that
contributes to a showing of Disability or Cause will not negate the
effect of the notice nor waive any right of the Company or preclude
the Company from asserting such fact or circumstance in enforcing
the Company’s rights.
(b) “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.
8.
Change of Control
. Upon and following a
Change of Control of the Company, as defined in the Amended and
Restated Change of Control Agreement between the Executive and the
Company dated effective December 2, 2008, and any amendments
thereto or any subsequent change of control agreement between the
Executive and the Company (the “Change of Control
Agreement”), the rights and obligations of the Executive and
the Company will no longer be governed by this Agreement, but will
be as provided in the Change of Control Agreement (including any
rights or obligations in this Agreement that are specifically
incorporated by reference therein). Upon the occurrence
of a Change of Control, the term of this Agreement will end, and
the provisions of this Agreement will be null and void, and of no
further force and effect, except that compensation and benefit
obligations accrued by the Company with respect to the Executive
prior to the Change of Control and during the term of this
Agreement will remain valid and enforceable, and the rights of
Executive to indemnification shall remain in effect.
Article IV
Obligations upon
Termination
1.
Separation from
Service . No
payments or benefits provided herein that are paid because of a
termination of employment under circumstances described herein
shall be paid, unless such termination of employment also
constitutes a “separation from service” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and the regulations and guidance
issued thereunder (“Section 409A”).
2.
Death, Disability or
Retirement. If (A) the Executive’s status as an
officer and employee is terminated by reason of the
Executive’s death or Retirement, or (B) the Company
terminates the Executive’s status as an officer and employee
by reason of Executive’s Disability then, subject to the
six-month delay set forth in Article VII, Section 14, if
applicable:
(a) The Company will
pay the Executive or his legal representatives the amount of the
Executive’s Base Salary earned through the Termination Date
to the extent not previously paid (the “Accrued
Obligations”);
(b) The Company will
pay to the Executive or his legal representatives a pro rata Bonus
(the “Pro Rata Bonus”) for the Fiscal Year in which the
Termination Date occurs, which shall be paid out at such time as
annual cash bonuses are paid to other senior executives in
accordance with the terms of the Annual Incentive Plan (as defined
above in Article II, Section 2). The amount of the Pro
Rata Bonus shall be determined by multiplying (i) the bonus the
Executive would have received pursuant to the terms of the Annual
Incentive Plan as determined by the Committee had he remained
employed by the Company through the applicable Fiscal Year, by (ii)
the fraction obtained by dividing the number of days in the year
through the Termination Date by 365. To the extent that
the Committee exercises negative discretion in determining bonus
awards under the Annual Incentive Plan for the Fiscal Year in which
the Termination Date occurs, such negative di
